War and Publification of Medicine Development, 2

The “war on disease” usage asserts a primary federal government role in directing the research and development of disease-directed therapies. The “war” usage asserts that the “market” for treating disease with new therapies–inventive therapies–is a governmental market, and that patents have no particular meaning in this market. This is especially the case given that the federal government awards patents in the first place. Why should the government give any inventor or company the right to disrupt the government’s efforts to fight anything, including disease?

It is worth here pausing to consider the broad policy implications. If the federal government announces that research concerning public health is within the government’s proper interest, and that the results of such research should be made available to the public, then the private effort to profit from the results of research in this same area–public health–are at odds with the public policy. One might say, contrary to that policy.

Consider water. Say that the federal government were to declare that clean drinking water should be made available to all, and that is a proper and vital interest of government to advance treatments to assay and treat water. The federal government declares war on unsafe water and undertakes to support, develop, and provide such new water technologies. Any advances in science and technology directed at water during this war are publified. If you are going to do research in this area, then you are necessarily part of the war effort or working to exploit and disrupt the war effort. Continue reading

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War and Publification of Medicine Development, 1

In 1944, President Roosevelt asked Vannevar Bush to respond to four questions (or, perhaps it was Vannevar Bush who arranged for President Roosevelt to ask him four questions). These questions formed the foundation for his report Science the Endless Frontier. The first question asked how the new science developed in military research during the war could be made available to the public for beneficial use. The second question was this:

With particular reference to the war of science against disease, what can be done now to organize a program for continuing in the future the work which has been done in medicine and related sciences?

Let’s consider this “war of science against disease.” On the surface, we can read it as simply a flowery metaphor for using the tools of science to understand and cure diseases. If one is into logical abstractions, then that’s probably the end of it. But “war of science against disease” signals much more than that, and it is worth considering this signalling in the context of federal research and invention policies.

Roosevelt’s premise underscores the translation of the war theme–an institutional construct designed to shift around institutional thinking–from the conflict on the battlefields of Europe, Asia, and Africa to civilian purposes:

New frontiers of the mind are before us, and if they are pioneered with the same vision, boldness, and drive with which we have waged this war we can create a fuller and more fruitful employment and a fuller and more fruitful life.

There’s a bunch happening under the surface here. Continue reading

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University breach of Bayh-Dole’s standard patent rights clause

Let’s get at the consequence of two non-Bayh-Dole provisions injected into the standard patent rights clause stipulated by Bayh-Dole: the (f)(2) written agreement requirement and the (g)(1) requirements on subcontracts. In particular, let’s look at what happens when a university contractor fails to comply with these two provisions together. Universities routinely breach the standard patent rights clause–get this–by insisting that employees must make agreements with them in order to comply with federal grant requirements.

Bayh-Dole requires federal agencies to use a default patent rights clause in all funding agreements for research or development with nonprofits and small businesses unless an agency can justify a different clause, and then makes it difficult for an agency to justify anything different. Bayh-Dole specifies what must be in this default patent rights clause (35 USC 202(c)) and authorizes the Secretary of Commerce (35 USC 206) to

issue regulations which may be made applicable to Federal agencies implementing the provisions of sections 202 through 204 of this chapter and shall establish standard funding agreement provisions required under this chapter.

Nowhere does Bayh-Dole authorize the Secretary of Commerce to mess around with the default provisions that Bayh-Dole requires. Federal agencies are authorized to mess with the default provisions, but only if they move through the proper procedures to do so. But what did the executive branch do once Bayh-Dole became law? Ah, yes, stick on their own provisions to the standard patent rights clause and make three such clauses (37 CFR 401.14(a)-(l), 37 CFR 401.14(a)-(j) and (l), and 37 CFR 401.9, which selects various provisions from 37 CFR 401.14(a))  instead of just one, plus one standing alternative clause required by the Department of Energy (previously 37 CFR 401.14(a)(b) and not conflated as a conditional in 37 CFR 401.14(a)). Continue reading

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A non-compliant Bayh-Dole written agreement at Yale-5

We are working through Yale’s “Patent Policy Acknowledgement & Agreement.” We have been looking at Paragraph 6 of the Yale patent policy to try to make sense of what inventions Yale really does assert an interest in. Paragraph 6 demands all inventions be reported when Paragraph 1 demands only the inventions made under University auspices must be reported. Which is it? Paragraph 6 will get into it by taking on inventions made in faculty consulting. But before it does so, it leaves us with one last thing:

All inventions made or conceived under circumstances involving University facilities or personnel are the property of the University.

