United States: Patent Related Changes To Bayh-Dole Act Regulations

Several important changes to Bayh-Dole Act implementing regulations took effect on May 14, 2018, that will apply to funding agreements executed after that date and may apply to existing funding agreements modified after that date. In this article, we focus on the most significant patent-related changes.

The Bayh-Dole Act & Implementing Regulations

The Bayh-Dole Act governs rights in inventions made with U.S. federal government funding. Broadly speaking, the Act imposes invention disclosure obligations on "contractors," permits contractors to elect to retain title (subject to a worldwide, non-exclusive license to the U.S. government), and requires contractors to pursue patent protection and commercialization. The Act also permits the U.S. government to restrict or eliminate the contractor's rights under defined ''exceptional'' circumstances. While the Act refers to non-profit organizations, universities, and small businesses, it was expanded to apply to businesses of all sizes by Executive Order 12591, as now expressly reflected in the revised implementing regulations.

The implementing regulations discussed here are set forth in 37 CFR § 401, and primarily relate to the "standard clauses" required to be in funding agreements awarded to contractors. As summarized in the Federal Register Notice, the "standard clauses" generally obligate contractors to:

  • disclose each subject invention to the Federal agency within two months after the contractor's inventor discloses it in writing to contractor personnel responsible for patent matters
  • elect in writing whether or not to retain title to any subject invention within two years of the disclosure to the Federal agency
  • file an initial patent application on a subject invention within one year after election (or prior to expiration of any statutory bar)
  • execute and promptly deliver to the Federal agency all instruments necessary to establish/confirm the government rights in the subject invention
  • require, by written agreement, the contractor's employees to disclose promptly in writing each subject invention
  • notify the Federal agency of any decision not to continue prosecution of a patent application
  • include in the specification of any U.S. patents/applications a statement that the invention was made with government support under the grant or contract awarded by the Federal agency, and that the government has certain rights in the invention
  • submit periodic reports as requested on the utilization of the subject invention
  • agree that neither the contractor nor any assignee will grant to any person the exclusive right to use or sell any subject inventions in the U.S. unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the U.S.

As set forth in the Federal Register Notice, the revised rules clarify electronic reporting, update certain sections to conform with changes in the patent laws, streamline the licensing application process for some Federal laboratory collaborators, make technical corrections, clarify the role of provisional patent application filing, explain a unique situation that may be appropriate for a Determination of Exceptional Circumstances, clarify the role of funding agencies in the Bayh-Dole process, and address subject inventions as to which a Federal laboratory employee is a co-inventor.

Patent-Related Changes To Bayh-Dole Implementing Regulations

Practitioners who manage or oversee inventions subject to the Bayh-Dole Act should study the revised rules in depth. Some key patent-related changes include:

  • clarifying that the Bayh-Dole Act and implementing regulations apply to funding agreements with business firms regardless of size (as well as to nonprofit organizations), except for funding agreements made primarily for educational purposes
  • requiring contractors to require by written agreement that its employees assign subject inventions to the contractor and execute all papers necessary to file patent applications and establish the government's rights in subject inventions
  • clarifying that a PCT application that designates the U.S. qualifies as an "initial" application
  • clarifying that the "statutory period" in the patent provisions refers to the one-year grace period available under the AIA-version of 35 USC § 102(b)(1).
  • permitting contractors to request extensions of time for filing a non-provisional application after a provisional application has been filed (to permit re-filing of a provisional application), and provide for automatic granting of a one-year extension to file a non-provisional application unless the Federal agency notifies the contractor within 60 days of receiving the request
  • extending the time period within which contractors are required to provide prior notice to the Federal agency to no less than 60 days prior to the expiration of the statutory deadline, and expanding the list of decisions subject to the prior notice requirement to include:
    • to request, be a party to, or take action in a trial proceeding before the Patent Trial and Appeals Board of the U.S. Patent and Trademark Office, including but not limited to post-grant review, review of a business method patent, inter partes review, and derivation proceeding;
    • to request, be a party to, or take action in a non-trial submission of art or information at the U.S. Patent and Trademark Office, including but not limited to a preissuance submission, a post-issuance submission, and supplemental examination.

Importantly, the revisions remove the time limit within which a Federal agency can take title due to a contractor's failure to timely disclose or elect title to a subject invention. According to the Federal Register Notice, this change is being made because "[a] contractor's failure to timely disclose or elect title to a subject invention, both as required by its funding agreement, can work to deny the Federal government any rights in the funded invention, through no fault of the funding agency."

Early Non-Provisional And Foreign Patent Filing Deadlines

While the previous version of 37 CFR § 401.14(c)(3) required contractors to file PCT and/or foreign patent applications within 10 months of filing an initial U.S. application (instead of the 12 months provided by the Patent Cooperation Treaty and Paris Convention), the revised rule expressly extends this "early" filing requirement to non-provisional applications filed after an initial provisional application:

(3) The contractor will file its initial patent application on a subject invention to which it elects to retain title within one year after election of title or, if earlier, prior to the end of any statutory period wherein valid patent protection can be obtained in the United States after a publication, on sale, or public use. If the contractor files a provisional application as its initial patent application, it shall file a non-provisional application within 10 months of the filing of the provisional application. The contractor will file patent applications in additional countries or international patent offices within either ten months of the first filed patent application or six months from the date permission is granted by the Commissioner of Patents to file foreign patent applications where such filing has been prohibited by a Secrecy Order.

If these requirements are not met, the Federal agency may obtain title to the subject invention, but if the contractor has filed a patent application in a given country after the time period specified but prior to its receipt of a written request to convey title from the Federal agency, "the contractor shall continue to retain title in that country."

As noted above, revisions to 37 CFR § 401.14(c)(5) provide for automatic one-year extensions for filing non-provisional applications, although a request for such an extension is required:

(5) Requests for extension of the time for disclosure, election, and filing under paragraphs (1), (2), and (3) of this clause may, at the discretion of the Federal agency, be granted. When a contractor has requested an extension for filing a non-provisional application after filing a provisional application, a one-year extension will be granted unless the Federal agency notifies the contractor within 60 days of receiving the request.

Many Strings Attached

U.S. government funding is an important source of funding for many small businesses and research institutions. While such funding comes with many strings attached, the ability to hold title to an invention developed with federal government support usually outweighs the administrative burdens of complying with the applicable statutory requirements and regulations. Contractors should take care to comply with these requirements, particularly in view of recent public scrutiny of private rights in federally-funded research.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Wolf, Greenfield & Sacks, P.C.
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Wolf, Greenfield & Sacks, P.C.
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions