9 things Bayh-Dole does not require universities to do, part 1

Let’s review some of the things Bayh-Dole does not require universities to do. These, despite what you may have heard. First the list, then the discussion, then an extended technical note for the folks that want detail and think perhaps there ought to be something rational about Bayh-Dole.

Bayh-Dole does not require

  • a university to do a single thing
  • a university to own any inventions made with federal support
  • a university to disclose any invention the university does not own
  • inventors to disclose their inventions
  • commercialization
  • a university to designate personnel responsible for patent matters
  • a university to have a patent policy
  • a university to have a technology transfer office
  • a university to license subject inventions for money

Let’s work through the list. Advocates of Bayh-Dole should love this stuff!

1. Bayh-Dole does not require a university to do a single thing.

Nothing, nothing, nothing at all. Only one provision of Bayh-Dole even applies to universities, and it is a conditional. Here it is (35 USC 202(a)):

Each nonprofit organization or small business firm may, within a reasonable time after disclosure as required by paragraph (c)(1) of this section, elect to retain title to any subject invention

That’s it. That’s the total of what Bayh-Dole has to say about universities, at least those that are nonprofits. A subject invention is an invention that the university has acquired and which was made in the performance of work under a federal funding agreement (and is or may be patentable, and was conceived or first actually reduced to practice under the funding agreement). If a university has gone to the trouble on its own to acquire such an invention, then it can choose to keep owning that invention, subject to the requirement that the university has disclosed the invention to the federal government. But a university doesn’t have to lift a finger to go out to acquire any invention made with federal support. It can ignore such inventions altogether–and so can its research personnel–if it so chooses, and then Bayh-Dole requires nothing of the university.

The rights of the nonprofit organization or small business firm shall be subject to the provisions of paragraph (c) of this section and the other provisions of this chapter.

The patent property rights–the “rights”–of the university in any such retained subject invention then are subject to the provisions of the patent rights clause (“paragraph (c)”). The “other provisions of this chapter” that are involved are 35 USC 200 (policy), 35 USC 201 (definitions–incorporated by reference), 35 USC 210 (preemption), 35 USC 211 (antitrust), and 35 USC 212 (no federal invention interest in educational grants). None of them requires a university to do anything, either. If a university does absolutely nothing about inventions made with federal support, then it is in full compliance with Bayh-Dole because Bayh-Dole simply does not make any demands on a university unless the university takes ownership of an invention. A subject invention must be one owned by a federal contractor. If the university doesn’t own, then the invention cannot be a subject invention and Bayh-Dole doesn’t apply.

Nothing in Bayh-Dole requires a university either to acquire ownership or to retain ownership. If a university does acquire ownership and does choose to retain ownership, then those rights of ownership are subject to the patent rights clause, Bayh-Dole’s general policy, and an exclusion of federal interest in educational grants.

Bayh-Dole’s patent rights clause does require a university to require certain of its employees to make a written agreement to protect the government’s interest in inventions that the university (i) does acquire or (ii) that are made by inventors who are parties to the funding agreement–ones added by the university–but that requirement is not in Bayh-Dole and is not expressly authorized by Bayh-Dole and matters only if the university takes either action (i) or action (ii). We will get to that written agreement later in the list. Here, it’s enough to note that even though the patent rights clause requires a written agreement to protect the government’s interest, universities have simply refused to comply and substituted all sorts of other things, and federal agencies have refused to enforce the patent rights clause requirement–thus, Bayh-Dole becomes a strange arrangement between federal agencies and contractors to make up their own playful, fanciful practice instead of what the law requires.

2. Bayh-Dole does not require a university to own any inventions made with federal support.

If a university acquires ownership of an invention, it does so with its own will (or in some few cases, state law that it advocated for–still, a university choice). Or, to speak less fictitiously, since universities do not have minds with which to will, university administrators willing for the university choose to acquire title to inventions. Bayh-Dole doesn’t make them do it. Bayh-Dole states only a conditional: if you go off and acquire an invention, then if you disclose it, you can choose to keep it where federal statutes would otherwise require you to assign the invention to the federal government or have to beg to keep it, subject to an agency’s discretion regarding what is in the public interest. Nothing in Bayh-Dole requires a university to go and acquire any invention made with federal support. 35 USC 202(a) is conditional or having done so decide to keep it. It is university administrators that choose to make the condition true, not Bayh-Dole.

Even if a university policy claims ownership of all inventions made by university personnel, university administrators do not have to act on such claims. They can waive any claim, and if they do, then Bayh-Dole does not come into play, and there’s then nothing a university has to do to comply with Bayh-Dole (but for the written agreement requirement that’s not in Bayh-Dole and which no one complies with, sigh).

