Simplify University Patent Policies

Posted on May 13, 2015 by Gerald Barnett

Close Encounters of the Third Kind begins with reports of strange doings from all over the world. Let’s start in a similar mode.

In The Rational Optimist, Matt Ridley makes the case that the inventions of the industrial revolution were not science-driven. Rather, they were the result of “tinkering businessmen, not thinking boffins” (256). Ridley argues that the prosperity created by these inventions funded the science that made sense of things:  “the philosophers played second fiddle to the engineers” (409).

In Modern Arms and Free Men, Vannevar Bush discusses how new military technology breakthroughs were made during the second world war: “The real reason we made such progress was not bright inventors or clever gadgets. It was the fact that we had thousands of men who understood the underlying science in the field, who skillfully practiced the necessary techniques, who were good gadgeteers” (244). Continue reading →

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A New Angle on Protecting University Employee Inventors

Posted on May 6, 2015 by Gerald Barnett

Washington state senator Maralyn Chase has introduced legislation (SB 6106 and SB 6107) to free up inventors at the state’s public universities from administrative requirements to assign all their inventions to the state for management. In addition to seeking to make voluntary faculty assignment of inventions, she has taken a new approach. Washington state is one of eight states, including California and Illinois, that has a law designed to protect employee inventors from predatory employers. Washington’s law is at RCW 49.44.140 and 150.

Patent law requires an agreement beyond mere employment for an employer to have a claim to ownership of an invention made by an employee–even if the employee has used company resources to construct the invention. Washington state’s law restricts employer claims in such agreements to only those inventions that are directly related to the company’s business and research or which used company equipment, supplies, facilities, or trade secret information or which were “performed by the employee for the employer”–for instance, the employer assigned the work. Continue reading →

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Efficiency in University Technology Transfer

Posted on May 3, 2015 by Gerald Barnett

Over at the GAIN group on LinkedIn, Laura Schoppe has asked a good question about “decentralization” of university licensing efforts. She appears to advocate for the efficiency of central IP offices. Peter Schuerman from UC Merced has already provided a solid response. I’ve commented as well, but since there’s a 4000 character limit there, I am posting here my full response.

Peter makes a great point. Technology transfer means movement of technology from one group who has it to other groups that don’t. The term “technology transfer” was popularized in the 1970s by Research Corporation, which used it to encourage the formation of campus offices that would identify inventions and help faculty inventors present those inventions to RC for possible management. That is, the transfer was from lab to invention management agent. Continue reading →

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Complexity that serves the intermediaries

Posted on March 12, 2015 by Gerald Barnett

In a recent article in Vanity Fair, Michael Lewis discusses the premise behind Flash Boys. Lewis argues that the stock market had become “complicated beyond belief.” Flash Boys chronicles the efforts of a group of traders to figure out what was going on and try to fix it:

In the end they figured out that the complexity, though it may have arisen innocently enough, served the interest of financial intermediaries rather than the investors and corporations the market is meant to serve. It had enabled a massive amount of predatory trading and had institutionalized a systemic and totally unnecessary unfairness in the market and, in the bargain, rendered it less stable and more prone to flash crashes and outages and other unhappy events.

I’m interested in this passage for what it suggests (quite without intention) about the rise of university technology licensing. According to the federal funding agreements backing grants made to universities, any intangible asset–including patents and patent applications–acquired with federal funds is to be held in trust by the university for the beneficiaries of the project (see 2 CFR 200.316). When a university claims ownership of patent rights in an invention made with federal funding as a condition of employment, then the university is expressly using federal funds to acquire the patent rights. That simply has to be the case, since the inventors are paid, while working on the federal grant, with federal funds, and their scope of employment while doing so is the work on the grant.  Continue reading →

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The Cork in the Keg: Open Source Software Complies with Bayh-Dole But University Invention Practice Often Does Not

Posted on March 4, 2015 by Gerald Barnett

Over on Daniel S. Katz’s blog there’s a discussion of university policies and open source software. The issue of Bayh-Dole came up, and I provided a comment there. I’m reposting here, with links and a few typos and awkwardnesses fixed.

The Bayh-Dole Act requires federal agencies to use a standard patent rights clause in funding agreements with universities, nonprofits, and small businesses. The patent rights clauses are not set out in the law but rather in the implementing regulations. Each time a university receives federal funds in the form of a grant, contract, or cooperative agreement, a federal funding agreement is created that includes a standard patent rights clause. For federal grants, the funding agreement is at 2 CFR 200 and the IP clauses are sections 315 and 316. That’s how Bayh-Dole gets to universities–universities formally agree to terms in federal contracts. Bayh-Dole *does not apply to universities directly*. Continue reading →

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Nolo Can’t Get Either Bayh-Dole or Stanford v Roche Right

Posted on February 22, 2015 by Gerald Barnett

I have always liked Nolo Press publications. They are usually well written, easy to read, and affordable. But here’s a bit from Nolo’s “Legal Encyclopedia” doing a number on Bayh-Dole–and this is after Stanford v Roche, because they manage to mess that up, too:

Today, many universities own large patent portfolios and earn substantial royalties from them. To keep those royalties flowing, most universities seek to obtain ownership of inventions created by their employees. Moreover, if the research leading to the invention was federally funded, they are required by law to obtain ownership under the Bayh-Dole Act, discussed below.

