Bayh-Dole’s repeal is more worser Bayh-Dole

I’ve worked this idea before, but I will try again.

What happens if Bayh-Dole is repealed?

First, things fall back to EO 12591, which stipulates that the heads of federal departments and agencies shall, among other things (1)(b)(4):

promote the commercialization, in accord with my Memorandum tot he Heads of Executive Departments and Agencies of February 18, 1983, of patentable results of federally funded research by granting to all contractors, regardless of size, the title to patents made in whole or in part with Federal funds, in exchange for royalty-free use by or on behalf of the government;

And that is worse than Bayh-Dole. The EO focuses on commercialization rather than utilization. The EO is narrower–restricted to research only. The EO grants title to patents rather than the right to retain title to inventions acquired. The EO limits public protections to a royalty-free use, and use rather than practice and have practiced.

The 1983 Memorandum in turn states new executive branch patent policy stipulates that federal agency disposition of inventions

shall be the same or substantially the same as applied to small business firms and nonprofit organizations under Chapter 38 [sic] of Title 35 of the United States Code.

There is no Chapter 38. Chapter 18 of Title 35 is Bayh-Dole. Later citations in the Memorandum make clear that Reagan meant Chapter 18. If Bayh-Dole is repealed, it doesn’t matter, as executive branch patent policy now comes into full effect and must operate “substantially the same” as Bayh-Dole, even if there is no Bayh-Dole. The Memorandum is also worse than Bayh-Dole. The next section of the Memorandum stipulates that if an award is not subject to Bayh-Dole, then a federal agency may waive Bayh-Dole’s sections 202-204 if the agency determines the public will be better served (whim) or the contractor is going to contribute substantial resources.

So, repealing Bayh-Dole leaves a ghost of Bayh-Dole still in executive branch patent policy. One would have to rescind EO 12591, and fall back to the Nixon patent policy, which required codification of its policies–which resulted in the now disappeared Federal Procurement Regulation, which was the entry point for the attempt to expand the IPA program to all federal agencies without Congressional authorization or oversight. We would then have to restore the FPR, which was displaced by the Federal Acquisition Regulation, which implements Bayh-Dole and ignores what happens if a contractor does not acquire title to an invention made in federally supported work.

In addition to all this, Bayh-Dole practice has caused other damage that cannot be undone by repeal of Bayh-Dole. University administrations, grossly misrepresenting Bayh-Dole, have changed university patent policies to require invention disclosure and compulsory university ownership of inventions (and non-inventions)–extending in some policies to claim inventions that public policy and equitable dealing would deny to the university–but inventions must assign even these inventions and then may beg for them back, subject to the university’s discretion. Yes, this is you University of Missouri.

University administrators have claimed that Bayh-Dole requires universities to take ownership of inventions made in work receiving federal support. Bayh-Dole does not do so. EO 12591, however, stipulates that federal agencies must “grant title” in patents to all contractors, and so including universities. Thus, even if a university allowed an inventor to own an invention, it would appear that executive branch patent policy would require the federal government to take title from the inventor and then grant that title to the university. Or something equally roundabout. The Supreme Court in Stanford v Roche held that Bayh-Dole did not mandate contractor ownership of inventions made in federal work–did not vest title, did not require assignment of title, did not provide any special privilege under which a university could take title. But EO 12591 came into effect long before Stanford v Roche was decided, and states the requirements on federal agencies independent of Bayh-Dole where Bayh-Dole does not apply.

Thus, just to unwind the damage, we would have to repeal Bayh-Dole, rescind EO 12591 and the Memorandum of February 18, 1983, reinstate the FPR over the FAR for inventions, and still universities would have to roll back their grasping, compulsory, comprehensive claims on inventions drafted with the claim that to avoid failing to comply with federal law, universities had to own everything.

Any university could in effect repeal Bayh-Dole by creating an open scholarship favorable patent policy. Claim nothing up front. Require no disclosure of inventions. Bayh-Dole, for that matter does not require inventors to disclose inventions that a contractor does not claim ownership of. You read that right. Bayh-Dole requires only that a contractor disclose each subject invention–one that the contractor has acquired–after that invention has “become known” to the contractor’s patent personnel. The implementing regulations in their doofus way go further and stipulate that if the contractor’s personnel do not have a conforming written disclosure from the inventor no less, then there’s no obligation for the contractor to disclose the invention to the federal government. Yeah. 37 CFR 401.14(c)(1). If a university makes no claim on a given invention, then that invention cannot be a subject invention (at least, not for the university), and all Bayh-Dole’s requirements directed at subject inventions–anything but 35 USC 200 (which is not restricted to subject inventions)–are moot.

(Yes, there is yet another end run, but it doesn’t work for university ownership either–37 CFR 401.14(f)(2), which is not authorized by Bayh-Dole, requires contractors to require certain of their employees to make a written agreement to protect the federal government’s interest in inventions. When a contractor requires that written agreement, the contractor extends the federal funding agreement to each employee that makes the agreement, making those employees “parties to the funding agreement” and therefore “contractors” under Bayh-Dole’s definitions at 35 USC 201(b) and (c). Now the employees are also contractors, and as contractors they by default own their own inventions, are assured by 35 USC 202(a) of the right to elect to retain title to their inventions made in federally supported work, and have a patent rights clause specific to their ownership at 37 USC 401.9. And that patent rights clause (a subset of the small business patent rights clause, which is a subset of the nonprofit patent rights clause) does not require inventors to file patent applications–that is, inventors can keep things open and don’t have to give up their inventions to either universities or federal agencies. That’s just the opposite of what Sen Bayh claimed was his intent in his amicus brief to the Supreme Court. Bayh was no friend of either inventors or open science. Fortunately, the Supreme Court looked at the law and ignored Sen Bayh’s account of his private intentions.)

Universities don’t have to disclose inventions they don’t own. And universities don’t have to require inventors to disclose to their universities inventions the universities don’t own. And federal agencies have no rights to inventions that universities don’t own. And if the federal agencies have rights to inventions that inventors own, they have no mechanism to force inventors to give up their rights once the inventors have disclosed their inventions–and inventors as contractors don’t have to disclose their subject inventions to the federal government until they have “made known” the invention to their patent personnel. If an inventor does not contract with a patent attorney or agent, then the inventor has no Bayh-Dole disclosure obligation. Open.

Thus, the shortest route to open is to insist that universities comply with the extraneous requirement of the nonprofit standard patent rights clause at 37 CFR 401.14(f)(2)–require the written agreement, making inventors parties to each funding agreement, and declining to take any interest in any invention the inventors might make under the funding agreement (which in turn brings the university into compliance with the extraneous requirement at 37 CFR 401.14(g)(1)). With compliant (f)(2) agreements in place, inventors have no obligation to disclose subject inventions to the university or to the federal government so long as the inventors do not make the inventions know to the inventors’ patent personnel and the university does not claim ownership of the inventions and require the inventors to make the inventions known to the university’s patent personnel.

Enforcing (f)(2) is the fastest formal way to open university science. Moot rather than repeal the mess called Bayh-Dole.




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1 Response to Bayh-Dole’s repeal is more worser Bayh-Dole

  1. Bruce Caron says:

    Many thanks for this clarification! I really appreciate the work you are doing here.

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