What is Bayh-Dole and why is it important to Technology Transfer?

Posted on April 8, 2013 by Gerald Barnett

Here is a short description of the Bayh-Dole Act at a US university tech transfer office web site.   There are many things wrong with the four paragraphs here.  Consider:

In 1980, the Bayh-Dole Act (PL 96-517, Patent and Trademark Act Amendments of 1980) created a uniform patent policy among the many federal agencies funding research.

Generally correct.  A good start.  This would be a good place to end, too.  But no, we go on.

As a result of this law, universities retain ownership to inventions made under federally funded research.

Only in a strange reading of “as a result of this law” to mean “taking advantage of ignorance about the law” can this statement be somewhat true.  Certainly “retain ownership” here is meant to mean “take ownership” and not “may elect to retain ownership if the university has obtained that ownership through assignment from the inventors.”  The language in the statement is the usual conflation of “elect to retain title” with “elect title” meaning “take title.”  After Stanford v Roche, it is clearly untrue.  That it persists in university web publications, where it could be readily revised, is something akin to contempt of court.

In return, universities are expected to file for patent protection and to ensure commercialization upon licensing.

There is no such bargain in Bayh-Dole.  Continue reading →

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The (f)(2) agreement that your university must require you to sign

Posted on March 7, 2013 by Gerald Barnett

[Updated for the 2018 NIST regulatory revisions.]

If you are working on a grant at a university, and the grant is from the US Government, and your university has accepted a standard patent rights clause in the form of 37 CFR 401.14, then your university has agreed to require you to make a written agreement of the following form:

Agreement to Protect the Government’s Interest

Title of Proposal:  _________________________________________________

Funding Agency:  ________________        Federal Contract #: _________________

Pursuant to the standard patent rights clause at 37 CFR 401.14(f)(2), I hereby agree (i) to disclose promptly in writing to University personnel responsible for patent matters using a University-provided disclosure form each subject invention I make within the planned and committed activities under the Federal Contract in order that the University can comply with the disclosure provisions of the patent rights clause of the Federal Contract, and (ii) to execute all papers necessary (a) to file patent applications on subject inventions and (b) to establish the government’s rights in the subject inventions.

I understand that the subject inventions to be disclosed to the University are only those inventions I have made under the Federal Contract and that the university has acquired from me.

Signed: __________________________         Date ______________________

Printed Name:  ____________________

If you haven’t signed such a document, then your university is not in compliance with its federal funding agreement obligations.  Continue reading →

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(f)(2), The Soul of Bayh-Dole

Posted on February 27, 2013 by Gerald Barnett

[Updated May 2018 to deal with the NIST screwballedness.]

At the heart of the Bayh-Dole Act is the disposition of ownership in inventions made with federal funding at universities. That disposition is intended to provide benefits to the public through the practical application of those inventions. The question for policy and practice, then, is just how this disposition is to come about, and what sorts of behaviors will bring about benefits to the public. For that, we have to look for the soul of Bayh-Dole.

To understand the disposition of invention ownership under Bayh-Dole, one has to see how the Act is structured. The Act applies to federal agencies, instructing them with regard to how they may claim ownership of inventions made with federal support, and when they must allow non-federal parties to claim ownership of such inventions, obtaining instead for the government a non-exclusive license for government purposes. To be clear, Bayh-Dole the law does not apply to universities, nor to faculty inventors (nor to any other inventors).

[Well, the law doesn’t apply to universities but for the bit in 35 USC 202(a) that asserts that nonprofits and small businesses may elect to retain title in inventions made under federal contracts that a contractor has acquired, subject to all the rest of the law and to the provisions of the standard patent rights clause authorized by Bayh-Dole to be created by the “Office of Federal Procurement Policy, after receiving recommendations of the Office of Science and Technology Policy, but now the Secretary of Commerce, as a result of the 1984 amendment to Bayh-Dole and without any recommendations from anyone.]

