The loss of public information in Bayh-Dole’s allocation of principal rights, 1

Posted on December 29, 2017 by Gerald Barnett

Under the Kennedy and then Nixon executive branch patent policies, contractors engaged in federally supported research or development–and which did not meet the ordinary conditions under which a contractor was allowed to retain ownership of inventions made with federal support–could request a determination of greater rights when they wanted to own patents on inventions made in that work. The request for determination of greater rights required a contractor to disclose a range of information regarding the use of, development of, and public access to inventions made with federal support.

Other than under the NIH (and later, NSF) Institutional Patent Agreement program, nonprofit “contractors” also had to request a determination of greater rights. Why? Because under the Kennedy/Nixon executive branch policy, such contractors lacked the standing to expect to receive “principal rights.” Here is the full paragraph (c):

In other situations, where the purpose of the contract is to build upon existing knowledge or technology to develop information, products, processes, or methods for use by the government, and the work called for by the contract is in a field of technology in which the contractor has acquired technical competence (demonstrated by such factors such as know-how, experience, and patent position) directly related to an area in which the contractor has an established non-governmental commercial position, the contractor shall normally acquire the principal or exclusive rights throughout the world in and to any resulting inventions, subject to the government acquiring at least an irrevocable non-exclusive royalty free license throughout the world for governmental purposes.

Let’s break it down: contractors get principal rights when

(1) the purpose the contract is to build on existing things to develop new things for use by the government and

(2) the contractor has technical competence directly related to the work and

(3) the contractor has an established non-governmental commercial position.

Universities and especially their research foundations will fail this test. They might get past (1) and (2), but they won’t have much chance with (3). Continue reading →

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Bayh-Dole and Clauses for domestic contracts, 1-9.107-6

Posted on December 26, 2017 by Gerald Barnett

Here’s Bayh-Dole’s definition of “subject invention”:

The term “subject invention” means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement: Provided, That in the case of a variety of plant, the date of determination (as defined in section 41(d) [1] of the Plant Variety Protection Act (7 U.S.C. 2401(d))) must also occur during the period of contract performance.

This is from 35 USC 201(e). That is, this is a definition of patent law. The patent property right in subject inventions is restricted by a statement of policy, also in federal patent law, at 35 USC 200. That statement requires the patent system to be used to promote the use of inventions arising in federally supported research. Subject inventions are clearly within the scope of that policy. A patent on a subject invention cannot be used to troll industry–if the policy on the patent property right is that the use of the patent must promote use, then the patent cannot be used, barely–as the only basis for enforcing rights–to suppress use.

Further, the policy statement requires the patent system to be used to promote free competition and enterprise with regard to such inventions. This requirement for use is a working requirement. The requirement for free competition and enterprise requires a patent owner to break up the patent monopoly. Breaking up a patent monopoly might involve limiting any term of exclusivity (including one’s ownership exclusivity), licensing non-exclusively on reasonable terms, or restricting exclusivity to sale of product while allowing non-exclusive making and use of the invention.

Bayh-Dole makes this definition of subject invention part of federal patent law. Continue reading →

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Merry Christmas!

Posted on December 25, 2017 by Gerald Barnett

Jane Jacobs observed that the purpose of economic life is us. Perhaps that goes as well for holidays–set aside for a moment the organized religion element, if you would–the purpose of Christmas, in a large sense, is us. The purpose of debating innovation policy, too, in its strange little way, is also us.

So here in a large sense is a “Merry Christmas” to everyone who cares enough about research enterprise to discuss it–for all our differences, our concern, through it all, is us. That’s a good starting point.

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Ten Points Regarding Bayh-Dole and Its Fantasizers

Posted on December 22, 2017 by Gerald Barnett

Here’s some things to consider about Bayh-Dole and university patent administration:

1. Bayh-Dole is part of federal patent law. Bayh-Dole defines a new category of patentable invention, the subject invention. Bayh-Dole defines a public covenant for subject inventions that runs with patent ownership, including a working requirement, restrictions on exclusive licensing, and the possibility for compulsory licensing. The patent property rights for a subject invention are unlike those of an ordinary patent. (See 35 USC 200; 35 USC 201(e))

2. Under Bayh-Dole, the government has a broad, unrestricted non-exclusive license to make, use, and sell any subject invention, and authorize others to do so to, for any government purpose. (35 USC 202(c)(4))

3. Bayh-Dole applies to federal agencies, not universities. Bayh-Dole requires federal agencies to use a standard patent rights clause in funding agreements. It is the patent rights clause that universities agree to comply with. The standard patent rights clause contains provisions not in Bayh-Dole. (35 USC 202(c); 35 USC 206; 37 CFR 401; e.g., 37 CFR 401.14(a)(e), (f), (g)).
Continue reading →

