Prior to this act, all inventions created with federal funding were owned by the federal government to discourage commercial production.

The Bayh-Dole Act encourages universities to compete for patentable inventions, which shifts the economic landscape of the academic world and rapidly increases the patenting of new insights in molecular biology. It also leads to an increase in the patenting of human genetic material, such as the patent obtained by Myriad Genetics on two genes linked to breast and ovarian cancer (BRCA 1 and 2) in 1994.