The failed Bayh-Dole bargain, 4

Posted on August 14, 2022 by Gerald Barnett

Finally, we reach Xtandi. The authors provide the pricing of $156,000 per year, but don’t point out that generic manufacturers have offered to produce Xtandi for $3 per pill–or about $4,300 per year. There’s a claim that Astellas has spent $1.4 billion on development, but there’s no supporting documentation for this claim. Give that UCLA exclusively licensed the series of compounds of which Xtandi was one to Medivation, who then contracted with Astellas for development on a non-exclusive basis (dividing up the world into a non-US market and a US market to avoid the US manufacturing requirement in Bayh-Dole), and that both UCLA and Medivation have sold out their interest in Xtandi in the Pfizer/Royalty Pharma transactions, what Astellas has put into development really has no bearing on march-in. There’s nothing in march-in that says “you can charge unreasonable prices if you spent a lot of money.” The standard of what is reasonable does not depend merely on what one has spent, but also on what one has made, and what one would make if there were, say, competition, even if there’s not because of the patent situation. Continue reading →

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The failed Bayh-Dole bargain, 3

Posted on August 13, 2022 by Gerald Barnett

We are working through a new article on Bayh-Dole march-in, written by two PhD patent attorneys. In its way, the article is more puff piece than law review, drawing its frame from the sources chosen, not much looking at the law itself, but also not much looking at the policy implications of using the pathway of march-in to create competition to restore reasonable terms for public access, especially to new medicines based on discoveries made in federally funded research.

In the big picture, the federal government could fund the “development” of new medicines that its research has discovered and then could produce and distribute those medicines directly, or contract with others to do so on its behalf. What sort of pricing would we expect if the government contracted for production and distribution? Perhaps cost of production plus a “reasonable” margin for contractors? If a company wanted to compete with this arrangement,  having open access to the invention, what pricing would we expect from it? If higher than the government version, on what basis? Higher quality? additional functionality? more readily available? Any of that might make reasonable sense. Continue reading →

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The failed Bayh-Dole bargain, 2

Posted on August 12, 2022 by Gerald Barnett

We are working through an article about the possibility that the federal government might use march-in to address unreasonable pricing for Xtandi. The case for march-in is as strong as any could be. But to get at this issue, our authors choose to frame things as a matter of what’s “uniform” about Bayh-Dole. The implication is that Bayh-Dole is supposed to make federal policy “uniform” and since march-in for Xtandi would not be uniform, well, then, there’s your implicit answer.

Now let’s look at Bayh-Dole. Is Bayh-Dole “uniform”? Hardly. The law suffers from a host of defects with regard to “uniform.” First, exceptions are baked into the law. The primary exception is for DOE nuclear research and development. The DOE fought to have its “non-standard” default reflected in the Bayh-Dole’s implementing regulations. There were then two default patent rights clauses–at the old 37 CFR 401.14(a) and (b). The design idea in presenting these clauses as (a) and (b) was that as agencies identified other “exceptional circumstances” under 35 USC 202(a), these could be codified at 401.14 as (c), (d), and the like. Exceptions were anticipated. Non-uniformity was anticipated. Second, Bayh-Dole goes out of its way to pre-empt any federal statute that dictates an invention ownership policy at odds with Bayh-Dole. Except that Bayh-Dole does not pre-empt the Stevenson-Wydler Act. Again, not uniform. Furthermore, Bayh-Dole provides that Congress can pass laws that also pre-empt Bayh-Dole, provided such a law cites Bayh-Dole and expressly indicates that the new law takes precedence. Not uniform. Continue reading →

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The failed Bayh-Dole bargain, 1

Posted on August 11, 2022 by Gerald Barnett

Dr. Rebecca McFadyen and Dr. Tara Nealey–both working for an IP law firm–have published an article “Will old Bayh-Dole be taught new tricks?” Me, Dr. Barnett–not working for an IP law firm–thinks they have got it wrong. Consider:

Before 1980 the US government did not have a uniform IP policy with respect to all federal granting institutions that funded research or technology transfer to the private sector.

