The NIH’s View of Bayh-Dole Compliance, 6

Research Enterprise has been examining the NIH’s representation of Bayh-Dole. So far we have seen that the NIH persists in citing a 1995 document that gives “guidance” that the Supreme Court in Stanford v Roche (2011) rejected. But the NIH hasn’t bothered to take down the document or revise it, or change any copy on the web that relies on it. We have also seen that the NIH apparently doesn’t understand much of anything about how Bayh-Dole operates in its substantive provisions. Most everything that matters, apparently, has to do with the finer points of paperwork compliance. Let’s drive that point home by looking at some NIH guidance for reporting, “Patents Part Two: A Closer Look at Reporting.”

The guidance here takes the form of general advice about managing inventions for patenting.

Here we cover types of patent applications, invention reporting requirements, and compliance advice. But first, a word to the wise.

And the word to the wise?

Patent Before Public Disclosure

When it comes to your invention, you should be thinking “first comes patent, then comes public disclosure.”

In other words, before publicly disclosing any details of your invention, such as in a publication, apply for a patent.

This is strange advice. First, in the US there’s a one-year grace period for publication before filing a patent application. Thus, the NIH apparently argues that obtaining the right to exclude others from practicing an invention in foreign countries is more important than announcing research results for others to use. Don’t even go to the problem of the added cost of going after foreign rights up front. One patent attorney I worked with for a long time once said (I paraphrase), “I’ve never seen a university foreign patent amount to anything.” The word to the “wise” then is to be sure to get those useless foreign patent rights before anything else.  Continue reading

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The NIH’s View of Bayh-Dole Compliance, 5

We are working NIH’s not so tasty guidance to participants in its SBIR and STTR programs directed at small businesses. We reach the NIH’s account of the “principal features” of Bayh-Dole, at least with regard to “intellectual property” requirements:

Principal Features of the Bayh-Dole Act

Organizations are required to establish a written agreement with all employees to disclose promptly each subject invention made under a federally sponsored program and to execute all papers necessary to file patent applications.

And here’s the first principal feature–of all things–the written agreement requirement. Well, the written agreement requirement is not in the Bayh-Dole Act. It’s not even in the implementing regulations. It shows up in the standard patent rights clause. There’s some logic to why it is there–we have just been through all that–but the written agreement is most certainly not in the Bayh-Dole Act.

Just to be clear: the principal feature of the Bayh-Dole Act is that federal agencies are limited in the conditions under which they can require a contractor to assign to the federal government an invention made with federal support if a contractor has otherwise acquired ownership of that invention. That’s the essence of 35 USC 202(a).


  • pre-empts other laws, but only when the contractor owns;
  • provides protocols for federal agencies to vary from the restrictions;
  • provides default requirements for contractors to retain ownership of inventions;
  • provides requirements for contractors to use inventions for public benefit on reasonable terms, mostly waivable by federal agencies.

The upshot is that Bayh-Dole creates a pipeline of patent monopoly rights in federally supported research to private companies, in secrecy, without public accountability, and with no enforcement of the public protection requirements in the default patent rights clause.

In practice, that pipeline principally exits to serve the pharmaceutical industry and by extension the biotech venture investment industry. The vast majority of federally supported inventions never emerge as products, but are held behind patent paywalls anyway. Money is made trading on speculation of future value of the patents. The rare products that do emerge are then sold at monopoly prices, not on “reasonable terms.” The claim made is that no product would ever emerge from the pipeline without having the benefit of a full patent monopoly.

Thus, the fundamental claim about Bayh-Dole–the principal feature–is that the federal government should subsidize the monopoly interests of speculators on health-related discoveries financed in the public interest by the NIH and other federal agencies.

