Gates Foundation v. Teachscape: Restrictions on Patenting of Gates-Funded Inventions

In the wake of the NIH’s letter to KEI declining to use the government’s rights in the federally-funded patents on Xtandi under the Bayh Dole Act, it is interesting to consider that even the Gates Foundation, hardly the anti-patent group, maintains certain programs and policies to ensure that Gates-funded inventions are used for charitable purposes, with limitations on pricing.

The Gates “Global Access” policy, in the Foundation’s own words, “requires our grantees and partners to commit to making the products and information generated by foundation funding widely available at an affordable price, in sufficient volume, at a level of quality, and in a time frame that benefits the people we’re trying to help.”

This policy was at the core of the case of Gates Foundation v. Teachscape, filed in May 2015 in the Western District of Washington (Case No. 2:15-cv-00680). In that case the Gates Foundation sued Teachscape, Inc., a company that uses tech-based tools for professional educator development in K-12 and higher education, for breach of contract and conversion of Gates Foundation property. The Gates Foundation alleged that Teachscape attempted to acquire exclusive patent rights over project materials without the consent of the Gates Foundation, and in violation of the Gates Global Access policy, “one of the Gates Foundation’s primary means of ensuring that funding provided to for-profit entities is ultimately used for charitable purposes.”

(Bill and Melinda Gates // Source: Gates Foundation)

According to the Complaint, Teachscape had entered into a consulting agreement with the Gates Foundation for services relating to the Measures of Effective Teaching project (“MET”), a $70 million project with over a dozen academic institutions and nearly 3,000 teacher-volunteers to measure teacher effectiveness. The Complaint iterates that the Global Access policy “requires that (a) the knowledge and information gained from any development funded by the Gates Foundation be promptly and broadly disseminated and (b) that such funded developments be made available and accessible for freee or at an affordable price in a manner that will benefit the people most in need,” and that Global Access terms were included in the agreement with Teachscape.

Among the specific provisions alleged to have been in the consulting agreement, the Gates Foundation was to retain ownership of all deliverables including IP stemming from the Gates funding (“project materials”), and Teachscape was to be barred from preparing or filing patent applications on project materials without Gates Foundation consent.

In spite of these contractual restrictions, Teachscape allegedly requested and was denied permission by Gates Foundation to patent certain project materials, and then proceeded to apply for patents anyway, naming Teachscape employees as inventors and Teachscape as the sole owner, and did so in several other instances between 2010 and 2013. The Gates Foundation argued that Teachscape’s patents on MET project materials “could prevent the access of the funded technology to other non-profits and companies that are dedicated to developing educational technology designed to help teachers provide quality education throughout the United States for low-income or impoverished school districts.”

The case settled out of court in June 2015, and the Gates Foundation was happy with the outcome.

In this case, the Gates Foundation’s Global Access policy was used to ensure charitable application of the results of funding, and illustrates how a contractual mechanism can ensure that inventions meant to be affordable to the public.