The VA gets a bit of Bayh-Dole

The Department of Veteran’s Affairs produced a template Cooperative Technology (Inventions) Administration Agreement available at a web site called Agreement Sample.  The template is modeled on a CRADA agreement, but instead of research, the agreement concerns the administration of inventions made jointly by university personnel and VA personnel. This sort of thing happens especially when an individual has a joint appointment–working for a university and for a VA facility–a “Dual Appointment Personnel” or DAP.

The template is interesting for the map it supplies to all the complications involved in sharing the administration of an invention between any two process and regulation-heavy organizations. But the agreement appears to date from 2010, and has been replaced.

Here is one bit from the first paragraph of the Recitals:

 VA and UNIVERSITY through their employment relationship with certain faculty and staff, through 37 C.F.R. Part 501, and/or through 35 U. S. C. §§ 200‑212, as well as state law and implementing policies, have an interest in inventions made by their employees;

37 CFR 501 codifies Executive Order 10096 pertaining to federal ownership of inventions made by federal employees. 35 USC 200-212 is the Bayh-Dole Act. The recital asserts–as uncontested fact–that a university has  “. . . through [Bayh-Dole] . . . an interest in inventions made by their employees. The Supreme Court in Stanford v Roche (2011) made clear that a federal contractor has no interest in inventions made by its employees as a consequence of Bayh-Dole.

Roll forward to the version prepared by the VA in 2018:

VA, in accordance with Executive Order 10096, 37 C.F.R. §§ 501-501.11, 38 C.F.R. §§ 1.650-1.663, and 15 U.S.C. § 3710a et seq., and University, through its policies and contractual employment relationship with certain faculty and staff, have an interest in inventions made by their employees.

38 CFR 1.650ff is the VA implementation of 37 CFR 501. 15 USC 3710a is part of Stevenson-Wydler pertaining to cooperative research and development agreements. Notice that the representation for the university interest in inventions has been changed and no longer recites Bayh-Dole. Now all we have is the assumption that a university will claim ownership of faculty and staff inventions–at least for “certain” faculty and staff. Perhaps that change is an effect of the Stanford v Roche decision. Unlike the NISTwits, it appears that the folks at the VA understand.

The new template requires the university to state how it comes to have an interest in certain faculty and staff inventions (bold in original):

University, through its Policy ______ [Insert reference to specific University Policy], set forth in Appendix C, and contractual employment relationship with certain faculty and staff, has an interest in inventions made by its employees. University obtains an assignment from its employees [select one, depending on University policy: upon commencement of employment/upon disclosure of an invention/once it is determined University has an interest in the invention].

Now a contractual employment relationship with an employee does not have any bearing in and of itself on an employer’s ownership claims to an invention. That, too, the Supreme Court made clear in Stanford v Roche. Mere employment is not sufficient. That is all the more true for faculty members at a university, who are appointed to their positions and paid a salary, but are not employed as servants to a master for very much at all of their activities at a university. Courts have held that university policy statements form implied contracts and if faculty don’t contest them, then it can be construed that the faculty members have agreed to them. That’s an interesting idea–that one can be held to a contract that one hasn’t had any hand in negotiating and may not even be aware of. Even so, courts have also held that in the case of ambiguity in an adhesion contract, the interpretation of the contract should side with the non-drafting party.

At least the VA template lays out three scenarios in which a university could come to have an ownership interest in inventions made by certain faculty and staff:

  • demands assignment up front–this is the present assignment mania, fueled by a misreading of Breyer’s dissent in Stanford v Roche.
  • demands assignment when an invention is disclosed–because now there’s actually something to identify with regard to a property right, but also backed by a policy claim that the inventor must assign.
  • demands assignment only when the university decides that it wants to manage the invention. This practice makes the most sense, of the three identified. Take only what one actually has a public policy mandate to manage, not everything before anything is invented, not everything just because it has been invented.

But there is a fourth possibility–that a university accepts assignment of an invention because an inventor requests the university to do so and the university agrees. I know, these days that possibility sounds just plain silly, but a century ago, faculty inventors repeatedly asked their universities to take ownership of inventions only to be turned down. Hence, Cottrell started Research Corporation and Steenbock started WARF.


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