In Bayh-Dole, the definition of “subject invention” is not a matter of defining a term in a federal contract. Bayh-Dole is part of federal patent law, so “subject invention” is a definition of patent law. A subject invention is a subject invention because a law defines it that way, not because a federal agency and a “non-federal entity” agree to use “subject invention” in a given way. Here’s the definition of subject invention from Bayh-Dole (omitting the trailer about Plant Variety Protection Act fussiness) (35 USC 201(e)):
The term “subject invention” means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement
The “of the contractor” means, as the Supreme Court ruled, that a subject invention is one that is owned by a contractor–any party to a federal funding agreement for research. Before a contractor owns an invention, it is just that, an invention “arising from federally supported research or development,” or “federally supported invention,” as Bayh-Dole’s statement of policy and objective puts it. Until a federally supported invention is owned by a contractor, it is not a subject invention. It fails the statutory definition. It is clear that “subject invention” in Bayh-Dole is utterly unlike “subject invention” in the IPA. In the IPA, a subject invention is any invention that’s a deliverable in a federal contract. In Bayh-Dole, a subject invention is any invention that a contractor has come to own and which is deliverable in a federal contract.
The implication is that Bayh-Dole requires, as a default contracting provision, federal agencies to have no interest in invention deliverables that are not owned by a contractor. All the contract provisions in Bayh-Dole that have to do with when the government can obtain title to an invention pertain to subject inventions–ones owned by a contractor. Even the (f)(2) written agreement in the standard patent rights clause at 37 CFR 401.14(a) only stipulates that contractors are to require inventors to make a written agreement to protect the government’s interest–by “executing all papers” to “establish the government’s rights in subject inventions.” There’s nothing in Bayh-Dole’s stipulation on what provisions must be in the standard patent rights clause that gives the government the right to demand inventions as contract deliverables other than subject inventions.
It’s a stupid mess, I know, but it’s a stupid mess made law by folks who thought of themselves as pretty darned clever and important, so it’s not a mess they will admit to. Even the Supreme Court found that the definition of subject invention in Bayh-Dole was ambiguous, and put some limits on its scope. There is a de minimis standard for the involvement of federal funds. An invention that has been conceived outside of federal contracting cannot become a subject invention simply by being first actually reduced to practice under a federal funding agreement. The contractor has to own an invention first, and then one can follow with an analysis of whether either the conception part or the actual reduction to practice part of the invention was specified in the funding agreement and so was made in performance of the “planned and committed activities” and thus makes the invention a contract deliverable–to be deferred to the extent that the contractor intercepts the deliverable by choosing not to deliver it and accepting instead the public covenant that runs with such a patent.
We are left, then, with this odd, arcane question of whether a “conception” alone can be “owned.” In a sense, it simply doesn’t matter, since patent law has changed and “conception” and “reduction to practice” are met with the filing of a patent application, and the first to file without derivation has priority to obtain a patent. Conception and reduction to practice were important when one had to establish who was first to invent, regardless of who filed a patent application first. That’s all but over now. But we are left with policies such as Missouri’s which, as a matter of a contract definition, insist that “conception” and “first actual reduction to practice” have meaning, and of course with Bayh-Dole, which has been allowed to persist in making the distinction for no good reason whatsoever. Why change a sucky thing? People might notice how sucky it is and try to get it unsucked, and to that, they would have to pull a thousand university patent administrators and their patent attorney buddies off those sucky parts.
Federal common law stipulates that inventors own their inventions. The Supreme Court in Stanford v Roche:
Our precedents confirm the general rule that rights in
an invention belong to the inventor.
If to “conceive” of an invention is to invent it, then conception alone is enough for someone to own an invention, even if it has not been reduced to practice and therefore not “made” for purposes of determining patent priority under the obsolete first-to-file system. Under that old system, “conception” meant (quoting the MPEP 2138):
- The inventor must form a definite and permanent idea of the complete and operable invention to establish conception.
- An inventor may consider and adopt ideas, suggestions and materials derived from many sources: a suggestion from an employee, a hired consultant or a friend even if the adopted material proves to be the key that unlocks the problem so long as the inventor “maintains intellectual domination of the work of making the invention down to the successful testing, selecting or rejecting….”
- There must be a contemporaneous recognition and appreciation of the invention for there to be conception.
The Missouri definition of conception ignores elements 2 and 3. Its concern is that the invention is complete. The MPEP recites another version of conception:
“[C]onception is established when the invention is made sufficiently clear to enable one skilled in the art to reduce it to practice without the exercise of extensive experimentation or the exercise of inventive skill.”
It is not enough that an inventor shouts “Eureka” or “Yreka” or even just “Eeeek.” There has to be some documentary evidence of the definite and permanent idea of the complete and operable invention. An invention report, properly done, may provide that evidence.
But here’s the thing. If conception requires “contemporaneous recognition and appreciation” of the invention by the inventor, then until an inventor announces that some idea is inventive–and is complete and all that–then the invention has not been “conceived.” It may be an invention–the words quoted above imply that an invention might not yet have been made “sufficiently clear” but is still an invention, not a proto-invention, or “that idea thing that comes before an invention is conceived.” Without getting into the ownership of proto idea things, we might say that inventions are owned by their inventors, and the right to a patent is established by the first inventor to file a patent application, and that without conception of an invention, an invention does not meet the condition of “is or may be patentable” but an invention that does meet the standard of conception in patent law does meet the condition of “is or may be patentable” because, well, a conceived invention may be patentable–but we won’t know until it has been reduced to practice and is filed as an application before anyone else’s in the patent office.
The defect of the Missouri patent policy…uh… let me come in again. Among the defects of the Missouri patent policy is the failure to make the definition of conception in the policy exactly that of now obsolete patent law. Bayh-Dole doesn’t bother with giving definitions for conception and first actual reduction to practice because it *is* patent law. Except, of course, conception and first actual reduction to practice don’t much figure in patent law now. What matters is that something has been invented, and is the subject of a patent application.
This is one problem in trying to be clever with a university patent policy by coming up with goofy custom definitions and making agreement about these goofy definitions a matter of contracting so that even when patent law changes, the goofy definitions go on until not only the policy changes but so also does the contract that incorporates the policy. If a patent policy merely recited “invention” as used in federal patent law, then these problems would not arise, or if they did, would not be so dramatic.
Another problem with the Missouri patent policy is its incompetent effort to change to comply in some way with Bayh-Dole. But Bayh-Dole does not require any university patent policy. The IPA program did, but not Bayh-Dole. As a federal contract, compliance with Bayh-Dole follows a university’s research policies, which generally provide that whatever a university’s patent policy, whatever a university agrees to with a research sponsor will take precedence.
Bayh-Dole’s “conceived or first actually reduced to practice” language is narrow, not broad. First there has to be a patentable invention. And that patentable invention has to be owned by the contractor. That means that the contractor has to have some legitimate basis for claiming ownership that has absolutely nothing to do with the fact of federal funding. For instance, a contractor might hire employees to invent a specific thing, as might a small business. Or a contractor might enter into a patent agreement with employees to define a class of inventions as “service” inventions–one’s that are within the scope of the contractor’s business or foreseeable future business. For university faculty, neither of these conditions apply. Universities assure faculty of freedom of research and publication, just as Missouri does. Faculty cannot be assigned to research tasks without their voluntary agreement, and university administrators do not have authority to threaten faculty with termination of employment if they refuse to do administrative research biddings.