3. Bayh-Dole does not require a university to disclose any invention the university does not own.

The Bayh-Dole disclosure requirement comes into play only after the university has acquired ownership of an invention that also meets the other elements of the definition of a subject invention. If the university does not own a given invention made with federal support, then that invention, for the university, is not a subject invention and the university has no disclosure obligation under Bayh-Dole. Subject invention: one owned by university. Disclosure: of subject inventions. Not owned by university: no disclosure obligation. It’s really simple when you stop to think about it.

4. Bayh-Dole does not require inventors to disclose their inventions.

Bayh-Dole’s disclosure requirement is specific to subject inventions–which must be inventions owned by a contractor, a party to a funding agreement. If inventors are not parties to the funding agreement, they cannot be contractors and their inventions cannot be subject inventions. There is no disclosure requirement in Bayh-Dole for any invention other than a subject invention. If an invention is not a subject invention, Bayh-Dole does not apply, Bayh-Dole does not preempt other federal statutes, and those statutes control.

When university administrators insist that Bayh-Dole (or “federal law”) requires inventors to disclose all their inventions, they are wrong. Inventors have no disclosure requirement in Bayh-Dole. It just is not there.

There is an inventor disclosure requirement in the standard patent rights clause authorized by Bayh-Dole, but the inventor disclosure requirement itself is not authorized by Bayh-Dole. Like other things, it has been inserted into the patent rights clause willy-nilly. That disclosure requirement then is a matter of federal contract, but isn’t Bayh-Dole except in some sloppy loose meaning in which stuff that’s not in the statute is talked about as if it were. Even so, the inventor disclosure requirement is conditional–only if a contractor acquires an invention made under contract do inventors have an obligation to disclose that invention. And there we get into the fun of university administrators insisting that they have acquired an invention without knowing what it is (“we will know it when we see it”)–a typical result of deeply clueless university patent policies.

5. Bayh-Dole does not require commercialization. 

The standard in Bayh-Dole is utilization. The technical standard for compulsory licensing is a failure to use an invention with benefits available to the public on reasonable terms–and the primary term under which the public obtains benefits is price. Another such “reasonable term” is fair, reasonable, and non-discriminatory access. The owner of a subject invention can use the invention itself–but then the public must get a reasonable–not monopoly–price or the federal government can intervene and require licensing. The owner of a subject invention may assign the invention–but then the new assignee is subject to the same requirement. Same for an exclusive licensee. Or the owner of a subject invention may grant FRAND licenses, as in supplying the invention to a commons, library of tools, or standard. In such a case, the public has access on “reasonable terms.”

Nowhere does Bayh-Dole stipulate that commercialization is a requirement. Utilization with reasonable public terms is the stated objective. Open access meets Bayh-Dole’s requirements as fully as does the production of commercial product. Indeed, open access does not raise the issue of price, whereas commercialization clearly does. In open access, the public terms that are reasonable concern the fair, reasonable, non-discriminatory access (which may include payment but also may include matters such as scope, liability, adherence to standards of quality or advertising, and share-alike). By contrast, in commercialization, the public terms that are paramount are price, availability, and design for particular purpose or circumstance. If one cannot produce a product that the public finds useful for *its* purposes, then the government has an obligation to intervene and compel licensing of the invention for those public purposes–either FRAND or to developers of other commercial products, even commercial products that compete with anything that has been made available but does not meet the public’s purposes and therefore is not made available on reasonable terms.

So, commercialization is not required by Bayh-Dole. There is no secret unfunded mandate in Bayh-Dole to commercialize. That’s just administrative gas. If university administrators choose to commercialize, it is on them. It’s not in Bayh-Dole.

6. Bayh-Dole does not require a university to designate personnel responsible for patent matters.

Bayh-Dole makes it a condition of disclosure that if personnel designated for patent matters receive a disclosure of a subject invention, they must disclose that invention to the federal government. But there’s nothing in Bayh-Dole that requires a university to make any such designation. A university can ignore patent matters. Inventors then have no obligation to disclose their inventions to anyone, as far as Bayh-Dole is concerned–and neither do universities. Of course, without going to personnel designated for patent matters, it’s darned hard to file a patent application. The upshot under Bayh-Dole is, inventions that don’t get to patent personnel enter the public domain. Big whoop. Why should university administrators care, given that Bayh-Dole doesn’t care? That’s just how it is. Anyone still bitching about it must think Bayh-Dole is defective and should be fixed by one’s personal authority to pull new law from one’s posterior cortex.


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