The Supreme Court ruling in Stanford v Roche made it clear that universities do not get an automatic title in federally funded research, they are not required by law to obtain title, and university inventors are not constrained in how they may dispose of inventions other than as they are constrained by a patent agreement. Mere employment is not sufficient.

So, for Nolo here: you should know better by now. Continue reading →

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Be True to the Mission, Not to the Apparatus

Posted on February 9, 2015 by Gerald Barnett

Col. John Boyd was, at one time, America’s best fighter pilot. He could out-maneuver any pilot flying, he could teach pilots to fly, and after earning an engineering degree from Georgia Tech, knew more about the dynamics of jet fighters than any other fighter pilot. He knew more, too, about design than the Air Force generals who approved aircraft designs for the next generation of fighter pilots.

In Boyd: The Fighter Pilot Who Changed the Art of War, Robert Coram describes the problem faced by Col. John Boyd. The Air Force generals were determined to build a fighter that could beat the Russian MIG. In Vietnam, the MIG-21 was beating the F-105. Even the older MIG-17 was taking down the F-105. The Generals wanted a plane that could fly farther, higher, and faster than the MIG. The trouble was, as Boyd, knew, farther, higher, and faster were not the properties that made a fighter successful. Continue reading →

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How we got here, in twelve chapters, 5

Posted on February 1, 2015 by Gerald Barnett

5. Further Implications of the Faux Bayh-Dole Act

The rise of the faux Bayh-Dole Act led university administrators with low status suddenly to see a way to acquire substantial power, using a claim that federal law gave them a mandate to take ownership of faculty inventions. Bayh-Dole was thus reconstrued as a proclamation of the supremacy of the technology licensing office over individual faculty investigators. In this faux version of Bayh-Dole, administrators ignored contractual requirements for implementation, including the key to the operation of the law, the (f)(2) requirement. As a result, the most favorable pathway for invention dissemination was suppressed by university policy. In its place arose a technology licensing office empire which has made quiet havoc of inventor initiative, the public domain for research findings, and the status of faculty members within the university. If Bayh-Dole is the killer, those constructing the faux Bayh-Dole arranged the hit. 

Almost immediately after the passage of the Bayh-Dole Act, the actual text of the Act was replaced by popular accounts of what the Act was supposed to do. These accounts appear to have originated with people who were the key advocates for the law. The accounts express what these advocates apparently intended the law to do, but the accounts do not report Bayh-Dole in the form Congress ultimately approved, and certainly do not report what the law does as it was implemented by standard patent rights clauses included in funding agreements. The faux Bayh-Dole Act, however, was much more attractive to university administrators, and as promoted by the newly created organization now known as the Association of University Technology Managers (AUTM), the faux Bayh-Dole law became, if not the law of the land, certainly the law of university policy.

Continue reading →

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How we got here in twelve chapters, 4

Posted on January 9, 2015 by Gerald Barnett

[I really do have the outline for the other 8 chapters! I just need to get back to pulling the explanatory text together]

4. Bayh-Dole the Killer

The Bayh-Dole Act is passed in 1980 on the premise that doing so will give federally supported inventions access to the emerging university approach to patent management. University administrators use Bayh-Dole to enfranchise provincial invention management schemes in place of Research Corporation’s national outlook, and this institutional self-interest then runs amok as Bayh-Dole is represented as mandating, requiring, or even outright vesting invention ownership with university administrations. Universities change their policies to “comply” with the law, and by the time the Supreme Court in 2011 gets a chance to throw the university claims out, it’s too late, the damage is done. Bayh-Dole has done its killing. 

The infrastructure to help faculty with inventions developed along two parallel paths, both external to the university. On one path was the Research Foundation, with a national outlook and an interest in using its royalty income to fund research wherever there was a need. On the other path were the university-affiliated research foundations, led by WARF, Purdue, Kansas State, and others. Within universities, the infrastructure that developed was one of identifying inventions and referring their inventors along one path or another. The outliers in all this were MIT and the University of California, both of which aimed to do deals directly.

But most university policies kept invention ownership and patent management outside the university, away from the administration, away from matters of research and instruction. Economic development and public welfare, as these may arise from patents on research inventions, came about through the efforts of external agents to match up inventors and their inventions with opportunities in industry.  Continue reading →

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How we got here in twelve chapters, 3

Posted on December 27, 2014 by Gerald Barnett

3. Chasing federally supported inventions

Federal agencies develop a variety of approaches to inventions made in contracted work. University research foundations make a pitch for management of federally supported inventions, but are resisted by Public Health Service policies. As a workaround, they develop Institutional Patent Agreements that permit university ownership of federally supported inventions. When the Department of Energy prevents Purdue Research Foundation from securing ownership of certain inventions, the Bayh-Dole Act is passed to normalize federal invention policy, giving universities access to a broad range of inventions made by their faculty.

Expanded federal contracting for faculty to lead government research projects added to the shift from equity review to ownership interest. Federal patent policy is directed by  a series of executive orders that eventually direct federal agencies to be flexible in dealing with sponsored research. Flexibility leads to research practices that vary by federal agency. Some agencies, such as the Department of Defense and the National Science Foundation, allow inventors and their contractors to keep title to inventions made with agency support. Other agencies, notably the Public Health Service, require assignment of inventions as a condition of federal funding.  Continue reading →

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