We have looked at five ways Bayh-Dole can play out with a single faculty researcher, who we call F. These are government title, university title, third party title, inventor title, and public domain. We have emphasized that Bayh-Dole makes uniform the government’s management of its interest in the personal rights in inventions arising in federally funded research. We have emphasized that it is the written agreement that is to be required by universities of its employees that is the basis for conveying rights to the government at the government’s request. And we have emphasized that when a university elects to retain title, it intercepts, if you will, the government’s right to request title as a deliverable, and stands in for the government. The title a university (or anyone to which the university assigns the right to request title) may request is the personal right that the inventor holds by virtue of inventing.
Let’s look at a variation on the theme. Let’s add a company scientist, S. S is obligated by S’s employment agreement to assign all inventions S makes to the company, less any inventions that state law does not allow the company to claim. Let’s say S has a present assignment of all such future inventions.
Now F gets a federal grant at the university. While working on this grant, F has a conversation with S, and together they invent something. Now what? F has an obligation to report the invention to the university under the written agreement required by Bayh-Dole. S has an obligation to report the invention to S’s company. When S does so, under the present assignment S has agreed to, S’s company holds title to S’s rights in the invention. But what about F’s rights? Title follows the usual Bayh-Dole route. The university may elect to retain title, or any of three other ways. But the fifth way—public domain—can’t happen unless the company also chooses not to file. That’s because in a co-invention situation, each owner has an undivided interest in the patent, regardless of which co-owner files the patent application.
This situation sets up some things worth noting. First, there is nothing wrong with this outcome under Bayh-Dole. There is no requirement that F keep research confidential or not involve anyone except university employees. A federal agency may impose non-disclosure, but for universities this generally requires defense classification and special handling. Universities also generally do not self-impose such requirements, other than those that are required by regulation (such as concerning release of personal information), or by external sponsors. Often sponsor requirements have to do with securing sponsor-provided technical data and review for patentable subject matter or use of proprietary information prior to publication.
Second, what the university gets if it elects to retain title is what the government is entitled to request–F’s personal interest, not title in its entirety, since the university has no claim under Bayh-Dole on S’s personal interest in title, which goes to the company. The government standard is that its interest is protected—not that the funded work is entirely controlled by the university, without any external involvement.
Third, if the company files a patent application on the joint invention, the university is not going to get an exclusive position to offer to monopolists for money. It can play the spoiler (such as making its undivided interest available at no charge), or it can work something out with the company to standstill on its undivided interest in any patent that issues. Or it can build a practice community or standard using its patent position (though this lies outside the expertise and interests of most technology transfer offices at present).
This is not commercialization the way it’s set out on in tech transfer diagrams about “the process”, but there may still be good work to do to help with implementation, quite apart from anything having to do with a patent license.
Fourth, if the university elects to retain title, it still has its Bayh-Dole compliance issues. But the company does not. Its interest has nothing to do with Bayh-Dole. Its employee S has no written agreement to protect the government’s interest. Bayh-Dole follows the disposition of the personal invention rights of F that arise in the federally funded research. It does not cut off co-inventor S from S’s rights when these lie outside Bayh-Dole, even if the invention is within the “planned and committed” work of the federally funded research at a university. Even if S used university facilities in making the joint invention, the matter is still not an issue for Bayh-Dole, since S is not a university employee. While the university may have some issues with S’s use of facilities, these don’t have anything to do with Bayh-Dole compliance.
Finally, what if the university elects not to retain title? Now the right to request title passes to the government. Again, it’s only F’s personal interest in the joint invention that is at play. If the government requests title, then it becomes a joint owner with the company. If the government declines to request title, then it’s up to F to request to retain title, with those minimum Bayh-Dole requirements. But what if F doesn’t request to retain title? Here’s the thing—F will still end up with title if the company files a patent application. F is a co-inventor, co-inventors are co-owners, title to an invention includes title to patents that issue on the invention.
From this it can be understood that for Bayh-Dole, retaining title means retaining standing to file a patent application. The written agreement required by universities under Bayh-Dole to protect the government’s interest is an agreement regarding who has standing, within the chain of government procurement of personal patent rights as deliverables, to file patent applications on subject inventions. If an invention is jointly made, and one of the co-inventors stands outside the scope of Bayh-Dole, then whatever happens under Bayh-Dole, that other co-inventor has standing to file patent applications and use the patent system in whatever way the co-inventor, or any successor in interest, chooses. In the case of joint invention, the emphasis of Bayh-Dole may shift from standing to file to who has an obligation to protect the government’s interest. If the university chooses not to retain title (since what’s the point? no monopolies here, move along), then it is up to the government. This is the government’s chance to secure for itself a royalty free license for government purposes. If it does not, then interest in title settles back to F. At this point, if the company is filing a patent application, F has title and so it would appear that the government, to obtain the non-exclusive license it desires, would need to require F to retain title.