Nine Points to Consider (with regard to Bayh-Dole)

Posted on December 10, 2018 by Gerald Barnett

No matter how one takes apart the assertions of the advocates for the Bayh-Dole Act, they just keep coming back, like some obsessive combatant out of Road Warrior. In the articles here at Research Enterprise, I have documented and reasoned and cited the evidence and the arguments that show that Bayh-Dole has been and continues to be a dismal failure. But things are beyond reason. Bayh-Dole represents a prophecy about good things to come, about potential, about bureaucrats trying so very hard, so earnestly, to make good things happen by owning research inventions, by attempting to license those inventions for commercial development. That prophecy has failed, but the adherents are deeply committed to the idea beyond all reason and double down. They can’t just walk away. This is not the Society for Putting Things on Top of Other Things, after all.

Without getting caught up in the details, let’s summarize.

1. Bayh-Dole is based on fake history. Universities were involved in technology transfer before Bayh-Dole. Bayh-Dole is premised on involving federally funded inventions in the same system of management that universities used for non-federally supported inventions. University licensing of inventions was not better than the federal government’s licensing, especially in biomedical matters.

The federal government did not own all inventions made with federal support prior to Bayh-Dole. Department of Defense contractors generally could own inventions made by their employees. The NIH and NSF operated Institutional Patent Agreement programs for nonprofits that required institutional ownership of inventions made with federal support when the nonprofit decided to file patent applications. Other federal agencies could allow contractors to own inventions on a contract-by-contract basis or on an invention-by-invention basis.

For universities, for biomedical inventions and basic science invention–Bayh-Dole represented no change in practice. At best there was a three-year lapse from the termination of the IPA program as ineffective and against public policy in 1978 to mid-1981 when Bayh-Dole came into effect. The 28,000 federal patents wasting away meme was just a political bluff by a federal attorney. But the fake history lives on, repeated as if Twilight were real.  Continue reading →

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In re King, 1

Posted on December 6, 2018 by Gerald Barnett

President Truman’s Executive Order 10096  in 1950 established the rules under which the executive branch should claim rights to inventions made by federal employees. The implementing regulations for Executive Order 10096 give guidance with regard to the definition of “made.” Here’s 37 CFR 501.3(c):

The term made as used in this part in relation to any invention, means the conception or first actual reduction to practice of such  invention as stated in In re King, 3 USPQ2d (BNA) 1747 (Comm’r Pat. 1987).

This definition of made is also used by Bayh-Dole, but without any guidance. Let’s have a look, then, at In re King.

In re King involves a dispute over whether the federal government owed compensation to Eddie King, who had invented a new way to connect pallets used to load and off load cargo from aircraft. In 1969, Eddie King worked as a civilian forklift operator for the U.S. Air Force, saw there was a problem, and spent his own time to come up with a workable invention. The Air Force tested the pallet coupler and found that it worked better than anything else they had, and started using it. The case ends up in dispute and gets decided on appeal in 1987 by the Commissioner of Patents and Trademarks. The outcome of the appeal hinges on nuances having to do with “first actual reduction to practice.”  Continue reading →

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On advocative fakery of Bayh-Dole

Posted on December 4, 2018 by Gerald Barnett

Advocates of Bayh-Dole tell a fake history. They say that before Bayh-Dole, the federal government owned all inventions made with federal support. They say that Bayh-Dole gave universities the right to take ownership of inventions made with federal support. They say that Bayh-Dole prompted university technology transfer. They say that university technology transfer has been wildly successful, and is successful because of Bayh-Dole. None of this is true. It’s made up. It’s political spin made to appear to be fact. Only fools reason from political spin as if it is fact. Advocates of Bayh-Dole apparently cannot help that there are so many fools around, and so exploit their advantage.

Advocates for Bayh-Dole have told this fake history so many times they believe it, and their professional reputations ride on that fake history being accepted as true. They need folks to play the fool. Don’t expect them to start retracting their assertions, their Congressional testimony, their articles, their AUTM workshops.

