Here’s the sequence of actions that complies with Bayh-Dole when a university desires ownership of a federally supported invention.
1) obtain a disclosure of invention
2) report this invention to the government
3) elect to retain title in the invention
4) direct the inventors to assign (to the university, to another organization)
5) file or cause to be filed a patent application
6) grant the government a royalty-free non-exclusive license
Under a federal funding contract, a university has no standing under its own employment polices or IP policies to require assignment of inventions to the university. There is no remedy by horsing up a promise to assign into a present assignment of future inventions. Those sorts of arrangements are superseded when a university takes a federal research award under the standard contract terms of 37 CFR 401.14. For all that, universities in their research policies typically have a statement to the effect that all employees will honor the terms of any extramural contract for research entered into by the university. Here is the language in the University of Washington Patent, Invention, and Copyright policy (Volume 4, Part V, Chapter 7, D):
“Research funded wholly or in part by an outside sponsor is subject to this policy as modified by the provisions of the agreement covering such work. Employees engaged in sponsored research are bound by the provisions of the agreement between the University and the sponsor.”
This is true, of course, for federally funded agreements. That means, under Bayh-Dole, the university’s IP policy is knocked out where Bayh-Dole controls. Thus, the university does not have a basis to require assignment in its own policies until it has fulfilled the formalities of its obligations under Bayh-Dole. The argument is: its own policy of requiring assignment does not operate for federal funding research. It does not matter if that policy is a promise to assign, an acknowledgment of an obligation to assign, or a present assignment of future rights. Once the university accepts the federal funding, then by its own policy the control of the funding transfers to the contract with the sponsor.
Under Bayh-Dole, there is no reason to transfer that control back to university policy. There is no requirement that a university receiving federal funds even have an IP policy. There is no obligation that that policy require assignment of IP to the university. It’s pure genius! Bayh-Dole implements the requirements it needs within the standard contract. That is, what the university is obligated to do is to protect the government’s interest via written agreements. Those are agreements authorized by Bayh-Dole and are *not* agreements to protect the university’s interests. The written agreements require prompt disclosure of inventions and to “execute all papers necessary to file patent applications on subject inventions and to establish the government’s rights in the subject inventions.” Doesn’t say who files the patent applications. Says nothing about establishing the *university’s* rights.
Now we get to the right of the university to “retain the entire right, title, and interest”. If the university retains that title, it stands in for the federal government, who otherwise has this right, since if the university does not elect to retain title, then it is obligated to “convey title to the Federal agency when requested.” It doesn’t even say assign title–because if the university does not elect to retain title, then it is responsible to require its employees under *their written agreement* to execute the necessary papers and establish the government’s rights. It is the inventors that assign. It is the university that sees that they do so, to convey title. If the university were to elect title, obtain assignment from inventors and then decide not to go forward with patent work, it would be the university that then assigned title to the Federal agency. “Convey” is used to good purpose. If “assign” had been meant, it would have been used. We can see that, yes, the university will eventually establish its rights. It will obtain assignment from the inventors, it will file a patent application that will if things go will issue to the university. In holding title, it will enter into contracts that grant licenses, and for that require payments that it will receive and book as its own. But for all this, none of it is really “its own”. The inventions are held in trust. The assignments of title protect the government’s interest. The acquisition of title places the university in the role of steward acting on behalf of the beneficiaries of the research. The money it receives after any costs (including sharing with inventors) goes to scientific research and education. There it is. In all of this squabble over title, the university is not in it *for itself*.
We can see that under Bayh-Dole, a university’s efforts to claim ownership of federally funded inventions through its own policy statements is not only not needed, but is superseded by the federal contract formed by Bayh-Dole. The standing to claim ownership is obtained by complying with the contract established by the law. The basis for obtaining assignment from inventors is the written agreement to protect the government’s interest that arises *when the contract is established, not before*. The university in electing title and obtaining assignment under this written agreement is *protecting the government’s interest*. The university stands in for the Federal agency to fulfill *Federal objectives* as stated in Bayh-Dole and Circular A-110. We can emphasize that no where does Circular A-110 or Bayh-Dole provide as a government interest or a purpose of contracting that universities enrich themselves through the accumulation of patent rights. Circular A-110, of which Bayh-Dole is a part, emphasizes that the university acts as a trustee for IP acquired or improved with federal funds. It is not the beneficiary. It is the steward acting for the beneficiaries. Circular A-110 and Bayh-Dole make clear the beneficiaries. The university is clearly not one of them. Even where the university runs a profit in its licensing of patent rights, the beneficiaries are to be researchers, teachers, and students. Not the administration, not the university as a corporate entity.