This is not particularly meaning-full prose. What is a “federal granting institution”? Are we talking federal agencies and the Department of Defense or something else? And what is this about funding “technology transfer”? Bayh-Dole certainly doesn’t anticipate funding “technology transfer”–though universities have figured a way to do this, sort of, sometimes, from licensing income, even if they have to violate Bayh-Dole’s patent rights clauses here and there to do it. No matter, federal agencies uniformly decline to enforce the patent rights clauses in any of their substantive terms, so there is that.

But the article is out there, and ought to be read, regardless of the garbled bits. Let’s put a stick in this mess and swirl it around a bit, and see what we’ve got here. Continue reading →

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WTF is the Bayh-Dole Coalition’s “What is the Bayh-Dole Act”?–2

Posted on July 1, 2022 by Gerald Barnett

We have worked over the Bayh-Dole Coalition’s account of the statute. Sure, Bayh-Dole is a complicated mess, but that’s no excuse for getting the law so wrong, with such a lack of consistency and careful distinction. But there it is. The folks associated with the Coalition would rather you believed their illusions and loose talk than give you a fair basis to assess what is going on and what might be done about it.

Let’s move on. What has the Coalition left out of its summary of Bayh-Dole?

Federal exclusive licensing and money interest. The law authorizes federal agencies to deal in patent monopolies with exclusive licenses and take a money interest in licenses. Both create huge institutional conflicts of interest and run against the Attorney General’s recommendations, which formed the basis for the Kennedy and Nixon patent policies. The federal agencies’ authority to grant exclusive licenses rather than release rights to all disenfranchises inventors from practicing their inventions. Once an invention is acquired by a federal agency, the inventors are pretty much screwed.

Development and marketing plans. The requires federal agencies to demand a development or marketing plan from anyone requesting a license. No one can receive a license merely to use an invention. Oh, and the plans become a government secret, so the public cannot see whether the plans are legitimate or have achieved their goals. This requirement eliminates the “dedication” of inventions to the public once a patent application has been filed. If inventors can’t come up with money and a development or marketing plan, they can’t practice what they have invented. This is a huge change over prior practice, in which inventors working at nonprofits could expect access to their inventions regardless of whether a federal agency, having acquired title, obtained a patent or not. In the prior regime, a federal agency patent was a kind of award, recognizing inventive work. In the Bayh-Dole regime, a federal agency patent severs inventors from their invention and invites others to take control of inventions.

Everything’s secret. When Bayh-Dole was first passed, the law provided that information provided to the government with regard to the utilization of subject inventions, and which was privileged or confidential, would be excluded from federal public disclosure law. Three years later, Senator Dole and Norman Latker amended the law to require that all information received would be treated as privileged and confidential–even if it wasn’t. Thus, the public has next to nothing with regard to the operation of the law. There’s no public reporting of practical application, of the terms on offer either to the public or to licensees, nor of the royalties or other payments received by contractors or by federal agencies. There’s no means, then, for public oversight, no way to evaluate claims made for the success of the law, and no insight available for how the law might be changed to improve performance or adapt to changing conditions. Given the organizational conflicts of interest created by Bayh-Dole–especially with regard to failure to utilize, failure to license, reasonable terms, exclusivity, and money interest competing with public interest–secrecy ensures that the conflicts of interest cannot be managed by the contractors or federal agencies. Without disclosure of the conflicts and recusal from taking actions when there are conflicts that are not managed or manageable, much of the present activity claiming authority from Bayh-Dole would shut down. That would not be a big problem because that activity is largely ineffective and noncompliant when it is not downright offensive. The Bayh-Dole Coalition plays off this secrecy by making its claims appear to be factual, when it’s just political bullspin.

