The University of Arizona has seen a surge in inventive output, thanks to federal funding aiding researchers in creating patented inventions . However, a potential reinterpretation of the Bayh-Dole Act could cause significant financial threats not only to the University but also to businesses and other entities involved in innovation.

The Bayh-Dole Act, enacted in 1980, has played a pivotal role in fostering innovation nationwide, allowing universities to retain ownership of inventions developed with federal funding in exchange for efforts to commercialize them.

This has been recognized in the US and around the world as a seminal law, as an amazing piece of legislation that has driven innovation in the United States, said Doug Hockstad, Associate Vice President of Tech Launch Arizona.

But now a proposed reinterpretation of the law could change the concept of “margin rights,” which could disrupt the current system. Under this proposal, if a researcher fails to advance their patented concept within a specified time frame, the federal government could revoke the patent and transfer it to another entity capable of further development. This could potentially leave creators without royalties, unlike the current system where they receive compensation similar to copyright law.

The concern is that people, companies, entities that are interested in some research that happened at the university will be reticent to actually license the patents that resolved because theyll be worried that at some point, the government may say Im charging too much, said Hockstad.

The economic implications of this potential change are substantial. Tech Launch Arizona anticipates significant growth in job creation, tax revenue, and economic output between 2021 and 2025 if the proposed interpretation does not take effect. However, should the law change, these projections could significantly diminish. The fate of this proposal rests with the Biden administration, which has initiated the discussion, sparking responses from researchers nationwide.