I have been working on some ideas regarding scope, but each time I go to university patent policies to illustrate the issues, I find totally crazy stuff. Here’s a bit from the “General Comments” section of Florida Atlantic University’s patent policy [the FAU patent policy web page has been taken down, or moved, as of May 27, 2016–so I’ve linked to the Wayback Machine’s copy]:
Under the Bayh-Dole Act of 1980 and subsequent amendments, universities are granted the ownership of intellectual property created under government-funded work and charged with commercializing those inventions for the public good.
This is wrong many ways.
First, Bayh-Dole does not apply to universities. Bayh-Dole authorizes the government to create standard patent rights clauses to be included in funding agreements. Those clauses control the disposition of inventions made with federal funds.
Second, the US Supreme Court in 2011 made it clear to universities in Stanford v Roche that Bayh-Dole does not grant them ownership of anything. All Bayh-Dole does is set up the requirements for what federal agencies may claim by way of patentable inventions, and what obligations any private party has if that party is permitted to retain ownership of patent rights to any such inventions. That FAU persists in making an untrue statement in defiance of the US Supreme Court is pure contempt. Where’s the Florida state attorney general?
Essentially, the standard patent clause reads: inventors can limit a federal agency’s interest in their patent rights to a non-exclusive license by assigning their ownership rights to their employer or to an agent that has as a primary function the management of inventions, or with the agency’s approval, the inventors may assign to anyone or keep the patent rights themselves. Universities have utterly misrepresented the standard patent rights clause, as FAU does here.
Third, the standard patent rights clause is concerned only with inventions that are or may be patentable. It is not concerned with “intellectual property” generally. Intellectual property includes copyrights and trademarks, along with patents. FAU’s patent policy repeats this misrepresentation in section 10.6.2 (my bold):
With the passage of the Bayh-Dole Act (Public Law 96-517 entitled The Patent and Trademark Amendments Act of l980) and subsequent amendments, the federal government facilitated the retention of intellectual property, particularly inventions, by universities. In this act the federal government gives nonprofit organizations, including universities, the right to retain title to inventions they have made in the performance of government grants and contracts. The act reflects Congress’ intention that these organizations use the patent system as a vehicle to effectuate the transfer of government-funded inventions to the public.
This is half-way correct–and thus, half-way wrong. Bayh-Dole does not “facilitate” the “retention” of anything. It requires a federal agency to permit organization that has acquired from an inventor patent rights in a federally supported invention to “retain” that title upon proper notice to the federal government. Not “intellectual property” generally. And, no, “universities” don’t make inventions–inventors do, and own those inventions as personal property as a matter of federal law. The FAU policy at this point is hopelessly corrupted–in one clause it claims Bayh-Dole gives the university ownership, and in another it says that Bayh-Dole facilitates the retention of intellectual property, and then narrows it down to inventions.
But then FAU’s policy defines Intellectual Property as copyright works and inventions–
c. Work(s) shall include any copyrightable material, such as printed material, computer software or databases, audio and visual material, circuit diagrams, architectural and engineering drawings, lectures, musical or dramatic compositions, choreographic works, and pictorial or graphic works. A Work also includes copyrightable material that is used to assist or enhance instruction. 5
d. Invention(s) shall include any discovery, invention, process, composition of matter, method of doing business, article of manufacture, know-how, design, model, technological development, biological material, strain, variety, culture of any organism, or portion, modification, translation, or extension of these items, and any mark used in connection with these items. An Invention also includes material, other than Works, that is used to assist or enhance instruction.
e. Intellectual Property means all intellectual property including all Works and Inventions.
Look at paragraph d. Invention gets defined to go well beyond “an invention that is or may be patentable.” We have, in addition to invention being defined to include “invention” also key words from patent law, and then a list of random things–“know-how, design, model, technological development, biological material, strain, variety, culture of any organism, or portion, modification, translation, or extension of these items”–plus any “mark”–presumably a trade mark, but not so restricted. Look at that list–“technological development” is so broad it could include wiring up a circuit board or writing a bit of software code or twisting a paper clip into a new shape to hold a sensor. Biological materials and cultures aren’t inventions at all. They are materials. Chattels. We are way beyond “invention” in this definition of “invention.” The list of “modification, translation, or extension” of the base “invention” reaches even further, as the modifications etc. are not restricted, even, to the same list of items. The final bit of the definition aims to include as an “invention” anything used “to assist or enhance instruction” that’s not “copyrightable.” Let’s leave aside the foolishness of using “copyrightable,” since there’s no such thing, once the US joined the Berne Convention–here the key point is that “invention” includes mood lighting, paint, and the like.
Paragraph e. then makes it all silly by defining intellectual property as “all” intellectual property, plus the laundry lists in c. and d.
Given what the FAU policy does with “Intellectual Property,” it’s clear in its treatment of Bayh-Dole that the policy is more than half wrong. Bayh-Dole deals only with patentable inventions, but FAU transmogrifies invention into “anything that FAU wants to call an invention.”
We are not yet done with our list of what’s wrong with the opening statement made by the FAU policy.
Fourth, Bayh-Dole does not “charge” universities with “commercializing” inventions. Look at the statement of policy and objective in 35 USC 200:
It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development; to encourage maximum participation of small business firms in federally supported research and development efforts; to promote collaboration between commercial concerns and nonprofit organizations, including universities; to ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery; to promote the commercialization and public availability of inventions made in the United States by United States industry and labor; to ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions; and to minimize the costs of administering policies in this area.
Buried in the middle of this list of objectives is “promote the commercialization and public availability of inventions.” Not, “commercialize” alone, but also public availability. The purpose of the Bayh-Dole Act is to promote these things. That is not a “charge” to universities. It is Bayh-Dole that promotes commercialization and public availability through patent rights clauses in funding agreements. Universities, if they acquire patent rights in federally supported inventions, have an implied charge (if that’s the right word), under the standard patent rights clause, with achieving within a “reasonable time” the “practical application” of each invention a university has acquired and retained. The definition of “practical application” (37 CFR 401.14(a)(a)(3) does not use “commercialize”:
Practical Application means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are, to the extent permitted by law or government regulations, available to the public on reasonable terms.
The essence of “practical application” is that an invention is used, and the benefits of the invention being used are available to the public on reasonable terms. Many forms of deployment of inventions are possible under the standard patent rights clause–commercialization is one of them, but there’s no “charge” for universities to commercialize anything. FAU just makes that up. It’s fiction. It’s nonsense. It’s incompetence. And it’s a fraud.
Beyond these points, the standard funding agreement at 2 CFR 215 makes clear that the standard patent rights clause is not the only regulation that governs a university’s control of patents acquired or improved with federal funds–a university must also act as a trustee for the benefit of the beneficiaries of the project that the federal government has funded. See .37. The trustee regulation has every bit the same standing in the funding agreement as the Bayh-Dole authorized standard patent rights clause at .36(b). It’s just that university administrators ignore .37, just as FAU does here with its patent policy.
University patent policies are for the most part incompetently written, nastily interpreted, and inconsistently practiced. Legal counsel is part of the problem–clearly the standards of practicing law at universities are low to the point of malpractice. But there is more wrong than bad lawyering–there’s also administrative abuse of power. Folks writing this stuff want power, and they must know–or they should be expected to know–that they are misrepresenting the law to get what they want. University patent administrators and senior administrators and even faculty who do not know the law or have much experience with invention management practice acquiesce in this badness, at a loss to everyone.
I used to be one of those patent administrators, and I chose to work to get the law right. So I write this stuff up, because I don’t expect anyone at FAU or AUTM or COGR will.