This assertion is at odds with the procedure set out in Paragraph 3 of the Patent Policy. In Paragraph 3, inventions made under auspices are reported, initially screened for auspices and Yale interests, some are then given detailed evaluation, and based on that evaluation, Yale or its partner may make a decision to file a patent application. Only then does Yale’s procedure provide for Yale requesting assignment of the invention. Only then does an invention become “the property of the University.” But here in Paragraph 6, inventions become the property of Yale without any of the procedure in Paragraph 3. So which is it? Is it really so difficult that someone drafting this policy cannot bounce back and forth between paragraphs all of two pages apart and get things right? And why the different wording? In Paragraph 1, it’s “inventions which result from . . . intellectual activity performed under University auspices.” In Paragraph 3, it’s “inventions of the kind referred to in paragraph 1”–has no one heard of definitions? In Paragraph 6, though, it’s “involving” or “using” rather than “resulting from.”

Yale’s patent policy then launches into inventions made in faculty consulting. Much of this is unnecessary bother. Here’s part of the fussiness: Continue reading

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A non-compliant Bayh-Dole written agreement at Yale-4

We are working through Yale’s “Patent Policy Acknowledgement & Agreement.” Most recently we borked about employment and faculty freedom. Now let’s look at how the agreement deals with consulting. It tries to worry the problem of conflicting obligations–Yale doesn’t want to agree to deliver rights in inventions to a sponsor only to find that its own personnel have obligated those same rights to someone else. It is a real worry worth worrying, but Yale deals with it ineffectively. What can be worse than a real worry that you think you have dealt with but haven’t? If one hasn’t covered the problem and instead has a piece of untested paper instead, and then lets down one’s practice awareness–that’s a recipe for inviting the very thing one has stopped worrying about.

So here is provision 3 of the Yale agreement:

3. I do not have any consulting or other agreement with any third person or organization which grants rights that are in conflict with this agreement, nor will I knowingly enter into any such agreement.

This provision, too, is interesting. There’s the oddness of “any third person or organization” where we would expect “third party.” There’s the oddness of the restriction to agreements which “grant rights” rather than a broader “would conflict with the obligations I hereby undertake.” Again, this provision smacks of misplaced angst over the Stanford v Roche situation. But there, Stanford officials knowingly encouraged a Stanford employee to “visit” Cetus for nine months to learn Cetus’s PCR technology for use in areas that Cetus was already exploring for use. Stanford officials knew and approved of Cetus’s requirements with regard to possible inventions. One of Stanford’s faculty members–and the post-doc’s supervisor at Stanford–even served on Cetus’s board. So, Stanford knew. Even if there had been a conflict between a promise to assign and Cetus’s added present assignment, Stanford had waived any claim it could make under its own policy. All that was left was the hope that somehow Bayh-Dole took precedence over Stanford’s waiver of interest and forced Stanford to take title, so it could sue Roche for a quarter billion dollars for using an invention that, so the general university argument goes, could not be used but for university patenting and grant of an exclusive license to enable financial investment to develop the invention for use. Continue reading

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A non-compliant Bayh-Dole written agreement at Yale-3

We are working through Yale’s “Patent Policy Acknowledgement & Agreement.” The agreement requires personnel signing it to “abide” by Yale’s patent policy, as if that patent policy does not apply but for this agreement. That’s a bit odd. Even odder, then, is that the agreement appears to be focused rather on research rather than the other things identified by Yale patent policy as within the scope of auspices–teaching and “other intellectual activities.” Here’s the second requirement:

2. If in the course of research conducted under University auspices, as defined by the Patent Policy, I make any invention (whether or not patentable), I will provide to the Yale Office of Cooperative Research a written disclosure of the invention, . . .

Here we are well outside of the written agreement requirements and Bayh-Dole’s scope. The premise for requiring this “Acknowledgement and Agreement” is compliance with terms of research contracts. But here, the agreement eliminates that restriction and simply claims “course of research conducted under University auspices”–much broader than “conducted under the terms of an extramural contract for research.”

For Bayh-Dole, Yale’s scope is not right. Bayh-Dole’s definitions of funding agreement and subject invention do not have to do with what the “course” of “research” might be, but rather whether an invention has been made in “work” that has received, somewhere, federal support. It then does not matter for Bayh-Dole if an invention is made under Yale’s “auspices.” What matters is that the invention was made (i) in the work and (ii) is owned by a contractor engaged for some part of that work. An invention, then, could be made by an employee of a contractor outside the “course of research” and still be within the “performance of work” for which the federal government has provided support–but perhaps not to Yale for the bit that is outside the “course of research” that Yale is concerned with here. Continue reading

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A non-compliant Bayh-Dole written agreement at Yale-2

Now let’s look at a “Patent Policy Acknowledgement & Agreement” from Yale University. Here it is:

Yale’s web site asserts that this agreement is required “for grant and patent compliance.” That’s a strange combination–grant and patent. One might think grant compliance with regard to inventions. But patent compliance? What’s that? Or is this just language to say everyone must sign because [important hand wave]. Turns out, even if everyone must sign, this agreement doesn’t do much for grant compliance, whatever it might signify about faculty subservience.

