There is no government use license in Bayh-Dole

I saw another search here at Research Enterprise for “government use license.”

There is no government use license in Bayh-Dole. That’s a sloppy myth created by university licensing officers who repeat nonsense. The license in Bayh-Dole (35 USC 202(c)(4)) is “to practice or have practiced.” That’s as broad as all substantial rights in any subject invention. Practice means to make, use, and sell. Practice was expressly defined that way in executive branch patent policy on which Bayh-Dole is based. The government license permits anyone–government or not–to make and use any subject invention and sell products incorporating or based on that invention “for or on behalf of” the United States–the federal government, state governments, municipal governments.

“Government use” license is just sloppy talk, a sign of sloppy thinking–or a sign of a concerted effort to defraud the government of the benefit of the Bayh-Dole bargain.

And, while we are at it, there is no “government purpose” license in Bayh-Dole either. The license is “to practice and have practiced for or on behalf of the United States.” That’s the scope. Practice = make, use, and sell. “For or on behalf of” oddly is not “by.” It’s the “federal agency” that has “the right” under the license. What’s the difference between “for” and “on behalf of”?

The Kennedy patent policy (1963) defines “Governmental purpose”–and the recites practice and have practiced, make, use, and sell, expands “Government of the United States” to include the federal government, state government, and domestic municipal government, and the has “by or on behalf of.” The Nixon patent policy (1971) replaces “practice and have practiced” with “make, use, and sell,” and retains “by or on behalf of” and the “Government of the United States” and then makes clear that “Government” now means the federal government, since it treats “States” and “domestic municipal governments” separately, and then gives federal agency heads–of all people–the right to limit the license to just the federal government. How strange is that? Given that the states cannot be sued for patent infringement anyway–sovereign immunity–what where those folks thinking? Anyway, the Federal Procurement Regulation (1975) that codified the Nixon patent policy, repeats the Nixon policy wording, without retaining the right of agency heads to limit the license to the federal government.

Bayh-Dole specifies that the “Federal agency” providing the funding has the “right” of the license. But Bayh-Dole’s implementing regulations replaces “Federal agency” with “Federal government” (37 CFR 401.14(b)). Apparently a federal agency does not have the right to withhold its “rights” from other executive agencies and departments (Bayh-Dole cites 5 USC 102–but the implementing regulations ignore).

Somewhere in the drafting of Bayh-Dole, “by” was dropped in favor of “for”; and “Government of the United States” was dropped in favor of “United States.” And “practiced and have practiced” was changed to “practiced or have practiced.” Perhaps it is all just sloppiness–or it’s all the same if one doesn’t bother much with words–a sort of adiaphora. It is clear how “by” differs from “on behalf of.” The licensee may act (“by”), or others may act to do things for (“on behalf of”) the licensee. But how does “for” differ from “on behalf of”? On the face of it, these express roughly the same idea. Here’s the bit of difference. “For” suggests that an action is authorized by the licensee–a master/servant relationship, while “on behalf of” suggests that an action need only anticipate a need of the licensee, with no express authorization necessary.

The statement of the license itself is strange. A federal agency (or federal government) “shall have” the “right” to practice or have practiced “for or on behalf of” the “United States.” “Shall have” is not “shall receive”–it’s rather that the license is granted when a contractor elects to retain title, as a self-executing compulsory license, rather more like a regulatory limitation on the scope of the contractor’s rights in a subject invention. “Right” suggests, too, something distinct from the license itself–as if a license that promises not to assert rights is distinct from the rights not to be asserted. There is not target for the license itself. Strange, again. One would think that all entities within scope receive the license, not just a “Federal agency” or even the “Federal government.” Who is it, then, that the license agreement is with? In the IPA master, at least the license is granted “to the United States Government” (a defined term in the Kennedy patent policy). But not so Bayh-Dole.

We might posit that the Bayh-Dole license is to the “United States,” which as a collective noun cannot itself act on these rights–only discrete entities such as federal agencies may act on rights under the license. Is that it? Perhaps. Maybe all of this is just slop–what does it matter that “by” becomes “for” or “practiced and have practiced” becomes “practiced or have practiced”?  That “Government of the United States” becomes “United States”? If these things are not slop, then it is a bit mystifying why there are such changes, and what we are to make of this license, which forms, clearly, part of the fundamental exchange–what the public gets in exchange for having a blind eye for a contractor getting to retain title to inventions made in work receiving public funding that the contractor has acquired.

Where does all this government use/purpose talk come from? Here’s a thought. Norman Latker drafted Bayh-Dole. Norman Latker also participated in drafted Bayh-Dole’s implementing regulations. Norman Latker served on the panel that codified the Nixon patent policy as the Federal Procurement Regulation. And Norman Latker revived the NIH IPA program in 1968 and drafted its master agreement. The IPA program was implemented under the Kennedy patent policy. Here’s the IPA on the government license (VI(b)):

The Grantee shall grant to the Government of the United States a nonexclusive. irrevocable, royalty-free license for governmental purposes and on behalf of any foreign government, pursuant to any existing or future treaty or agreement with the United States under each U.S. or foreign patent application it elects to file on a subject invention. The form of the license to be granted shall be as set forth in Exhibit “A” attached hereto, and by this reference made a part hereof. Any license issued by Grantee shall be made expressly subject to the license to the Government of the United States.

No scope is given here, but we have “governmental purposes” and “Government of the United States”–both defined terms in the Kennedy patent policy, but left undefined here. The same is true of the license in Exhibit A–there’s no actual statement of what the license grants to the Government of the United States. But then the license adds a definition:

As used herein, “governmental purpose” means the right of the Government of the United States (including any agency thereof, state or domestic municipal government) to practice and have practiced (made or have made, used or have used, sold or have sold) throughout the world by or on behalf of the Government of the United States.

This definition is straight out of the Kennedy patent policy. The sloppy talk about government purpose comes from the IPA. It comes via Latker. It relies on reading the IPA master agreement and not looking at the definition of governmental purpose left to a definition after the statement of the license in IPA Exhibit A. Latker claimed that Bayh-Dole was essentially a codification of the IPA. Not that Latker was correct about even that, but it makes sense that Latker picked up from the IPA the parts he wanted, just as he later lifted whole sections of the FPR into Bayh-Dole’s standard patent rights clause even though these sections never made it into Bayh-Dole and one would think that these sections would be *excluded* by Bayh-Dole from the standard patent rights clauses but for a federal agency determining exceptional circumstances or a Congress passing a law that cited Bayh-Dole and expressly provided for these additional provisions.

We then may posit that there are two traditions of talk with regard to Bayh-Dole. There’s a tradition of talk that is based on the law and regulations as they are written. That’s the tradition that the Supreme Court participated in when it decided Stanford v Roche. And there’s a second tradition of talk that follows Latker, Bremer, and Allen–an oral tradition of what Bayh-Dole is supposed to do, what the law “was intended” to do, and what then it “does.” In this oral tradition–conveyed through SUPA (then AUTM), COGR, and other university-affiliated lobbying organizations–Bayh-Dole has a government use license or government purpose license, not a license to practice or have practiced. People repeating this oral tradition accept what they have heard about “the intention” behind Bayh-Dole and are comfortable replacing the language of the law with a gloss provided to them from what they take to be authoritative sources–Latker, Bremer, and Allen, and AUTM, COGR, NACUA, and other organizations. It’s just that these sources are not authoritative. They have adopted a private version of the law and have repeated it so often that they believe what they say–and, certainly, there’s no way any of these sources–still living–could ever admit they have gotten things wrong all these years. My guess, though, is that’s where we are.


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