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Thinking about projects, small and big–8

Posted on December 18, 2017 by Gerald Barnett

Here’s the rub for “the work” that necessarily includes “commercialization.” Any license or assignment of an invention made in “the work” draws that licensee or assignee into “the work.” That licensee, to the extent that commercialization is a requirement of the license, is performing work supported in part (an earlier part) by the federal government. The license is the documentary evidence that the university is commissioning the licensee to participate in “the work.” If the university did not have a formal declaration that it sought to commercialize inventions it owns, including at least the one that’s subject to the license requiring commercialization, then the commercializing “work” might be in doubt. Similarly, a non-exclusive license need not expect commercialization, and thus does not necessarily come within the scope of “the work” of commercialization. And alternatively, if the university does not assert a claim of ownership over inventions, then when it otherwise obtains an invention and seeks to commercialize it, again, there may be a reasonable doubt that the “work” that was funded by the federal government includes the university’s licensing for commercialization, since there never was any link between the funded work and subsequent activity of the university (or any university licensee or assignee).

Why does this matter? Consider drug development. If a university has a policy of ownership of all inventions and asserts that it is a matter of public interest that the university seek to commercialize these inventions, then “the work” that the federal government supports “in part” includes the commercialization effort, no matter how the university does this work (itself or through contractors or through contractors acting as licensees or assignees). They all operate in part to achieve “the work.” Any inventions they make in “the work” are supported in part by the federal funding. Their efforts are all directed at achieving the purpose of “the work,” which is a commercial version of the molecule cum drug. Any inventions they make are licensed to the federal government to practice and have practiced. They are all part of the same contractual, documentary ecosystem that comprises “the work.” They have chosen this condition. It has not been forced upon them. They have not been tricked into it. This is no clever ruse. This is the baseline of what’s equitable. Any other outcome involves a clever ruse, incompetence, negligence, fraud, or some other moral failing. Continue reading →

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Thinking about projects, small and big–7

Posted on December 15, 2017 by Gerald Barnett

What have we got to by musing on research projects at universities? First, that a sponsor may support a big project by providing support to a small project that is a component of that big project. The sponsor who does so has good reason to expect to have access not only to the work of the small project but also to the work of the big project. It is the big project that the sponsor supports. It is the outcomes of the big project that the sponsor ought to have access to. In a policy environment in which those involved in the project publish their findings, make their data available, make their new tools available, and license any patents on fair, reasonable, and non-discriminatory terms, sponsors of small projects indeed can expect to have access to the results of the big project, too.

It’s important that you see this. It is all too easy to game it otherwise.

If a big project intends to keep its results secret, or behind a patent paywall for the benefit of a single patent speculator, then why would anyone support a small project part of that big project when it is offered for sponsorship? Why, even, would donors support a small project if it was made explicit to them that their money subsidized the interest of a speculative investor in a patent that kept all others from having use of the results? If a small project lays the groundwork for later inventive work in the big project, then the small project also supports that inventive work. The small project is an integral part of the big project, regardless of how a university manages the accounting and regardless of the sequencing in time of the small project and other later work. Continue reading →

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More Contempt of the Supreme Court at the NIH

Posted on December 12, 2017 by Gerald Barnett

Here is more misrepresentation of Bayh-Dole from the NIH, the creator of Bayh-Dole, purporting to be advice for inventors:

Under the Bayh-Dole Act, your institution as the grant recipient owns rights to the NIH-funded invention and has the right and obligation to patent under the Bayh-Dole Act.

This is from “Let’s Be Patently Clear About Patents,” published by NIAID. The assertion is flat out wrong. The Supreme Court established in Stanford v Roche in 2011 that Bayh-Dole did not take inventions from inventors, did not give university employers a right to take inventions. Nor is there an obligation for universities to patent inventions under Bayh-Dole unless they do acquire ownership, which they do not have to do. That the NIH permits pages like this to be posted is contempt of court.

More from the web site, talking of Bayh-Dole:

In a nutshell, it states that funding recipients, e.g., grantees, have the right to retain title to inventions made under federally funded research but must comply with regulations (37 CFR 401 et seq. ) to ensure the timely transfer of the technology to the public sector.

We can disagree on the nutshell version of Bayh-Dole. I might say it states that the federal government should allow funding recipients to create patent monopolies to pass to private speculators to exploit public needs for maximum profit, especially in matters of health. But that’s no doubt too starkly true for the NIH to find the courage to post.  Continue reading →

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University Confusion Over Bayh-Dole and Copyright, 2

Posted on December 11, 2017 by Gerald Barnett

We are working through a recent article posted at Emory University’s technology transfer site [since thankfully removed]. The article claimed that Bayh-Dole has something to do with copyrights and data, asserted that the reporting requirements are complicated, and then fussed around trying to make sense of its muddle. While the article itself is worthless as substance, it does provide an opportunity to work through the regulations and get a reliable understanding of how things work in federal grants to nonprofit organizations.