Inventor contractors. A contractor is any party to a funding agreement. A contractor may make employees or other individuals parties to a funding agreement (by any assignment, substitution of parties, or subcontracting any duties). Those individuals are treated as contractors by Bayh-Dole. Those individuals, when they invent under the funding agreement, own their inventions, those inventions become subject inventions, and the inventors, as contractors, have the same right to elect to retain title as any other contractor. No other contractor–even their employer–has a right under Bayh-Dole to “take” title. Inventor contractors are to be treated as small business contractors, even if the inventors work at a nonprofit. Inventor contractors have their own patent rights clause, which does not require them to file patent applications or lose ownership of their inventions. Inventors are first in line for title to their inventions, not last after universities and federal agencies have picked over what they want. And if those inventors have not become parties to the funding agreement, their inventions cannot be subject inventions unless they assign those inventions to contractors, and nothing in Bayh-Dole gives those contractors any authority, mandate, or privilege to “take” title. Wow. Bayh-Dole supports inventor rights–but you would never know it.

Free competition. Throughout Bayh-Dole are requirements that if complied with create conditions for competition in the utilization of inventions arising from federally supported work. There is a working requirement not found otherwise in federal patent law. The patent system is to be used to promote utilization. That would exclude enforcing a patent to suppress utilization of an invention. There is an express statement expecting the patent system to be used to promote “free competition and enterprise.” That would strongly indicate that nonprofits, lacking their own basis for competing with private industry, should be granting non-exclusive licenses the vast majority of the time. The restrictions on federal agency exclusive licensing make clear the extent of Bayh-Dole’s concern with exclusive licenses as anti-competitive. The march-in provision–the requirement to grant licenses upon request by a federal agency for a failure to achieve practical application or satisfy health or regulatory needs or fail to obtain a waiver for US manufacturing in the context of exclusive licenses to use or sell in the United States–makes clear that it is considered entirely viable to operate under Bayh-Dole by granting non-exclusive licenses. The “on reasonable terms” requirement in the definition of “practical application” is at the heart of Bayh-Dole’s concern for free competition. Those “reasonable terms” are the terms, including price, that would be offered if there were free competition, even if there is not.

Government license. As a condition of electing to retain title to an invention arising from federally supported research or development a contractor has acquired, the contractor must grant to the federal agency a non-exclusive license to practice and have practiced the subject invention. The wording comes from the Kennedy patent policy via the NIH’s institutional patent agreement, on which Latker said he based Bayh-Dole (and he sort of did, but didn’t). In the Kennedy policy, “practice” is defined as “to make, to use, and to sell.” Thus, to practice and have practiced for all government purposes (“for or on behalf of the United States”) essential divides the invention rights between a contractor and the federal agency. The contractor cannot exclude the government and anyone the government authorizes to act on its behalf. This license then divides the use of the invention between what the Kennedy policy calls the “non-governmental market” (the contractor’s market) and a governmental market (everything within the authority of the United States–including state governments). Outside the governmental market, with restrictions, a contractor may choose what to seek to patent, when to enforce the patent, and when, if ever, to license the invention to others (or one other).

Nonprofit restrictions. Bayh-Dole requires the executive branch to create standard patent rights clauses implementing the requirements set out by the statute. Small businesses have one clause. Inventor contractors have a subset of this clause. But nonprofits have a clause that’s more restrictive than the small business clause. The nonprofit clause restricts assignments of inventions, and requires the nonprofit clause to apply to any assignee, even if the assignee is a for-profit company. The other nonprofit restrictions then come into play–anyone operating under the nonprofit clause must share royalties (if they ever license) with inventors and must use all income net costs of administrating subject inventions for scientific research or education. Any exclusive license that conveys all substantial rights in an invention–make, use, and sell–may operate as an assignment of the invention. An exclusive patent license may also assign the underlying claimed invention. Boom! Get it? Universities routinely use exclusive patent licenses to assign the underlying subject invention. The title to the patent stays with the university, but the title to the invention goes to the assignee, along with the requirement that the assignee comply with the nonprofit patent rights clause. If a company does not want to dedicate the balance of its income earned with respect to a subject invention to scientific research or education, then it would do well to not accept an exclusive license to all substantial rights. It must take a shorter term exclusive license, or an exclusive license to sell, or to use, but not encompass all rights in an invention, or take a non-exclusive license and run with it. The provision is never enforced, but there it is. Maybe if organizations purporting to be authorities on Bayh-Dole pointed this bit out, federal agencies would feel some pressure to enforce. And we’d see way more nonprofit non-exclusive licensing promoting free competition and enterprise.