Given all we have been through to consider Bayh-Dole’s standard patent rights clause written agreement requirement, is this agreement said to be necessary for compliance indeed compliant with the written agreement requirement? Well, at least it *is* written, so we are off to a good start. Some policies just make an assertion that employees will comply. That surely is not good enough. Unfortunately, the rest of the Yale agreement makes clear it does not comply with Bayh-Dole’s standard patent rights clause requirement.

I understand that Yale University has a Patent Policy that applies to inventions made under University auspices.

This is just making the employee mouth words to defeat any claim that an employee didn’t know there was a policy. If Yale expects that faculty members don’t know that Yale has a patent policy and must put words in their mouths that they do, then how could Yale possibly argue that faculty should be in general bound by that patent policy? Certainly there’s no expectation on Yale’s part that there has been a meeting of minds on the matter, given that Yale indicates that faculty minds have not met the Yale patent policy and until now have not shown that they agree to be bound by it.

Yale makes faculty sign this agreement, as well, on the argument that the agreement is necessary for Yale to comply with the terms of extramural awards. But what research sponsor requires any organization providing research services to expressly re-require its employees to follow policy? If one found a situation in which an organization did not already have binding agreements in place with employees, one would be hard pressed to continue to want to contract for research with that organization. In such a case, one would want the special performance of a given employee, and not rely on the organization at all. One would demand to have an agreement directly with that employee who would do the work. One would not demand that the organization make the employee give up rights to the organization.

But wait–isn’t this exactly the situation if the employee is not actually an employee for research, such as almost always is the case with university faculty? And isn’t it a specific faculty member or team that one wants access to, not the organization other than as it provides services that make that access easier and more reliable? And wouldn’t one want from the organization then something more like a release so that one sponsoring research could have a relationship directly with that faculty member or team without being accused of tortious interference, but still have (and pay for) access to the organization’s facilities, equipment, and personnel to support the faculty member’s sponsored work?

Finally, just so you see this thing for what it is, if Yale has a policy under which it claims to require reporting of, and own, all inventions made under its auspices or using its facilities (which it does, as we will see), then what possibly could there be in any research contract acceptable to Yale that would cause Yale to require this Patent Policy Agreement & Acknowledgement? Whatever it is, it would have to otherwise violate Yale’s patent policy, it would have to be an exception to the general policy. Now if that were the case, then this patent agreement would be necessary only for those awards that presented exceptions, not for all awards, generally. But here Yale requires signature from everyone, all the time, as if all the awards Yale contemplates accepting somehow violate Yale’s patent policy and therefore require (in some administrator’s head) everyone signing off to indicate their acknowledgement and agreement with such breach of Yale’s patent policy. What do we get to? A patent policy so limited and misguided that every research agreement requires an exception to the policy. Isn’t that weird?

In practice, only one form of extramural research agreement requires a written agreement to be made by employees as a condition of the award, and that is a federal funding agreement operating under Bayh-Dole. That written agreement requirement does not require Yale to make its employees agree to Yale’s patent policy or agree to Yale’s claim to own inventions that they may make. That written agreement does not even require disclosure to Yale of inventions other than those that Yale has acquired ownership of–subject inventions. For that, the written agreement requirement is restricted to Yale’s employees–those persons for which Yale acts as the master and they the servants. There is no such written agreement requirement for volunteers, for independent contractors, for subcontractors–indeed, for subcontractors, the standard patent rights clause forbids Yale to have any interest in a subcontractor’s subject inventions as a condition of the federal award. For these personnel, Yale’s Patent Policy Acknowledgement & Agreement would openly violate the standard patent rights clause by asserting Yale’s interest in inventions that the standard patent rights clause forbids.

Now consider: if Yale’s faculty are not, generally, Yale’s employees in matters of extramural research but rather are only treated that way as an administrative short hand, but rather are released from their official duties to conduct research for others, using Yale’s facilities and personnel, for which Yale is compensated, then Yale’s faculty really are independent contractors with regard to research. This is certainly all the more true with regard to patentable inventions. Employment does not establish in the employer any equitable claim to own an employee’s inventions, nor does use of the employer’s facilities. That’s even all the more true when the employer approves of the use of the facilities as a condition of an extramural award, agrees to supply those facilities, and is compensated for doing so. Yale does not assign faculty to research tasks, does not direct that research, does not approve the results, does not decide when or if to publish.

Faculty are not employees for purposes of extramural research unless they expressly waive their academic privilege assured them under Yale’s policies and Yale then acts the employer, exercises the rights of an employer. If one works through these realities, then the standard patent rights clause written agreement requirement does not apply to Yale faculty under most circumstances and Yale has no obligation under the standard patent rights clause to require the written agreement, and furthermore, no right in contracting with those faculty in their non-employee research role to take an ownership position in their inventions. Yale’s patent agreement, because it is expressly conditioned on grant compliance, is then expressly non-compliant with Bayh-Dole, with federal law, with the standard patent rights clause.

If Yale wanted to assert an ownership position in such faculty inventions, it would have to do so, at least for federal awards, before and entirely outside of any compliance with those awards, or require faculty to give up their academic freedom and turn into Yale’s research employees prior to being allowed to participate in any federally funded work.

Any private sponsor of research worth its administrative brains would not find any assurance in Yale putting its Patent Policy Acknowledgement & Agreement under faculty noses for signature. Acknowledging there’s a policy does not do anything for whether that policy applies in any given situation or what the policy requires–or even why that policy is a policy at all and not something that’s already in one’s employment agreement or an agreement made at the time of employment or afterwards, with its own consideration. A policy, generally, binds the organization–binds those with authority to act for the organization. A policy may authorize the organization to bind employees and officers, but to get there, someone acting for the organization must do the binding. That’s what this “Acknowledgement & Agreement” apparently is intended to do–as we will see.

I also understand that Yale’s funding agreements with third parties, including the United States Government, impose certain obligations with respect to rights in inventions.

This is, sad to say, mealy mouthed. Let’s deal with the non-federal funding agreements. Such funding agreements are negotiated. Nothing in these agreements is imposed. Yale accepts the terms–indeed, Yale may demand the terms. Nothing, then, in non-federal funding agreements enters Yale’s system without Yale’s approval, if not also Yale’s action to insert requirements that then enter its system. In effect, Yale asserts that it can impose on employees whatever it wants, and employees must comply. Now if that’s what the Yale Patent Policy provides–that Yale can make up whatever requirements it wants and employees must comply, so long as Yale has gone to the bother to get a third party to agree that Yale can impose those requirements on its own employees,–then Yale’s Patent Policy cannot possibly be contractual because it lacks a meeting of the minds on something definite. If Yale can alter the deal at will, the deal cannot be an enforceable contract. It’s just a statement that employees must obey. And even that statement is open to challenge, given that Yale elsewhere in policy makes all sorts of assertions about faculty privileges. This is the stuff, then, of threats, not contracts. The Yale Patent Policy Acknowledgement & Agreement is a threat put in the clever form of an agreement.

Yale’s patent policy makes all this explicit in its Paragraph 7 “When Arrangements with Outside Organizations Override This Policy”:

Arrangements with outside organizations that propose terms which are exceptions to this Policy must be submitted to the President or Provost for review by the University with
the advice of the Committee on Cooperative Research, Patents, and Licensing. If approved by the University the terms shall be binding upon all members of the faculty, staff, and employees of the University conducting such research or utilizing such
facilities, and will supersede the provisions of the patent policy to the extent that the terms are inconsistent therewith.

Well, that’s a legal mouthful. Broken down, it says that Yale can change its patent policy any time it wants, provided a committee passes the change on to the President or Provost and they agree, and then everyone has to comply with the change. Again, that’s just demanding agreement to agree–or, another way, a threat. It’s hard to understand what changes to the Yale patent policy an outside organization might propose. That inventions aren’t disclosed? That they must be disclosed somewhere in Yale other than the Office for Cooperative Research? That royalties must be shared with research staff even though Yale doesn’t normally do that (and how they comply with Bayh-Dole on this point is an open issue for federal audit)?

This provision is a remainder from past policy regimes in which a university doesn’t make claims on faculty inventions and a sponsoring organization might require that the university do so or might require that inventors assign directly to the sponsor. That would be the sort of exceptions to policy that would come into play in extramural research contracting. That was especially true of federal contracts, in which, for nonprofits and especially in areas of public health, the federal government required assignment of inventions and would release inventions for private management via patents only if those requesting the release (contractors, or inventors) could show a better likelihood of public benefit from their control of the inventions. Otherwise, the federal agency would release the invention for all to use, including the inventor and the contractor. In a grasping invention scheme, where neither the contractor nor the federal agency release inventions for general access, both inventors and the general public get screwed over. Inventors have the right to use inventions they make in federal work only by license from the contractor or the federal agency–they have no expectation that they can leave the contractor’s employment and continue to use what they have invented without risking a claim of infringement. Talk about leashing up innovation.

