The Association of University Technology Managers sponsored “Bayh-Dole Central,” (now the “Bayh-Dole History and Research Central”), a site hosted by the University of New Hampshire School of Law and devoted to the Bayh-Dole Act. There you can find all sorts of papers provided by Howard Bremer, Norman Latker, and Joseph Allen, along with Senators Birch Bayh and Robert Dole–the “founding fathers” as the site calls them. It’s good reading, the organization is a work in progress, and the site does a great service to make the documents available, but the picture that emerges is less the heroic effort to pass the Bayh-Dole Act as it is the politics of happily spinning an idea about advantageous policy to create a law designed by and for middlemen–for patent administrators–to pass patent monopolies created from university research to the pharmaceutical industry under the guise of serving the public interest better than could the federal government.
Consider the head note at Bayh-Dole Central:
The Bayh-Dole Act or University and Small Business Patent Procedures Act is United States legislation dealing with intellectual property arising from federal government-funded research.
Of course, Bayh-Dole does not deal so generally with “intellectual property.” It deals with how federal agencies may contract for patent rights–it’s specific to patentable inventions (and, oddly, plant variety certificates) and does not concern all forms of intellectual property. That’s a needless expansion, and makes it appear that Bayh-Dole also deals with, say, copyrights, which it doesn’t.
Adopted in 1980, Bayh-Dole is codified in 35 U.S.C. § 200-212 and implemented by 37 C.F.R. 401[2].
I don’t know what the [2] is doing there. The regulations are indeed at 37 CFR Part 401. But that’s not the end of it. The codification of the law also includes the critical piece that the law authorizes–the standard patent rights clauses. These clauses are not in the law, and include stuff not in the law, but are authorized by the law. Looking at 35 USC 200-212 gets at what the government must do to control what federal agencies must do when contracting for research with universities. What the federal agencies actually do is a matter of how they handle the standard patent rights clause in their funding agreements. What universities do depends on their compliance with these patent rights clauses, funding agreement to funding agreement. the standard patent rights clause generally makes it into university funding agreements through 2 CFR 200.315(c). That is, whatever universities must do is a matter of federal contracts, not federal statute. Put another way, Bayh-Dole for the most part–(but for 35 USC 200 [policy], 35 USC 201 [definitions, including subject invention], and 35 USC 202(a)) [contractors obtaining ownership of subject inventions may keep those inventions provided they disclose them and subject to the requirements of the patent rights clause and the rest of Bayh-Dole–for which all that’s left is the statement of policy])–does not apply directly to universities–though the law does define a new class of patentable invention–the subject invention–and establishes the policy and objective for the use of the patent system with respect to subject inventions.
The difference between the statute and a federal contract is that federal agencies get to enforce contracts, and thus they can waive whatever they want to waive. Rule of contract is simply not rule of law. Bayh-Dole is a law that shifts control of what ought to be law to federal agencies in the form of federal contract, so they can do whatever they choose to do–enforce the contract or waive its provisions. That’s not something available to federal agencies with regard to statutes. Sort of stunning as a clever ruse, isn’t it?
It’s just that virtually no one among university patent administrators accepts that Bayh-Dole places any meaningful limits on what a university can do with a subject invention. That lack of acceptance of limits is a consequence of the reality that federal agencies, but for making a show of the paperwork aspects of the standard patent rights clause, make no effort to enforce the standard patent rights clause for any of its substantive requirements.
Consider what comes next:
Among other things, it gave US universities, small businesses and non-profits intellectual property control of their inventions and other intellectual property that resulted from such funding.
The “among other things” is a strange construction, giving the impression of a cornucopia of good things, only a few of which can possibly be mentioned here. But there’s really only one thing. But Bayh-Dole Central, the place that ought to get things right, simply can’t bring itself to do so. Bayh-Dole did not “give” universities anything. Bayh-Dole required federal agencies not to require transfer of ownership of subject inventions under some circumstances and it required agencies to take a non-exclusive license in all patents in subject inventions that might issue to non-federal owners. These are not matters of giving–they are matters of conditional not taking. There’s a huge difference.
But “giving” is also deeply disingenuous. The verb gives the impression that the government can gift invention rights to universities. The government has no rights in inventions made with federal support, when those inventions are made, but for a requirement as part of a federal contract that makes those inventions deliverables assignable to the government. Bayh-Dole requires federal agencies not to require inventions as deliverables if:
- an inventor is a party to the funding agreement or assigns to a party to the funding agreement; or
- the federal agency does not determine exceptional circumstances and use an alternative to the default patent rights clause specified by Bayh-Dole
There’s nothing by way of invention ownership for the federal government to give to universities because the federal government does not have that ownership in the first place. Inventors have the rights.
