There is yet another angle. Why must the prior present assignment and Bayh-Dole be mutually exclusive? Bayh-Dole sets out to provide a uniform policy to protect the government’s interest. That interest is satisfied per the written agreement requirement, for inventors, when they disclose in a timely and sufficient manner, they execute instruments that allow patent applications to be filed and for the government to establish its rights in inventions. Under Bayh-Dole, the government has already ceded that it does not require exclusive title to inventions–and it does not even require title at all, so long as it gets a royalty-free non-exclusive license for government purposes.
Everything else in Bayh-Dole arises not from the actions of individual inventors but from the university’s action to claim title. If a university elects to retain title, then a bunch of things kick in specific to that election. Note that if the university does not elect to retain title, and the agency does not require conveyance of title, then a whole lot fewer things kick in with regard to the inventors retaining title themselves.
Why not shape the rescoping argument so that while the present assignment is still binding as to title, when federal funding is involved, assignment of title becomes joint—that is, to the company and as directed in the chain of titlation that Bayh-Dole triggers. If the university waives its claim, and the government waives its claim, then the inventors could deal directly with the company on the value of the undivided interest they would yet have in the invention. If by title we mean the right to have a patent issue in your name as owner, then it would appear that by dividing the title between personal and federal interests, one arrives at an outcome in which the company is not denied its reasonable, bargained for rights, while the government protocols may still be followed by the university, and the university is not culpable for organizational conflict of interest, unfair competition in seeking federal awards, and restraint of trade.
Again, exclusive title is not a requirement of Bayh-Dole, not as part of the written agreements made with inventors to be, not with regard to conveyance of title to the government, and not on behalf of universities seeking to elect to retain the title. There is no requirement to exclude all others who might co-invent, and no penalties if such a circumstance arises. The law restricts obligations to university employees other than clerical and non-technical employees. There is no guidance with regard to others. There is not even clear guidance with regard to whether the only employees implicated are those working with the funding of a particular grant, or whether, if a university has but one federal grant, all qualified employees must agree in writing to the conditions of Bayh-Dole.
This brings us back to the written agreement with qualified employees required by Bayh-Dole. Neither AUTM/WARF nor the Solicitor General deal with the written agreement. It is clear that in federal awards to universities, and in many federal contracts as well, it is the special performance of faculty investigators that forms the basis for the award. The experience and capability of these investigators is in play, not the university as an administrative entity (only if the university has a history of incapacity or not being responsible does the administrative side enter).
When a research employee is permitted to consult and sign an IP agreement with a company, that action pokes a big hole in the university’s own IP policy. When that employee is permitted to then participate in a federally funded agreement, there is a potential collision between the written agreement to protect the government’s interest and the prior commitment of future patent rights. It is not simply that these are mutually exclusive, as the various friends of the court assume. If the inventor to be timely discloses, and signs whatever is needed to allow patent applications to be filed (the law does not specify who must file), and sign whatever is needed to establish the government’s rights in the invention (which does not stipulate the university’s rights, outside of those rights that serve the government’s interest), then the inventor is not in breach of the Bayh-Dole written agreement. If the prior present assignment, for instance, includes a requirement not to disclose any such invention to anyone else, then there would be a problem.
This approach puts the focus on what the university is able to do if it elects to retain title. The Fear the Reaper argument says, when the university elects to retain title, regardless of the circumstances on the ground and its own involvement in creating those circumstances, the university can void, rescope, and otherwise avoid commitments it has made, or allowed its employees to make, even if it could comply with Bayh-Dole by not electing to retain title, or if electing to retain title, taking action that complies with both the prior personal commitment and the university’s obligations under Bayh-Dole.
The AUTM/WARF folks are worried: what if the invention had been made solely by the inventor who pre-committed rights to a company? That isn’t this case, of course. So it’s asking the Supreme Court to jump from justice in a particular case to a worry by administrators about something else, to re-writing federal law by judicial action to make universities happy, at some disaster for private contracting of patent rights.
So what if the invention had been made solely by the inventor who pre-committed rights to a company? First, can the prospective inventor subsequently agree to the written agreement required by Bayh-Dole? If so, then if the university wants to take title, it has to follow the pathway that allows both the prior commitment and the written agreement to be honored. If not, is it the company’s fault and loss? Or is it the university’s? Or the government’s? It is, after all, the university that is required by the Act to obtain the written agreement of its qualified employees. It would appear that it is the university’s actions that should be subject to review if the employee is unable to act to protect the government’s interest and is permitted to be involved in the federally funded research.
The government’s interest might be threatened any number of ways. The company holding title could sue the government for infringement after a patent issues. The company holding title could refuse to file a patent application. The company could refuse to develop the invention, withholding the invention and its benefits from the public. The company could require unreasonable conditions on the benefits of the invention, again preventing the public from reasonable access. Absent the university’s election of title, the dispute, should it arise, would be between the company and the government. The university, in failing to obtain a written agreement from its employee to protect the government’s interest, would be in breach of its obligation. The employee in knowingly participating in federally funded research with a prior obligation would also be in breach.
One may therefore look at this dispute as one in which a university coalition does not want to be liable in a specific way for their compliance with a federal law. They seek a radical and supportable interpretation of the law to make it impossible for the university to be liable for compliance. No matter what the prior circumstances, getting a federal award erases any non-compliant agreements. Wonderment. Talk about risk mitigation. They envision a law so favorable that there is no possibility of violating it. For this interpretation to succeed, the law has to pre-empt even a university’s own actions and set them right, even if this means huge exposure to losses by others.
It is reasonable to look at scoping of invention commitments. It is reasonable to look at competing assignment obligations. It is reasonable to look at scoping of statements of work as between federal awards and closely related company work. It is reasonable to look at the operation of written agreements made to ensure personal compliance with federal contracting requirements.
It is unreasonable, however, to argue that a law must be read so that the university and its employees can never violate it. It appears some folks want whatever they do to be the law, rather than that they are also subject to the law, not merely its beneficiaries.