Before 1980, many of the inventions funded by government research rested in the public domain. President John Kennedy issued a memorandum that the government retain the rights to all publicly funded health-related inventions. Most federally funded patents were issued through nonexclusive licenses to all applicants.
But that changed with the passage of two 1980 laws: the Bayh-Dole Act, or Patent and Trademark Law Amendments Act, which granted the ability to license government patents to commercial entities on an exclusive basis, and the Stevenson-Wydler Technology Innovation Act, which made technology transfer to commercial entities a mission of government-owned laboratories.
“The law was a turning point, allowing the privatization of research, even if it was partially or entirely funded by public money,” said Achal Prabhala, coordinator for the AccessIBSA project, which campaigns for access to medicines.
The Bayh-Dole Act included provisions to prevent abuse by commercial patent-holders, including march-in rights for the government to retake patents and issue compulsory licenses. If a patent-holder, such as a drug company, failed to make a prescription drug developed through a public patent available or reasonably affordable to the general public, the government could revoke the license for the patent right and issue it to another firm.
But over the last 40 years, the pharmaceutical industry has defeated every attempt to use march-in rights to control costs. The named sponsors of the law, former Sen. Birch Bayh, D-Ind., and former Sen. Bob Dole, R-Kan., went on to work for law and lobbying firms that represented drug companies. Dole also became a pitchman for Pfizer and was seen widely in television commercials for Viagra.