The IPA and Bayh-Dole on nonprofit assignment of subject inventions, 4

Posted on February 18, 2021 by Gerald Barnett

Well, now we can look at Bayh-Dole’s nonprofit assignment provision. It’s in Bayh-Dole’s specification for what must be included in a patent rights clause that runs with any funding agreement with a nonprofit or small business. Here, 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);

We have the same restriction to nonprofit organizations, and the same structure–a prohibition followed by an exception. But things are different.

a prohibition upon the assignment of rights to a subject invention in the United States

The prohibition is restricted to the US. A nonprofit can assign foreign rights without conditions. Also, any small company can assign any rights in a subject invention without any conditions. One wonders, what changes when a subject invention is owned by a nonprofit so that there must be federal approval, but only for US assignments? Continue reading →

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The IPA and Bayh-Dole on nonprofit assignment of subject inventions, 3

Posted on February 17, 2021 by Gerald Barnett

We are working through the approaches of the IPA master and Bayh-Dole’s standard patent rights clause to the assignment of inventions by nonprofit organizations.

Unlike the IPA, which was a federal master contract made with selected organizations, Bayh-Dole is a federal statue, a part of patent law. Bayh-Dole authorizes patent rights clauses that look a lot like IPA master agreements, except under Bayh-Dole, there’s no master agreement. The patent rights clause runs with each federal funding agreement. Thus, the Bayh-Dole sequence is:

1) Nonprofit accepts federal funding for research or development.

2) Nonprofit accepts the patent rights clause for that funding agreement.

3) Nonprofit requires potential inventors to make a written agreement to protect the government’s interest.

4) Inventor makes an invention.

5)  (a) If the nonprofit acquires the invention, then it must disclose the invention to the federal agency and within two years of that disclosure decide whether to keep title to the invention and, prior to a patenting bar date (basically, within one year after public disclosure), file a patent application.

(b) If the nonprofit does not acquire the invention, then the invention is not a subject invention, is not subject to the Bayh-Dole patent rights clause.

Oddly, inventions not acquired by a federal research contractor appear not to be subject to any federal requirements. Continue reading →

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An odd statement of government interest in a Navy “UFO” patent

Posted on February 16, 2021 by Gerald Barnett

Here’s US patent 10322827. One of the “UFO” patents. It’s interesting physics, if not controversial, for being innovative in an institutional world that has made innovation mostly boring.

But we are concerned with something else here. Continue reading →

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The IPA and Bayh-Dole on nonprofit assignment of subject inventions, 2

Posted on February 16, 2021 by Gerald Barnett

We have looked at the IPA assignment clause. Since the IPA is specific to nonprofits, there’s no reason to call out nonprofitedness. But there is a reason then to restrict any later invention assignment to nonprofit assignees. Why? The point of the implicit IPA policy is that a nonprofit–set up as it is already to serve public interests–may serve as an appropriate alternative to a federal agency in the management of a “public” asset such as an invention made in work supported by the federal government. The policy then is that when nonprofits are engaged to do work in the public interest, the patentable results of that work should go to for-profits by means of a license. If one nonprofit can do the job of managing patents for another, fine. But things stay within the nonprofit circle. Clearly, for-profit operators, even if they might be more capable or more effective or more cost effective (there’s a long discussion there about how even in seeking to tack on a profit margin a for-profit magically finds ways to cost less overall than anyone else happy to do things at cost, or for reasonable hire), are as a matter of policy, excluded from taking assignment of an IPA invention from a nonprofit, just as they would be prior to Bayh-Dole if the federal agency owned the invention.

This nonprofit stickiness of the IPA is itself rather strange. The federal policy insists that whenever there’s an exclusive license to an invention made with NIH support, a nonprofit has to be on one side of that license, that the nonprofit has a role, then, in policing that exclusive license agreement, and the NIH has a role in policing the nonprofit. All this policing, so the idea goes, will protect the public from abuses of the patenting system such as blocking other research or concentrating economic power or withholding inventions from public access or charging exorbitant prices or failing to meet public needs. That’s a lot of stuff to ask of any federal agency or nonprofit licensor. But conjectures about how innovation surely works better with bureaucrats armed with aspirational mission statements and patent attorneys tend to ignore such details.

