We are not talking about the rainbows

Posted on April 2, 2018 by Gerald Barnett

A while ago, Research Enterprise argued that the “manufactured substantially” requirement in Bayh-Dole, for all its gesture toward American manufacturing, is a nearly empty requirement. Absurdly narrow, easy to circumvent, waivable by federal agencies (“we tried and failed” or “we didn’t bother even to try”–both okay excuses), unenforced, backed by march-in procedures so narrow and convoluted that no agency has ever marched-in for non-compliance.

In a nutshell, section 204 reflects the characteristics of Bayh-Dole in general. Bayh-Dole exists to permit the federal government to subsidize the patent medicine industry by means of patent monopolies on publicly funded research.

This claim is clear from the history of federal patent policy. We may start with the pharma boycott of the Public Health Service in the early 1960s, move to the NIH use of the Harbridge House report to restart the IPA program in 1968, note the fact that the IPA program itself was an end-run around executive branch patent policy (and PHS policy). When the NIH was blocked trying to expand the IPA program to all government agencies and the IPA program shut down in 1978 for doing sweetheart exclusive licenses with pharma, we get Bayh-Dole doing much the same thing, introduced in 1979, passed in 1980, effective mid-1981.

We can also see the pipeline in the mechanics of Bayh-Dole. For all the rainbows that appear to be about “protecting” the public, the rainbows end up being political fantasy to dissuade anyone from challenging the pipeline by which publicly funded inventions are assigned (under the cover of exclusive patent licenses that in fact assign) to pharmaceutical companies or to companies formed by speculative investors to sell out, eventually, to pharmaceutical companies.

Bayh-Dole’s rainbows don’t operate. Continue reading →

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Some reading for technology transfer professionals

Posted on March 30, 2018 by Gerald Barnett

Every so often I have asked people what articles ought to be required reading for people in university technology transfer. One great suggestion is David Teece’s “Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy.”

Another has to be Benoît Godin’s work on the history of the concept of innovation. “The Linear Model of Innovation: The Historical Construction of an Analytical Framework,” for instance. But most anything by Godin is worth the read. Benoît Godin has two rooms full of books on innovation, stacked floor to ceiling.

For general innovation stuff, you might start with these:

Kevin Ashton, How to Fly a Horse: The Secret History of Creation, Invention, and Discovery
Scott Berkun, The Myths of Innovation
Jane Jacobs, The Economy of Cities
Steven Johnson, Where Good Ideas Come From: The Natural History of Innovation
Matt Ridley, The Rational Optimist: How Prosperity Evolves
 Continue reading →

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University of Connecticut patent practice hash, 4

Posted on March 29, 2018 by Gerald Barnett

So now back to UConn’s patent policy claim. Look at it again:

Under Connecticut state law, the University owns all inventions created by employees in the performance of employment with the University or created with University resources or funds administered by the University (“University Inventions”).

It’s simply not true. “Created” does not show up in the state law. The state law uses “conceived,” “conceived or developed, “emerges.” The invention “vests” with the university. The university does not own the invention until assigned. State law authorizes the university to own and limits the scope of that ownership claim by reciting the situations in which the university can require assignment. The university’s patent policy, however, does not respect those limits–and that’s unacceptably awful.

And now garble: “by employees in the performance of employment with the University.” What can we make of that? What does “with the University” mean? For that matter, what does the policy mean by “employment”? The state law is fussily clear about Category A inventions–“customary or assigned duties.” “In the performance of employment” is nonsense written by someone with fantasizing about rainbows and dancing hippos. Clearly, the university’s policy overreaches.

There’s no mention in the state law of “funds administered by the University”–state law’s treatment of “at university expense” is not the same thing at all. Money provided by a donor or sponsor in support of a project is not “at university expense.” Same for “University resources.” State law identifies only with the “aid” of “equipment,” “facilities,” and “personnel.” Again, the patent policy generalizes without authority.

In all, the UConn patent policy is a con job. Continue reading →

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University of Connecticut patent practice hash, 3

Posted on March 28, 2018 by Gerald Barnett

Here’s UConn’s policy on invention ownership:

Under Connecticut state law, the University owns all inventions created by employees in the performance of employment with the University or created with University resources or funds administered by the University (“University Inventions”).

No definition there of “invention.” So we go to Connecticut General Statutes, 10a-110a:

“invention” means any invention or discovery and shall be divided into the following categories: A. Any invention conceived by one employee solely, or by employees jointly; B. any invention conceived by one or more employees jointly with one or more other persons; C. any invention conceived by one or more persons not employees.

