University administrators have been fond to claim that the Bayh-Dole Act gives their universities ownership of inventions made with federal support–or a right of first refusal, or a prohibition on assigning ownership to anyone other than the university. This was nothing more than a self-serving “presumption” about the law, not to be found in the law at all. After the Supreme Court in their Stanford v Roche decision taught university IP lawyers how to read, there is no doubt about it.
Patent rights are personal rights in property established by federal law: “Subject to the provisions of this title, patents shall have the attributes of personal property” (35 USC 261). The U.S. Constitution permits the federal government to secure to inventors “the exclusive Right” to their inventions (Article 1, Section 8).
There are proper ways to go about obtaining ownership of patent rights in inventions. One way is by mutual agreement. An inventor agrees to assign title in exchange for some consideration–money, paying for patent prosecution costs, proper management of the patent, whatever. Another is an agreement tied to employment. In such an agreement, continued employment may be the consideration for the agreement to assign patent rights. Employment alone–or the pay that attends employment–is not sufficient. There has to be something more. As the Supreme Court put it: “No one would claim that an autoworker who builds a car while working in a factory owns that car. But, as noted, patent law has always been different: We have rejected the idea that mere employment is sufficient to vest title to an employee’s invention in the employer” (10).
Merely stating in a patent policy that it is a condition of employment that the university owns inventions does not change this rejection–it ignores it and attempts to impose administrative will on employees. Similarly, adding a policy claim that everyone must agree to the policy does not change the nature of the assertion–which is that as a condition of employment, employees (and others using university resources who aren’t employees) must assign, and promise to assign, and do assign their inventions to the university. Assertions about what must be done are not the same as agreements to assign. At best, such statements establish a basis for termination–if one does not agree to assign an invention, then the university can fire the employee.
Even that claim, though, has to be evaluated in light of what actually has gone into the employment agreement, including in the case of faculty, matters of tenure, and for everyone else, what was set forth in the terms of employment–where agreeing to follow policy means the policy in place at the time of hiring, not whatever policy administrators might later impose. Otherwise, we have an agreement to agree–generally unenforceable, or we have an agreement in which the drafting party claims the right to decide later what the wording means–no meeting of the minds. Or, the new policy or policy reading fails to show new consideration for the change–again, not a binding agreement. Just because a university patent policy asserts something as a condition of employment does not make that assertion true or binding or enforceable or legal or even without liability for the university.
But what about universities that leave in their policies statements about Bayh-Dole or the requirements of federal law, as if somewhere in law there is a provision that requires universities to take ownership of patent rights.
Here is the University of Southern California:
Note the reference to federal law. Later:
In each of these passages–I include all three to show it’s no accident–the university claims federal law gives it ownership of intellectual property created by individuals at the university–cast in broad language–course of responsibilities, pursuant to a sponsored agreement, significant use of facilities and the like. None of this meets the requirements in law for the conveyance of title in inventions from inventors to the university. Similarly, there is nothing in Bayh-Dole or the standard patent rights clause applicable to university contractors (37 CFR 401.14(a)) that requires a university to “retain title” in subject inventions. That’s not even close to the idea that “elect to retain title” means “take title.” USC’s policy claims that the university must not only get title outright, but also it must keep that title. This is not true, and after the Stanford v. Roche decision in 2011, not even arguable. And USC was one of the bevy of universities that signed on to an amicus brief arguing that Bayh-Dole vested ownership of federally supported inventions with their host universities. So USC knows the case. Surely knows the outcome.
Now consider this federal statute, “Conspiracy against rights” (18 USC 241) (bold supplied):
If two or more persons conspire to injure, oppress, threaten, or intimidate any person in any State, Territory, Commonwealth, Possession, or District in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or because of his having so exercised the same; or
If two or more persons go in disguise on the highway, or on the premises of another, with intent to prevent or hinder his free exercise or enjoyment of any right or privilege so secured—
They shall be fined under this title or imprisoned not more than ten years, or both; and if death results from the acts committed in violation of this section or if such acts include kidnapping or an attempt to kidnap, aggravated sexual abuse or an attempt to commit aggravated sexual abuse, or an attempt to kill, they shall be fined under this title or imprisoned for any term of years or for life, or both, or may be sentenced to death.
And consider as well 42 USC 1983–“Civil action for deprivation of rights”:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress …
Now think about this in the context of the USC statements about federal law. The statements clearly are not correct. They are in fact contrary to federal law. It’s hard to see them as anything but deliberative, intentional. One could argue that now, whatever the original intent of those that drafted these statements might have been, these statements represent a conspiracy to deny inventors their rights to inventions–a right that is based in the Constitution and federal law. Further, any attempt to enforce the USC policy against inventors based on these claims would appear to be a threat or intimidation, creating personal liability that may involve fines or up to ten years in jail.
Here are other examples. At the University of Washington, “A Brief Guide to Intellectual Property in a University Context,” posted at on a UW department web site as information:
Bayh-Dole does not give universities ownership of inventions made with federal funds. And does not address any other form of intellectual property. This is simply untrue on both counts.
On a UNLV sponsored programs web site “Guide to Research Agreements Between UNLV and Industry:
Bayh-Dole does not require a university to retain ownership of inventions–and has nothing to do with “IP” in general.
Here is a passage from Rutger’s patent policy:
There is no right of first refusal in Bayh-Dole. The policy has been updated as of 7/2013–two years after Stanford v Roche. Is this contempt of court?
