For federal research and development contracts, Bayh-Dole defines a new category of invention in federal patent law, the “subject invention.”
A subject invention is an invention that
- is or may be patentable
- is owned by a party to a funding agreement
- was either conceived or first actually reduced to practice in the performance of work under a funding agreement.
(A subject invention may also be a non-patentable plant variety.)
Nothing in Bayh-Dole gives a party to a funding agreement any special right to own any invention arising in federally supported research or development. The Supreme Court in Stanford v Roche was clear on this point. No-one has a special right under Bayh-Dole or in the standard patent rights clause in any funding agreement to own, to take, to have an option to, or have a mandate to acquire any such invention.
Bayh-Dole’s patent rights clause requirements become effective when a party to a funding agreement acquires ownership of an invention within the definition of “subject invention.” Only then does the invention becomes a subject invention–only when it is owned by a party to a funding agreement.
A subject invention and the property rights in patents on subject inventions are established by federal patent law. A subject invention does not lose its special status when it is licensed or assigned, even if assigned to a company (as is often the case with exclusive licenses) or to the federal government.
Bayh-Dole makes clear that a subject invention is not an ordinary invention, and a patent on a subject invention is not an ordinary patent. Subject inventions are controlled by standard patent rights clauses that federal agencies must use in funding agreements. The property rights in patents on subject inventions are restricted by Bayh-Dole’s statement of policy and objective, 35 USC 200.