Not much help here, either. “Invention” means “any invention or discovery.” Invention means invention, dammit. The categories are fussy bureaucracy at their fussiest. Moloch state drinks Moloch beer. Continue reading →

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University of Connecticut patent practice hash, 2

Posted on March 27, 2018 by Gerald Barnett

The definition of subject invention in federal funding agreements is not a matter of university administrator preference. Either an invention meets the definition of subject invention or it doesn’t. The administrator’s job is to gather the documentation that provides the basis for making a determination. But why do actual work when one can postpone the effort (“most grants won’t produce inventions”), pass the work, and the blame if things go wrong, to the inventor? And that’s of course just what the UConn disclosure document does at the end–

The inventors are to confirm “the completeness and accuracy of the information.” Well, there you have it. The inventors not only must provide their opinions, but also they have to swear to the information. One would think that the university administrators are the ones charged with confirming the completeness and accuracy of the information. The only thing an inventor is asked to do is to provide a description of the invention. Here’s the requirement from the standard patent rights clause at 37 CFR 401.14(a)(c)(1) (I have added numbering and broken up the layout):

The disclosure to the agency shall be in the form of a written report and shall

[1] identify the contract under which the invention was made  and the inventor(s).

It shall

[2] 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.

The disclosure shall also

[3] identify any publication, on sale or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication at the time of disclosure.

The standard patent rights clause then requires university contractors to require their technical employees to make a written agreement to disclose inventions so the university can meet this standard (37 CFR 401.14(a)(f)(2)): Continue reading →

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University of Connecticut patent practice hash, 1

Posted on March 26, 2018 by Gerald Barnett

Let’s work through the University of Connecticut’s intellectual property practice on disclosure and ownership of inventions. We will start in the middle, with a disclosure form–much like a university inventor might do.

UConn has an “Innovation Alert” web “portal” that can be used for “pre-disclosure”:

Inventors are invited to disclose before they disclose. Something about this smacks of a failure of language. One might think that this “pre-disclosure” starts the 60-day clock ticking for UConn to report a pre-disclosed invention to a federal research sponsor. I expect the university administrators who chucked up this idea will argue that this cannot be an invention disclosure because it has “pre-” right there in its name. They fail to understand that an instrument is what it does, not how it is labeled.

What is to be pre-disclosed is variously called a “big idea,” “new idea,” an “innovation,” or an “invention.” Apparently in pre-disclosure, UConn administrators cannot focus on any one thing. “Big idea” is cartoonish condescension; “new idea” is nonsense, because ideas don’t have much to do with invention, and the focus is invention not, say, business ideas in general; “innovation” is pretentious because innovation is something adopted by a group as new, a change in the established order as it were, not merely something new in one’s head or lab; and “invention” is the putative target of an “invention” disclosure form–but the “Innovation Alert” portal makes a hash out of that by inviting disclosures of stuff that isn’t inventive (in the patentable sense).

The actual focus of the disclosure should be a patentable invention–one that’s new, useful, and not obvious. How difficult is that to communicate? Furthermore, the university’s scope of claim to ownership is restricted (we will get to this later), but here the offer is to evaluate any “big idea, new idea, innovation, invention” regardless of the university’s ownership position. Big-hearted, if true.  Continue reading →

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Subject invention reporting and federal funding agreements

Posted on March 23, 2018 by Gerald Barnett

It would be interesting to see an audit of university invention reporting practices, especially in light of the definition of “funding agreement” and what it means for an invention to be made “in the performance of work under a funding agreement.”

In very short. Developers working under standard university exclusive licenses that function as assignments also produce subject inventions that go unreported.

That is, with less shortness, subject inventions are produced not only by federally supported research but also by product development that follows on that research when either (i) the product development is clear in the proposed work–as proposed by the federal government or by the university-approved proposal or by the proposal taken in the context of formal university statements with regard to a commitment to commercial development (such as a determination to “commercialize” results), or (ii) when the developer becomes a party to the federal funding agreement through “any assignment, substitution of parties, or subcontract of any type”–such as happens when the developer accepts assignment of a subject invention from a university and must therefore also accept the nonprofit standard patent rights clause. Continue reading →

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The effect of eliminating Bayh-Dole invention reporting

Posted on March 22, 2018 by Gerald Barnett

The invention reporting requirement is fussy bureaucracy as it is presently practiced. Federal agencies appear to do nothing with the information reported other than to run up costs at taxpayer expense to receive the information. Nothing meaningful happens as a result, not for the practical application of inventions, not for free competition, not for American industry and labor, not for government practicing and having practiced any subject inventions. The invention reporting requirement is just a tax on innovation to bloat university administrations and federal agencies alike. Call it the beer of the Moloch state. Moloch beer.

