The IPA and Wisconsin’s 1969 Patent Policy, 1

Posted on May 15, 2017 by Gerald Barnett

Tucked into Congressional testimony in 1978 on expanding the Institutional Patent Agreement program is the 1969 University of Wisconsin patent policy. This policy is notable for a number of reasons. First, because it is an actual policy statement on patents, where for a long time Wisconsin refrained from having a formal patent policy. If the university had no interest in the patents of its personnel, why should it have a policy about it? After all, the university has no ownership interest in the cars or houses of its personnel, and has no need of a formal policy to disclaim that interest, or to try to find strangely curious situations in which it might end up with an ownership interest anyway. So why patents?

Here is a statement of Wisconsin’s “unofficial” patent policy, from about 1960:

Faculty inventors have “full possession of patent rights unless … financed by grant funds where certain patent rights must be assigned or given to the grantor, such as … the Federal government.”

The 1969 Wisconsin patent policy is interesting for a second reason. The Wisconsin Alumni Research Foundation’s Howard Bremer was one of the primary players behind the efforts to make the IPA program government-wide. That effort failed but in its place came an even rougher beast called Bayh-Dole. In 1968, Norman Latker at the NIH had revived the IPA program, following on the Harbridge House report regarding federal government patenting activity and policies. The next year, in 1969, Wisconsin’s new patent policy includes an account of how the IPA program affects university researchers and inventors.

The new patent policy opens with a typical preamble–creativity is important, inventions happen. The university asserts a say in how inventions are managed:

Continue reading →

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DIY Plus: inventions, claims, and technology transfer

Posted on May 13, 2017 by Gerald Barnett

I will start with a mostly unreadable diagram:

This is the rhetorical anatomy of the relationship between an invention and a patent, or a “claimed invention.” It is important to see the difference because people tend to talk about inventions and patents as identical, that an invention is “patented” and the invention is a “thing” (like a cotton gin or an MRI device or compound 169′ that became Xtandi). But the thing that’s conceived in a material form–which an inventor might think of as an “invention”–and the thing that’s claimed legally as the subject of a patent that grants the right to exclude others are often very different things.

Let me explain, using the notation of the mostly unreadable diagram. Continue reading →

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A New Fakographic from APLU and AAU in 10 Exhibits

Posted on May 12, 2017 by Gerald Barnett

A couple of university front organizations, APLU and AAU, have published a two-page infographic that presents a glowing picture of Bayh-Dole and university patent-based commercialization. Titled “How Technology Transfer Transforms Society,” the infographic confidently presents arguments for university commercialization practices. Let’s have a look.

Exhibit 1

University research may indeed “drive” some innovation. But university research is not the only driver, by far. Furthermore, the light bulb is not one of the results of university research. Perhaps APLU could have picked something that really has been produced by university research. Tomato pickers, say. Invented at UC Davis, and “transformed society”:

There are many stories we could tell about the harvester and its impact on California agriculture, California eating habits, and California’s farm labor. One of them would explain how it displaced thousands of mostly Mexican-American farm laborers in the 1960s, and then became the subject of a major lawsuit against the University of California, ultimately resulting in a new ethos of worker-impact-centered agricultural research on our campuses. Another would illuminate the lightning-fast implementation of the machines and the rapid changes they brought to farming and consumer practices.

One might also tell the story of how UC Davis then created new varieties of tomatoes that could be picked mechanically, starting the trend toward the red, tasteless tomatoes now available in most any grocery store.

Quick, pick out which story APLU and AAU would pick for their infographic.

There’s another problem, here, though, that’s deeper. Research may be conducted at universities, but is not the university’s research. It is ideas that people come up with while at universities. That’s what the light bulb is an emblem for–ideas. Those ideas don’t arise necessarily because of research in the abstract (the domain of administrators counting university beans), but rather ideas arise in people’s heads in a context that includes research–but also includes conversation, making things, consulting, musing about stuff. The ideas that matter might well be ones that recognize that the research activities aren’t going anywhere, but something else might. So APLU and AAU present “university research” as the driver (and thus claim administrative possession of the activity and its results), when the driver, apparently, is people with good ideas, some of whom are doing research. Continue reading →

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Unpacking COGR’s argument that universities should have “uniform” patent policies

Posted on May 11, 2017 by Gerald Barnett

For fifteen years, Archie Palmer worked to get universities to adopt formal patent and research policies. Palmer’s work ran in parallel with the growth of federal subvention funding for research–the government just gave money to university-hosted research projects, not because anyone had any specific need but because it had been decided that more research was good for the public, that research was a good way of expanding the frontiers of science, and that with expanded frontiers, scientific research would provide benefits in the form of new technology, new industries, more jobs, and enhanced public welfare.

