The Bayh-Dole Act or University and Small Business Patent Procedure Act gave universities, small businesses and non profit initiatives in the USA, intellectual property rights over their inventions resulting from federally funded research. The Act is known after two senators of the congress, Birch Bay and Bob Dole, who sponsored it.
The historical background of the Act is that before this legislation the US government had accumulated about 30,000 patents which remained virtually unutilized. Only 5% of those patents were licensed out for use. The state agencies held title to those patents on behalf of the government.
This Act enables the concerned university, small business or non profit organizations to have ownership and patent of their invention in preference to the government. This legislation allows universities and their faculty members to stake patent claims over discoveries made under the umbrella of federally funded research schemes instead of leaving patent rights to the government. Thus a collaborative model has been set up by and between governments, universities and start up private firms. This change led to breakthroughs that resulted in the development of new biotech drugs and other products.
Universities and their scientists were allowed to own patents and commercialize their inventions. Faculty members set up their own private concerns to hold ownership of patents or granted licenses to biotech company partners for exploitation.
In exchange the concerned small business and non profit organization must grant the federal government a non transferable but irrevocable license to use or exploit the invention on its behalf throughout the world on royalty sharing basis with the inventor.
Though this industry academy collaboration has opened up new vistas in successful commercial projects for new biotech products, yet it has diverted universities and federally funded researchers away from fundamental research on basic sciences.
(More : http://www.ovpr.uga.edu/tco/Understanding%20Technology%20Transfer.pdf)