Look, then, at how the NIH describes the written agreement. First, they double up “subject invention” and “made under a federally sponsored program.” The appearance is that the defining characteristic of a subject invention is that it is one that has been supported by federal funding. But the defining characteristic that matters is that the invention is owned by a contractor. Any invention–even ones made in work receiving federal support–that is not owned by a contractor is not subject to Bayh-Dole. “Subject invention” then includes “made under a federally sponsored program.” The thing that an SBIR recipient might want to know, rather, is that Bayh-Dole doesn’t apply until the recipient owns a given invention made under a federally sponsored program. Continue reading

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The NIH’s View of Bayh-Dole Compliance, 4

Here’s the NIH offering an overview of Bayh-Dole for its SBIR and STTR programs. Much of the “information” here appears to be drawn from an NIH Q&A document from 1995. That document, “A ’20-20′ View of Invention Reporting to the National Institutes of Health,” presents a view of Bayh-Dole that the Supreme Court rejected in Stanford v Roche (in 2011). After Stanford v Roche, the NIH should have reviewed all its published guidance on Bayh-Dole and removed or corrected all statements that ran against the Supreme Court interpretation of the law. But no. Just like other agencies–most especially NIST–the NIH ignores Stanford v Roche and goes its merry way on Bayh-Dole.

I groused about NIH’s 20-20 document five years ago here at Research Enterprise. And five years before that. But let’s look at it afresh, since it’s been nearly a decade, filtered through NIH guidance for small businesses with regard to Bayh-Dole.

Bayh-Dole Act Background

The Bayh–Dole Act is US legislation dealing with intellectual property arising from federally funded research.

Nope, just patent rights and PVPA. Bayh-Dole is part of federal patent law. Furthermore, on its federal contracting side, Bayh-Dole deals only with those patentable inventions that a contractor owns.

This Act encourages researchers to patent and market their inventions by guaranteeing patent rights.

Nonsense. Nothing in Bayh-Dole encourages researchers to patent and market their inventions. The patent system, if it is used, is to be used to promote utilization of inventions. That must be too hard to think about. To require inventions to be used is to impose a working requirement. We might say then that Bayh-Dole introduces into  federal patent law a working requirement for inventions made with federal support that are acquired by a contractor. Continue reading

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The NIH’s View of Bayh-Dole Compliance, 3

We are working through NIH guidance on Bayh-Dole reporting requirements. In the process we are making note about how thoroughly NIH misrepresents Bayh-Dole. Sloppy? Indifferent? Does it matter?

The next bit is going to be a bother:

If it helps, just assume that NIH has things backwards. Then it almost makes sense. The Supreme Court made it clear in Stanford v Roche that inventors own their inventions, even those made with federal support. Bayh-Dole does not disturb that ownership. Bayh-Dole gives no special privilege for anyone to take ownership of inventions from inventors. Bayh-Dole manages the priority of claim between a grantee/contractor and the federal agency only once a grantee/contractor has taken ownership of an invention from an inventor. Continue reading

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The NIH’s View of Bayh-Dole Compliance, 2

A while ago, I worked through a slide in an NIH presentation about Bayh-Dole compliance. The conclusion there was that the presentation was sloppy, lacked important details, and misrepresented the Bayh-Dole standard patent rights clause. There are other accounts of Bayh-Dole compliance from NIH. Let’s look at another, the NIH version of the iEdison “Intellectual Property Reporting Guidelines.

In this document we have a table that shows the differences between paper and iEdison reporting, along with the various requirements. Take a look at the first requirement:

Let’s work through this restatement of the (f)(2) written agreement requirement. There’s much that is not compliant. First, the written agreement at (f)(2) of the standard patent rights clause is specific to subject inventions–not “all” inventions but only those inventions owned by the contractor, the “grantee.” The NIH ignores the distinction–and just where making that distinction would matter. The NIH goes further out on a limb:

The agreement to be obtained by the grantee/contractor organization is that the employee will abide by the terms of the patent rights clause.

