March-in Rights and Compulsory License in the United States

by Sterne, Kessler, Goldstein & Fox P.L.L.C.

Sterne, Kessler, Goldstein & Fox P.L.L.C.

        March-in rights in the US were created in 1980, as part of the Bayh-Dole Act.  Simply stated, when the US government funds research that results in patents, it obtains rights to those patents. These rights are retained even when the patents are licensed to a third party.  While the government is granted a worldwide royalty free right in the patents under Bayh-Dole, the government’s only real vehicle to enforce its rights is through march-in rights in the patents.[i]

        As a measure intended to protect against nonuse or unreasonable use of federally-funded inventions, 35 U.S.C. § 203 states that, “the Federal agency under whose funding agreement the subject invention was made shall have the right . . . to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances . . . if the Federal agency determines that such—

            (1) action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;

            (2) action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees;

            (3) action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the contractor, assignee, or licensees; or

            (4) action is necessary because the agreement required by section 204 has not been obtained or waived or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of its agreement obtained pursuant to section 204.”[ii]

        As stated above, march-in rights were originally created to ensure that patent owners commercialized federally-funded inventions.  Recently however, march-in rights have become a lightning rod for consumer groups to push for lower US drug prices.[iii]  In the 37 years since their creation though, the US government has not exercised these rights although there have been several formal march-in petitions filed.

        In the first such petition in 1997, the US government refused to exercise its rights to march in on a patent owned by Johns Hopkins University.[iv] In In re CellPro, Johns Hopkins sued CellPro for infringement of a patent related to a stem cell-specific antibody.  In response, CellPro first asked the court for a compulsory license and then petitioned the National Institutes of Health (NIH) to march in on the theory that Johns Hopkins had failed to effectively commercialize the patented invention.[v]  NIH declined to exercise its rights reasoning that although Johns Hopkins commercialization efforts were slower than those of CellPro, the University was taking reasonable efforts to gain market entry of their antibody.  Since In re CellPro, there have been a number of additional denials of march-in rights, including: In re Norvir[vi], In re Xalatan[vii], In re Fabrazyme[viii], and most recently, In re Xtandi[ix].

        While march-in rights generally appear to be US-specific, the US and most other nations have rights under compulsory licenses.  Authorized under 28 U.S.C. § 1498(a), compulsory licenses are available in the US, but the government has never exercised this right.  This is in contrast with several other nations that have used these rights with respect to HIV and cancer drugs.  In this issue’s companion article, the use of compulsory licenses since enactment of the TRIPS agreement is discussed.

 [i] David S. Bloch, Alternatives to March-in Rights, Vanderbilt J. Ent. & Tech. L. 18:2:247

[ii] 35 U.S.C. § 203


[iv] In re Petition of CellPro, Inc. (Nat’l Inst. of Health, 1997) (determination),

[v] David S. Bloch, Alternatives to March-in Rights, Vanderbilt J. Ent. & Tech. L. 18:2:247

[vi] In the Case of Norvir® Manufactured by Abbott Laboratories, Inc. (Nat’l Inst. of Health, 2004) (determination),

[vii] In the Case of Xalatan® Manufactured by Pfizer, Inc. (Nat’l Inst. of Health, 2004) (determination),

[viii] In the Case of Fabrazyme® Manufactured by Genzyme Corporation (Nat’l Inst. Of Health, 2010) (determination),



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sterne, Kessler, Goldstein & Fox P.L.L.C. | Attorney Advertising

Written by:

Sterne, Kessler, Goldstein & Fox P.L.L.C.

Sterne, Kessler, Goldstein & Fox P.L.L.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.