We are working through what Bayh-Dole did and didn’t do in managing federally funded inventions made at universities. If you are with me, we did a “thought experience” (not “experiment”). Then I got all grumpy about rhetoric. But that’s out of my system now, and we can review. In the world before Bayh-Dole, with a normal Patent Act, inventions made in research are personal to the inventors, they owe the government title on request as a condition of the award, and they convey title by a written assignment as provided by the Patent Act.
Universities gain the benefit of Bayh-Dole. They believe that exclusive patent positions are necessary to work the Little Linear Model. While the government wants the personal title one has, the university wants all the title there is. What’s at dispute is whether Bayh-Dole reflects the government’s interest, or the university’s interest. That is, in electing to retain title, are universities accepting the government’s interest, or are they claiming that the government’s interest is that they do whatever they will, with the rights they want, not the rights that the government otherwise would obtain as a deliverable?
The universities are making the argument that Bayh-Dole sneakily changed the Patent Act (the abynormal Patent Act), and changed the government interest to be whatever the universities want, and what they want is to make money licensing rights to monopolists, so that is the secret purpose of Bayh-Dole. (Oh, if this is twisting it–go back and read Dag Wags Dog, or Doping the System). The changes in the Patent Act were so sneaky that the Patent Office never realized it, universities never realized it, and only now is it coming to light how abynormal it all is. All this to try to *defend* Bayh-Dole.
Now, some more thought experience. Let’s say that Bayh-Dole aims to normalize the delivery of title and management of university requests to step in and take over what otherwise would be the government’s to dispose of. The aim then would not be to change things, but to make the treatment of these things in federal funding agreements–grants and contracts–uniform.
For this to happen, Bayh-Dole has to preserve a default that if the university doesn’t step in, then agencies get the opportunity to request the title as usual. This is the pathway if the university does not step in.
And it has to provide a protocol by which when a university requests to stand in for the government, it gets to do so *automatically*. That is, it does not obtain title to inventions *automatically* (since the government didn’t), but rather that the agency does not have to review the request with diligence before taking an action to allow it. The notice of election to retain title serves this function. It means: rather than title passing from inventors to the government at the government’s request, the university may make that request, and dispose of title according to the protocols of Bayh-Dole.
How does Bayh-Dole manage these two pathways? It really is genius. Bayh-Dole requires universities to require written agreements from employees–the research employees–to protect the *government’s* interest. That interest is in obtaining title (if need be) or in obtaining a royalty free license (otherwise), or in working directly with the inventors (if it comes to that), and in any event seeing that the objectives (all of them, not just one) of Bayh-Dole are met. That written agreement says, report inventions timely in reasonable detail, and execute all papers necessary as requested to allow patent applications to be filed and establish the government’s rights in the inventions. That agreement is personal to the investigators, to the inventors-who-may-be. That agreement reflects the special performance due the government. That agreement is specifically to protect the government’s interest, and to allow the government to establish its rights in inventions. The university has this obligation, but it is not about the university’s benefit or the university’s interest in inventions, patents, money, policy, compliance.
It is all there in 37 CFR 401.14(a)(f)(2).
It is by this written agreement that everything having to do with title happens in Bayh-Dole. If the university does not elect to retain title, then this agreement is the means by which the government may request title and get it as a deliverable. And if the government chooses not to request title, then no title has changed hands. It is with the inventors, and the government may allow the inventors, at their request, and with some delay to talk the tech transfer office down from the ceiling, to retain title to their inventions, per 37 CFR 401.9.
If the university does give notice that it elects to retain title, then what it gets is the benefit of that same written agreement. The university may request from its employee-inventors the title they otherwise would owe to the the government. That is what retaining title means. It ought to be very clear to anyone not paid to murky it. Retain as keep it back from passing to the government, rather than retain as in hold it automagically under the abyNormal Patent Act even before electing to retain title, only to have it spring up automagically with the inventors if one doesn’t elect title and the government waives its interest in title.
What the university gets is what the government would get. What is not clear at all is whether anything else that the university claims under its own IP policy it should get. Bayh-Dole says what the deliverable is, as a matter of federal law, and what is to be obtained and how disposed. Does it not pre-empt university claims on title? If Bayh-Dole says, if the university does not elect to retain title, and the agency chooses not to require the conveyance of title from the inventors, then the inventors may retain that title. That’s the federal position. It doesn’t say, the inventors may hold that position, but if the university’s IP policy claims the rights anyway, then so much for 401.9, and we have a second right of refusal, better than the first, since under a post 401.9 claim, as soon as the university gets title (under its own IP policy claim), it owes the government only what is assignable to it by the inventors–a much more limited set of obligations than under its own election to retain title via Bayh-Dole.
We may underscore: Bayh-Dole allows a university to elect to retain title. It does not say title vests upon invention with the university. It does not say that by electing to retain title the university has title. It does not even say that by electing to retain title the university must actually obtain title (since the university can assign its interest in obtaining title to, say, a research foundation, as a number do) and never hold title at all. Electing to retain title cannot possibly mean that the university already had it, automagicaly, under the abyNormal Patent Act.
Is it clear now? Is it clear the angle AUTM and others are taking? Why I call it the dag wagging the dog? Rather than look straight at the law and how it operates–which folks should know even by looking at their own practices–they drop out whole sections of the Act, such as the written agreements and the nature of electing to retain title. Instead they reason from bits of wording, and would turn the whole Patent Act on its head (and put it in a bottle labeled AbyNormal no less), and cancel otherwise valid private agreements after the fact in order to deal with their problem having to do with personal disposition of rights. Confiscate those rights! Make it as if they never were!
I call this position inventor-loathing. It’s short hand for failing to respect the idea that invention is a personal right established and guaranteed by the Constitution, and we ought to frame our practices around that, so long as we honor the Constitution. So I don’t give a rat’s ass about administrative efficiencies or presumptions or what would solve some bureauklept’s desire for money or satisfaction or power or convenience. Get it right, honor the inventor, think hard about those beloved processes and charts with boxes and arrows before you think invention is a commodity, that applying the process is better than any other prospects the public might have for promoting the practical application of each invention.