The (f)(2) agreement has no such requirement. Here’s what does happen: when a contractor/grantee complies with the (f)(2) written agreement requirement (no one does–ha!), it makes each employee a party to the funding agreement. The part of the funding agreement that becomes the employee’s personal responsibility is to disclose subject inventions (we will get to this) to the contractor/grantee, to sign papers to permit patent applications to be filed, and to sign papers to establish the government’s rights in subject inventions. NIST has added an additional obligation, that the employee must assign subject inventions to the contractor/grantee, which makes garble of the written agreement. Continue reading

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Bayh-Dole Up Your Counsel, 4

We are working through the UpCounsel account of Bayh-Dole. It’s not all terrible. There are some useful points to come. Overall, however, the work here is sloppy, misleading, not what one would expect for a barrel full of part-time legal help offering their services.

Does the Bayh-Dole Act Have Any Controversies?

One of the lesser-known details of this law is that Bayh was a lame duck member of the Senate at the time. His term had ended after he lost his re-election bid to Dan Quayle, who would later become Vice President. This act was Bayh’s last major legislation, but it had political opponents.


Outgoing President Jimmy Carter considered a pocket veto. He didn’t believe that such important legislation should happen during a lame duck session. He also wanted a more comprehensive law. Eventually, Carter’s advisers persuaded him to sign the bill, which he did on December 12, 1980.

And that proposed law was backed by Sen. Harrison Schmidt, the former astronaut, with many co-sponsors.

Since Bayh and Dole had to work together quickly, the law had a few omissions.

No–they had plenty of time, starting with the introduction of S. 414 in 1979. Omissions? What omissions?

The largest one is how the law applies to nature and the human body. The Supreme Court eventually ruled in Molecular Pathology v. Myriad Genetics that a business couldn’t claim ownership of genes.

This is an issue for patent law, not Bayh-Dole. Bayh-Dole applies to federal agencies. Perhaps UpCounsel thinks of these as “government bodies.” There we go. Continue reading

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Bayh-Dole Up Your Counsel, 3

I won’t belabor the problems in the next section of UpCounsel’s account of Bayh-Dole. The major provisions of Bayh-Dole are 1) a public covenant that runs with patent property rights on inventions arising in federally supported research or development–and specifically on a new category of patentable invention defined in federal patent law call the subject invention; 2) authorization for federal agencies to deal in exclusive licenses for inventions acquired by the federal government; 3) restrictions on how federal agencies can contract for inventions as research deliverables, including the specification of provisions to be included in standard patent rights clauses unless a federal agency can justify an exception.

What Are the Major Provisions of the Bayh-Dole Act?

The major provisions of the Bayh-Dole Act are as follows:

All non-profits can retain a full claim on innovations made with the help of federally-funded research. Universities also fall into this category. The only exception is if the government states upfront that it will keep ownership of any innovations discovered during the project.

Nonprofits can choose to keep title to federally supported inventions that they have otherwise acquired ownership of. There are multiple exceptions to the standard patent rights clause. The “exceptional circumstances” determination does not merely involve the government taking ownership–any change to the standard patent rights clause must follow the exceptional circumstances determination.

Universities can and should file patents on their innovations. Otherwise, the government retains the right to take control of the invention. The Bayh-Dole Act attempts to legislate universities into more aggressive reactions to innovation.

There is no “can and should.” If a university has obtained ownership of a federally supported invention, it has an obligation to file a patent application. There is absolutely nothing in Bayh-Dole that “attempts to legislate universities into more aggressive reactions to innovation.” That’s laughable, if even comprehensible. Bayh-Dole is directed at federal agencies. At best (where at best may mean less horrific), Bayh-Dole prevents federal agencies from readily requiring inventions as research deliverables and makes it more difficult for those in federal agencies who desire to grant broad public access to such inventions to be able to do so. Continue reading

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Bayh-Dole Up Your Counsel, 2

This is UpCounsel’s 11 minute Q & A on the Bayh-Dole Act. We are working through it, Mystery Science Fiction Theatre 3000 style. Are you Joel? Am I Tom Servo? And who is the mad Dr. Forrester who keeps making us deal with these Bayh-Dole fakographic/FAQ/Q&A “summaries”?

