Patentdocs has a useful discussion of Stanford v. Roche, covering the key elements of the case and the history of decisions up to November of last year. At the end, Kevin Noonan makes an effort to get at why there is this dispute. Here is the bit I want to discuss (my bold):
While the outcome is not surprising and indeed is consistent with well-established patent law principles, wherein rights to an invention arise first in the inventor and can be freely alienated by the inventor (absent any agreement, such as an employment agreement, to the contrary), it is clear that this outcome is contrary in spirit to the intent of the Bayh-Dole regime.
What is the “spirit of the Bayh-Dole regime”? And why is spirit being invoked to deal with law, even after agreeing that the court followed well established principles of law? Does spirit trump principles? This is important. In addition, we need to look for where this spirit resides. Is it in the law, or is it in a group of interpreters of the law?
I am not going to try to be brief here. Don’t keep reading if you want a short bit. Maybe later.
I’m not persuaded being brief is the best approach to sophisticated text. It is the perfunctory bullet-point attitude of people who are too busy to think and too preoccupied to consider anything other than the gross superficialities of the world. One can choose to live in a simplistic world. And one can try to impose that simplicity on others. There is a time to be simple, but there is also a time for depth. Depth can reward awareness, an awareness that is not got by boiling things down to a crisp crud at the bottom of the pan.
The Spirit and the Text
The spirit of Bayh-Dole, as it is developed by the tech transfer community, would appear to be some variation of: “universities should own research inventions made with federal funding.” Variations include: “Bayh-Dole intended to make expeditious the process by which universities come to own subject inventions.” “Subject inventions are owned by universities.” Bayh-Dole, of course, does not come out and say this, and does not present a particularly direct means for such a thing to come about, so perhaps this motivates the idea that the spirit of Bayh-Dole, speaking through law, stammers out this plain truth.
I don’t think this reading of Bayh-Dole is anywhere near the truth of it. It’s a deeply misguided effort by university patent administrators to nail home this idea by means of snookering courts to hand them an interpretation that is not in the law on the basis that they really, really want it, have configured their own practices as if what they want is true, and now will be really, really disturbed if it doesn’t turn out that way. We do learn something from such an effort, though: how superficial the whole effort is to deal with research inventions–in its impetus, its justifications, in what it wants, and in how it reasons about what it wants, not to mention its blindness to the harm it is doing.
It is this situation, and not the immediate outcome of Stanford v. Roche, that takes concerns me. The potential for collateral damage is huge. In the technology transfer community, there is no active debate on the matter. There is the appearance of consensus, with no minority positions, no white papers exploring the issues, nothing. I get notes that folks agree with my points but fear for their jobs, their reputations, their careers. That also concerns me. Given the ruling in Garcetti that public employees can face retaliation for speaking out contrary to their employers’ positions, technology transfer officers have to live with the expectation of hostility. It is up to the administrators to provide a forum for discussion, and they have not done that. Quite the opposite, they are working to make sure such a forum is not available.
In this context, let’s get at the spirit of Bayh-Dole. It would be nice if we could align spirit and principle and the text of the Act, rather than making the Act an administrative wishing well for title extracting efficiency.
If Congress Had Wanted a Vesting Statute
If Congress had wanted Bayh-Dole to be a vesting statute, there are really easy ways to do that. “Title to any and all subject inventions shall vest with the contractor without formalities.” What is so hard about that? Oh, was it politics, because if folks in Congress had figured out what universities really wanted, they wouldn’t have voted for them? Then the spirit of the law would be what folks really wanted but didn’t dare put in the law directly. Not sure that’s a particularly good position to press on the courts.
Why all the convolution? Why not:
As a matter of patent law, title to subject inventions vests in the contractor, any other agreements or laws to the contrary.
or:
Inventors of subject inventions are obligated to assign title to contractor. This obligation takes precedence over any other agreements or laws.
Instead, we see that the Act is clearly directed at agencies, not at universities, not at their employees. The Act makes agency procurement uniform. It does not make university procurement uniform, and it does not do that procurement for the universities. The Act most definitely does not apply to employees or inventors, or touch on the standing of title to their inventions directly.