Now all these new and enhanced things sound pow’ful fine to me. But there’s not a whole lot of reason to restrict one’s attention to the idea that scientific research starts the process of discovery, or that it is exclusively (or even predominantly) from the findings of science that one draws the materials of innovation. For that matter, what we mean by “science” itself comes into play–is “science” a method? or a body of consensus findings? or an inventory of natural phenomena? or provisional explanations of relationships, couched in quantitative terms of mass, time, length, and charge? Or bits of all of this, as paints on a palette, that each of us gets to paint in our policy imaginations?

But this connection between science, technological innovation, and public welfare is the line that’s been drawn, and it’s quite the amazing line, both hopeful and seductive. Call it a happy myth to be all-in about. Continue reading →

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Five ways to attack Bayh-Dole corruption, short of repeal

Posted on May 10, 2017 by Gerald Barnett

Powerful interests protect Bayh-Dole. But Bayh-Dole should be repealed. Heck, 23 senators led by Sen. Harrison Schmitt tried to do that the year after Bayh-Dole was passed, to replace Bayh-Dole with a comprehensive law regarding research inventions! But short of repealing Bayh-Dole, here are five areas to attack that might change university patenting and licensing practice. Maybe, even, change those practices for the better.

1. Demand that universities (and their patent brokers) report publicly on the status of each subject invention that they claim. Bayh-Dole makes subject invention use reports exempt from FOIA, but these reports are not necessarily exempt from state public records law. Universities should include sufficient information to determine whether the standard of “practical application” has been met. For each subject invention, identify the date of first commercial use or sale. For each subject invention, identify whether the invention has been licensed exclusively, non-exclusively, or not at all. Identify whether the invention has ever been offered for non-exclusive licensing (and if so, on what terms, since these terms would be necessarily public).

Shame the universities that don’t report publicly. Argue that they should not receive federal research funding. That’ll scare them. Introduce state legislation that requires public reporting of invention management. When the use statistics get out, Bayh-Dole will have nowhere to hide. It is a dismal failure. University monopoly patent practices under Bayh-Dole are a dismal failure.

2. Demand that federal agencies enforce the public protection elements of the standard patent rights clause. Bayh-Dole should not be a do WTF you want law. The law requires the use of a standard patent rights clause but does not require agencies to enforce that clause. Clever trick, but corrupt. In particular, federal agencies must

  • require the (f)(2) written agreement;
  • challenge exclusive patent licenses that are also subject invention assignments;
  • object to litigation for infringement that violates the patent system policy statement of Bayh-Dole (a part of federal patent law);
  • march-in on all instances of nonuse of subject inventions;
  • demand that universities favor small businesses in the licensing of any subject invention; and
  • audit the nonprofit use of income arising from the exploitation of subject inventions to ensure such income is not being misspent.

Federal agencies do, roughly, none of these things. They should. Bayh-Dole would be a different law, perhaps even a kinder, gentler dismal failure.

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Seven Pillars of Bayh-Dole, the Law that Loots the Commons

Posted on May 9, 2017 by Gerald Barnett

I’ve spent more than a few months now focused on Bayh-Dole and its history. It’s worth taking a moment and summarizing some findings. Perhaps this could be the start of a new guide to the Bayh-Dole Act, told from the point of view of the vanquished and the screwed over.

Bayh-Dole is built on the ruins of public policy that expected the opposite of what Bayh-Dole enables, using much the same terminology, but doing something very different.

If you want to know what Bayh-Dole is all about, here are seven pillars of the law that you won’t find in any university, AUTM, or COGR guide to Bayh-Dole. These pillars are the working intentions and claims that underlie the law. You won’t find any of it expressly in the law itself. That’s part of the design of the law, to open the pathway but to make that pathway obscure with apparatus and politically expedient statements of intention that appear to point the opposite of what’s actually done. I can show you how each bit of the pathway operates, chapter and verse. But you have to have an eye for detail and the ability to think like a patent broker to see most of it.
Continue reading →

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Notes toward a future FAQ on (f)(2)

Posted on May 8, 2017 by Gerald Barnett

Q. Under Bayh-Dole, if a contractor requires inventors to assign all inventions made with federal support to the contractor, doesn’t that requirement comply with Bayh-Dole? 

A. No.

Bayh-Dole applies to federal agencies, stipulating how agencies may contract for patent rights in funding agreements for research. Contractors see the effects of Bayh-Dole in the standard patent rights clause (or a variation) included in each funding agreement. Thus, what a contractor does with regard to inventors has nothing to do with Bayh-Dole directly. Though it may seem counter-intuitive, given all the “guidance” about Bayh-Dole that’s out there, it’s simply not possible for contractors to “comply” with Bayh-Dole. Federal agencies must comply with Bayh-Dole.

Q. Well, then does a contractor requirement that inventors assign inventions made with federal support to the contractor comply with Bayh-Dole’s standard patent rights clause?

A. No. A promise to assign to the contractor (or even a present assignment of future interests) does not comply with the SPRC requirement that contractors require potential inventors to make an agreement to protect the government’s interest.

