Publication Title

Texas Intellectual Property Law Journal

Keywords

Bayh-Dole Act, employee inventions, federally funded research

Document Type

Article

Abstract

This article argues that the current Bayh-Dole Act is incomplete because the Act fails to provide a mechanism for contractors to secure the ownership of federally funded inventions from their employees. Part I of this Article discusses this flaw in the current Bayh-Dole Act, highlighted by Stanford v. Roche, and argues that a historical accident resulted in this flaw due to Congress's failure to pass a series of bills based on the German EIA. Passages in the Bayh-Dole Act suggest that the Act assumes a transfer by operation of law to secure the ownership of federally funded inventions through a mechanism provided by the German EIA based bills. Without such a mechanism, many federal funded inventions will fall outside of the Bayh-Dole Act if contractors fail to execute written assignments with inventors. Common law ownership rules do not provide any help to contractors because they can guarantee only non-transferable, royalty-free, nonexclusive licenses for the contractors. Many of the contractors, particularly universities, do not practice patents by themselves. Differing state laws and state legislative actions prevent assignment contracts between the contractors and their employee-inventors from securing the ownership of all federally funded inventions, thereby preventing the federal government from implementing a uniform policy.

In order to propose a mechanism for contractors to secure the ownership of federally funded inventions, Part II of this article examines a statutory model based on federal laws for handling inventions closely related to national security. These Acts provide an effective mechanism for securing rights in the ownership of inventions by operation of law. However, the increased administrative costs on both the United States Patent and Trademark Office ("USPTO") and applicants would not justify adopting a similar mechanism for the Bayh-Dole Act.

Part III of this article examines the German EIA and compares it with the Bayh-Dole Act. Congress's interest in the EIA resulted in the overall structure of Bayh-Dole Act sharing key features with the EIA and thus it should be easy for the Bayh-Dole Act to adopt an ownership transfer mechanism developed under the EIA. The comparison also reveals the lack of a mechanism in the current Bayh-Dole Act for protecting inventors' rights to compensation when ownership is transferred to employers, although the Bayh-Dole Act does provide inventors a similar right to compensation.

Part IV of this article discusses which aspects of the German EIA should be adopted in the Bayh-Dole Act and how that adoption should take place. It will also propose adopting, from the EIA, a mechanism to protect inventors' rights to compensation. Moreover, today's university research environment makes it necessary for the federal government to apply the Bayh-Dole restrictions and conditions to federally funded inventions created by students and visiting researchers, regardless of employment status with the contractors. With just compensation through royalty sharing, the Bayh-Dole Act should be revised to allow contractors to secure the ownership of inventions from these nontraditional employees as long as their inventions resulted from federally funded research activities.

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