An Act of Agreements
We have seen in other discussions how Bayh-Dole is a law of agency procurement contracting for inventions. It requires agencies to follow a uniform approach to university research. It is implemented by means of a standard patent rights clause inserted into agreements for grants, cooperative agreements, and contracts for research. It is part of each agreement. It has effect as it is agreed to. The terms of that agreement place minimum conditions on the university as contractor. It is up to the university to decide how it deals with those terms. What a convoluted thing to do if the purpose of Bayh-Dole is to put invention ownership in the hands of university patent administrators. If national research innovation policy is: every new thing should be touched by patent administrators–then there are direct ways to do it. Bayh-Dole surely is not a direct way of doing it.
A first finding as to the spirit of Bayh-Dole: Bayh-Dole applies to agencies in their contracting with universities. Its spirit is to make the agency behavior uniform.
A second finding as to the spirit of Bayh-Dole: Bayh-Dole is a law of federal agreements, of agencies with universities, and what universities must require of their research employees to protect the agencies’ interests.
If Bayh-Dole were a law directed at inventors, then it would tell inventors what to do. It would say, if you invent with federal support, all your inventions are belong to us. It doesn’t say that. It is not its spirit. Its spirit is something else. Can we find that?
Inventors or Title?
Let’s start with 37 CFR 401.14(a) (b). Right there it says that “The Contractor may retain the entire right, title, and interest throughout the world to each subject invention”…. Doesn’t that mean the Contractor owns inventions? Isn’t that clear enough, that that is the spirit of the Act? No. Words matter.
The operative words are “may” and “retain”. The direct way a vesting statute would operate would be: Title to subject inventions shall vest in the Contractor.” Wouldn’t that be simple enough. Then anything the government would want is a matter between the agencies and the universities. Get those nasty inventors out of the way right off. If the spirit of Bayh-Dole was to get the inventors out of the way, then there are direct ways to do it. Yeah, yeah, can’t do those because then there would be objections, so it had to be done, you know, covertly, with cleverness.
The spirit of Bayh-Dole then is, we would gather, to sneak title from inventors in favor of patent administrators. Some national innovation policy. If this were the reading, then the spirit of Bayh-Dole would be, diminish the importance and uncertainty of dealing with inventors in research settings in favor of their employers and especially the noble patent administrators. Really? I am not buying this. Actually, it appears just the opposite, leading to a third finding:
A third finding as to the spirit of Bayh-Dole: it preserves a role for inventors in the process. One might say, Bayh-Dole respects inventors. One might say an effort to read Bayh-Dole as favoring patent administrators *disrespects* inventors.
One might go so far as to put an edge on the reasoning given by these patent administrators as *inventor-loathing* because they propose the outright disenfranchising of title from inventors–and if not for title to their inventors, what is an inventor? Just an egg-laying hen, valued for the eggs, not for hennishness.
We might note again that inventorship is a personal right established under the Constitution. The patent administrators posit, yeah, sure, but *get title away from inventors as expeditiously as possible*. The spirit of Bayh-Dole would be: skip the Constitution, when the federal government funds the work, as a matter of federal policy, do things as expeditiously as possible. It’s university patent administrators that should have been named in the Constitution, and this is an inspired way of getting things right, finally. No. Fail. Wrong. One might say such a spirit would disrespect the Constitution.
When so many universities show up disrespecting inventors, the Constitution, and seeking to read a federal law pertaining to agency procurement of invention rights in research with universities demanding it be read as a law of the land separating inventors from title to their inventions automagically, I can see why the Supreme Court might say, this has gone far enough, we have to deal with it.
The Apparatus of Bayh-Dole
The apparatus of Bayh-Dole, and in particular the standard patent rights clause, the march in provisions, the 401.9 mini-patent rights conditions for inventors–all of this points to a different sort of spirit. Not a spirit of expeditious removal of invention title eggs from the labs of nesting faculty. Not a covert way of sneaking something through Congress that otherwise wouldn’t have been approved. Not a strange love of complex bureaucracy that only a clear headed university administrator could cut through and make evident to all. Nope.
