Page B. Agreements Permitting Qualified Universities to C. Additional Benefits Would Flow if Qualified (4) Use of Management Capability for All Inventions (5) Training of Future Technology Transfer Managers B. Shortcomings of Acquisition of Title by the Government 8, SPECIFIC RECOMMENDATION ADOPT A POLICY THAT QUALIFIED UNIVERSITIES MAY RETAIN TITLE IN INVENTIONS UNDER INSTITUTIONAL PATENT AGREEMENTS. 16 18 21 The President's Statement on Government Patent Policy stresses that inventions resulting from research funded by the Government constitute a valuable national resource, and that the public interest requires that efforts be made to encourage the expeditious development and civilian use of these inventions. The Subcommittee was established to recommend a patent policy which the Government should follow in its research and development activities with universities and other nonprofit organizations. The importance of this assignment is evidenced by the substantial amount of research funded by the Government at universities and nonprofit organizations.1/ For example, in Fiscal Year 1972, the Government spent approximately $3.1 billion of the total $12 billion expended on research and development outside its own laboratories on grants and contracts to universities.2/ 1/ For convenience, "Universities and nonprofit organizations" shall hereafter be referred to as "universities". In this regard, see APPENDIX B, "Issues Upon Which the University Patent Policy Ad Hoc Subcommittee Voted", where the Subcommittee discussed this matter and voted to afford universities and nonprofit organizations the same treatment. However, also note Section 9(d) (11) of the Federal Ilonnuclear Energy Research and Development Act of 1974, which, while affording special treatment to universities, makes no mention of nonprofit organizations. 2/ The distribution of such funds on an agency basis was as follows: 2 2. CURRENT PRACTICES OF THE AGENCIES 3/ Except for the agencies discussed below, Executive agencies have traditionally interpreted the provisions of the President's Statement on Government Patent Policy or applicable statutes to require the use of patent rights clauses in grants cr contracts with universities to provide for either title in the Government in the invention generated in performance of such grants or contracts or a deferred allocation of patent rights. The deferred allocation clause provides for deciding the allocation of patent rights until after an invention is identified. Under this policy, after the making of the invention, the university may seek to retain principal rights in the invention, subject to the funding agency's agreement. Where a title clause is used ownership to resulting inventions are acquired by the Government. However, in many cases the clause, like the deferred clause, may permit the grantee or contractor to request and retain the principal rights in the invention after the invention has been identified with the agency's agreement. The Department of Defense (DOD), the Department of Health, Education, and Welfare (DHEW), and the National Science Foundation (NSF) have each adopted special patent policies and regulations vis-a-vis universities. DOD has applied the "special situations" provision of section 1(c) of the President's Statement, and allows universities with "approved patent policies" to retain title provided the award does not fall within section 1(a) of the Statement. DHEW and NSF have both adopted special policies for universities implemented by Institutional Patent Agreements (IPA) with qualified universities, which provide that Such universities may retain title subject to various conditions and limitations.4/ In the case of DHE, its special policy applies only to grants. Inventions generated under DHEW contracts are subject to a deferred allocation policy. The SF special institutional policy applies to grants and contracts. In any case, NSF and DHEW may except specific awards from the operation of their institutional agreements. 3/ The Subcommittee at the outset of its assignment conducted a survey 4/ Copies of the DIIEW and NSF IPA's are set forth in APPENDIX A of Both NSF and DE consider their university policies consistent with section (a) of the President's statement, based on an carly interpretation of this provision by the Patent Advisory Panel of the Federal Council for Science and Technology. The Subcommittee gives it great weight as a contemporaneous interpretation by persons who were closely involved with its original development.6/ Of course, DOD, DHEW, and NSF continue to use essentially a deferred determination approach with universities which do not have IPA's or qualified patent policies. 5/ The Panel's interpretive statement, set forth in the 1965 Annual Report on Government Patent Policy, reads as follows: "Examples of exceptional circumstances of the type contemplated by section 1(a) might be . . . where the public interest will be advanced by leaving principal or exclusive rights to a nonprofit educational institution that agrees to administer inventions in a manner deemed by the agency to be consistent with the public interest." 6/ The President's Patent Policy is founded on the concept that the allocation of patent rights should be determined at the time a contract or grant is awarded. This policy contemplates a review at the time of each award to determine whether Section 1(a) or 1(b) is applicable. Some agencies have adopted specific procedures to conduct this evaluation. (See ASPR 9-107.4(b) and DOD Form 1564, noted in ASPR 9-107.4(a)). Other agencies whose programs fall basically under Section 1(a) have not adopted procedures for reviewing each award in the light of the President's Statement, but have operated on a presumption that all their awards are under the title portion of Section 1(a). Only where a special patent rights problem arose was a specific determination made. Agencies which have adopted the "exceptional circumstances" interpretation of the President's Statement to include universities with approved patent policies have also utilized the concept of a presumption that all awards to such universities fall within "exceptional circumstances" subject to a specific review or procedure for exempting specific awards where the agencies determine that exceptional circumstances are not present. The utilization of this presumption for "exceptional circumstances" is considered to be consistent with the interpretation of and procedures utilized by the agencies under the President's Statement. 3. THE GOAL OF UNIFORMITY : .. Four basic approaches are now being used for the allocation of patent rights under university grants and contracts, i.e., deferred allocations; title in the Government, with or without provision for the contractors to request and retain principal rights after the invention has been identified; recognizing universities under 1(c) as a special situation, (DOD); and the DHEN/NSF Institutional Patent Policy approach with selected miversities. Yet one of the basic considerations underlying the 'resident's Policy is the need for a "Government-wide policy reflecting common principles and objectives, at the same time recognizing that need for uniformity in the area of patent rights must be subservient to the missions of the respective agencies." In framing its recommendation, the Subcommittee has considered the differing missions of the respective agencies and the types of university research which they support. In the Subcommittee's opinion, the differing missions of these agencies do not support the wide differences in treatment of a particular university doing similar work for different agencies, although it is recognized that some agencies may be governed by statutory requirements that hamper implementation of the recommendations made in this report. Furthermore, the need to arrive at a uniform university patent policy is supported by Governmental policies in addition to the President's Statement of Government Patent Policy. For example, the following directive from Federal Management Circular 73-7 was considered by the Subcommittee to be a further mandate to seek a uniform Government patent policy as applied to universities: "Differing administrative policies and practices associated Since many burdensome inconsistencies in Government Administrative policies and practices can be removed without jeopardizing the effective pursuit of the research efforts, it is in the interest of both the Government and educational institutions to remove such inconsistencies wherever feasible." FHC 73-7, Administration of College and University Research Grants |