After the Supreme Court ruled in Stanford v Roche, Joe Allen and Howard Bremer wrote an article (“After Stanford v Roche: Bayh-Dole Still Stands“) in which they asserted that they had argued against the idea that Bayh-Dole vested with contractors ownership of inventions made with federal support:
When the vesting argument first raised its head, we warned that the theory was not supported by the Bayh-Dole Act, or its legislative history, which we were directly engaged in creating. It will never be known what might have happened if the vesting argument had not been put forth.
It may be true that that Allen and Bremer warned folks about the problems with the vesting theory. Nobody listened. Not AUTM, not WARF, not COGR, not any of the universities or university systems or research foundations that weighed in. Not the US Solicitor General. Not even Senator Birch Bayh. I don’t find it at all plausible that they warned anyone–but perhaps Joe Allen can document his warnings to AUTM or COGR or Senator Bayh and set us all at ease on that point. And it is of course true that vesting is not supported by Bayh-Dole. But the rest of Allen and Bremer’s statement is pure political porn.
First, Allen and Bremer for decades led the claim that Bayh-Dole was a vesting statute. Second, their warning about “vesting” appears to play with an idiosyncratic notion of the definition of “vesting.” Third, a year after their political porn article, they were back at the vesting idea, despite Stanford v Roche. Let’s look at how these folks have operated, and how they have misrepresented Bayh-Dole.
Consider (with my bold) these excerpts, from among many:
Bremer:
FINALLY, THERE IT WAS, THE REWARD FOR ALMOST 20 YEARS OF EFFORT, PL 96-517, THE LAW THAT CHANGED THE PRESUMPTION OF TITLE TO ANY , INVENTION MADE BY SMALL BUSINESSES, UNIVERSITIES AND OTHER NONPROFIT ENTITIES THROUGH THE USE OF GOVERNMENT FUNDS, IN WHOLE OR IN PART, FROM THE GOVERNMENT TO THE CONTRACTOR-GRANTEE. (1992)
However, of all of the considerations attendant upon the establishment of a governmental patent policy only one consideration should be paramount: In whose hands will the vestiture of primary rights to inventions serve to transfer the inventive technology most quickly to the public for its use and benefit? (1998)
The most significant feature of the Bayh-Dole Act was that it changed the presumption of title in and to any invention made in whole or in part with the use of government-supplied funds from the government to the universities. (2001)
Bremer argued that Bayh-Dole “changed the presumption of title” and that the “vestiture of primary rights” went to universities. Before, the government was presumed to be the owner of inventions made with federal support; now universities were presumed to be the owner. That’s vesting of ownership. That’s what “presumption of title” means–the title is with the presumee, and according to Bremer, the inventor is not that presumee. The Atomic Energy Commission and NASA Space Act regulations both refer to “vesting” of inventions with the U.S. government. Changing the presumption of title necessarily changes the presumption of where the title vests.
Bremer, Allen, and Latker:
Congress agreed with the senators’ conclusion and in 1980 overwhelmingly passed the Bayh-Dole Act. The statute encourages the development of inventions made by nonprofit organizations and small business companies through the use of federal funds by: allowing ownership of such inventions to reside in those entities;
Well, yes, “reside” could mean “stay, having been acquired,” but read on:
Passage of the BayhDole Act represented the ultimate step in a long-term effort toward reshaping government patent policy, and was Congress’ response to the paramount question:
In whose hands—the federal government or the inventing organization—is the ownership and management of federally funded inventions best placed to promote the prompt development of important discoveries for the benefit of the U.S. taxpayer?
There is no place for the inventor. Ownership will end up with “the inventing organization”–vesting there.
That the effect of the act was so profound, beneficial, and far-reaching is because of several primary factors: …
It changed the presumption of title to inventions made in whole or in part with federal monies from the government to universities, other nonprofit institutions, and small business.(2009)
Universities are “presumed” to have title. Title is presumed to have vested. Not that Bayh-Dole ever uses the words “presume” or “presumption.” These are words Bremer supplies. He wants everyone else to presume that universities have title. Bayh-Dole doesn’t presume anything on the point.
And even a year after Stanford v Roche, Allen and Bremer again (handwaving to claim that my account of Stanford v Roche was mistaken):
Bayh-Dole stipulates that before academic researchers can own federally funded inventions, the university must first decline to take ownership of the patent. Next, the university must notify the federal agency funding the research, which has the option to take patent ownership. Only if both the university and the agency decline ownership can the invention be assigned to the researcher. (2012)
Bayh-Dole stipulates nothing of the sort. The Supreme Court ruled nothing of the sort. Even after the Supreme Court worked through the vesting arguments–all of them–and tossed them, Allen and Bremer claim it’s only a flesh wound. Allen and Bremer want to now distinguish “decline to take ownership” from “vesting” and “presumption of title.” It’s all pretty much the same thing, however you cut it–vesting, vesting upon election to retain title, vesting upon notice to the government of election to retain title, first right of refusal, presumption of title–all of these things add up to some version of vesting. The differences have to do with the details of the formalities. Or one has to imagine that Bayh-Dole suspends the very idea of title in an invention, and title is not with anyone until it is summoned into existence, so that Bayh-Dole doesn’t vest title, but rather prevents title from happening until the very exact moment that a university elects to “retain it”–then the university both already has it and gets it at just that moment. The metaphysics here is dizzying.