Here, the Yale policy is nothing but fussy leftovers to once was a freedom-loving policy. Here is Yale’s patent policy from 1943 in its entirety:

It is the policy of the University that it or members of its faculties should not make profits from inventions or discoveries made at the University, or in connection with its activities, and especially from inventions or discoveries which may affect the health or welfare of individuals or of the public. In any case where for the public interest or the advancement of learning it may seem desirable to apply for patents covering inventions or discoveries so made, the inventor should bring the matter to the attention of the President for report by the President to the Prudential Committee of the Corporation. The Prudential Committee is hereby authorized to deal with each case according to its merits.

No profits from patents, especially ones involving health, and no patents without the approval of the Prudential Committee. Leave it at that. It’s a pretty simple statement, whatever one might want to complain about with regard to certainties. At its base, the policy assumes that patentable stuff will be rare, and it will be even rarer that an invention ought to be patented to advance the public interest or learning. Thus, it can be treated as a matter for the university president and a general committee to take up from time to time.

By 1958, Yale’s policy has morphed somewhat. There’s still the base statement–“In general it is not the policy of the University to hold title to patents.” But now the policy goes on to describe Yale’s relationship with Research Corporation, which gets a right of first refusal. The earlier policy’s scope of interest–“made at the University or in connection with its activities” becomes “auspices” and a special mention is made of facilities and persons, as if there were somehow inventions that might be made at Yale by persons not associated with Yale. There is also now a new Committee on Patents, suggesting that the volume of reporting has ticked up or that special expertise is needed to decide whether an invention should be patented and the like:

When an invention of any person associated with the University results from research conducted under University auspices or with the use of facilities under the control of the University, the inventor shall report the fact to the Committee on Patents.

It is then up to the Committee to decide whether to submit the invention to Research Corporation. If Research Corporation chooses to handle the invention, then the inventor will assign the invention to Research Corporation. Yale still stays out of it. If Research Corporation declines, and Yale declines to find some alternative, and the Committee on Patents doesn’t think the invention should not be patented, then Yale has no further interest in the invention. In Yale’s 1958 patent policy, inventors decide when something has been invented under Yale auspices or using Yale facilities. Inventors report the fact of the invention to a committee–and if the committee decides to refer the invention to Research Corporation, then the inventor discloses the invention to Research Corporation for review, and if Research Corporation accepts the invention for management, the inventor assigns the invention to Research Corporation for 15% of any future royalty income. The policy does not demand Yale see every invention or own every invention–instead, it expects inventors, if they think their invention has been made in research either (i) conducted under “University auspices” or not conducted under University auspices but (ii) “with the use of facilities under the control of the University,” then the inventors are to report their inventions to the Committee. In the 1958 policy, Yale’s interest in inventions is limited to research-originated inventions, and there only those research-originated inventions involving research under University auspices or using University facilities. Any other inventions are not Yale’s problem. To avoid a Yale interest, don’t do the inventing in sponsored research or in Yale buildings.

Here is the 1958 forerunner of the current Yale workaround to the patent policy:

The terms of proposed grants from, or contracts with, outside organizations or agencies respecting rights to patents developed as a result of research conducted under such grants or contracts, or with facilities provided by any such outside organization or agency, must be approved by the Committee on Patents and if so approved shall be binding upon all members of the faculty, staff and employees of the University conducting such research or utilizing such facilities and shall supersede the provisions of Sections I and II hereof to the extent they are inconsistent therewith.

Keep in mind that Sections I (objectives) and II (administration) are all there are. Yale won’t take title. Yale gives Research Corporation first refusal. Otherwise, except in unusual circumstances, inventors own their stuff and do what they want. The exceptions policy is restricted to research and concerns itself with research at Yale under contract and research in the sponsor’s facilities. There, sponsors have some say in what happens with inventions–and they may not want Research Corporation to have first refusal or they may not want any patenting, or in the case of federal agencies, they may want ownership of inventions for the purpose of releasing the invention to all, regardless of whether they use the patent system to publish the invention. Any changes approved by the Committee are binding on those involved in the research. Finally, notice that Yale’s personnel are described as “members of the faculty,” “staff,” and “employees of the University.” Three categories. Faculty members are not in the category of “employees of the University.” That’s interesting, no?

