AAU, APLU, and others aim to “bolster” federal technology transfer, 4

Posted on August 13, 2018 by Gerald Barnett

We are dealing with the bombast that AAU and other “higher education associations” put forward as advice to NIST with regard to how the federal government might better manage its own technology transfer. Instead, the HEAs seek to improve their members’ own technology transfer. The HEAs adopt the fine bureaucratic strategy of insisting they are doing everything well and Bayh-Dole is working as intended while complaining that they don’t have enough money, that the requirements are too demanding, that patent law is a problem, and that the tax code lacks the proper incentives. That is, the university approach to patent monopolies on publicly supported research is not working, but it is not the fault of the HEA members, even though they have adopted a historically failed approach, spent wickedly on it, and ignore all the key requirements of Bayh-Dole while they are at it.

Let’s continue. The HEAs are going to argue for new metrics to account for what universities do in technology transfer, since the metrics that the universities have put out during the Bayh-Dole era apparently are inadequate. But first the HEAs insist on using those old metrics.

The HEAs claim in their advice to NIST that universities received 6,452 US patents in 2016. A PTO search for utility and plant patents assigned to universities shows 10,978 US patents. But only 3,264 recite government funding. The HEA patent figures aren’t even close, and why do the HEAs cite all university patenting when the issue at hand isn’t all university patenting, but rather federal technology transfer–the inventions owned by the federal government, or made at federal labs?

Lost in all of this is the observation that universities get nearly 2/3 of their research funding from the federal government, but only about 1/3 of their patents include a federal funding notice. Isn’t that an amazing result? The HEAs want NIST to look at all university patenting, but not at the oddity that the non-federal funded research is twice as productive in producing patents as is the federally funded research. Now producing patents is itself not a good measure of anything related to technology transfer, innovation, or public benefit–but it does suggest that there are university practices at work that favor dealing with inventions that don’t involve federal funding. Continue reading →

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Bayh-Dole’s preemption of public purposes to re-establish a patent monopoly pipeline

Posted on August 10, 2018 by Gerald Barnett

I wrote a Twitter thread in retweeting this observation.

Don’t forget about Bayh-Dole, passed in the 80s, which enabled the #NIH to use our tax dollars to fund drug research at institutions & businesses; allow them to patent those discoveries & then grant exclusive licenses to drug companies. Until then, they were in the public domain.

Of course, Bayh-Dole did not enable NIH to fund drug research at institutions and businesses–it had been doing that for years already. And same for patenting–at least for nonprofits, the NIH had restarted the Institution Patent Agreement program in 1968. The IPA program allowed nonprofits to patent discoveries and grant exclusive licenses to drug companies. But yes, otherwise, inventions in federally supported research addressing matters of public health were to be made available to all. The IPA master agreement even has an elaborate apparatus that makes it appear that non-exclusive licensing would be the primary method of nonprofit invention deployment, but when the IPA program was reviewed, almost all the nonprofit deals were exclusive. The non-exclusive licensing apparatus was just for show.

What leverage did the pharmas have over the NIH that led the NIH to create a patent monopoly pipeline from federally supported research to pharma companies? What would motivate the NIH to go against the public policy of the executive branch and the Public Health Service to deliver patent monopolies into private hands? Dunno. Maybe it was just an Iago-like distaste for things being valued for being the right thing to do.

Anyway, here’s the thread, with some minor edits to fill out lines. Continue reading →

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AAU, APLU, and others aim to “bolster” federal technology transfer, 3

Posted on August 10, 2018 by Gerald Barnett

A set of higher education associations–front groups for a bunch of research universities–has published their advice in response to NIST’s call for ways to improve federal technology transfer. AAU, APLU, AAMC, COGR, and ACE all signed on to the statement that we have the opportunity to review.

Here’s the gist of NIST’s call:

NIST requests information from the public regarding the current state of Federal technology transfer and the public’s ability to engage with Federal laboratories and access federally funded R&D through collaborations, licensing, and other mechanisms.

