Does Bayh-Dole require a written assignment?
No. But Bayh-Dole is screwy. I’ll elaborate.
Look all you want, there’s no assignment requirement in Bayh-Dole. Heck, the Supreme Court looked for an assignment requirement and couldn’t find it. Here’s how the majority opinion in Stanford v Roche put it:
Nowhere in the Act is title expressly vested in contractors or anyone else; nowhere in the Act are inventors expressly deprived of their interest in federally funded inventions. Instead, the Act provides that contractors may “elect to retain title to any subject invention.” 35 U. S. C. §202(a).
. . .
The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.
. . .
But because the Bayh-Dole Act, including §210(a), applies only to “subject inventions”—“inventions of the contractor”—it does not displace an inventor’s antecedent title to his invention. Only when an invention belongs to the contractor does the Bayh-Dole Act come into play. The Act’s disposition of rights—like much of the rest of the Bayh-Dole Act—serves to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more.
There is no authority in Bayh-Dole for inventors to be forced to give up ownership of their inventions–not to contractors and not to the federal government. Furthermore, Bayh-Dole expressly preempts all other statutes (but for Stevenson-Wydler and any future law that references Bayh-dole), so there’s nothing outside of Bayh-Dole that a federal agency can rely upon to insist that inventors give up their rights in federally supported inventions. (Well, there is 15 USC 2218(d)–but that’s a long story for tomorrow.)
Bayh-Dole clearly does not require written assignments or any other sort of vesting of inventions by inventors to either their employers who host federally supported research or to federal agencies–with one exception that I will outline below.
The implementing regulations for Bayh-Dole include in the standard patent rights clause include a requirement that contractors require their employees (other than nontechnical employees) to make a written agreement. Universities have construed this written agreement as some sort of patent agreement between the university and its employees, but there’s no support for that position in the implementing regulations.
Norman Latker, who was a member of the executive subcommittee that oversaw the drafting in 1975 of the Federal Procurement Regulations that codified the Nixon patent policy of 1971 (which Latker also apparently had a hand in the drafting of), surely knew how the FPR patent rights clause handled the situation–contractors were required to have patent agreements with their employees to “effectuate” the delivery of invention ownership to the federal government except if an exception applied. Four years later, Latker drafts Bayh-Dole and doesn’t include this same provision in the list of requirements for a standard patent rights clause, and a few years later when Latker is in charge of drafting Bayh-Dole’s standard patent rights clause, he doesn’t include an assignment requirement in the written agreement requirement at 37 CFR 401.14(a)(f)(2)–now 37 CFR 401.14(f)(2).
The written agreement requirement had no assignment clause for over thirty years (it does now, but it is not what people might think). Instead, (take a breath) the written agreement requirement requires contractors to require inventors to become parties to the funding agreement by promising to sign papers to establish the government’s rights in subject inventions.
Now a “subject invention” is an invention “of the contractor”–and “of” means “owned by.” So inventors are to be required to establish the government’s rights in subject inventions–but if a contractor has to own an invention to make it a subject invention, then inventors will never have any rights to sign away to the federal government–that would be for the contractor-owner to do. It would make a core part of the written agreement requirement totally useless.
But the written agreement requirement is drafted, not to be a requirement for a patent agreement with each employee but rather it is in the form of a compulsory subcontract. If you follow the definition stack in Bayh-Dole, a contractor can add other parties to a funding agreement, and these new parties are defined by the law as contractors. Rather than requiring inventors to give up their inventions to contractors–something the Supreme Court insists is not in Bayh-Dole–the standard patent rights clause instead solves the problem by requiring contractors to make their inventors parties to the funding agreement. Then, when the inventors invent, they are contractors and they own their inventions–voila–the inventions are subject inventions, with no assignment to the prime contractor–the employer contractor–required.
