Bayh-Dole Compliance

A law firm, Sterne, Kessler, Goldstein & Fox, PLLC, has posted an article on Bayh-Dole compliance written by attorney John Covert, “Patent Prosecution Tool Kit: Federally Funded Inventions and Compliance with the Bayh-Dole Act.” The advice given here is typical, and unfortunately “typical” means in a number of places simply wrong. And there’s more. But first let’s work through the wrongness, and by doing so learn something more about Bayh-Dole and its advocates.

The article starts with basic Bayh-Dole wrongness:

Any invention conceived or reduced to practice with the assistance of the Federal funding is subject to the Bayh-Dole Act.

This is not true. Bayh-Dole defines a subject invention to be an “invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement” (35 USC 201(e)). The article drops three critical elements of scope that limit what inventions come within Bayh-Dole and its standard patent rights clause. Continue reading

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On Technology Transfer Metrics, 3: Money

Universities don’t track their transfers, the federal government does not track university transfers, and professional organizations and nonprofits do not track university transfers. Law firms don’t track university transfers. Venture capital firms don’t track university transfers. Pretty much anyone who has something to gain from the activity is not also tracking transfer activity for outcomes. There’s no public reporting, no public oversight, no place for public involvement–even though, presumptively, all this university technology transfer effort is supposed to be for the public benefit. Apparently, the public will best benefit from institutional actions if the public is excluded from the processes and everything is kept secret. Makes one wonder, at least.

The AUTM licensing survey is useless for tracking technology transfer–even if one wanted just to know whether any technology was actually being transferred. The AUTM survey does not consider the transfer of technology (but rather only patents, licenses, money, and startups). Outcomes–actual transfers–are not tracked. AUTM also does not track adverse consequences–faculty giving up university work in disgust, bitter fights among research team members over royalty shares, companies pulling out of affiliates programs or dropping consortium memberships, companies refusing to adopt a new “technology” because of the university’s patent position.

The AUTM licensing survey is useless in another way. I spent nearly two decades in university licensing. I never used the “data” we had to collect to supply to AUTM for its survey. We had to keep two sets of records–one set to supply to AUTM and one set for ourselves. It’s not that the numbers in the two sets were different–the records tracked different things. AUTM wanted to know how much we spent on patenting. We wanted to know how much we were spending and not getting reimbursed. To get reimbursed meant that someone else–multiple companies, say–were paying for acquisition of technology.

More generally, the primary–if not only–thing that senior administrators care about with regard to “technology transfer” is net income. “How much money are you making that we get?” That’s it. That’s the primary metric. If a university patent licensing office hit it big–talking millions a year from a patent license–the best thing of all to do would be to shut down the licensing office altogether until the licensee stopped paying, and then start things up again. But no, university administrators can’t do that because they are so fixated on money that they think if they got one amazing deal, then by converting everything over to a bureaucratic, managed system of patenting and licensing, then they will make even more money. It is a sort of gambling addiction. And it’s not even “I got lucky at blackjack so now I’ll start counting cards and make a system of winning.” It’s more like “I got lucky at blackjack so now I’ll start stealing systematically from neighbors’ garages to get enough money so I can be lucky again and again and then I’ll pay them all back.” Continue reading

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On Technology Transfer Metrics, 2: Management

There are uses for metrics in business. One is to make management decisions. There’s a repeated bit of nonsense–you can’t manage what you don’t measure. There’s a veneer in truth in that, along the lines of “if you measure it, then you can respond to the measurements.” But even in sports, afloat in statistics, the goal is not to get more first downs in a football game or more hits in the defensive zone in hockey–the goal is to win games and in the process make the game exciting to watch, to be part of. As Deming put it:

Nothing becomes more important just because you can measure it. It becomes more measurable, that’s all.

And as Don Peppers puts it, in an article that I pulled this quote from,

Quantifying things has now become an easy way to escape responsibility for using ordinary human judgment, or for taking a considered, intelligent point of view.