The Bayh-Dole standard patent rights clause at (f)(2) requires contractors to require certain employees to make a written agreement to protect the government’s interest in inventions made with federal support. Essential to the (f)(2) agreement is that inventors have an obligation to sign papers to establish the government’s rights in subject inventions–inventions made with federal support and owned by a contractor, by a party to the funding agreement.

Inventors have no obligation even to report inventions under Bayh-Dole if those inventions are not subject inventions. Unless the (f)(2) agreement is required, contractor inventors are not parties to the federal funding agreement and thus no invention they make is owned by a contractor and cannot be a subject invention. Continue reading →

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The sound and fury of nonprofit assignments of subject inventions

Posted on May 7, 2017 by Gerald Barnett

Over the past few months I have returned the issue of exclusive licenses and assignments in Bayh-Dole. Here’s the operative requirement for nonprofits (35 USC 202(c)(7)(A)):

(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 (provided that such assignee shall be subject to the same provisions as the contractor);

The problem is that if one grants an exclusive license to the substantial rights of an invention–make, use, and sell–then the courts have long held that such an exclusive license is in fact an assignment. In copyright law, by way of reference, an exclusive license is defined in the law as one of the ways to transfer ownership in a copyright.

Despite all this, university patent administrators routinely grant exclusive licenses to subject inventions that cover all substantial rights–grant the right to enforce the patent, grant the right to sublicense, and require a reimbursement of the university’s patenting costs–putting the exclusive licensee into the position of paying as if the licensee had filed the patent application. Such exclusive licenses are in every way possible assignments. To be valid, under Bayh-Dole’s requirements–other than requiring federal agency approval–an assignment (even if labeled “exclusive license”) must include that the assignee is subject to the same provisions as the nonprofit contractor–that is, with restrictions on assignment, on sharing royalties with inventors, on recovering costs only for the management of subject inventions, and using the remainder of any income only for scientific research or education. These are not restrictions that most for-profit companies will accept.

And despite this argument, I have yet to encounter many university patent administrators who agree. They guffaw and swear and insist that there’s no problem. They have nothing to back it up other than they haven’t been caught out for it.  Continue reading →

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Going to Eleven on NIST and (f)(2)

Posted on May 6, 2017 by Gerald Barnett

NIST is drafting new rules for the standard patent rights clause authorized by Bayh-Dole. Included in the proposed new provisions is a requirement that contractors require the assignment of inventions to the contractor. This is a bad idea. Besides, it’s nuts. It can’t happen, except in the fantasy world of faux Bayh-Dole.

For once, NIST, cut inventors some slack. If you are going to revise (f)(2), bolster the protection for inventors by expressly forbidding, in the case of nonprofit contractors, for any contractor requirement that inventors must assign inventions. That is, make it clear that (f)(2) takes precedence over any nonprofit patent policy, employment agreement, patent agreement, non-competition covenant, trade secret claim, claim based on use of resources, financial interest, demand to control, threat, or abuse of authority that would claim the nonprofit has a right to own inventions made with federal support. 

1. There’s nothing in Bayh-Dole that requires assignment of inventions to a contractor–or mandates such an assignment, or restricts any other assignment, such as with a first right of refusal. That’s what the Stanford v Roche decision was all about. The Supreme Court made clear there that Bayh-Dole is not a vesting statute–that means, there’s nothing that changes federal common law of invention ownership, and contractors if they want title should contract for that title outside of Bayh-Dole. Here’s the Court: Continue reading →

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Bayh-Dole’s restrictions on Pigpen use of licensing income, V

Posted on May 5, 2017 by Gerald Barnett

Exclusive licensing creates its own complexities, just like the Peanuts character Pigpen brings his own dust storm with him wherever he goes. If inventions are “dedicated” to the public or are licensed non-discriminatorily on standard terms, there’s not so much complexity. The “complex problems of technology transfer” that Jones refers to have to do with exclusive licensing, with licensing by nonprofits to generate profits, and with the tax consequences of doing so. Those are complex problems–but they are problems created by the practices of “commercialization” using patents as monopolies. These “complex problems” of technology transfer are not the only problems of technology transfer–they just happen to be ones that university business officers have been willing to create to get their way.

As for the idea that “the licensing process draws the research university closer to industry”–this, too, is not so true for exclusive licensing practices. Wherever a university licenses a patent exclusively, everyone else in industry has a motive to undermine that invention–to design around it, to create blocking patents on improvements and applications, to build standards that exclude it, to downplay its importance in industry roadmaps. Do such things “draw the research university close to industry”? No, not really. Non-exclusive licensing might. But so might dedication of results to the public domain, allowing graduates from a lab to practice what they have learned directly in industry, without waiting for bureaucratic approval, which may never come (unless one happens to take a job with an eventual exclusive licensee). No, the licensing process tends to distance the research university from industry, even while forming a close working relationship (as parasite to host) with the company that obtains an exclusive license. Continue reading →

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