What Does the Bayh-Dole Act Do?

The federal government funds countless projects in a given year. Some of them lead to innovations worthy of patents. Prior to this legislation, inventors of any such innovations had to sign over ownership to the United States.

“Countless” is hype. Inventions, not “innovations.” And what makes an invention “worthy” of a patent other than that it is new, non-obvious, and useful? Oh–perhaps it is whether a university administrator thinks the patent can be exploited to make money. In any event, this part is garble.

As for the second sentence, it simply isn’t true. The IPA program permitted over 50 universities and nonprofits to take ownership of inventions made with NIH and NSF funding–the primary funding sources for universities. For other inventions, the executive branch patent policy permitted agencies to allow nonprofits to retain ownership of inventions based on a case-by-case determination that such ownership would be in the public interest. The objection raised by Bayh-Dole advocates was that these determinations could take a long time, and federal agencies did not always agree that a private patent monopoly was in the public’s interest. Bayh-Dole precludes case-by-case determinations and arbitrarily requires federal agencies to allow nonprofits to retain ownership of inventions made in projects receiving federal support, regardless of any given nonprofit’s capability to manage inventions, its past performance, and the purposes of the federal funding.

With the introduction of this legislation, the federal government negated its claim on patents. As of 1980 [sic], inventors from small businesses working for the government could earn patents. Non-profits that receive federal funding can also gain patents.

Bayh-Dole limits how federal agencies can claim inventions arising in projects receiving federal support. Bayh-Dole allows federal agencies to determine there are exceptional circumstances and require assignment of inventions. It’s just that Bayh-Dole requires a convoluted, contestable process for that determination. Continue reading

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Has NIST finally created a foobar standard patent rights clause?

Words in laws ought to mean something.

According to Bayh-Dole’s standard patent rights clause, the initial contractor must require its employees to make a written agreement to establish the government’s rights in subject inventions.

But, but, but . . . subject inventions are defined as ones already owned by the contractor.

Inventors then must have no rights in subject inventions with which to establish the government’s rights. On the face of it, the written agreement here makes an empty requirement: inventors must agree to establish the federal government’s rights in inventions for which they don’t have any rights to establish the federal government’s rights.

Same for the NIST addition of an assignment requirement. Inventors have nothing to assign to the contractor, either, if a subject invention is already owned by the contractor.  Continue reading

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Bayh-Dole Up Your Counsel, 1

A lawyer staffing service and web site, UpCounsel, has a friendly page that offers “everything you need to know” about the Bayh-Dole Act. They promise you can learn what you need with an “11 min read.” I think it’s something of a bait page, slapped together to get search engine hits rather than to provide anything close to accurate information about Bayh-Dole. Let’s see.

What Is the Bayh-Dole Act?

The Bayh-Dole Act gave universities, non-profits, and other small businesses the ability to earn patents to inventions. This law settled a longstanding issue about the patenting of federally-funded projects.

Bayh-Dole gives no-one any “ability” to “earn patents.” Nor did it settle any issue regarding patenting of “projects.” There’s no way you would learn anything from these two sentences, and if you already know what they were “intended” to mean, then you could not possibly learn anything new from them, as they merely remind you of what you already know.

The Bayh-Dole Act establishes patent property rights pertaining to inventions arising in federally supported projects (35 USC 200) and which are owned by a party to the funding agreement. We might call that a public covenant that runs with such inventions. Patents on inventions arising in such projects are not ordinary patents. There are restrictions on how a patent owner may use such a patent. Bayh-Dole also authorizes federal agencies to grant exclusive licenses to inventions owned by the federal government, but only after an agency makes a determination that an exclusive license is necessary. Finally, Bayh-Dole sets limits on the interest a federal agency can have in an invention arising in a federally supported project after a nonprofit or small business contractor has acquired ownership of such invention. Such inventions are called “subject inventions” and Bayh-Dole’s contracting provisions apply only to subject inventions, and not to inventions before they become subject inventions. Continue reading

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