To show how the disposition of inventions comes about, one has to read both the law and the implementing regulations. Bayh-Dole is a law about how the federal government enters into funding agreements that have a patent rights clause. That is, Bayh-Dole is about the structure of federal agreements.   Continue reading →

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Freedom to Innovate in Washington State: Undoing the Embarrassing and Deceptive Muddle of UW and WSU Invention Policies

Posted on February 18, 2013 by Gerald Barnett

Here in the state of Washington, we are working to free faculty at public universities from state control of scholarship.  That’s the purpose of SB 5247, now in committee in the Washington state senate.

Presently both the University of Washington and Washington State University claim ownership of faculty “inventions” asserting through policy statements that such ownership is a condition of employment and/or use of university resources, even though there are a multitude of good reasons for them not to do so.

University of Washington

The University of Washington patent policy claims (Executive Order 36) to cover “innovations” rather than, say, inventions that are or may be patentable.  An “innovation” is something new to an adopting party.  More generally, it is “an introduced change in the established order”.  In economic development terms, an innovation is often equated with “a new product offered for sale”.  Thus,  I have put “inventions” in quotes–since the policy aims to define invention to be “an invention, or a non-invention that we choose to call an invention anyway”–which if one thinks about it only a little bit is a really expansive claim.    Continue reading →

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The University as Bayh-Dole Privateer

Posted on February 15, 2013 by Gerald Barnett

Why would a nation-state seek to claim ownership of inventions made by its citizens?  That is, what uses would a nation-state put its patent system to, beyond those that one might expect of an individual inventor, entrepreneur, investor, company, university, or local government?   Put another way, why does the Bayh-Dole Act insist on the use of the patent system to promote the use of federally supported inventions and discoveries?   Why not allow such inventions to enter the public domain or be dealt with by their (mostly) faculty inventors?

We might divide possible reasons into ones directed at domestic activity–innovation, prosperity, competition–and ones directed at international activity–the relationship between nations affecting military technology, trade, and economic advantage.  (In all of these, of course, there is money, fame, power, altruism, envy, and lulz but considering these will be for another time.)

A patent by its nature is a government-granted right to permit a patent owner to exclude others from practicing an invention.   Continue reading →

Posted in Bayh-Dole, Commons, Innovation, Metrics, Policy, Shanzhai | 1 Comment

Fixing the Flaw in Bayh-Dole with Freedom to Innovate Legislation

Posted on February 12, 2013 by Gerald Barnett

The essence of the Bayh-Dole Act is that government, though it supports faculty-led university research, should defer to investigators and inventors who wish to develop the inventions they make. Bayh-Dole does this by pre-approving a broad set of arrangements that inventors might make to promote the use of their inventions, subject to the condition that [if they assign their inventions or file patent applications, that] they use the patent system and [the law makes it easy if they choose to that they] work with an organization that has as a primary function the management of inventions, or with the university that hosted their work, even if the university doesn’t have anyone who manages inventions.

In this way, the Bayh-Dole Act is an insightful resolution to the debate over whether the federal government in supporting faculty research is contracting to own important research results, such as inventions, or is simply making donations and doesn’t care at all what happens with results. What is especially important is that Bayh-Dole frees up funding agencies so that they do not have to claim everything and review on a case-by-case basis every single proposal by inventors and their invention management associates to develop their inventions. As long as the invention management agent is pre-approved, the government does not have to demand a show of capability, a detailed plan of action, or a set of performance metrics by which progress can be judged. It is a decidedly non-bean-counting approach. Or, put another way, it is an approach that respects the judgment and motivations of university investigators.

