The NIH’s View of Bayh-Dole Compliance, 6

Research Enterprise has been examining the NIH’s representation of Bayh-Dole. So far we have seen that the NIH persists in citing a 1995 document that gives “guidance” that the Supreme Court in Stanford v Roche (2011) rejected. But the NIH hasn’t bothered to take down the document or revise it, or change any copy on the web that relies on it. We have also seen that the NIH apparently doesn’t understand much of anything about how Bayh-Dole operates in its substantive provisions. Most everything that matters, apparently, has to do with the finer points of paperwork compliance. Let’s drive that point home by looking at some NIH guidance for reporting, “Patents Part Two: A Closer Look at Reporting.”

The guidance here takes the form of general advice about managing inventions for patenting.

Here we cover types of patent applications, invention reporting requirements, and compliance advice. But first, a word to the wise.

And the word to the wise?

Patent Before Public Disclosure

When it comes to your invention, you should be thinking “first comes patent, then comes public disclosure.”

In other words, before publicly disclosing any details of your invention, such as in a publication, apply for a patent.

This is strange advice. First, in the US there’s a one-year grace period for publication before filing a patent application. Thus, the NIH apparently argues that obtaining the right to exclude others from practicing an invention in foreign countries is more important than announcing research results for others to use. Don’t even go to the problem of the added cost of going after foreign rights up front. One patent attorney I worked with for a long time once said (I paraphrase), “I’ve never seen a university foreign patent amount to anything.” The word to the “wise” then is to be sure to get those useless foreign patent rights before anything else. 

We might wonder, then, who the “you” is in NIH’s guidance who has “your invention.” If this is a university faculty member, then why would anyone assume that a patent is even desirable for a research finding? Perhaps the faculty investigator participates in open science, and is dedicated to building a robust research commons, or a cumulative technology platform, or a standard. Why then would it be “wise” to think “first comes patent”?

There is no requirement in federal patent law that inventors must use the patent system. Bayh-Dole is part of federal patent law, and the Supreme Court was clear that Bayh-Dole has to do only with subject inventions–patentable inventions made under a funding agreement and which are owned by a party to the funding agreement. Bayh-Dole does not disturb an inventor’s ownership of any such invention–no vesting, no special right to take, no obligation to take, no mandate to take ownership. Bayh-Dole addresses the priority of rights as between a contractor–a party to a funding agreement–and the federal government when a contractor has acquired ownership of an invention made in work receiving federal support. If a contractor has not acquired ownership of such an invention, then the various federal laws that Bayh-Dole preempts only for subject inventions then control the disposition of rights.

Thus, we might argue that the wise advice to faculty inventors is to consider first the public interest–what advances the public benefit from a given research finding? Patenting is merely a potential instrument to advance the public welfare. It is not an unthinking first step–and certainly not a thinking first step.

Then there’s the not so veiled threat:

In fact, if you don’t submit a required invention disclosure to NIH, your patent rights will be in jeopardy.

This is correct, in its weird way. Bayh-Dole’s standard patent rights clause does provide that the government can request title to a subject invention that has not been disclosed to the government. It’s just that the NIH has never–to my knowledge–demanded title for a failure to disclose an invention. The standard patent rights clause does not require a federal agency to request title. It’s just there as an option. Often, the failure to disclose runs in parallel with publication of the invention that creates a bar to patenting, and a year later, there are no patent rights for the NIH to jeopardize.

In the bigger picture, what is the point to disclosure of inventions to a federal agency? How does mandatory reporting of inventions advance practical application, innovation, research, or public welfare? Why wouldn’t just including a notice of federal rights in each patent application be sufficient? Why not have that notice stand as the government’s non-exclusive license to practice and have practiced? After all, it is the patent that would give rise to an action for compensation in the Court of Federal Claims, but for the license.

The “shred of hope”:

In the event you fail to file a patent application before publicly disclosing your invention, there may be a shred of hope for you. If you file your patent application within one year after publicly disclosing your invention and no one else files a patent application before you do, then your rights may be protected.

Well, that’s just part of it. You’ve blown most foreign rights immediately. That could be a refreshing thought. As for the US rights, it’s not just a race to the patent office with first to file, but it has to be an independent race–someone cannot claim an invention first that is derived from access to yours.

Again, bigger picture. What does it matter? If federal research is competing with other federal research, then what does it matter to the federal government which federal researcher gets to the patent office first. It’s all the same thing. And if the federal research is competing with private industry and private inventors, what’s up with that? If the goal is to use patents rights to set up industry and entrepreneurs, then why should the federal government somehow prefer the pathway that runs through federally funded research, university patenting, and a bureaucratic licensing apparatus to weigh everything down. Why would that administrative mess of regulations be preferable to a company or entrepreneur patenting first and ridding itself of all that baggage?

It’s as if Bayh-Dole has to be inserted into every opportunity, like an obnoxious guest at a party banging around determined to tell off-color jokes to everyone who is having a pleasant conversation.

Invention and Patent Reporting

You’ll recall from our previous article that 1) the Bayh-Dole Act of 1980 requires all government-funded inventions be reported to the awarding federal agency, e.g., NIH, and 2) you must use iEdison to electronically report all NIH-funded invention disclosures, patent applications and patents, and related reports or documents.

We will go back some time to the previous article. But that article certainly is wrong. Bayh-Dole requires disclosure only of subject inventions–and those are inventions owned by a party to the funding agreement. If the inventor is not party to the funding agreement, the invention cannot possibly be a subject invention and does not have to be reported under Bayh-Dole. Further, just to be stinky about it, Bayh-Dole’s definition of subject invention is not merely those that are “government-funded.” The scope of interest is those that are the result of the “planned and committed” activities under a funding agreement (statement of work) or those that “diminish or distract” from those activities (course of work). The definition of funding agreement requires one to first ascertain the “work” that is to be performed, and then ask whether a funding agreement has provided funding for at least part of that work. If so, then an invention is within scope if it “is or may be” patentable and it is owned by a party to the funding agreement. Just to be stinky.

Next, a tease:

Required compliance documents for invention and patent reporting include, but are not limited to, the following:

  • Final Invention Statement (HHS 568) – (grant closeout, not submitted in iEdison)
  • Invention Report and “Disclosure” (invention records)
  • Government Support Clause (GSC) (patent records)
  • Confirmatory License (CL) (patent records)
  • Annual Utilization Reports (for all inventions regardless whether patent applications are filed)

These are all helpful things to be aware of for NIH reporting compliance. But NIH adds “include, but are not limited to.” Well–what else is the NIH withholding? That’s some guidance. At least the NIH might indicate what the other required compliance is, given that it is, after all, required.

Oh, there is this (links removed):

For a complete list and descriptions, go to section 8.2.4. Inventions and Patents  in the NIH Grants Policy Statement . Also see iEdison’s graphic Invention Reporting Timeline: At a Glance pdf

We will go there next, and be back where we started, but sadder and wiser.

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