Another question on RE: what to do if a subcontractor has a subject invention?–3

Posted on October 9, 2019 by Gerald Barnett

Now for the mess. The standard patent rights clause inserts a provision that’s not authorized by Bayh-Dole and is a screwed up version of an FPR provision. This is the provision for a written agreement in 37 CFR 401.14(f)(2).

The contractor agrees to require, by written agreement, its employees, other than clerical and nontechnical employees, to disclose promptly in writing to personnel identified as responsible for the administration of patent matters and in a format suggested by the contractor each subject invention made under contract in order that the contractor can comply with the disclosure provisions of paragraph (c) of this clause, to assign to the contractor the entire right, title and interest in and to each subject invention made under contract, and to execute all papers necessary to file patent applications on subject inventions and to establish the government’s rights in the subject inventions.

This is a big wad. Let’s reduce it:

The contractor agrees to require, by written agreement, its employees

to disclose promptly each subject invention

to assign to the contractor the entire right, title and interest in and to each subject invention

and to execute all papers necessary to file patent applications on subject inventions and to establish the government’s rights in the subject inventions.

Continue reading →

Posted in Bayh-Dole | Tagged , | Comments Off on Another question on RE: what to do if a subcontractor has a subject invention?–3

Another question on RE: what to do if a subcontractor has a subject invention?–2

Posted on October 8, 2019 by Gerald Barnett

We are working through what to do if a subcontractor under a federal funding agreement for research or development has a subject invention–that is, an invention within the definition set out by Bayh-Dole that the subcontractor has acquired and was made under the funding agreement.

We turn now to the basic grant of Bayh-Dole, 35 USC 202(a), to see about subcontractors:

Each nonprofit organization or small business firm may, within a reasonable time after disclosure as required by paragraph (c)(1) of this section, elect to retain title to any subject invention

There a bunch of provisions that follow, but this is the basic gesture. Instead of “contractor” we have “nonprofit organization or small business firm.” That’s a weirdness. One would like to think that only nonprofits and small businesses that are contractors–parties to the funding agreement–are included in this provision. But that’s not necessarily the case. Let’s follow the reasoning out for those nonprofits and small businesses that are contractors. In that case, if one is a contractor, then one has the right to keep ownership of any invention (arising in work supported by the federal government) that one has acquired ownership of. Bayh-Dole has nothing to say about how one goes about acquiring ownership or from whom. The Supreme Court in Stanford v Roche made it clear that to acquire ownership of an invention from the inventor requires the established ways of doing so–by written assignment, say. Bayh-Dole offers no magickal vesting or mandate or first option or second option twice removed to give a contractor any advantage in acquiring inventions from inventors. Continue reading →

Posted in Bayh-Dole | Tagged , , , , | Comments Off on Another question on RE: what to do if a subcontractor has a subject invention?–2

Another question on RE: what to do if a subcontractor has a subject invention?–1

Posted on October 7, 2019 by Gerald Barnett

Bother. For the TL;DR crowd, I’ll copy the end to the beginning:

What to do if a subcontractor has a subject invention?

It’s not yours. It’s theirs.

If the subcontractor is a company, then if you have previously negotiated a deal to acquire inventions, regardless of any future subcontracting relationship on any federal contracts, then pull out that deal and send notice. Otherwise, make an offer.

If the subcontractor is an employee inventor, and you are a for-profit company, then you do the same thing–pull out the patent agreement and send notice.

If the subcontractor is an employee inventor, and you are a nonprofit operating with a federal grant, then you cannot have a deal in which the consideration for the obligation to assign is continued employment or use of resources for work under the grant, as you the employer have permitted the employee to work in the federally funded research and are required to require the written agreement that makes the employee inventor a party to the grant funding agreement and therefore the employee inventor is a subcontractor–a contractor operating under the inventor owns patent rights clause at 37 CFR 401.9 not under institution owns patent rights clause at 37 CFR 401.14. Make an offer.

Okay, now back to the discussion that documents the short answer.

Bayh-Dole governs the disposition of ownership of certain inventions made in research work funded by the federal government. The disposition of ownership, however, has only to do with a tug of war between a contractor having acquired ownership and a federal agency required by law or otherwise wanting to obtain ownership. An invention that’s (i) otherwise patentable or may be patentable (but could turn out not to be patentable) or is a plant variety that’s not patentable and (ii) is made in performance of work under a funding agreement becomes a subject invention when (iii) it is acquired by a party to the federal funding agreement (a “contractor”). When a contractor–a party to a federal funding agreement–acquires an invention made in performance of work under a funding agreement–then Bayh-Dole applies. If in doubt, read the Supreme Court decision in Stanford v Roche. Oh, heck. Here: Continue reading →

Posted in Bayh-Dole | Tagged , , , | Comments Off on Another question on RE: what to do if a subcontractor has a subject invention?–1

Another question on RE: Can Bayh-Dole void an exclusive license?