And there’s the rub for efforts to measure, or quantify, “technology transfer.” Continue reading

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On Technology Transfer Metrics, 1: Issues

Let’s follow up on the fact that there’s no publicly available–free–data source to track university to industry technology transfer. There’s no non-free data source to track such transfer, either. You would think there would be.

To get at metrics, let’s distinguish three separate issues: management metrics, public metrics, and federal policy metrics.

First, there’s the metrics one uses to manage a university technology licensing operation. For that, one starts with the approach one is going to take. Open innovation follows different parameters than does relying on patent monopolies, and patent monopolies (with default exclusive licensing) behaves differently from pushing out startups for economic development. And for all that, focusing on patentable inventions is an altered dynamic from focusing on copyrights, data, and materials, and focusing on research services differs from focusing on proprietary positions. Add to that running a compulsory participation program–the university owns everything, even what it does not know it owns and even what it is wrong for it to claim–differs from running a voluntary program–present to us stuff you think it would be helpful for us to support and we will consider it.

In short, if you don’t know what you are doing, cannot decide among these approaches, then it makes perfect sense to report a set of abstractions like inventions reported (inventions and  non-inventions), patent applications filed (of all sorts, count provisionals and then count full utility filings, and then count each divisional, continuation, continuation-in-part, reissue, PCT, and national phase filings as an application), patents issued (in any country), total licenses (anything over $1,000 a pop, say), and income (regardless of basis–patenting reimbursements, realized equity, license issue fees, license maintenance fees, license milestone fees, settlements, judgments, and the like). But these metrics are useless for management. They are more like bragging metrics, or metrics for people who don’t know what to look for, or metrics to make a case that a licensing office needs more funding (“look at all that potential!”). Continue reading

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Freely available data resources to track US university technology transfer

I answered a Quora question. Here it is.

Are there any freely available data resources to track technology transfer activity between universities and commercial businesses in the US?

Here’s my answer.

No. And that’s quite amazing.

Most universities publish an annual report on their technology transfer activities, but those reports don’t list inventions reported, and for each, what’s been patented, what’s been licensed, and with what scope (assigned, exclusive, non-exclusive), and what has happened after the license (nothing, research use, internal company uses, development with more patented inventions, commercial products, etc.).

Most universities also publish on the web a “technologies available for licensing” list, but they don’t list technologies no longer available for licensing—because they didn’t obtain patents or the patents have expired or the inventions have been listed as “inactive” or the invention has been licensed exclusively.

The Association of University Technology Managers does an annual survey of licensing activity. That sounds nice, but the survey collects mostly useless information. Inventions are conflated with non-inventions. Patented inventions are conflated with inventions and non-inventions that aren’t patented. Stuff is not sorted or traced through. So what’s reported as an invention in a given year is not related to what’s patented in that year or what’s licensed. One just counts: we received x reports of invention, filed y patents (across our whole portfolio), obtained z patents (again, across our whole portfolio), did zz licenses (across … ). Most of the transfer activity involves inventions (and other stuff) reported in prior years. One very active piece of software, for instance, could be licensed scores of times per year for a decade. And a single reported invention may result in four or five issued patents over a number of years, what with divisionals, continuations, and continuations in part. Continue reading

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A major law firm’s new FAQ on Bayh-Dole, 4: More Mindless Administrative Compliance

We are nearly done with this FAQ from a major law firm purporting to give advice to small companies regarding Bayh-Dole. We are working through a list of 12 administrative compliance steps singled out as the essence of the law–those incentives that you thought were to be a form of enticement, but now you begin to see the bureaucratic humor in the choice of words. Ignored are all those Bayh-Dole objectives that have to do with public benefit, use of inventions, American jobs, and free competition. But no matter, innovation is about compliance, and compliance means proper, timely paperwork, and without paperwork, don’t even think about getting funding from a sophisticated investor using a sophisticated law firm–here, “sophisticated” means “can’t get Bayh-Dole right but it doesn’t matter because the whole point is to beg you to get the paperwork right so you can become deal flow.”

