Only Bayh-Dole and University Research Enterprise, 3

We are working through Bayh-Dole without the cover of the political bluffery that permitted Bayh-Dole to become national policy. Without the bluffery, Bayh-Dole addresses the same situation addressed previously by the IPA program, which in turn took up the Harbridge House report. The Harbridge House report argued that no “uniform” patent policy would meet the needs of all federal agency research work and at the same time address the widely and even wildly varying attitudes regarding patents in industries and even among companies within a given industry. Harbridge House, then confirmed the Kennedy patent policy’s approach of flexibility and primary attention on those practices in particular dealings that best advanced the public interest.

The Kennedy patent policy (1) identified four circumstances in which the government ought to take ownership of inventions regardless; (2) a broad situation in which companies with established commercial positions should be allowed to keep whatever inventions they did acquire, provided they timely develop those inventions for use; (3) and for the rest, an agency should determine whether to grant a request for private ownership of a patent, whether at the time of an award or after an invention has been made.

The four Kennedy default ownership circumstances became exceptional circumstances in Bayh-Dole–difficult to get rather than fundamental public policy. Only the DOE’s nuclear program has managed to be incorporated as a default conditional in the present standard patent rights clause.

Bayh-Dole broadens the company circumstance to include nonprofits and weakens the circumstance by abandoning the idea that the company or nonprofit have any capability at all to develop a given invention. Bayh-Dole does not repeal the agency determination circumstance but rather makes the company circumstance take precedence whenever a contractor obtains ownership of an invention made with federal support. If a contractor gains ownership, then the company circumstance applies, regardless of the merits and practices of the organization involved, Bayh-Dole then applies. If a nonprofit contractor does not gain ownership, then the invention is subject to the old rules, and federal agencies decide whether to request ownership or allow the inventor or other, non-contractor assignee to continue to own a given invention.

From this account, one can see that Bayh-Dole is anything but “uniform.” It is, rather, a “carve-out” that preempts two parts of the Kennedy patent policy with another part, but only if and when a contractor obtains ownership of a given invention. If you own it, then Bayh-Dole applies. Otherwise, it’s the Kennedy patent policy plus various purpose-specific statutes. Contractor ownership is the trigger. The Supreme Court was clear–that’s why the definition of “subject invention” includes “of the contractor.” The flexible, public-purpose directed policy applies except if a contractor gains ownership, and then all public purposes are set aside in favor of whatever the hell a contractor cares to do with a patent monopoly on work that was earlier funded as a matter of public benefit.

Any exploitation of a patent on such work by a contractor is more important than any other public objective of any federal agency. If a federal agency wants to create a standard, too bad. Sucks to be a federal agency. University administrators trying to make money from a blocking patent is more important as public policy. If a federal agency wants to use multiple university faculty to work on a solution to a problem, too bad. With Bayh-Dole, each university gets to file patents on its part of the work and hold out against the rest for the biggest piece of pie it can have. Sucks to work on CRISPR stuff. If a federal agency wants research tools to circulate readily so that everyone has access, too bad. Bayh-Dole says each university can prevent research uses in favor of buddy third tier technology speculators fussing around with a startup trying to make a commercial product to sell to researchers three or five years from now. Sucks to even try.

Of course, a federal agency could try to declare an exceptional circumstance for such things as standards, collaborative development, or research tools, but then university administrators go running to their lobbying groups who then complain bitterly about how such exceptional circumstances will cause universities to have to refuse such federal funding and how awful this will be for the public. Bayh-Dole makes it difficult for federal agencies to have any public purpose in funding university research. Research funding is entitlement. A virtue signal of how excellent and important universities are to the economy and public welfare. Pork to be spread around by an agency so that university officials everyone all continue to support the pork program.

The public purpose under Bayh-Dole is research funding stripped of context, not something to be achieved in a project that benefits from federal support rather than private support or no support at all. University administrators then may talk openly about “research as an industry”–research exists to receive and spend money, 1/3 of which goes as a tax to support administrators and facilities. No wonder research administrators don’t ever talk about focusing or limiting extramural research. Once research funding has been stripped of context, then it begins to appear reasonable that an effort to commercialize research results using patent monopolies is a meaningful activity. If one denies all other public purposes for research, then one is left with “research as an industry”–research for the sake of stimulating the economy through spending–and “research as a subsidy for patent speculation”–research for the sake of producing inventions to be offered for “commercialization” through a patent monopoly.

If you accept this rhetorical geography, then you will teach yourself not to consider alternatives and will dedicate yourself to “making the system work,” especially if others claim wild success with the system. You will have to show a similar wild success–fake the data if you need to, substitute proxy metrics if you must, and present things out of context so they deceive the public and policy-makers into supporting your work. If you can’t make the system work, then you already know that people will blame you, not the “successful” system. If you try to do something on your own, outside the system–open source, say, or socially responsible licensing–then you risk being shut down by the practitioners of the “successful” system. The one thing they cannot stand is anyone doing anything worthwhile outside the system. Cult? Scam? Bozonet? All of that.

