What have we got to by musing on research projects at universities? First, that a sponsor may support a big project by providing support to a small project that is a component of that big project. The sponsor who does so has good reason to expect to have access not only to the work of the small project but also to the work of the big project. It is the big project that the sponsor supports. It is the outcomes of the big project that the sponsor ought to have access to. In a policy environment in which those involved in the project publish their findings, make their data available, make their new tools available, and license any patents on fair, reasonable, and non-discriminatory terms, sponsors of small projects indeed can expect to have access to the results of the big project, too.
It’s important that you see this. It is all too easy to game it otherwise.
If a big project intends to keep its results secret, or behind a patent paywall for the benefit of a single patent speculator, then why would anyone support a small project part of that big project when it is offered for sponsorship? Why, even, would donors support a small project if it was made explicit to them that their money subsidized the interest of a speculative investor in a patent that kept all others from having use of the results? If a small project lays the groundwork for later inventive work in the big project, then the small project also supports that inventive work. The small project is an integral part of the big project, regardless of how a university manages the accounting and regardless of the sequencing in time of the small project and other later work.
This is the upshot of the federal government’s license to inventions that are “conceived” “in the performance of work” under a funding agreement. That looks relatively bounded. “Conceived” is a term of art in patent practice, used to determine priority of invention in the olden days of first to invent. To “conceive” is to realize, mentally, an invention in all of its parts. To reduce the invention to practice makes the invention patentable, all other conditions for patentability staying true. But look at the definition of “funding agreement”–the contract referred to “in the performance of work under this contract” in the standard patent rights clause:
The term “funding agreement” means any contract, grant, or cooperative agreement entered into between any Federal agency, other than the Tennessee Valley Authority, and any contractor for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.
This is from 35 USC 201(b) but it’s the same in 37 CFR 401.2(a). Let’s shorten it to make clear what we are dealing with:
Funding agreement means any . . . agreement . . . for the performance of . . . work funded in whole or in part by the Federal Government.
We have left out the qualifiers to make clear the structure. Now look:
Funding agreement means any . . . agreement . . . for the performance of . . . work funded in whole or in part by the Federal Government.
If the bolded phrase was just “in whole,” then we would have a limitation on each project. Only inventions fully conceived within a small project would be implicated. If even one element of an invention was thought up outside that small project, then the invention wouldn’t be a subject invention because–heh, heh–some part of it, the tail of the buffalo, wasn’t “conceived” in the performance of that small project work.
In a similar line of cleverness, parts of an invention might be “conceived” before the work even begins, so that most any invention could hardly never be fully conceived within the performance of the work in any small project. It would be the inventor’s word about it. All one would have to do is limit the documentary record. That’s why, way back when, the Department of Defense insisted that it also would have rights to inventions made in anticipation of being awarded a research contract. Otherwise, it’s just too easy to game the system. If all we have is “in whole,” then in practice, the only inventions that would be “in whole” conceived under any given agreement would be those that an inventor chose to represent that way. For all the legal language of contracts, things would end up being about what an inventor chose to include under a given contract.
Put it another way, to show the extent of the gaming possible. An inventor could choose not to think through the implications of a line of development and complete an invention after the term of the small project, so the invention wasn’t “conceived” under that small project, technically. Or an inventor might move the idea to a different project and finish the conceiving there, using money from another source, so that the invention was not “conceived” in performance of work under the first small contract’s budget. Just split up the inventing and the conception can’t possibly have taken place under any given contract’s budget.
But the patent law definition of a funding agreement includes “in whole or in part” with regard to work funded by the federal government. What does the “in part” do? First, clearly, it greatly broadens the scope of the funding agreement–any work funded in part by the federal government. Now reassemble the definition of subject invention from 35 USC 201(b), substituting the key expansion of scope in the definition of funding agreement:
The term subject invention means any invention of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement funded in whole or in part by the federal government.
And there you have the expansion of any small project funded by the federal government to include any big project of which that small project is a part:
any invention conceived in work funded in whole or in part by the federal government.
or
any invention conceived in work funded in part by the federal government
There is no time requirement on when the invention becomes “conceived.” The invention may be conceived before the federal funding, during the federal funding, or after the federal funding. The invention may become “conceived” in work running simultaneously with the federal funding. What matters is how the federally funded work is connected with other work by the “in part” prong of the definition. Put it another way: it matters a whole lot how investigators, universities, and the federal government express themselves with regard to what constitutes “the work.”
It is this “the work” that is the big project. It is this “conceived” that becomes the big invention, the invention completed in all its parts, not even just the first patentable part of the invention, but all the patentable parts of the invention, no matter how the inventive work is distributed over time or over accounting.
