Two Key Moves in IPA to Bayh-Dole

Posted on August 4, 2013 by Gerald Barnett

The short form on IPAs vs Bayh-Dole.  Two big changes:

1.  Bayh-Dole removes the requirement for university ownership

The IPAs forced university ownership of inventions made by anyone working on a federally funded project–faculty, subcontractors, volunteers.  Bayh-Dole and its CFR rejects this approach in favor of requiring employees and subcontractors to make a commitment to establish government rights.  Universities are forbidden from seeking an ownership interest in subcontractor inventions as a condition of the subcontract.  Pity the same was not made express for university faculty.

2.  Bayh-Dole guts public accountability

Bayh-Dole guts the gestures in the IPAs to protect the public interest.  It eliminates the public interest mandate (by displacing it to a statement of objectives that does not find its way to the standard patent rights clause), default non-exclusive licensing (gone), the time limits on exclusive licenses (gone), and mandatory reporting (made optional, and any reports are made secret).  Bayh-Dole shifts the burden to the government for showing why a monopoly should not be maintained rather than following the IPA’s requirement that a university “show cause” why it should keep its monopoly.  The march-in procedures in the CFR for Bayh-Dole are so convoluted it is clear they were intended never to operate.  Under the IPA, there is a simple determination that the monopoly should end, and a 30 day period in which a hearing can be requested.

Bayh-Dole leaves university inventors exposed to institutional invention ownership claims and tosses public oversight of university patent dealings.

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TLO Summits, Cheap Talk, and Sacrifices

Posted on August 4, 2013 by Gerald Barnett

James Mawson has a thoughtful account of a recent meeting at UCSF to discuss how university technology transfer offices could better deal with current conditions for research, licensing, and money.   A description of a meeting isn’t, of course, the meeting itself, so it is difficult to get a sense of what was going on.  From the description, folks attending appear confused by their own rhetoric, and perhaps even by the concepts that they bring to their work.  Consider this bit of Mawson’s account:

The TTOs wanted to use corporations to commercialise their inventions but also provide money and personnel to translate basic research into work to help society. As one panelist said: “We see tech transfer as finding the public benefit, not about the money.”

The “TTOs” frame the discussion in terms of “commercialization”–that is, the creation of salable products from academic inventions.  They don’t think about much about creating better conditions for collaboration or independent innovation.  For that, “commercialization” would not be something that a university administration would focus on.  The “processes” of commercialization of stuff into product form is one thing.  The insistence that university patent positions be used to push these processes into licensing relationships fueled by speculative investment is another.  In the same sentence, though, we are told that TTOs also want money for more research “to help society.”  One has to work at it to come up with how commecialization and helping society are connected in this line of discussion.  Continue reading →

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The Free Play of Free Intellects

Posted on August 3, 2013 by Gerald Barnett

The Bayh-Dole Act has been championed as a great turning point in the federal government’s management of inventions made by university faculty (for the most part) supported by federal money. The impression meant to be left with us is that before this time, the government was doing a rotten job with such inventions and the private sector stepped in to show how productivity could be boosted with a bunch of motivating self-interest and professional focus. After Bayh-Dole, university patent administration has shown thirty years of constant “success.” Rebecca Eisenberg and David Mowery, in particular, have shown that this impression is not well grounded.

Universities were very active in patent matters before Bayh-Dole, and indeed their success–such as it was–was a foundation for the arguments in support of Bayh-Dole. It’s just that their success was based largely on a diversity of approaches, a great deal of faculty governance, and invention management agents that were highly selective. As Mowery has it, the agents “cherry-picked” the inventions they would work with.  Further, a number of federal agencies allowed contractors to own and management inventions made with federal support. Many of the patents held by the government were made in military research, for which the contractors had chosen not to pursue patents. For such inventions, there may well have been no commercial products to be made, and if there were, then the military contractors were not the ones to pursue them, and it was just as well to place the science and technology for such uses in the public domain, or to make the inventions available on a royalty-free or FRAND basis. One might argue that the government was doing a pretty good job with inventions in this area, and that the perceived problems in “losing national competitiveness” or “economic slowdown” were not the result of invention management problems in federally supported research.

There were changes afoot.  Continue reading →

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IPA compared with BD and its CFR and SPRC

Posted on August 2, 2013 by Gerald Barnett

I have created a table that lays out some of the differences between the 1968 HEW Institutional Patent Agreement template and the Bayh-Dole Act, the implementing regulations at 37 CFR Part 401, and in particular the Standard Patent Rights Clause at 37 CFR 401.14. [I have updated CFR references to current citations and added some further notes.] Enjoy.

