We have been working through a DoD guide for contracting officers in navigating IP rights–Bayh-Dole and data rights. The data rights are a whole nother saga, so we are leaving them alone for now. Here in summary form are the primary worries about Bayh-Dole, what the guide suggests to avoid Bayh-Dole, and some comments on the guide’s proposed solutions.
Conception and first actual reduction to practice
Companies object because they don’t want the government to have a free license to an invention because the government funds the testing of the invention to demonstrate it works for its intended purpose. This is the lingering ambiguity of In re Eddie L. King, in which an invention made by a federal employee on his own time, with a patent application prepared but not filed based on actual prototypes, was provided to the Air Force for testing in its applications. The Patent Commissioner ruled that the Air Force had a license to the invention as a result of its spending money on testing–even though the results of the test were not necessary to the patent application. The Patent Commissioner left open whether the Air Force would have had rights to the invention had the patent application been filed before any government testing took place. Is first actual reduction to practice still a thing once there has been constructive reduction to practice? Continue reading
We are working through a guide for Department of Defense contract officers that has been left up at a government website for nearly twenty years. Much has changed, but the guide hasn’t. From it we can gain some insights into how federal contract officers think about Bayh-Dole–or at least how they were mentored to think.
We have worked through some Bayh-Dole clauses, the anticipated industry objections, and proposed workarounds. Now we get to the guide’s account of the history of Bayh-Dole. Here we get much garble along with some good.
Prior to 1980, various statutes and regulations concerning patents established the Government’s right to take title to Federally funded patents and freely distribute the information to the general public.
The various statutes and regulations were directed at the government’s right to own inventions. “Federally funded patents” is just silly. The government supports research that results in inventions. The government does not pay contractors for their patent work. The government has the right to require the assignment of patentable inventions. Picky? Yes, but the pickiness points out that the guide is not in control of the details here. The point is not that the government had the right to “freely distribute the information” but rather that the government’s practice was not to enforce patent rights, permitting the general public to practice–make, use, and sell–products and services based on the inventions. A patent freely distributes information. That’s totally not the point. Continue reading
In 2001, the Office of the Under Secretary of Defense For Acquisition, Technology and Logistics published a guide to federal contracting–“Intellectual Property: Navigating Through Commercial Waters: Issues and Solutions When Negotiating Intellectual Property with Commercial Companies.” The guide is helpful in setting out the statutory and regulatory framework for federal contracting. I remember when I first had to work with the FAR, DFARs, and NASA FAR Supplement. Layers on layers of requirements and alternates.
The guide is helpful, too, in helping us understand how intellectual property is treated by federal policies. In particular, for patentable inventions, software, and trade secrets.
The guide also discusses Bayh-Dole, and here it gets things very wrong. Sure–it’s a twenty year old document written a decade before Stanford v Roche, but it is worth discussing its wrongness because it is still up at a U.S. government website. Continue reading
Before the Bayh-Dole bill came together, there were precursors. One of these is a draft bill produced by Senator Dole. It differs in a number of ways from the bill that became Bayh-Dole, and the differences provide some insight into both the eventual architecture of the final bill and the problems that were introduced by changes that weren’t thought out and weren’t followed for effects throughout the bill.
Let’s look at the Dole bill’s use of “subject inventor” and “subject invention”:
There is no “subject inventor” in Bayh-Dole, though perhaps there should be. In the Thornton draft bill (HR 8596) and in Bayh-Dole, eventually, the term used is “contractor.” A contractor becomes “any person (as defined in section 1 of title 1, United States Code) that is a party to the contract” (HR 8596) or “Any person, small business firm, or nonprofit organization that is a party to a funding agreement” (Bayh-Dole).
Though the wording in these three versions appears similar, it actually expresses substantially different concepts. Continue reading
We are looking at a draft of a bill proposed by Senator Dole, with Bayh along for the ride. It–and other drafts, such as the Thornton bill (HR 8596), and the Institutional Patent Agreement master, and the Federal Procurement Regulation codification of the Nixon version of executive branch patent policy–eventually became Bayh-Dole. So we will call this draft bill the Dole-Bayh Act, though it never was.
The draft of Dole-Bayh starts with a premise that’s not in Bayh-Dole: “a consistent policy and procedure concerning patentability of inventions made with federal assistance.”
Oh wow. This is not just an idle reference. Here’s the title of the proposed new chapter of federal patent law:
The foundation of the bill is how inventions made with federal assistance are patentable. Continue reading
Bayh-Dole defines “contractor” as “Any person, small business firm, or nonprofit organization that is a party to a funding agreement.” In turn, 1 USC 1 defines “person” thus:
In determining the meaning of any Act of Congress, unless the context indicates otherwise—
. . .
the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals;
Some universities, say, might be left out of this definition because they are chartered under state law and not organized as corporations or the like. Bayh-Dole deals with this by defining both small business firm and nonprofit organization and adding these to the standard 1 USC 1 definition of person.