Before Bayh-Dole the federal government did not own all inventions made with federal support. The claim the government did own all such inventions is simply not true. The Department of Defense, for instance, was adamant that contractors should have the right to own inventions made in defense contracted research. The NIH and NSF IPA programs permitted–no, required–each participating nonprofit to take ownership of each invention made with federal support when the nonprofit decided to file a patent application on the invention. More generally, the Kennedy patent policy of 1963 made it express that federal agencies could allow contractors to own inventions made with federal support, even for research contracts that otherwise were required by federal statute to start with a claim of federal ownership. [Agencies could allow such ownership upfront, contract by contract, or could allow such ownership after an invention had been made and reported, if doing so was in the public interest.

For nonprofits, then–especially those doing the bulk of federally sponsored research, and that from the NIH and NSF–the IPA program meant that the nonprofits, not the federal government, could step in and own any invention made with NIH or NSF funding whenever they wanted–or at least whenever they chose to file a patent application. The IPA program ran from the early 1950s to 1978, when it was shut down for good as ineffective. At best, there was a two-year gap between the end of the IPA program and Bayh-Dole. Even so, the implementing procedures for the Nixon revision of the Kennedy executive branch patent policy for those two years still allowed federal agencies to allow contractors to own, contract by contract or invention by invention. If a federal agency chose not to do so, it was because the agency determined it was not in the public interest not to do so, not because some statute or executive branch policy required federal ownership.] Continue reading →

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Nixon’s Need and Encouragement

Posted on December 3, 2018 by Gerald Barnett

In a series of articles we have dealt with the monopoly meme. The monopoly meme argues that the true purpose of patents is the corporate right to exclude all others from practicing an invention. Without this right of exclusion, so the meme goes, no one will use any invention and no one will develop the invention and therefore the public will not benefit from the invention. “What is available to all will be developed by none.”

The monopoly meme generally dismisses the role and rights of inventors in the use of the patent system. What matters is that a single company–one that’s wealthy or that can attract investors–gains exclusive control over an invention and “develops” it for commercial advantage. Without the “incentive” of exclusive control, neither companies nor investors will be motivated to “take the risk” to develop any invention, and without companies and investors, the public then will not have the benefit of any invention, let alone inventions made with federal funding, and that federal funding then will be wasted.

Here’s President Nixon’s version of the monopoly meme, from a March 16, 1972 explanation for changes in the Kennedy patent policy:

One important barrier to the private development and commercial application of Government-sponsored technologies is the lack of incentive which results from the fact that such technologies are generally available to all competitors. To help remedy this situation, I approved last August a change in the Government patent policy which liberalized the private use of Government-owned patents. I directed that such patents may be made available to private firms through exclusive licenses where needed to encourage commercial application.

Continue reading →

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15 USC 2218(d)

Posted on November 23, 2018 by Gerald Barnett

A federal statute passed in 1974 establishes a federal policy with regard to inventions made with federal support–15 USC 2218(d). Folks wrapped up with Bayh-Dole don’t often mention 15 USC  2218, which establishes the authority of the administrators of federal agencies to enter into contracts for research and to perform other administrative functions. Among these, 15 USC 2218(d) addresses federal claims to inventions and discoveries:

(d) Inventions and discoveries

All property rights with respect to inventions and discoveries, which are made in the course of or under contract with any government agency  pursuant to this chapter, shall be subject to the basic policies set forth in the President’s Statement of Government Patent Policy issued August 23, 1971, or such revisions of that statement of the policy as may subsequently be promulgated and published in the Federal Register.

The Nixon patent policy revised the Kennedy patent policy of 1963 and required a codification of the policy in the Federal Procurement Regulations, which was finalized in 1975. The codification featured standard patent rights clauses to be used in all federal research and development contracting unless a federal agency could justify an exception that better served the public interest.

Thus, by 1975 federal policy had a uniform executive patent policy that was expressly endorsed by Congress, backed by a thorough codification of the policy that included patent rights clauses to be used by all federal agencies and provided for contractors who met certain conditions to own inventions arising in federally supported research or development.

