We have pounded our way through the definition of subject invention. We started with the observation that Bayh-Dole is part of federal patent law, not merely an executive branch regulation. Bayh-Dole preempts other federal law and executive branch patent policy when an invention meets the definition of subject invention. Rather than repealing those other laws and policy, Bayh-Dole adds yet another layer of administrative fussiness. But this fussiness is embedded in patent law and changes the property attributes of patents obtained on subject inventions as well as requiring owners of inventions to behave in ways that are not required of the owners of ordinary inventions.
However, in the case of both ordinary inventions and subject inventions, nothing in federal patent law-including Bayh-Dole–requires inventors to use the patent system or behave so that their inventions become subject inventions. Bayh-Dole applies after an inventor becomes a party to a federal funding agreements or assigns his or her invention to someone who is a party to the federal funding agreement–provided that the invention is patentable and was made under that funding agreement (that is, made in a project that received at least some federal funding in some part of the project). Got it.
Subject invention is a definition in federal law. People cannot merely assert an invention is a subject invention, even “just in case” or to gain (what they may think is) a legal advantage. People cannot agree with a federal agency that something is a subject invention and somehow make it so. People can conduct their affairs to bring an invention within the scope of subject invention (by acquiring ownership, say, or by documenting the invention sufficiently for it to be patentable, if it is otherwise patentable). But patent law does not force anyone to use the patent system, the Bayh-Dole part included.
Let’s wrap up.
We can rule out some things that people routinely claim constitute a subject invention.
A subject invention is not any invention made with federal support.
Among other things, an invention must be owned by a federal contractor to be a subject invention. See Stanford v. Roche. This refutes the “if even $1 touches an invention” argument, which the Supreme Court in Stanford v Roche scoffed at. It is not the money touching an invention that matters–it is a contractor doing so, by means of ownership. What matters, further, is whether federal funding was allocated to some portion of a larger project that has produced an invention–and federal funding is not allocated in portions of $1.
Inventions that are not patentable are not subject inventions (except for new plant varieties–another Bayh-Dole screw up).
If an inventor does not recognize the inventive nature of what has been done, the invention is not patentable. If an invention has been disclosed for more than a year in the United States without a patent application filed, it is not patentable. If an invention is not new, or not useful, or is obvious (including obvious from a combination of published sources that would be reasonable for someone with ordinary skill to combine), then the invention is not patentable. If an invention has not been adequately documented, it is not patentable.
Inventions made by added parties to a funding agreement, especially developers who receive assignment of a subject invention from a nonprofit organization (even assignment via an exclusive patent license), if owned by those added parties, and otherwise meeting the definition of subject invention, are subject inventions.
These inventions are typically reported if the parties are added by subcontract or by substitution of parties where an invention management organization works for a nonprofit, and are typically not reported when a nonprofit assigns a subject invention to a company for commercial development, in violation of Bayh-Dole.
So where are we? A subject invention must meet every element of the definition at 35 USC 201(e).
The invention must be owned by a party to the funding agreement.
Ownership is conveyed from inventors by written instrument. No written instrument, no conveyance.
A contractor may make its inventors parties to the funding agreement.
The invention must be patentable or possibly patentable or a plant variety.
The inventor must recognize its inventiveness.
The invention must be statutory subject matter for patenting.
The invention must be new, useful, and non-obvious.
The invention must be documented in sufficient detail and completeness.
The invention must not have passed bar dates for filing patent applications.
It must have been made in a project that has received at least some federal funding for research, experimental, or developmental work.
Chronology of work and funding is not determinative (see 37 CFR 401.1).
Separate accounting does not matter.
Includes testing necessary to first demonstrate that the invention works for its intended purpose done by party to the funding agreement or done with federal support.
What is the project? Did the federal government provide research, experimental, or developmental funding at any point to the project.
If federal funding has been used to do work outside the scope of a funding agreement, resulting in an invention that may be a problem of misuse of funds, but misused funds do not cause an invention to meet the definition of subject invention.
Any party to the funding agreement may make a subject invention, even one recruited to develop a commercial product, if the recruitment takes the form of assignment, substitution of parties, or subcontract.
An exclusive license to all substantial rights in an invention (make, use, sell) acts to assign the invention and makes the exclusive licensee (assignee) a party to the funding agreement.
Inventions made in the commercial development of a subject invention are also subject inventions if (a) the inventions are owned by a party to the funding agreement and (b) otherwise meet the requirements of Bayh-Dole’s definition.
There. Now you have it. A long explanation for a clumsy, kooky, badly drafted, ineffective federal law that most everyone ignores, misrepresents, fails to enforce, and makes up fake history and bogus metrics for. In practice, a subject invention is whatever people who can ruin your life say it is. You know, like Thrasymachus’s argument in The Republic, that justice is whatever those in power say it is.