Now back to today. Here’s the Yale exceptions policy again:

Arrangements with outside organizations that propose terms which are exceptions to this Policy must be submitted to the President or Provost for review by the University with
the advice of the Committee on Cooperative Research, Patents, and Licensing. If approved by the University the terms shall be binding upon all members of the faculty, staff, and employees of the University conducting such research or utilizing such
facilities, and will supersede the provisions of the patent policy to the extent that the terms are inconsistent therewith.

The language is very similar, but the policy that is referred to has changed substantially. That policy is broader, claims Yale ownership, and demands disclosure of most anything, even stuff that Yale by policy does not have a claim to. The fundamental ambiguity here is the first restrictive clause: “that propose terms which are exceptions.” Is it “arrangements that propose terms which are exceptions” or “organizations that propose terms which are exceptions”? A basic rule of interpretation is that a modifier ought to modify the closest element. Here, that would be “organizations.” The provision then would read, “When an organization proposes terms that require an exception to be made to Yale’s patent policy . . . .” Yale would have no standing to propose the exceptional terms itself. But even here, what is going on? Just because an organization proposes terms that violate Yale’s patent policy, why would Yale accept those terms and push them through as an exception? Would not Yale’s first obligation to all involved be to resist those terms? Wouldn’t this be a matter of public purpose (as Yale’s patent policy emphasizes).

One could imagine that if those Yale personnel involved in the sponsored research wanted the exception that Yale might be somewhat inclined to waive its policy for them. We don’t get any guidance about what the driving issues are. However, if the “that propose terms” gets tied to “arrangements,” then Yale allows itself to propose arrangements inconsistent with its own policy so long as it gets approval to do so. Either way, the policy is open to change at the whim of the administration, and researchers and inventors appear to have no standing to be involved or to resist, short of refusing to do the work.

This exception procedure creates an open-ended method for Yale to insert requirements into a sponsored research agreement that it wants to add to its own patent policy, and then impose those requirements on its own personnel. Thus, Yale might expand its claims on inventions or require a non-compete clause or forbid consulting and the like. Not stuff an outside organization would require, but which an outside organization would not contest if Yale inserted the exceptions into any given sponsored research agreement. In those universities that had patent policies acknowledging much broader inventor freedoms (including using university facilities without making any special claims), administrators used this policy exception for contracts to insert a claim to university ownership into research contracts. Indeed, that workaround to liberal university patent policies (such as the one at the University of Wisconsin) is at the heart of the NIH’s and NSF’s IPA programs in the 1970s.

Now let’s look at federal funding agreements. We have had a close look at the written agreement requirement in the standard patent rights clause. The only obligations in the written agreement pertaining to rights in inventions are that (1) inventors will assign inventions that Yale owns to Yale and (2) inventors will assign or license to the federal government inventions they own and made under contract, provided that Yale has made them parties to the funding agreement. Bayh-Dole does not require inventors to assign inventions to prime contractors or to employers. The standard patent rights clause for nonprofits does not require inventors to assign any inventions to prime contractors or employers other than inventions those contractors and employers already own. (Some stuffiness here about the differences between assigning title and conveying ownership in an invention, and whether the assignment results in a transfer of title or memorializes in a written form what has already happened some other way to meet the paperwork expectations of the USPTO.)

We can ask, then, what are these “certain obligations with respect to rights in inventions” for federal funding agreements as far as employees–potential inventors–are concerned. Those obligations would be the ones required by (i) the written agreement requirement and (ii) the inventor patent rights clause at 37 CFR 401.9. Neither of these provisions has anything to do with providing Yale with leverage to take invention rights. If anything, the written agreement requirement, once Yale complies with it, precludes Yale from having an interest in any inventions of the inventor except those inventions that it is equitable under the circumstances for Yale to own–inventions made by employees hired to invent, assigned to research or experimental tasks with an expectation of inventing, directed to invent to meet some Yale-defined need. For anything else, reasonably, Yale is precluded from taking an interest by the fact that it has required of its employees something else–the written agreement–and therefore made those employees, for matters of their inventing, parties to the funding agreement with their own standing as contractors on matters of inventions.

The written agreement requirement does not require prime contractors to put their employees on notice with regard to the employee’s inventor patent rights clause obligation, nor that employees, once they become parties to the funding agreement have an obligation to disclose their subject inventions to the the federal government, to timely elect to retain title if they want to retain title, and, depending on what they then do, either publish without patenting, patenting and granting the government its license, or having started the patenting process and choosing not to finish it, assigning the invention upon request to the federal government.