Continue reading →

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Thanksgiving 2018

Posted on November 22, 2018 by Gerald Barnett

It’s Thanksgiving here in the United States.

It’s a good time to give thanks to (and for!) all the people who come up with things new and intriguing–whether by accident or design, whether directed or random, whether paid or free, whether looking to make a mint or happy with the pleasure of finding things out.

And it’s a good time, too, to give thanks to (and for!) all the people who are willing to work with and for and on behalf of people and their new and interesting things to improve things in this mysterious and strangely ever-giving world of ours.

Introducing new things into established orders turns out to be not all that easy. Established orders have their own rationales for why they are what they are, and have their own plans for how they will change. New things coming in from outside, or leaving from the inside, don’t set so well.

We should give thanks, too, to all the smugglers and enablers and facilitators and defectors and cheaters and those that look the other way and those that choose not to comply or force compliance, and even those that repeat unfounded myths about innovation and federal law and policy, and those who by their own accidents of administration set the stage for others to mess with established orders.

It’s a big wide weird world. Stuff gets done anyway, despite the urge to own and manage, despite mania for process and procedures, despite ideology and despite anarchy, despite IP and despite open, despite selfishness and despite altruism. It seems that we humans have been on a hunt for new tools since before we were fully conscious of our hunt.

So, thanks for the desire to hunt, to be gruntled, to be enough curious and desirous and optimistic that we keep pushing our imaginations, our ability to observe, our making records of what we observe, and reasoning, stumbling, fighting, and cooperating our way to new things drawn from the apparently endless frontier of what the world must be, despite whatever appearances it may have at first and later habitual glance.

 

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“Government” rights in federally supported inventions, 2

Posted on November 21, 2018 by Gerald Barnett

We might ask, then, what happens if a contractor does not acquire ownership of an invention made in the performance of work under a federal funding agreement. The answer is that 15 USC 2218(d) remains in effect, and even though the Federal Procurement Regulations no longer exist to codify the Nixon patent policy, and even though the replacement Federal Acquisition Regulations are based on Bayh-Dole’s standard patent rights clause, the Nixon patent policy, now without the bother of codification, applies.

The Nixon patent policy sets out conditions under which the federal government should acquire rights (Section 1(a)):

Where . . . [four conditions] . . . the Government shall normally acquire or reserve the right to acquire the principal or exclusive rights throughout the world in and to any inventions made in the course of or under the contract.

Notice that the general requirement for government acquisition has nothing to do with whether a contractor owns an invention–just that the invention was made “in the course of or under the contract.” Even though the codification of the Nixon policy includes a definition of “subject invention” that is one “of the contractor,” the codification’s standard patent rights clause also requires contractors to have patent agreements to “effectuate” the delivery of invention ownership to the government. If the government has the right to receive title, then that title comes through the contractor via the required patent agreement, and so the contractor will own all such inventions, and they will be subject inventions. Bayh-Dole forgets all this and doesn’t require any such patent agreements and furthermore does not stipulate that a federal agency should have any expectation of ownership except in the failure of a contractor, having acquired an invention, to disclose it or file a patent application and follow through on that application. So there’s no standing requirement for government ownership in Bayh-Dole. Bayh-Dole expressly preempts it by preempting the Nixon patent policy requirement of 15 USC 2218(d)! Continue reading →

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“Government” rights in federally supported inventions, 1

Posted on November 20, 2018 by Gerald Barnett

Bayh-Dole requires federal agencies to use a patent rights clause that includes a provision under which contractors who obtain ownership of a patentable invention made in the performance of work under a federal funding agreement and elect to retain that title must grant to the government a license. The wording matters. Here’s 35 USC 202(c)(4):

With respect to any invention in which the contractor elects rights, the Federal agency shall have a nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world . . . .

The requirement states a licensee (the federal agency that made the contract) and a scope (to practice and have practiced for or on behalf of the United States . . . throughout the world). Bayh-Dole does not define “United States” and so one might think “United States” is just a handy synonym for the federal government. But no.

