Bayh-Dole Secrecy, Part 5

Posted on March 17, 2017 by Gerald Barnett

We have looked at Bayh-Dole and at FOIA. The upshot is that the 1984 amendment that changed Bayh-Dole’s secrecy requirement at 202(c)(5) from “may” to “shall” apparently fails to meet the requirements of FOIA for withholding information. 202(c)(5) does not state that such information is secret. 202(c)(5) does not require an agency to contract to agree not to disclose information otherwise exempt from FOIA’s obligation to disclose. It does something screwy instead and makes it appear that if federal agencies rely on a provision in a funding agreement to require invention use reports, they have to treat the use reports as confidential and therefore as exempt from FOIA even if the information in the reports isn’t exempt from FOIA. Whew. I feel like I have bureaucracies on my bureaucracies.

We will get to an outcome of all this that makes all this work in tracing through the details of the particular language moot–remember, Bayh-Dole is a do WTF you want kind of law. But there is a point to working through the details that has to do both with how Bayh-Dole operates, and the consequences of that operation with regard to information about whether the law is accomplishing its purposes. Given that Bayh-Dole is barely enforced, we might wonder how a law that is not enforced can accomplish its purposes. Save that thought for a bit.

We have yet to look at what happens to secrecy in Bayh-Dole’s implementing regulations and the standard patent rights clause authorized by Bayh-Dole. The same person who packed Bayh-Dole with clauses for “political expediency” to get the law passed in a lame duck Congress as a parting candy gift to Senator Bayh (this is how important the law was to the Senate, apparently) moved over to the Office of Federal Procurement Policy (now the task is assigned to the Department of Commerce, which has for some reason delegated the task to NIST) to write the implementing regulations. At the Office of Federal Procurement Policy, the regulations could be shaped in all sorts of odd ways, such as making the procedures for march-in so convoluted they could never possibly operate. Let’s see what happens to secrecy in the regulations that implement Bayh-Dole, which requires agencies to treat invention use reports as exempt from FOIA.

A federal agency cannot just decide in the moment that it has the authority to make any information “privileged” or “confidential.” If an agency did have that authority, then there would be no point to FOIA. An agency could just declare everything it receives confidential. Wait–no–that’s just what Bayh-Dole requires agencies to do in their contracting for research with universities. Continue reading →

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The heart plug in federal grants and contracts

Posted on March 16, 2017 by Gerald Barnett

I see a question in my search feed: “Does a Bayh-Dole patent clause make a grant a contract?” Let’s sort this out.

Short answer. No, the presence of a patent rights clause does not change the nature of the agreement.

Bayh-Dole requires the use of a standard patent rights clause in every federal funding agreement. Here’s the definition of “funding agreement”:

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.

So whether a funding agreement is a grant or a contract is determined by something other than the presence of a standard patent rights clause.  Continue reading →

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Bayh-Dole Secrecy, Part 4

Posted on March 15, 2017 by Gerald Barnett

We have been looking at the Bayh-Dole Act’s secrecy provision regarding invention use reports. That provision was changed from “may” to “shall” in 1984, and we have argued that the change in wording requires us to look for a change in meaning. “May” exclude from disclosure any information that is confidential is not at all the same as “shall” exclude from disclosure all information regardless of whether it is confidential. I know, it’s all convoluted and federal agencies aren’t going to change their practices and no one is going to sue to get a court to explain how Bayh-Dole doesn’t do what the implementing regulations make it do. So what follows is just to document what’s going on. It’s not entirely wasted effort, however, because we learn something new about Bayh-Dole by working through its secrecy requirements.

Bayh-Dole’s secrecy provision at 35 USC 202(c)(5) depends on how it conforms with the federal Freedom of Information Act (FOIA). The provision in Bayh-Dole says that use report information is to be treated as information excluded from FOIA disclosure. Sounds simple enough. What could possibly go wrong? For that, let’s look at FOIA disclosure requirements. We will have to work through all this more carefully. Let’s get at it. Continue reading →

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Not fixing a hole in Bayh-Dole

Posted on March 14, 2017 by Gerald Barnett

Bayh-Dole does not disturb federal common law with regard to inventions. Inventors supported by federal research funds own their inventions. The Supreme Court made this clear in Stanford v Roche.

Bayh-Dole applies to subject inventions only. Subject inventions are patentable inventions made with federal funds and owned by a contractor. A contractor is any party to a federal funding agreement for research.

