The laboratory and discovery

It’s a nice thought that faculty and students make their discoveries “in the lab” as a recent APLU infographic depicts.

There certainly are discoveries made in laboratory work. But discoveries are also made out collecting samples, and in work shops, and at computer workstations, and–this really eats at university administrators–not anywhere near university-controlled facilities. Discovery can arise in, say, conversation, or listening to a talk at a conference:

Here, for instance, is an account of Boyer and Cohen meeting up (from Sally Smith Hughes, Genentech: The Beginnings of Biotech):

In November Cohen and Boyer arrived in Honolulu for the conference, neither knowing the details of the other’s research. As it came time for Boyer to present, Cohen listened raptly to his description of EcoRI’s properties. His mid lit up when he heard that the enzyme cut DNA molecules predictably and reproducibly into unique fragments with sticky ends. IN a flash of insight, he wondered: could one use Boyer’s enzyme to sever a plasmid precisely and use the sticky ends to attach a second DNA fragment?

In other words, the groundbreaking discovery came at a conference. The lab work set up the discovery, but the discovery that was groundbreaking wasn’t in a lab, and wasn’t even the subject of the research that was going on in the labs.

Imagine if university administrators had gotten to Cohen and Boyer first, before they had met–they may well have filed patents on the stuff in the labs, and it may have been impossible to coordinate the licensing of those patents.

In a way, it is a fairy tale that research discoveries take place “in the lab.” The lab is a place someone goes to test something. The discovery is often the reason someone goes to a lab, not the thing that someone comes back out of the lab with. Continue reading

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Fenn and Shaw

Here are two court decisions at cross-purposes. In 1997, Shaw v The Regents of the University of California held that a patent agreement should be interpreted using common law of contracts and rejected the Regents contention that its patent policy was an administrative matter subject to its discretion to change and enforce at will.

We find no merit in the University’s suggestion that, as a public employee who is employed pursuant to statute, not contract, Shaw has no vested contractual right in his terms of employment, such terms being subject to change by the University.

When a public employer chooses instead to enter into a written contract with its employee (assuming the contract is not contrary to public policy), it cannot later deny the employee the means to enforce that agreement.

We also reject the University’s argument that the Patent Policy is a mere personnel policy which it may modify unilaterally. Although the University is entitled to revise its Patent Policy, it cannot do so with respect to Shaw because of its written agreement with him.

In 2003, in Fenn v. Yale, the court held that a patent policy could be changed at will by the university, and provided that an employee did not object to the changes, the changed policy would then apply (brackets in original): Continue reading

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The Key Provisions of Bayh-Dole

Now, with all that fusstation from the University of Pittsburgh out of the way, we might ask then what are the “key provisions” of Bayh-Dole that a university should make faculty and the public aware of.

Only One Key Provision

For universities, there is only one key provision in Bayh-Dole that actually matters. Everything else is contingent on discretionary actions. Here it is (35 USC 202(c)(1)):

That the contractor disclose each subject invention to the Federal agency within a reasonable time after it becomes known to contractor personnel responsible for the administration of patent matters, and that the Federal Government may receive title to any subject invention not disclosed to it within such time.

That’s a requirement for what must be in the standard patent rights clause. Here’s the version in the standard patent rights clause, then (37 CFR 401.14(a)(c)(1)):

(1) The contractor will disclose each subject invention to the Federal Agency within two months after the inventor discloses it in writing to contractor personnel responsible for patent matters.

There’s a bunch more administrative hoo-haw, of course about the level of detail, and that the report has to be written, and further any statutory bars, especially publications: Continue reading

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The University of Pittsburgh’s Fake News Summary of Bayh-Dole, 4

We are working through the University of Pittsburgh summary of the Bayh-Dole Act, and I at least am getting increasingly grouchy as I do. How can someone writing for university faculty “innovators” get things so wrong in some many places? That’s more of a rhetorical question than a metaphysical one, of course.

  • The University must provide the U.S. government with a nontransferable, irrevocable, paid-up, nonexclusive license (“confirmatory license”) to use the invention.

The “confirmatory license” is not in Bayh-Dole, and there’s a “throughout the world” left out, but no matter. The license required is “to practice and have practiced” not merely to “use” an invention. In the history of federal invention regulations, “practice” means “to make, use, and sell” and “have practiced” means “to have made, have used, and have sold.” That’s way, way broader than to “use” an invention. The license does not exist until it has been granted. The paper copy may confirm something–but what it confirms is compliance with the patent rights clause, not something that the government already has in the absence of anyone at Pittsburgh getting around to granting the government its license.

  • In granting a license to use the invention, the University also generally must give priority to small businesses, while maintaining the fair-market value of the invention.