Pseudo-uniform treatment. Bayh-Dole requires federal agencies to use default patent rights clauses unless they can justify custom clauses. And Congress can override Bayh-Dole at any time by citing the law and expressly providing for different treatment for a given class of inventions. Various parts of the patent rights clause may be waived, and there’s nothing requiring federal agencies to enforce any provisions of the patent rights clause. Thus, uniform patent rights clauses is pretty much a sham–yes, everyone starts with roughly the same clauses unless they decide not to, but waivers and enforcement are all over the place, as are agency actions to request title if a contractor fails in the bureaucratic bits of the law having to do with timely disclosure of inventions, electing to retain title, and seeking patents. Practice under the law is anything but uniform by both contractors and federal agencies.

The Bayh-Dole Coalition isn’t just doing its best to summarize a complicated statute. It is playing fast and loose with the law, swapping in pious visions and made up conditions for what’s there in the law. When it has come to litigation, as in Stanford v Roche, this kind of fast and loose changing of the law has been dismissed. Bayh-Dole is a mess of law. It’s not just a mess in how the law came to be, but the law itself is a mess. The Bayh-Dole Coalition glosses over the mess with a prophetic vision of what might be, presented as fact when there is woefully little–next to nothing–to support that vision. On the other side, we have 50,000+ university utility patents in the Bayh-Dole era citing federal funding. Most are unlicensed. Most of what’s licensed hasn’t met the standard of practical application. The law and practices under the law are a dismal failure. Start there. Work through what would happen if federal agencies were required to comply with Bayh-Dole, and were required to enforce the patent rights clauses, not turn a blind eye or stumble around like bureaucratic clowns fussing over the timing of a disclosure report or patent application and ignoring the public protection requirements that limit the patent property rights in subject inventions.

There you go. Now you have a better grasp on Bayh-Dole than the Bayh-Dole Coalition has ever got. I’m sure of it.

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WTF is the Bayh-Dole Coalition’s “What is the Bayh-Dole Act”?–3

Posted on July 1, 2022 by Gerald Barnett

[This article published before I finished it! — so there will be updates as I add citations and discussion.]

We have been through the Bayh-Dole Coalition’s nonsense about Bayh-Dole. I’ve provided some brief comments. Now let’s work through some of those comments with more detail. The Coalition claims that Bayh-Dole “empowers” contractors to “take” ownership of inventions within the scope of the patent rights clause included with each funding agreement. (Well, actually, the Coalition gets the scope wrong, but I don’t have it in me to keep repeating their dumdrum.) But the Supreme Court looked squarely at this issue and ruled that the claim repeated by the Coalition is not the law. Perhaps the Coalition thinks the Supreme Court is wrong. But it’s a variety of contempt of court to state their (wrong, discredited) claim as if it were true, when it’s not.

Empower.

The Supreme Court in Stanford v Roche ruled that Bayh-Dole did not “empower” anyone to “take” ownership of inventions:

Nowhere in the Act is title expressly vested in contractors or anyone else; nowhere in the Act are inventors expressly deprived of their interest in federally funded inventions.

. . .

The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.

“Empower” is wrong. The Supreme Court said it was wrong. Members of the Coalition filed amicus briefs in the case that the Supreme Court showed were wrong. But the Coalition cannot admit they were wrong and persist–contemptuously, deceptively, stupidly–in repeating their claim as if it were authoritative, true.

During.

