Patenting Inventions Developed Using Federal Research Grants

The Bayh-Dole Act permits recipients of federal research grants to retain ownership of inventions made during a grant-funded project, provided certain regulatory requirements are complied with, including reporting inventions or electing title within the specified times. The National Institute of Standards and Technology (NIST) recently amended the Bayh-Dole regulations, making it more difficult to comply and the consequences of non-compliance much more draconian.

As amended, the regulations now require a grant recipient (a “contractor”) to file to a non-provisional patent application on an invention within ten (10) months of filing a provisional application on the federally funded invention, instead of the one-year period afforded by the patent laws.

A contractor who fails to timely report an invention or elect title risks the Government taking title to the invention. Under the prior regulations, the Government had 60 days to take title and if it did not act within the 60 days the contractor could rest assured that its rights in the invention had effectively vested. The amendments remove that 60-day deadline. As such, a federal agency can take title from the contractor at any point after a failure of disclosure. It is therefore imperative that companies receiving Government funds to implement Bayh-Dole compliance systems. Not only will this reduce the risk of the Government taking title, but also mitigates a risk for potential investors conducting an IP due diligence on the contractor.