Ascope

Under Bayh-Dole, the IPA master agreement approach is replaced by patent rights requirements governed by each agreement. There is no master relationship. No patent policy is required. There is no review for licensing practices. Each funding agreement contains a patent rights clause, as required by 37 CFR 401. The standard patent rights clause is at 37 CFR 401.14. This clause finds its way into most university funding agreements via 2 CFR 200.315(c). Continue reading →

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I want my, I want my IPA–Part IV

Posted on July 31, 2013 by Gerald Barnett

Previous parts of this essay (I, II, and III) have taken up the structural shift of Bayh-Dole from the Institutional Patent Agreement, removing assignment to the university but also relaxing licensing oversight to the point of non-consequence.  What is left is to look at the march-in provisions in Bayh-Dole and with them the reporting requirements.  The march-in requirements have never operated, and the reporting requirements, well, because of FOIA, are just another form of administrative burden.

The march-in requirements in the IPA are found in Article XII, labeled “Additional Licenses.” Let’s look at part (a) first.

The Article uses “Grantee or its licensee” to suggest that the issue of additional licenses likely only applies in the case of an exclusive license, so long as non-exclusive licenses are still on offer.  They would not be, for instance, if the Grantee has offered a limited number of what have been called “co-exclusive” licenses, or has agreed to end its non-exclusive licensing program as a condition of a final non-exclusive license, or a sole license that grants all remaining non-exclusive licenses a Grantee has left.

More important, this Article gives a term–three years from date of patent issue.  Continue reading →

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I want my, I want my IPA–Part III

Posted on July 31, 2013 by Gerald Barnett

Part III continues a discussion of the changes from the Institutional Patent Agreement to the Standard Patent Rights Clause authorized by Bayh-Dole.  (Part I is here; Part II, here). The Bayh-Dole Act was passed like swiss cheese, with a bunch of holes to be filled in later.  The holes were where there were objectionable parts to the IPA.  There was plenty for folks to dislike in the IPA.  Agencies could dislike it because it let universities loose with federally supported work.  Companies could dislike it because it let universities loose with federally supported work.  Inventors could dislike it because…  well, more of the same.  And university administrators could dislike it because it did not make them loose enough.  The effort to produce an SPRC to fill the holes centered around how federal power through the offer of support to faculty-proposed and -led work could leverage claims to agency control of inventions, on the one hand, and university patent broker control of those same inventions, on the other.

In 14th-century England, there was a poem called Winner and Waster, in which a personage representing Hoarding debates a personage representing Squandering.   The argument is over who is better.  Winner and Waster are taken to be failed virtues of Prudence and Generosity.  Neither should win.  Reason should win.  But the poem we have is fragmentary, and lacks the ending, so we will never know.  However, in the case of the debate between university patent brokers and federal agency administrators over who should get control of faculty-led inventions, at least we have it in our power to write the ending the way we want, if we have the will to do it.  For thirty years, we have let it go.  Now with the Supreme Court guidance in Stanford v Roche, we have an opening.  What will we do with it?

Changes in how assignments of inventions are handled between the IPA and SPRC also changed the responsibility for the looking out for the public interest. Continue reading →

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I want my, I want my IPA–Part II

Posted on July 31, 2013 by Gerald Barnett

The first part of this essay showed how the architecture of the Institutional Patent Agreement differs from the new structure introduced by the Bayh-Dole Act. An IPA was a master agreement while Bayh-Dole was embedded in patent law, applied to agencies, and was implemented agreement by agreement through patent rights clauses. Part I then works through differences in scope and definition of “subject invention” between an IPA template and Bayh-Dole and shows that the changes bear the marks of a particular style of university-affiliated patent broker, one that seeks to “protect” inventions from use in order to improve profits through licensing and for that purpose seeks to expand the scope of federal claims to remove inventions from conventional, and generally liberal, approaches to inventions left in the hands of faculty policy makers and faculty inventors.

To get Bayh-Dole passed, the advocates had to omit what they knew would be objectionable in the IPAs. The idea must have been that once the bill was through Congress, these things could be added in later. Thus, Bayh-Dole rather than stating things in clear terms, defers key elements to what is now the Department of Commerce to draft–not only implementing regulations but also the patent rights clauses themselves.  n this way Bayh-Dole authorized the creation of a standard IPA, but then devolved it to each funding agreement rather than preserving an IPA as a master agreement covering all work with a given institution. Once Bayh-Dole was passed, Norm Latker, who had spearheaded the effort from within the NIH, moved to a position where he would be responsible for drafting the implementing regulations. What he may not have anticipated, however, was the battle he was to experience with the agencies over what would go into those regulations.  It was not going to turn out to be the straight shot that the university patent brokers had imagined to back fill the regulations with the parts of Bayh-Dole that would never have gotten through Congress. As it was, plenty enough never made it through.