Unless a contractor owns an invention made with federal funds, Bayh-Dole does not apply. Under Bayh-Dole, an inventor has no obligation to assign inventions and so turn them into subject inventions or even to report inventions unless they are subject inventions.

There is nothing, moreover, in Bayh-Dole that requires inventors to assign inventions made with federal funds to the federal government, or requires inventors to promise to assign such inventions to the federal government.

Pause with me a moment. If an invention is not owned by a contractor, then the invention is not a subject invention and Bayh-Dole’s apparatus for patent rights clauses in funding agreements does not apply. Continue reading →

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Bayh-Dole Secrecy, Part 3

Posted on March 14, 2017 by Gerald Barnett

Let’s examine the 1984 amendment to Bayh-Dole’s secrecy provision for invention use reports in more detail. It is worth pointing out that Section 202 of Bayh-Dole has been routinely amended and it would be worth at some point to show the general nature of the amendments–most of which appear to remove public protections and agency power to exercise oversight over the work of patent brokers gaining access to federally supported inventions.

The provision regarding non-disclosure of invention use information shows up in a list of clauses that must be included in any funding agreement for research:

(c) Each funding agreement with a small business firm or nonprofit organization shall contain appropriate provisions to effectuate the following: . . .

The actual wording is not specified–just that there must be “provisions to effectuate” what follows. (Please, avoid phrases such as “provisions to effectuate” with your families. These are not nice words.) It is important to see this fundamental move by Bayh-Dole. The law is directed at federal agencies, but instead of setting things out directly, Bayh-Dole specifies what a patent rights clause must do–but it leaves that doing to be drafted outside the law. If you want, it is a back door built into the facade of the law. The law can make whatever gestures it wants, but the actual impact of the law will come with how the standard patent rights clause is constructed, and that construction takes place without Congressional oversight or approval.

Bayh-Dole then includes at its core the freedom for the drafters of the implementing regulations (it turns out, funny, the same folks drafting Bayh-Dole itself) to mess around with the requirements after Congress has approved the basic idea. Given these folks could have included the language they really wanted right here in the statute (they were the same folks, after all), and didn’t, should tell us something. I wonder if this clever bit in Bayh-Dole also has been exported to all those other countries adopting a “Bayh-Dole” law. One might compare the Kennedy patent policy, where requirements for agency contracting for invention rights are set out with some definition, to be walked back when there’s a matter of public interest that takes precedent. Continue reading →

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Bayh-Dole Secrecy, Part 2

Posted on March 13, 2017 by Gerald Barnett

We are working through how Bayh-Dole, a law that requires the patent system be used to promote the use of subject inventions with public benefits on reasonable terms, comes to be a law that gives the impression that required reports of such use must be held as federal secrets. That is, Bayh-Dole appears to require the federal government to withhold from public release any information on the status of subject inventions. It wasn’t this way in the original law. But it’s this way now.

Here is the big scheme of secrecy in Bayh-Dole as it applies to the use of subject inventions, across multiple layers of implementation:

Bayh-Dole

35 USC 200 Use the patent system to promote use of subject inventions.

35 USC 201(f) Practical application requires established use with public benefits on reasonable terms.

35 USC 202(c)(5) Agencies don’t have to require reports of use, but if they do, reports they receive are to be treated as information exempt from federal public disclosure law.

This in a nutshell is the stated goal of Bayh-Dole–subject invention use, with public benefits on reasonable terms, reported to the federal government by the contractor, and kept secret by the federal government.  Continue reading →

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Royalty-free exclusive licenses under Bayh-Dole?

Posted on March 11, 2017 by Gerald Barnett

A question popped up in my WordPress dashboard as a search query–“Is it ok to grant an exclusive royalty-free license under Bayh-Dole?” I thought I’d give an answer.

Yes.

There’s a bit of a problem, though. Continue reading →

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Bayh-Dole Secrecy, Part 1

Posted on March 10, 2017 by Gerald Barnett

Bayh-Dole makes information about the use of subject inventions a federal secret. Or, more accurately, Bayh-Dole excludes subject invention use information from disclosure under the Federal Freedom of Information Act (FOIA). Or, yet more accurately, Bayh-Dole requires federal agencies to agree with contractors to keep use information from disclosure under FOIA. Or, more accurately still, Bayh-Dole requires federal agencies to include in federal funding agreements a provision by which they agree to exempt use reports from FOIA disclosure. Or, if we must be yet more accurate, Bayh-Dole requires federal agencies to use a provision by which they agree not to disclose use reports outside of government as if the reports were exempt from FOIA disclosure. Or, because we really must be accurate, Bayh-Dole has permitted the creation of implementing regulations and a standard patent rights clause under which agencies are required to agree to exempt use reports from FOIA disclosure.

