The National Institute of Standards and Technology (NIST), an agency of the U.S. Department of Commerce, has requested public comments on a set of draft guidelines which will invoke the University and Small Business Patent Procedures Act of 1980 based on the prices of pharmaceuticals alone.  The University and Small Business Patent Procedures Act of 1980 (commonly known as the Bayh-Dole Act) grants the government the authority to suspend the patents of products of inventions that were developed with federal funding if those products or inventions are not made available to the public.

The authors of the Bayh-Dole Act, the late senators Birch Bayh (D-Ind.) and Robert Dole (R-Kan.), publicly stated that the law they developed did not intend for the government to be able to set prices on products.

"The law makes no reference to a reasonable price that should be dictated by the government," the pair wrote in an op-ed in The Washington Post. "This omission was intentional; the primary purpose of the act was to entice the private sector to seek public-private research collaboration rather than focusing on its own proprietary research."

The seizure of patent rights under Bayh-Dole is called "March In Rights"  a discussion of those rights by the Congressional Research Service:

https://crsreports.congress.gov/product/pdf/R/R44597

The NIST "Request for Information Regarding the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights":

https://www.federalregister.gov/documents/2023/12/08/2023-26930/request-for-information-regarding-the-draft-interagency-guidance-framework-for-considering-the

Request for Information Regarding the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights

A Notice by the Commerce Department and the National Institute of Standards and Technology on 12/08/2023

This document has a comment period that ends in 57 days. (02/06/2024)

AGENCY:

National Institute of Standards and Technology, Department of Commerce.

ACTION:

Notice; Request for Information (RFI).

SUMMARY:

The National Institute of Standards and Technology (NIST) seeks comments on the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, which reviews the factors that an agency may consider when deciding whether to exercise march-in rights. NIST requests information from the public on the proposed version of this guidance document to ensure that it is clear, and its application will both fulfill the purpose of march-in rights and uphold the policy and objectives of the Bayh-Dole Act. The information received in response to this RFI will inform NIST and the Interagency Working Group for Bayh-Dole (IAWGBD) in developing a final framework document that may be used by an agency when making a march-in decision. NIST will hold at least one informational webinar explaining the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights and how the public can submit comments. Details about the informational webinar(s), including dates, times and any registration requirements, will be announced at https://www.nist.gov/​tpo/​policy-coordination/​bayh-dole-act .

 

DATES:

Comments must be received by 5 p.m. Eastern time on February 6, 2024 to be considered. Written comments in response to the RFI should be submitted according to the instructions below. Submissions received after that date may not be considered.

ADDRESSES:

Comments may be submitted by electronic submission via the Federal eRulemaking Portal.

1. Go to www.regulations.gov and enter NIST–2023–0008 in the search field.

2. Click the “Comment Now!” icon, complete the required fields.

3. Enter or attach your comments.

Please submit comments only and include your name and/or your organization's name (if any) in your submission. Comments containing references, studies, research, and other empirical data that are not widely published should include copies of the referenced materials.

All submissions, including attachments and other supporting materials, will be a matter of public record. Relevant comments will generally be available on the Federal eRulemaking Portal at https://www.Regulations.gov . NIST will not accept comments accompanied by a request that part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. Therefore, do not submit confidential business information or otherwise sensitive, protected, or personal information, such as account numbers, Social Security numbers, or names of other individuals.

FOR FURTHER INFORMATION CONTACT:

Mojdeh Bahar, Associate Director for Innovation and Industry Services, National Institute of Standards and Technology, 100 Bureau Drive, Gaithersburg, MD 20899, (301) 975–2340 or by email to mojdeh.bahar@nist.gov.

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Government invests approximately $115B each year in extramural research and development at universities, non-profits, and small and large businesses.^[1] This results in the creation of thousands of inventions annually. The University and Small Business Patent Procedures Act of 1980, Public Law 96–517 (as amended), codified at title 35 of the United States Code (U.S.C.) 200 et seq., commonly known as the “Bayh-Dole Act” or “Bayh-Dole,” governs these inventions made with Federal assistance. The Bayh-Dole Act outlines the rights of persons, nonprofit organizations, and small business firms (“contractors”), and, as set forth in Executive Order 12591, all contractors regardless of size and to the extent permitted by law, in “any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement” (“subject invention”) as well as rights retained by the government. One such right is the funding agency's right to require the contractor, an assignee, or exclusive licensee of a subject invention to grant a license to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee, or exclusive licensee refuses such request, to grant a license itself (35 U.S.C. 203). This right, referred to as “march-in,” can only be exercised if the agency determines that:

(1) action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;

(2) action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees;

(3) action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the contractor, assignee, or licensees; or

(4) action is necessary because the agreement required by section 204 has not been obtained or waived or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of its agreement obtained pursuant to section 204.

