10 Oddities of 35 USC 210

The Bayh-Dole Act does not repeal prior law with regard to inventions arising from federally supported research or development. Instead, it selectively preempts statutes (with some exceptions). Here is the start of 35 USC 210(a):

This chapter shall take precedence over any other Act which would require a disposition of rights in subject inventions of small business firms or nonprofit organizations contractors in a manner that is inconsistent with this chapter . . .

This statement is odd in a number of ways.

1. The provision does not repeal or amend prior laws. It makes Bayh-Dole out to be a law in conflict with other laws and asserts precedence. The other laws remain in effect until expressly amended (as some have been). If those other laws–the “Acts”–require inclusion of specific contracting language to make them effective, then that’s not happening. For such a thing to take place, there would have to be in each federal contract or grant or cooperative agreement a patent rights clause specific to each such Act, as well as the one required by Bayh-Dole.

Or, another way, there would be two patent rights clauses–one when an invention was made by a contractor into a subject invention and another for inventions that were not subject inventions but were still made under contract or otherwise within the scope of an Act. Continue reading

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Bayh-Dole government-wide licenses

In a Twitter thread in which Jennifer Gunter argues that “Americans should not be bankrolling the pharmaceutical industry,” Steven Martin tweets

Let’s work this through. There is no need to revise Bayh-Dole for state and municipal governments to authorize the production of medicines under Bayh-Dole. They already have the right to do so under Bayh-Dole’s “government” license. Bayh-Dole requires a patent rights clause in every federal funding agreement that includes a provision that as a condition of a contractor’s right to elect to retain title to a subject invention, it must grant to the United States a license to practice and have practiced. See 35 USC 202(c)(4).

In this license, “practice” means to make, use, and sell–the substantial rights in any invention. So to practice and have practiced means that the United States has the right–without owing any compensation to an owner of a subject invention–to make, use, and sell and authorize others to make, use, and sell. Furthermore, “United States” means the federal government, state governments (yes, the states, united), and municipal governments.

To show you that this is true, look at the usage of practice in the Kennedy and Nixon executive branch patent policies. Continue reading

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Reagan’s Bayh-Dole cluster bungle

In 1987, President Reagan signed an executive order (12591) that aimed to legitimize his 1983 memorandum that instructed heads of executive branch departments and agencies to “promote the commercialization . . . 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.”

This 1987 executive order is nothing like Bayh-Dole. Bayh-Dole has nothing to say about promoting commercialization. Bayh-Dole does not grant title to patents to contractors. Bayh-Dole does not even grant title to inventions to contractors. Bayh-Dole’s scope is inventions arising from federally supported research or development–not just research, and not just “results of” but “arising from.” Bayh-Dole requires a government license to practice and have practiced, not merely use–much broader.

It’s even hard to understand how an executive order to agency heads could result in federal patent law being superseded, so that somehow title to patents could be granted by the federal government to contractors rather than to inventors, without the active concurrence of the inventors. More than that, it is hard to understand how Reagan could by an executive order overturn Bayh-Dole. Bayh-Dole sets the requirements for standard patent rights clauses used in federal funding agreements. For Reagan’s executive order to be effective, agencies would have to determine, for nonprofits and small companies, exceptional circumstances and substitute Reagan’s requirements in place of the defaults specified by Bayh-Dole. Continue reading

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A Quora answer links to a Youtube video about the Battle of Alesia, which took place in 52 BC between the Romans and Gauls. The video examines Julius Caeser’s strategy in defeating a larger army with a better position in the field. The video ends with a discussion of Caesar’s way of thinking about achieving victory.

Here–you can watch it if you want.

Here’s the key thought–Caeser’s thinking vs conventional thinking. Continue reading

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The inefficiencies of Bayh-Dole discussions-1

A common approach to discussions of Bayh-Dole is

(1) accept that what is happening is just what people say is happening–the law is working (as people claim), based on a politicized spun history (as people claim), based on a metrics of success (as people claim), and then

(2) misrepresent the law (or uncritically repeat misreprestations of the law) to account for why, and then

(3) go on complain about the law anyway or propose how to build on its wonderfulness.

