The Bayh-Dole Act itself — codified at 35 U.S.C. §§ 200-212 — sets the policy: universities, other nonprofits, and small businesses may generally keep title to inventions made under federal funding agreements, in exchange for specific obligations to the funding agency. But the statute itself is short on operational detail. The actual deadlines, forms, and clause language that a research administrator or tech transfer office (TTO) works against day to day come from 37 CFR Part 401, the Department of Commerce regulation that implements the Act. This guide covers the regulatory structure of Part 401 itself: what it requires, on what timeline, and what happens if a recipient institution misses a step. For the march-in rights remedy specifically, including its four statutory trigger conditions and enforcement history, see CASRAI’s dedicated Bayh-Dole March-In Rights guide — this page covers where march-in sits inside the broader Part 401 structure, not the mechanics of a march-in petition itself.
What 37 CFR Part 401 Is and Why It Exists Separately From the Statute
35 U.S.C. § 202 requires a funding recipient to disclose each subject invention to the funding agency “within a reasonable time.” It does not say how many days that is. It requires an election of title but does not fix a deadline for making it. Congress left those specifics to be worked out in regulation, and 37 CFR Part 401 — administered on a government-wide basis, with the National Institute of Standards and Technology (NIST) now the lead policy office — is that regulation. Its centerpiece is 37 CFR § 401.14, the “standard patent rights clause,” which every federal funding agreement covered by Bayh-Dole (grants, cooperative agreements, and, for procurement contracts, the parallel FAR clause) must incorporate. Part 401 also contains the government’s march-in rights procedure (§ 401.6), a march-in-adjacent provision for exceptional public-interest circumstances (§ 401.5), and the mechanics for agency requests for title, appeals, and government-wide policy exceptions.
A useful way to keep the two documents straight: the statute (35 U.S.C. 200-212) states the policy and the four march-in conditions; the regulation (37 CFR 401, and specifically the 401.14 clause) states the actual clock — how many months, how many years, which form, which system.
The Standard Patent Rights Clause: 37 CFR § 401.14
Every funding agreement subject to Bayh-Dole must include the 401.14 clause, either verbatim or through incorporation by reference. It is the operational core of the whole regulation. The key deadline structure, drawn directly from the clause text:
- Internal disclosure trigger (401.14(f)(2)): the funding recipient must have written agreements with its research personnel requiring them to disclose each subject invention promptly, in writing, to the institution’s designated patent-matters personnel (typically the TTO). This internal disclosure is what starts the federal clock — it is not itself the agency disclosure.
- Disclosure to the funding agency (401.14(c)(1)): the institution must disclose the invention to the funding federal agency within two months after the inventor’s written disclosure to the institution’s patent personnel.
- Election to retain title (401.14(c)(2)): the institution must elect in writing whether to retain title within two years of the agency disclosure. That window can be compressed by the agency to as little as 60 days before the end of any applicable statutory bar period under 35 U.S.C. § 102(b) — i.e., if a publication or public sale has already started the one-year on-sale-bar clock running, the institution does not get the full two years to decide.
- Patent application filing (401.14(c)(3)(i)): once title is elected, the institution must file its initial patent application within one year of election (or earlier if a statutory bar forces an earlier filing).
- Utilization reporting (401.14(h)): the funding agency may request invention utilization reports no more than annually, covering development status, date of first commercial sale or use, and gross royalties received.
- Government-support statement (401.14(f)(4)): any patent application filed on a subject invention must include a standard statement disclosing the federal government’s interest and support.
These deadlines are tracked and reported almost universally through iEdison, the interagency invention-reporting system now hosted by NIST (transferred from NIH in August 2022). For the mechanics of disclosure content and form, see CASRAI’s Invention Disclosure Form guide; for how disclosure timing interacts with when to actually file, see the Invention Disclosure vs. Patent Application comparison.
Consequences of Missing a 401.14 Deadline
37 CFR § 401.14(d) is the enforcement mechanism behind the timeline above. If an institution fails to disclose an invention, fails to elect title, or fails to file a patent application within the (c)(3) window, the funding agency may require the institution to convey title to the government on written request. This is a distinct consequence from march-in rights — it is a title-forfeiture remedy for a compliance failure, triggered by missed paperwork deadlines, not a third-party-licensing remedy triggered by underuse of an invention the institution already owns. The two are easy to conflate because both originate in the same regulatory structure, but they operate on different facts and produce different outcomes.
