[Updated for the 2018 NIST regulatory revisions.]
If you are working on a grant at a university, and the grant is from the US Government, and your university has accepted a standard patent rights clause in the form of 37 CFR 401.14, then your university has agreed to require you to make a written agreement of the following form:
Agreement to Protect the Government’s Interest
Title of Proposal: _________________________________________________
Funding Agency: ________________ Federal Contract #: _________________
Pursuant to the standard patent rights clause at 37 CFR 401.14(f)(2), I hereby agree (i) to disclose promptly in writing to University personnel responsible for patent matters using a University-provided disclosure form each subject invention I make within the planned and committed activities under the Federal Contract in order that the University can comply with the disclosure provisions of the patent rights clause of the Federal Contract, and (ii) to execute all papers necessary (a) to file patent applications on subject inventions and (b) to establish the government’s rights in the subject inventions.
I understand that the subject inventions to be disclosed to the University are only those inventions I have made under the Federal Contract and that the university has acquired from me.
Signed: __________________________ Date ______________________
Printed Name: ____________________
If you haven’t signed such a document, then your university is not in compliance with its federal funding agreement obligations.
A policy statement that you must comply with the terms of any grant is not sufficient, as the requirement that must be complied with is one directed at the university. You are not required to comply with anything in the grant funding conditions with regard to inventions but for the university acting to require this agreement of you. If the university fails to do so, that is the university’s problem, not yours.
Furthermore, the above agreement is entirely distinct from agreements under which the university requires you to assign ownership of inventions to the university. Such agreements aim to protect the university’s interest, but are not tied to specific grants, and do not have the effect that arises when one signs the agreement stipulated in 37 CFR 401.14(f)(2). An agreement to assign to the university, whether a promise to assign, a present assignment of future rights, or an acknowledgement of an obligation to assign upon request concerns only the interests of the university, and not the government, and stands outside any given funding agreement.
Typically the university-directed agreement is made upfront, at some point such as employment, or when an administrator gets a hot urge to bully about the faculty with some new claim to power. In any event, well ahead of any possible need for it. The (f)(2) agreement, however, only becomes a requirement *after* a specific federal funding agreement has been accepted by a university. It is only *then* that the university is required to require the (f)(2) agreement, and then only *for the specified funding agreement* that carries the (f)(2) requirement. Some federal funding agreements may have different patent clauses, because of a finding of exceptional circumstances or other allowable conditions. Thus, you can tell whether your university is even making the attempt to comply with their federal funding agreements by whether the requirement to sign an agreement comes along with a new grant, or happens in some random, independent manner.
The requirement at (f)(2) in funding agreement standard patent rights clauses has an effect very different from that of a university-based agreement. The (f)(2) agreement joins the investigators, as potential inventors, to a particular funding agreement. Those investigators become parties to the funding agreement, via the patent rights clause, via the (f)(2) requirement, under which they agree to, and their university authorizes them to perform, the three actions set forth in the agreement–to disclose to the university those subject inventions that the university owns (as only they will know they have invented); to sign paperwork to allow patent applications to be filed (as only the true inventors can sign some of such paperwork); and to establish the government’s rights in inventions (because under federal patent law an invention is owned, initially, by its inventor; therefore before anything else, it is the inventor to whom the government turns to obtain rights by license or title, absent any other action with regard to disposition of invention ownership).
Stop and gather up your senses. The (f)(2) agreement, when executed, makes certain potential inventors parties to the federal funding agreement. By definition, these potential inventors become contractors. The university, by requiring the (f)(2) agreement, necessarily waives any claim it may make on these future inventions based on the federal award–use of federal money, use of university resources directed to the work specified under the award, use of university resources contributed in addition to that work. As a contractor, when a potential inventor invents within the scope of the funding agreement, the invention is owned by the inventor and therefore is a subject invention. But that subject invention is not at that point a university subject invention. It is an inventor-employee subject invention. The controlling patent rights clause is 37 CFR 401.9, not 37 CFR 401.14 as it is for the university. The inventor-employee as a contractor has the right under 35 USC 202(a) to disclose the invention to the federal government and elect to retain title to it. And if an inventor does so, then the inventor also has no obligation to file any patent application, per 37 CFR 401.9–and unlike the requirement to do so for universities and other institutional contractors under 37 CFR 401.14. Got it now?
This is the true soul of Bayh-Dole, which is a law regarding procurement contracts involving inventions, and if one is going to procure inventions, then the place to start is the original owner of the invention, and that is the inventor. The (f)(2) agreement functions as a release by the university for employees to deal directly with the government. It is an essential element of the procurement relationship for inventions. As a party to a funding agreement, the inventor becomes then a “contractor” within the definition of the law, and thus the invention that is made becomes a “subject invention,” that is, an “invention of a contractor that is conceived or first actually reduced to practice in the performance of work under a funding agreement,” or as the explanatory section of the implementing regulations has it, the “planned and committed activities of a government-funded project.” That little word “a” turns out to be important. There is not just one contractor–the university–but potentially as many more contractors as there are inventors.