And even if the government did convey rights to universities, the idea behind “give” is that there is no consideration, no requirements on the exchange. Bayh-Dole authorizes a conditional agreement–the federal government will allow inventors to assign their rights to a party to the funding agreement on the condition that the new owners properly use the patent system. That’s a barter. Not a gift. “Give” suggests there are no strings attached. That’s hardly the case, though no strings is clearly what the universities sought and what they claimed to have got. There are requirements a university must follow if it obtains rights.
control of their inventions
There is nothing in Bayh-Dole that gives, grants, or authorizes university “control” of patent rights or any other rights. Federal agencies are required not to meddle without good reason. Universities, if they get assignment of subject inventions, control those inventions by virtue of the assignment transaction. But universities are also limited in what they can do with subject inventions based on the patent rights clause in the federal funding agreement under which each subject invention was made.
The “their” in “their inventions” is happily ambiguous. Yes, once universities obtain ownership of subject inventions, those acquired inventions can be said to be “their” inventions. But the usage here implies that all inventions made with federal support are properly “their” inventions–inventions made by the institutions, as if universities not only are entitled to these inventions, but that these inventions are the universities’ “automatically, by operation of law,” to quote Senator Bayh. And that is simply not the case. The “their” is deceptive. It’s wrong.
See how this whole mess of administrative subversion works? According to this–wrong–version of Bayh-Dole, the law gives universities ownership of federally supported inventions, so those inventions are “their” inventions. There never was an inventor using federal funds that mattered. This is the faux Bayh-Dole Act, the paradise of bureaucrats, the version of Bayh-Dole that the US Supreme Court expressly rejected. And yet AUTM sponsors this site that ignores the Supreme Court.
There’s more, of course, as with any swindler’s sales pitch:
and other intellectual property that resulted from such funding.
Now the “other intellectual property” must be a reference to the Plant Variety Protection Act, since that’s in the definition of “subject invention” but not within what’s patentable under federal patent law:
The term “invention” means any invention or discovery which is or may be patentable or otherwise protectable under this title or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
The term “subject invention” means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement: Provided, That in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act (7 U.S.C. 2401(d))) must also occur during the period of contract performance.
But adding new plant varieties to the definition of subject invention is hardly the same thing as “other intellectual property”–one might write “inventions and new plant varieties” and be clear and accurate. “Other intellectual property” when combined with the general reference to intellectual property in the first sentence leaves the impression–hard not to–that Bayh-Dole deals with all forms of intellectual property, not just patentable inventions and new plant varieties. (And even the inclusion of plant variety protection in Bayh-Dole is a crock-up. In the federal procurement regulations on which Bayh-Dole is based–and the Nixon revision to the Kennedy executive branch patent policy on which the federal procurement regulations are based–the scope was “. . . any variety of plant, which is or may be patentable.” That is, not PPVA at all, any more than mask works or other such tweener IP.)
We are then left with the contorted expression
gave … intellectual property control of their inventions and other intellectual property …
This is awful editing–another hallmark of Bayh-Dole advocates. They generally can’t write worth a bean, especially when they are writing about key points involving Bayh-Dole. Then they are loose, lazy, and careless. They don’t check their work–and they don’t want to.
Perhaps the most important change of Bayh-Dole is that it reversed the presumption of title. Bayh-Dole permits a university, small business, or non-profit institution to elect to pursue ownership of an invention in preference to the government.
This is hokum. Bayh-Dole has nothing to do with title or presumptions. The word “presumption” does not appear in Bayh-Dole or the implementing regulations or the standard patent rights clause. Here’s the Supreme Court:
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.”
All the standard patent rights clause does is to limit when a federal agency can request title. And anyone working for a university writing about the history of Bayh-Dole should know it. Under the Institutional Patent Agreement arrangements, the federal government clearly had no “presumption of title.” The IPAs required universities to obtain assignment of inventions from inventors. The government would not require a university to obtain assignment of inventions if the federal government magically had title in the first place. Under the IPAs, presumption of title was where it always was–with inventors. Bayh-Dole prevented federal agencies from specifying delivery of patent rights as a default contracting requirement. That is, if there was a “presumption” of title, it was in federal agency contracting guidance to its own contract officers, conditional on the implementation of an invention delivery clause in a federal funding agreement. And the IPAs already had dealt with that for HEW and NSF. So the general claim about “reversing” “presumption” of title is just nonsense.