Posted on October 4, 2019 by Gerald Barnett

Can Bayh-Dole void an exclusive license?

Let’s unravel this one. A rewrite–

Question: Can a federal agency void an exclusive license under Bayh-Dole’s standard patent rights clause?

Answer: Yes.

Now some text. The exclusive license voiding has more to it than just the easy answer.

Bayh-Dole authorizes the creation of standard patent rights clauses to be used in federal funding agreements with nonprofits and small companies for research or development. Bayh-Dole also stipulates what the default provisions for the clauses should be. One of those default clauses, at 35 USC 203, involves “march-in” under which a federal agency can require a contractor to grant licenses, or if the contractor fails to do so, to grant the licenses itself. Continue reading →

Posted in Bayh-Dole | Tagged , , | Comments Off on Another question on RE: Can Bayh-Dole void an exclusive license?

An invention is not a thing, 4: Compounds patented by GSK

Posted on October 3, 2019 by Gerald Barnett

An invention is not a thing, it is a collection or set.

Consider this invention, “Compounds.” A US patent (10,428,078) was issued to GlaxoSmithKline Intellectual Property Development Limited on October 1, 2019–just a few days ago. An earlier patent (10,125,141) with some other claims issued in 2018. There are published applications or issued patents related to these US patents derived from a common PCT patent application in a number of other countries as well, including Argentina, Australia, Brazil, Canada, China, Spain, Japan, Korea, Russia, Taiwan, and Uruguay.

Here is the Abstract:

The present invention relates to novel compounds that inhibit Lp-PLA.sub.2 activity, processes for their preparation, to compositions containing them and to their use in the treatment of diseases associated with the activity of Lp-PLA.sub.2, for example Alzheimer’s disease.

So the invention relates to novel compounds that affect the activity of an enzyme that changes fats into fatty acids that are implicated in various diseases, such as Alzheimer’s disease. If an invention were a thing, we might expect to find here a claim for one compound that provides a therapeutic benefit in the treatment of Alzheimer’s. But that’s not the case. It’s not one compound, it’s not one disease. Continue reading →

Posted in Bayh-Dole, Policy | Tagged , , | Comments Off on An invention is not a thing, 4: Compounds patented by GSK

An invention is not a thing, 3: Some university policy definitions of invention

Posted on September 30, 2019 by Gerald Barnett

An invention is not a thing. An invention is a set of practices and objects. Invention is broader than just what’s patentable, as is the case with Bayh-Dole’s definition of invention, which includes stuff that’s not patentable and stuff that people think might be patentable but turns out not to be patentable. The edges of the scope of Bayh-Dole’s definition then are as flexible as what people think about inventions. If they don’t think certain inventions are patentable, then, well, those inventions fall outside Bayh-Dole’s definition even if those inventions turn out to have been patentable. Obviously, if someone files a patent application on a given invention, then someone at least–a patent attorney, say–thinks the invention may be patentable.

Invention, then, has all sorts of meanings, depending on context. Universities write policies with all sorts of corny definitions of invention. It would be funny except the consequences can be horribly sad. Look–here are some:

Northwestern:

Invention: A machine, method, manufacture, composition of matter, or design that may or may not be patentable under the patent laws of the U.S. or a foreign jurisdiction.

Northwestern recites patentable subject matter and then provides a useless division between stuff that “may be” patentable and stuff that “may not be” patentable. Talk about ambiguity. Excluded from the definition: stuff that *is* patentable and stuff that *is not* patentable. A definition of what is perhaps. Worse, an invention is not merely a machine–it’s a machine that is new in some way. And to make it a patentable machine (which Northwestern’s policy does not care about), the inventive aspects of the machine must be new, useful, and non-obvious. It’s a stupid definition–it means “anything that may be or may not be” patentable. Anything that may not be patentable is pretty much *anything*. Sorry, Northwestern. It’s stupid. Continue reading →

Posted in Bayh-Dole | Tagged , , , | Comments Off on An invention is not a thing, 3: Some university policy definitions of invention

An invention is not a thing, 2: The fringe cases and federal policy

Posted on September 28, 2019 by Gerald Barnett

We are working through the logic of Bayh-Dole’s requirements on ownership of inventions made in work receiving federal support. We have made the point that an invention is not a thing–it is a category, a set, a collection of ways to practice. The definition of invention varies based on context. Federal patent law, other than Bayh-Dole, has no definition of invention. So we are taking apart Bayh-Dole’s definition of invention, which is, basically, an invention is anything that is or may be patentable and plant varieties that aren’t. This definition has a scope that’s beyond what is patentable and we have been considering the “may be patentable” part, which we have called strange because it covers stuff that turns out to be patentable as well as stuff that turns out not to be patentable and therefore not the stuff federal patent law is looking for.