Let’s get back to these two key words “may” and “retain”. We have argued that there are direct ways to put title with universities, and these two words aren’t that way. “May” means there is a possibility, as set out in the law, for the university to do something with title–that is, “retain” it. “May” carries both a permissive element (“it is allowed”) and a subjunctive element (“it is something the university might do”). It is not merely statement of enablement (“could”) or a vesting of title (“shall”).
Turning to “retain” we can consider a few issues. Patent administrators say, you cannot retain something unless you already have it, hence Vesting Statute. But retain has other meanings as well. One retains an attorney that one does not already have, meaning that one secures services that otherwise would go to others. One retains a hillside by putting something in place–a retaining wall–that was not there so as to prevent ground movement, which is potential but not happening.
The primary point is, one cannot reason from the word by taking only one meaning. The secondary point is, we have to look to the text of the law to see what meaning is given to “retain”. A third point is, if the law had wanted to vest title in the university, this would have been a really obvious place to do it, and it is not done here. No place in the law does this. Here would be the place to do it.
Instead we end up with a reading by patent administrators that says, the law says we can retain title, so right here it really is saying we have title and thereby modifies the whole of the Patent Act on this, but jumps out ahead of itself and uses “retain” because this modification thing is so obvious that no one need remark on it. One might think the spirit of Bayh-Dole is sloppy drafting not to state the obvious. Or perhaps to assume self-interest and then try to read the law that way, no matter what. Let’s say not.
If we work our way through the standard patent rights clause at 37 CFR 401.14(a), we see how the Act is implemented through agreements not fiat. Agreements first with universities, and then agreements universities require research employees to make.
A fourth finding: the spirit of Bayh-Dole is in agreements that eventually have to involve inventors. The key is whether this spirit respects inventors or exploits them. What do you think a national innovation policy should do? Patent administrators are squarely on the side of exploit. Is this a good omen for national innovation policy? Even if it appears administratively more efficient to exploit inventors?
The Standard Patent Rights Clause and Title
In the standard patent rights clause, we find that universities must do a few things. First under (f)(2) they must require research employees to agree to protect the government’s interest by disclosing inventions and signing paperwork. Second, they must disclose inventions to the government and decide whether to elect to retain title. Third, if they elect to retain title, then they have to do other things, such as filing patent applications, reporting on utilization, and sharing royalties with inventors.
What does it mean to “elect to retain title”? One reading is to decide to keep title one already has under the unstated but obvious abyNormal Patent Act. A second reading is that “elect to retain title” means “acquire title when notice is given”. That is, it is the act of notifying the government of the university’s choice that vests title. That’s when title whooshes from the inventor’s possession to the university without additional formalities. Or, if there are formalities, federal law constrains the inventors that they must, they are compelled, it is the only personal right they have, to assign to the university. If they do not assign, they are committing a felony. That sort of reading. These readings all require something to happen with title or obligation at the point of electing to retain title. The mechanism for this has to be assumed, because it is not in the Act. One has to say, it has to be there because my reading demands it. That may be willful, it may feel good, but it is a lousy reading.
Another reading, however, is that elect to retain title means to act to prevent the movement of title from inventors to government, at the agency’s request under the (f)(2) agreement the government (and university) has with the university’s inventors. There is, after all, a clear mechanism in the law to get at what inventors are obligated to do, and how that mechanism comes into existence.
First, the responsibility for putting (f)(2) into place is with the university. This responsibility is in a section of the standard patent rights clause labeled Contractor Action to Protect the Government’s Interest. There is no section labeled Contractor Action to Protect Its Own Interest. Why is that? An oversight? Or it does not have to because Bayh-Dole is a Vesting Statute, along with the other obvious things that were intended somehow but that aren’t ever stated outright?
We have argued elsewhere that (f)(2) is set up as an agreement in writing that allows the university to stand in and retain rights that otherwise inventors would assign to the government on request. (f)(2) is triggered on request. This leads to another finding about Bayh-Dole:
A fifth finding: transfer of title is triggered by requests.
Under (d), the government may request conveyance of title. Under 401.9, inventors may request to retain ownership. Under (k), universities may request to assign rights to an organization lacking a primary function to manage inventions. If we work within this spirit, “elect to retain title” is a request that cannot be refused by the agency if it is made within the uniform provisions of the standard patent rights clause.
