The Biden Administration’s recent publication of the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights and its request for comments on the draft guidance will impact how march-in rights under Bayh-Dole may be exercised in the future. BackgroundOn December 7, 2023, the Biden Administration announced “a proposed framework for . . . the exercise of march-in rights on taxpayer-funded drugs” and, for the first time, specifically stated that “price can be a factor in considering whether a drug is accessible to the public.” A day later, the National Institute of Standards and Technology (NIST) published a Request for Information and released its Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which “reviews the factors that an agency may consider when deciding whether to exercise march-in rights.” 88 Fed. Reg. 85593, 85593 (“Draft Guidance”). The Draft Guidance comes less than nine months after the Departments of Commerce and Health & Human Services issued a joint press release announcing the formation of an Interagency Working Group for Bayh-Dole that would pursue a “whole-of-government approach” to review the government’s march-in authority. Importantly, the Draft Guidance confirms that no agency has ever exercised its march-in authority. Id. at 85596. If a patentee obtains a patent using federally funded research, the Bayh-Dole Act allows the government agency that provided the funding to require that the patentee grant a license to another entity if the agency determines that (1) the patentee “has not taken . . . effective steps to achieve practical application of the subject invention,” or (2) such an action is “necessary to alleviate health or safety needs which are not reasonably satisfied” by the patentee. See 35 U.S.C. § 203(a)(1), (2). The term “practical application” requires that a produc

r LDTs, so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs.” The OMB concluded its review of the proposed rule on April 22, suggesting that it is on track for Federal Register publication in early- to mid-May.2. Medicare Payment RulesAlthough Medicare payment rules are “must pass” regulations and therefore not generally at risk of being undone by the CRA, they do take up resources in OMB. Currently pending promulgation are final rules related to the fiscal year 2025 Medicare hospital inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS).3. March-In Rights for DrugsOn December 8, 2023, the National Institute of Science and Technology (NIST), part of the Department of Commerce, which has overall responsibility for Bayh-Dole administration, issued a “Request for Information Regarding the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights” 88 Fed. Reg. 85593 (the Draft Guidance). The NIST Draft Guidance for the first time (and contrary to all prior NIH pronouncements) explicitly authorizes “march-in” on the basis of a drug’s price, but without much guidance on how to assess when a price should trigger “march-in.” A group of Republican senators recently requested that the U.S. Government Accountability Office (GAO) determine whether the NIST proposal meets the definition of a rule under the CRA, thus making the proposal subject to repeal.14. Insurance Market ReformsThere are two proposed rules from the Centers for Medicare and Medicaid Services (CMS) reforming various aspects of health insurance coverage:Provider Nondiscrimination Requirements: The proposed rule would implement section 108 of the No Surprises Act, which directs the HHS to health plans from discriminating against qualified licensed health care professionals, solely on the basis of their licensure.Coverage of Certain Preventative Services: The proposed rule amends the final

The National Institute of Standards and Technology (NIST) released a draft framework allowing the U.S. government to consider product pricing as a factor in whether to exercise “march-in” rights under the Bayh-Dole Act.NIST is currently accepting public comments untilFebruary 6, 2024.Stakeholders should monitor the comments and further action by NIST.Federal grant and CRADA recipients should exercise diligence in timely complying with Bayh-Dole requirements to avoid giving the federal government an easy opportunity to take title to patents.The Biden-Harris Administration recently announced various actions to lower healthcare and prescription drug costs. In one action, the National Institute of Standards and Technology (NIST) released in December 2023 a draft framework on the U.S. government’s exercise of “march-in” rights.Request for Information Regarding the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, 88 F.R. 85593 (Dec 08, 2023). “March-in” rights are provided in the Bayh-Dole Act at 35 USC § 203, and provide for the government’s ability to unilaterally sublicense privately-owned patents if such patents were created using government funding and the patent owner or its assignee has not taken steps to put the invention into practical application, to use the invention to alleviate health or safety needs, to meet requirements for public use specified by Federal regulations, or because the preference for U.S. industry has been breached or not met. NIST’s draft framework potentially expands the government’s discretion to “march-in,” a power that has previously never been employed. Most notably, this framework gives explicit permission for agencies to include product pricing in this discretion.Seeid.at 85599.The proposed framework requires that a federal agency consider three overarching questions before instituting march-in. First, the invention in question must be subject to Bayh-Dole, i.e., the presence of a fede

