Federal agency patent enforcement under Bayh-Dole, 1

This may appear to be an outrageous claim, but it isn’t.

Bayh-Dole does not authorize federal agencies to enforce patents held by the federal government.

That much is not outrageous because there is nothing in Bayh-Dole that authorizes such enforcement. You can go look. You won’t find anything. But there’s more.

There’s nothing other than Bayh-Dole that gives the federal government authority to enforce patents that it holds.

That’s outrageous! Ah, you say, federal patent law–35 USC 281–remedies!

A patentee shall have remedy by civil action for infringement of his patent.

And a patentee is defined 35 USC 100(d):

The word “patentee” includes not only the patentee to whom the patent was issued but also the successors in title to the patentee.

It seems obvious that the federal government, when it takes assignment of inventions from inventors or from contractors becomes a patentee and has “remedy by civil action” for infringement. The federal government has the right to enforce the patent. Over! Done! QED! There’s glory for you!

If you reason this way, it is easy to see my claim as outrageous, and silly, and unproductive, and  not worth a single moment of precious time.

Let’s work through it reasoning a different way–by looking at more texts that fundamentally reshape what a federal agency that becomes a patentee can do–and that includes the Constitution, Stevenson-Wydler, and Bayh-Dole. Ready?

The federal government, in creating laws, is constrained to the authority it has under the Constitution. Federal patent law is one such law, deriving its authority from Article 1, Section 8, Clause 8:

The Congress shall have the Power . . .

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

It would be most interesting if the federal government then also had Constitutional authority to create a law requiring inventors (or anyone else) to assign their inventions, or patents on their inventions or the right to patent their invention, to the federal government. Rather than securing to inventors the exclusive right to their inventions, the federal government in such a case would by law secure that exclusive right to itself–something that is not authorized by the Constitution.

If Bayh-Dole were to vest title in inventions with federal contractors in the form of small businesses and nonprofits, it would be unconstitutional–such contractors are not inventors. If Bayh-Dole were to require that if a federal contractor, having got title to an invention made in federally funded research or development, screws up patenting, then the federal government can take title, it would also be unconstitutional. Oh, wait.

If NIST were to try to create a regulation that forces inventors to assign subject inventions to federal contractors, where if those contractors screw up patenting the federal government can acquire title, that too would be unconstitutional. Hmmm.

Nothing in Bayh-Dole requires inventors to assign their inventions to anyone. There’s no authority in Bayh-Dole for NIST’s regulation. Bayh-Dole applies, on the contracting side, only after a contractor has acquired title. And Bayh-Dole has nothing to say about how the federal government acquires title to inventions made by federal employees. Even the Supreme Court, in addressing (and rejecting) the “vesting of ownership in contractors” idea in Bayh-Dole, found Bayh-Dole’s lack of third party rights of appeal to be “deeply troubling” but for a substantial limitation of the law to only the disposition of patent rights between a contractor and a federal agency, after a contractor had acquired invention rights from an inventor. For “deeply troubling” read “right on the edge of unconstitutionality.” One might argue that the Supreme Court demanded a narrow interpretation of Bayh-Dole in order to save it from being tossed entirely.

It therefore matters a great deal how the federal government comes to be a “patentee” by becoming successor in title to a patent. It cannot be by operation of federal law. 

We can accept, for the sake of prolonging this article reaching its already announced conclusion, that the federal government may contract for the assignment of invention (and therefore patent) rights–from employees and from contractors. And it may receive assignment voluntarily, whether by way of donation or purchase. Can the federal government use eminent domain to take a patent rather than to break it? That is, could a federal agency use eminent domain to acquire a patent and then enforce that patent against persons and companies in the United States? There’s an argument that says no, it cannot. It might receive patents by any of these methods–but by obtaining ownership of patents does not mean the federal government has any ordinary right to enforce them. In part, what Bayh-Dole has done, is make it clear that the federal government may own patents but is limited in how it may enforce them. It’s a rather beautiful bit of an otherwise ugly law.

In the case of contracting, the federal government does not obtain its interest in inventions made by law, but rather obtains its rights by entering into a funding agreement for which it provides consideration–employment, research funding, and the like–and in return receives (or, because it is a federal contract, asserts) an interest in inventions made under the funding agreement. Even the federal statutes that assert federal ownership of inventions made with specified funding end up as directives for federal agencies to contract so that the agencies may require federal ownership of such inventions. Someone has to accept the federal offer to participate in the identified work to come under the obligation to assign inventions to the government. People and companies don’t have to take the government’s funding offer. It’s not a mob-like offer that cannot be refused. Federal laws stipulate how federal agencies contract for employment or research or development services, but don’t stipulate that inventions made under contract will be owned by anyone other than inventors. Not research host organizations, not employers, not federal agencies. Any such organizations can own inventions, of course–they just don’t get there by federal law. They get there by donation, contract, or an equitable claim.

One part of Bayh-Dole is a law of federal agency contracting, not of ownership of inventions. The other part concerns federal licensing and assignment of federally owned inventions. Bayh-Dole’s contracting bit is to require federal agencies not to contract for ownership of inventions except in limited circumstances–(i) when a nonprofit or small business contractor for research or development has got ownership of an invention and doesn’t patent or screws up patenting, or (ii) there are exceptional circumstances at the time of contracting (ones not the default circumstances, not extraordinary or rare circumstances).

For both federal agency contracting for inventions and federal agency licensing and assignment of inventions, Bayh-Dole stipulates restrictions on federal actions. These restrictions are part of federal patent law. As such, the restrictions affect not only agency actions directly but also limit the scope of patent property rights and the remedies available for infringement. Bayh-Dole covered inventions are not ordinary inventions. Bayh-Dole patents are not ordinary patents. Repeated theme. Breathe it deep.

Although the federal government may be a patentee as a successor in title to a patent, that alone does not of itself give the federal government full right to the ordinary remedies for infringement set forth in federal patent law. The federal government may have some remedies–but clearly not all of them. A federally held invention is not an ordinary invention, and a federally owned patent is not an ordinary patent. As federal patent law puts it–35 USC 261:

Subject to the provisions of this title, patents shall have the attributes of personal property.

Bayh-Dole is part of federal patent law (35 USC Chapter 18) and therefore patents within the scope of Bayh-Dole have the attributes of personal property subject to the provisions of Bayh-Dole. 

Here is one example to show that there must be limitations on federally held patents made within Bayh-Dole’s scope. Under federal patent law, suing for infringement is qualified by those “patent owners otherwise entitled to relief” (see 271(d)).  We find a list of actions a patent owner (a patentee) may take that does not preclude seeking “relief.”   One of these actions is (4):  “refused to license or use any rights to the patent.” But Bayh-Dole’s statement of policy (35 USC 200) stipulates that

It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development

There are more stipulations–and these will matter, too–but first this example. If patents on inventions arising from federally supported research or development (by contractors, by federal employees) must be used to promote the utilization of inventions, then the federal government cannot be allowed to seek relief even if it refuses to use or license rights to the patent. That is, Bayh-Dole imposes a working requirement on such inventions and limits the scope of property rights in patents on such inventions and therefore breaks the assurance in 35 USC 271(d)(4) that a patent owner is entitled to remedies for nonuse or refusal to license. The federal government, under Bayh-Dole, is not “entitled to relief” from infringement. Bayh-Dole precludes such relief in the case of nonuse and refusal to license.

Bayh-Dole prevents reliance on 35 USC 271(d)(4). That at least should raise your skeptical curiosity.

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