Let’s be clear. Bayh-Dole doesn’t transfer ownership to grant recipients. Grant recipients obtain ownership when they exercise protocols available to them under Bayh-Dole, and only then when they choose to become the owners. The transfer of ownership in inventions is from the inventors to the grant recipients or to whomever the grant recipients may designate. That happens by assignment. Bayh-Dole allows grant recipients to step ahead of the Federal agency and have standing to require the assignment of patent rights from the inventors. Huge difference. It’s not the law that does this, it is an administrative choice. Universities do this to themselves.
Furthermore, the effort of the Act is not to move research technology to the public domain, but rather to use the patent system to promote the use of federally supported inventions. That’s not a policy of the public domain but of the patent system. Perhaps the authors meant by public domain “public benefit”. But if so, then it’s sloppy, since “public domain” is a term of art in patent work.
In the case of medical technology, which the authors raise as an instance, contra the assertion they make, those doing the development may be especially well trained and equipped to teach and enable the use of what they develop. How could one say otherwise in general? That the surgeon who develops a new stent isn’t qualified to continue to work toward widespread use? No, there’s a difference between mass production and regulatory approvals and being ill equipped to provide the public with access. But these are nits, perhaps. I don’t see in Bayh-Dole a goal of *increasing* public access. Check for yourself: here. It may be that an argument used to pass the law was that there would be more public use, but it’s not in the law. There’s a difference between arguments used to pass a law, and what the law itself sets out as the law. Hmpf.
The upshot of this paper is that federal contractors have an implied duty to partner with industry to commercialize “promising federally funded research”. They don’t. They have a choice about it, not a duty. They don’t have to commercialize at all. They don’t even have to collaborate with industry. They can hand stuff off to others that do this. They can grant a royalty-free public license. That’s not commercializing. Companies can just make and use the inventions, not making products at all. That is, use by commercial entities is not use in commerce. Methods to improve safety or production. Not commercialization. Products? Not required. It’s a choice.
The paper has many flaws. It’s not my place to work through them all. The central flaw, however, is the displacement of practical application with commercialization, and then a selective slog through the law to find support for this reading. Badly reasoned, poorly annotated, not persuasive. I’m sorry.
Bayh-Dole lists a number of objectives. Commercialization is mentioned but it is given little room in the law or its implementing regulations. Thus, I guess the need to squeeze something implied out instead. Practical application, however, plays a much greater role, is given a definition, and tracks the overall goal of promoting use. The law also encourages nonprofit-industry collaboration, especially through small companies, and support for US manufacturing. But commercialization is not the same as practical application. It cannot be because both are present in the law, and there is no indication they are intended to be used interchangeably or synonymously. Just as practical application is not simply or secretly commercialization, so also collaboration isn’t secretly and implicitly licensing patent rights for product development and sales. Practical application encompasses all sorts of beneficial uses, and does not require that products be made and sold. A company might self-implement an invention, realize benefits, and pass these along to the public, without any product being made whatsoever. And companies might collaborate with nonprofits to do this. The internet is an example, with many inventive technologies federally supported and deployed without commercialization. That’s because they became standards, not products.
We see the authors of our paper conflating commercialization and practical application: “In addition, the Act mandates that contractors take necessary steps to commercialize any discoveries or inventions resulting from federally-funded research….” This mandate is not in the Act. It is an objective but the mandate does not fall on the contractors to commercialize, but rather makes a condition of taking title to use the patent system to promote use.
The Act: “to promote the commercialization and public availability of inventions made in the United States by United States industry and labor”. This is one of eight or so objectives along with, for instance: “to promote the utilization of inventions arising from federally supported research” and “to ensure inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery” and this: “to…protect the public against nonuse or unreasonable use of inventions.”
