Another thought experience. Imagine if you will a university faculty member, who we will call F. F’s university requires F to agree to a patent policy that used to say, F promises to assign title to all inventions that the university has an interest in to the university. Now the university says, we will fix this hole and require F to make a present assignment of all future inventions F makes in which the university has an interest. This last bit is necessary, because states have laws that make an obligation to assign in an employment agreement void if it over-reaches the reasonable bounds of the employer’s interest.
This should fix the hole, says the university, thinking that the hole is in *their IP policy* (which better than thinking it is in an attack on Bayh-Dole).
Let’s see. The university has a policy that allows, even encourages F to consult with industry. In this consulting with a company, F agrees to a present assignment of future invention to this company. Is this a problem?
Generally, no. There is no collision between the present assignment to the university and the later present assignment to the company because the scopes do not overlap. The university has agreed that F can consult, so long as the work does not involve university facilities, is not commissioned by the university, and is not the subject of extramural research contracts that require other disposition of IP. The consulting doesn’t do that, so the scope is good, the present assignment is good, it’s all good.
The key is: the scope of the present assignment to the university has to change with the conditions under which the university permits personal consulting. If the IP policy said, no consulting allowed, or no IP disposition in consulting, that would be another thing. But most university IP policies, for very good reasons do not, even cannot go there. Again, the key is the scope of the claim, not the mechanism of the claim. It really doesn’t matter, looked at this way, whether it is a promise to assign or a present assignment of a future interest. What matters is the scope of interest in that commitment.
So far, so good. Now consider what happens if F likes the consulting work a lot and decides to apply for a federal grant to continue the work at the university. F writes a proposal, and the proposal is in the scope of the present assignment to the company. The grant is awarded to the university, and now it is time for the university to follow Bayh-Dole. What is required?
Right! The university must require a written agreement from its employees on the grant, namely F, to protect the government’s interest. That interest is (1) in timely disclosure *to the university* in reasonable detail and to execute papers necessary (2) for patent applications to be filed and (3) to establish the government’s interest in the inventions.
What does F have to do to comply? To meet (1), F will have to make sure that the company waives any non-disclosure arrangements and that the university accepts a non-disclosure agreement. (2) is easy. The written agreement in Bayh-Dole doesn’t specify who provides the papers to sign. (3) Would require that whoever is taking title, if it is not the government, has to comply with the government’s interests as these may be established by Bayh-Dole. There is nothing in Bayh-Dole that precludes title in inventions made in the research passing to the company.
Of course, there may be other things that would stand in the way. Agency approval would be required if the company did not have invention management as a primary function. But since it was smart enough to get a present assignment, and astute enough to hire F as a consultant, that sounds like it’s okay.
Or the university could refuse to assign its Bayh-Dole interest to the company. That’s not a function of Bayh-Dole; that’s a function of the university’s position. But if the university found itself in this situation, and the only way to comply with Bayh-Dole was to assign Bayh-Dole obligations to the company, and the university did so, then Bayh-Dole *would be fine*. It is an outcome that is not only possible under Bayh-Dole, one might even think it would be desirable! The university already have the commercialization partner, has it without having to do a license, and the partner has taken on Bayh-Dole compliance.
Of course, this would produce only a cool industry partnership, which is fluffy and uninteresting, even if it is an express objective of Bayh-Dole, rather than a tough sounding, royalty-bearing license for development of commercial product.
What about university IP policy? Even if the contractual obligations can be satisfied, isn’t the research using university facilities? Yes, of course, but again, the issue is whether the university in accepting the grant and permitting the services of F has waived that claim on its facilities use. The government, after all, is obligated to pay the direct and indirect costs of the research and so presumably is covering all the costs of those facilities. In some cases, yes, there may be cost sharing. For another time. In essence, the university isn’t out anything doing the research, or if it is, it is its own durn fault for not negotiating a proper F&A rate or finding a way to damp its facilities costs.
By the way, I have yet to see a university IP policy that claims patent rights on the basis of significant use of university administration. It’s always facilities. Too funny.
But what about a more general claim to IP under university policy, and that present assignment of future inventions. First, there is the problem of scope. The scope that controls was created by the second present assignment. In allowing the consulting, the university cedes scope to the company’s present assignment. In allowing the research to continue in the university, the university confirms that scope is still in play. Otherwise, the university would not allow the research. If F cannot agree to the Bayh-Dole written requirement, then F cannot be involved in the research as an employee of the university. That is the university’s obligation. If F can agree to the written requirement but the outcome doesn’t give the university title to inventions, but there’s a way that Bayh-Dole is satisfied, then that’s a university problem, not a Bayh-Dole problem.
Of course, in this, the company may not want to comply with Bayh-Dole, what with all royalties going to scientific research and education. Maybe the company would cut a deal to waive its present assignment and have instead a license that limits its exposure.
Anticipating such a thing, the company may insist on a research relationship with the university going into the research using federal funding. That relationship could provide for the license, the consideration, and all things juicy.
Or, not wanting anything like this, the university could prevent F from participating. Even if there were a pathway under Bayh-Dole for compliance, it is up to the university to decide to do it. It can even refuse to accept the award.
What does not at all seem reasonable is the argument that the university can accept the award, knowing about the present assignment F has with the company, and simply argue that this assignment is canceled automatically by the operation of Bayh-Dole, and that neither F nor the university has any obligation to the company, regardless of the value the company has provided to F, and the reliance the company has made of the university’s acceptance of the scope of obligations as between the present assignment to the university and the later, and university-authorized present assignment to the company.
And what about university IP policy generally? Bayh-Dole does not acknowledge university IP policy. The only things that matter are stated in the Act. The Act doesn’t say, do these things this way unless you have your own IP policy and then do things however you wish under that policy. It doesn’t say you have to have an IP policy that tells people to do things to comply with the Act but throw in anything else you want at the same time and make your employees agree to that stuff, too, as a condition of being able to agree to the written agreement required by Bayh-Dole. Nope, none of this. One might say, under Bayh-Dole one does not need to have much of an IP policy, because Bayh-Dole is self-directing. It’s all there. The IP policy for Bayh-Dole is to do those things required, and don’t make anything that isn’t required as a condition of doing those things that are required.
I know, been through this already. It’s like training terriers–it takes a lot of reps to get there. Given how many things have been put forward repeatedly in the name of Bayh-Dole, perhaps it is a necessary counterpoint to repeat things in various ways.