Instead of providing anything of substance that might contribute to a discussion of federal lab and agency technology transfer, the AAU, APLU, and other HEAsses instead submit a tome about themselves and claims they make for and about their university members. It’s like they can’t read. No matter, we have worked through their statement of “priorities.” Now let’s work through the details of what these HEAs think is important for federal lab technology transfer.

In the first two parts of this article, we looked at the the HEAs’ statement of “priorities.” Now let’s deal with their discussion. We will quote bits and comment.

The HEAs assert that Bayh-Dole is working “as intended.” This is all very well, but the primary statute dealing with federal laboratory technology transfer is Stevenson-Wydler, which Bayh-Dole acknowledges takes precedence. Of course, Stevenson-Wydler has been amended to point back to Bayh-Dole at various points, so it’s all a fine bit of spaghetti code. Wouldn’t it be great if attorneys had to learn a structured programming language before they could practice law?

The HEAs assert that Bayh-Dole is working. Surely it’s not “working as the law provides” since universities don’t comply, federal agencies don’t enforce, and federal agencies don’t act on the rights reserved for them. Surely it’s not working “as intended by Congress” because no one bothers to comply with what Congress set out as Bayh-Dole’s policy at 35 USC 200–that is, unless Congress intended for everyone to give the law lip service and then do WTF they wanted, deceive about impacts, and generally screw things up. Thus, it would be nice to get clear from the HEAs just what they think the intention for Bayh-Dole is, and who it is who has that intention, since clearly it’s not the express statement of Bayh-Dole’s policy and objectives. Continue reading →

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AAU, APLU, and others aim to “bolster” federal technology transfer, 2

Posted on August 9, 2018 by Gerald Barnett

We are working through advice offered to NIST by various higher education associations on how to improve federal technology transfer by funding without oversight the “technology transfer” programs of non-federal institutions. If the gist is all you  need, then don’t bother reading further. Perhaps giving more and more money to university administrators for consistently failed programs is better than spending that money on research or something. Perhaps there’s a public policy debate there.

In the meantime, we are working through the list of priorities from the HEAs (AAU, APLU, AAMC, COGR, ACE), and we are in the middle of the potpourri priority (4) in which everything that’s wrong with the failed model of university administrations dealing patent monopolies stems from failings of the patent system, which is not sufficiently “robust.” If software cannot be “patented,” so the HEA argument goes, then how can it possibly be excluded from use so that speculators on monopoly positions will be attracted to spend money to try to profit from that patent monopoly by making commercial products? The HEAs continue:

and inconsistency in the government’s approach to rights in software,

We can’t have open source, apparently. The HEAs evidence no clue with regard to software. Perhaps that is because the university folks behind the HEA’s position here also don’t have a clue. I ought to know. I’ve done a heck of a lot of software deals for research universities, from open source to venture-backed startups, with all sorts of things in between.

Software is one area in which patents are pretty much useless for university-based research enterprise other than to disrupt collective development and to make people find ways to design around you. Pretty much the only thing one uses software patents for is to attract investment capital to a startup, and the investment capital willing to accept that a startup has an invention under license from a university is a pretty low-IQ investment firm. It is no wonder that most university licensing offices have no success patenting software. Oh, well, my licensing group did have success–we were always relieved when there wasn’t any federal money involved and didn’t have to deal with the Bayh-Dole advocates and their fixation on patent monopolies. As one software developer has advised with regard to patents in software, “Don’t be an asshole.” But AAU and the other HEAs want to be that asshole and want the federal government to help them to be better, more bolstered, robust assholes. HEAsses! Neat. Continue reading →

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AAU, APLU, and others aim to “bolster” federal technology transfer, 1

Posted on August 8, 2018 by Gerald Barnett

AAU has tweeted out its happiness with advice it and other “higher education associations” (APLU, AAMC, COGR, and ACE) have given in response to NIST’s call for public comment on ways to improve federal “technology transfer.” AAU tweets that “Bayh-Dole is working as intended.” It is unfortunate that we don’t know who did the intending that the AAU reports. Maybe that would help to explain the silliness that follows.

