Bayh-Dole’s Fair Licensing Requirements


There aren’t any fair licensing requirements in Bayh-Dole.

Let’s go looking. Bayh-Dole does a number of things:

(1) Bayh-Dole defines a new category of patentable invention, called a “subject invention” and establishes in federal patent law a policy statement governing subject inventions;

(2) Bayh-Dole establishes provisions that must be in a default standard patent licensing clause and the procedures to be used to vary from the default;

(3) Bayh-Dole establishes ownership and licensing requirements for federally owned inventions, in particular enabling exclusive licensing to the point of assignment;

(4) Bayh-Dole takes precedence over any other “Act” that conflicts with Bayh-Dole, except for Stevenson-Wydler and any later act that expressly takes precedence over Bayh-Dole.

If we are going to go looking for “fair” licensing requirements, we might look in the policy governing subject inventions. That would be 35 USC 200. Here are some statements of policy that might apply: Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 7

WARF’s charter was designed to prevent the University of Wisconsin from using its money for non-scientific research–social sciences, humanities, and the like. The charter also prevented WARF from funding as well as university public service. The idea was that research in the sciences would produce more inventions, and the inventions when patented would produce licensing income, and that income could then be invested in stocks, and each year this financial engine could turn a profit while accumulating capital, and that capital could then be used to generate more inventions. WARF was designed as an engine to accumulate capital, use that capital to make more capital through investment, and return a portion of the profits to the University. In that, by any estimate, WARF has been wildly successful.

In WARF’s focus on natural sciences research, we find Bayh-Dole’s requirement that nonprofits use any balance of licensing income for “scientific research or education.” The provincial interest of WARF founders became, when WARF officials worked alongside Norman Latker at the NIH to expand the IPA program government-wide (and therefore nation-wide), a national provincialism. Each university was set up to compete with other universities to gain a share of patent royalties from the inventions from research each university hosts. As hosts to federally supported subvention research, universities are generally not employers and ought to have no interest whatsoever in the inventions made by personnel working with their resources. But with the WARF model, university administrators have come to believe that each of their universities is distinctly entitled to the lion’s share of proceeds from the exploitation of any invention made at their universities. Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 6

In 1999, Edmund Cronon and John Jenkins included a chapter on the Wisconsin Alumni Research Foundation in their history of the University of Wisconsin. The discussion of WARF is interesting for its spin and what it leaves out. WARF represents not only a piece of the now widespread way of thinking about university patenting but also in many ways is the first primary representative of this thinking, the origin as it were, the place where the tick bit into the neck and introduced the systemic changes that have properties not unlike Lyme disease but adapted for university patent management.

Thus, working through Cronon and Jenkins’s account of WARF provides an opportunity to gain a sense of perspective on what now are taken as obvious truths. But at the time, WARF was a work-around to popular expectations of university work, and a work-around to the way that the Research Corporation proposed to do things. It’s only fitting, then, that WARF is started by an invention at the University of Wisconsin which was itself a work-around to federal regulations. The mindset that WARF brings to the development of university patent policy and practice is one of clever work-arounds to public policies. One might say, WARF institutionalized the idea of gaming the system of university research, which led to the IPA program, which led to Bayh-Dole. And in Bayh-Dole we find the same mindset, the same gaming, the same work-arounds, cast in a vocabulary of public interest but in practice being something entirely different.

According to Cronon and Jenkins, WARF was something revolutionary: Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 5

The new 1969 Wisconsin patent policy broadens the scope of the university’s interest in patents yet further:

Here is the Wisconsin IPA definition of “subject invention”:

Both elements are essential to the definition. First, a subject invention is not just any invention “arising out of” or “in any way connected” with a federally funded project. Rather, that invention must be “made in the course of or under research supported” by HEW grants. “Under research” means that the research specifies that the inventive work. “In the course of” means what is done to achieve the specified work. “Made” means that the specified work anticipates conception of the invention or the first actual reduction to practice. This definition is a limiting definition of invention deliverables. The government bargains for inventions that are anticipated in the work proposed, or made in the course of doing that work–as evidenced by the grant documents. Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 4

One might see how, if university administrators believe that they have become, for invention purposes, the federal sponsor of the research, that they could also come to believe later that the Bayh-Dole Act vested ownership of inventions with the university as if the university were the sponsor of research and the federal funding agreement redirected any federal interest in inventions to the university. If the federal government asserted ownership of inventions through funding agreements (and regulations that form those funding agreements), then when the invention portion of the funding agreement is transferred to the university, so must also the ownership claim. The university can assert equitable title in inventions it never funded, simply because the government had funded them and transferred control to the university.

At least, that’s one way of reading the IPA program (and, later, Bayh-Dole). Things start with the Kennedy patent policy “presumption of title” with the government as a basis for federal contracting. Federal contracts are created by a combination of laws, regulations, and written agreements. The university then gets to stand in for the federal government for anything concerning inventions. Thus, the university gets the benefit of the federal “presumption” as a matter of assignment of the invention portion of the federal contract. When a university “elects to retain title” (in this manner of thinking), the university is “technically” “electing to accept being nominated by the federal agency to substitute for the federal government in the federal government’s claims to inventions made with federal support.” Under the IPA program, this thinking might have almost worked. Under Bayh-Dole, however, it’s impossible (though it is still done, of course) because Bayh-Dole displaces executive branch patent policy with a Congressionally mandated patent policy that does not include any requirement in federal funding agreement that the federal government has a claim to inventions made with federal support unless a contractor intervenes. Not there. Darn.