It’s a grim way to discuss policy, what with all its trappings of academic sophistication and  authority of publication. Such articles gather together, reinforcing each other and vying to move the policy discussion to be about some bit that each posits. As a result, the academic literature on anything Bayh-Dole is nigh unto useless for practice, policy, or thinking about innovation. AUTM data is also useless. Summaries of Bayh-Dole drawn from the academic literature are largely wrong–especially if written before 2011. But so are the political spin statements made about Bayh-Dole when it was debated and which have been repeated, unchallenged and unchanged, for over thirty years. Even Senator Bayh was wrong about Bayh-Dole’s fundamental operation, and the US Supreme Court ruled as much in Stanford v Roche. It’s almost like people want to get Bayh-Dole wrong, regardless of whether they love it, hate it, or just want to gussy it up.

Here’s an article by way of example: “Correcting Bayh-Dole’s Inefficiencies for the Taxpayer” by Michael Sweeney, published Northwestern Journal of Technology and Intellectual Property in 2012. Let’s work through the article’s account of Bayh-Dole. The exercise is not so much to show the defects of this work–it’s someone’s annotated opinion, so fine, and I could pick almost anything–but rather let’s use this work as a springboard to open up what Bayh-Dole actually does, were folks to comply with it, and perhaps from there we might begin to think about what ought to be done about it, if anything. So, consider that the article–forgotten perhaps by all but for the internet and a guy’s law firm bio–has a place of honor here at Research Enterprise and still has a legitimate role to play, though it is badly defective on the law and those defects render its proposals for change mostly useless.

Here’s the start of Sweeney’s article on Bayh-Dole:

By transferring ownership rights of federally funded inventions to non-government contractors and their subsequent licensees, the University and Small Business Patent Procedures Act of 1980 (Bayh-Dole Act) gives private actors unprecedented rights to intellectual property that was cultivated with public money.

I have bolded some things for consideration.

Continue reading

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A sense of proportion–5

One can see, then, where Bayh-Dole comes into play in this meaningless mess. Bayh-Dole was drafted by the same folks who created the IPA system. The IPA system was shut down in 1978 as ineffective and contrary to public policy. Bayh-Dole emerged the next year, slogged through Congress, failed, and then was revived, tacked onto a bill to make technical changes to federal patent law, and passed in a lame-duck session as a parting gift to Senator Bayh, who had lost his re-election campaign. Bayh-Dole was given the appearance of doing what the IPA program had done.

Norman Latker, the NIH patent counsel that had developed the IPA program, had a hand in the Nixon patent policy revisions of the Kennedy patent policy, and then had a hand in drafting the Federal Procurement Regulation that codified the Nixon patent policy (because the Nixon patent policy had added this requirement for codification, by perhaps total coincidence), wrote later that Bayh-Dole was based on the IPA program. Really, Bayh-Dole was based on the Federal Procurement Regulation, not the IPA program, but because the FPR, which become effective in 1975, was designed to create the opportunity to expand the IPA program government wide, really Bayh-Dole was constructed out of parts of the IPA and FPR, a sort of franken law raised from the dead to serve university patent administrators. Continue reading

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A sense of proportion–4

To lay it out in bullet points, the now dominant university patent-based approach to research inventions defaulting to exclusive licenses:

    • fragments invention platforms with no way to restore them
    • attracts speculative investors while pushing away companies
    • raises barriers to early adoption and variation on new technology
    • induces companies to work to undermine the invention rather than build on it
    • constricts the value of new technology to an institutional licensing relationship

None of this “protects” research inventions. None of this facilitates technology transfer. Quite the opposite. There’s enough money supporting this approach, however, that all that’s needed is one big financial outcome every two decades or every 5,000 inventions per university to make it all appear profitable–a patent license, a startup is acquired, an infringement judgment, a financial settlement in a contract dispute. All the other inventions in the university’s “portfolio” then become the grist for the successful deal, and the practice perpetuates itself for another couple of decades. Continue reading

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A sense of proportion–3

Prior to federal funding becoming the dominant source of university research funding, most universities operated their invention policies with a review committee that made recommendations to the university president with regard to particular inventions. The volume of invention reporting was sufficient low that people could consider possible a committee review. But with even a small uptick in the volume of inventions reported, committees were simply not workable. They would have to meet daily if not weekly, they would have to have technical, business, and legal knowledge from across the whole gamut of university research, they had no idea what to do if they said “no” to taking on any given invention, as “no” appeared to waive the whole invention policy apparatus. By the early 1980s, university invention review committees at a research university of any size were unworkable.