We will work through the HEAs’ priorities, note that their exercise is unresponsive to NIST’s call, and then examine their discussion in some detail. If you want to skip all that, the gist is that these HEAs want is more money and less accountability for the administration of technology licensing programs that have failed to produce.

But I know you–you aren’t content with the bland conclusion that faceless bureaucrats who won’t even put their names to a string of unfounded assertions have produced another foul document asking for more money for administrators to use with less oversight. You want to see how bad it really is, and thus you read on.

Here are the “priorities” that AAU and other HEAs recommend for NIST. Let’s consider.

(1) No changes to the Bayh-Dole Act are necessary. The statute should be considered a set of core principles that must be protected.

In other words, there should be no innovative change to a law concerning the use of inventions. Yes, that’s very bureaucratic. Furthermore, there should be no change to a law regarding federal licensing of inventions owned by the federal government that merely provides that the government may license such inventions non-exclusively, co-exclusively, or exclusively to the point of assignment. So the federal government can do most anything–but how does preserving such authorization (35 USC 207, 209) help the government understand what it should do? Again, it’s very bureaucratic to say nothing should change in a part of a law that doesn’t have much of anything to do with federal technology transfer other than say “do anything you want.”

While we are at it, what are the core principles of Bayh-Dole? Let’s put them in pragmatic style:

  • University administrators may preempt both federal and faculty public purposes
  • Keep reports of utilization a federal secret
  • Federal agencies need not enforce the standard patent rights clause
  • Federal agencies need not act on rights reserved for the federal government
  • Third parties have no right to appeal actions by universities or inaction by agencies

Continue reading →

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Bayh-Dole Basics, 7: Disclosure comments, 4

Posted on August 7, 2018 by Gerald Barnett

Though it’s rather useless to do so, let’s consider then the steps required by a Bayh-Dole compliant disclosure. I say it’s useless because no one complies with Bayh-Dole and federal agencies don’t care. The law doesn’t operate but enables something else to operate. It’s like using the rule of law to avoid the rule of law. If you follow this recursion, then you see the cleverness of Bayh-Dole. It’s the flip of “copyleft.” Rather than use copyright to require others to “share alike,” Bayh-Dole posits using patents to “defect on the commons that justifies the use of public resources” to justify the use of public resources. “We must prevent stuff that is publicly funded because it should be public to become public because if it became public then the public would not benefit from it not becoming public.”

Let’s put it in terms you may recognize: the public won’t benefit from publicly funded research unless that research is secured as patent monopolies and conveyed to single companies for their exclusive use, because no company will develop any such invention without a patent monopoly and freedom to exploit that monopoly–and that, my friends, is the only path to public benefit arising from publicly funded research. Any enforcement of Bayh-Dole would sour the whole enterprise and drive away these companies that are essential to the public benefit that may arise from publicly supported research.

Or, in its politically effective form: “what is available to all will be used by none.” Absurd? Yes, of course. Crazy? Yes, beyond simple lunacy. Inspired? Yes, but only if you are a BDCBF Bayh-Dole advocate.

Steps in Disclosure

It is important, then, that folks get the disclosure right. Bayh-Dole’s standard patent rights clause (at (f)(2)) requires contractors to require their technical employees to make a written agreement that includes a promise to disclose inventions to the contractor so the contractor can comply with the disclosure requirement. The disclosure must identify the funding agreement and the inventors, as well as any statutory bar to patenting. But the core of the disclosure is that:

It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention.

In other words, the disclosure is essentially the text needed for the specification part of a patent application–the part that teaches one with ordinary skill in art how to practice the invention. Put another way: before a contractor must disclose a subject invention, the contractor must

  • determine that the invention is or may be patentable,
  • obtain information on possible patent bars,
  • acquire ownership of the invention,
  • determine that the invention was made under a federal contract,
  • obtain a sufficient description of the invention that it could use the description to prepare a patent application, and
  • convey this description to its patent administrators.

