Joe Allen was a legislative aide to Indiana Sen. Birch Bayh in 1978, when Ralph Davis came to call. Davis, an agronomist who was director of sponsored programs at Purdue University, asked Bayh to find a way to make it easier for universities to use research grants they received from the federal government to license researchers' inventions.
“After World War II, the U.S. had no international competition,” Allen recalled. “The rest of the world was devastated after the war, but Europe and Japan rebuilt fairly quickly and started competing with U.S. companies. Japan was notorious for copying the technologies that came out of federally funded labs and universities.”
In the late 1970s, the federal government didn't have a unified patent policy for its agencies that funded university research. They kept the titles to inventions that came from federal grants and often licensed them to more than one applicant. That policy played havoc with the incentive to invent and innovate, and researchers and inventors often watched helplessly as their work was carted off to Europe and Japan.
Senator Bayh, a Purdue graduate, was determined to change that, and help American scientists and innovators, and the universities and non-profits they served, to enjoy the benefits from their work.
What happened next changed the landscape for research and technology in the U.S. and around the world, and spawned the greatest surge in innovation in modern history.
It may have also been one of the greatest feats of across-the-aisle congressional bipartisanship in the American 20th century. Bayh, a Democrat, teamed up with Sen. Robert Dole, a Republican, to draft what became known as the Bayh-Dole Act. The bill would give universities and non-profits the rights to intellectual property that resulted from federal research grants, and to license the inventions and innovations that came out of their research labs.
But the bill faced tough sledding in Congress when it was introduced in 1978, and was quickly shelved. Unperturbed, Bayh and Dole reintroduced it in 1979, but it still hadn't passed both houses of Congress when Bayh was swept out of office with the Republican wave that brought Ronald Reagan to power in 1980. It took some innovative horse-trading between some very odd political couples to finally pass the bill. Then it languished on outgoing President Jimmy Carter's desk until he finally signed it just before he left office in January 1981.
The Bayh-Dole Act launched a massive wave of scientific and technological innovation, Allen said, which brought billions of dollars in licensing fees to universities, which in turn poured those funds back into research and development projects.
“The impact on universities, the economic impact is astounding,” said Chris Bayh, the youngest of Birch Bayh's two sons and an Indianapolis attorney. “Bayh-Dole turned out to be an avenue for developing and licensing technology on campuses that didn't exist before.”
Bayh-Dole allowed Larry Page and Sergey Brin – both engineering students at Stanford University – to launch and license an online search engine in 1996, which they later modestly named Google. Purdue, Indiana University and the University of Notre Dame each received dozens of licenses for startup companies, technological innovations and inventions that have resulted in billions of dollars poured into the American economy.
As universities and companies that benefited from the Bayh-Dole juggernaut prepare to celebrate the law's 40th anniversary, many of those beneficiaries worry about the federal government's assertion that it is entitled to “march in” and wrest control of technological innovation from developers, supposedly to benefit the public by lowering prices.
But there can be no question that the law profoundly changed the way Americans innovate and invent, and that the brainchild of a progressive Democrat and a conservative Republican made all the difference.
This story has been corrected.