And the scope is not inventions made “during” federally funded research. Here’s Bayh-Dole (35 USC 200):

inventions arising from federally supported research or development

The Coalition’s “during” if fundamentally different from Bayh-Dole’s “arising from.” “During” is a time function. “Arising from” is not limited to the time during which research is conducted, nor to just that research that is paid for with federal funds, but rather has to do with the consequences of conducting research and development. The implementing regulations here, at 37 CFR 401.1, give an example to make clear that neither chronology nor separate accounting are controlling factors in determining the scope of a funding agreement:

The time relationship in conducting the two projects and the use of new fundamental knowledge from one in the performance of the other are not important determinants

and

Separate accounting for the two funds used to support the project in this case is not a determining factor.

How hard is it to use “arising” just as the law does?

More from Bayh-Dole (35 USC 201(e)):

any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement

Bayh-Dole further explains (35 USC 201(b)) that the scope of a funding agreement includes

the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.

The “work” is not just what is paid for with federal funds. The “work” here, is the overall project, for which the federal government is asked to provide at least some support. Inventions might arise in parts of the overall “work” that are not paid for with federal funds. These inventions, too, may come within the scope of Bayh-Dole. There’s even more. “Funding agreement” also

includes any assignment, substitution of parties, or subcontract of any type entered into for the performance of experimental, developmental, or research work under a funding agreement as herein defined.

A contractor may add additional parties to a funding agreement. The work that those new parties do is also “performance of work under a funding agreement.” A nonprofit assigning a subject invention to a company “for development” or to another nonprofit “for licensing” brings that assignee under the funding agreement. Same for subcontracts, or swapping in a research foundation for a university. A fair restatement of this part of Bayh-Dole is that it “allows contractors and those that they assign to or subcontract with to retain ownership of inventions that they have acquired and which have arisen in work funded at least in part by the federal government.”

The distinction between “during” and “arising from” is actually huge and points to a failure to be attentive to the law, even while posturing to provide an authoritative summary of the law.

An invention may be made “during” work that’s federally supported and not be in performance of work under a funding agreement. An invention might have nothing to do with the overall project but be made during the research. Similarly, an invention might be made after the federal funding portion of a given project has ended, such as in the case that a contractor assigns an invention to another party and this other party “develops” the invention by making additional inventions–which may well be still made in performance of work under the funding agreement.  Such development is expressly provided for by the language of Bayh-Dole. “Arising from” takes in those inventions directed at the objectives of an overall project, when those inventions come to be owned by any party to the funding agreement, that is, any “contractor” (not just the small business or nonprofit that was the first contractor to accept federal support).

University practice citing Bayh-Dole is all over the place, and mostly non-compliant. Many universities now put their disclosure forms behind a login so they are not readily available. But here are a few that are available.

UC Berkeley

This section must be completed to assure that inventors and the University meet any obligations to sponsors. Include all agencies, organizations and companies that provided funds or resources that were used by any inventor in research that led to the conception or reduction to practices of this invention.  In the event that no grant funds were used in the development of this invention, please write “None” in the space provided.

Recites Bayh-Dole’s wording used in the definition of a “subject invention.” But it is not material whether an inventor used resources or someone else used the resources. An inventor need not be a resource-users. The form omits “actual” from “reduction to practice” and adds a superfluous “s” to “practice.” What matters is whether the invention, having been made–conceived and reduced to practice–comes within the scope of the patent rights clause of a federal funding agreement. That is, is the invention within the “planned and committed” activities under the funding agreement? (As provided by 37 CFR 401.1.) It does not matter whether “grant funds were used in the development of this invention.” “Development” is the wrong word anyway. The concern is the conception of the invention–and there, since, conception takes place in one’s mind, it is difficult to see how grant funds would be used there at all. So we are left with actual reduction to practice–building of a prototype or testing to demonstrate that each element of the invention works as conceived. Was this activity within the “planned and committed” activities of a federal grant or otherwise did not distract or diminish work under that grant? If so, then if the invention is assigned to the university or the university has made an inventor a party to the funding agreement, then the invention must be disclosed to the federal agency; otherwise, no disclosure to the government is required, even though UC Berkeley still requires disclosure to the university’s licensing office.