In the general case, where a contractor acquires ownership of an invention made in work receiving federal funding, Bayh-Dole could easily be reduced to the government gets a royalty-free, non-exclusive license and that would be it. No special disclosure requirements, no electing to retain title, and all that paperwork bother that doesn’t do a thing for innovation, commercialization, practical application, or US manufacturing.

But what about other cases, other than when a contractor acquires ownership of an invention made in work receiving federal funding? Let’s consider fringe cases. Continue reading →

Posted in Bayh-Dole, Policy | Tagged , , , | Comments Off on An invention is not a thing, 2: The fringe cases and federal policy

An invention is not a thing, 1: the “may be patentable” category

Posted on September 27, 2019 by Gerald Barnett

An invention is not a thing. An invention not a “cotton gin” or a “light bulb,” even though a cotton gin and a light bulb were once inventive. It doesn’t help to use things as proxies for inventions.

An invention is a set, a category of possible things (things = objects or techniques). Often lots of “things.” A patent teaches the category and claims as much of the category as the inventor chooses to claim. The category consists of variations and functional equivalents–all the ways of practicing the invention. Each “way” may be a thing or a subset of things. The “invention” is all the ways of practicing the invention. A sum, a collection, a set.

The invention set itself is not strictly defined. Federal patent law does not define invention. Well, except for the Bayh-Dole part of federal patent law does define invention–but that definition isn’t particularly helpful. Here it is (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.).

An invention then, for patent law, is what patent law pertains to. (Plus, through a silly drafting cleverness, also non-patentable plant varieties.) Even here, the definition is expansive–“is” patentable restricts an invention set to the scope of possible claims for the set, even if an inventor does not make any or all of those claims, but “may be” is strangely broad. The scope of “may be” includes all those ways of practicing the invention that are not patentable but this condition is not obvious at the start–through lack of awareness of the prior art, through not having the test data to demonstrate that those ways perform as conceived, through lack of actual “utility,” and the like. Continue reading →

Posted in Bayh-Dole, Policy | Tagged , , | Comments Off on An invention is not a thing, 1: the “may be patentable” category

Would you believe still more on Can universities assign patent rights under Bayh-Dole?

Posted on September 25, 2019 by Gerald Barnett

The distinction between exclusive license and assignment also matters in Bayh-Dole practice. Bayh-Dole’s definition of funding agreement at 35 USC 201(b) makes clear that any assignment by a contractor extends the funding agreement–and necessarily the patent rights clause–to the assignee. The assignee becomes a party to the funding agreement, a “contractor” per the definition at 35 USC 201(c). Each added contractor then works with the form of the standard patent rights clause specific to its standing–either a for-profit or nonprofit–with the stipulation, following 35 USC 202(c)(7)(A), that if a nonprofit assigns to a for-profit, the nonprofit patent rights clause must still apply to the for-profit.

This asymmetry is in its way huge. When a for-profit takes assignment of a subject invention from a nonprofit, it must, in addition to the general requirements of Bayh-Dole and its patent rights clause, also follow the nonprofit-specific requirements of 35 USC 202(c)(7)–limiting assignment, sharing royalties with inventors, deducting from income earned and royalties only administrative expenses to manage subject inventions, dedicating any remaining income and royalties to scientific research or education, and working to attract small businesses as licensees.

No normal for-profit company in its right profit-seeking mind would accept assignment of a subject invention from a nonprofit. 

And that, too, is a fundamental policy of Bayh-Dole. Continue reading →

Posted in Bayh-Dole | Tagged , , , | Comments Off on Would you believe still more on Can universities assign patent rights under Bayh-Dole?

More on Can universities assign patents rights under Bayh-Dole?

Posted on September 24, 2019 by Gerald Barnett

35 USC 201(b) makes clear that any assignee of a subject invention becomes a party to the funding agreement–a “contractor” in Bayh-Dole’s definitional usage:

The term “funding agreement” means 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. 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.

Thus, assignment of a subject invention (and associated patent rights) does way more than an ordinary assignment of a patent. The assignee becomes a party to the federal funding agreement and by the definitions of Bayh-Dole, is a contractor subject to the patent rights clause of that funding agreement. The provisions of Bayh-Dole, communicated through the patent rights clause, then run with ownership of any subject invention (and any patent rights). It’s not just that the federal government has a license to practice any subject invention, regardless of assignment–it’s also that the owner of the subject invention must comply with the requirements of the patent rights clause, including disclosure of subject inventions (an invention may be assigned before it has been disclosed to a federal agency, for instance) and reporting on utilization and exposure to march-in interventions. Continue reading →

Posted in Bayh-Dole | Tagged , , | Comments Off on More on Can universities assign patents rights under Bayh-Dole?