Federal law on inventions made with federal support, 4

One cannot read “contractor” in Bayh-Dole and assume that “contractor” only refers to the initial or prime contractor. One must always look to the circumstances of a given contract to determine whether others have been made parties to the funding agreement. A contractor may add parties to a funding agreement by any assignment, substitution of parties, or subcontract of any type. Let’s work through some examples. We will start with more overt examples and then look at stuff that is not what you find in the usual glossy accounts of Bayh-Dole.

Consider some examples.

(1) Nonprofit subject invention assignment.  Bayh-Dole requires federal agencies to require nonprofit organizations, if they assign a subject invention, to require the assignee to comply with the nonprofit’s patent rights clause. See 35 USC 202(c)(7)(A):

In the case of a nonprofit organization, (A) a prohibition upon the assignment of rights to a subject invention in the United States without the approval of the Federal agency, except where such assignment is made to an organization which has as one of its primary functions the management of inventions (provided that such assignee shall be subject to the same provisions as the contractor)

This provision then shows without the second set of parentheses in the standard patent rights clause at 37 CFR 401.14(k)(1).

Rights to a subject invention in the United States may not be assigned without the approval of the Federal agency, except where such assignment is made to an organization which has as one of its primary functions the management of inventions, provided that such assignee will be subject to the same provisions as the contractor;

If a nonprofit assigns a subject invention to a company, even under the cover of an exclusive patent license, the company becomes a party to the funding agreement–becomes a contractor–and any inventions made by the company made by the company arising from federally supported research or development are also subject inventions. Furthermore, the company is obligated to handle those inventions under the nonprofit patent rights clause. Specifically, the company-assignee agrees–as a party to the funding agreement–to dedicate income earned with respect to subject inventions to the specified public purposes. Continue reading

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Federal law on inventions made with federal support, 3

Now, let’s emphasize a few points.

There are at least three ways that a contractor may come to own an invention made with federal support:

  • inventors assign their inventions
  • state law (in some cases, such as Ohio Rev Code 3345.14)
  • by making inventors parties to the federal funding agreement.

In the last instance, a contractor turns inventors into contractors rather than takes ownership of inventions from inventors. There are other ways, too–for instance, by bequest, by a court’s finding of equitable title (an implied, compulsory assignment), by exclusive license that grants all substantial rights.

Bayh-Dole’s standard patent rights clause (at 37 CFR 401.14(f)(2)) requires contractors to require certain employees to make a written agreement to protect the federal government’s interest. Let’s explore this written agreement and its status within the federal contracting environment of specialty statutes, the Reagan patent policy that modifies the Nixon patent policy, and Bayh-Dole.

The written agreement requirement is oddly worded. Had Bayh-Dole been intended to apply directly to inventors, the law could (perhaps) have openly required inventors to disclose inventions or to assign or license inventions to the federal government or to contractors as may be provided for under the law. As the Supreme Court noted in Stanford v Roche, the law nowhere does this, and if Congress intended such an outcome, it would have to make its intent to do so manifestly clear. Continue reading

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Federal law on inventions made with federal support, 2

Next, we add citations and qualifications to ground this framework.

Specialty statutes for specific federal purposes control federal claims of ownership of inventions made under federal contract.

See the list of such statutes at 35 USC 210. If a specialty statute controls, it takes precedence over any executive branch policy.

The Nixon patent policy as amended by Reagan’s executive order otherwise controls federal claims of ownership of inventions made under federal contract.

See 15 USC 2218(d), which requires federal agencies to use the Nixon patent policy:

All property rights with respect to inventions and discoveries, which are made in the course of or under contract with any government agency  pursuant to this chapter, shall be subject to the basic policies set forth in the President’s Statement of Government Patent Policy issued August 23, 1971, or such revisions of that statement of the policy as may subsequently be promulgated and published in the Federal Register.

In 1983 Reagan issued a Memorandum to federal agencies to require the application of requirements “the same or substantially the same” as Bayh-Dole for research and development contracts to parties not otherwise addressed by Bayh-Dole:

To the extent permitted by law, agency policy with respect to the disposition of any invention made in the performance of a federally-funded research and development contract, grant or cooperative agreement award shall be the same or substantially the same as applied to small business firms and nonprofit organizations under Chapter 38 of Title 35 of the United States Code.

Reagan got the chapter wrong–it’s Chapter 18, not 38. And his Memorandum would not be “permitted by law” if it was not published in the Federal Register as required by 15 USC 2218(d). Reagan fixed this in 1987 with executive order 12591, which cites the Memorandum and the Nixon patent policy, and was published in the Federal Register:

(4) promote the commercialization, in accord with my Memorandum to the Heads of Executive Departments and Agencies of February 18, 1983, of patentable results of federally funded research by granting to all contractors, regardless of size, the title to patents made in whole or in part with Federal funds, in exchange for royalty-free use by or on behalf of the government;

Bayh-Dole preempts the specialty statutes and the Nixon policy (i) when a federal contractor owns an invention:

See the Supreme Court decision Stanford v Roche (2011):

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.

Continue reading

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Federal law on inventions made with federal support

First, the brief version:

Specialty statutes for specific federal purposes control federal claims of ownership of inventions made under federal contract.

The Nixon patent policy as amended by Reagan’s executive order otherwise controls federal claims of ownership of inventions made under federal contract.

Bayh-Dole preempts the specialty statutes and the Nixon policy (i) when a federal contractor owns an invention:

Because a federal contractor obtains assignment;


Because a federal contractor makes inventors become federal contractors who own their inventions.

and (ii) for all research or development contracts, requiring at least government license and the right to march-in.

Reagan’s executive order requires federal agencies to follow something almost like Bayh-Dole unless a specialty statute requires otherwise.