Again, UC Berkeley gives wrong guidance. Is the invention within scope of a federal patent rights clause? To answer that question, one needs a description of the nature of the invention and a copy of the funded grant proposal. “We discovered a new class of compounds that may treat cancer.” “We were part of a project that received federal funding to look for new compounds that might treat cancer.” Looks like a match.

Michigan State

MSU is required to report all inventions made with Federal funding to the relevant agency, so it is imperative that you provide details on all federally funded inventions, in particular the agency and the grant number. Please list all other potentially relevant grants, funds, collaborations, or materials received from third parties such that we can do the appropriate reporting to the sponsoring groups and determine if there are any pending license rights to the invention. 

Misstates Bayh-Dole and ignores Stanford v Roche. Bayh-Dole does not require disclosure of all inventions made with federal funding. Inventions become subject inventions only when a contractor acquires title to them. Either the university acquires title or the university makes the inventor a party to the funding agreement–and hence a contractor. In this second instance, the inventor is required to disclose to the federal agency under 37 CFR 401.9, not the university under its patent rights clause at 37 CFR 401.14. “Made with” is also wrong. “Arising from” is the statutory language. “Made with” funding is something of an absurdity, unless a prototype was built out of dollar bills or something. Separate accounting is not determinative. Was the invention, once made, conceived or first actually reduced to practice in a project that also has received federal support? An invention might be reduced to practice by someone paid with federal funds but not be within scope of Bayh-Dole’s patent rights clause if the work on the invention was not planned and committed and did not prevent the planned and committed work from getting done. “We invented a device to monitor the temperature of the fridge in which we store stuff for our federal grant to look for compounds to treat cancer, and we still got our proposed grant work done.” Not a subject invention. But you’d not know that from MSU’s disclosure form guidance.

University of Missouri–Kansas City

INVENTION SUPPORT:  Because the University is required to report all inventions made with federal funding to the relevant agency, details on all federally funded inventions should be provided, including the particular agency and the grant number. In addition, please list all other potentially relevant grants, funds, collaborations, or materials received from third parties so that the University can do the appropriate reporting to the sponsoring groups and determine if there are any obligations to third parties with respect to the invention.

We find the same misrepresentation of Bayh-Dole as above. The concern is not “federally funded inventions.” That is not just an administrative shorthand for what everyone knows is something else. It is just wrong. The Bayh-Dole standard is an invention owned by the university and which was conceived or first actually reduced to practice in the performance of work that also received federal funding. Want to be short and imprecise about it, but still accurate? “Inventions made in work receiving federal funding.” It is federally funded work that matters, not federally funded inventing. The funding supports (at least in part) the work. An invention arising from the work, made within scope of the work, conceived within scope of the work, built and tested within scope of the work–these are all accurate if not sufficiently broad on their own to get at things.

What becomes obvious as one works through the bad guidance on these forms–misrepresenting Bayh-Dole and the university’s obligations, leaving out the part that Bayh-Dole’s patent rights clause for the university does not come into play for disclosure until the university has acquired ownership, and getting it wrong about scope, all the while using defined terms from the patent rights clause without making that clear–“invention,” “conceived,” “reduced to practice,” “made,” and the like–is that the disclosure form is wrongly positioned in the work flow. These universities use the disclosure form to start their management procedures, as a basis for them to take action. But to put the form there means that they ask inventors to make determinations about scope and the like–stuff that the administrators clearly cannot even get right.

A better process is to ask for basic information about the invention–what is it and who has worked on it. Then decide whether to acquire.  The university can look up the current and recent past funding for those involved and ask whether the invention is within scope of that funding agreement. Once the university has acquired an invention, then it may request any additional documentation to allow the university to determine whether it must disclose the invention to a federal agency. The universities don’t just get Bayh-Dole wrong, and screw up on which patent rights clause controls, but they also don’t have even the basics of the process of “disclosure” down. They haven’t thought it through. They have not got a grasp of the details. They write sloppy guidance. There’s no excuse not to get things right, other than they are just not up to the task of doing so. Which makes one wonder how they are coping with anything else that requires a degree of care.