Thus, the (f)(2) agreement is an essential first step in any procurement relationship. With the (f)(2) agreement in place, a university’s obligation to the government in the event of a subject invention is simply to convey any report of the invention to the government in a timely manner. That is it. Yes, there are a few other things that a university has to do regardless of any invention: designate personnel responsible for patent matters, educate employees on the importance of timely reporting inventions, and require the (f)(2) agreement. There is nothing else that is required. Everything that matters for compliance is covered by the (f)(2) agreement. The university fails to elect to retain title? Doesn’t matter–an invention is not the university’s until the university goes out of its way to accept assignment. Fails to obtain assignment of the invention? Doesn’t matter. The invention is “of a different contractor”–the contractor that has compliance obligations until title is assigned is the inventor-as-contractor not the university-as-contractor.
With the (f)(2) agreement in place, compliance with the standard patent rights clause in Bayh-Dole is *absurdly simple*. There is nothing difficult about it at all. Yet I have yet to find a single research university that has complied with the (f)(2) requirement. Unfortunately, if your university has not required you to make the (f)(2) written agreement, then even if you fill out the above form and sign it for the grant you are working on, it doesn’t quite work. You cannot force your way into becoming a party to a funding agreement: the university has to delegate that role to you. This is all about how contracts are managed, how one party may include others by assignment, substitution, or subcontract.
It is all the worse if your university has a policy that says that you cannot be a party to a research agreement. Such a policy necessarily conflicts with a policy that states that you will comply with all the requirements of any research agreement. And it conflicts with the particular requirements of the standard patent rights clause in federal funding agreements, which, as it turns out, require universities to act so as to make their investigators (employees other than clerical and non-technical workers) parties to a tiny bit of the funding agreement, conditional contractors as it were responsible for the part of the work that they are uniquely responsible for: their actions regarding inventions.
Indeed, if you invent, and do not assign ownership of the invention to anyone (even if they stamp their feet and throw sticks in the air), and the funding agency allows you to keep that ownership because you wish to use the patent system yourself to promote the utilization of what you have invented with federal support, then the regulations implementing Bayh-Dole at 37 CFR 401.9 instruct federal agencies, following 35 USC 202(d), are instructed to treat the inventor as if the inventor were a small business contractor–not a university or nonprofit contractor.
The university you work for, if its administrators have chosen to ignore the (f)(2) requirement, probably are very hot to try to patch up how they propose to comply with the standard patent rights clause. For this, their typical response has been to try to tighten their claims on your work.
They recognize that a policy statement under which you are told that you agree to assign inventions to the university when the university requires such assignment as a condition of a grant doesn’t work. Of course, they don’t quite get why it doesn’t work. They think that it would work if the promise to assign were turned into a present assignment, which they then think will self-execute so that you never will have ownership of your inventions–or will have ownership for the tiniest interval of legal time between the recognition that you have invented and that the invention is within the scope of a federal funding agreement and the next moment in which the title to the invention flies away from your lab, or your car, or your bathtub, and settles into a new home in an administrator’s office. But the reason that the promise to assign policy statement does not work is not that at all. It is because there is no requirement in the standard patent rights clause that the university must get title, or requirement assignment of title, or anything like that. The university cannot require assignment of inventions, however the assignment is to be made, as a condition of complying with a federal funding agreement, and certainly not as a condition of complying with Bayh-Dole, which at this level as nothing whatsoever to do with things.
The imposition of the requirement to assign to the university must arise from some other authority than that of the federal funding agreement, or federal law, or federal policy. The problem is, that in substituting the obligation to assign to the university, the university is not restoring its compliance with the federal funding agreement. It is not “just the same thing done differently” but rather a “very different thing done to look almost the same.” In one case, that of the imposition of assignment, the university claims that federal policy, or law, or contracting demands that the university take immediate ownership of your scholarship, and inventions made in federal research are exactly what scholarship is all about. In the other case, that of complying with the (f)(2) agreement, the university acknowledges that federal policy, law, and contracting requires the university to delegate to its investigators the primary responsibility for the disposition of title to the inventions they make.
This other case preserves the independence of faculty (and other) investigators using federal funds, reflects the same deference that Bayh-Dole mandates that federal agencies make toward the use of federal funds, and allows the chain of possible actions to develop an invention–as a research tool, for public use, as a standard, to bring collaborators together, as a means of cross-licensing to gain access to other technology, to engage those making improvements in common cause, and even to invite investment, create startup ventures, and develop commercial products–starting with the personal judgment, and choice, and initiative, of the inventors. For a national innovation policy, entrusted to elite investigators selected to be led by independent faculty, worthy of federal grants for the work they propose to do, what a great way to do it.