Jon Stone Explains in Inside Higher Ed Article How March-In Rights Threaten Stability in University Licensing
Jon Stone, national chair of the Quarles & Brady Research Institutions & Higher Education Industry Team, wrote an article for Inside Higher Ed about the possible far-reaching impact of the threat by President Trump’s administration to implement march-in rights under the Bayh-Dole Act.
The 1980 Bayh-Dole Act incentivized innovation within academic institutions by allowing universities to hold ownership of inventions developed with the support of federal funding. The march-in rights provision of the act, never previously activated, was intended to allow the federal government to require universities to license these patents to the government if certain specific conditions were not met. Earlier this year, the Trump administration threatened to impose march-in rights as a routine enforcement tool against universities.
In his article, Stone explained the significance of this potential action for universities and the business that partner with them, as well as the potentially negative impact it could have on innovation.
An excerpt:
This unprecedented regulatory escalation has sent ripples of concern throughout the higher education community and industry alike, revealing a new era marked by uncertainty over patent ownership and licensing agreements. For businesses that partner with universities, this uncertainty threatens to chill collaborative innovation by undermining the foundation of predictability essential to long-term success.
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Industry collaborators value clarity, stability and risk mitigation when licensing university inventions or entering research partnerships. The trust that a negotiated license grants exclusive or protected rights is paramount. Regulatory uncertainties—such as the threat of government march-in actions—introduce significant risk into this equation, increasing transaction costs and dampening corporate willingness to invest in the costly, lengthy process of commercialization. In addition, industry partners may now increase their scrutiny of university compliance with Bayh-Dole requirements during due diligence processes, imposing greater administrative pressure on universities to demonstrate full and timely compliance with their disclosure and commercialization obligations.
Companies may delay or forgo entering partnerships if regulatory uncertainties threaten to disrupt their rights or planned revenue streams; additionally, the reputational toll on universities subjected to regulatory investigation could damage their attractiveness to future collaborators, creating a self-reinforcing cycle of diminished innovation partnerships. The practical outcomes of this climate of increased regulatory scrutiny are profound: slowed innovation pipelines, reduced industry funding for academic research and fewer ventures aimed at bringing university-derived technologies to market. Over time, this could stifle the very ecosystem that Bayh-Dole was meant to nurture.
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