35 U.S.C. - Written Description

Bayh-Dole and tangible property

Anyone that has done work for a Tech transfer office of a major university has probably encountered the Bayh-Dole Act. Bayh-Dole is the government's answer to its own technology transfer questions. The law is somewhat obscure, but relatively simple to interpret. One question, though, that is not addressed is, "what happens to tangible property?"

Quick Bayh-Dole introduction

The Bayh-Dole Act permits colleges and universities--and other organizations--conducting research with federal funds to elect to retain title to “subject inventions.” In exchange, the inventor must grant the Federal government certain rights in those “subject inventions.” Among other obligations, where an institution elects to retain title, the institution must grant to the government a “nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced on its behalf throughout the world any subject invention.” 35 U.S.C. §202(c)(4). Bayh-Dole defines the term “subject invention.” In relevant part, subject invention means, “any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement…” 35 U.S.C. §201(e). In addition, an “invention means any invention or discovery which is or may be patentable or otherwise protectable under this title…” 35 U.S.C. §201(d).

What about resulting tangible property?

Here the law is not very clear. Bayh-Dole grants certain rights to the federal government in “subject inventions.” The definition of invention includes “any invention or discovery which is or may be patentable or otherwise protectable under this title.” Bayh-Dole thus addresses the interest in the patent rights of any subject invention, but does not address the government’s interest in the tangible property of government-funded research.

Neither the courts nor other statutes offer guidance as to rights in the tangible results of government-funded research. First, this author could not find a single court opinion addressing the issue of rights in tangible property under Bayh-Dole. Second, outside ordinary procurement regulations, federal statutes and regulations do not address the issue of resulting property from research. Moreover, the title to equipment and supplies acquired with federal funds, in general, lies in the inventor subject to other regulations. e.g., 45 CFR §74.34.

Arguably, the effect of Bayh-Dole on tangible property can be understood by what it grants to the government. Bayh-Dole gives the government a nonexclusive license to practice a subject invention. In general, a license is a waiver of a right to sue. As such, Bayh-Dole merely provides the federal government protection from infringement suits. The license, in and of itself, granted under Bayh-Dole does not confer right to any tangible property. Instead, the government could use its nonexclusive license to make, or have made on its behalf, the tangible property, limited only be the need to acquire other third-party licenses.

It's also clear that Bayh-Dole does not constrain funding agencies contractual abilities concerning tangible property. Largely, Bayh-Dole applies to grantees’ patent rights. Bayh-Dole merely permits a grantee to retain title in a subject invention. Bayh-Dole does not preclude an agency from creating other contractual rights under its funding agreements. In that case, a funding agency’s rights in tangible property are subject only to other statutes or regulations.

This seems to be the position of the NIH. The NIH has developed specific policies regarding interest in unpatented, biological materials. NIH Procedure for Handling Non-Election of Title to Patentable Biological Materials. In a situation where neither the grantee nor the NIH takes title to an otherwise patentable technology, the NIH imposes guidelines for the material’s distribution. Id. at §D. the NIH does not seem to believe it has title to the property as a whole—even where the grantee does not follow the prescribed procedure. Id. at §D(6). Instead, the policy merely imposes the obligation to make the biological material available to non-profit organizations and grants a Bayh-Dole like license to the material to the government to “make, use or distribute.” Id. at §D(5). It does request, though, that the grantee provide some of the material to the government. Id. This policy is somewhat consistent with Bayh-Dole. The policy recognizes that had the government elected title, it would have an interest in a subject invention. That interest would include the ability to make and use a subject invention. This right might justify the requirement that a grantee provide the agency with some of the biological material. Nevertheless, even with a patent, the government would still not have rights in the tangible property itself and the grantee would retain the minimal rights prescribed in 37 C.F.R. §401.14(e)(1). Therefore, the grantee’s retention and use of the material would not be infringement. In any case, it is not clear that such a policy applies where the grantee does take actual title.

posted by Mike @ 7:11 AM