This is nonsense! There’s nothing whatsoever in Bayh-Dole about maintaining the “fair-market value” of an invention. As Captain Haddock would say, “Billions of blistering blue barnacles!” Here’s what Bayh-Dole requires to be in the standard patent rights clause: Continue reading

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The University of Pittsburgh’s Fake News Summary of Bayh-Dole, 3

We are working through the fake history published by the University of Pittsburgh regarding the Bayh-Dole Act and its “key provisions.” “Fake” is too light a word for it, but it’s trendy and so people get the general idea. Really, what’s going on is material misrepresentation of federal law and regulations in a decades-old institutionally self-serving scheme to defraud inventors of the rights to their inventions. All this is put forward as virtuous, endorsed by law, and wildly successful. What better cover for intellectual fraud. No wonder university technology transfer is so complicated–it is built, in most places, on a lie.

The act ultimately has motivated more and more universities to become actively involved in the transfer of technology from the lab to market.

As David Mowrey has demonstrated, universities were active before Bayh-Dole. Many were involved in the IPA program up to its end in 1978. What Bayh-Dole has done is two-fold. First, it has induced (in a misrepresented form) many more university administrations to take patent management in-house. A few universities had done so before Bayh-Dole–notably, University of California, MIT, and Stanford. After Bayh-Dole, however, many more universities did so. Why? For one, Bayh-Dole was misrepresented as requiring university ownership. Second, Bayh-Dole was used to create the impression that the goal of federal research was commercialization rather than public benefit arising from the use of inventions. Bayh-Dole does not require commercialization, but it is drafted so badly that it is easy to deceive the casual reader. And since most university administrators and faculty don’t read the law or the implementing regulations, it’s just too easy to fool them.

The ability of universities, including the University of Pittsburgh, to retain title to and actively license these technologies serves as a tremendous incentive.

“Retain title” here is used without critical context. Here’s an accurate statement, if long-winded to make things clear what the University of Pittsburgh means by “retain title,” despite the muddy anchor of having read Pittsburgh’s statement first:

The ability of university administrators to retain title to inventions when they acquire that title and to attempt to license patents based on these inventions serves as a tremendous incentive to operate an invention management office as an internal university program.

I have no doubt that having a blank check from the government to keep any federally funded inventions university administrators acquire has served as a “tremendous incentive.” Continue reading

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The University of Pittsburgh’s Fake News Summary of Bayh-Dole, 2

We are working through the University of Pittsburgh’s account of the Bayh-Dole Act since AUTM has called it out as worth reading. We need to pause and consider some real history to work out of our imaginations the fake history implied by Pittsburgh’s account.

The government’s position on the use of patents is captured by this Congressional report by the National Patent Commission in 1945:

The Commission recommends that the Government as a general rule continue to pursue the historic policy of not exercising the right to exclude conferred by patents which it owns; of not attempting to exclude its own citizens from engaging in any enterprise; of not seeking to derive revenue from patents, and of not undertaking control by means of patents. Inventions covered by patents owned by the Government should be available for commercial and industrial exploitation by anyone, with, however, the recourse open to the Government to take different action in exceptional cases.

The National Patent Commission then goes on to discuss exceptional cases, such as where general access is not sufficient to attract the investment necessary to move an invention from its initial condition to a form from which the public can benefit. Much of what then becomes a quest for a “uniform” patent policy is one of debating whether the default should be open innovation, with some few things controlled by patent by the government (and its contractors), or whether the default should be monopolies in inventions, with only those things judged absolutely worthless permitted to fall into the public domain. The Kennedy patent policy describes the conditions under which the government should allow contractors to pursue monopoly positions–namely where private risk capital is necessary to bring an invention to the point of practical application, and then for only so long as is reasonable for that contractor to recover that risk capital from the practical application of the invention. Continue reading

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The University of Pittsburgh’s Fake News Summary of Bayh-Dole, 1

AUTM a few weeks ago pointed favorably to a description of the Bayh-Dole Act posted by the University of Pittsburgh. Let’s have a look, then.

The post is titled “What It Means for Technology Commercialization.” While “It” is ominous in these Steven King days, let’s say “It” is the clownish Bayh-Dole Act and not something yet more horrible. We will take Pittsburgh’s AUTM-endorsed account of Bayh-Dole section by section.

The Bayh-Dole Act is a federal law enacted in 1980.  This legislation, cosponsored by Senators Birch Bayh and Robert Dole, enables universities, nonprofit research institutions, and small businesses to own, patent, and commercialize inventions developed under federally funded research programs within their organizations.