There is an express duty to meet the conditions of the law. The law is implemented by means of the standard patent clause at 37 CFR 401.14. It is placed in the context of federal research policy by OMB Circular A-110. A university comes within the scope of the law when it accepts federal funding carrying the obligations of 37 CFR 401.14 as a federal contract. At that point, the university has a good faith obligation to comply with the contract to achieve its objectives–not only 37 CFR 401.14 but also Circular A-110. The law creates the foundation for regulations that establish a standard Federal patent clause. If a contractor elects to retain title in a subject invention, then the contractor necessarily accepts the additional stated duties with regard to reporting on utilization, filing patent applications, and the like. Apparently the authors want it to be that regardless of the express statements of the Act, the implied duty is that only one of the objectives of the Act really matters objectives–to “commercialize” inventions. One can assert this. One can insist it matters. But it’s not an implied duty. It’s an asserted one.
The authors want march-in rights to be more fodder for the implied duty to commercialize, but even in their development they use “practical application” which is a different, broader thing, of which commercialization is only one way. But march-in rights are much more directly dealt with in the Act, to protect the public from non-use or unreasonable use. If there is use, and it is reasonable, we are done. But not if there’s an implied duty to commercialize, or, that the law hints at something it doesn’t come out and say but that anyone reading this paper would realize is also part of the law. The authors call this “use it or lose it” policy. Yes, but they never can connect up use and commercialization.
We can see how different use and commercialization are in the Act by looking at the chain of decisions that result in the inventors retaining title to their inventions. If the contractor waives the right to retain title, and the federal agency chooses not to require assignment of title, then title stays where it always was, with the inventors. Under the Act, the inventors are required to elect title and file, including in patent applications a statement of federal funding, report on utilization, prefer US industry in exclusive licenses, and accept march-in provisions in the event of non-use, unmet health or safety needs, public use specified in federal regulations, or to deal with exclusive licensees not manufacturing in the United States. If the inventors fail use, the remedy is a compulsory license required by the government with “terms that are reasonable under the circumstances”, not a loss of title. If the inventors fail to file, that’s a different matter, but that is not “use it or lose it”–it is “file it or waive it”. Failure to commercialization does not cause a loss of title, but may create an obligation to accept a government imposed license (with reasonable terms, including one might infer consideration). The difference is pretty clear.
The authors argue that that “ultimate goal” of Congress is that “federally funded inventions are made available to the public, for the public’s benefit.” By “ultimate” we must infer “not stated in the law, but sure helps our argument if you pretend it’s there.” Again: the Act says that the objective is to use the patent system to promote the use of inventions made with federal funds, with some things that follow from that. If the government wanted the public to have access to the inventions, it would have required publication of all invention reports and access to the inventive labs for a period of time so the public could come and gawk and fill their pockets with as much access as they could carry. No need for patents. No, patents serve a national interest–inventions made in the US result in US jobs. That’s what’s clear in the language of the Act, whatever purposes we wish to assign to the Congress that passed it into law.
The authors conflate invention, technology, patents, and products. Making it simple like this gives them a plausible argument to discover implications. But the conflation does a disservice to the Act and to technology transfer practice. Where it may take a lot of specialized resources to get a new drug approved, it may take very little to implement a new disease assay, and in fact, we find that university lab medicine personnel are just as good if not better at doing so than their industry counterparts. While the lab medicine doctors might not be able to come up with branding, or restrict the invention to a particular product form easy to manufacture and designed to maximize profits, they are way better at practical application and are much the better route to public benefit.
I know this is all sort of slant from the endpoint of the paper, which is to argue that Bayh-Dole represents a societal statement encouraging universities to work closely with industry despite cultural differences and the prospect for conflict of interest, and that with thoughtfulness these challenges can be met so that federally supported inventions get commercialized. One might even think the implied duty to commercialize is somehow intended as a federal pre-emption to concerns about conflict of interest or an indifference to commercialization, especially among biomedical researchers.
I think it is quite fine to construct a societal argument for the importance of commercialization. This can be directed at the role of industry in deploying medical knowledge through technology. One can look at the rise of new technology with the potential for undertaking medical interventions. One can ask how markets and investors create value that might focus development work to move from bench to bedside. These are decent things, and worthy. It’s a choice to do these things, not an implied duty under the law.
There’s just no reason to squeeze implied duties out of the law to get there.