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Bayh-Dole Regulations FAQs

Question

Response

Effective Date
What is the effective date of this new rule with respect to existing awards?

The effective date of the revised rule is May 14, 2018.  The revised rule does not apply to a funding agreement (contract, grant or cooperative agreement) in effect on or before May 14, 2018, and a provisional application that was pending on May 14, 2018 would not fall under the revised rule.

If a funding agreement in existence on or before May 14, 2018 is thereafter amended, the funding agency may, but is not required to, recite in the amended funding agreement that it will be subject to the revised rule.
An amendment for this purpose is any formal communication from a funding agency informing the contractor that the revised rule will apply.  A funding agency is not limited to any particular form or type of funding agreement amendment, and may amend a pre-existing funding agreement solely for the purpose of requiring compliance with the revised rule.

The intent is to permit a pre-existing funding agreement to continue under the old rule even after the effective date of the revised rule, where, for example, a funding agency considers that requiring a change would be confusing.  
At the same time, a funding agency has discretion to amend a pre-existing funding agreement to require compliance with the revised rule prospectively (but not retroactively). 

Is this rule applicable to all agencies?

The revised rule applies to any funding agreement as defined in 37 CFR 401.2(a).

You should always consult the General Terms & Conditions and any Special Award Conditions specific to your funding agency's award, and contact your contracting or grants officer with questions about  agency-specific notification requirements and processes.

Assignment
What language needs to be included regarding present assignment in employment agreements under the new language in 37 CFR 401? Contractors in fulfilling the requirements of 37 CFR 401.14(f)(2) may wish to seek counsel familiar with present assignment of future rights, addressed by the Court of Appeals for the Federal Circuit in FilmTec Corp. v. Allied-Signal, Inc., 939 F.2d 1568, 1572-73 (Fed. Cir. 1991), and with the laws of their state, when crafting employment agreements or separate written agreements with their employees.
Can the present assignment agreement collected at the time of invention disclosure serve as the "written agreement....to assign" in the revised rule?   Does the assignment agreement have to be in place at the time of award funding?

The purpose of the requirement under 37 CFR 401.14(f)(2), that a contractor agree "to require, by written agreement, its employees . . . to assign to the contractor the entire right, title and interest in and to each subject invention made under contract . . ." is to ensure that an employee's written obligation to assign to the contractor is clearly established for the entirety of the funding agreement, and so to protect the Government's interest against competing claims.  This issue was addressed by the Supreme Court in Stanford University v. Roche Molecular Systems, Inc., 563 U.S. 776 .  Waiting until the time of invention disclosure to require an employee to execute an agreement to assign to the contractor would satisfy neither the rule nor the purpose of the rule.

Many contractors fulfill this and other elements of 37 CFR 401.14(f)(2) by incorporating these requirements into employment agreements or through separate written agreements with their employees.
Such agreements are contracts generally governed by state law, and contractors may wish to seek counsel familiar with the laws of their state with questions regarding such agreements.

Another of the elements under 37 CFR 401.14(f)(2) is the contractor's agreement to require its employees to "execute all papers necessary to file patent applications on subject inventions and to establish the government's rights in the subject inventions."  These papers may include, inter alia, an assignment identifying a patent application by number as required by the USPTO under 37 CFR 3.21, separate and apart from the employee's written obligation to assign, discussed above.

Compliance
What is the consequence of failing to provide sufficient  advance notice for patent prosecution?

The  requirements under 37 CFR 401.14(f), including the requirement to notify the funding agency of a contractor's decision under 37 CFR 401.14(f)(3), are intended to protect the Government's interest in a subject invention. Failure to satisfy any of these requirements would violate the terms of the funding agency's award, and could subject a contractor to legal action.

Depending upon the circumstances, the consequence could be as serious as contractor debarment or loss of rights in a subject invention (see, e.g., Campbell Plastics Eng’g & Mfg. v. Brownlee (Fed. Cir., 2004)).

Does an invention need to be reported if it was conceived before an award but reduced to practice as part of the award?

The Bayh-Dole Act applies to a "subject invention," defined as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement."  35 USC 201(e).
An invention conceived and actually reduced to practice by a contractor prior to commencement of a funding agreement would not be a "subject invention" that would require reporting.

However, an invention which had been conceived but not actually reduced to practice by a contractor prior to commencement of a funding agreement, and which was first actually reduced to practice under that agreement, would be a "subject invention," even if a provisional application had been filed prior to commencement.

