There Is No Bayh-Dole Compliance for Universities

There is no Bayh-Dole compliance for universities. I know. This goes against everything you’ve heard. But really, let’s get real. Five points.

  1. Bayh-Dole doesn’t apply to universities. It applies to federal agencies and changes property rights in patents on inventions made with federal support. Nothing for universities to comply with. It boggles that university administrators can’t grasp this point.
  2. It’s the patent rights clause in each funding agreement that matters. The requirements of Bayh-Dole are conveyed to universities in the form of a standard patent rights clause that is made part of each federal funding contract. Federal agencies may alter the standard patent rights clause. Universities must comply with the patent rights clause in each agreement. There are requirements in the patent rights clause that are not in Bayh-Dole and arguably not authorized by Bayh-Dole and, based on how Bayh-Dole is drafted, are not allowed by Bayh-Dole. Complying with “Bayh-Dole” then might require a university to refuse to comply with a patent rights clause.
  3. Federal agencies don’t enforce the key parts of the patent rights clauses, have the right to waive most everything else, and so what? While Bayh-Dole requires federal agencies to use a standard patent rights clause in funding contracts, Bayh-Dole does not require federal agencies to enforce the patent rights clause. In fact, Bayh-Dole walks back the requirements for more provisions in the standard patent rights clause, and the implementing regulations and standard patent rights clause itself walk back these requirements even more. Other than loss of ownership of some patents for not reporting subject inventions, there is no other consequence for failing to comply with a patent rights clause.
  4. And universities routinely ignore patent right clause compliance and federal agencies routinely ignore university non-compliance. Universities refuse to comply with the (f)(2) written agreement requirement. Universities routinely assign inventions without federal agency approval under the cover of labeling the assignment an “exclusive license.” Universities routinely ignore the requirements for the use of royalty and other income arising from the exploitation of subject inventions. Universities routinely ignore small business licensing preferences, making no effort to attract small business licensees when a large business licensee is in hand and substituting their own startups rather than attempting to attract existing small businesses.
  5. Federal agencies routinely ignore the rights provided to them under the standard patent rights clause. They make no use of the reporting requirements. They do not march-in for non use of inventions or to carry forward a public purpose involving health or safety. They do not practice and have practiced subject inventions. They see no benefit in the standard patent rights clause. Compliance, if and when a federal agency insists on it, is for compliance’s sake, for appearances. No one cares. University research is that inconsequential to government purposes.

In short, federal agencies and university administrators don’t care about Bayh-Dole compliance beyond making a show of reporting inventions, “electing to retain title” in them, and putting a federal funding notice in patent applications. None of these “compliance” things have an ounce of anything to do with making inventions available for public benefit. They are administrative waste effort, put forward as virtue. If putting a meaningless statement in patent applications about federal support helps inventions get used, we ought to put some such statement in even more patent applications! But, sadly, federal funding statements in patent applications have no beneficial purpose. They are make-work when it comes to innovation. Making a big deal out of “Bayh-Dole” compliance is just another way to waste money on administrators and consultants to do their work for them.

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