Why is the 1995 NIH "20-20" Guide Still Up?

At the University of Cincinnati Intellectual Property web site we find this NIH Guide, the 20 Questions About Extramural Invention Reporting:

The Bayh-Dole Act encourages researchers to patent and market their inventions by guaranteeing patent rights.

[No, wait–we find the 20-20 Guide still up at the NIH, as well, as of May 16, 2018.] The Bayh-Dole Act does not encourage researchers to patent and market their inventions. It restricts what federal agencies can claim by way of rights to inventions made with federal support by researchers at universities. It is someone else who is “encouraging” the patenting and marketing of inventions. And that “encouragement” is generally not encouragement, but rather a demand that the researchers give over the patenting and marketing decisions and control to university administrators, who apparently are the weak link to the patent speculator marketplace. But it’s worse. The whole banal argument about “title certainty” is replaced with “by guaranteeing patent rights.” In the original argument, the problem was that an invention broker, having gotten assignment of rights, could worry that a federal agency might fuss over that assignment and claim title must be conveyed to the agency. [And, really, the way Bayh-Dole is described here by the NIH, one would have to say the law is about encouraging universities to force researchers to patent their inventions, whether they want to or not, so that the inventions can be offered to investors and speculators hoping to profit from the exploitation of patent rights.]

There was never any doubt as to who owned the invention–the inventor, and then the assignee of the inventor.  The doubt was over whether the assignee had the right to continue to hold title.  That was a legitimate debate, and one element of it had to do with agency oversight of inventor assignment circumstances, so that inventors were not pressured into making inappropriate assignments of invention–ones that would interfere with government rights or disrupt efforts to build platforms of technology upon which American industry could build competitively, without monopoly disruptions. It is worth pointing out that one of the organizations leading the push for Bayh-Dole, the Wisconsin Alumni Research Foundation, was sued multiple times by the government for antitrust patent licensing behaviors. It was no idle concern whether an invention broker had got patent ownership and was using it in a manner consistent with government interests. With Bayh-Dole, university inventors lost that government oversight. Oversight then fell to the universities, which fell in with the wolves, and in doing so renewed their interest in what they regarded as the hen house. Why have eggs when one can have the hens, too?

The next sentence rams the whole idea of “guaranteeing patent rights” home as having to do with university claims on invention ownership, rather than keeping what the university might have gotten through negotiation:

This Act automatically grants first rights to a patent for an invention fully or partially funded by a Federal agency to the awardee organization.

It has been nearly two years since the Supreme Court rejected the idea that Bayh-Dole was a vesting statute. Yet this statement still persists.  Universities appear in no rush to take it down. The Act does not “automatically” grant anything, let alone “first rights to a patent.” The first right to a patent is the right of invention ownership. That’s what owning an invention under the patent laws means–the right to apply for a patent, with the presumption of ownership of that patent. Here all that is turned on its head to perpetuate the faux Bayh-Dole Act.

Skipping down the Q and A:

37 CFR 401.14 requires organizations 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. By its acceptance of an NIH award, a grantee or contractor organization agrees to obtain written agreements from its employees…

[The NIH here omits the third requirement of the written agreement–that employees agree to sign papers to establish the government’s rights in subject inventions. Employees have no papers to sign, with regard to rights in subject inventions unless the employees have personal rights in those inventions. Further, the written agreement requirement expressly excludes non-technical and clerical employees–so the NIH’s assertion of “all” employees is not true.]

Here the (f)(2) agreement is turned into an agreement *with* the university rather than *for the benefit of the government, joined as a party to the funding agreement in the event of an invention*. The statement makes it appear that Bayh-Dole requires employees to assign to the university, when it does no such thing. Bayh-Dole does not apply to employees. It does not even apply to universities. [It applies to federal agencies. See 35 USC 206:

The Secretary of Commerce may issue regulations which may be made applicable to Federal agencies implementing the provisions of sections 202 through 204 of this chapter

Its standard patent rights clause does not even extend to all employees. Even NIST’s May 2018 addition of an assignment requirement in the (f)(2) agreement does not operate as one might think. NIST requires universities (and other contractors) to require employees to assign subject inventions to the university contractor (at least for inventions made under contract, not grant or cooperative agreement)Thus, NIST requires contractors to require their inventors to agree to assign to the contractors what the contractors must already own. Fathom that.]

The NIH Guide conflates Bayh-Dole the law and with the standard patent rights clause to be used in each funding agreement, whether grant, contract, or cooperative agreement. The person drafting the NIH Guide in 1995 was mostly clueless, but perhaps it was excusable as the passion of the times for the faux Bayh-Dole and a hint of totalitarian beneficence. After the Stanford v Roche decision, however, it is not excusable for this stuff to stay up.

The implementing regulations for Bayh-Dole contemplated the prospect that universities would argue that some inventions were not subject inventions, and the government might have to push back on that. But what is odd that once the vesting idea came to light, everything was turned on its head. The universities before Bayh-Dole did not generally have a way to get at federally supported inventions. The prevalent form of patent policy at universities required assignment of inventions to comply with law or contract, and that the terms of contracts accepted by the university took precedence over any other provisions of policy. If Bayh-Dole could be construed as a vesting statute, then the law controlled, and the university gained ownership of what otherwise it lacked policy to take. Universities then could exploit an ownership claim without changing the text of their patent policies. That is, they could change the policy without changing the policy.  Clever, but dishonest and a defection on academic values.

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