d Marvin Slepian are joining thePatent Public Advisory Committee(PPAC), and Valerie Calloway, Nehal Madhani, and Douglas Masters are joining theTrademark Public Advisory Committee(TPAC).USPTO NewsThe USPTOannouncedthat it will open two new outreach office locations, one in the Atlanta, Georgia metropolitan area serving innovators in the Southeast region, and one in Strafford County, New Hampshire, serving innovators in the New England region.The USPTO established a newpre-application assessment programto support underresourced inventors. Under the program, USPTO examiners will help first-time prospective patent applicants assess if their invention is novel in the art by providing search assistance using public patent tools.Beginning on January 30, 2024, the USPTO will start issuingcertificates of correctionfor patents electronically.Notices, Guidance, and RequestsRequest for Information Regarding the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, 88 Fed. Reg. 85593 (Dec. 8, 2023) [Comments due by February 6, 2024] [The National Institute of Standards and Technology (NIST) is seeking comments on the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, which reviews the factors that an agency may consider when deciding whether to exercise march-in rights under the Bayh-Dole Act. The USPTO issued apress releaseencouraging stakeholders to submit comments.]Notice and Request for Comments on the Implications of Access and Benefit Sharing (ABS) Commitments/Regimes and Other Proposed Commitments Being Considered Under a WHO Convention, Agreement or Other International Instrument on Pandemic Prevention, Preparedness and Response, 88 Fed. Reg. 88637 (Dec. 22, 2023)[Comments due by Jan. 22, 2024] [The Department of Health and Human Services (HHS) issued a Request for Comment seeking information on concepts currently under consideration by parties negotiating a World Health Organization (WHO) Pandemic Preparedness Agreement. The USPTO issu

ts, under the much-publicized “march-in rights” provision found in Section 203 of Title 35 of the U.S. Code. Under the statute, if a patented invention was developed with any amount of government support, the government may force the patent owner to grant a license to a third party to commercialize the invention under specific circumstances. Past administrations (both Democratic and Republican) had decided that offering an invention at a very high price did not justify using march-in rights. In a pivotal shift from precedent, the administration has now proposed that the government should use march-in rights if the invention is unduly expensive or offered under terms that are unreasonable. While the immediate focus is on enabling the sale of more affordable generic drugs, this proposal’s scope is not limited to pharmaceuticals, potentially impacting any product.The proposal was published by the National Institute of Standards and Technology (NIST) in the Federal Register on December 8 (88 Fed. Reg. 85593). NIST is accepting public comments through 5 PM Eastern time on February 6, 2024.Understanding March-In RightsMarch-in rights have been the subject of public debate for many years. Under the Bayh-Dole Act, when a small business or nonprofit accepts federal support (whether a contract or a grant), patent rights for resulting inventions are owned by the recipient of the support. However, the government retains several rights over the invention.One such right is the ability of the funding agency to grant a license to a third party without consent from the owner (a “compulsory license”). This may be done at the request of a third party, or on the agency’s own initiative. The agency cannot wield this authority arbitrarily; there are several conditions that must be met. First, the terms of the compulsory license must be “reasonable under the circumstances.” The agency must find that at least one of four conditions are met in order to use march-in rights: (1) the patent owner is not doing e

/www.nist.gov/system/files/documents/2018/12/06/roi_initiative_draft_green_paper_nist_sp_1234.pdf.18NIST, Return on Investment Initiative, Final Green Paper (2019), https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.1234.pdf.19Rights to Federally Funded Inventions and Licensing of Government Owned Inventions, 86 Fed. Reg. 35, 37 (proposed Jan. 4, 2021).20See, e.g., Letter from Senators Elizabeth Warren and Angus S. King, Jr. and Congressperson Lloyd Doggett to Xavier Becerra, Sec’y, U.S. Dept. of Health & Hum. Servs. (Feb. 17, 2022), https://www.warren.senate.gov/imo/media/doc/2022.02.17%20Letter%20to%20Sec.%20Becerra%20on%20Xtandi%20March-in%20Petition%20(2).pdf.21Exec. Order No. 14036, 86 Fed. Reg. 36987 (July 14, 2021).22Rights to Federally Funded Inventions and Licensing of Government Owned Inventions, 88 Fed. Reg. 17730, 17730–31 (Mar. 24, 2023).23Request for Information Regarding the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, 88 Fed. Reg. 85593 (Dec. 8, 2023).24Seeid. at 85594.25See id. at 85596–97.26Id. at 85598.27Id28Id. at 85599; see also id. (“Has the contractor or licensee made the product available only to a narrow set of consumers or customers because of high pricing or other extenuating factors?”).29See id. at 85600 (referencing 37 C.F.R. § 401.6(a)(6)).30Id31See id.32Id33See id.34See id.35Id.36Id37See generally Inflation Reduction Act of 2022, Pub. L. No. 117-169 (Aug. 16, 2022); see also David J. Farber et al., Price Negotiation, Medicare Rebates, and Benefit Reform, King & Spalding (Aug. 15, 2022), https://www.kslaw.com/news-and-insights/price-negotiation-medicare-rebates-and-benefit-reform.3888 Fed. Reg. at 85600–01.39See id. at 85603–04.40See 35 U.S.C. § 203(b) (describing an administrative appeals process as well as a petition to the United States Court of Federal Claims).