University of Utah’s Policy on State Control of Research Results

University patent policies these days typically contain a definition of “invention.”  Often they try to conflate copyright and patent matters and introduce a new definition, such as “discovery” or “intellectual property” in an attempt at administrative convenience.  These new definitions in turn add yet another layer of confusion into the mix.  It would be so much better to use the definitions of federal patent law, but no.

One thing that has happened over the years is that policies requiring disclosure for the purpose of ascertaining the equities of those involved have been turned into ownership policies.  The scope for disclosure under an equity approach might be necessarily broad.  Openness permits evaluation.   However, institutional claims of ownership were narrow, limited to work done in official duties, or when required by a sponsor of research, or when an agreement had been made with faculty regarding extraordinary commitment of institutional resources.  As policies moved toward ownership as an institutional solution to equity discussions, and especially after Bayh-Dole gave administrators a plausible front to require assignment of inventions made with federal support, the scope of claim came to be the scope of disclosure.  With this convergence has come some unexpected consequences.

A disclosure obligation may be very general.  It may apply to patentable inventions and to other intangible assets that may be created.  It may apply to everyone working in a university environment, whether an officer, appointee, employee, student, visitor, or volunteer.  A disclosure obligation carries with it no assumption of ownership, no premise of commercialization, no review for value, and no implicit request that the university take title.  A disclosure merely provides everyone notice of an asset’s existence, with an opportunity for anyone who has contributed and has not been acknowledged to come forward and get any concerns they may have addressed.  Disclosure is a way of keeping everyone together within a diverse community.  It’s sort of like knowing where the kid has been with the family car or who has put what in the lunch room fridge.  It’s that basic rule of working in a band, that band members bring in their new music ideas for consideration.  Disclosure is, in a way, fundamental to the function of a “household” or “commons”.  Thus, disclosure expectations can be broad.  It’s no big deal in a commons.

However, as the scope of disclosure comes to be conflated with the scope of ownership claim, strange things happen.  Continue reading

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A Brief History of University Patent Policies

[Updated May 2018]

American University Patent Policies:  A Brief History

1900-1924 Universities have no formal policy on patents, and follow defaults provided by law, addressing issues as they arise.

1912 University of California professor Frederick Cottrell forms non-profit Research Corporation to manage inventions submitted by faculty, starting with management of some patent rights on his own invention, the electrostatic precipitator. Faculty inventors receive royalties, and their institution or research foundation may also receive a share. Research Corporation donates income after expenses to the Smithsonian for research, and also supports research directly across the country.

Cottrell describes Research Corporation in “The Research Corporation, an Experiment in Public Administration of Patent Rights.” The Journal of Industrial and Engineering Chemistry.  December 1912, 864-67. Continue reading

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10 Issues That May Limit Infringement Claims on Subject Inventions

I have been working on the problem of infringement litigation involving subject inventions under Bayh-Dole. Here is a working summary of Bayh-Dole-related issues that companies being hit by universities with subject invention infringement cases might consider. I am not aware of anyone attempting to challenge the standing of universities to bring infringement litigation using patents on subject inventions. However, I’d say it’s time that folks pushed back. It is only by doing so that universities will be required to comply with Bayh-Dole, and not use it as a means to attack practice and industry for profits, with or without speculative investors lined up at the trough with them.

1.  Failure to comply with assignment provisions

If there is an exclusive licensee involved, and the licensee is bringing the infringement action to which the university is required to join, then challenge the license under 35 USC 202(c)(7)(A).  An exclusive license that transfers substantially all rights may well be an assignment that requires federal agency approval:

a prohibition upon the assignment of rights to a subject invention in the United States without the approval of the Federal agency, except where such assignment is made to an organization which has as one of its primary functions the management of inventions (provided that such assignee shall be subject to the same provisions as the contractor);

See Stuart Schanbacher and Bruce G. Chapman and Keith D. Fraser for recent discussions of the issue. If the exclusive licensee/assignee cannot show that it has as a primary function the management of inventions, then the assignment is not in compliance with the law. Call the assignment void, and seek to exclude the company as a party to the infringement action. The invention, at that point, becomes unlicensed. That might be a good time to obtain a non-exclusive license on reasonable terms.  Continue reading

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Letters of Marque

Here is an odd thing. Under the US Constitution, Congress is granted in Article I, Section 8, among other Powers, the power

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

The power granted here is that Congress may establish a patent system, that secures for inventors the exclusive right to their discoveries. That exclusive right becomes the right to exclude others from making, using, and selling the invention (and the variants, having made, offering for sale, importing).  By securing this right for inventors, Congress may thereby promote the progress of the Useful Arts.