Failure to report a subject invention under this circumstance would violate the terms of the funding agency's award, and could subject the contractor to legal action, the consequence of which could include debarment or loss of rights in the subject invention (see, e.g., Campbell Plastics Eng’g & Mfg. v. Brownlee (Fed. Cir., 2004)).

Is software a subject invention?

The definitions of "invention" and "subject invention" under prior 37 CFR 401.2( c) and (d) have not been changed under the revised rule.

Subject matter eligibility under 35 USC 101 is outside the scope of this rulemaking.

Is the ability of the agency to elect title when a contractor fails to report an invention the same as March-in rights?

These are different rights and obligations.

The provision that a contractor will convey title to the subject invention to the funding agency upon written request under 37 CFR 401.14(d)(1) applies only if a contractor fails to disclose or elect title to a subject invention, or elects not to retain title, as set forth under 37 CFR 401.14(c).

Under 37 CFR 401.14( c)(5), first sentence, a contractor may request an extension of time to make that disclosure or election.  Under these provisions, the march-in right does not apply.

The provision for march-in rights, 37 CFR 401.14(j), which addresses licensing of a subject invention, recites the determinations which must be made by the funding agency, and governing procedures are set forth in 37 CFR 401.6.  Under these provisions, conveyance of title does not apply.

Do I still need a Government Support Clause?

Under 37 CFR 401.14(f)(4), the contractor is required to include a Government Support Clause (GSC) within the specification of any United States patent applications and any patent issuing thereon covering a subject invention.

Inclusion of a GSC in the specification notifies those reading the patent application or patent that the Government has certain rights in the subject invention.  Where a GSC is included in the specification, but is incorrect, a contractor should contact the funding agency contracting or grants officer about correction.

Will the definition of "contractor" in the new rules allow for direct assignment to a separate entity Technology Transfer Office?

Under 37 CFR 401.2(b) of the revised rule, "contractor" means "any person, small business firm or nonprofit organization, or, as set forth in section 1, paragraph (b)(4) of Executive Order 12591, as amended, any business firm regardless of size, which is a party to a funding agreement."

The revised rule does not change the definition of a contractor as "a party to a funding agreement."

Election of Rights
Can a Bayh-Dole party wait to elect title until a non-provisional is filed, even if a provisional is filed prior to the 2 years?  Under 37 CFR 401.14(c)(2) "the contractor will elect in writing whether or not to retain title to any such invention by notifying the Federal agency within two years of disclosure to the Federal agency. However, in any case where a patent, a printed publication, public use, sale, or other availability to the public has initiated the one year statutory period wherein valid patent protection can still be obtained in the United States, the period for election of title may be shortened by the agency to a date that is no more than 60 days prior to the end of the statutory period."
Is it a requirement under Bayh-Dole to report provisional, PCT and/or foreign applications?   A "patent application" as to which reporting requirements apply under the rule continues to include a provisional or nonprovisional U.S. national application for patent as defined in 37 CFR 1.9 (a)(2) and (a)(3), respectively, or an application for patent in a foreign country or in an international patent office.  37 CFR 401.2(m).
Does a Bayh-Dole party need to file a patent application to elect title or are other forms of intellectual property protection available as an alternative?  A contractor must file an initial patent application on a subject invention to which it elects to retain title.  37 CFR 401.14 ( c)(3).
How does this rule change the timing to elect rights?

If a contractor fails to timely disclose or elect title to a subject invention as required under 37 CFR 401.14(c), 37 CFR 401.14(d) provides that the contractor will convey title to the subject invention to the funding agency upon written request.

A contractor's publication of a subject invention under such circumstances could work to deny the Federal government any rights in the funded invention, through no fault of the funding agency.

A contractor should consult the General Terms & Conditions and any Special Award Conditions specific to the funding agency's award, and contact the contracting or grants officer with questions or concerns.  

How does a contractor notify the funding agency that it does not plan to convert a provisional application?

If a contractor files a provisional application as its initial patent application, it is required to file a non-provisional patent application within 10 months under 37 CFR 401.14( c)(3) of the revised rule.

However, if a contractor has filed a provisional application but  thereafter does intend to abandon the subject invention and not file a corresponding non-provisional application, conveying title to the funding agency within 10 months would relieve the contractor of the obligation to file a non-provisional application.

A contractor in this situation should contact its contracting or grants officer.

While it is expected that iEdison will be updated to reflect this and other changes under the revised rules for participating federal agencies, a contractor should always consult the General Terms & Conditions and any Special Award Conditions specific to the funding agency's award, and contact its contracting or grants officer with questions about  agency-specific notification requirements and processes.