The article continues its discussion of copyright with another confused, if institutionally self-interested claim:

Grantee institutions may apply for copyright protection for their research results as well as any data that result from a federally funded research study.

A problematic sentence. One does not “apply” for “copyright protection.” “Research results” are not within the scope of copyright anyway, nor are “data.” Gibberish. Spouting. Blistering blue barnacles. Of greater concern is that the article allows the impression that federal regulations somehow provide grantee institutions with the authority to own copyrights and data. They don’t. They simply provide that the federal government won’t demand delivery of that ownership claim as a condition of the federal award. Nothing in the regulations for grants makes it a compliance requirement that a grantee-entity assert an ownership claim in copyrights or research data. The “may” is ambiguous, then: “may” may mean “has the federal government’s permission” or may mean “has the federal government’s mandate.”

The general statement in the regulations on intangible property makes clear that the issue is where title vests when intangible property is acquired by a grantee-entity, not that a grantee-entity has any compliance obligation to acquire intangible property or even a mandate to do so. The article makes it appear that federal regulations give universities a right to take copyrights and data just as they claim such a right under Bayh-Dole–and all of that is total absolute utter nonsense. In a contracting environment, it is fraud. In a statutory environment, it involves a conspiracy to deny citizens of their constitutional and statutory rights (see 18 USC 241). In a legal environment, it is malpractice and unethical. And in an environment in which one provides education to faculty, staff, and students, it is a betrayal of trust–not just a tolerable incompetence.  Continue reading →

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University Confusion Over Bayh-Dole and Copyright, 1

Posted on December 8, 2017 by Gerald Barnett

[This article comments on an article at Emory University’s technology transfer office’s web site. The article has finally been removed, so I have in turn removed some identifying elements. I’m keeping this article up, however, for the discussion of Bayh-Dole and copyright, since the lesson is useful, however difficult the learning might be.]

Confusion is like spilled milk. It’s only a mess because it has been spilled, and the effort to clean it up is much greater than the effort to pour a glass of milk to drink. Thus we have to write two articles rather than two sentences.

A little over a week ago, a university transfer office, posted “Bayh-Dole Reporting for Copyrights” on their technology transfer office blog. At first I thought it must be a joke title to draw in the curiously knowledgeable reader. But alas, no. I pointed out the problems with the article to the folks at the university via Twitter, since they had announced the article there, and all I got back from them was a look at my LinkedIn profile. The article is still up, uncorrected. [Update–the article has now been disappeared. Pity they didn’t correct it and use its catchy title to draw in the curiously knowledgeable reader.] So let’s break it down and see if we can tease out the confusion and learn something helpful in the process.

Let’s get one thing out of the way from the start. Bayh-Dole has nothing to do with copyrights. Bayh-Dole is part of federal patent law. Its contracting scope is restricted to inventions that “are or may be patentable” (or covered by plant variety certificates) when owned by a party to a federal funding agreement. Its federal licensing scope is inventions  in which the federal government owns “a right, title, or interest.” Nothing about copyrights. Nothing.

But it’s worse that simply that. Observe.

With the passage of the Bayh-Dole Act in 1980, researchers are generally allowed to establish rights to their data, even when their research was supported by federally funded grants.

Rights in data also has nothing to do with Bayh-Dole. Continue reading →

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Thinking about projects, small and big–6

Posted on December 7, 2017 by Gerald Barnett

We have looked at projects. Small projects can be pieces of bigger projects. It’s the big project that controls. Now let’s look at inventions, small and greater. We will see roughly the same thing: the idea of “invention” can be narrow (and made narrower by a patent strategy) or broad (as, formally and expressly defined by many university IP policies).

Invention does not have a formal definition in patent law. Even Bayh-Dole bites its tale with regard to the definition of invention. Here 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. 2321et seq.).

That is, invention isn’t defined at all! It’s just restricted to what’s “protectable” by patent law. The function of the definition is to eliminate the need to repeat “discovery” along with “invention” and to include plant varieties under Bayh-Dole’s contracting requirements, as if they were patentable. The definition doesn’t do anything at all for an understanding of invention–other than to create cognitive dissonance because in Bayh-Dole, a part of federal patent law, we now have to remember that invention doesn’t mean even an invention “protectable” under patent law–patent law has been twisted to include non-patent law–the Plant Variety Protection Act, which is distinct from plant patents. Why not also mask works? Or rights in technical data? Sigh. This definition is contract language elevated without much thought to be made patent law. Continue reading →

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