When the government tries to claw back revenue from federally funded research, it risks choking off the very innovation pipeline it set out to create. History shows that discoveries like MRI and CRISPR only reached patients because universities were empowered—through the Bayh–Dole Act—to patent their breakthroughs and partner with industry. Undermining that framework today would not just alter the flow of money, it would jeopardize the next wave of life-saving technologies.
The Bayh–Dole Act of 1980 came after the original MRI breakthroughs by Damadian, Lauterbur, and Mansfield, but it played a pivotal role in how the technology evolved and spread. While those early discoveries and patents predated the law, Bayh–Dole created a framework for universities and hospitals—often funded by NIH and other federal agencies—to patent subsequent MRI improvements and license them to industry. This shift gave academic institutions clearer ownership rights and incentivized partnerships with manufacturers like GE, Siemens, and Philips, which rapidly advanced MRI technology in the 1980s and 1990s. In short, Bayh–Dole didn’t spark the invention of MRI itself, but it greatly accelerated the commercialization and refinement of the technology that followed.
For CRISPR, the Bayh–Dole Act was central: unlike MRI, whose first inventions came before 1980, CRISPR emerged squarely in the Bayh–Dole era. CRISPR research was born in academia, fueled by public funding–NIH, NSF, European Research Council, and Max Planck Society grants supported the labs of Doudna, Charpentier, and Zhang.The law allowed universities to patent their federally funded CRISPR discoveries, leading to aggressive licensing battles but also enabling the creation of biotech startups that are now driving CRISPR into clinical trials. In essence, Bayh–Dole turned CRISPR from a scientific breakthrough into an economic and medical engine almost overnight.
Bayh-Dole at Risk: How Government Revenue Grab Could Derail American Innovation
For over forty years, the Bayh-Dole Act has been the backbone of American innovation policy. By giving universities ownership of inventions funded by federal research dollars, Bayh-Dole created the conditions for breakthroughs in biotechnology, pharmaceuticals, semiconductors, and information technology to leap from the lab into the marketplace. The logic was simple: incentivize commercialization, and society reaps the rewards of new products, new companies, and new industries.
Now that model is under direct threat. The Trump administration, through Commerce Secretary-designate Howard Lutnick, has floated a radical plan for the government to seize a 50% revenue share of all patents generated by universities. Coupled with proposals for a “patent tax” on corporations and the Biden administration’s expanded interpretation of “march-in rights,” this signals a bipartisan trend: Washington wants a bigger cut of the innovation economy. The implications could be devastating.
A Direct Assault on Bayh-Dole
Lutnick has summarized the policy starkly: the government receives “zero” financial return when its citizens’ tax dollars are spent supporting university inventions. This overlooks Bayh-Dole’s proven track record. By granting universities rights to patents, the act has given rise to a process whereby knowledge is generated and brought to benefit society and the economy at large. The government already reaps rewards through employment and economic expansion and through its royalty-free license to its own needs. To expect 50% financial return reverses Bayh-Dole policy and makes universities junior venture partners to their research products.
Such a shift would do more than reduce revenue. It would erode the very incentives that drive technology transfer. Licensing deals would become less attractive to industry partners; venture investors would balk at startups saddled with federal co-ownership. The likely result is not more government revenue, but fewer innovations reaching the public.
A Pattern of Policy Overreach
The tax proposal by the Trump administration on patents—a 1% to 5% per annum tax paid by a patent’s assessed value—would hurt large portfolio companies most, adding to the base cost and potentially having the consequence of valuation uncertainty–affecting value assessment, mergers and acquisitions, and assets. The Biden administration’s reinterpretation of Bayh-Dole’s “march-in rights” to include drug pricing is yet another federal interference with patent exclusivity. Legally untested as it is, it is another example of interference.
Each exception to Bayh-Dole’s policy individually is risk enough; but combined, they potentially could lead to a bad trend. The ultimate consequence is a loss of confidence by the private sector in the stability of patent rights protection. Once innovators fear their patents can be retroactively taxed, diluted, or confiscated, investment in commercializing them will start to diminish. Innovation doesn’t progress amidst uncertainty—it stagnates.
The Bigger Picture
There is something bigger at stake here–more than university budgets or corporate profits. The Bayh-Dole framework has helped power entire industries and spurred trillions in economic growth all of which the US government reaps benefit from down the line. Weakening it risks slowing the pace of discovery and innovation at a time where the pace of innovation has accelerated, potentially handicapping America’s innovation economy at a time when global competition is fiercer than ever.
By treating federally funded research as a immediate compensation revenue stream capture rather than an engine of growth that will yield long term economic and financial benefits, Washington risks short-term gain at long-term cost. This is a pattern we’ve seen from an administration that make sweeping executive policy without full view of long-term outcome. If the government becomes co-owner of innovation, it will also become co-responsible for its stagnation.
There is no short term winner or loser in this scenario. Those hit hardest short term will not be universities or companies alone—it will be patients waiting for new cures, workers waiting for new industries, and a nation that has long relied on its ability to turn ideas into progress. Now is not the time to risk slowing down or stagnating innovation