We might add, requests are not compulsory events forced by law, but rather choices made within a framework of agreements authorized by the law. It is the agreements that establish the conditional promises triggered by requests. Some requests carry approval steps, and some do not. But the mechanism is not the same as compulsion.
There are two competing spirits here for the soul of Bayh-Dole. One is requests within an framework of agreements, and the other is the force of law making something happen outright. The law recites requests. The law does not recite compulsions. Those have to be supplied. They are the spirit of those doing the supplying. If the attitude is, oh gawd cut to the chase, universities own, that’s the deal, and better without administrative overhead, one has a *totally different spirit* for Bayh-Dole than one of agreements, conditionals, requests, and responsive actions.
You might then see why the AUTM position is properly described as inventor-loathing. There is no reason to make it sound more pleasant. No reason for a fluffy pattern of agreements if one can cut to the chase with the power of law.
Second, by retaining title, the university relies on (f)(2) to obtain is position. It has the privilege of just the same rights that the government has. If it complies with the disclosure provision, even if the government takes title (from the inventors or from the university, later) this extends almost precisely to what the government gets if the –a non-exclusive license for university purposes, including the right to sublicense for any commitments made prior to the federal funding agreement (as per (e)).
Dealing With (f)(2)
What about the university’s own IP policy, research compliance policies, patent acknowledgments and patent agreements? What about promises to assign and present assignments? What about, even, state laws demanding ownership of inventions made by state employees working at public universities, even those employees who are clerical or non-technical workers? Do they back up (f)(2)? Do they stand in for (f)(2)? Are they want (f)(2) requires? If they vary from (f)(2) are they void? If they add more than (f)(2) requires, is that stuff void? If there are other agreements out there, does (f)(2) void them? or do employees have to renegotiate their other arrangements until they can meet (f)(2) commitments or not participate in the research? Is the agreement required in (f)(2) a federal agreement that pre-empts any agreements enforceable under state laws? Does (f)(2) pre-empt any state law to the contrary? Does the standard patent rights clause, when it is inserted into a funding agreement? This is where the battle for the spirit of Bayh-Dole is going to be fought, where principles of interpretation will fight with the spirit of patent administrators. Where requests are pitted against expediency. Where respect for inventors meets up with rushing the trough. Where would you expect national research innovation policy to do?
Here is one way to look at it. Whatever else, however (f)(2) is expressed, the university has *agreed* to requiring (f)(2) as its obligation to the government under the standard parent rights clause in each funding agreement. That is, whatever all the text of those other documents, the portions of text that operate are at least those parts that implement (f)(2) at each point in the succession of decisions that the standard patent rights clause authorizes. Any other parts *are not required* by the standard patent rights clause. If they are not consistent with the standard patent rights clause, then they do not operate *because the university has agreed they do not operate in accepting the standard patent rights clause*, and not because somehow the standard patent rights clause voids them. If the university cannot agree to (f)(2) because state law says something different, then the university cannot receive federal funds, or is in breach of the standard patent rights clause, or is authorized to modify state law to permit its compliance. At least some states, such as California, are smart enough to build in an exception for Bayh-Dole.
We are not yet to what happens with other commitments that university inventors may have at the point the university is required to have them agree to (f)(2) in writing–that is, so that it is recorded, meets the conditions for an enforceable agreement, and constitutes informed consent.
Keeping the University’s Promises
We have been working through the implications of “may” and “retain”. We have got as far as arguing that may indicates the possibility of action, and retain means to change the course of rights that otherwise might be conveyed by request by the funding agency. We have pointed to the means by which this happens, the very sophisticated, very cool (f)(2) written agreement that universities require of their research employees and that they necessarily accept in lieu of anything else they may require of their employees. Whatever obligations employees have to their university, the ones that operate are consistent with (f)(2) because that’s what the university has agreed with in each deal for funding it has with the government.
A sixth finding: Bayh-Dole establishes what and how universities can come to have an interest in the invention rights of their employees when those employees are supported by federal funds. The spirit of Bayh-Dole is that the universities live up to their agreements with regard to these agreements with their research employees and inventors.
