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Bayh-Dole Regulation Update

This final rule reduces regulatory burdens by clarifying electronic reporting, updating certain sections to conform with changes in the patent laws, and streamlining the licensing application process for some Federal laboratory collaborators, makes technical corrections, clarifies the role of provisional patent application filing, explains a unique situation that may be appropriate for a Determination of Exceptional Circumstances, clarifies the role of funding agencies in the Bayh-Dole process, and addresses subject inventions as to which a Federal laboratory employee is a co-inventor.

These rule revisions implement title 35 of the United States Code, sections 200-209, commonly known as the “Bayh-Dole Act,” which governs rights in inventions made with Federal assistance. The Bayh-Dole Act requires disclosure of inventions arising from research activities funded by Federal agencies, and permits the recipients of Federal funding to retain ownership of the inventions. Implementing regulations for inventions developed using extramural funding are codified at 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms under Government Grants, Contracts, and Co-operative Agreements,” while implementing regulations for inventions developed using intramural funding are codified at 37 CFR part 404, “Licensing of Government Owned Inventions.”

The Bayh-Dole Act and its implementing regulations require “standard clauses” in funding agreements which obligate the recipients to take actions to properly manage inventions, including timely disclosure of the invention, periodic reports on how the invention is being used or developed, and a requirement that products utilizing the invention will be “manufactured substantially” in the United States unless the funding agency grants a waiver. The regulations also direct Federal agencies in the licensing of intramural inventions, including conditions for nonexclusive, partially exclusive, and exclusive licenses.

This rulemaking reduces regulatory burdens on large and small businesses, universities, non-profit organizations, and other recipients of federal funding in several ways. The rule provides greater clarity federal funding recipients by updating regulatory provisions to align with provisions of the Leahy-Smith America Invents Act, clarifies electronic reporting processes, provides for automatic extensions of the requirement to file non-provisional patent applications, and removes the requirement for some Federal agency collaborators to execute a separate license agreement. The rule shall apply to new funding agreements executed after the effective date of the rule, and allows funding agencies to use their discretion in amending existing agreements to apply the revised rule.

Full Text of 37 CFR 401:

Full Text of 37 CFR 404:

AUTM Webinar: The New Bayh-Dole Rules: What They Are, What They Mean (May 8, 2018)

FLC Webinar: New T2 Regulations: What You Need to Know (May 2018)


Q: Is the rule applicable to all new inventions after the effective date?
A: The rulemaking applies to new funding agreements executed after the effective date of May 14, 2018, and amendments where a funding agency explicitly states that the agreement is subject to the May 2018 revision of Bayh-Dole. An agency is free to amend an existing funding agreement without making the agreement subject to the May 2018 revision of Bayh-Dole, and in that case all subject inventions would be governed by the previous rule.

Q: Is the rule applicable to all funding agencies?
A: The rule applies to all agencies.

Q: How will iEdison know which agreements are subject to the new rule?
A: A notation system for iEdison is in development.

Created June 5, 2018, Updated August 23, 2023