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Bush v Kilgore v the Old Order v Now

In 2005, Nicholas Steneck at the University of Michigan taught a course in the history of science–“Science, Technology and Society–1940 to the Present.” Here’s his lecture outline for the part about federally funded science and engineering during World War 2:

President Roosevelt was persuaded to ask Vannevar Bush for his views on how government ought to fund science after the war, given how things were done during the war. See Nathan Reingold’s account in “Vannevar Bush’s New Deal for Research: Or the Triumph of the Old Order.”

Prof. Steneck outlines two competing proposals, one from Senator Harley Kilgore, and the other from Dr. Bush: Continue reading

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The new rule

I once created a game I called “Tradition.” I was trying to find games with simple rule sets. In Tradition, the only rule was you could make a rule or make a move. At the outset, then, the only move is to make a rule. A move that ends the game immediately is to make a rule that there can be no more moves. That’s equivalent to messing up the chess board, say. Otherwise, the challenge in Tradition is to create rules and moves that are worth conforming to and performing. In a way, Tradition is rather like an open-ended discussion or conversation, where there are tacit rules and moves that each participant recognizes and which may be brought into play.

In what sense is exploration and discovery more like an open-ended discussion than it is something “systematic” and “managed”? If we know what we are looking for, or where we are going to find it, we might mount a systematic effort to find it. Create a grid and start digging. But if there are countless combinations to consider, such systematic brute force methods don’t answer. Instead, we have to rely on intuition, luck, prepared mind, serendipity, accidents. We do things without “management” approval, outside what “management” can imagine. Such actions look imprudent, ill-advised, lacking theoretical justification, lacking good experimental design, outside established consensus, looney, a waste of effort, impractical, bad for one’s career, people will laugh or won’t listen.

You know, that stomach ulcers are caused by H. pylori. Or that continents drift. Or that hand washing can save mothers’ lives during child birth.  Continue reading

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Inventor freedom and the unexpected model of innovation, 1

Consider an alternative to the present university administrator mania for patenting. Let’s start with inventor freedom and then look once more at what I call Vannevar Bush’s unexpected model of innovation.

There are difficulties in the effort. First, the social sciences have a long history of proposing “models” of innovation. Anything anyone might say then can be fitted into a “model,” reduced to social scientific debate, and secured by experts in the field as a species of their own making. Just as one engaging in politics is expected to bluff and deceive, one engaging in what looks like policy discussion will be expected to propose a policy–or if not, a policy will be constructed from the discussion and then critiqued. What if, however, one proposes a policy that has as its aim to beat back policy? A bill of rights for freedom from policy. A sort of “policy-left,” a recursion on policy, a use of policy to limit policy. Not so much anti-policy policy as exploiting policy to prevent policy from exploiting anything else. The one thing policy chokes on is policy that argues that policy is not the best honesty. Continue reading

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Vannever Bush on the control of scientists

Here’s Vannever Bush on the institutional desire to control scientists:

There is nothing more deadly than control of the activities of scientists and engineers by men who do not really understand, but think they do or must at least give others that impression, and the worst control of all is by individuals who have long been immersed in a particular subject and have made it static.

Perhaps NIST might consider this point as it tries  to “unleash” American “innovation.” Perhaps NIST should tweak Bayh-Dole regulations in favor of scientists rather than in favor of institutional controls. But no, NIST adds regulations against the authority of Bayh-Dole to force scientists to give up control of their inventions made with federal funds to bureaucrats–and not even government bureaucrats.

Oh, yes, the non-federal nonprofit bureaucrats made the argument that they were more effective bureaucrats in taking things from scientists than were the federal bureaucrats. They were bluffing, of course, and weren’t any better. But in politics bluffery is fact, as AUTM reminds us every day.

Lost in the debate–no doubt on purpose–was the idea that both kinds of bureaucrats suck when it comes to control of scientists.

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Another NIST FAQ-up, 2

For the rest of NIST’s FAQ’d-up answer, let’s parse closely. NIST has just repeated the obvious–if an invention has been conceived and reduced to practice prior to federal funding, it is not a subject invention. The question, however, has to do with what happens when reduction to practice takes place after federal funding and “as part of the award.” Here’s NIST:

However, an invention which had been conceived but not actually reduced to practice by a contractor prior to commencement of a funding agreement,

Keep in mind that if a contractor does not own an invention, it cannot be a subject invention, ever. NIST drops the contractor ownership part of the definition and adds the “actually.” “Actually” reduced to practice is not “actual” reduction to practice. Someone doing the drafting at NIST does not have a clue what they are writing–or at least they are certainly not attentive to what they are writing. Maybe they don’t care, really.

Bayh-Dole’s definition plays with technical terms in federal patent law practice having to do with determining who has invented first. It is an obsolete discussion, but lives on in Bayh-Dole. For an invention to be patentable, among other things, it must be conceived and reduced to practice. Conception means that the invention has been completely represented in the mind of the inventor and the inventor must recognize that what is there in his/her mind is an invention. And to demonstrate conception, there must be documentation. Though the eyes may be the window to the soul, paperwork is necessary to see the state of an inventor’s mind. Continue reading

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Another NIST FAQ-up, 1

NIST doesn’t understand Bayh-Dole. Let’s take another look at their mind-numbing FAQ.

Here’s the question NIST asks:

Does an invention need to be reported if it was conceived before an award but reduced to practice as part of the award?

This is an important question, but NIST casts it with a fundamental ambiguity. The point of the FAQ ought to be to call out the ambiguity and show how to better understand circumstances and anticipate outcomes. But no. Instead, NIST gives an answer that is not helpful. Continue reading

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