Now we turn to the Bayh-Dole Act, which states a somewhat different objective of Congress:

It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development

Continue reading

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The Compliance Apparatus is Essential to Bayh-Dole

The Bayh-Dole Act is often presented as a boon to universities. Yet a reading of the law as it makes its way into federal funding agreements suggests otherwise. Universities are a problem, and a lot of apparatus of Bayh-Dole is to provide protections for the federal government, for faculty inventors, and for the public. Indeed most of the Bayh-Dole apparatus is protective in nature. If these protections do not operate–whether from lack of compliance, federal agency indifference, or failure in their purpose–then the $40 billion per year of federal support provided to faculty-led research is at risk to be exploited by all sorts of characters.

If Bayh-Dole had been a vesting statute, it could have been as simple as Article 39 of the UK Patents Act of 1977 with some U.S. language stuffed in (my version of a substitute Bayh-Dole requirement is in bold):

Notwithstanding anything in any rule of law, an invention made by an employee shall, as between him and his employer, be taken to belong to his employer for the purpose of this Act and all other purposes if: it was conceived or first actually reduced to practice in the performance of work under a federal funding agreement. The Federal government shall have the right to practice or have practiced for or on behalf of the United States any such invention throughout the world.

There. That does it. No need to chase this through all federal funding agreements, no need for separate reporting and the like, no need for universities to issue pro forma licenses to federal agencies, no need for requirements to file, march-in, preferences for small companies or US manufacture, sharing royalties, assignments, residual rights to the contractor if the government takes title through non-compliance. Done.

This kind of change is what the Supreme Court was referring to in the Stanford v Roche decision when the majority wrote:

We are confident that if Congress had intended such a sea change in intellectual property rights it would have said so
clearly—not obliquely through an ambiguous definition of
“subject invention” and an idiosyncratic use of the word
“retain.”

Continue reading

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An Updated Guide to the Bayh-Dole Act

Ah, COGR has not contacted me yet for help in revising their long-neglected Guide to the Bayh-Dole Act. While I waited for their call, I put together this text for a brochure that might serve until they have finished revising, correcting, and updating their Guide. It’s a draft, of course, and I expect I will be revising it in the coming days.

The Bayh-Dole Act:  An Updated Guide
to the Law, Implementing Regulations, and Impact

 

The Bayh-Dole Act Today

The Bayh-Dole Act, Public Law 96-517, has had far-reaching consequences. Bayh-Dole limits how federal agencies may require assignment of title to inventions made in faculty-led research supported with federal funds. The Act requires agencies to offer university-hosted inventors using federal funds a fundamental option for any invention they may make:  choose an invention management agent or allow the government to decide the disposition of the invention. Continue reading

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Problems with COGR’s 1999 "Guide" to Bayh-Dole

In 1999, the Council on Governmental Relations, a non-profit organization that fronts for over 100 research universities on lobbying and advocacy issues, produced an influential summary of the Bayh-Dole Act, “The Bayh-Dole Act:  A Guide to the Law and Implementing Regulations.” The COGR summary has made its way to a number of university technology transfer office web sites and may well be the primary authority for many in understanding the Act. Unfortunately, the COGR summary has got Bayh-Dole wrong in critical places and contributes to the misapprehension of the Act, the Standard Patent Rights Clause, and university invention policies.

I wrote to COGR at one point a few years ago asking for a clarification on their interpretation of Bayh-Dole and they didn’t even bother to reply. Later, I saw a public copy of some fun email where COGR folks worried to some other folks about my examination of Bayh-Dole and appear to fret in passing that maybe I had a point. So folks at COGR, perhaps, can take this as an open letter about where they might revise their Guide to Bayh-Dole, and perhaps in doing so take the time to point out their changes to the broader community, for everyone’s benefit.  Since the Supreme Court’s ruling in Stanford v Roche, which made it clear that Bayh-Dole is not a statute that vests ownership of inventions made with federal support with the university that hosts the research, COGR really does need to reconsider the status of its published documents pertaining to Bayh-Dole. Of course, if they want assistance, I’m available to help.

