Here are 10 reasons why Bayh-Dole is not a vesting statute, shouldn’t become one, and why that approach should not be taken in an effort to resolve Stanford v. Roche.
1. It is a broken reading of the law. Trying to read Bayh-Dole as a vesting statute conflates retaining title with having title, and makes a muddle of the rest of the law while it is at it. The law operates by mandating a uniform approach to agency requirements on delivery of title to inventions. The law requires a standard patent rights clause in funding agreements. It is a law of federal contracting for inventions, not a statutory vesting of inventions with universities. They still have work to do for anything they want to acquire. Imagine—top university patent administrators do not understand the law that founds their practice, or worse, they don’t care to. Either way, it appears to be more than an honest mistake or something merely worth a shot to argue for.
2. It is lousy public policy. Who would have thought the inspired part of Bayh-Dole was to have bureaucrats touch every federally supported university invention? No, there is no way that federal research innovation policy was made so bureaucrats could take everything outright. There ought to be a negotiation. No, there ought to be other routes to innovation that do not pass through the little invention mortuary called the technology licensing office. What a dull world university patent administrators imagine for us, no innovation but for the thumbprint of a bureaucrat.
3. It will create havoc. As a vesting statute, it would make impossible most agreements pertaining to inventions. Claims based on first actual reduction to practice with federal funds could strip private parties of fairly bargained for rights to inventions. Don’t like the deal you just did? Run to a university with federal funding and void the deal. Oh, and if you like the deal you just did, don’t talk shop at lunch within anyone receiving federal funds. So much for university-industry research collaboration, faculty consulting, industry visitors, student internships, and the like. University taking title is not so much more important than all that.
4. It would be unconstitutional. As a vesting statute, it would ignore the Constitutional foundation of invention rights as personal property, and would implement a regime of acquisition that failed due process and just compensation. This, especially true for public universities taking private property for public use. Most inventors are never paid, and they have to take the royalty share deal as a non-negotiable condition of employment. Who cares about Constitutional limits when there is a ready trough waiting?
5. Bayh-Dole has never been practiced this way. Not by the PTO, not in the MPEP, not by universities, some of which require assignment by employees to research foundations, and not even by AUTM’s Practice Manual, which warns of the dire consequences of not having agreements in place to obtain assignment of inventions. Thirty years of practice getting assignments. Even Stanford went back for assignments. And it’s just OMG! it was a vesting statute all along and we didn’t have to do that? Really?
6. It makes a hash of the case. Rather than trying to cancel valid assignments, follow the assignments of the entire right, title, and interest and see where the assigned Bayh-Dole obligations end up. Those obligations provide the means for an equitable resolution of the case. At least one resolution, finding that Roche is a party by assignment of subject invention to Stanford’s funding agreement and patent rights clause, would require sharing royalties with inventors and use of remaining funds after expenses of invention management to go to scientific research and education. That would be a huge result, likely a lot better financially for the inventors, and pushing perhaps billions into research and education rather than corporate profits. Gosh, maybe Roche should settle.
7. It’s a sloppy answer to administrative laziness. The upshot is that university administrators really, really want title to inventions, but don’t want to be bothered with any diligence along the way. It’s just too hard they argue. Why create havoc so that university administrators don’t have to be diligent with what they value? Make a pitch for responsibility in invention management the old fashioned way—earn it.
8. It disrespects inventors. University administrators want title but don’t want to negotiate with inventors, deal with inventors, or learn from inventors. They characterize university inventors as gullible, selfish, and inept. They argue that taking ownership is necessary to defend the public from such awful people. Shame on the bureaucrats who pretend that the inventions are made for them as owners not as chosen trustees. Start with inventors, include principal investigators, add available expertise in the broader community, and one has about the right mix into which university resources may also be contributed.
9. It forgets history. This whole technology transfer business was started by faculty inventors working independently of their universities to create agents to collaborate with industry in the development of new products. One might even make a good case that the National Science Foundation springs from this same root, and with it, the rise of the American research university based on the advancement of science through basic research. Making the approach compulsory misprises the basis on which both basic research and technology transfer have developed. The move of patent rights administration from agencies to universities is not so that universities could behave, in the end, just like the agencies were behaving, accumulating patents with too much overhead to be able to find and do deals, but rather so that university inventors could continue to lead the development of research enterprise, supported by university resources.
10. It’s a form of patent practice poorly suited to basic research and innovation. Taking everything and releasing only later what no longer has any value creates a dragon’s lair of unworked assets, destroys research collaboration opportunities, and loses valuable things in the accumulation. While it might be the thing in a competitive product driven world, it is exactly not what is called for in developing research assets to advance science, collaboration, and community. Not all pathways to innovation run through a university grubbing for commercialization dollars. In fact, as history bears out, very few do. The efforts to make the model work are becoming more extreme, less transparent, and in the end, more wasteful, not only of the dollars spent on a hopelessly workable when carefully limited model, but also on the dollars not spent on other things that would do a much better job of advancing the impact of university expertise in the community. Expediency in obtaining title is not the problem. Having next to nothing useful to do with that title is–despite all the aspirational rhetoric about public benefit.