March-In Rights Procedure: 37 CFR § 401.6
Section 401.6 sets out the procedural steps an agency must follow to exercise march-in rights under 35 U.S.C. § 203 — notice to the contractor and any exclusive licensee, an opportunity to be heard, a written determination with findings, and an appeal path to the U.S. Court of Federal Claims for a party adversely affected by a march-in decision. The four substantive grounds an agency must find before marching in at all — failure to achieve practical application, unmet health or safety needs, unmet public-use requirements specified by federal regulation, or a Section 204 domestic-manufacturing failure — are set by the statute itself (35 U.S.C. § 203), not by 401.6. Section 401.6 is the procedural shell around that statutory test: it governs how a march-in proceeding runs once initiated, not when one is justified. No federal agency has ever actually granted a march-in license, though petitions have been filed and considered, most visibly in disputes over prescription drug pricing. A related, narrower provision, 37 CFR § 401.5, addresses the government’s ability to acquire additional rights in exceptional circumstances determined in advance by the funding agency (an “exceptional circumstances” or “EC” determination), which is procedurally distinct from a 401.6 march-in action taken after the fact. For the substantive four-condition test, the practical-application standard, and what the current NIST guidance framework does and doesn’t change, see the full March-In Rights guide — it is the deeper treatment; this page’s role is showing where 401.6 sits in the regulation as a whole.
Government License Rights
Independent of who holds title and independent of whether march-in is ever exercised, 37 CFR § 401.14(b) reserves the federal government a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the subject invention throughout the world, on behalf of the United States. This mirrors 35 U.S.C. § 202(c)(4) in the statute. It is easy for a first-time TTO staff member to confuse this standing government-use license with march-in rights; they are not the same tool. The government license exists automatically, on every subject invention, from the moment of federal funding, regardless of who elects title and regardless of any march-in determination — it does not require a finding of underuse, unmet need, or noncompliance, and it does not extend rights to any third party. March-in, by contrast, is a discretionary, rarely-invoked remedy that can compel the title-holder to license a specific third party, and only after the 401.6 procedural findings above are made.
Relationship to the FAR Parallel Clause
37 CFR 401.14 applies to grants and cooperative agreements. Procurement contracts run instead through the Federal Acquisition Regulation’s parallel clause, FAR 52.227-11 (“Patent Rights — Ownership by the Contractor”), prescribed by FAR 27.303(b)(1) for contracts awarded to small businesses and nonprofits (including universities) for experimental, developmental, or research work. FAR 52.227-11 is not a competing or “non-Bayh-Dole” regime — it is the FAR’s own codification of the same statutory framework, with substantively the same two-month disclosure window, roughly two-year election period, government paid-up license, and march-in rights. For other-than-small-business, for-profit contractors, or contracts primarily for production/marketing of an end product, the contracting officer instead prescribes FAR 52.227-13 (“Patent Rights — Ownership by the Government”), under which the government, not the contractor, takes title from the outset. See CASRAI’s FAR 52.227-11 dictionary entry and the Grant vs. Contract vs. Cooperative Agreement comparison for how instrument type determines which clause governs.
Frequently Asked Questions
Is 37 CFR 401 the same thing as the Bayh-Dole Act?
No. The Bayh-Dole Act is the statute, codified at 35 U.S.C. §§ 200-212, enacted in 1980. 37 CFR Part 401 is the implementing regulation issued under that statute, containing the specific deadlines, clause language, and procedures that agencies and funding recipients must actually follow. The statute sets policy and the substantive march-in conditions; the regulation sets the operational mechanics.
How long does an institution have to disclose an invention under 37 CFR 401.14?
Two months from when the inventor discloses it in writing to the institution’s designated patent personnel, the institution must disclose the subject invention to the funding federal agency (37 CFR 401.14(c)(1)).
What is the election-to-retain-title deadline?
Up to two years from the date of disclosure to the funding agency, though the agency can shorten that window to as little as 60 days before a 35 U.S.C. 102(b) statutory bar would otherwise run if a public disclosure or offer for sale has already occurred (37 CFR 401.14(c)(2)).
What happens if a university misses a 401.14 deadline?
Under 401.14(d), the funding agency may require the institution to convey title to the government on written request. This is separate from, and more common than, march-in rights.
Does 37 CFR 401.6 govern when march-in rights can be exercised?
Not the substantive grounds — those four conditions come from 35 U.S.C. 203. Section 401.6 governs the procedure an agency must follow once it considers marching in: notice, hearing, written determination, and appeal rights.
Does the government’s license right require a march-in determination?
No. The government’s nonexclusive, paid-up license under 37 CFR 401.14(b) exists automatically on every subject invention regardless of title-holder or march-in status. March-in is a separate, discretionary remedy that can extend rights to a third party.
