Bayh-Dole is the reason a small company can patent an invention it made with federal money and keep it. The bargain is not free: in exchange for title, the government keeps a permanent license, imposes a preference for US manufacturing, and requires you to report what you invented. Understanding what you give up is more useful than celebrating what you keep.

Electing title to a subject invention

An invention conceived or first reduced to practice under a federal award is a subject invention. Bayh-Dole gives your company the right to elect title to it — to file and own the patent in your own name — provided you disclose the invention to the funding agency and elect within the required windows. Missing those windows is the one way this goes badly, because the agency may then take title. The disclosure deadline is short and measured in months from the point your own people learn of the invention; the election and filing deadlines are longer but still finite. Confirm the current periods in your award terms rather than working from memory, since the implementing rules have been amended more than once.

What the government keeps

Three obligations ride along with the title you elected. First, the government retains a nonexclusive, nontransferable, irrevocable, paid-up license to practice the invention throughout the world for or on behalf of the United States — it can use your invention for its own purposes forever without paying you. Second, there is a preference for US manufacturing: broadly, products embodying the invention that are sold in the United States are expected to be substantially manufactured here, and an exclusive licensee generally has to agree to that. Waivers exist but are requested, not assumed. Third are the reporting duties — the invention disclosure, periodic utilization reporting, and a statement of government support printed in the patent itself.

Bayh-Dole is not SBIR data rights

This is the confusion worth clearing up. Bayh-Dole governs inventions: who owns the patent and what license the government holds in it. SBIR data rights govern data: what the government may do with the reports, drawings, software and test results you deliver. They run in parallel, they have different deadlines, and complying with one does not satisfy the other. A company can be perfectly current on its invention reporting and still have handed over broad rights in its deliverables through careless marking. The general ownership picture for federally funded work covers both, and it is worth reading alongside the practical mechanics of patenting.

One STTR-specific note: because STTR requires a research institution partner, ownership allocation between company and university is set in the required agreement between you, and universities are Bayh-Dole entities in their own right. Settle it before award, not after — the same principle that applies to any research partnership with a university lab, and a real difference between the two programs.

This is general information, not legal advice. Bayh-Dole compliance turns on your specific award, and it belongs with counsel experienced in federal contracting.

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