This is all pretty messed up, though it is foundational to the structure of the law. Bayh-Dole purports to be about how nonprofits and small businesses deal with federal agencies over invention rights the nonprofits and small businesses have got from inventors working in projects receiving federal funds. The definitions of funding agreement and contractor then are fundamental to that scope. Except they aren’t exactly. Continue reading
Bayh-Dole is a mess of a law. There’s the mess of the conception itself, the disgusting and ineffectual idea that the federal government should sue its citizens for using inventions made with public funding to advance public purposes–and should do so to protect the profit-seeking interests of favored companies chosen by unelected, not even appointed merely hired government officials to seek those profits and share some bit with the government, as if money for the government’s share of price gouging and suppression of access was the prize, rather than the public use of the results of that research work. Now repeat that again for university officials. Make it all secret, eliminate public oversight. Crass stuff.
And there’s the boring bureaucratic idea that “uniform” treatment of patent rights is somehow better for innovation based on federally supported research than treatment specific to the situations that present, or that “uniform” is a virtue for all research purposes, for all industries, and for all inventions and what most matters is the convenience of patent administrators in exploiting patent monopolies. Strangely messy too is that this idea of “uniform” treatment of patent rights has only to do only with a default ownership position offered in a patent rights clause that itself can be varied–and immediately was for nuclear propulsion and weapons research, and there are no controls on the disposition of patent rights once they are in the hands of contractors or federal agencies–then enforcement of the patent rights clause and licensing under the patent rights clause is anything goes. So much for “uniform.”
There’s the mess of the architecture, as part of patent law rather than federal procurement, taking precedence over other law rather than repealing those laws or amending them. Ignoring the Federal Procurement Regulation and the Nixon patent policy altogether. Defining subject invention to be “of the contractor” rather than just following the IPA definition of any invention made within scope of a federal contract, regardless of who might own it. There are problems with the interface with FOIA and with antitrust law. There’s the problem of a law requiring a default federal contract wording but having no requirement of enforcement, secret reporting and secret licensing terms, and no right of public appeal. Continue reading
We are working through Mick Stadler’s 1976 letter to Research Corporation’s Willard Marcy. Stadler outlines eight functions for a next generation “technology transfer mechanism.” The essentials of Stadler’s view are that the mechanism must distribute technology widely, must be distributed, must be flexible, must focus on the needs of the inventor, must recognize multiple forms of transfer, and where patents are used, must make clear the economic and procedural reasons for doing so.
We continue then with Stadler’s points 5 through 8.
Stadler builds on the problem that university-based patent administrators are doomed to isolation–and the problem only gets worse if their response is to band together to compare notes at AUTM meetings. Stadler points to the importance of seeing many new technologies in a given area–from multiple sources, with multiple targets of possible action. That’s what a specialized firm can do. A firm that works with video game development will have different expertise from a firm that does pharmaceutical drug development will have a different expertise from a firm that handles 3d printer technology. There still will be inventions that aren’t anticipated by anyone–and it may be that for those, simply being hired to “transfer technology” isn’t a workable qualification–nor would “representing university policy enforcement.” Continue reading
On June 29, 1976 Mick Stadler wrote a letter to Willard Marcy, the Vice President of Research Corporation’s Patent Program. Stadler, at the time was assistant director of the Case Western Reserve technology transfer program. He would go on to work for University Patents and then Research Corporation and then quietly went around the country involved in venture-based organizations spinning out technologies and companies from universities. The general context of Stadler’s letter is a “Patent Awareness Program” organized by the NSF and a proposal to extend the NSF and NIH IPA programs government-wide. Thus, one of those cc’d on the letter is Norman Latker at the NIH. The reason to revisit this letter after so many years is Stadler’s discussion of what is needed in a technology transfer program.
The IPA program required a participating university to demonstrate that it had technology transfer capabilities, and not all–indeed, perhaps, not many–had such programs or even the resources to create them, or even the volume of inventions to justify the expense. Instead, Research Corporation, which was the leading patent development firm at the time, might play a role in setting up regional offices for technology transfer, hosted by a cooperating university to provide services to a number of universities in the area whose inventors then could liaison readily with Research Corporation staff, at a cost of perhaps a half-time administrative position per university. It was a brilliant proposal, but as it turned out, Research Corporation could not execute on the plan.
In the course of his letter, Stadler lays out eight services of an “effective transfer mechanism.” His observations then are just as relevant today. Let’s work through these eight services. Continue reading
When Bayh-Dole came into effect in 1981, it had this requirement for subject inventions retained by contractors (35 USC 202(c)(3)) (my bold):
(3) A requirement that a contractor electing rights file patent applications within reasonable times and that the Federal Government may receive title to any subject inventions in the United States or other countries in which the contractor has not
filed patent applications on the subject invention within such times.
Three years later, in 1984, Bayh-Dole was amended by PL 98-620, which made significant changes throughout. At 202(c)(3), the requirement to file patent applications was changed:
(3) That a contractor electing rights in a subject invention
agrees to file a patent application prior to any statutory bar
date that may occur under this title due to publication, on sale,
or public use, and shall thereafter file corresponding patent
applications in other countries in which it wishes to retain title
within reasonable times, and that the Federal Government may
receive title to any subject inventions in the United States or
other countries in which the contractor has not filed patent
applications on the subject invention within such times.
The “reasonable times” requirement then was interpreted by the implementing regulations finalized in 1987 thus (37 CFR 401.14(a)(c)(3)): Continue reading