NIST has been delegated responsibility by the Secretary of Commerce to promulgate regulations concerning the management and licensing of federally funded inventions. On January 4, 2021, NIST published a notice of proposed rulemaking (NPRM) in the Federal Register (86 FR 35) ^[2] requesting public comments on several proposed changes to the Bayh-Dole regulations at 37 CFR parts 401 and 404, including a provision related to march-in rights which stated that march-in “shall not be exercised exclusively based on the business decisions of the contractor regarding the pricing of commercial goods and services arising from the practical application of the invention.” In connection with that provision and other proposed changes, NIST received over 81,000 public comments and was directed through Executive Order 14036 to consider not finalizing the provision on march-in rights and product pricing in the proposed rule. In the Final Rule published in the Federal Register (88 FR 17730) ^[3] on March 24, 2023, NIST did not finalize this provision but stated its intent to engage with stakeholders and agencies with the goal of developing a comprehensive framework for agencies considering the use of march-in.

NIST has been working with the IAWGBD which regularly meets to find agency consensus on policy and procedures related to the implementation of the Bayh-Dole regulations, to draft this framework. The objectives for the Draft Interagency March-In Guidance Framework are to:

• Provide clear guidance to an agency on the prerequisites for exercising march-in, and, if those prerequisites are met, on facts to be gathered by the agency and factors to consider in determining whether to march-in.
• Ensure that decisions to exercise march-in support the policy and objectives of Bayh-Dole.
• Encourage the consistent and predictable application of the Bayh-Dole Act's march-in authority.
• Balance the need to incentivize industry investment in the development and commercialization of subject inventions with the need to promote public utilization of subject inventions.

II. Request for Information

NIST publishes this notice to seek comments on the Draft Interagency Guidance Framework for Considering the Exercise of March-in Rights, included with this RFI as Appendix A.

All responses that comply with the requirements listed in the DATES and ADDRESSES sections of this RFI will be considered.

The following list of topics covers the major areas about which NIST seeks information. The listed areas are not intended to limit the topics that may be addressed by respondents so long as they address the proposed march-in framework, including, but not limited to, sections or questions that are confusing or need additional context or explanation; additional sub-questions that would assist an agency in answering the major questions outlined in the framework; specific challenges posed by the framework as written; and other recommended improvements. Responses may include any topic believed to have implications for decision making related to march-in, regardless of whether the topic is included in this document.

NIST is specifically interested in receiving input from the public pertaining to the following questions:

(1) After reading through the framework and example scenarios, if needed, how could the guidance about when an agency might want to exercise march-in and the factors that an agency might consider be made clearer?

(2) The framework contains many terms which have specific meanings under Bayh-Dole or in technology development and commercialization. Are the definitions provided at the beginning of the framework easy to understand? Do they aid in your ability to interpret the framework?

(3) How could the framework be improved to be easier to follow and comprehend?

(4) Does this framework sufficiently address concerns about public utilization of products developed from subject inventions, taking into account the fact that encouraging development and commercialization is a central objective of the Bayh-Dole Act?

(5) The framework is not meant to apply to just one type of technology or product or to subject inventions at a specific stage of development. Does the framework ask questions and capture scenarios applicable across all technology sectors and different stages of development? How could any gaps in technology sectors or stages of development be better addressed?

Authority:35 U.S.C. 203, 206; DOO 30–2A.

Alicia Chambers,

NIST Executive Secretariat.

Appendix A

Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights

Table of Contents

Definitions

Introduction to March-in Rights & Framework

Does Bayh-Dole Apply?

Ownership and Licensing

Is a Statutory Criterion Met?

 

Would March-In Support the Policy & Objective of Bayh-Dole, Considering The Specific Case And Broader Context?

Scenarios & Examples

The full NIST request is too long to republish here.  Go to the hyperlink, above, to read its full text.