University of Minnesota

Funding Sources.Please list all sources of funding related to the conception and development of this intellectual property (include federal (e.g. NIH, NSF, USDA, VA, etc.)and non-federal (e.g. foundation, industry sponsored, gifts, etc.).).

Minnesota adds, in bold:

It is important that this information is accurate and complete because sponsors may have certain rights in the intellectual property. If no funding was used, write “None” in the table. Please provide PDF copies of any Notice of Grant Awards (NOGA’s) when you submit this disclosure.

“Funding related to the conception and development of this intellectual property” is very strange. Minnesota conflates inventions and works of authorship, and so feels the need to abstract to “intellectual property” rather than focus on inventions and use “invention.” “Funding related” is terribly broad. What does it mean for funding to be related to some other thing, like an invention? It is a mess wrapped in a muddle. Here, the funding is related to “the conception” of “intellectual property”–which does not work at all for works of authorship. “Related” clearly is wrong. What the university needs is scopes of work for funding agreements, and the university already has those filed away in its sponsored projects office. It’s just laziness not to go get those agreements when it needs them. And then Minnesota drops “actual reduction to practice” and replaces that phrase with “development.” What does “development” mean here? Test? Improve? Change the best mode? Add stuff around the invention to make it easier to use? Make it look like a product? It’s difficult to say. But Bayh-Dole does not worry about “development” any more than it does “research.” These are not concepts of scope of claim but rather types of work under which the federal government has an interest in adjudicating ownership claims once a contractor has acquired ownership.

Minnesota adds “If no funding was used, write ‘None’ in the table. As we have seen, “using” funding is not determinative of Bayh-Dole scope. “No funding was used” implies separate accounting, which is one of the easiest dodges to try to avoid a sponsor’s claim of interest in an invention. USC used that dodge back in the 1940s with the U.S. Navy, and lost in Mine Safety Appliances. UCLA used that dodge with Medivation to trick the company into sponsoring research on the series of compounds from which Xtandi was developed, but not gaining access to a second series of compounds that UCLA kept secret from the company but which were arguably within scope. So, yeah, “funding used” is wrong. “If no extramural funding supported any part of the project from which the invention has arisen, write ‘None.'”

Universities expanded the scope of their patent policies claiming that Bayh-Dole required them to do so. They were wrong about Bayh-Dole, as the Supreme Court made clear, even though scores of university attorneys signed on to amicus briefs in the case arguing that somehow Bayh-Dole gave universities rights outright in inventions. They were wrong, but expand they did. Once they had expanded claims to ownership in place, it does not matter what Bayh-Dole says–unless one aims to void their new policies based on the fraud of claiming that federal law (Bayh-Dole, the standard patent rights clause) required the expansion. Otherwise, Bayh-Dole could be repealed for all that but universities would not back down an inch on their expanded ownership claims. It’s just that they have no legitimate basis for their expanded claims. It’s not in the law, it’s bad for academic science, it’s bad for technology transfer, it’s bad for use and development.

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WTF is the Bayh-Dole Coalition’s “What is the Bayh-Dole Act?”–1

Posted on June 30, 2022 by Gerald Barnett

Here is the “Bayh-Dole Coalition” on “What is the Bayh-Dole Act?” I will quote, mark up, and then comment briefly. There is more to write, but here’s enough to show that the Coalition has no grasp of the law, or has a grasp and chooses to misrepresent the law (less likely), or aims to deceive to get at what it wants, in typical political fashion. In the second part, I add eight key elements in Bayh-Dole that the Coalition leaves out, and those elements change everything. Funny they would ignore these things. Funny-sad, not funny-funny.