So far, pretty good. Bayh-Dole was enacted in 1980–into effect in mid 1981. And Bayh and Dole did co-sponsor the bill in the Senate. And Bayh-Dole does, indirectly, “enable” universities and others to own inventions made with federal research funds. It’s an odd use of “enable,” however, and one has to know just enough fake history to have the courage to use “enables.” The fake history is that prior to Bayh-Dole the federal government in its contracting claimed ownership of all patentable inventions made with federal support FAKE. If a university got assignment of an invention, then the government made the university assign the invention to the government anyway IT HAPPENED A FEW TIMES. The government stockpiled patents and refused to license them to anyone FAKE, ensuring that the public would not benefit from any of the great research universities were otherwise doing FAKE. Bayh-Dole came along and reversed all this FAKE, by “enabling” universities to own inventions made with federal support. Continue reading

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A Brief History of “Of” in Federal Invention Regulations

In Stanford v Roche, the Supreme Court ruled that “of the contractor” in the definition of “Subject Invention” meant “owned by the contractor” and not “made by employees with the use of federal funds.” Here’s the Court:

Stanford asserts that the phrase “invention of the contractor” in this provision “is naturally read to include all inventions made by the contractor’s employees with the aid of federal funding.” That reading assumes that Congress subtly set aside two centuries of patent law in a statutory definition. . . .

In fact, this is what the universities, led by Bremer and Latker, were trying to do–induce Congress to set aside two centuries of patent law, and to get there, things had to be done subtly. More from the Supremes:

Construing the phrase to refer instead to a particular category of inventions conceived or reduced to practice under a funding agreement—inventions “of the contractor,” that is, those owned by or belonging to the contractor—makes the phrase meaningful in the statutory definition. And “invention owned by the contractor” or “invention belonging to the contractor” are natural readings of the phrase “invention of the contractor.” As we have explained, “[t]he use of the word ‘of’ denotes ownership.”

There’s a good argument that this little “of” ruined the whole cleverly crafted scheme by patent brokers to take from university inventors ownership rights in their inventions. Of course, the patent brokers couldn’t bear the thought of all those inventions going to the federal government, to be lost from the opportunity to profit from monopoly positions. So where did things go so wrong? Continue reading

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Getting off your UFRDA

In 1981, Senator Harrison Schmidt introduced a bill to replace Bayh-Dole with a more general law regarding inventions made with federal support, the “Uniform Federal Research and Development Act of 1981.” It doesn’t appear that the university patent brokers had much fondness for the bill, and it failed to pass, despite being co-sponsored by a number of senators.

Much of the UFRDA is plucked from Bayh-Dole, but often with a slight twist, and sometimes the slight twists are rather significant. The strategy of the law is to state those situations in which the federal government can require assignment of inventions, and for all other situations allow the contractor to own inventions made with federal support. Thus, here are some situations in which the government can require title:

(2) the restriction or elimination of the right to retain title to any subject invention is necessary to protect the national security nature of such activities;
(3) because of exceptional circumstances, acquisition of title by the Government is necessary to assure the adequate protection of the public health, safety, or welfare, recombinant DNA research being considered an exceptional circumstance;
(4) the principal purpose of the contract is to develop or improve products, processes, or methods which will be required for compliance with Government regulations;

This set does not show up in Bayh-Dole. Continue reading

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Nolo Press Still Confused About Bayh-Dole, 2

Now the Nolo page turns to Stanford v Roche. Given how Nolo can’t seem to get much at all right about Bayh-Dole, what do you think the odds are with Stanford v Roche?

Stanford v. Roche (2011): The Supreme Court Weighs in on Bayh-Dole

A 2011 Supreme Court case illuminated the power of the Bayh-Dole Act and cleared up some issues regarding assignments: specifically, the difference between a promise to assign a patent, and an actual assignment. (Board of Trustees of the Leland Stanford University v. Roche Molecular).

Totally inaccurate, other than the link to the case.

The Supreme Court did not discuss promise to assign vs present assignment. That was decided by the CAFC. The Supreme Court held that Bayh-Dole does not automatically vest title to federally funded inventions in federal contractors or authorizes contractors to unilaterally take title to such inventions. Justice Breyer’s dissent complained that the Court did not address the CAFC’s distinction between a promise to assign and a present assignment of a future invention. Breyer argued there should not be so great a distinction. Breyer’s point is a good one, but it runs to just the opposite of what is put here. If one follows Breyer’s opinion, it does not matter whether one promises to assign or makes a present assignment of an invention that hasn’t been made yet. Breyer’s argument is that the wording should not make a difference. It is the CAFC’s distinction that causes people to change the wording of their patent agreements. Continue reading

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