Attorneys analyzing Stanford v Roche and the Bayh-Dole Act from a distance need to understand:
Bayh-Dole is directed at federal agencies. It requires agencies to use a standard patent rights clause in their funding agreements. The patent rights clause is what universities agree to, not the law, which does not apply to them.
In that standard patent rights clause is the (f)(2) agreement, which is not in Bayh-Dole. Universities agree to require (f)(2) of their employees. It is the (f)(2) agreement that transmits agency interest in inventions through contractors to potential inventors employed by the contractors but made available to work on federally supported projects. It is by contractor action that the (f)(2) agreement is realized, and it displaces any contractor requirements that would conflict with its obligations.
A university does not need an IP policy or ownership agreements with its employees, and certainly not compulsory ownership or present assignments to comply with Bayh-Dole. A university does need to do what it has agreed to do and require the (f)(2) agreement. University demands for ownership are not a substitute for (f)(2) and do not meet the requirements of (f)(2). They are skew from (f)(2) and address a different, subsidiary, issue.
If attorneys want to analyze Bayh-Dole in practice, then they have to recognize they are looking at federal contracts, both with contractors and through contractors with the contractors’ employees who might invent. Most anything happening at the university (short of inventors retaining title), is driven by the agreements in play, federal and private, not the law that authorizes the formation of the federal agreements.
The (f)(2) agreement has precedence over contractor interest in inventions. It makes the university another agent that the inventor may choose, one with more privileges than any other agent. With the (f)(2) agreement in place, an employee, when he or she invents, has standing under the patent rights clause, and thus under the funding agreement, and becomes a party to the funding agreement. That is how subject inventions not reported or owned by or promised to the university-as-contractor are still subject inventions “of the contractor”–the contractor is any party to the funding agreement, not just the university (or a research foundation receiving funds for a university).
The government, for patent rights, contracts with each employee who might invent. It is in the nature of special performance, the idea of the grant proposed by individuals (not the contract bid by organizations), the approval by which universities grant release from normal duties to participate, and the formal conditions of the funding agreement under which support is provided to the university for the use and benefit of the individuals who are approved to do the work. The funding agreement establishes the relationship of the agency with the university. The university acts under that agreement to require its employees to establish a relationship with the agency. The (f)(2) agreement is the federal form of a patent agreement with the contractor’s employees, authorized by the contractor.
Furthermore, for federal grants made to universities, the controlling regulations are at 2 CFR 215. These form the federal funding agreement. The implementing regulations for Bayh-Dole are a subsection in 2 CFR 215, otherwise known as Circular A-110. It is Circular A-110 that forms the funding agreement. The standard patent rights clause must therefore be understood in the context of Circular A-110. There, we find that intangible property, including patents, acquired by the recipient are to be managed by the recipient of the grant as a trustee for the beneficiaries of the federally supported project. Whatever the overall objectives of Bayh-Dole in directing agency contracting, the federal policy with regard to university ownership of grant-funded inventions is in Circular A-110. For federal grants, the intended beneficiary of the support is not, generally, the university that hosts the work and is to act as a trustee.
It is therefore entirely inappropriate to reason about university ownership of inventions made with federal support without primary reference to the controlling funding agreement that transmits federal research policy to universities and is what directs and constrains university actions. It is a legal analysis that borders on malpractice. But here we find attorneys changing a contracting situation that exists in the real world into a fictitious armchair statutory situation that is “easier to analyze”. They then authoritatively propose “improved” practice for this fictional world. Federal innovation policy made by armchair attorneys. Bah! Dolts! It’s another bozonet!
No one looking at 35 USC 200-212 will ever see this. They will not understand that they are dealing with federal agreements. They will not comprehend practice. They will give very bad advice. They will soil the nest. They should leave the den. Please, now.