This is challenging work–but only because university administrators are so conditioned to think they will never be caught out being clever and gaming the system. What I’m writing here runs against the in-house guidance that university administrators repeat to themselves and what their legal counsel approves. 98.6% of all university research administrators will object, because they have been conditioned to object.
Even the oft-repeated but silly “if even $1 of federal money touches an invention, it is a subject invention” misses the point, and the Supreme Court was right in laughing at the claim. The point is not what the federal money touches, but whether the invention was made in work funded at least in part by the federal government. “The work” meant then is not the huffing and puffing while spending federal money. “The work” is the objective for which some huffing and puffing is supported by federal money, even if the federally supported huffing and puffing is not itself the activity that achieves that objective in whole.
Do you see it now? Is it that wholly shit moment? Baked into the federal patent statute is an expansive definition of subject invention that spans all projects connected by a common objective to form “the work” that the federal government may support by a funding agreement in whole or in part.
Usually, university administrators think in terms of what should be reported as a subject invention to the government. But this analysis doesn’t care about such bureaucratic details, even if the only precondition for electing to retain rights is to report to the government that one has rights (see 35 USC 202(a)). Rather, think about the scope of the federal government’s license to practice and have practiced, which is buried in 35 USC 202(c)(4)–to be part of each funding agreement’s patent standard patent rights clause. That scope is a broad as all inventions made in work funded in part by the federal government. Check those modifiers:
work funded in part
not
inventions funded in part
Start with “the work.” Ask whether the federal government has funded any part of “the work.” Now ask whether any inventions have been made in “the work.” That’s your scope. It’s not funding in part the huffing and puffing for any given invention that matters. Meaningless whether $1 touches any given invention’s huffing and puffing. Does the federal funding support at least in part the work in which an invention has been made? That’s the condition.
Thus, it is absolutely essential to consider how “the work” that can be supported in part by a funding agreement is constructed. Let’s restrict ourselves to documentary evidence and not go ranging to whatever anyone might have by way of unexpressed hopes. What are the documentary ways that “the work” might be constructed? Let’s list a few:
- The federal agency defines a project with objectives, and requests proposals responsive to that project and its objectives. The federal agency might fund a number of proposals, all directed at performing, in part, some of the requested work. Each funded project supports in part the overall project. Each funded project supports in part the work.
- The investigator proposing work for funding describes a larger project for which the federal funding plays a part. “We intend to develop a new device to permit rapid production of 3d cookies, and this federal funding will permit us to investigate the viscous behavior of wheat gluten, contributing to the science of viscosity of complex organic materials.” Here, “the work” is not merely experiments in wheat gluten viscosity. “The work” is the development of a new device that exploits a better knowledge of wheat gluten viscosity for producing 3d cookies. Any invention–including the device, methods of making the device, or product produced by the device–are all made in performance of “the work.” The federal government supports “the work” in part. The federal government has a license to all inventions made in “the work.”
- The investigator or the university, acting as the contractor for the funding agreement on behalf of an investigator, insists that any invention made “under the funding agreement” will be commercialized through patent licensing. The “work” now is extended to the effort to “commercialize” each invention made in “the work.” In our 3d cookie example, it is not merely that a device is constructed that demonstrates its new capability to produce a 3d cookie. It is that the device is also configured to be sold as a commercial product. “The work” now includes the effort to produce an acceptable commercial version of the device. Any activity directed at that “commercialization” necessarily falls as well within “the work”–the investigator or university (or both) have insisted that this is so. When a university states in its formal written policy that it will attempt to commercialize all inventions that it claims, then the university makes every activity that might produce an invention part of a new “the work” that includes commercialization.
- The investigator and a federal agency may, through written communications, establish that they have a shared objective, and that the investigator’s efforts, combined with collaborative efforts of the sponsor, might contribute to that objective. “The work” is this greater objective that both investigator and sponsor have chosen to share.
- The investigator offers to others an opportunity to collaborate, announcing a purpose to the collaboration that is greater than the particular effort funded by the federal government. This collaborative work–call it a consortium or joint research–may establish a greater “work” for which the investigator’s federal funding “in part” supports.
Perhaps this is enough. You see the pattern. In each instance, there is documentary evidence that the federally supported effort is part of a larger “work”; the federally supported effort supports that larger “work” in part. Any invention in that larger work is also licensed to the federal government–because the investigator and/or university have chosen to document that larger “work.” Perhaps they do so to induce the federal government to fund their work: “See the important thing we hope to achieve–so fund this part of it.” In the case of university insistence on commercialization of inventions, the assertion is precisely the same: “See the important thing we hope to achieve (commercialization that results in public benefit) so fund this part of it.” Some universities even have been known to argue that the quality of their technology transfer services helps their investigators compete for federal grants.