What’s in the balance is whether universities are going to live up to their promises to the federal government. The patent administrators are petitioning the government to be released from these promises, to recast these as an expeditious administrative race to the patent trough, with the idea that by holding all invention rights outright, national innovation policy will have its finest moment. As you might expect, I don’t think so. And I’ve been a university patent administrator. I have talked to many. I am rather relieved I am not one now.
Let’s take it further, having got this far. We are working for depth and spirit here, and we have made some useful findings.
Reading to Be Right
There is a way of reading text in which one seeks in the text a confirmation of one’s desires. Where the text has authoritative status, such as a sacred text, or legal text, or scientific text, this sort of reading has the effect of providing a kind of moral confirmation to one’s will. It’s a heady thing. One does not cite a script from, say, an episode of Gilligan’s Island or an advertisement from Victoria’s Secret to establish one’s position–even though those might carry some decent truths. No, one seeks to align one’s will with authoritative text. There is a risk in this, as well, in that interpretation may lead one from an understanding built from the guidance of the text to one in which one’s will establishes a claim on the necessary interpretation, leaving the rest of the text to be interpreted as needed to make everything work out.
This kind of interpretation can be done. It’s done a lot of the time in undergraduate literature courses. One of the objectives of these courses, back in the old days of three decades ago, was to condition readers to work against their will and respect the text, the context in which it presents, the apparent intentions of authors, the conventions of language and discourse. One can assert a text means just what one says it means. Or one can assert that a text confirms on one the status that one desires for oneself. But where texts are social objects, and that is often the case with law, it is also a matter of gauging the local readings with the broader interests in interpretation by everyone else. In a law case, spirited capable arguers are paid to push self-interested interpretations, and a judge is asked to look out for the broader interests of the text and the community that interprets that text. We call this justice.
For the interpreter of texts with status, it is not a matter of self-will, nor is it a matter of accepting some consensus view, or even the view of some authority. For texts with status, the matter is to come to understand the text in its parts, where there are differences in interpretation in the community, and what those may mean for one’s own actions. It is not the text that forces one’s actions. It is not the text that gives moral substance to one’s choices and actions. It is the manner of engaging the text with regard to the community and its interpretants that establishes one’s moral grounding.
This is the important thing about reading Bayh-Dole. Yes it is law and implementing regulations and federal agreements and technical clauses that create promises and conditions under those agreements, and in the end all this does touch on title to research inventions made with federal support. But Bayh-Dole is also innovation text. It is interpreted like all text. And it is authoritative text in its way. It is worth, therefore, coming to know the text before jumping to an interpretation that in the end causes the text to fail in many parts of its guidance. In doing that, we replace text with will, and due process with arbitrary self- interest. This leads to another finding:
A seventh finding: the spirit of Bayh-Dole is in part to be found in the regard those have for the text apart from their own self-interest.
This is an impossible concept for many attorneys. They won’t interpret a text unless there is a dispute. And when there is a dispute, the range of interpretations narrows to a hired self-interest. Imagine if we dealt with novels this way. Yet, whatever else Bayh-Dole is, it is also a key statement of national research policy with regard to inventions made at universities. It is not merely a text to confirm a local interest.
How Bayh-Dole Reaches Research Employees
Now we can turn to this issue of an employee participating in federally supported research while having obligations to others. The thought is, this goes against the spirit of Bayh-Dole even if there are well established patent principles. If one thinks that Bayh-Dole enables patent administrators to rush the trough, then why yes, the outcome is against that reading, that spirit. If patent administrators go, well, we cannot let this reading stand because then we all look like fools for not getting things right for so long, making Bayh-Dole out to be this compulsory thing to force invention title out of our employees–that’s an understandable reaction. How often do university administrators go–we stand corrected. Sorry. It is so rare we have come not to ever expect it.
The spirit of Bayh-Dole is in a pattern of promises, conditions, and requests. Inventors are considered distinct in their inventing from their employers. Thus, employment agreements are not sufficient, because those employment agreements may not address the government’s rights. Further, the employer may not decide to participate in invention management. Bayh-Dole does not require a university to elect to retain title, does not require even an IP policy or a technology transfer function. Bayh-Dole makes only conditional requirements of universities. Strip it all away and the only thing that matters in Bayh-Dole is (f)(2). That’s the bargain for deliverables–report inventions, sign paperwork to allow patent applications to be filed, sign paperwork to establish the government’s rights. That’s the deal. Letting universities decide how to benefit from (f)(2) is where all the build-out takes place, and if universities don’t elect to retain title, then 401.14(a) disappears but for (d)(1), and control moves over to 401.9, where the university has merely the right to be consulted as to arrangements between the government and inventors.