We will go through the brochure section by section. So open up a second browser window, and follow along. Here is are links to Bayh-Dole and to the implementing regulations, if you want to check text for yourself.  Continue reading

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Compulsion, Fifth Amendment Taking, and SPRC (f)(2)

Given the apparent intention of certain advocates for Bayh-Dole that the purpose of the law should be that universities come to own faculty inventions made with federal support, thereby effectively cutting off Research Corporation and other independent invention management agents from having direct access to faculty inventors, so as to give the advantage to the single-university-dedicated licensing offices, why did the Department of Commerce feel the need to insert the (f)(2) requirement in the Standard Patent Rights Clause?

Many university administrators and legal counsels rallied to amicus briefs fronted by organizations they populate, such as AAU, APLU, and AUTM, and argued that Bayh-Dole is a vesting statute, that it changes a fundamental of US patent law, in defiance of the US Constitution, to make title to inventions made with federal support vest with the university employer rather than with the faculty inventor.   Short of the vesting argument, there are a number of variations:  that Bayh-Dole requires inventors to assign, or prevents inventors from assigning to anyone else, or gives university employers “first right” or “right of first refusal” to such assignments.  None of these arguments hold up on a reading of the law.  It’s all really so much bombast, but it is presented as the suave pronouncements of authorities on the subject.  Or, put another way, the arguments express a deep-seated projection that whatever Bayh-Dole was about, it should have been–and therefore really was–about university administrators gaining expedited ownership of faculty inventions, helped by a glorious new federal law to make administrative acquisition of inventions unilateral, expeditious, and certain.

The situation has been made all the worse because a number of “experts” among university administrators and legal advisors have asserted that Bayh-Dole vests/requires assignment of invention title to university employers.  Continue reading

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Three Responses to the SPRC post-Stanford v Roche

In the Bayh-Dole Act,  a “subject invention” is defined as

any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement… (35 USC 201(e)).

A “contractor” is defined as

any person, small business firm or nonprofit organization that is a party to a funding agreement. (35 USC 201(c)).

A “funding agreement” is

any contract, grant, or cooperative agreement entered into between any Federal agency other than the Tennessee Valley Authority, and any contractor for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.

That much is fine.  But there’s another sentence:

Such term includes any assignment, substitution of parties, or subcontract of any type entered into for the performance of experimental, developmental, or research work under a funding agreement as herein defined. Continue reading

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Digging in New Places, Following Old Patterns

An article in a recent Economist reports that elite craft industries in Italy–fashion and leather goods–are unable to find new workers even though there are jobs available that pay well and youth unemployment is 35%.  It seems that youth are being lured (or pressured) to take yucky college courses in the hope of obtaining jobs with apparent higher status than that of making textile things.  One might think that the honor of craft work has diminished, not as a result of anything about the work itself, but for other reasons.  It may be part of a larger ethos, that somehow making things is the domain of machines, even if they cannot do it so well, and repairing things is, well, why do that when things can be thrown away and new machine-made things purchased?  “No customer serviceable parts inside–really, we mean it, we designed it that way, it is part of our business model!”

In economic development circles, a lot of the talk is about jobs, and a currently trendy way to talk about jobs is with the language of innovation and collaboration.  In part, this appears to be a patch-thinking selection of wording from Porter’s work on industry clusters.  There, a cluster forms as firms interact with each other, do business with one another, and share economies of scale and visibility by co-locating, and as a consequence recruiting new talent and suppliers to the area.  But in economic development studies like the ones commissioned at the level of a city or county, industry cluster often means merely grouping a bunch of businesses under the same category, regardless of whether they do business with one another, or have sufficient critical mass to distinguish their products and services regionally let alone nationally or internationally, or enjoy any economies of scale or externalities as a result.  For economic development studies, apparently, having a clump is as good as a cluster. Or perhaps it is the case that policymakers believe they can turn clumps into clusters by writing a report about it and hoping. Continue reading

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