Anyhows. The FAQ continues with the things a company has to do to comply with Bayh-Dole’s patent rights clause.

7. File a non-provisional application within 10 months of the filing of the provisional application.

Yes. Continue reading

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A major law firm’s new FAQ on Bayh-Dole, 3: Mindless Administrative Compliance

We are working through a FAQ on Bayh-Dole that doesn’t hesitate to delight and entertain with compliance porn. Remember, the FAQ started out with the claim that Bayh-Dole was intended to “provide incentives to promote commercialization”–which isn’t rightly defensible (there’s no such statement of objective in the law, nor any incentives offered). But all we get is a storm of complicated compliance requirements. Apparently the path to commercialization lies in tons of petty paperwork required by federal agencies, where “incentive” is a code word for “almost entirely but not quite entirely unlike incentive.”

FAQ: What are the terms and conditions if the company takes title to a Subject Invention?

Again, Bayh-Dole’s verb is “retain” not “take”–what are the terms and conditions if the company elects to retain title to a subject invention?

A company must:

1. Grant the government a nonexclusive, irrevocable, paid-up license to use the Subject Invention throughout the world.

Nope. The license is to “practice and have practiced.” Continue reading

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A major law firm’s new FAQ on Bayh-Dole, 2: Subject inventions

We are working through a sparkling fresh FAQ on Bayh-Dole by a major law firm, apparently directed at small companies fool enough to consider taking SBIR funding from the federal government.

Now we must get into the deep mud. The FAQ fumbles toward an all-important question, but doesn’t get there because the FAQ does not grasp the architecture of Bayh-Dole and instead of making anything clear, the FAQ repeats phrases from the law without indicating that the words are fraught with meaning. This would be the place to demonstrate that there’s a lot going on, that a great IP attorney could guide you, fool company, through it all, and don’t worry the details because that’s what the great IP attorney is there for. But alas, no.

FAQ again: What inventions are covered by Bayh-Dole provisions?

This is a poorly framed question. Continue reading

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A major law firm’s new FAQ on Bayh-Dole, 1: What is Bayh-Dole?

Wilson Sonsini, a big law firm, just published “Basics of the Bayh-Dole Act: FAQs.” The document appears to be directed at companies getting SBIR/STTR awards. The document is filed under “Client Advisories.”

The FAQ, as a rhetorical piece, makes it clear that Bayh-Dole allows a company to keep title to inventions that it acquires that were made in work receiving federal funding, but to keep that title, there’s a ton of mindless bureaucratic tasks that are so difficult to describe that the FAQ cannot seem to get any one of them right. By simple reasoning, then, no small company thinking about SBIR funding could possibly do better–but they better. A firm like Wilson Sonsini is known for its work with technology investments. The implication is that such firms are watching you small pickup companies, and you had better have your paperwork in order when a big dump comes through to consider an investment, buyout, or merger.

Let’s work through the FAQ and see what it advises.

The first FAQ question is “What is Bayh-Dole?”

Bayh-Dole refers to a law (spearheaded by Senators Birch Bayh of Indiana and Bob Dole of Kansas) passed in 1980

So far, so good. Continue reading

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The Dole-Bayh Act: Preference for United States Industry

Before there was the Bayh-Dole Act, Senator Dole drafted a version of the law. We are looking at various sections. Today, the Preference for United States Industry. In Bayh-Dole, this is 35 USC 204. But in Dole-Bayh, it is Section 205 (the Dole-Bayh section 204 has to do with the federal government getting a share of royalties from nonprofits and small company licensing).

There are two parts to Section 205. Here’s the first.

Let’s work through this provision, and then compare with Bayh-Dole. Continue reading

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