By way of contrast, here’s the Supreme Court:
Nowhere in the Act is title expressly vested in contractors or anyone else; nowhere in the Act are inventors expressly deprived of their interest in federally funded inventions.
Bremer and Allen were wrong, are still wrong. I know–it’s hard to believe that the folks that were the point people to get Bayh-Dole passed haven’t ever got the law right. And they have misled a whole lot of people with their authoritative pronouncements. If inventors are not deprived of their interest in federally funded inventions, then they have those rights.
The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.
No version of vesting happens–not conferring of title and not a happy time taking title by “electing to retain it.” And if “electing to retain” is supposed to mean “taking what one doesn’t already have,” then “retain” is even more twisted than even a vesting argument makes it. Perhaps Bremer and Allen mean that they warned people about the vesting theory because Bremer and Allen believed in an even more twisted reading of the law, and vesting was too tame. More from the Supremes:
Only when an invention belongs to the contractor does the Bayh-Dole Act come into play. The Act’s disposition of rights—like much of the rest of the Bayh-Dole Act—serves to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more.
The “nothing more” is Poe-ian in its finality. Bayh-Dole has only to do with the disposition of rights between the government and a contractor if and when a contractor comes away with rights. There’s no vesting, no pecking order for ownership, not even by ravens, not by nothing.
It would be noteworthy enough for Congress to supplant one of the fundamental precepts of patent law and deprive inventors of rights in their own inventions. To do so under such unusual terms would be truly surprising. We are confident that if Congress had intended such a sea change in intellectual property rights it would have said so clearly—not obliquely through an ambiguous definition of “subject invention” and an idiosyncratic use of the word “retain.”
The Supreme Court is incredulous. It’s not a technical issue of whether Bayh-Dole vests title, presumes title, allows title to be unilaterally taken, or any metaphysical variation on how title comes to land with contractors. Title is with inventors. If the drafters had wanted to plant title with universities by federal law, then they could have done so in the law. Bremer knew the IPA assignment clause. Why doesn’t it show up in Bayh-Dole? Because I bet there was no way at all they could have ever gotten such a law passed. It is one thing to allow that the federal government has good reason to exclude atomic energy and space rockets from private patent rights. What is the domestic market for these things? Who is it that inventors will exclude from practice, other than the government or contractors working for the government?
But how does one go about arguing that a right reserved for inventors for legitimate domestic markets should pass instead to universities, simply on the argument that they are federal contractors? Where is that in the Constitution? The way Allen and Bremer have it, universities obtain title to inventions (in whatever magical extra-legal way) without any showing of qualifications or capacity to handle those inventions. There’s absolutely nothing universities have to do to have the benefit of patent rights. They are not inventors, they don’t hire for invention, don’t contract for it. The universities just take federal funds that are to be passed through to university faculty as grants, and for that, they get to own whatever they want, and get to try to profit from this windfall.
There were enough skeptics to Bayh-Dole as it was. But it turned out that the critics could be snookered into thinking that “presumption of title” (not in the Act) and “elect to retain title” (in the Act) both had to do with a dispute between federal agencies and contractors, not a wholesale change in patent law, so that a broad class of inventors–anyone working for a nonprofit or small business (and extended by executive order to anyone at all) under a federal contract for research simply has no invention rights because these are handed by operation of law to the organizations that host the work with the stipulation that if they don’t want the rights, then they can offer the rights to government, and if the government doesn’t want the rights, well, they can settle then on the poor, stupid, incapable, selfish, tin-hatted university inventors.
The idea apparently was that the drafters would get the text of the law close, and then save all the good things to put in the standard patent rights clause. So first Latker drafts the bill while still working for the government. Then once Bayh-Dole is passed, Latker moves to the office that’s drafting the regulations, and settles in to make sure the regulations and the standard patent rights clause seal the deal. It’s just that the agencies put up a huge fuss. Bremer has to come in with university folks and make sure that the public oversight stuff is stripped out and federal agencies have no control over inventions–not for public policy, not for petty power plays, not for oversight of private exploitation of patents. It’s a grand scheme. It makes for high drama. It is a huge practical joke played on government officials–except, of course, it’s no joke. Instead, it’s politics, or, a scam.
