In 2013, David Schwartz wrote an article posted at Tech Transfer Central’s “Technology Transfer University Reporter” about the “substantially manufactured” requirement in Bayh-Dole (35 USC 204). Schwartz reports advice offered by a workshop panel on handling NIH waiver requests, but his sources don’t do so well with Bayh-Dole. Here we will attempt to straighten things out.
The “substantially manufactured” requirement is part of what, by its own assertion of precedence, is the most important provision in federal patent policy. Thus, we might expect commentaries on the provision to be directed at how to build up American manufacturing capabilities when licensing exclusively, but this is not the case with the discussion presented in Schwartz’s article. Instead, the focus is on how to get that waiver and so avoid the obligation by engaging the NIH bureaucracy.
We have discussed section 204 recently. While set out as important, it turns out that the actual provision is designed to be hopelessly weak, to the point of being useless in developing American industry. At exactly those points where it might be strong, it wilts. It makes big fuss over an implausibly narrow demand on licensing behavior, and within that demand it sets out an ambiguous standard, and then authorizes federal agencies to waive the requirement at will, with necessary fussing over paperwork, while placing enforcement in the unworkable march-in provisions, where the logic of compelling non-exclusive licenses defeats the premise of the provision. Continue reading