Instead, university administrators worked with Research Corporation to streamline reporting of inventions directly to Research Corporation. Research Corporation worked in the 1970s to create “technology transfer offices” at universities to help inventors recognize inventions and report them to Research Corporation for review. Thus, there were on many campuses people who knew something about inventions, how to document them for management review, and how to get them to Research Corporation or some other agent. These people were motivated to get invention agents to pick up reported inventions for management–each one represented the prospect of licensing income–and therefore of continued employment for the administrators involved. Conversely, each invention that was not adopted by an invention management agent meant the loss of the effort to get the invention fully documented and the prospect of having to waive the opportunity to make money for the university back to the inventor. Continue reading

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A sense of proportion–2

University administrators have engaged in a thirty-year effort of research invention management that creates patent gridlock for what amounts to a tiny bit of the overall inventive activity in the country. That’s the black border area on this nice blue circle:


This domestic block fest is particularly the case for federally funded inventions–but keep in mind we are talking about 0.8% of all US patents from 1981 to the present.

The federal government early on in its foray into funding research to advance the frontiers of science and whatnot constrained itself to avoid the concentration of economic power that might arise if only a few companies or regions gained the benefit of federal subsidies–as Vannevar Bush had done during World War 2, contracting with only select companies and universities to get the indicated work down. Instead, the government committed itself to spreading the work around. And in doing so, by design federal funding fragmented where inventorship would arise in its programs for any given field of scientific and technological inquiry. It wasn’t that much of a problem, however, because federal invention policy meant that the government would acquire inventions made under contract other than with companies who had established commercial positions and make those inventions available to all.

Put simply, companies with real business could keep their patents, subject to a government license, and non-profits and contract research organizations that just did research for doing research would treat inventions as contract deliverables, knowing that they would get a non-exclusive license to practice along with everyone else. Another way: the federal government aimed not to disturb the commercial marketplace by its contracting–it wanted companies to participate in a fashion so that no one company obtained a dominant position with regard to others merely for having latched on to a source of government subsidy not available to the rest.

Yet another way: the federal government maintained its commitment not to use the patent system to sue its own citizens for using what they had funded nor to take a financial interest–necessarily then conflicted with regard to regulation and justice–in anyone exploiting patent rights under a government license.

Thus, as long as university research inventions were treated as contract deliverables, available to all via the federal dedication of inventions to the American public, spreading the work around to various universities and regions of the country–research as a form of economic pork rather than for its timely and useful results–was not a big deal because the government in effect made inventors and their employers cooperate in the release of the inventions to all. Continue reading

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A sense of proportion–1

“If life is going to exist in a universe this size, the one thing it cannot afford to have is a sense of proportion.”

Douglas Adams, Hitchhikers Guide to the Galaxy

In the Bayh-Dole era–1981 to the present–the US Patent Office has issued somewhere around 6.1 million utility patents. During this time, American universities and their affiliated nonprofits have obtained around 120,000 patents, of which a bit over 50,000 cite federal funding. We can illustrate this situation:

The circle area represents all US utility patents in the Bayh-Dole era. The university contribution is 2%, the federally funded university contribution is 0.8%. That is, the university contribution is within the area taken up by the black border of the circle, and the federal contribution–for maybe a trillion dollars of research–is less than half of that black border.

Counting patents is pretty much goofball. A lot of patents does not mean a lot of innovation. A lot of patents might not mean anything at all. A lot of patents is like describing a baseball season as a lot of hits. There’s not much one can tell from counting hits. What did the hits do? Who won what games? Were the games fun to watch? One hit in a 1-0 nine inning game no hitter may be worth way more than 22 hits in a 17-2 blowout. Counting patents, like counting hits without context, is meaningless. Continue reading

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