In the Kennedy and Nixon patent policies, the grant of license is to the “Government” and Government is defined to be the federal government, state governments, and domestic municipal governments. Here’s the old Federal Procurement Regulations (1975) restatement of the Nixon (1971) patent policy: Continue reading →

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Does Bayh-Dole Require a Written Assignment?

Posted on November 19, 2018 by Gerald Barnett

Does Bayh-Dole require a written assignment?

No. But Bayh-Dole is screwy. I’ll elaborate.

Look all you want, there’s no assignment requirement in Bayh-Dole. Heck, the Supreme Court looked for an assignment requirement and couldn’t find it. Here’s how the majority opinion in Stanford v Roche put it:

Nowhere in the Act is title expressly vested in contractors or anyone else; nowhere in the Act are inventors expressly deprived of their interest in federally funded inventions. Instead, the Act provides that contractors may “elect to retain title to any subject invention.” 35 U. S. C. §202(a).

. . .

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. 

. . .

But because the Bayh-Dole Act, including §210(a), applies only to “subject inventions”—“inventions of the contractor”—it does not displace an inventor’s antecedent title to his invention. Only when an invention belongs to the contractor does the Bayh-Dole Act come into play. The Act’s disposition of rights—like much of the rest of the Bayh-Dole Act—serves to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more.

There is no authority in Bayh-Dole for inventors to be forced to give up ownership of their inventions–not to contractors and not to the federal government. Furthermore, Bayh-Dole expressly preempts all other statutes (but for Stevenson-Wydler and any future law that references Bayh-dole), so there’s nothing outside of Bayh-Dole that a federal agency can rely upon to insist that inventors give up their rights in federally supported inventions. (Well, there is 15 USC 2218(d)–but that’s a long story for tomorrow.) Continue reading →

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University policy beyond higher purposes and loopholes

Posted on November 17, 2018 by Gerald Barnett

The University of California Standards of Ethical Conduct (Regents Policy 1111) states that individuals must set aside their own ethical judgment and comply with institutional policy, conform to institutional roles:

Each situation needs to be examined in accordance with the Standards of Ethical Conduct. No unlawful practice or a practice at odds with these standards can be justified on the basis of customary practice, expediency, or achieving a “higher” purpose.

Each member is expected to seek clarification on a policy or other University directive he or she finds to be unclear, outdated, or at odds with University objectives. It is not acceptable to ignore or disobey policies if one is not in agreement with them, or to avoid compliance by deliberately seeking loopholes.

The university’s statement of ethics announces that it is beyond the control of the individual. No individual may conceive of a motive beyond compliance with the organizational demand. “Higher” purposes are unethical purposes. Even seeking to avoid compliance by “seeking loopholes” is unethical. Individuals must “seek clarification” from university officials on any organizational demand that is otherwise stupid. Individuals authorized to speak for the otherwise mute and fictional person of the university decide what words will control individual practices. Individuals cannot be trusted to use their own judgment.

A university policy of commercialization through monopoly exploitation of patents is placed beyond the control of the individual inventor and even beyond the control of the individual university patent licensing officer. It is declared as a matter of institutional policy that to seek “loopholes” around “commercialization” is unethical.

For inventions taken broadly we must then add to university claims of ownership interest and financial interest a claim that the university protects its personnel from their own necessarily unethical behavior–behavior that’s unethical because it does not comply.

To ask what patent policy should control federal research contracting or should control university claims on inventions already presumes that the purpose to be achieved is the control of individuals by organizations. The policy that comes to mind, then, is reflexive policy: policy that restricts the organizational imposition of policy. You know, taking seriously Vannevar Bush’s idea from Science the Endless Frontier of the “free play of free intellects.”

Reflexive policy is the one form of policy that organizational thinking cannot tolerate. In institutional speak, ethics means compliance with institutional policy not commitment to a common standard of virtue or integrity or character. Emotivism holds there is no such standard and diversity argues that such a standard is not even desirable. Yet institutions insist on imposing their own arbitrary standards in the form of policy statements.

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