There are four sections. Let’s get at them. Continue reading →

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Lessons from The Sound of Innovation: Lesson 1, On the Border

Posted on June 7, 2022 by Gerald Barnett

In The Sound of Innovation: Stanford and the Computer Music Revolution, Andrew J. Nelson recounts how John Chowning and others developed digital music while working in between the cracks of computer science, music, and electrical engineering. Nelson emphasizes this situation as a matter of “multivocality.” The idea is that the history of Chowning at Stanford is a diorama of evidence in support of a social sciences concept. Two be good at two or three things at once is strangely not part of normal academic depictions of people. Can’t be a banjo player and comedian/actor, say. Perhaps it’s something about how academic credentialing works.

But there’s another way to look at people who have skills in multiple areas, or who can do a number of things and don’t bother to try to keep those things separate, as public life and  private hobbies, or as professional expertise and amateur messing around. We might see them as capable people on a fringe of institutional domains where being able to do multiple things is not particularly valued. Continue reading →

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A very short primer on reasonable price

Posted on April 21, 2022 by Gerald Barnett

Joe Allen writes this: “Price was not something march-in rights were ever meant to control, and wielding them this way would be a misuse of the law and it would kill Bayh-Dole.”

This is nonsense. Allen provides no evidence for his claim, and there isn’t any. But we do have evidence–and plain meaning–for what Congress did intend. 35 USC 200 sets out Congress’s “policy and objectives” for Bayh-Dole.

Congress intended federal agencies to protect the public from nonuse and unreasonable use, to promote free competition and enterprise (35 USC 200), and to require licensing–via march-in–when terms offered to the public are unreasonable (201(f), 203(a)(1)).

Here is it then:

Price is often the *primary* “term” in any offering of benefit to the public.

March-in does not “control” price–but unreasonable price is a trigger for march-in.

March-in introduces competition (“free competition” 35 USC 200).

Competition addresses price.

If not, then antitrust (35 USC 211).

Bayh-Dole does not call out “price” because Congress uses the more general “terms.” Price is within the set of “terms.” If there is a price on offer for the benefit of utilizing a subject invention, then price necessarily is a term of that offer. Bayh-Dole does not “control” price. But if price is a term on offer to the public (and it is), and that price is unreasonable, then it is an unreasonable term. March-in.

In Bayh-Dole’s logic march-in requires licensing which introduces competition and expands supply and utilization.

“Reasonable terms” then includes a price that would be reasonably offered if there were competition, even if, by patent allowed to a federal contractor, there isn’t.

It’s pretty simple, even in a stupid law like Bayh-Dole. If using Bayh-Dole for its stated purposes, including protecting the public from unreasonable use of subject inventions such as offering benefits of utilization at unreasonable prices–unreasonable terms–is unacceptable, then Bayh-Dole must be repealed. If federal agencies refuse to recognize unreasonable pricing, then they have no business doing exclusive patent deals and taking a financial interest in the results of those deals. And they should be relieved of their authority to decide on march-in. If not that, repeal this stupid law and get the price-gougers, speculators, pyramid schemers, and trolls out of federal research directed at public health.

Yes, “kill” Bayh-Dole, especially this faux version of Bayh-Dole.

 

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Bayh-Dole, Competition, Reasonable Terms, and March-in (Short Version)

Posted on March 30, 2022 by Gerald Barnett

How are competition, reasonable terms, and march-in related in Bayh-Dole? Here is the short version.

Bayh-Dole stipulates that a contractor must timely achieve practical application of a subject invention and must reasonably satisfy public health needs in doing so. 35 USC 200, 201(f), 202(a), 203(a). Bayh-Dole defines practical application (35 USC 201(f)) as the utilization of a subject invention such that the benefits are available to the public on reasonable terms.

If the terms on offer are not reasonable, then the federal agency has a mandate to “march-in” and require the contractor to grant licenses (35 USC 203(a)(1)). The effect of such “march-in” is to introduce competition, and competition in turn, is to address the unreasonable terms.

What then are “reasonable terms”? Continue reading →

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