The implementing regulations, and the standard patent rights clause, therefore, should be read not as merely procedural boffin drafting, but rather the debris left from battles among opposing forces. The debris are assembled, and put into a condition of operation, as something of a compromise, leaving it to practice, and agency interests in compliance, to determine what actually would happen. Having had to omit much in the text of Bayh-Dole, and finding themselves unable to add everything back that they wanted in the regulations and standard patent rights clause, the advocates for Bayh-Dole settled for ambiguity, relaxed reporting and licensing compliance, and a declawed march-in provision that was expected would never be able to operate.

Ownership of inventions.  The second important aspect of the IPA and its differences from Bayh-Dole has to do with ownership.  Continue reading →

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I want my, I want my IPA–Part I

Posted on July 31, 2013 by Gerald Barnett

From time to time advocates of the idea that Bayh-Dole vests ownership of inventions with employers argue that the intent of the law was to build off of the Institutional Patent Agreement model developed by the NIH. The IPA approach appears to have been a workaround to the HEW patent policy that the pharmaceutical industry hated so much that they began a boycott of government-identified compounds. If universities could get rights, and then license the rights, maybe that would be an acceptable alternative.

It is true that many of the key concepts in the IPA make it to Bayh-Dole. Subject inventions, electing something related to patenting, sharing royalties with inventors, a kind of march-in, and a number of reporting requirements.  It’s just that the IPA, and these concepts, are very different, and have different means of operation and different effects, when translated into the Bayh-Dole Act and especially into the implementing regulations and the standard patent rights clause. An examination of four core issues–subject invention, ownership, licensing, and march-in–demonstrates how different things became under Bayh-Dole. This examination will also show where the real boon to university licensing offices and their affiliated foundations aimed to be, and why that couldn’t be placed in Bayh-Dole proper and get the bill passed, so it was postponed for the regulations in the hope that things there could be arranged to the university/foundation patent administrators’ liking.

Grab your copy of Bayh-Dole and its regulations, and pull up a copy of an IPA template, and follow along. Continue reading →

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A Provisional History

Posted on July 30, 2013 by Gerald Barnett

I have been trying to figure out what happened to Research Corporation and why AUTM is so antagonistic to the idea of faculty inventors having a choice of who they work with to deploy their research findings.  I call it inventor-loathing.  It will be a happy day when AUTM renounces its inventor-loathing and rediscovers how productive relationships for creative work can be developed without the need for slave labor, autocratic control, and an ungainly and often poorly done institutional apparatus fitted over every possible opportunity.

There are various histories of university patent stuff and Bayh-Dole.  Rebecca Eisenberg and David Mowery and their respective co-authors have done a lot to contribute to this area.   Their research challenges commonly made claims, such as that the government was doing a poor job with its patents, that Bayh-Dole sparked the university technology transfer revolution, and that the metrics put out by AUTM show that the present system of compulsory institutional ownership of inventions is a “success.”

The challenge in all of this is that the winners tend to tell a different story than others.  Thus, there’s plenty of material around written by folks who are proud of getting Bayh-Dole passed, and who associate the growth of university technology licensing operations with the “success” of Bayh-Dole.  But there appear to be factors at play, and as I have talked with folks who were in a position to observe, a different picture gradually emerges.  Thus, this provisional history.  I expect there are still things I don’t have nuanced or pinned in the right part of the bug collection, but I’m thinking it is getting close.  Continue reading →

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Patent litigation: the new public purpose of the American research university

Posted on July 29, 2013 by Gerald Barnett

While working on a new Guide to Bayh-Dole (one that COGR has yet to thank me for), I spent some time looking at recent patent infringement litigation initiated by universities.  It’s not a pretty picture. In “Sue U.,” Jacob H. Rooksby found “more than 60 universities” participation in more than 280 patent-infringement lawsuits since 1973. A dissertation by Maria Teresita Barker at the University of Iowa found “171 patent-related lawsuits involving a college or university” between 1980 and 2009:

The 85 universities identified in this study were most often public research universities suing corporations for infringement in order to protect their rights in a university-owned patent. These corporations were most frequently competitors of a corporation with whom the university had an existing licensing agreement.

Among the flagship cases have been Stanford, which sued Roche, a company that had acquired technology assets from a company that had collaborated with Stanford, sharing technology and lab space. Stanford took its case all the way to Supreme Court, and lost. Perhaps it was only coincidence that Roche closed its 900 person lab in Palo Alto, laying off 500. Part of a restructuring and consolidation after its acquisition of Genentech, or something like that. Continue reading →

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