401.9
One could say that the great genius of Bayh-Dole, its inspiration beyond the comprehension of university patent administrators, is 401.9–which is another kind of standard patent rights clause, authorized by Bayh-Dole, this one to be used when the inventors become the relevant parties to the funding agreement. That is, the default, the glory for you, the nice knock-down argument, is 401.9. Strip everything away: if (f)(2) does not operate because the university opts out, and does not operate because the agency makes no requests of the inventors for title, then the deal for invention rights is 401.9.
The Solicitor General’s amicus brief in Stanford v Roche argues that Bayh-Dole puts inventors at the bottom of the bottom, the last in line with their hats out hoping for charity against the uppity power and grander vision of the universities and government agencies. In terms of our spirit question, the Solicitor General, having met with university patent administrators, argues that Bayh-Dole is inventor-loathing. That in terms of national innovation policy, the purpose of Bayh-Dole is to put inventors last in line. But we can argue that Bayh-Dole does nothing of the sort. It creates a set of agreements and conditions so that if universities or agencies have a better capability and opportunity than inventors alone, they might take advantage of their position. There is no requirement that they do so. There is nothing that forces this result automatically, so they have to take action to resist it.
We might say that Bayh-Dole respects inventors in the context of their commitments, based on the exchange of proposing meaningful work to the government and the government committing funds in support of that work. We might say that the core of Bayh-Dole is 401.9, not 401.14(a). It is 401.14(a) that steps in between inventors and their deal with the government. It is the universities who are the interlopers as much as agencies once were aggregators. These days, the universities are aggregators in practice, licensing no more of their inventions than federal agencies were doing. As Circular A-110 has it, universities when then acquire title are stewards of this exchange, not outright owners as a result of it. In holding patents in trust for the beneficiaries identified in a federal grant, a university is held to a standard not of how to force assignment of all invention rights from its employees, but overall how does the work of the grant lead to benefits for those who should benefit. If the grant is to develop a tool to determine if AIDS treatments are working, then the primary point of analysis is whether or not there is an AIDS tool and is it being used to help AIDS patients. Whether the university is making money on it *is not ever at issue*. Nor, for that matter is whether the university *takes title*.
Bayh-Dole presents with an apparatus for agencies dealing with inventors directly. That’s 401.9, which university patent administrators deal with but rarely. Most would see invoking 401.9 as a failure or a clever exploit. But if universities would get out of the way, 401.9 would rule. Universities have to do something *better* than 401.9. It is not the case that universities have to work to *prevent* 401.9 activities because those might make the universities’ 401.14(a) decisions to intervene look bad. Subtle point? Are we at depth yet?
Consider at this point a baseline. University research employees may invent. When they do so, absent any other promises they have made, they have the right to title to their inventions under US patent law. Patent law provides for how they may transfer title–in writing. Bayh-Dole establishes a contractual framework under which inventors may be asked to transfer title, or if they retain title, the conditions under which they work to meet the objectives of national research policy.
Finding eight: under Bayh-Dole, a subject invention is committed to use so that its benefits are available to the public, regardless of who has title–inventors, universities, foundations, companies, or government agencies.
The Preemptive Principle
If the patent system will not promote use, then the patent system shouldn’t be used. Before anyone deals with title, the first order question is whether a patent will do any good and *not whether one can make money with the patent*. Wrong issue. It is not even in the text of the law that “by making money universities benefit the public” or that “the money the universities make is proxy for the benefit the public is receiving”. The objectives of the law are there in 35 USC 200. The objective of federal research policy with regard to universities is in 2 USC 215.37. I would think these capture the spirit of the law. Certainly much better than something that says that the spirit of the law is something other than what the law says it is about, or an operation of the law that isn’t in the law, but has to be assumed for one’s reading of the law to justify the positions one wants to have confirmed.
