What is the Bayh Dohl Act?

Bayh-Dole permits a university, small business, or non-profit institution to elect to pursue ownership of an invention in preference to the government.
The Bayh–Dole Act or Patent and Trademark Law Amendments Act is United States legislation dealing with intellectual property arising from federal government-funded research. Adopted in 1980, Bayh-Dole is codified in 35 U.S.C. § 200-212[1], and implemented by 37 C.F.R. 401[2]. Among other things, it gave U.S. universities, small businesses and non-profits intellectual property control of their inventions and other intellectual property that resulted from such funding. The Act, sponsored by two senators, Birch Bayh of Indiana and Bob Dole of Kansas, was enacted by the United States Congress on December 12, 1980.

Recipient requirements
Small businesses and non-profit organizations can retain the title in a federally funded "subject invention." In exchange, the organization is required to
•    Report each disclosed invention to the funding agency
•    Elect to retain title in writing within a statutorily prescribed timeframe
•    File for patent protection
•    Grant the federal government a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced on its behalf throughout the world
•    Actively promote and attempt to commercialize the invention
•    Not assign the rights to the technology, with a few exceptions
•    Share royalties with the inventor
•    Use any remaining income for education and research
•    Give preference to U.S. industry and small business
[edit] Subject inventions

A subject invention is defined as "any invention of the contractor that is conceived or first actually reduced to practice in the performance of work under a funding agreement."[1] In Stanford v. Roche, the US Supreme Court made clear that "of the contractor" means "owned by or belonging to the contractor."[2] Thus, subject inventions represent a subset of all inventions that may be made under a federal funding agreement; namely, those for which the contractor has obtained ownership:
"The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.... Only when an invention belongs to the contractor does the Bayh-Dole Act come into play."[3]

The CFR addresses the relationship between federal funding and other funding that may supplement the federally supported research. If an invention is made outside the research activities of the federally funded research "without interference with or cost to the government-funded project," then the invention is not a subject invention. Similarly, an invention is not a subject invention if it arises in closely related research outside the "planned and committed activities" of the federally funded project, and the closely related research does not "diminish or distract from the performance" of the federally funded project.[4]

Many institutions have assumed that where federal funds have been used anywhere in a lab, a subject invention exists.