In order to facilitate compliance with the terms of those agreements and applicable Federal regulations, I agree as follows:

Here, the standard patent rights clause is misconstrued as a “federal regulation” and it is left out who exactly is to comply with such regulations. The regulations that implement Bayh-Dole apply to federal agencies–they instruct federal agencies that they must use a patent rights clause, what provisions must be in that clause, how the clause may vary depending on the status of the contractor, and the procedures to be used to make changes to these clauses, adjudicate disputes, and the like. The standard patent rights clause, in turn, comes into play only when Yale becomes a party to a federal funding agreement.

There, other than the written agreement requirement, nearly everything else (there are some communications clauses) depends on Yale having acquired ownership of an invention made under contract. If Yale doesn’t acquire any invention, the only thing that would bring an invention made under contract within Bayh-Dole’s scope is the operation of the written agreement, which makes inventors become contractors, makes their inventions made under contract become subject inventions when they are made (conceived or first actually reduced to practice (=tested to show all elements of the invention work as intended)), and imposes on inventors the obligation to establish the government’s rights in those inventions.

Yale makes it appear that Yale is operating to comply with federal regulations, and is using this instrument to transmit that obligation to its employees. But that isn’t what the written agreement requires Yale to do. Yale is to put its employees in parallel standing to Yale, as parties to the funding agreement, and leave their inventions alone but for those that become Yale’s subject inventions as a matter of equity. A generalized policy claim on inventions is not necessarily a matter of equity. Certainly a policy claim merely based on some invention having been made under a federal contract is not an equity claim. The Supreme Court in Stanford v Roche made clear that employment was not a basis for an equity claim, and that Bayh-Dole did not vest inventions with employers or otherwise give employers some special right to take title to inventions made under contract. Bayh-Dole applies when a contractor obtains title, and is not some means to getting that title. Bayh-Dole does not create for Yale any equitable claim to inventions made under federal contract. The government’s interest is in its own rights to such inventions and does not care which contractor–prime contractor, subcontractor, assignee, employees of any of these, if contractors–owns such an invention. Yales obligation–to comply with its patent rights clause–is to ensure that its inventors also become contractors–and that’s what the written agreement is to do.

For all that, “facilitate” is the wrong verb. It is not that Yale requests help, as if Yale could do this all itself anyway, but cooperation makes its work easier. The correct verb is “comply” and the construction ought to be “In order that Yale may comply with the terms of these agreements, I agree as follows.”

But then, there has to be a set of provisions that are specific to the funding agreement that Yale has accepted–what is it that the employee as a potential inventor must do so that Yale can comply? Let’s see.

1. I will abide by the Yale University Patent Policy, including any amendments to it adopted from time to time, and I will execute any assignments or other documents necessary to comply with its terms.

Well this is strange! What is this doing here? The implication is that, but for this Patent Policy Acknowledgement & Agreement, inventors don’t have to comply. Otherwise, there’s no reason to put this statement here. Furthermore, as we have seen, this requirement amounts to an agreement to agree–the employee must accept whatever Yale puts in its patent policy. Yale could require that employees wear clown shoes and ride unicycles, or assign all their inventions to Satan or Baal or Comcast and apparently all Yale employees would have to comply. There’s nothing binding in agreements to agree. (The “any amendments” is lawyer patch to cover for the debacle of their persecution in the courts of Professor Fenn,)

While for non-federal contracts, Yale may require that its employees “abide” by the patent policy’s terms, for federal contracts, Yale must require instead the written agreement. Bayh-Dole does not care about a contractor’s patent policy. Bayh-Dole does not care that a contractor has any patent policy. Bayh-Dole is designed to operate without reference to a contractor’s patent policy, technology transfer operation, or anything else. A contractor does not have to have policies or even to have personnel designed for patent matters. A contractor does not have to take an ownership interest in any invention, file patent applications, seek commercialization, nada. Bayh-Dole is self-implementing via the standard patent rights clause and entirely conditional on a contractor acquiring ownership of an invention made under contract. If a contractor does not acquire that ownership, it has no obligation but for requiring the written agreement–it does not have anything to disclose, to elect to retain title for, to file patent applications on, or license or assign to the government, or report on the utilization of. None of that.

Bayh-Dole is entirely conditional, and so is the patent rights clause, but for the written agreement requirement, by which the contractor delegates, conveys, substitutes parties, assigns, subcontracts (pick your verb) the invention stuff to its employees for whom there might be some equitable basis for taking an interest (as there would not be for clerical or non-technical employees). If a prime contractor does not acquire ownership of any such invention, then for the invention to become subject to any Bayh-Dole’s patent rights clause, the inventors must have become contractors. Otherwise, Bayh-Dole does not preempt any other “Acts” and if no other Act applies, then executive branch patent policy applies, but no, that policy was amended by Reagan and the codification abandoned so that there in effect is no executive branch patent policy to govern inventions made under contract that are not owned by a contractor. What a cock up. And these are the brilliant bureaucrats that would unleash an innovation economy based on institutionalized research? Ah, we get what we deserve.