If employees hold their invention rights prospectively until they agree in writing otherwise, we can ask whether it is in the spirit of Bayh-Dole that somehow universities have to end up with title. We might find that the answer is no, if for no other reason than 401.9. We might go further and ask, does the mere existence of 401.14(a) as a future possibility put every other agreement regarding invention rights on hold, or make those agreements provisional on what might happen later, in federal funding agreements.
Put another way, are federal funding agreements so much more important to the development of inventions that they pre-empt any other arrangements that might get in the way? And even if there is some sort of pre-emption, is it of the personal rights of inventors or of the claims the government may make of inventors, and by proxy the claims universities may make of inventors? For one, it is hard to believe that an inventor lacks standing to commit personal invention rights in the future simply because there is a chance he or she might later participate in federally funded research.
That’s the essence of the patent administrator’s position. It’s against the spirit of Bayh-Dole to do anything because there is a chance it might apply later. That’s more than a precautionary principle. It is a preemptive principle. The mere existence of a law making uniform the invention procurement clauses of federal agencies makes the private commitments of all inventors in the country contingent on their never participating in federally supported research. That sounds like a policy to keep anyone with any good stuff *out* of federal research. That sounds like a policy to preclude any agreements on future inventions. That sounds like a law of unintended consequences. The spirit of Bayh-Dole would then be: to make university ownership the top priority of national invention policy, all other arrangements must be declared provisional. Is that the spirit of Bayh-Dole that we are hoping for?
Just as there are different readings for “retain”, there are different places in which the promises a university makes under the standard patent rights clause may preempt any other demands it might make rather than preempt the personal rights of inventors. We may say: when universities agree to the standard patent rights clause, they do so *on their own* and not *on behalf of their research employees*. The effect of the university agreement is to conduct their relationships with their research employees *within the framework of Bayh-Dole* rather than any other framework. Bayh-Dole preempts their self interest, not the personal invention rights of research employees. Or more accurately, the universities in promising to follow Bayh-Dole, self-restrain their own interests, their own policies written for other things. The policies that say, everyone will comply with extramural award conditions operate this way, to say all that other stuff doesn’t apply–only the standard patent rights clause, and for employees (f)(2) however you get to it, but it is clear that *universities have to require it* not that the law requires it. The deal is an arrangement between the universities and their research employees to the benefit of the government, the conditions of which are set out in plain terms in (f)(2). All the university has to do is take action to *require it*.
What if (f)(2) Fails?
If the university does not *require it*, what then? One of the first questions I asked my director of technology transfer when I started in this field was, where is the step where we obtain written agreements from research employees? The answer was, our policy does that and we won’t create paperwork until an agency requires it. That may be a good answer, but it leads to an easy conflation. It may be that a university’s written policy statements are sufficient to meet the conditions of (f)(2), but when they do, it is (f)(2) that is followed, not the authority of the policy documents and not any other elements that may be present in these statements.
If we accept that research employees have their prospective invention rights until they commit these, and that they are free to do so at any point until they are required by a university to comply with (f)(2), then we can see that Bayh-Dole does not void anything preemptively. That is not its spirit or its manner of operation. There is nothing automagical about it, no vesting statute, no re-scoping of private agreements, not even of the private agreements that research employees may have with their university employers. It is the *universities’ promises and actions in accepting the standard patent rights clause and making choices under it that may re-scope the agreements it may have with its research employees*, not the agreements their research employees have with others. It is up to research employees to re-scope any agreements they have to comply with (f)(2). It is up to universities to see that they do this. In this, it doesn’t matter whether (f)(2) takes the form of a promise to assign or a present assignment of future inventions. It really doesn’t. What matters is that the scope of commitment is sufficient to meet the requirements of (f)(2). It is scope that matters, not the form.
What happens if a university fails to secure an (f)(2) written agreement? Here is what I think. The university loses its means of obtaining title. It has lost its own policy claims by accepting the standard patent rights clause instead. And it has lost the mechanism for requesting title from its inventors. So whatever else a university that fails with (f)(2) is out of the title hunt.