The folks behind Bayh-Dole made a concerted effort to prevent any inventions from falling outside Bayh-Dole’s control. Their first effort this way was to draft Bayh-Dole to be ambiguous with regard to title. The drafting makes it appear–but does not actually say–that the law concerns all patentable inventions made with federal support. Thus, it is an easy misreading to turn “subject invention” into “all patentable inventions made with federal support,” with “of the contractor” meaning “and necessarily owed to the contractor by operation of Bayh-Dole.” This is how university administrators and their policies and guidance documents depict Bayh-Dole, even now, seven years after Stanford v Roche. They refuse to accept that contractor ownership, not patentability or federal funding, is the trigger that invokes Bayh-Dole’s carve out.

Their second effort to expand Bayh-Dole was to include a requirement in the standard patent rights clause that isn’t expressly authorized by Bayh-Dole. That’s the (f)(2) written agreement requirement. That requirement requires contractors to require certain employees to make a written agreement to protect the government’s interest in subject inventions. That’s really weird on the face of it. Why the convoluted apparatus? Why require agencies to use a clause that requires contractors to require their employees to make a written agreement with regard to inventions the contractors by definition must already have acquired? The IPA master agreement, by contrast, defined a subject invention as one made within scope of a funding agreement, and then required the nonprofit to have patent agreements with employees under which the employees agreed to assign only those inventions that the nonprofit had decided to file patent applications on.

Work this through. Under the IPA, an employee invents and reports the invention. The nonprofit then decides whether to file a patent application or not. If so, then the nonprofit relies on the patent agreement with the employee-inventor to require assignment of the invention. Otherwise, the employee has no obligation under the IPA to assign to the nonprofit, and government regulations kick in as usual with regard to the employee’s obligations to the federal government.

Bayh-Dole does not do this. Instead, Bayh-Dole leaves it entirely open how a university comes to own an invention made within scope of a federal funding agreement. Bayh-Dole applies (and preempts other law) only after a university comes to own an invention. The (f)(2) written agreement, then, cannot have anything to do with forcing each inventor to assign all inventions within scope of a federal funding agreement to the university. The sequence that must operate under Bayh-Dole is this (there are two branches):

Branch A

  1. an inventor makes an invention
  2. reports it to the university
  3. the university requests and obtains assignment
  4. Bayh-Dole now applies
  5. the inventor discloses the invention
  6. the university complies with Bayh-Dole reporting requirements

In this Branch A, there’s a crucial difference between reporting an invention and disclosing it. An invention report indicates that an invention has been made, and perhaps some things about what it does or why it matters. An invention disclosure, by contrast, includes the technical information necessary to file a patent application–the disclosure is “enabling”; the disclosure specifies the invention; the disclosure is what is necessary for a patent application to be filed. A report may or may not include such disclosure.

Branch B

  1. an inventor makes an invention
  2. the invention is within scope of the inventor’s duties to invent
  3. the university as employer holds equitable title
  4. Bayh-Dole now applies
  5. the inventor discloses the invention
  6. the university complies with Bayh-Dole reporting requirements

In Branch B, an inventor is assigned to invent or to conduct experiments or holds a relationship with the organization such that it is equitable that the organization hold title to the invention. The obligation to assign arises as a matter of equity. A court might construe an implied promise or contract to assign based on the circumstances. Thus, if a university holds equitable title but not formal title, the university may request that the inventor comply with an implied, equitable duty to assign formal title.

In neither branch, however, does Bayh-Dole force inventors to use the patent system. This is huge for universities and especially for university faculty. University faculty are unlike ordinary employees when it comes to their scholarly activities, including research but also creativity and instruction. Most universities include in formal policy a statement on faculty freedom of research and publication–those policy statements often assert that these freedoms are the foundation for the university itself. Freedom of research means that the university does not assign or control a faculty member’s choice of research; freedom of publication means that the university does not control a faculty member’s decisions about what and where and when to publish.

If a university gives up the right to assign or control a faculty member for purposes of research and scholarship, then the normal master-servant employment relationship simply does not exist. Toss all that. The idea of faculty research is, and is supposed to be, special, extra-ordinary. It is this special, extraordinariness that recommends the use of federal support for faculty-proposed research projects. That’s one of the key thrusts of Vannevar Bush’s report Science the Endless Frontier–that university faculty, “the free play of free intellects,” would lead the exploration of new science–and the justification for federal involvement in such things was, at the heart of it, this “free play of free intellects.” It was not the assigned and controlled duty-bound work of technically capable servants to administrative masters. Repudiate university freedom of research and publication and you repudiate Science the Endless Frontier, federal funding for faculty-proposed research, and also the patent system as we have it.

On this last point–nothing in the patent system forces inventors to use the patent system. Bayh-Dole is part of federal patent law. Bayh-Dole also does not force inventors to use the patent system. Bayh-Dole also cannot and does not force employers to force inventors to use the patent system. This, despite persistent efforts by university administrators and patent brokers to assert otherwise. It is not merely that these folks are wrong. It is that they violate the rights of faculty inventors under the color of law–a federal offense under 18 USC 242. They just don’t care because they don’t know of anyone getting charged. So they get slack, then confident, then defiant about it. Looting or shaking down faculty inventors becomes an administrative right, a public virtue, an act for the good of the inventors themselves, if only they thought about it in the right, administrative way. A pack of mercenary university lawyers is always ready to assist. I have met only once in my years of university work only one university-employed attorney willing to represent the best interests of faculty inventors against unwarranted administrative claims.

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