Posts in Legislation

Normally when we discuss the impact of the Bayh-Dole Act, allowing universities and small companies to commercialize inventions made with federal support, we focus on the life sciences where the resulting new drugs and therapies dramatically improved lives for millions around the world. However, the celebration of Earth Day is an appropriate time to consider the contributions our publicly funded research organizations– partnering with an entrepreneurial private sector– make in protecting our environment.

HyperSolar, Inc. has developed a technology that they claim will produce hydrogen that is renewable and utilizes natural power sources: sunlight and water. Who knows whether the HyperSolar/UC technology will ultimately lead to the dawn of a hydrogen energy economy. What we do know is that without the forward-thinking legislation that gives Universities incentive to partner with the private sector there would be no such potential. As alluring as alternative, cheap, clean energy is, efforts to get from where we are to where we ultimately need to go will be extremely expensive and the research highly speculative. Such high cost and extremely speculative research is realistically only carried out by Universities.

Ongoing efforts to support student entrepreneurship and/or invention on campus included a variety of programs: 84% of schools have entrepreneurship classes, bootcamps or other similar programs; 72% have business plan competitions; 50% have incubators for student-owned companies; and 41% offer student entrepreneurship funding. “By supporting student innovation and entrepreneurship, AUTM hopes to see commercialization of student inventions grow just as we have seen growth in the commercialization of faculty inventions,” says AUTM Vice President for Membership Phyl Speser.

In going from the current “first to invent” to the new “first to file” regime mandated by the America Invents Act (AIA), much attention has been focused on the amorphous “grace period” provision provided to patent applicants for certain activities undertaken by them prior to filing for a U.S. patent. Much less attention was paid to the amendments made to sections 203(c)(2) and 203(c)(3) of the Bayh-Dole compliance obligations which were directly impacted by this change in definition from the old “statutory bar” provision (based on publication, on sale, or public use of the invention caused by the patent applicant), to this new “grace period” provision. But even more astounding (and unsettling) are the unrecognized consequences caused by the AIA in “realistically” meeting certain Bayh-Dole compliance obligations by going from the current “first to invent” to the new “first to file” regime.

Finally, we believe that in the interest of fairness a word about the person who has his name attached to this case – Dr. Mark Holodniy—is required. Rather than being a rogue inventor, or a naïve academic wandering around signing invention rights away, another portrait emerges from this case. Dr. Holodniy did exactly what he was asked to do by his employer through instructions from his superior. He dutifully signed an agreement giving Stanford rights to his inventions, and agreed to go to Cetus as he was requested to do. At Cetus he complied with their policies.

At issue in the case, essentially, was whether the extraordinarily successful Bayh-Dole legislation (enacted in 1980) automatically vested ownership of patent rights in Universities when the underlying research was federally funded. In a blow to the convention wisdom of Supreme Court patent-watchers, the Supreme Court actually affirmed the United States Court of Appeals for the Federal Circuit. Unlike some recent decisions where the result of the Federal Circuit was affirmed but a wholly new test announced, the Supreme Court simply concluded: “The judgment of the Court of Appeals for the Federal Circuit is affirmed.” Perhaps even more surprising, the Supreme Court seems to have objectively reached the correct conclusion.

Today marks the 30th Anniversary of the most forward thinking patent legislation since Thomas Jefferson wrote the Patent Act in 1790, which was the third Act of Congress. Truthfully, the Bayh-Dole legislation is likely more forward thinking and inspired than even Jefferson’s work, given that the patent law written by Jefferson was merely an attempt to codify and improve upon the patent regime of Great Britain. The Bayh-Dole Act, which was enacted on December 12, 1980, has lead to the creation of 7,000 new businesses based on the research conducted at U.S. universities. As a direct result of the passage of Bayh-Dole countless technologies have been developed, including life saving cures and treatments for a variety of diseases and afflictions.

Bayh-Dole was created because of a glaring problem– billions of hard earned tax dollars invested annually in government R&D were being squandered by ineffective government patent policies. If this research cannot be taken out of the labs and turned into products, the public is being short changed. Even so, it was a long, tough road to travel, and we only succeeded by the smallest of margins. Turning around long standing government policies, no matter how ineffective, is never easy.

Betsy de Parry spoke of how the Bayh-Dole act affected her personally by lending time and resources to university discoveries that created the life saving treatment that has led her to 8 years of being cancer free. de Parry brought an emotional and very human element to the celebration because she is living proof of what this piece of legislation has meant to so many — it fostered discoveries and drugs that literally saved her life. Her story was quite moving and admittedly brought me to tears. For those of us who have loved ones afflicted by cancer, it gives me great hope that eventually a cure will be found.

We caught the tide– but just barely. That the Bayh-Dole Act passed was amazing. That it passed in a lame duck session of Congress with its principal author defeated, the US Senate changing hands, and a sitting president thrown out, was a miracle. Even then success was not assured. Fortunately, we launched and caught the tide. This is my “staff’s eye view” of how it happened.

At IPWatchdog.com we will spend the next month celebrating Bayh-Dole. We kick off our month long celebration of Bayh-Dole with an exclusive interview with the chief architect of the legislation — The Honorable Birch Bayh, a former three-term United States Senator from the State of Indiana. Senator Bayh is now with Venable LLP, which is located in Washington, DC, and where I conducted my interview with him on October 13, 2010.

During this first installment of my two-part interview with Senator Bayh we discuss some of the accomplishments of Bayh-Dole and Senator Bayh tells the story of how Bayh-Dole came to be. I suspect many, if not most, will be amazed to learn just how close we came to not have this monumentally successful legislation. But for another Senator lifting a hold with an hour left in the 1980 lame duck session there would never have been a Bayh-Dole Act.

Federal funding, typically in the form of research grants, is often used to support university research.  The Bayh-Dole Act also allows universities to retain title to invention rights in such research (referred to as “subject inventions”).  See 35 U.S.C. § 202(c)(2).  What the Federal Circuit has struggled with recently is what does “retain title” mean under Bayh-Dole, and especially where…