The U.S. Government has the right to “march-in” and grant licenses to additional companies under federally funded patents. The two main reasons March-In rights are used are if there are public safety concerns or if a patent owner has not made an effort to execute the patent.
In 1980, the Bayh-Dole Act put academic institutions and small businesses in charge of patenting and licensing their inventions they have made that were supported partly by federal funding. On average, three new start-up companies and two new products every day of the year are created under Bayh-Dole.
March-In rights are given to the U.S. Government to grant patent licenses to parties other than the patent owner if the research and development is federally funded. March-In rights allow the government to give patent licenses to other parties, including competitors (or themselves) if the patent owner:
- Has not taken, or is not expected to take, effective steps to achieve practical application of the subject invention
- Is not reasonably satisfying health or safety needs
- Is not reasonably satisfying regulatory requirements for public use
- Has violated provisions of federal law 35 U.S.C § 204
March-In rights mainly apply to drugs discovered and developed with the help of federal funding made available only at unaffordable prices. There have been at least six petitions filed by government officials, companies, public interest groups, and patients in the past, but the U.S. government has never exercised its march-in rights.
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The Bayh-Dole Act, previously the Patent and Trademark Act Amendments, is a federal law enacted in 1980 that enables universities, nonprofit research institutions, and small businesses patent and commercialize inventions with the investment of federal funds.
The law intends to drive innovation and support technology transfer. To date, the Bayh-Dole Act has supported 6 million jobs, helped launch 15,000 start-up companies, and contributed $1.7 trillion to U.S economic output.
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March-In Rights During COVID-19
In August of 2020, a time when there were no FDA-approved vaccines or drugs to prevent or treat COVID-19, a group of attorneys argued the U.S. government should exercise its march-in rights under the Bayh-Dole Act and license Gilead’s remdesivir (COVID-19 antiviral drug) to third-party manufacturers.
Their hope was to use march-in rights to scale up production and lower the price of the drug to increase access to remdesivir. They argued:
- Remdesivir was too expensive
- There was no guarantee of sufficient supply
- Gilead “has benefited from millions of dollars of public funding, including a $30-million NIH-funded clinical trial”
After consideration, March-In rights were not exercised, and Gilead’s collaboration with government researchers did not give the government intellectual property rights to remdesivir. The two main problems were:
- The Bayh-Dole Act is not triggered by high drug prices
- The National Institutes of Health (NIH) is hesitant to exercise its march-in rights because it does not want to hinder innovation
March-In rights are granted to the U.S. government “in case of emergency”. While march-in rights have never been used, they act as a safety net to protect patients and payers by permitting the government to grant additional licenses if a patented invention is not made available “on reasonable terms”.