This ought to look like a weird list. How can anyone determine that an invention may be patentable without having a full disclosure of the invention and information regarding patent bars? But none of these things are required until a contractor owns an invention made under a federal funding agreement–including, even, determining whether the invention was made under a federal contract. Continue reading →

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Bayh-Dole Basics, 7: Disclosure comments, 3

Posted on August 6, 2018 by Gerald Barnett

We are considering disclosure under Bayh-Dole. You may have thought that every invention made with anything like federal support must be disclosed. That you now know is not true. Under Bayh-Dole, inventors have no obligation to disclose anything, though they might under the statutes and regulations not preempted by Bayh-Dole. Under Bayh-Dole’s standard patent rights clause, universities are required to require inventors to promise to disclose, but only inventions that a university already owns. Fathom that.

But university administrators refuse to comply with the standard patent rights clause requirement. Fathom that, too.

I won’t go into the details, but the upshot is, Bayh-Dole does not require university inventors to use the patent system or to assign their inventions to anyone. Even NIST’s silly addition of an assignment requirement to the written agreement requirement that university administrators blow off applies only to subject inventions, not to all inventions made in work receiving federal support.

What Bayh-Dole requires to be disclosed is only those inventions that are determined to be subject inventions. Anything else might have to be reported to a federal agency–but that obligation falls outside of Bayh-Dole and into the framework of federal statutes and regulations that Bayh-Dole otherwise preempts.

And even if a contractor fails to disclose an invention that turns out by federal agency determination to be a subject invention–what happens? The contractor discloses the invention, elects to retain title, grants the government its license and life goes on. What then is the point of disclosure? A contractor could just agree not to file claims in the Court of Federal Claims for compensation for government use of subject inventions. No disclosure necessary. And since the Court of Federal Claims is where disputes regarding a determination of subject invention show up, the requirement is merely that things will get settled in the Court of Federal Claims, where disclosure will be necessary to determine whether a given invention was made in the performance of work under a federal funding agreement. Continue reading →

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Bayh-Dole Basics, 7: Disclosure comments, 2

Posted on August 3, 2018 by Gerald Barnett

We are working through the details of Bayh-Dole’s requirement that all subject inventions must be disclosed. What are subject inventions? What is the scope of a funding agreement? Who must disclose? What is the nature of the disclosure? Good questions, all. If Bayh-Dole were a clear, smart law, the answers would be clear and smart. But alas, Bayh-Dole is a mess and the people who have exploited the mess haven’t bothered with logic or public purpose and have turned Bayh-Dole into a do WTF you want law. If you believe that bureaucrats doing WTF they want is grand public policy, then what goes on here is not likely to help your peace of mind. I’m not at all opposed to bureaucrats doing WTF they want–if that’s the public policy we decide on, I’m not going to go all resistance on it. What’s wrong is bureaucrats deciding on their own to do WTF when law and regulation don’t authorize the bureaucrats to do so. Rule of law or rule of WTF bureaucrats–probably a lousy dichotomy for federally supported inventions, but there it is.

We see what happens with the WTF bureaucrat part–dismal practice, most everything locked behind patent paywalls, patent speculators attracted, lack of public domain, fragmentation of cumulative technology, exclusion from participation in standards, lack of interoperability, no competitive development of variations and functional equivalents, a twenty-year lock out on the results of federally funded research with incentives not to use, to design around, to undermine, to ignore, to take work offshore where the sun still shines. And for a handful of cases, mostly in pharma, a lucrative deal in which a university shares in the upside of a patent monopoly on a class of compounds that would treat a disease. Now let’s look at the rule of law part.

Disclosure of Subject Inventions

Let’s consider, then, disclosure of subject inventions in Bayh-Dole. Disclosure is the fundamental requirement in Bayh-Dole pertaining to subject inventions–inventions a contractor has acquired. Here’s 35 USC 202(a):

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

This is the heart of Bayh-Dole’s carve out. The federal framework of laws gives federal agencies the right to require contractors and their employee inventors to convey title to the government, except for contractors with established commercial positions in non-governmental markets or otherwise when the agency has determined that it is in the public interest that a contractor be allowed to deal in patent monopolies. For the rest–where statute, regulation, and federal agency policy might require federal ownership as a default in the public interest, Bayh-Dole instead permits a contractor who gains title of a patentable invention made in performance of work under a funding agreement to preempt the framework and exploit patent monopolies, subject only to the apparatus of Bayh-Dole, which turns out not to operate, despite hand-waving gestures to the public interest.