Getting compliance with subject invention reporting is no easy task. First, one has to audit all university inventions–not just the ones that universities claim, but also those that people working at a university claim privately. I’ve seen university faculty with way more private inventions than ones disclosed to the university. Second, one has to establish whether any given invention was made in performance of work funded in least in part with federal money under a funding agreement. It would all be so much easier if government rights were restricted to stated invention deliverables, either in the request for proposals (procurement) or request for support (subvention). Beyond that, what should the government care? (There are reasons why a government should care, but (sigh)).

If subject invention reporting were dropped, nothing but bureaucracy would change. Bayh-Dole’s public covenant is virtue-signaling without substance. Nothing of substance is enforced in the standard patent rights clause. Bayh-Dole’s only reason for being–despite all the garbage thrown around by its advocates–is the one thing they refuse to mention: to pipeline federally funded research as patent monopolies to the pharmaceutical industry and to venture investors hoping to sell their companies to the biomedical industry. Bayh-Dole sets it up so that even if universities choose not to deal in patent monopolies on publicly funded inventions, the federal agencies–and especially the NIH–are authorized to do so.

Essentially Bayh-Dole sets up a second shadow patent system right in the middle of the legitimate patent system. Continue reading →

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Why universities might fail to report subject inventions

Posted on March 21, 2018 by Gerald Barnett

James Love asks why universities fail to report subject inventions.

The question might seem rather odd, because in practice Bayh-Dole has been construed to give university administrators incentives to expand the definition of subject invention and so claim anything and everything they can. University administrators viewed Bayh-Dole as giving them an end-run around university research policies. Those policies generally state that research contracts take precedence over patent policy inventor ownership rules–which at the time often favored faculty inventors. Thus, according to these university administrators, Bayh-Dole happily also preempted academic freedom, freedom of research, and freedom of publication–all things otherwise assured by university policy. University administrators did not have to change any policy–they just asserted that federal law required them to take ownership of any inventions with a whiff of federal support. Then they went back and made changes in university policies to bring the policies into compliance with federal law. It was all bogus–incompetence and clever malice all rolled up into one slime ball of self-interest. But that’s what we have. You can see why university administrators are pretty much the only folks in love with Bayh-Dole–oh, along with much of the pharmaceutical industry.

But Love reports that his organization (KEI) is finding numerous instances of non-reporting of what appear to be federally supported inventions made at universities. Here is a KEI “Briefing Note” that provides a bunch of information with regard to Bayh-Dole invention reporting.

So if Bayh-Dole offered incentives for university administrators to expand the definition of subject invention and report everything as a simple way to claim institutional ownership with the apparent power of federal law, why would administrators under report?

Here are some possible reasons why: Continue reading →

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Nonprofit assignment of subject inventions in the standard patent rights clause 37 CFR 401.14(a)(k)(1)

Posted on March 20, 2018 by Gerald Barnett

[As of May 14, 2018, NIST has relettered things so the reference is now 37 CFR 401.14(k)(1)–there cannot be multiple standard patent rights clauses anymore–just one big honking one with a maze of conditionals.]

Universities ubiquitously claim as a matter of formal policy to handle patentable inventions in the public interest. That expectation forms a basis for the federal government to award grants–subvention funding, grants-in-aid–for faculty-proposed research hosted by these universities. That’s also the basis for the requirement in Bayh-Dole that federal agencies must require in their funding agreements that nonprofits  include the nonprofit patent rights clause in any assignment of a subject invention. See 37 CFR 401.14(a)(k)(1).

Again. Universities swear they will manage inventions in the public interest. Bayh-Dole agrees and requires federal agencies to use a patent rights clause specific to nonprofits in funding agreements with nonprofits. That nonprofit patent rights clause requires that when a nonprofit assigns a subject invention, the nonprofit patent rights clause is included. The nonprofit patent rights clause requires nonprofits to use income with respect to any subject invention, after allowable costs, to support scientific research or education. The same goes, then, for any assignee of a subject invention. If you are a company, then unless you are a big-hearted, publicly spirited sort of company, you really, truly do not want to receive assignment of a subject invention from a nonprofit.

Here is the original version of the nonprofit patent rights clause (my emphasis), as a required by clause (35 USC 202(c)(7)):

In the case of a nonprofit organization, (A) 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 and which is not, itself, engaged in or does not hold a substantial interest in other organizations engaged in the manufacture or sale of products or the use of processes that might utilize the invention or be in competition with embodiments of the invention (provided that such assignee shall be subject to the same provisions as the contractor)

Here’s the amended version, circa 1984, after the university patent brokers finished removing the restriction that an invention management organization could not have a conflict of interest by holding stock in companies that also might compete with others for licenses: Continue reading →

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