Technology Transfer:

Reporting Requirements for Federally Sponsored Inventions Need Revision

RCED-99-242: Published: Aug 12, 1999. Publicly Released: Aug 12, 1999.

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Pursuant to a congressional request, GAO provided information on the government's rights to inventions under the Bayh-Dole Act and Executive Order 12591, focusing on whether federal agencies: (1) ensure that contractors and grantees are complying with the provisions of the Bayh-Dole Act and Executive Order 12591 on the disclosure, reporting, retention, and licensing of inventions created under federally funded projects; and (2) exercise their rights to use the royalty-free licenses to which they are entitled.

GAO noted that: (1) federal agencies and their contractors and grantees are not complying with provisions on the disclosure, reporting, retention, and licensing of federally sponsored inventions under the regulations implementing the Bayh-Dole Act and Executive Order 12591; (2) in GAO's review of more than 2,000 patents issued in calendar year 1997 as well as an Inspector General's draft report on 12 large grantees of the National Institutes of Health, GAO found that the databases for recording the government's royalty-free licenses are inaccurate, incomplete, and inconsistent and that some inventions are not being recorded at all; (3) as a result, the government is not always aware of federally sponsored inventions to which it has royalty-free rights; (4) few statistics were available on how federal agencies exercise their rights to federally sponsored inventions; (5) agency officials said the primary benefits of the royalty-free licenses are that the government can use the underlying research without concern about possible challenges that such use was unauthorized; and (6) the licenses normally would not be a means by which the government could lower its procurement costs by avoiding the payment of royalties, as royalties are not a factor in most federal procurements.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: Congress may wish to consider amending the Bayh-Dole Act to standardize, improve, and streamline the reporting process for inventions subject to both the act and Executive Order 12591. Congress could consider: (1) requiring the Secretary of Commerce to develop standardized disclosure forms and utilization reports for federally funded inventions; (2) making the patent the primary control mechanism for reporting and documenting the government's rights and the only written instrument for confirming the government's royalty-free license; and (3) requiring the Patent and Trademark Office to provide information to the funding agencies to assist them in monitoring compliance.

    Status: Closed - Implemented

    Comments: The Technology Transfer Commercialization Act of 2000 (P.L. 106-404) was enacted on November 1, 2000. This Act makes reference to and includes technical amendments to the Bayh-Dole Act. One of the Act's findings is that federal technology licensing procedures should balance the public policy needs of adequately protecting the rights of the public, encouraging companies to develop existing government inventions, and making the entire system of licensing government technologies more consistent and simple. Section 4 on the Act deals with the licensing of federally owned inventions and provides that one of the terms and conditions of the license is "requiring periodic reporting on utilization of the invention, and utilization efforts, by the licensee..." Section 10 of the Act deals with reports on utilization of federal technology and requires annual agency reports on their technology transfer activities, including the number of patent applications filed, the number of patents received, the number of fully-executed licenses which received royalty income, and the total earned royalty income and the disposition of that income. This section also requires the Secretary of Commerce, in consultation with the Attorney General and the Commissioner of Patents and Trademarks, to submit an annual report that draws upon the individual agency reports and discusses the (1) technology transfer best practices and effective approaches in the licensing and transfer of technology and (2) progress made toward development of additional useful measures of the outcomes of technology transfer programs of federal agencies. Section 10 of the Act also includes a provision for the Comptroller General to report on the effectiveness of federal technology transfer programs, including findings, conclusions, and recommendations for improvements in such programs and that this new reporting requirement is integrated with the existing mandated reporting requirement that the Comptroller General report at least once every 5-years on the implementation of the Bayh-Dole Act.

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