Let’s look at some of the claims made about Bayh-Dole.
1. Bayh-Dole is about commercialization. Only a little tiny bit. Get over it.
No, really. Look at the objectives of the Act, at 35 USC 200. The primary emphasis is on practical application, with a host of affiliated activity, including collaboration between universities and industry, support for small companies, job creation, protection of the public from non-use or misuse of inventions, and encouragement of competition. Commercialization is one element in the list, not central, not all important, not all consuming of the others. Throughout the Act, where one finds any reference to commercialization, one also finds, in parallel, references to use and to practical application. Commercialization is just one possible outcome in a broad federal research agenda. It’s a mistake to make it the be-all and end-all of Bayh-Dole or of federal research support for universities. It may be that folks really want commercialization over things like broad public use. But that’s not Bayh-Dole’s problem.
2. Bayh-Dole requires university ownership of inventions. Not at all.
The NIH has a policy that recites such as thing. At least the NIH has included a tag “as Bayh-Dole requires”. But Bayh-Dole does not require university ownership. It requires an agreement with employees to protect the government’s interest. The Act operates so that if a university does obtain ownership, then the university may retain that ownership if it does the things it agrees to do in the standard patent rights clause. Bayh-Dole works perfectly well if the university waives its interest in ownership, and works well if the university chooses to assign ownership to another qualified entity, and works well if the university allows its inventors to designate who they would like to assign ownership to, among qualified possible assignees.
3. Universities are expected to claim ownership. By whom, and is it a good thing?
Certainly a lot of university administrators apparently think universities should claim ownership of everything invented with federal support. There are also faculty who support this approach, as it (to their minds at least) protects the academic environment from the selfish personal commercial interests of other members of the faculty. There are other rationales as well. That the university should get a share of royalty income, even for inventions that it has not supported other than by providing release time for researchers (since the government is paying the costs). Or that the university’s patent management office is better than faculty at licensing. Bayh-Dole, however, makes no such assumptions. If a university claims ownership, then it is obligated under the standard patent rights clause of the funding agreement to do certain things. But neither the patent rights clause, nor the Act, make any assumption that the university must own each invention for the Act to meet its objectives. The ownership assumption is entirely with certain parts of the university community. I know of no good argument that as a matter of national innovation policy, all really good research inventions should pass through the hands of bureaucrats. I can see the logic of a university taking ownership when requested to do so by inventors, but even then, only when its capabilities are well matched to the expectations for the development of the invention. Otherwise, it is unprofessional and a generally a bad thing for a university to require ownership of assets it has no good way of improving.
4. The public is harmed by university entrepreneurs. Hardly.
Or in the alternative, the university is harmed. Hardly for the alternative, too. This very approach using patents from research comes from faculty entrepreneurs, not from university bureaucrats. The public should expect that faculty entrepreneurs have great potential to develop stuff that changes lives and transforms economies. How they do it should largely be up to them, whether they give stuff away, start companies, create a standard, or hand rights to a broker working on behalf of science, or government, or a foundation, or a university. If they want access to institutional resources, they can ask. Those resources should not be forced on them in exchange for a lot of paperwork, process, and pain. WARF in particular (WARF–the past shining light in support of inventors–how could you?) , with a number of universities riding their coattails, put it out in multiple amicus briefs that university faculty are inept, selfish, and gullible. It is arguments like WARF’s that damage the expectations people have of universities and in doing so, hurt us all. The public is harmed by bureaucracy standing in the way of efforts to innovate. The public is most definitely not protected by a consuming desire to institutionalize every research invention as soon as possible, as often as possible.
5. The real purpose of Bayh-Dole is to generate discretionary revenue for university administrators. Actually, no.
There appear to be a number of administrators especially at public universities who think Bayh-Dole is the answer to rising administrative costs and falling state subsidies. It’s “only fair” that the university get a share–typically the biggest share–of licensing revenues. Bayh-Dole does not make university revenue an objective. There is no obligation in Bayh-Dole that universities generate licensing revenue. There is an expectation that they will, but it is not a primary metric. In fact, Bayh-Dole can be read to provide protections to inventors and the public from administrative abuse. Universities are particularly called out for special restrictions on income in the standard patent rights clause. Inventors are to receive a share as part of the costs incidental to the administration of subject inventions (see 37 CFR 401.14(a)(k)(2)). This could be *all* of the licensing income other than costs. Bayh-Dole provides that if a university after expenses (include sharing with inventors) has anything left over, that must go to “scientific research or education.” Oddly, universities generally do not report what they used all that “balance” after expenses for–what was the fuss about? What was so important that universities have to square off against industry, but still cannot be bothered to report to the public what they used their licensing proceeds for? I would note, further, that Bayh-Dole restricts use of funds to expenses for subject inventions–so a university licensing office that retains income on a percentage basis should have to account for the use just as the rest of the university does with regard to federal funds. I doubt any technology transfer office could survive such an audit.
6. Universities don’t need the (f)(2) agreement. What is it they don’t get?
When a university accepts federal funds, it accepts the standard patent rights clause at 37 CFR 401.14(a) (or an allowed modification) as part of the federal funding agreement. (f)(2) of the standard patent rights clause requires the university to obtain written agreements with employees other than clerical and non-technical workers to protect the government’s interest. University technology transfer offices for the most part ignore this requirement and substitute language that protects their institutional interests. They put forward these policies and assignments as requirements of Bayh-Dole, which they aren’t, while they ignore the (f)(2) agreement, which is a requirement. The (f)(2) agreement is pivotal to the implementation of Bayh-Dole within a funding agreement. Absent the university’s claim to title, and in the case of employees contracting their rights in inventions other than to the university, the (f)(2) agreement is what protects the government’s interest. If an employee cannot sign the (f)(2) agreement because of conflicts with prior agreements, then the employee cannot participate in the research. Without the (f)(2) agreement for each funding agreement, a university is flying blind. No wonder they want outright automatic ownership of federally supported inventions–it’s the best way they can see to comply with their funding agreements (at least the part of the law having to do with government rights).
7. University patent policies should include a present assignment of future inventions. No, wrong way.
The idea is that a promise to assign is too weak and in the Stanford v. Roche case somehow the present assignment was stronger and trumped the earlier promise. But university IP policies do not work in the same way as corporate ones. They uniformly are conditional. The obligation to assign is only to those inventions that the university has a claim to. Inventions made in consulting and prior to employment stand outside the claims. So do, under some states’ labor codes, inventions made without use of university facilities. Since Bayh-Dole does not require university ownership of inventions, research policies that say that the university must claim inventions made with federal funds are simply wrong, if not deceitful. Actually, Bayh-Dole makes ownership conditional as well: the university might not elect to retain title, in which case, the discussion over title is between the inventors and the federal agency. While a present assignment might serve to ensure that the university owns every invention to which it can make a claim, such a present assignment is still restricted by the scope. It is not the method of assignment that matters, but the scope. If the university tries to restrict scope, then it cuts off consulting, may run afoul of state labor laws, and in the case of public universities raises the prospect of violating the due process and just compensation bits in the Fifth Amendment. What is actually needed is a patent policy that goes the other way, and provides for university ownership only a) when the inventors are required to assign to the university by some third party or b) when the inventors choose to assign to the university of their own accord and the university agrees to accept the assignment. This kind of policy would end the university practice of dropping a university-owns clause into research agreements. The request for the clause would have to come from the principal investigator or the sponsor with the concurrence of the principal investigator.