When inventors own subject inventions, the implementing regulations instruct federal agencies to treat inventors as small business firms with their own special patent rights clause that’s a subset of the small business contractor patent rights clause. If inventors are small businesses, then they have the full benefit of Bayh-Dole’s fundamental grant of priority of rights at 35 USC 202(a):
Each nonprofit organization or small business firm [including therefore inventors treated as small business firms] may, within a reasonable time after disclosure as required by paragraph (c)(1) of this section, elect to retain title to any subject invention…
Inventors have the same right as any other contractor under Bayh-Dole to elect to retain title. If an inventor elects to retain title, there’s nothing that a federal agency can do to force the inventor to assign title to the prime contractor or to anyone else. There’s nothing, even, that the prime contractor can do to demand title unless the prime contractor already has equitable title through some circumstance that does not have anything to do with the federal funding or patent rights clause. The standard patent rights clause forbids contractors from having any interest in the subject inventions of subcontractors as a condition of any subcontract. That goes as well for the compulsory subcontract to inventors required by (f)(2).
Under the inventor patent rights clause at 37 CFR 401.9, inventors are not even required to file patent applications. If they disclose their inventions and elect to retain title, they don’t have to use the patent system. If they do file patent applications, then they do have an obligation to follow through with prosecuting the application and maintaining any issued patent or the federal government can request rights (there’s the purpose of the (f)(2) requirement that inventors promise to establish the government’s rights in subject inventions). But if an inventor does not file a patent application, nothing in the inventor patent rights clause requires the inventor to assign the invention to the federal government or to anyone else.
Screwy, you might think. Yes, but it sorta works. It’s just that it is complicated enough that it’s beyond the comprehension of most university administrators and AUTM executives and the typical university lawyer, who lacks credible IP and contract experience.
Now, NIST, which is in charge of Bayh-Dole regulations, added an assignment provision to the (f)(2) written agreement requirement in 2018. But that assignment requirement is directed to subject inventions. That means a contractor must already own the invention that inventors must promise to assign. That’s almost but not quite nonsense. A contractor could be said to own equitable title in an invention, just not legal title. Then the (f)(2) agreement would make some sense, but only in a NIST-screwy sort of way.
But if someone said–aha, this new assignment provision forces inventors to give up their rights to any invention made with federal support–they would be wrong. The Supreme Court was clear that there’s no authority in Bayh-Dole to require such a thing, and since Bayh-Dole preempts all other authority on the matter, there’s nothing outside Bayh-Dole that permits NIST to add an assignment requirement to the standard patent rights clause. The only way to do it, short of a new law, is for NIST to determine “exceptional circumstances” by following Bayh-Dole’s procedures, and then force inventors to be divested of the ownership of their inventions.
And if someone said–aha, the (f)(2) requirement does make inventors into contractors and their inventions subject inventions, so now NIST’s addition of an assignment requirement forces the inventors to give up their inventions to their employer-contractors–they would still be wrong. When the inventors become contractors, the prime contractor is forbidden from having an interest in any subcontractor-inventor’s inventions as a condition of the subcontract–as a condition, therefore, exactly of (f)(2). The NIST assignment requirement can’t be general to all inventor-owned inventions–it has to be specific to inventions that the employer-contractor already owns.
Oh, one last thing. No one complies with the (f)(2) requirement and no federal agency enforces it. So there’s no point in this whole discussion other than to emphasize how Bayh-Dole is a do WTF you want law that makes it look like everyone is looking out for the public good but in actual practice both universities and federal agencies are happy to screw the public by not complying with Bayh-Dole or its implementing regulations, and federal agencies are happy to look the other way or waive public interest requirements of the standard patent rights clause and never to act on the federal government’s license to subject inventions. So, yeah, Bayh-Dole is screwy.
The implementing regulations for the Nixon patent policy required inventor assignments. The IPA program master agreement under the Kennedy patent policy required inventor assignments when the contractor chose to file a patent application. But the codification of the Nixon/Kennedy patent policy was evaporated in 1984 when the Federal Acquisition Regulations replaced the Federal Procurement Regulations, and with it went the requirement for inventor assignments. At that point, Bayh-Dole was running only half the federal invention management regime–the part that covers what happens when a contractor acquires an invention made under federal contract. The other part–what happens when a contractor does not acquire an invention made under federal contract–has been disappeared, though vestigial authority for it remains hinted at in 15 USC 2218(d).