Another question on RE: When does Bayh-Dole not apply?–4

Posted on October 29, 2019 by Gerald Barnett

Now that you have a better idea about Bayh-Dole and have done some thinking about why someone might want it Bayh-Dole to apply and others might not want it to apply, let’s work the definition of invention (at 35 USC 201(d)):

The term “invention” means any invention or discovery which is or may be patentable or otherwise protectable under this title or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

This is actually a problematic definition. Bayh-Dole is part of federal patent law, but federal patent law does not otherwise define invention. The point of federal law is to set out when someone may receive a patent on an invention that meets the law’s requirements for patenting, and what rights a person has who holds a patent. What matters is what is patentable, not the word for whatever it is that is patentable. Patent law concerns *the conditions on which one can get a patent*, not what defines everything  for which one might imagine getting a patent.

Bayh-Dole could be really simple:

If you decide to seek a patent, then specially report the discovery or invention on which you have based your decision.

No definition of discovery or invention is necessary. It’s whatever you define as the subject of your patenting effort. If a contractor doesn’t seek a patent, then the discovery or invention will be disclosed to the federal government as part of findings without any special hoo-haw about patentable inventing. But Bayh-Dole also adds authorization for federal agencies to deal in exclusive licenses–patent monopolies, if you wish–and that provides a motivation for attempting to capture everything that anyone at a federal agency (or someone in a company that has the ear of someone at a federal agency)–more than the inventor, or the contractor–might want the federal government to patent and so control exclusively.

Look at the logic of Bayh-Dole’s definition:

“invention” means both “patentable invention” and “not patentable invention” including “plant varieties” that may be protectable and may not be protectable, and anything else that is “otherwise” protectable under federal patent law (i.e., “this title”–title 35 USC) but not “patentable.”

If an invention “may be patentable” then the “may” also means that the invention might not be patentable, but patentability has not yet been conclusively decided, and so an invention comes within the scope of Bayh-Dole’s definition of invention whenever patentability has not been conclusively ruled out. That is, a final rejection of a patent application from the USPTO or a determination that an invention otherwise fails to meet the statutory requirements for patenting–directed to non-patentable subject matter, application filed after a statutory bar to patenting, and the like. But as long as someone thinks an invention may be patentable and hasn’t bothered to have a determination made otherwise, the invention clearly “may” be patentable–at least in the indecisive, non-authoritative mind of someone. Continue reading →

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Dialogue Concerning the Two Chief Invention Systems

Posted on October 28, 2019 by Gerald Barnett

A Dialog Concerning the Two Chief Invention Systems

Interlocutors

Libero , Proprietario, Kissero

Kissero: Look! Here’s something I’ve done in my research!

Libero: Whoa! Very interesting! Was it done under our federal contract?

K: Yeah, I think so. During work hours, in the same subject area as our contract.

L: Okay–write up a report for the government.

K: This is pretty neat stuff.

Proprietario: Yup. But once the government gets it, they are free to tell everyone else. We need to act now to prevent others from using this stuff, given that once we report it to the government, we won’t be able to prevent others from knowing about it. We need to get a patent application filed asap. This is our one chance to stake out this territory. We will look bad if we let this slip away.

K: What good is a patent? Continue reading →

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Another question on RE: When does Bayh-Dole not apply?–3

Posted on October 28, 2019 by Gerald Barnett

Back for more of when Bayh-Dole does not apply, I see. Well, let’s get serious about this.

Let’s look at the Bayh-Dole definitional cascade for subject invention. We worked through “invention”–strange, broad, both patentable and not demonstrably not patentable, except for plant varieties, which are demonstrably not patentable. But Bayh-Dole’s definition of “invention” is not what matters. What matters are the restrictions placed on invention in the definition of subject invention. Bayh-Dole’s general policy statement at 35 USC 200 concerns inventions “arising in federally supported research or development” and Bayh-Dole’s confidentiality provision at 35 USC 205 authorizes federal agencies to withhold from the public information disclosing any “invention in which the Federal Government owns or may own a right, title, or interest (including a nonexclusive license).” Bayh-Dole’s federal licensing requirements at 35 USC 207 concern “inventions in which the Federal Government owns a right, title, or interest.” 35 USC 208 authorizes the Secretary of Commerce to create regulations concerning the licensing of “federally owned” inventions, and 35 USC 209 specifies the management of such licensing.