The whole point of the IPA was to allow NIH nonprofit contractors to take patent positions on NIH research inventions and pass these patent positions (in theory) to pharmaceutical companies for “development” into public-benefiting commercial products, avoiding executive branch patent policies that made a claim for government rights in inventions made in working with inventions made under NIH research awards. Continue reading →

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The IPA and Bayh-Dole on nonprofit assignment of subject inventions, 1

Posted on February 15, 2021 by Gerald Barnett

Norman Latker, patent counsel at the NIH, drafted Bayh-Dole on the sly, working against HEW policy on inventions to create an easier pathway by which nonprofits could pass exclusive control of inventions made in work receiving NIH funding to the pharma companies of their choice. Latker based Bayh-Dole on the Thornton bill (according to Betsy Ancker-Johnson) and on the Institutional Patent Agreement master (according to Latker himself). Really, Bayh-Dole is a Frankenstein’s monster of body parts snatched from the IPA, Thornton, and the Federal Procurement Regulation.

Let’s look at how the IPA and Bayh-Dole handle one provision–the assignment of subject inventions. We will go a long way around to provide context about how both the IPA and Bayh-Dole operate. Short form–both the IPA and Bayh-Dole require assignees of nonprofit-acquired subject inventions to follow the nonprofit requirements of the funding agreement.

Here’s the IPA:

VII. Patent Management Organizations

The Grantee shall not assign any subject invention to parties other than the Grantor in circumstances as set forth in this Agreement except it may assign rights in the invention to a nonprofit patent management organization, provided that the patent administration agreement between such organization and Grantee is approved by the Grantor. Any reference to a Grantee in this Agreement shall also include a patent management organization when applicable and an assignment to such an organization shall be subject to all the terms and conditions of this Agreement.

Grantor is the United States of America, represented by the Secretary of the HEW. Grantee is the nonprofit. Let’s work through this provision.

Continue reading →

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Misconceptions about the law that catalyzed 40 years of university patent bungling

Posted on February 10, 2021 by Gerald Barnett

In a recent op/ed (“The Law That Catalyzed Nobel Prize-Winning Research at UC Berkeley”), Carol Mimura argues, in effect, that provisions of Bayh-Dole should not be used to deter price gouging or to increase the availability of needed medical treatments. Apparently university non-compliance and government inaction and secrecy are what make Bayh-Dole work.

Mimura is entitled to her opinion, of course. But let’s look at her Bayh-Dole claims. Keep in mind that mere opinions don’t depend on reasoning or evidence, though we might expect more from professional opinions (unless they are political–in which case anything goes because no one expects the truth so any reliance is one’s own laziness). Mere opinions that become personal beliefs may persist despite evidence and reasoning, like beliefs in prophecy, like UFOs from the Planet Clarion arriving to save true believers from global devastation. Faced with contrary evidence, believers double down rather than change their opinion–and that’s especially true once they have taken a public action based on their belief. My regrets, Carol, but you know I have to respond.

Mimura writes:

Unfortunately, some misconceptions about Bayh-Dole could chill future private-sector interest in developing university discoveries.

Well, let’s look at Mimura’s misconceptions about Bayh-Dole.  Her op/ed starts with three “key points”–all wrong or fallacious.

The Bayh-Dole Act induces private sector investment into R&D projects that commercialize university research

The badly chosen word here is “induces.” Nothing in Bayh-Dole induces any private sector investment. Nothing in Bayh-Dole’s contracting provisions requires or mandates or privileges commercialization. No one is forced to invest in projects to commercialize anything. University patent administrators might demand certain deals–this or nothing–but that’s on them, not Bayh-Dole. They induce themselves, as it were. Why not own it rather than blame it on Bayh-Dole, or, as bureaucrats do, credit Bayh-Dole? The administrators have got so accustomed to rationalizing their patent practices without challenge that to suggest using Bayh-Dole–properly, with compliance–all but demands they change their practices, which, stubborn typical bureaucrats that they are, they cannot do. Having spent years claiming they are doing things the best way, the necessary way, the way that works so well it is wildly successful, it is very difficult for them to admit they are wrong, misguided, and are screwing up royally. Continue reading →

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A question on RE: practice the invention

Posted on February 8, 2021 by Gerald Barnett

Search on RE: “what does “practice the invention” mean under bayh dole.”

Practice means “to make, use, or sell” an invention. Practice means to use any of the substantial rights to a patentable invention. Practice means to “work” an invention so that the benefits of that invention are available to the public. Practice is not limited to merely the “use” of an invention.

