Transcript Bayh-Dole Act and Tech Transfer

Bayh-Dole Act and Tech
Transfer Issues
FLC Mid-Atlantic Regional Meeting
October 23, 2007
John Raubitschek
US Army Patent Attorney
Bayh-Dole Act
• Allows non-profits and small businesses to own
their inventions made with federal funds – 35
USC 202(a)-(c)
• Authorizes agencies to patent and license their
inventions – 35 USC 207 & 209
• Allows disposition of rights in joint inventions
involving federal employees – 35 USC 202(e).
Prior to 2000, agencies could only “transfer or
assign” their rights to the contractor. Now, joint
inventions can be assigned or licensed to or by
an agency even in the absence of funding
agreement.
Bayh-Dole Act (cont’d)
• 35 USC 202(e) may conflict with USG’s residual rights in nonelected inventions under 35 USC 202(c)(2)
• Another conflict may arise if non-profit or small business contractors
working for USG on CRADAs make an invention because
collaborator would not have rights to those inventions
• DoC addressed this issue on April 2, 2004 (69 FR 17299) with an
alternate provision to standard patent clause in 37 CFR 401.14
requiring contractors to grant collaborator an option for a license.
This was a shift from the DoD proposal to take title to the
contractors’ inventions and royalty share with their inventors. DOC
objected to the DoD proposal as being inconsistent with making the
minimum changes in the clause as described in 37 CFR 401.3(b).
• 37 CFR 401.3(a)(5), in a sense, authorizes agencies to do a DEC.
• The alternate provision is included in FAR “plain language” revision
expected to be published soon as a final rule.
DECs
• All agencies, except for DoE, DoD and NASA, are
required to use the Bayh-Dole clause FAR 52.227-11 for
all contractors
• However, agencies may modify clause in “exceptional
circumstances” after making a determination or DEC
• Legislative history – S. Rep. 96-480 (1979), p 32. DECs
should be used sparingly, for example when use by the
public of a product is required by a UDG regulation or
when agency plans to fully fund and promote invention to
market. But agency should define its specific fields of
use and carefully structure deferred determinations so
that it does not destroy incentives to commercialize in
fields not of interest to agency.
DECs - Procedures
• What action requires a DEC? Any “restriction or elimination of the
right to retain title to any subject invention” 37 CFR 401.3(a)(2)
• The requirement that a contractor license a third party, such as a
prime, would need a DEC
• Modification or tailoring of the patent rights clause as described in
37 CFR 401.5 does not need a DEC
• What is the necessary justification for a DEC – Modification will
better promote the policy and objectives of the Bayh-Dole Act
• The revised clause should start with the basic patent clause and
make only such modifications as are necessary to address the
exceptional circumstances or concerns which led to the use of the
exception (37 CFR 401.3(b)). In other words, it would not be
appropriate to start with the title clause in 52.227-13.
DECs (cont’d)
• 401.3(a) requires written determination with statement of facts
supporting the conditions identified in the exception exist and
address with specificity how alternate provisions will better achieve
B-D objectives
• Must provide contractor with option for greater rights under 401.15
or 52.227-13(b)(2)
• Copy of DEC must be sent to contractor (prospective) with appeal
rights under 401.4 (30 working days) or under 35 USC 202(b) and
203 (60 days to COFC); appeal decided by head of agency or
designee
• Copy must be sent w/i 30 days of contract award to DoC (Assistant
Sec. for Tech Policy, now abolished) and SBA (Chief Counsel for
Advocacy), if small business
• If DoC thinks there is a pattern inconsistent with B-D, notifies head
of agency and OFPP which may recommend corrective action
• GAO may request agencies to provide info on DECs
DECs - FAR
• Agency head makes a DEC – FAR 27.303(d)(ii); 37 CFR
Part 401 does not specify authority level except for
appeals
• Covers all contractors
• Appeals decided by head of agency or designee at level
above person making DEC w/i 45 working days or 30
working days if there is fact finding
• If appeal raises genuine dispute over material facts,
agency must conduct fact-finding in accordance with
agency procedures to be completed w/i 45 working days
• Contractors may appear with counsel, submit evidence,
present witnesses and confront agency witnesses
• Must have a transcribed record unless parties waive
DEC Activity
• Most DECs come from Energy and NIH
• NIH has done “6 or fewer” DECs – GAO Report
98-126
• DoC received notices from NIH (3) and DOE (3);
only objected to DEC by Energy in U.S.
Advanced Battery Consortium – a $200M cost
share battery program for electric cars with the
big 3, which took title to all inventions for
automobile applications. B-D subs would
receive reasonable royalties for use of their
inventions by other than USABC and EPRI.
GAO Analysis of DECs
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GAO Report 84-26 analyzed 7 DECs (Energy – 6 and NASA - 1)
GAO reviewed DECs until statute was changed in 1984 to assign
responsibility to DoC
Under its statute, NASA took title to Cal Tech’s inventions under a contract
awarded prior to B-D but renewed afterwards. Cal Tech requested DEC for
uniform treatment of inventions. GAO did not object to DEC.
Similarly, GAO agreed with 4 Energy DECs where the subs’ inventions were
owned by the prime contractor in an award made prior to B-D.
GAO disagreed with Energy DEC relating to a contract for nuclear waste
disposal and storage because the agency has no present intent to transfer
the technology in view of existing government policy relating to storage of
nuclear waste
GAO also disagreed with two Energy DECs because it didn’t accept basis
for withholding patent rights, i.e. that participants needed a royalty-free
license in inventions by universities and small businesses.