Under the new regulations, it is possible to abandon a provisional patent application without abandoning the underlying invention.  Is that also true for abandonment of a nonprovisional or foreign patent application?

NIST recognizes that a contractor may reasonably decide, as a matter of prosecution strategy, not to convert a provisional application under appropriate circumstances, without abandoning the subject invention itself or foreclosing the contractor's ability to file one or more additional applications directed to that invention.  In this circumstance, the contractor would not need to convey title to the funding agency to protect the Government's interest in the subject invention.

NIST expects that a contractor making such a strategic decision involving a provisional application will communicate to the funding agency contracting or grants officer its decision and its intent not to abandon the subject invention itself, so that the funding agency is assured that the contractor is protecting the Government's interest in the subject invention through appropriate patent application filings.

In any country in which a contractor decides to abandon a non-provisional application or patent, 37 CFR 401.14(d) provides that the contractor will convey title to the subject invention to the funding agency upon written request.

Extension
What is the mechanism for an extension for the election period?  Can this be requested in iEdison?

A contractor seeking an extension of time for disclosure, election or filing under 37 CFR 401.14( c)(5) must file a specific extension request, which the funding agency may grant in its discretion.

While it is expected that iEdison will be updated to reflect this and other changes under the revised rules for participating federal agencies, a contractor should always consult the General Terms & Conditions and any Special Award Conditions specific to the funding agency's award, and contact its contracting or grants officer with questions about  agency-specific notification requirements and processes.

Is there any fee for an extension to elect title to an invention?  No fee is established, authorized, or charged under the Bayh-Dole Act or its implementing regulations.
Why is the time for filing a non-provisional 10 months instead of 12 months?

Prior 37 CFR 401.2(n) limited the definition of "initial patent application" to "a nonprovisional U.S. national application for patent as defined in 37 CFR 1.9(a)(3)," and a provisional application was not included in this definition.
The revised rule expands the definition of "initial patent application" to permit a contractor to file a provisional application as its initial patent application. 

If a contractor files a provisional application as its initial patent application, it is required to file a non-provisional patent application within 10 months under 37 CFR 401.14( c)(3) of the revised rule.

Recognizing that a contractor may, as a matter of patent prosecution strategy, decide not to convert a given provisional application without necessarily abandoning the subject invention, this is not included among the conditions when the Government may obtain title under 37 CFR 401.4(d).

However, if a contractor has filed a provisional application but  thereafter does intend to abandon the subject invention and not file a corresponding non-provisional application, the 10-month requirement affords reasonable opportunity for the funding agency to take title and to protect the Government's interest in the subject invention.

Provision to request extension of the 10-month requirement is made under 37 CFR 401.14(c)(5) of the revised rule.  Such a request would  evidence the contractor's intent to file a corresponding non-provisional application.

Is the one year extension from the date of request or from the 10-month deadline?

The deadline for the contractor to file the corresponding non-provisional application will be one year from the 10-month deadline, or 22 months from the filing date of the provisional application.

Under 37 CFR 401.14( c)(5), second sentence, when a contractor has filed a provisional application as its initial patent application on a subject invention and timely requests an extension for filing a non-provisional application, the an extension of one year from the 10-month deadline date will be granted unless the funding agency, within 60 days of receiving the contractor's extension request, notifies the contractor of its decision to deny the request or to grant an extension of other duration.

Initial Patent Application
Does a non-provisional application include a Patent Cooperation Treaty filing? An international application filed under the Patent Cooperation Treaty as defined in 37 CFR 1.9(b) which designates the United States would satisfy the requirement under 37 CFR 401.14(c)(3) to file a corresponding non-provisional application, where the contractor had filed a provisional application as its initial patent application.
What changed in the definition of initial patent application?

As referenced in 37 CFR 401.2(m) and (n), the definition of a provisional patent application is set forth under 37 CFR 1.9(a)(2), and the definition of a non-provisional patent application is set forth under 37 CFR 1.9(a)(3).

And, under 37 CFR 401.2(n), an international application filed under the Patent Cooperation Treaty as defined in 37 CFR 1.9(b) which designates the United States may, depending on the circumstances under which it is filed, be a non-provisional application for the purposes of the revised rule.

Has iEdison been updated to reflect the changes in the rule? While it is expected that iEdison will be updated to reflect this and other changes under the revised rules for participating federal agencies, a contractor should always consult the General Terms & Conditions and any Special Award Conditions specific to the funding agency's award, and contact its contracting or grants officer with questions about  agency-specific notification requirements and processes.

 

Created August 7, 2018, Updated October 15, 2019