Bayh-Dole uses “practice” with regard to inventions at 35 USC 202(c)(4):

With respect to any invention in which the contractor elects rights, the Federal agency shall have a nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world:

This language comes from the Kennedy executive branch patent policy by way of the NIH IPA master agreement. Norman Latker, patent counsel at the NIH, drafted both the IPA master and Bayh-Dole. Latker claimed that Bayh-Dole was based on the IPA master. Here’s Kennedy, in its definition of “Governmental purpose”:

the right of the Government of the United States (including any agency thereof, state, or domestic municipal government) to practice and have practiced (made or have made, used or have used, sold or have sold) throughout the world by or on behalf of the Government of the United States.

The Nixon revisions to Kennedy remove “practice and have practiced” and replace these terms directly with “make, use, and sell.” Continue reading →

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What has Bayh-Dole changed?

Posted on February 1, 2021 by Gerald Barnett

There’s a persistent claim made that Bayh-Dole somehow changed university technology transfer–started it, revolutionized it, and/or made it successful where it wasn’t before. Something pretty darned big, anyway.

But nowhere in Bayh-Dole is there any hint that nonprofit technology transfer is non-existent, sub-performing, in need of change, requires greater investment. No-one even argued that the law was needed to improve university invention management.

But university patent licensing has indeed changed significantly after Bayh-Dole. How? Here are six things that have changed since, roughly, Bayh-Dole came into effect:

In-house patenting and licensing has displaced Research Corporation
Universities have imposed compulsory invention assignment policies
There has been a great loss of selectivity in what to manage or patent
Universities default to exclusive licenses or no license at all
Inventors are excluded from invention management negotiations
Universities are now conflicted with regard to the public interest

None of these things are mandated, required, encouraged, or privileged by Bayh-Dole. Bayh-Dole was predicated on universities having access to a robust technology transfer system–led by Research Corporation, Battelle, and such agents. The idea was that federal inventions made at universities could then follow the same pathway as other, non-federal inventions that inventors submitted for management. There was no need to start a technology transfer system or to revolutionize it. Just the opposite. Continue reading →

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A Bayh-Dole Quick Read, made longer with comments–Orp!

Posted on January 28, 2021 by Gerald Barnett

A Twitterer admonished another Twitterer to give Bayh-Dole a quick read. Sigh. But then I thought that I could help out. Here’s a really short version of Bayh-Dole, extracted from the swamp of muddy drafting that is Bayh-Dole. I’ve added comments (in red), because, well, short reads are boring compared to reads the point out the drafting and conceptual awfulness of Bayh-Dole rather than gloss everything over in generalities that obscure practice.

It is the policy and objective of the Congress to use the patent system

This is a statement of limitation of patent property rights, not merely a new rationale for the Bayh-Dole bit of federal patent law. Bayh-Dole’s policy replaces executive branch patent policy (codified in the Federal Procurement Regulation, which has since been replaced by the Federal Acquisition Regulation). 

to promote the utilization of inventions arising from federally supported research or development;

This–use patent system to promote the utilization of inventions arising from federally supported research or development–is Bayh-Dole’s fundamental statement of scope. This is a working requirement within patent law, not there for other inventions. The scope is general–“inventions arising from federally supported research or development.” It covers inventions made in work done by both contractors and by federal employees. The stated purpose imposes a limitation on the use of the patent system: to promote use of inventions. Not to promote use of the patent system. Not to make huge amounts of money by suppressing use.  

The Constitutionally authorized purpose of federal patent law is to promote the “progress” of the useful arts–“progress” meant “spread” or “dissemination.” Bayh-Dole adds a new element–the utilization of inventions–and doing so by using the patent system. A working requirement is also a restriction on the rights that a patent holder if an ordinary invention otherwise has. Question: how does a patent holder enforce patent rights to promote use of a claimed invention? If infringement is use, then suing to stop use would violate Bayh-Dole’s fundamental statement of policy. 

Continue reading →

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Bayh-Dole, Piscopo version

Posted on January 25, 2021 by Gerald Barnett

Use the patent system!
To promote use of inventions!
Got an invention in federal research?
Keep it!
But license the feds!
To practice and have practiced!
Reporting?
All kept secret!

Nonprofits!
Patent money?
Deduct admin costs only!
Use the rest for scientific research or education!
Assignees of nonprofits?
Must follow the same nonprofit rules!

Feds!
Now, exclusive licenses!
Demand royalties!
Grant right to enforce!
But must get a plan!

March-in!
No practical application?
Unsatisfied health needs?
Compulsory licensing!

Practical application!
Benefits available to the public!
On reasonable terms!

Piscopo 

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