The Bayh-Dole Act Does Not Divest an Inventor's Original Rights
Stanford argued that the Bayh-Dole Act required a different result, but both the Federal Circuit and the Supreme Court disagreed. As summarized by the Supreme Court, the Bayh-Dole Act (35 U.S.C. § 200 et seq.) was enacted in 1980 in order to “promote the utilization of inventions arising from federally supported research,” “promote collaboration between commercial concerns and nonprofit organizations,” and “ensure that the Government obtains sufficient rights in federally supported inventions.”
The Bayh-Dole Act permits a grant recipient to “retain title to any subject invention” as long as certain conditions are met. These include (i) disclosing the invention to the granting Federal agency “within a reasonable time”; making a “written election [to retain title] within two years after disclosure”; and filing “a patent application prior to any statutory bar date.”
Even when the grant recipient retains rights, the granting Federal agency has “a nonexclusive, nontransferrable, irrevocable, paid-up license to practice . . . [the] invention.” Additionally, the agency has “[m]arch-in rights” to grant a license to a third party under certain circumstances, such as if the grant recipient does not develop the invention. Moreover, if the grant recipient does not elect to retain title to the invention, the agency can entertain requests from the inventor to retain rights to the invention.
Stanford focused on language of the Bayh-Dole Act that defines governed inventions as “any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement,” and language that refers to a grant recipient's right to “retain” rights to an invention. Stanford urged that this statutory language vested federally funded inventions in the grant recipient in the first instance, bypassing the inventor.
The Supreme Court disagreed, noting that where Congress has intended to depart from the default rule of inventor ownership, it has done so more directly. The Court cited three specific examples: (i) inventions made under “certain contracts dealing with nuclear material and atomic energy,” where the relevant statute (42 U.S.C. § 2182) expressly states that “title to such inventions ‘shall be vested in, and be the property of, the [Atomic Energy] Commission’”; (ii) “certain inventions made pursuant to contracts with the National Aeronautics and Space Administration,” which the relevant statute (51 U. S. C. §20135(b)(1)) provides “shall be the exclusive property of the United States”; and (iii) “certain inventions under contracts with the Department of Energy,” which the relevant statute (42 U.S.C. § 5908) provides “shall vest in the United States.”
Finding no such language in the Bayh-Dole Act, the Supreme Court determined that it did not upset “the fundamental precepts of patent law and deprive inventors of rights in their own inventions.” The Court stated:
The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.