And any of the universities that recite (properly) that Bayh-Dole allows universities to “retain” ownership of inventions made with federal funds, but (improperly) imply or leave it for readers to assume to mean that universities may take ownership from inventors at their pleasure, under the authority of federal law. This, too, is a misstatement of the law, one where clarity is necessary to ensure that individuals know their rights. This is particularly egregious in public universities, which as instruments of the state owe citizens a clear, accurate account of their obligations under the law.
Consider this, from a guide for principal investigators at Colorado State:
Bayh-Dole requires a standard patent rights clause. That clause requires universities to require potential inventors to make a written agreement to disclose inventions to the university to protect the interests of the government (37 CFR 401.14(a)(f)(2)):
to disclose promptly in writing to personnel identified as responsible for the administration of patent matters and in a format suggested by the contractor each subject invention made under contract in order that the contractor can comply with the disclosure provisions of paragraph (c), above.
There is nothing in Bayh-Dole about disclosure to the university to determine if something is patentable or “commercially viable.” Only inventions that are or may be patentable are can be subject inventions. The requirement to disclose is only for such inventions. The only person under the standard patent rights clause authorized to make that determination is the inventor. Paragraph (c) requires the university to disclose subject inventions to the government within two months of an inventor disclosing an invention to the university’s “personnel responsible for patent matters” with guidance on what the disclosure must include–complete in technical detail, identify any publication, on sale, or public use of the invention, and any pending publications. So CSU has it bass-akwards here. Inventors disclose federally supported inventions when they are or may be patentable. They do so so that the university can report the invention to the government in proper detail. That’s it.
But this is not a simple mistake of the law. It creates the impression that the university receives the disclosure to decide on patenting, as if the university is the owner of the patent rights under federal law. Earlier in the manual, we get this:
The language is “elect to retain ownership”–and it’s quite true that if a university does elect to retain ownership, then it must file for patent protection. But what’s left out is that Bayh-Dole has nothing to do with how a university gets ownership in the first place, in order to elect to retain that ownership. That’s deceptive. There are other misrepresentations, here, too. There’s simply nothing in Bayh-Dole that requires a university to “pursue commercialization via licensing.” That’s just made up administrative fantasy. Bayh-Dole’s objectives include “to promote the commercialization and public availability of inventions made in the United States by United States industry and labor.” That’s an objective of Congress, not a requirement on universities. With commercialization also there is public availability. The key term throughout is practical application, not commercialization. Use, not sales. The university here invokes federal law as the basis for its choice of goals for its technology transfer program–commercialization via licensing. But it’s not in federal law. Here’s the law on use of royalties (35 USC 202(c)(7), which ends up in the standard patent rights clause as 37 CFR 401.14(a)(k)(3)):
a requirement that the balance of any royalties or income earned by the contractor with respect to subject inventions, after payment of expenses (including payments to inventors) incidental to the administration of subject inventions, be utilized for the support of scientific research or education;
The royalties are not available to fund university technology transfer in general–they are restricted to expenses “incidental to the administration of subject inventions”–that is, the technology transfer process but only for federally supported inventions, not any other inventions, and not non-inventions, whether or not federally supported. Finally, the CSU restatement conveniently omits that research must be scientific, that education may also be supported, and that there is no restriction on where the scientific research or education takes place or who spends the royalty money. The university here simply rewrites the law to make it appear that the law was created for the benefit of the university, when that’s simply not the case. It may well be that the university has written its policy for its own benefit and not that of the public–raising questions of mission, ethics, and the merit of further public support–but then the university should not recite federal law as the basis for doing so, and should come out and say that the university chooses to be self-interested with the results of research in which it thinks to find an opportunity to make money.
Here’s the University of Cincinnati, at its Intellectual Property Policy website:
Universities may elect to retain title to subject inventions that they have obtained title to by some conventional means. They do not get to “elect to own” inventions. They get to elect to continue owning inventions they have already legally, properly acquired. The lack of making clear what the federal law does is to make it appear that “elect to own” means “take ownership of.” That is, the statement here reflects a university presumption of title. In tort law, this would be an act of “conversion.” Here’s the discussion from The Legal Dictionary (which got this from The People’s Law Dictionary)
n. a civil wrong (tort) in which one converts another’s property to his/her own use, which is a fancy way of saying “steals.” Conversion includes treating another’s goods as one’s own, holding onto such property which accidentally comes into the convertor’s (taker’s) hands, or purposely giving the impression the assets belong to him/her. This gives the true owner the right to sue for his/her own property or the value and loss of use of it, as well as going to law enforcement authorities since conversion usually includes the crime of theft.
It would appear that the tort of conversion is rampant in university patent policies, official guides to federal law and research, and accounts of university technology transfer. And if university administrators, in groups of two or more, attempt to enforce policies that claim the university owns inventions made with federal support as a consequence of federal law, then they are also engaged in conspiracy against the rights of inventors, rights established by federal law, not stripped from inventors by federal law. In addition to having standing to sue for the loss of the value of their inventions–which could be a very large number, when these calculations are done, because the value of the invention may have little to do with the value a university squeezes out of it–there appears also to be a cause of action that may be brought against university administrators personally for denying inventors their right and privilege secured by the Constitution and the laws of the United States.
It’s not just that university administrators assert the right to draft incompetent garble as patent policy, or that they have a penchant for twisting and misstating federal laws to serve their institutional interests, or that in their hearts they feel a sincere desire to run a successful licensing program that serves the public and makes money both–but they also run the risk of personal, criminal liability if they conspire to threaten or intimidate inventors to give up the free exercise or enjoyment of their rights as inventors on false, misleading, or unsupported claims, whether made in policy, or by interpretation of policy, or by assertion without legal foundation that policy is actually a contractual agreement, or that the policy itself has the force of law.