Yale has no obligation to obtain ownership of any invention made under federal contract. It has no special right to that ownership, no mandate to take ownership, no obligations whatsoever other than to comply with the written agreement requirement and pass the obligation to establish the government’s interest to inventors. For that Yale must make them parties to the funding agreement, require them to timely disclose to Yale inventions in which Yale has equitable ownership, assign those inventions to Yale, and otherwise sign paperwork to allow patent applications to be filed (by Yale or its assignees or the federal government) and to assign to the federal government or license to the federal government any other inventions made under contract.

That’s Yale’s obligation under its patent rights clause. When an employee-contractor invents, then the inventor patent rights clause at 37 CFR 401.9 applies to that invention, unless Yale has an equitable ownership interest in the invention and the inventor assigns that invention to Yale. Then the inventor has an obligation under the written agreement to sign paperwork as requested by Yale to permit Yale to file patent applications.

Nothing in this first provision complies with Bayh-Dole’s written agreement requirement.

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A non-compliant Bayh-Dole written agreement at Yale-1

Bayh-Dole’s standard patent rights clause introduces a requirement not in Bayh-Dole. 37 CFR 401.14(f)(2) requires contractors to require their employees, other than clerical and non-technical employees, to make a written agreement to protect the government’s interest in subject inventions:

The contractor agrees to require, by written agreement, its employees, other than clerical and nontechnical employees, . . .

This is not statutory material. It is not something in Bayh-Dole that stipulates a contractor’s employees’ obligations under the law. It is, rather, a regulatory requirement in the form of a federal contracting provision that the contractor take a specific action *after the contractor has accepted the funding agreement and become a party to it.* Bayh-Dole specifies what is to be in the standard patent rights clause. This written agreement isn’t there. How does the executive branch (that is, Latker, again) have authority to make up something outside Bayh-Dole (that he didn’t get into Bayh-Dole) and insert it instead as a condition of the operation of Bayh-Dole? Here’s the thing. The written agreement is itself part of a second patent rights clause–one specific to inventors who are also employees of a contractor. That’s how.

Bayh-Dole defines “funding agreement” so that a contractor may add new parties to the funding agreement by “any assignment, substitution of parties, or subcontract of any type.” These new parties Bayh-Dole then defines as “contractors”: Continue reading

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3 More Oddities of 35 USC 210

We are working through oddities of Bayh-Dole’s assertion of precedence over other Acts.

11. Consider some possible variations on 35 USC 210’s treatment of precedence. Here’s the present text of the start of 210(a) again:

This chapter shall take precedence over any other Act which would require a disposition of rights in subject inventions of small business firms or nonprofit organizations contractors in a manner that is inconsistent with this chapter

Why not remove “of small business firms or nonprofit organizations contractors”? It is an ugly construction anyway. Subject invention contains within it an express dependency on the definition of contractor. Contractor in turn includes small businesses and nonprofits–but also includes persons. If a person becomes a party to a funding agreement, then that person is also a contractor. It would appear that Bayh-Dole aims to exclude persons from the benefit of precedence, even if those persons are otherwise contractors and subject to Bayh-Dole’s contracting provisions. If that’s the case, then for persons, Bayh-Dole does not preempt other Acts, those Acts apply and one might think it is reasonable then that those other Acts take precedence because Bayh-Dole carefully chose not to assert precedence when it had the opportunity to do so. Continue reading

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10 Oddities of 35 USC 210

The Bayh-Dole Act does not repeal prior law with regard to inventions arising from federally supported research or development. Instead, it selectively preempts statutes (with some exceptions). Here is the start of 35 USC 210(a):

This chapter shall take precedence over any other Act which would require a disposition of rights in subject inventions of small business firms or nonprofit organizations contractors in a manner that is inconsistent with this chapter . . .

This statement is odd in a number of ways.

1. The provision does not repeal or amend prior laws. It makes Bayh-Dole out to be a law in conflict with other laws and asserts precedence. The other laws remain in effect until expressly amended (as some have been). If those other laws–the “Acts”–require inclusion of specific contracting language to make them effective, then that’s not happening. For such a thing to take place, there would have to be in each federal contract or grant or cooperative agreement a patent rights clause specific to each such Act, as well as the one required by Bayh-Dole.

Or, another way, there would be two patent rights clauses–one when an invention was made by a contractor into a subject invention and another for inventions that were not subject inventions but were still made under contract or otherwise within the scope of an Act. Continue reading

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