In 2002, a district court provided an implicit interpretation of a key word in the Bayh-Dole Act. No, not “of”–but rather “promote.” Let’s look at “promote” in Bayh-Dole, and then at the case.
The first section of Bayh-Dole, 35 USC 200, opens with these words:
It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development; to encourage maximum participation of small business firms in federally supported research and development efforts; to promote collaboration between commercial concerns and nonprofit organizations, including universities; to ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery; to promote the commercialization and public availability of inventions made in the United States by United States industry and labor . . .
In all, “promote” is used four times in a single sentence. “Promote” is important to federal patent law, since the Constitution grants Congress the power to
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
For reminders, here is the preamble to the Constitution:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
So what does “promote” mean? Here’s the first definition for “promote” in Webster’s Dictionary of 1828:
To forward; to advance; to contribute to the growth, enlargement or excellence of any thing valuable, or to the increase of any thing evil;
as, to promote learning, knowledge, virtue or religion; to promote the interest of commerce or agriculture; to promote the arts; to promote civilization or refinement; to promote the propagation of the gospel; to promote vice and disorder.
“To forward, advance, contribute to the growth, enlargement or excellence.” That makes sense of the power to “promote” the general welfare or to “promote” the progress of the useful arts. When Bayh-Dole uses “promote”–as part of federal patent law–we might expect that Bayh-Dole also means, then, to use the patent system “to advance” the utilization of inventions or “to contribute” to the conditions under which inventions may be utilized. Similarly, “to promote” collaboration must mean to create conditions that favor collaboration, so that there will be more collaboration or more excellent collaboration; and “to promote” commercialization and public availability must mean creating better conditions than otherwise under which inventions are both commercialized and are publicly available. That is, the conditions for commercialization and public availability of inventions have been advanced over those that otherwise would prevail.
Bayh-Dole’s usage for free competition is somewhat more complex:
to ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery
Congress intends the law to ensure that inventions are used to promote free competition and enterprise–“in a manner” that promotes free competition and not in other manners that otherwise would be possible and legal were federal patent law not amended by Bayh-Dole. Here “promote” must mean “advances” or “contributes to the growth of” free competition and enterprise. By the manner of use of an invention, free competition is advanced. The use of inventions by nonprofits and small businesses must–ensure–follow those ways–manners–by which free competition grows, is advanced, is promoted.
We might then understand Bayh-Dole’s policy and objective to be that inventions arising in federally supported research or development are to be used, and that the particular use of these inventions by nonprofits and small businesses must advance free competition and enterprise.
A preamble by itself may be taken to be declaratory, not legally binding. Bayh-Dole, however, goes out of its way to assert that its first section states not just an objective but also a “policy.” Bayh-Dole replaces executive branch policy–and its codification as federal regulation–by a new policy. Thus, it is reasonable to expect that 35 USC 200 does in fact have statutory power–not merely to provide some general guidance on how to read what follows in the law, but itself is part of that law, limiting the patent property rights in inventions to conform with the policy of Congress (rather than the Executive branch) with regard to inventions arising in federally supported research and development. Of course, reasonable expectations mean next to nothing for a law that no one complies with, no one enforces, and for which pretty much anyone can make up anything they want to about it. What matters is how the law gets argued by lawyers before courts, and what those courts decide–and even then, it appears that folks are more than happy to ignore the courts when it suits them.
Thus, even though courts have ruled that an exclusive license that conveys all substantial rights in a subject invention–one that comes within the scope of Bayh-Dole–constitutes an assignment of the invention, no one cares that Bayh-Dole limits how nonprofits can grant such assignments nor the conditions that Bayh-Dole places on such assignments. Similarly, even though the Supreme Court has ruled that Bayh-Dole applies only after a contractor obtains ownership of an invention, and that Bayh-Dole provides no special power or privilege for a contractor to obtain that ownership, university administrators still retain their policies that make it appear that federal law gives them those special powers and privileges. It would make a heck of a difference in practice were Bayh-Dole enforced–were it that anyone cared. But Bayh-Dole is so important, so critical, so successful that no one is supposed to care.
It is worth noting, as well, that while Bayh-Dole sets out a general limitation on the use of the patent system–to promote utilization of inventions made in work with federal support–the law does not place any limitations on federal agencies that own these inventions with regard to promoting free competition and enterprise. While nonprofits and small businesses must use inventions to promote free competition and enterprise, the executive branch agencies are not under any such statutory obligation. Thus, when the implementing regulations for federal agency administration of inventions were written, Bayh-Dole’s statement of policy and objective was reduced to (37 CFR 404.2):
It is the policy and objective of this subpart to use the patent system to promote the utilization of inventions arising from federally supported research or development.
All the rest of the policy and objective go by the board. Unlike the statutory statement, which constrains the use of inventions for nonprofits and small businesses–maximum involvement of small businesses in research and development; collaboration between commercial concerns and nonprofits; use that ensures free competition and enterprise; commercialization and public availability of inventions made by U.S. industry and labor–the federal agency implementation leaves “utilization” bare naked. Who utilizes? In what manner? With what public outcome–what promotion of public welfare?
Elements of Bayh-Dole’s policy and objective, along with specific requirements of this policy and objective applicable to nonprofits and small businesses, are re-introduced in regulations pertaining to the licensing of federally owned inventions (for which, see 37 CFR 404.5), but as licensing requirements, these are now substantially changed into administrative matters that restate what ought to be obvious–if there’s an agreement for U.S. manufacturing, then that agreement should be in the license. Woah.
Let’s take it, then, that it is reasonable to expect that “promote,” as used in Bayh-Dole, means “to forward, advance, contribute to the growth of.” And that the primary objective for anyone that owns an invention arising in federally supported research or development is to use the patent system to promote the use of the invention. The outcome of the activities authorized under Bayh-Dole starts with a greater growth in the use of inventions than would be had otherwise–as a matter of general welfare, or as Bayh-Dole has it in the definition of practical application, use that can be established with benefits of the inventions available to the public on reasonable terms.
Bayh-Dole mandates a practical application of federal inventions when owned by contractors or federal agencies better than would otherwise happen. Bayh-Dole works only if the law promotes–advances, contributes to the use of the specified inventions.
Does that meaning of “promote” make sense? Are you willing to stick with this meaning through thick and thin? Let’s see.