The question remains for how the government deals with inventors who have rights. The government does not have the benefit of an (f)(2) agreement with them, so it cannot request title that way. It does have the benefit of the standard patent rights clause, so it can request that the university convey title. The patent administrators would invoke their spirit of Bayh-Dole to say that it does this for them, automatically. The reading given here says, you do it the old fashioned way, you pay what it is worth to acquire title and convey it to the government. That’s what you agreed to do, that’s what you will be compelled to do if the agency requests title. If the agency doesn’t request title, then you are off the hook. It is as if you did not elect to retain title and the agency has decided not to request it and we are done with 401.14(a) and on to 401.9, which has no requirement of (f)(2) and isn’t anything that a university has agreed to in any funding agreement. A number of elements come into play. The government might refuse to allow a patent to issue on the invention without the inventors’ accepting the conditions of 401.9. Section 401.9 can be construed as a mini standard patent rights clause in those circumstances in which 401.14(a) does not operate, and the university policy on compliance with the terms of extramural research contracts will force inventors to comply with 401.9 even if the university has no way to take title.
Why Bayh-Dole Is Inspired Legislation
This has been a long haul. There are shortcuts but they do not address the many issues that swirl around Bayh-Dole. I have constructed this piece as a reading of the law that pays attention to its mechanisms and doesn’t pick and choose for any one narrow outcome. I’ve talked about what kind of spirit is represented in the text of the law, and I have made it clear where I think things are headed.
What do we make of all this in light of the comment on Patentdocs? First, that it is within the spirit of Bayh-Dole that individual inventors deal their personal interest in patents. The spirit of Bayh-Dole says, get agreements with research employees that provide for reporting, patent filing, and government rights. In the case of a research employee obligating rights ahead of time elsewhere, get these or exclude the employee from the research or involve the individual in a capacity other than as an employee. The (f)(2) requirement on universities means *cause research employees to be in a condition under which they can comply with requests involving title or license*. If the university fails to do this, the spirit of Bayh-Dole does not do it for them. There is no Doleus ex Machina to save the day for the university. It is not that big a thing that inventors have rights, or obligate those rights. That’s patent law. That’s the Constitution at work promoting progress in the useful arts. It’s up to the agency to decide what is to be done if it believes better outcomes might be achieved in taking title or preventing the assertion of patent rights.
The role of Bayh-Dole is to define a uniform way in which universities gain the benefit of stepping between an agency and the inventors it supports. There is no compulsion. No entitlement. No preferred model. No requirement to make money. No requirement for “commercialization”. No need for a technology transfer office. No automagicality. No arbitrary re-scoping. No making all private dealing with regard to inventions provisional pending federal funding prior to actual reduction to practice. Imagine all these things and one has got close to the spirit of Bayh-Dole, and well away from those things that university patent administrators, at least some vocal ones with attorneys willing to take their case, believe. What matters is the public benefit, transacted by inventors through whatever agency might work best, so that their inventions are used, and those uses result in benefit to the public. Standards, products, internal applications, roll your own everyone, the law doesn’t specify how it doesn’t care, it need not care, it is not in its spirit to care. It respects American institutions, starting with inventors, and permitting universities a role in the social contract that federal support for university-based research establishes. It is up to the inventors and their universities to work out what will work, and the law out of respect cannot do this, cannot dictate the outcomes, cannot step in to make up for what folks don’t do, can’t turn shortcuts and oversights and desires into the law of the land. What an inspired piece of legislation! What amazing deftness in drafting! It is not what the university patent administrators claim it is. It is something much better, broader, thoughtful, and interested in allowing a diversity of practices. By making agency treatment of research inventions uniform, it allows a robust, decidedly non-uniform approach everywhere. How odd to have calls to make those approaches uniform, or to invoke Bayh-Dole to make any one approach automatic, so that all the others are shut off. That would be entirely *against* the spirit of Bayh-Dole.
At this point in time, given that university patent administrators and even university faculty who might agree with this line of reasoning cannot speak out for fear of retaliation, others will have to do the speaking for them. Perhaps the Supreme Court will spend some time reading carefully and listening beyond the self-interest of university patent administrators and the organizations they pay to front them to get at what really matters, and provide a lesson in how to implement an inspired national policy on research invention management.