Bayh-Dole and Technology Transfer

Summary
The biotechnology industry is the most research and development intensive and capital-focused industry in the world. The United States currently leads the world in the area of biotechnology because U.S. patent laws and legislation such as the Bayh-Dole Act have provided favorable incentives to mitigate the high risks. The biotechnology industry relies on the protections afforded by the patent laws and on the opportunity to exclusively license discoveries from academic partners through the mechanisms established in the Bayh-Dole Act. Without these protections and incentives, many life-saving discoveries would not have been realized. Prior to the Bayh-Dole legislation, federally funded research was owned by the government and offered for licensing on a non-exclusive basis or simply dedicated to the public. There was little incentive for businesses to undertake the financial risk to develop a product. The result was that only 5% of NIH-funded discoveries ever led to new or improved products. The change in policy affected by Bayh-Dole dramatically stimulated the commercialization of federal government-supported research, resulting in important new therapeutics and the wide array of diagnostic testing options available to the medical community today.

The United States leads the world in the area of biotechnology and patents. It is the bedrock for the entire world of biomedical research. Over 50% of total G-7 medical R&D investment is now made in the U.S. No other industry spends more on research and development per employee than biotechnology. Furthermore, no industry faces a lengthier or more complex regulatory process before bringing its products to market than the biotechnology industry. Continued strong intellectual property protection and favorable licensing opportunities are critical incentives if the United States is to maintain its lead.