Well, Bremer and Allen have some vision for national innovation from university research. A bureaucratic feeding frenzy over patent rights to inventions that suddenly and remarkably have been separated from their inventors. Bureaucrats to save America. Not just any bureaucrats, but patent bureaucrats! The achievement of Bayh-Dole is to put university patent bureaucrats before federal patent bureaucrats, because unlike their federal compatriots, the university patent bureaucrats, thanks to Bayh-Dole, have next to no public oversight or accountability and can do pretty much anything they want. There is no penalty for non-compliance with Bayh-Dole but for a loss of some institutional patent rights–and in the 35 years of Bayh-Dole, there is not be a single substantive consequence for non-compliance.
Bremer and Allen, for whatever their claim about vesting might be now, were all in with what what Senator Bayh argued in his amicus brief to the Supreme Court. Perhaps Bremer and Allen warned Senator Bayh and he ignored them. At any rate Senator Bayh made it clear that presumption of title and vesting were one and the same thing:
Rights to the institution. That’s vesting. Of course nothing in Bayh-Dole grants anything to contractors. They get to keep what they otherwise can get. No “granting” language. But not for Senator Bayh:
“Presumptively and automatically vests.” There’s the explicit connection. That’s no presumptive vesting either. Perhaps that’s the fine line that Allen and Bremer take–that “vesting” should have “presumptive” in front of it. Maybe they warned Senator Bayh to put “presumptive” in front of “vesting.” Or “automatic” or “magical.” That somehow there’s a difference with “presumptive” as an adjective. Try to tell inventors there’s a difference. The actual use of “presumptive” is “this is what we intended and so it is the law.” Inventors don’t have any “transferable interests” in inventions. Title sure doesn’t vest with them. Perhaps Allen and Bremer mean that “vesting” isn’t right because there’s no patent title at all until a university acts or a federal agency acts. That would also be a clever variation on patent law, that when the federal government funds research, there are no patent rights until a contractor creates them out of thin air. Well, patent rights are just a legal fiction anyway, so why not? But some legal fictions are better than other legal fictions.
More from Senator Bayh:
So it’s a special kind of magic. “Vesting” is a good word for it. And “presumptive, automatic vesting” only suggests that the university has to act to obtain title–by giving notice to the government: “I elect to retain title to this invention, and by doing so, woah dudes, I have created title and retained it all at once.” Yes, I mock this idea.
In the Bremer-Allen version of Bayh-Dole, title to inventions vests in contractors. That’s what “presumption of title” means. The magic claimed is that all a university had to do to secure title was to elect to retain it. To retain it, everyone argued, was to already have it. But Allen and Bremer argue a pretty thin point to say that technically this is not “vesting”–even though that’s the whole point of the presumption of title.
In Senator Bayh’s view, the reason there’s no assignment requirement in Bayh-Dole is because Bayh-Dole is set up to pre-empt the need for assignments:
Under the statute neither, neither the contractor nor the government requires an inventor’s permission to develop their respective statutory rights.
No assignment is necessary. Inventors aren’t needed. Bayh-Dole is about harvesting a field sowed by no one of account, no one who should expect to own anything. So perhaps “vesting” does indeed miss the full impact of what it is that Bremer, Allen, Latker, and Bayh thought they had done. This then was their “ultimate step,” a step “so profound, beneficial, and far-reaching” that it removed inventors entirely from any ownership of their inventions. It was not so much that title “vested” with the universities–it was just that it most certainly did not vest with inventors–until, according to this faux view of Bayh-Dole, the magic of the law abated for any particular invention and it turned out that the university bureaucrats and the federal bureaucrats didn’t want it, and then and only then, might title to nothing of any particular value be deposited in the hands of the inventors.
The faux Bayh-Dole Act–the law intended by Bremer, Latker, and Allen that never was and yet became the dominant interpretation of federal research innovation policy–imagined a world in which inventions had value to bureaucrats but inventors had no right to those inventions, so long as federal dollars supported the work. All inventors got was to be the dumping ground, to beg the bodies of their inventions back from the bureaucrats, when they were done with them. The reason there’s no assignment requirement in Bayh-Dole is because the presumption put forward was that that inventors–by an act of law–never had any rights to begin with. Any rights inventors might obtain came as a gift from the federal government, once university and federal folk made sure there was nothing sweet left in them. This indeed was something to turn federal patent law on its head: the central aim of federal subventions in support of research is to allow bureaucrats to profit from speculation on the patent rights. And that’s the genius of what Bremer and Allen call something not quite but almost entirely like “vesting.”
Now university administrators behave like they’ve arrived at the Hotel California. They don’t know if it is heaven or hell to own all these patents. They can’t escape their choices. And when they try to change patent policy to get things right, they just can’t kill the beast.