Bayh-Dole takes some pains to distinguish subject inventions from other “inventions made in the performance of funding agreements” (35 USC 210(b)) and “inventions made in the performance of work under funding agreements” (35 USC 210(c)). Subject inventions are a carve out of not just the general category of inventions but also of inventions made in the performance of work under a funding agreement. Bayh-Dole’s contracting provisions–35 USC 202, 203, and 204–apply only to subject inventions. It is subject inventions that a contractor may continue to own if the contractor obtains ownership. It is subject inventions that must be disclosed. It is subject inventions for which a nonprofit or small company contractor must file a patent application.

If an invention is not a subject invention, then the portion of Bayh-Dole applying to federal contracting does not apply. So it is essential to understand what a subject invention is–because everything else is not. The definition of subject invention in turn involves a number of other definitions– invention/funding agreement/contractor/made. It’s not pretty. Let’s say that this ugliness is intended rather than is a defect. That’s how most features show up in statutory hell. Continue reading →

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Another question on RE: When does Bayh-Dole not apply?–2

Posted on October 27, 2019 by Gerald Barnett

Let’s get into the details–dance with devils, reveal Bayh-Dole’s true character. Get some sympathy.

Let’s consider again that heading of Title 35 USC, Chapter 18:

“Patent Rights in Inventions Made with Federal Assistance.”

In Bayh-Dole, “patent rights” are restricted, relative to ordinary patents, “patent rights” includes contractor “rights to patent” relative to federal claims on that right, “patent rights” also includes the federal government’s right to grant exclusive licenses to inventions owned by the federal government; “invention” is broadened in weird ways to include non-patentable stuff, and “federal assistance” is really, really broad.

Bayh-Dole does four things:

authorizes as a default that nonprofit and small business federal contractors, if they acquire a covered invention, may, by timely disclosure and notice, preempt any claim of federal ownership to that invention.

establishes procedures by which federal agencies and new statutes can vary from this default.

authorizes federal agencies the right to grant exclusive licenses in inventions owned by the federal government and establishes procedures for federal licensing.

establishes the patent property rights in covered inventions, including imposing a working requirement for those inventions, whether owned by a contractor or by the federal government.

establishes the conditions upon which the federal government may receive a license to or ownership of a subject invention or require the licensing of a subject invention.

Bayh-Dole applies generally to inventions arising in federally supported research or development (35 USC 200), applies to rights to subject inventions acquired by nonprofit and small business contractors (35 USC 202(a)), applies to other federal statutes (35 USC 210), and applies to federal agencies (most everything else). Not in this list? Bayh-Dole doesn’t apply. Continue reading →

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Another question on RE: When does Bayh-Dole not apply?–1

Posted on October 26, 2019 by Gerald Barnett

When does Bayh-Dole not apply?

Bayh-Dole is part of federal patent law, Title 35 USC, placed in Chapter 18 with heading “Patent Rights in Inventions Made with Federal Assistance.” Thus, broadly, we can expect that Bayh-Dole does not apply to non-inventions, to inventions for which there are no patent rights, to inventions not made with federal assistance.