It’s all wickedly clever thinking, at least if one intends to co-opt inventor rights. Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 3

In most cases, a principal investigator will know immediately whether an invention or discovery is within scope of a well drafted research agreement–is this invention something that was proposed, as the solution to a problem, say, or that might arise as a result of an investigation? Did the research propose to build or demonstrate or test something new that might have utility for the grantor? Why would a principal investigator hold out on a sponsor of research? Would such “holding out” constitute research misconduct? If so, how could university administrators properly review the situation to ensure compliance if “holding out” on a sponsor meant that the university might be in line for profits from patent licensing via an invention management agent? The review of inventions by deans and business officers only works if the university has no interest in the outcome but for compliance.

Of course, with federal funding, this entire calculus is switched around. If the government receives inventions to ensure that the patent system is used to make inventions (and rights to inventions) broadly available to all, then “holding out” on the government amounts to finding a way to prevent the government from making inventions broadly available (without charge, without playing favorites, without upsetting the competition for additional research and development funding). An inventor might “hold out” and claim an invention, then, against the interests of a federal agency because the inventor wants to use the patent system in some other way–to prevent all use, or to make money from any use, or–perhaps–to make the invention broadly available, but using some special method that’s different than the government’s methods and so does for the government more and faster and better than what the government hopes to accomplish using its methods.

The IPA then switches the calculus of this last –perhaps– into the primary position. The government, so the IPA proposes, wants private invention management agents to step in and take assignment of inventions made with federal support from inventors and use the patent system better than might the federal government to do this –perhaps– thing, to make inventions broadly available using special private methods better than the government’s own methods. In this view, if an inventor “holds out,” the inventor is now “holding out” against the assumed better use of the patent system entrusted by the federal government by federal contract operating outside the actual funding agreement to private invention management agents. Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 2

In the new 1969 Wisconsin patent policy, we encounter a corporate agent and the passive voice: “it has become necessary for the University to scrutinize with care the funding which has assisted the making of the invention to be sue that all the obligations attaching to the contract or grant have been met.” The University, of course, cannot scrutinize anything. Someone has to act for the University to do the scrutinizing. Who should that be? Administrators? Faculty investigators? Patent brokers looking for more work? The policy doesn’t out and say “administrators” but that’s the clear implication, as will be made apparent in the policy soon enough.

The Wisconsin policy now turns to a discussion of the IPA program, announcing that the university now has an IPA master agreement with the Department of Health, Education and Welfare (HEW). Signing on to the IPA program, then, forms the reason for Wisconsin to have a patent policy. Why? Well, for one thing, the IPA program requires a review of a university’s patent policies and practices before a university can be signed up. So Wisconsin rather has to have something to show, if it wants to participate in the IPA program.

This IPA appears to have been the first master agreement negotiated after Norman Latker revived the IPA program at the NIH. We will get to what the policy means when it describes the IPA program as giving inventors “greater latitude.” Continue reading

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More Fakographic Comment

APLU and AAU published an infographic about university research and technology transfer. Technology transfer, the infographic claims, “transforms society” and the infographic will show us how. The “driver” of this transformation, we are told, is institutional licensing of patents based on inventions made in university research. That’s a nice idea, were it true (or demonstrable). University research, so the impression is framed, is a predictable administrative process that takes research money from the government and uses patents to create countless new commercial products.

Here’s the gist of the infographic:

Federal law mandates university patenting of federally supported inventions.
University patenting of federally supported inventions is good for society.
So, don’t mess with Bayh-Dole.
Don’t examine our effectiveness.
Shut up and be grateful. Continue reading

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The IPA and Wisconsin’s 1969 Patent Policy, 1

Tucked into Congressional testimony in 1978 on expanding the Institutional Patent Agreement program is the 1969 University of Wisconsin patent policy. This policy is notable for a number of reasons. First, because it is an actual policy statement on patents, where for a long time Wisconsin refrained from having a formal patent policy. If the university had no interest in the patents of its personnel, why should it have a policy about it? After all, the university has no ownership interest in the cars or houses of its personnel, and has no need of a formal policy to disclaim that interest, or to try to find strangely curious situations in which it might end up with an ownership interest anyway. So why patents?

The 1969 Wisconsin patent policy is interesting for a second reason. The Wisconsin Alumni Research Foundation’s Howard Bremer was one of the primary players behind the efforts to make the IPA program government-wide. That effort failed but in its place came an even rougher beast called Bayh-Dole. In 1968, Norman Latker at the NIH had revived the IPA program, following on the Harbridge House report regarding federal government patenting activity and policies. The next year, in 1969, Wisconsin’s new patent policy includes an account of how the IPA program affects university researchers and inventors.

The new patent policy opens with a typical preamble–creativity is important, inventions happen. The university asserts a say in how inventions are managed:

Continue reading

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DIY Plus: inventions, claims, and technology transfer

I will start with a mostly unreadable diagram:

This is the rhetorical anatomy of the relationship between an invention and a patent, or a “claimed invention.” It is important to see the difference because people tend to talk about inventions and patents as identical, that an invention is “patented” and the invention is a “thing” (like a cotton gin or an MRI device or compound 169′ that became Xtandi). But the thing that’s conceived in a material form–which an inventor might think of as an “invention”–and the thing that’s claimed legally as the subject of a patent that grants the right to exclude others are often very different things.

Let me explain, using the notation of the mostly unreadable diagram. Continue reading

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