There is, of course, the issue of the AEC and NASA laws that stipulate that inventions made in the areas of AEC and NASA spheres of control are owned by the US government–and there even if not directly the result of federal contracting. Bayh-Dole indeed forces changes on these laws, too, requiring these agencies also to follow the standard patent rights clause rather than rely on the law that establishes their scope of authority in matters of inventions of interest to them. Even here, Bayh-Dole does not reverse the presumption of title from federal government to university contractor. It restricts a prior law’s requirement of federal ownership. It does not convey the government’s statutory claim to university contractors, it simply places conditions on the government’s statutory claim.
Bayh-Dole Central contains many interesting and useful documents. It is a wonderful resource. But the folks writing the headnote do the public a disservice by failing to write a clear, accurate head note to the law. Perhaps they should call their site “Faux Bayh-Dole Central”–the version of the law that never was except in the minds of patent administrators who claimed to have done something they never did.
What still boggles me is how many people think it is a really good thing for the federal government to decree that university bureaucrats should control the work of university faculty, and should do so without public accountability.
I don’t expect the folks at Bayh-Dole Central to ever walk back on their misrepresentations of the law. Though they would be respected if they did so. To help them along, here is a revision that corrects the most deceptive language:
The Bayh-Dole Act or University and Small Business Patent Procedures Act is legislation dealing with patentable inventions arising from federal government-funded research. Sponsored initially by senators Birch Bayh of Indiana and Robert Dole of Kansas, Bayh-Dole came into effect in 1981 and is codified in 35 U.S.C. § 200-212 and implemented by 37 C.F.R. 401.
Bayh-Dole limits how federal agencies can acquire inventions made under federal funding agreements for research conducted at nonprofits and small businesses. If US nonprofits, including universities, and small businesses acquire inventions made with federal support, federal agencies are required to allow these new owners to keep title, subject to certain conditions.
Perhaps the most important change of Bayh-Dole is that it greatly reduced public oversight for private exploitation of patents on inventions made with federal support.
Or they might consider something like this, which reduces the needless technical detail and focuses on the key features of Bayh-Dole:
Sponsored by senators Birch Bayh of Indiana and Robert Dole of Kansas, the Bayh-Dole Act came into effect in 1981. The Bayh-Dole Act limits federal government interest in inventions made in federally supported research conducted at nonprofits and small businesses.
Federal agencies must use a standard patent rights clause in their funding agreements unless they can show that an exception will better meet the objectives of the Bayh-Dole Act. The standard patent rights clause allows nonprofits and small businesses, if they acquire ownership of patentable inventions made with federal support, to retain their ownership of these inventions, provided they use the patent system to promote the practical application of these inventions. Bayh-Dole also greatly reduced federal oversight for the private exploitation of patents on inventions made with federal support.
Or, if the truth be told:
The purpose of the Bayh-Dole Act, which came into effect in 1981, was to re-establish a patent monopoly pipeline from federally funded research in matters affecting public health to the pharmaceutical industry, using universities as the cover for what otherwise the public would not allow. To protect this pipeline, Bayh-Dole is made to be government-wide, so that any invention of value to the pharmaceutical industry can be placed in the pipeline, regardless of the sponsoring federal agency and its objectives in providing public funding.
By being government-wide, Bayh-Dole is also made to appear to be a general response to innovation from research rather than designed to meet the particular demands of the pharmaceutical industry, which boycotted the use of Public Health Service supported inventions when the PHS insisted that such inventions be made available on a non-exclusive basis.
To make it appear that the public is protected from exploitation of patent monopolies that take advantage of public suffering, Bayh-Dole asserts a set of conditions on the private use of subject inventions, including use of the patent monopoly, but Bayh-Dole and its implementing regulations also walk back those conditions through waivers, obtuse procedures, deliberately weakening of requirements, keeping reports of invention use and development secret, and by delegating enforcement of substantive provisions to federal agencies, which in general enforce none of these provisions.
As a result, Bayh-Dole enables a patent monopoly pipeline to pharmaceutical companies and by allowing the suppression of use and competitive development of university research findings contributes to the excessive high prices charged for new prescription medications. For most everything else, Bayh-Dole is an absolute disaster, withholding the most significant research assets from immediate public use (even for research) in favor of shopping those assets to speculative investors willing to bet on the future financial value of monopoly positions.