I know, it’s a bother to be accurate, and with Bayh-Dole, it is more difficult than usual, since Bayh-Dole is mostly a law about how the federal government makes funding agreements having to do with inventions made with federal support. That is, Bayh-Dole’s focus is about what must go into a funding agreement’s patent rights clause and how that clause may be modified. What actually happens, then, under the clause is a matter of federal agreement, not directly federal law. A university, for the most part, does not comply with Bayh-Dole. Rather, it complies with the patent rights clause in each federal funding agreement. (For completeness, Bayh-Dole, as a part of federal patent law, adds a new category of invention, called a “subject invention” and establishes federal policy specific to this category of invention–and compliance with that patent law policy does not depend on the operation of any particular federal funding agreement–but that’s another matter). (For further completeness, universities don’t comply with most substantive parts of any patent rights clause–just the administrative paperwork part, and even then they get that wrong, but no matter, the federal agencies don’t care or get those parts wrong, conveniently, in just the same way, forming a sort of public-private partnership to ignore the law while making a big show over compliance.)

And here’s the rub. Once we are accurate, we find that Bayh-Dole apparently requires federal agencies to contract to ignore FOIA with regard to subject invention use reports. If Bayh-Dole works the way it appears to work, then it provides a map for an easy federal work-around to FOIA disclosure requirements–just contract to ignore FOIA and agree with a private party that FOIA won’t apply. Interesting. Continue reading →

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What about “recalibrating” Bayh-Dole?

Posted on March 9, 2017 by Gerald Barnett

In 2013, Howard Markel published a “perspective” in the New England Journal of Medicine on the Bayh-Dole Act, “Patents, Profits, and the American People–The Bayh-Dole Act of 1980.” In his article, Markel argues that Bayh-Dole should be “recalibrated,” in part to deal with the high price of “lifesaving technologies,” along with problems of sharing, undue emphasis on applied research at the expense of basic research, and conflicts of interests for doctors. “All Americans should be able to share in the bounties of federally funded biomedical research.” It’s difficult to argue with any of this.

What concerns me, however, is how Markel describes Bayh-Dole. It’s not that he doesn’t have citations for his treatment, but rather that he apparently accepts the assertions of those “sources” though they lack any substantive basis. Since the bulk of Markel’s argument consists of retelling a history of Bayh-Dole, we may as well give some context to that history in the interest of providing a sense of perspective.

History is often told from the perspective of the victor. In the case of Bayh-Dole, the victor has been the patent brokers who went up against public policy to ensure that pharmaceutical companies could maintain monopolies over new therapeutic compounds that might be beneficial in fighting disease. But let’s work through Markel’s retelling and point out some of the problems with the victors’ account. The starting point is this statement regarding Bayh-Dole: Continue reading →

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The Lack of Debate on University IP Management

Posted on March 8, 2017 by Gerald Barnett

Julie Preston, writing in MedCity News (“Why does anybody own CRISPR? An argument against academic IP“), reports on a talk given by Michael Eisen a few days ago. Eisen has published an article at his blog on the patent fight between UC Berkeley and The Broad Institute (and its backers MIT and Harvard). “The soul of academic science is being destroyed, one patent at a time,” writes Eisen. According to Preston, in his talk, Eisen argued against “intellectual property in academia”:

Intellectual property in academia is a drain on the system. It’s a model that was ushered in decades ago with an aim to encourage innovation. Instead, it stifles the academic process with licensing costs and intellectual secrecy. The incentives it creates, Eisen argued, run counter to the pursuit of knowledge.

It may be worth disentangling some things. Eisen is discussing a patent fight, not all IP. Copyright is a different matter. Heck, the basis of open source software is copyright. And it makes sense that an author might limit how people can change his or her work and redistribute that work–call it “curatorial” copyright. It’s not “intellectual property” that is a “drain on the system.” It is something else, that Eisen doesn’t name, but I will give it a shot. The issue here is institutional control of intellectual property, and in particular institutional control of patent rights–not just patents, but the right to decide to patent, and the right to decide how to license what has been patented. 

That is, the problem is university administrators who have the idea that no innovation should be made available to anyone who doesn’t pay the university for the right. In short, their vision is “No innovation pie without a bureaucrat’s thumb.” Continue reading →

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