Mississippi State University misrepresents Bayh-Dole, 2

Mississippi State provides us with this diagram of the “commercialization” process that ends up with a singular “license.” What goofiness–an assertion of order in an activity that is almost always disorderly. According to the diagram, “ideas” get “protected” and then “marketed” for the formation of a singular “license.” Notice that we don’t start with an invention, but with an idea. We also don’t start with research, nor with a hunch, nor with working with a company or a farmer on a problem. Ideas pop out of the void to be captured by university administrators using policy claims to “intellectual property.” All subsequent work is intended to result in a license. Isn’t it strange that the end point is a license and not a commercially available product? One might think that exclusive patent licenses are the expected product of research programs and not “commercial utilization.”

I will skip over the silliness of the commentary that accompanies the process diagram, other than to point out that a provisional patent application does not provide a year of “protection.”

Bayh-Dole does not require institutional ownership of inventions. Bayh-Dole anticipates that institutions will not claim ownership. In that case, there’s a separate patent rights clause specific to inventors–inventors are to be treated as small business contractors, but with more freedom than under the standard small business patent rights clause. Why do institutions then work so hard to cut off this inventor-based approach in Bayh-Dole, when that’s the approach with the greatest freedom, the approach that most closely follows the approach that led to the modest success of invention licensing in the 1920s through 1960s? It was that modest success that Bayh-Dole advocates pointed to get Bayh-Dole passed–“see, universities are doing a great job–by allowing inventors to pass their inventions to invention management foundations or publish them or whatever.” Where did this become “universities will do an even better job by owning all inventions, denying inventors any freedom to decide, and cutting inventors and their research collaborators off from any further access to their inventions except for use within the institution itself?”

The Mississippi State policy statement is not merely untrue and misleading–it is also, then, a whoop-ass claim that federal law has decreed that the university must operate a patent licensing shop on just those principles that the patent licensing folks want to use–own everything, license everything for money, use exclusive licenses as the default, call it “commercialization”–federal law, the bit goes, requires just this.

An invention may be used beneficially without there ever being a patent ownership position. An invention may be used beneficially even with a patent ownership position but not an institutional owner–an inventor owns, or a standards organization owns, or a company owns. An invention that’s owned may be used beneficially without an exclusive position being asserted–through a standard or cross-licensing or a commons or a non-exclusive licensing program to manage quality. An invention may be used beneficially without there ever being a product version–as a research tool, for instance, or as a method or device that any capable company may practice. An invention may then develop in a product version after beneficial use or in parallel with beneficial use. There is no need to exclude such use in order to preserve a broader patent monopoly in an invention.

University talk about “commercialization” aims to rationalize not making inventions broadly available for people (in research, in industry) to make and use. It is mealy-mouthed. It is nonsense. It is administrative word-poop.

And let’s deal with this bit of ugliness from Mississippi State’s response to the question “Why does the University patent technology?”:

If the University elects not to patent the discovery, the sponsoring federal agency may request ownership of the patent rights.

We will ignore the superficial ugliness. One does not choose to “patent” or not–one chooses whether to file a patent application or not. And the object of the patenting bounces from “technology” to “discovery” as if the writers don’t care, or got bad advice in high school about adding variety to their empty prose by using a thesaurus. And the federal agency may request ownership of the invention, not the patent rights. There are no patent rights at that point. This stuff is just ugly, written by incompetents. But let’s look more carefully for the method to their muddiness.

Under Bayh-Dole’s default patent rights clause for nonprofits, Mississippi State does not have the right to “elect” not to “patent the discovery.” The university’s right to “elect” has to do with whether it will retain title to an invention that the university has acquired. The default patent rights clause makes clear that when a university elects to retain title, it creates for itself the obligation to file a patent application. To then “elect” not to file a patent application amounts to a willful breach of the patent rights clause in the funding agreement. Although inventors don’t have a cause of action for such breach under Bayh-Dole (as the Supreme Court warily noted in Stanford v Roche), they may very well have a cause of action under the university’s own research policies. When a university elects to retain title, it has agreed, under federal contract, to file a patent application. The patent rights clauses uses “fails to file patent applications” not “elects not to file patent applications.” To not file is to fail; to elect not to file is to willfully fail to do what the university agreed to do.

Thus, it is accurate to state that if a university has acquired an invention made with federal support, it must file a patent application or give up title to the federal government upon request. And it’s also accurate that if the university fails to file a patent application, then the federal agency may request title to the invention. And it is worth pointing out that if the university fails to file a patent application and misses a statutory bar, then there’s  not much point in offering anything to the federal government. But Mississippi State’s folks cannot bother to get things even close.

What’s not stated is that if the university does not take ownership of an invention made with federal support, then the ownership of the invention remains with the inventor, and the inventor has the benefit of a different patent rights clause (37 CFR 401.9) with much more favorable terms than those required of nonprofits. If the university left inventions with their inventors, and allowed the inventors to elect to retain title and then have the obligation to file patent applications, the inventors could then assign the invention to anyone willing to undertake the filing (anyone other than the university–which would still be under the nonprofit patent rights clause).

Indeed, the effect of the (f)(2) written agreement requirement in the nonprofit default patent rights clause is to isolate ownership of inventions with inventors, just as the subcontracting requirement (g)(1) forbids contractors from having an interest in a subcontractor’s inventions. If we parapharse (g)(1) for (f)(2), we have “the inventor will retain all rights provided for the contractor in this clause, and the university will not, as part of the consideration for allowing the inventor to participate in the funding agreement, obtain rights in the inventor’s subject inventions.” That’s the effect of (f)(2)’s requirement that the university require its inventor-employees to make a written agreement to protect the government’s interest in the inventions they make, including “establishing the government’s rights” in those inventions. An inventor cannot establish the government’s rights if the inventor has no rights. The university, by requiring the (f)(2) written agreement cannot both demand the inventor’s rights and confirm that the inventor has those rights. The (f)(2) requirement takes precedence over any other university claim. Has to.

Not only does a university not have a requirement to take ownership of inventions made in federally supported work (the Supreme Court was clear about that) but also the university is required by the (f)(2) written agreement requirement to give up any policy or contractual right to “take” ownership of inventions–at least as a condition of the funding, participation in the research, or use of university resources committed by the university to the funded research. The right to inventions has to be waived to the inventors, who must be made parties to the funding agreement. But university administrators ignore the (f)(2) requirement and refuse to comply. That’s how Bayh-Dole works in practice–plenty of flourishes about the public interest but in practice most anything substantive is not complied with, not enforced, not acted upon.

One can see that repealing Bayh-Dole will accomplish nothing, since Bayh-Dole doesn’t authorize the practices attributed to it. Enforcing Bayh-Dole–now that would scare the bejeezus out of university patent administrators. Implementing new standard patent rights clauses that prohibited ownership claims on inventions by nonprofits that host federally supported research, or that enabled the federal government to acquire the inventions to be dedicated to the public. For all that, the federal government could implement a patent rights clause that allowed the principal investigator at a nonprofit to choose the patent rights clause most appropriate to the public purpose of the research. It could be part of the grant proposal process. A check box.



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