Thus, Bayh-Dole does not apply to original works of authorship, not to copyrights, not data rights, not trade secrets, not gathered stuff, not ideas, not know how, not domain names or trademarks, mask works, experimental set ups, computer software. Not “intellectual property” in general, not even “intellectual property” made with federal assistance, not even inventions made with federal assistance that are excluded from Bayh-Dole’s scope, such as funding agreements not for research, experimental, or development work. Funding agreements where the primary purpose is training or education are within Bayh-Dole’s scope (see 35 USC 212) but Bayh-Dole then exempts such agreements from Bayh-Dole’s contracting provisions, and so Bayh-Dole doesn’t apply to inventions made with federal assistance under those funding agreements, even though it applies to those agreements.

That’s not quite it, but it is a good place to end for people who just want a sound bite. TL;DR. Heave ho, off you go.

Continue reading →

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Another question on RE: Are data rights subject to Bayh-Dole?

Posted on October 25, 2019 by Gerald Barnett

Are data rights subject to Bayh-Dole?

No.

Sigh. Yes, in a way.

Data rights generally involve the right to control disclosure and/or use of technical information generated within research, experimental, or development work. While some data may involve copyrights (as in selection and arrangement of data as an original work of authorship, or data that takes the form of drawings, photographs, or text that is otherwise covered by copyright), the primary method of establishing and controlling data rights is by means of trade secret, which involves information with economic value and that is not generally known to the public and for which the proprietor makes reasonable efforts to prevent public disclosure. Research data, upon creation/collection, is not likely to be publicly known, may or may not have economic value, and the means for preventing disclosure is typically by a non-disclosure agreement or is established by an implied duty of non-disclosure or by privilege (as in attorney-client privilege).

Does Bayh-Dole protect trade secrets? No, not directly, but generally Bayh-Dole restricts federal government disclosure of some information reported by contractors pertaining to subject inventions. Does Bayh-Dole deal in copyrights? No.

Contractors are not constrained by Bayh-Dole in their use or disclosure of data developed under federal contract, other than in two obscure circumstances for data essential to the practice of a subject invention: (1) the contractor has failed to disclose the subject invention or failed timely to achieve practical application and a federal  receives title to the subject invention–the standard patent rights clause stipulates that the contractor does not retain a non-exclusive license to practice the invention; and (2) a federal agency grants an exclusive license in that invention, following a march-in process, that conveys all rights in the invention to an exclusive licensee. In either case, the contractor would not have sufficient rights to use the data to practice the invention because the contractor would no longer have the right to practice the invention. But the contractor could still disclose the data and use the data for anything other than practicing the invention. But this is very obscure stuff, nearly pigs with wings. The general answer is “no” and you can stop reading now and go have a social life. Continue reading →

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The consequences of Bayh-Dole non-disclosure of inventions, 3

Posted on October 23, 2019 by Gerald Barnett

Finally, we reach a non-empty consequence of an invention becoming a subject invention, even if not disclosed to the federal agency. This consequence has to do specifically with subject inventions made under the nonprofit patent rights clause. Bayh-Dole stipulates that each federal funding agreement will contain a standard patent rights clause. But there are three versions of this clause–one version for nonprofits, another version for small business contractors, and a third version for inventors treated as small business contractors. NIST has created a fourth version, taking up Reagan’s extension of Bayh-Dole practices to large company contractors–but botches this version because Reagan’s executive order cannot preempt federal law nor can it use Bayh-Dole to preempt federal law for contractors that are beyond the scope of Bayh-Dole.

Anyway, the general idea in Bayh-Dole is that contractors operate under the version of the standard patent rights clause that is appropriate to them. Thus, nonprofits have 37 CFR 401.14(a) thru (l), small business contractors have 37 CFR 401.14(a) thru (l) but not (k), and inventors as small business contractors have a subset of the small business contractor clause as set out at 37 CFR 401.9. The implementing regulations for Bayh-Dole stipulate that when a contractor adds parties to a funding agreement by subcontract, the subcontract’s patent rights clause takes the form appropriate to the status of the subcontractor. If the prime contractor is a for-profit and a subcontractor is a nonprofit, then the nonprofit subcontractor operates under the nonprofit version of the standard patent rights clause even though the for-profit operates under the for-profit version.