If a contractor gains ownership of such an invention, the contractor can keep that ownership and preempt by patent monopoly any disposition of the invention in the public interest expected by law, regulation, agency policy, faculty investigator, or inventor.

In this regime, disclosure is everything. Continue reading →

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Bayh-Dole Basics, 7: Disclosure comments, 1

Posted on August 2, 2018 by Gerald Barnett

This will be longish. For the brief of heart, here’s a synopsis.

  • Invention disclosure is the heart of Bayh-Dole standard patent rights compliance.
  • Disclosure is not reporting that an invention exists.
  • Disclosure means providing, for an invention owned by a contractor, the information necessary for a determination of patentability and for a patent application to be drafted.
  • Bayh-Dole plays games with the timing of disclosure. Originally, it was within a reasonable time after a subject invention was made. Now, it’s two months after a contractor’s designated patent administrators receive disclosure in writing from the inventors–could be a long time.
  • An invention must be owned by a contractor before Bayh-Dole applies. Contractor ownership is Bayh-Dole’s trigger, not inventing, not federal funding.
  • The definition of subject invention means that a contractor can become aware that an invention exists–and acquire ownership of it–long before a conforming disclosure is received by the contractor’s patent administrators.
  • Contractors may be added to a funding agreement by assignment, substitution, and subcontract, and any inventions these contractors make are also subject inventions for which the disclosure requirement applies.

Procedures for disclosure have to be strange because of the definition of subject invention.

Okay, here’s the discussion, O less brief of heart.

First, Bayh-Dole

Bayh-Dole requires federal agencies to use a default patent rights clause in funding agreements for research or development when they cannot justify a purpose-specific clause. The patent rights clause establishes the primary obligations for a contractor who obtains ownership of a patentable invention made under the funding agreement and chooses to retain that ownership. The patent rights clause then becomes part of the federal funding agreement. While Bayh-Dole specifies the provisions that are to be included in the patent rights clause, the implementing regulations establish four variations on the patent rights clause–one for companies, one for nonprofits, one for inventors (a subset of the company clause), and one that originally was a default “exceptional circumstance” for DOE nuclear energy and weapons programs.

If a contractor obtains ownership of a patentable invention, and that invention has been made under a federal funding agreement, the invention becomes a “subject invention.” The requirements of the standard patent rights clause then apply to that invention. How does a contractor determine that an invention is a subject invention? First requirement: the contractor must acquire the invention. That part requires, for an institutional contractor, either a written assignment or a claim of equitable title based on a work assignment to invent. So, there should be a piece of paper. But also, an assignment is directed to a specific property–so there must be some definition of what is assigned (and what is not). That’s the starting point for a disclosure–the disclosure defines what is to be assigned. Otherwise, the assignment is really a promise to assign later, when everything has been sorted out: “I assign all of this whatever” is really “I assign what later we agree on what I have assigned.” Continue reading →

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Bayh-Dole Basics, 7: Disclosure

Posted on August 1, 2018 by Gerald Barnett

The Bayh-Dole Act requires contractors who acquire title to an invention made in the performance of work under a federal funding agreement to disclose that invention to the federal government. Here’s 35 USC 202(c)(1), specifying one condition among others that must be in a standard patent rights clause:

That the contractor disclose each subject invention to the Federal agency within a reasonable time after it becomes known to contractor personnel responsible for the administration of patent matters, and that the Federal Government may receive title to any subject invention not disclosed to it within such time.

“Contractor” is a collective noun, used for any and all parties to a funding agreement. A prime contractor may add other parties to a funding agreement by any assignment, substitution of parties, or subcontract of any type. A subject invention is a patentable invention owned by a contractor and which has been made under a federal funding agreement.  Continue reading →

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