US Bayh-Dole Act has added $3.3 trillion additional economic output by incentivising US researchers to monetise IP

Photo by Jorge Fernández Salas on Unsplash

The Bayh-Dole Act, passed in 1980, aimed to help federally funded researchers to monetise their innovations – and an analysis just published by the Bayh-Dole Coalition says the Act has driven as much as $3.3 trillion in extra US economic output through the creation of new companies, products, and jobs in the 45 years since then.

Originally called the Patent and Trademark Law Amendments Act, the bi-partisan bill became known as the Bayh‑Dole Act after the two Senators who co-sponsored it, Birch Bayh (Democrat, Indiana) and Bob Dole (Republican, Kansas).

Until the Bayh-Dole Act was passed, Federal law gave the US Government ownership of inventions resulting from federal funding. This had led to the US Government building up a stock of 28,000 patents, only 5% of which had been licenced for commercialisation. After the Act passed, universities and research institutions were incentivised to exploit their inventions – between 2000 and 2024, over 155,000 patents based on federally-funded research were issued by the US Patent & Trademark Office.

Key findings of the report, The Economic Impact of the Bayh-Dole Act, which can be downloaded here, include:

From 2001-2025, Bayh-Dole-enabled technology transfer at academic institutions has led to more than 19,000 startups launched and over 17,000 new products

Between 1996 and 2025, Bayh-Dole-enabled technology transfer from university and nonprofit research that benefited from federal funding added as much as:

• $3.3 trillion to U.S. gross economic output

• $1.7 trillion to U.S. GDP

• 6 million job-years of U.S. employment

Between 2021 and 2025, Bayh-Dole-enabled technology transfer from university and nonprofit research that benefited from federal funding added as much as:

• $577 billion to U.S. gross economic output

• $288 billion to U.S. GDP

• 08 million job-years of U.S. employment

Since 1980, the annual number of patents filed on inventions that benefited from government funding has increased more than 70-fold.

Joseph P. Allen, Executive Director of the Bayh-Dole Coalition, an advocacy body formed in 2021 to support the Bayh–Dole Act, says: “For more than 45 years, Bayh-Dole has helped turn American research into American innovation, jobs, companies, and economic growth. These numbers show the enormous economic impact of giving those closest to an invention the incentive and opportunity to bring it from the laboratory to the marketplace.”

Allen adds: “Scientific discoveries do not benefit the public simply because they are made. They benefit the public when they become products that support companies, create jobs, and strengthen industries. Bayh-Dole creates the incentives and partnerships that make that possible. At a time of intense global competition for technological leadership, policymakers should protect and strengthen the system that has delivered these extraordinary returns for the American economy.”

The new report updates and expands on a landmark 2022 study by Lori Pressman, Mark Planting, Carol Moylan, and Jennifer Bond, Economic Contributions of University/Nonprofit Inventions in the United States: 1996-2020. Using the same economic modelling framework, the new analysis incorporates five additional years of data from AUTM (previously known as the Association of University Technology Managers) taking the period covered up to 2025.

It also includes new data on state-by-state and regional startups, products, and licensing activity in communities across the country. The report draws on nearly three decades of data from AUTM’s voluntary licensing survey, analysed by health technology researchers Vital Transformation. It details how federally funded research contributes to the American economy through breakthrough products, startup creation, jobs supported, and more.

While there is considerable evidence that the Bayh-Dole Act has significantly contributed to US economic growth since 1985, it is not without its critics.

For example, under the Act, the Federal government has ‘march-in rights’, which permit the federal government to license a federally funded patented invention to a third party, if the original patent holder fails to make it available to the public on reasonable terms.

The Biden administration was suggesting amending the Act to allow federal agencies to exercise these march-in rights to reduce the price of certain medicines for the US public.

More recently, the Trump administration has used the Bayh-Dole march-in rights as leverage in its ongoing disputes with US universities over issues of freedom of speech and DEI rules (Diversity, Equity, and Inclusion).