However, this is not the case when a nonprofit prime contractor adds parties to the funding agreement by assignment. Here Bayh-Dole is express that in this situation, the assignee must operate under the nonprofit’s patent rights clause. Once a subject invention is acquired by a nonprofit contractor, the nonprofit patent rights clause–and in particular paragraph (k)–applies to any assignee (35 USC 202(c)(7)(A)): Continue reading →

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The consequences of Bayh-Dole non-disclosure of inventions, 2

Posted on October 22, 2019 by Gerald Barnett

We are looking at the consequences of a contractor not disclosing a subject invention to the federal agency that funded work in which the invention was made. One consequence is that the federal agency “may receive title” to such an undisclosed invention, provided that the federal agency finds out that an invention has not been disclosed and then is able to define that invention with sufficient clarity (i.e., obtains disclosure) so that it can properly require the contractor to convey title in that invention. Logically and practically, this requirement is a mess. How do federal agencies find out that there’s a subject invention out there–if the invention has not been disclosed? And what public good is served by the federal government taking ownership of such an invention? No, this way leads to economic mayhem, not to any particular public advantage.

One might say, then, that disclosure is the necessary step to enable Bayh-Dole preemption of other federal statutes and regulations pertaining to ownership. But that’s the case only with regard to the disposition of ownership of subject inventions as between a contractor and the laws under which that federal agency contracts for research other than under the Bayh-Dole standard patent rights clause. Whether or not a federal agency has the right to require assignment of a subject invention is distinct from the other requirements imposed on subject inventions by Bayh-Dole. Continue reading →

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The consequences of Bayh-Dole non-disclosure of inventions, 1

Posted on October 21, 2019 by Gerald Barnett

If the federal government had the courage to enforce any one thing in Bayh-Dole, it would be the nonprofit assignment and accounting requirements at 35 USC 202(c)(7). The federal government taking title to non-disclosed subject inventions is mostly useless. Let me explain. Continue reading →

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Invention is not a thing, 14

Posted on October 18, 2019 by Gerald Barnett

Bayh-Dole’s public protection apparatus, even unused as it is, makes it clear that the federal invention economic system is intended to be different from that of private exploitation of patents for financial gain. In the federal economic system, patents are to be used to promote use, not suppress use, of all instances of any given invention. This is dramatically different from the idea of simply expanding private speculation on patents to include inventions that have been made in publicly directed projects, as if patent speculators don’t have enough opportunities to speculate and need a federal welfare program in the form of research grants and contracts to help them in their struggle for huge, lottery-style upsides.

For governments that hold patents on inventions, whether federally supported or not, these issues are magnified. State governments, unlike private parties, have obligations to serve the public welfare. Even Bayh-Dole makes this distinction (though like much of Bayh-Dole largely unenforced). Contractors have one public protection apparatus, in the form of 35 USC 202-204; 206 and  37 CFR 401 requirements. Federal agencies have a different public protection apparatus, in the form of 35 USC 207-209 and 37 CFR 404. The striking difference concerns exclusive licensing.

On the contractor side, contractors may license exclusively with few controls–an easily circumvented and regularly waived requirement for a narrow set of exclusive licenses to require U.S. manufacturing. If an exclusive license functions as an assignment of the invention, then nonprofits are required to pass through with the license the nonprofit’s patent rights clause to the assignee. And the federal government may march-in and void an exclusive license for nonuse, failure to meet demand, or failure to comply with the empty U.S. manufacturing requirement.

On the federal side, however, there is a vast apparatus that purports to control exclusive licensing. The government is authorized to grant exclusive licenses, even to the point of assignment of the invention (35 USC 207, finally addressing the statutory gap made clear by the Supreme Court way back in 1933 with its Dubilier decision). 35 USC 209 then lays out criteria under which an exclusive license may be granted.

It’s an involved list of criteria. We will use a broad brush. Continue reading →

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