Unfortunately, there is a huge flaw in Bayh-Dole, though it could not have been obvious at the time the law was drafted and passed.  Continue reading →

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15 arguments for the university innovation machine… and why they are wrong

Posted on February 6, 2013 by Gerald Barnett

University administrators are hot on the idea of compulsory institutional ownership of faculty “inventions.”  The idea of “invention” is itself the subject of expanding ideas of scope–not just patentable inventions, but pretty much anything that a university administrator thinks could be sold off to trolls, bullies, and speculators. It’s really quite a remarkable account of public service.  But despite reasons why states (in the form of public universities) shouldn’t be controlling faculty scholarship, the value of an independent faculty, the reduction of costs and overhead by developing a diverse network of invention management, and the importance of the university’s role as mediator and sometime steward rather than self-interested greedster, administrators still have these hot flashes of instant wealth.

The clever scheme that’s been cooked up sounds so very excellent:  a system by which all inventions are reported and assigned to administrators, who hire diligent professionals who license the inventions to industry where they are developed into products that save lives and provide happiness, feeding lucrative royalties back to the administrative pot so that taxpayers won’t have to subsidize universities ever again.   Call it the “innovation machine.”  Pay no mind that it doesn’t work, historically hasn’t worked, damages things that it works on, and that no university is willing to report the actual condition of its portfolio of claimed inventions, only success stories that promote the eventual success of the innovation machine.

Somehow, there are still arguments that lead administrators to believe that the innovation machine is a really keen idea.  Continue reading →

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The Kind of Stuff I Do

Posted on January 30, 2013 by Gerald Barnett

While working on a book chapter on Bayh-Dole and university IP practice, I thought that it might be helpful to put together in one place a description of the sorts of projects I have worked on and continue enjoy being involved with. There are any number of folks around who can help a university licensing office do more of the conventional thing–how to file patents, how to market patents, how to interest venture capitalists, how to draft a tight-fisted licensing agreement, and how to present tight-fisted licensing agreements as happy and easy to industry while selling faculty inventors on the idea of instant wealth and a cool Porsche (like the one in the Research Enterprise banner at Laguna Seca) in their university parking lot… though these days, perhaps it would be a cool Tesla. Continue reading →

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Manitoba’s Bold New Licensing Practice

Posted on January 28, 2013 by Gerald Barnett

It’s only a news story, but it shows the continuing set of underlying assumptions about university involvement in innovation. These assumptions just won’t let go. There is a narrative frame around them that squeezes tight. Take a look at this story from the University of Manitoba.

The University of Manitoba is embarking on a new approach to technology commercialization — they’re giving it away.

Well, not exactly.

But instead of hard-boiled negotiations between the university and industry partners on royalties and licensing agreements for intellectual property developed in-house, the university will make the research available to partners with no financial commitment until the company itself starts making money from the technology.

It’s a bold realignment and an attempt to allow innovative work that is going on at the university to get outside the ivory tower.

I’m trying to understand just how this is a “bold realignment.” Back in the day, it was a pretty standard deal–it’s called a royalty-bearing license. One doesn’t pay until one is selling product. While it may be “bold” to return to such a position, it isn’t really a particularly noteworthy thing. There is still a negotiation over royalties to be had–what difference does it make whether payments are due immediately or at some later date?  Surely, that isn’t the biggest issue in a hard-boiled license negotiation, and surely delaying payment doesn’t unboil much of anything. But that’s not the thing that catches my attention. Continue reading →

Posted in Policy, Technology Transfer | 1 Comment

Finding the True Intent

Posted on January 25, 2013 by Gerald Barnett

I have been mulling over this sequence of statements from the court in the case of Shaw v. The Regents of the University of California:

The true intent of a contracting party is irrelevant if it remains unexpressed.

When a public employer chooses instead to enter into a written contract with its employee (assuming the contract is not contrary to public policy), it cannot later deny the employee the means to enforce that agreement.

We also reject the University’s argument that the Patent Policy is a mere personnel policy which it may modify unilaterally. Although the University is entitled to revise its Patent Policy, it cannot do so with respect to Shaw because of its written agreement with him.

In the Shaw case, the University of California argued that it had intended something in its patent policy that wasn’t expressed in the language of the policy. The court was having none of it.   Continue reading →

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