One of the characteristics we have seen in our analysis of COVID-19 contracts is heterogeneity. The Bayh-Dole was enacted in 1980 to provide for uniform provisions on funding agreements regarding the ownership of inventions and the public’s rights. But for COVID-19 research and procurement contracts, the federal government has been using an exception, referred to “Other Transactions Authority, or OTA, which allows a funding agency to modify or ignore the standard provisions found in the Bayh-Dole Act. And, not only have agencies used language that differs substantially from Bayh-Dole on a range of issues, such as march-in and government use rights, but the contracts have been using language that is different from each other. This contractual heterogeneity has consequences in terms of predictability which makes the calls for transparency even stronger.
To make this point, I will use one issue, the definitions of “subject invention,” in different COVID contracts negotiated under the Other Transactions Authority.
The Bayh-Dole Act defines a “subject invention” in 35 USC 201(e) as “any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement .” As shown below, at least some COVID-19 contracts depart from this standard language. What is more, each one of these examples introduces a different definition of the same concept.
Janssen (Johnson & Johnson)
“Subject Invention: Any Invention that (i) has utility in the Field; and (ii) where the conception of such Invention and either (a) the first actual reduction to practice or (b) constructive reduction to practice of such Invention occurs in the performance of the Program.”
“Subject Invention” means any invention of the MCDC’s PAH or its subcontractors of any tier conceived or first actually reduced to practice in the performance of work on a Project Agreement under this Agreement.”
Janssen (Johnson & Johnson)
“Subject Invention (“SI”): Any Invention (ii) where the conception of such Invention and either (a) the first actual reduction to practice or (b) constructive reduction to practice of such Invention occurs in performance of the Project.”
“Subject Invention: Any Invention Made in the performance of work under this Agreement within the Field for which Recipient pursues a patent; provided that, all [REDACTED] are Inventions Made under this Agreement within the Field [REDACTED] Agreement will be deemed to be Subject Inventions.”
In some cases, the definition of “subject invention” is clearly narrower than the Bayh-Dole Act. For instance, under the Janssen HHSO100201800012C contract a “subject invention” needs to have “utility in the Field.” This is more restrictive than the Bayh-Dole definition, which encompases inventions reduced to practice “in the performance of work” regardless of whether they are useful in any given field. The Regeneron HHSO100201700020C contract limits subject inventions to those that are made in the performance of work “within the Field […]” Again, this language is more restrictive than the Bayh-Dole Act.
Moreover, the fact that each of these contracts define the basic concept of “subject invention” differently creates challenges in terms of interpretation and predictability. The Janssen and Regeneron contracts both appear to have limitations relating to the “field,” but with a different wording. One uses the phrase “utility in the Field” and the other cites “within the Field.” What does this mean? Are these limitations different? Is the concept of “utility” a higher threshold than “within”, or vice versa? Why would the U.S. government agree to use different words to adopt what appears to be equivalent limitations?
Similarly, the Janssen contracts define subject inventions as those that are conceived and first actually reduced to practice in the performance of work. The Bayh-Dole Act, as well as other COVID-19 contracts that we have seen, require that an invention be conceived or first actually reduced to practice in the performance of work. First actual reduction to practice can be established in several different ways, including constructively based on the date when a patent application was originally filed. Establishing the date when an invention was first conceived is a harder, fact-intensive inquiry. Therefore the fact that the Janssen contracts require that an invention be conceived and reduced to practice in the performance of work may constitute an important deviation from the Bayh-Dole Act. Janssen might be able to circumvent the concept of subject invention by claiming that they “conceived” an invention outside of the funded work, even if they first reduced it into practice during the project. Whether such a claim would succeed, however, will depend on how the U.S. government decides to interpret this provision, which is hard to know.
There are decades of guidance and debates about the meaning of the standard Bayh-Dole Act provisions. Even if the interpretations adopted by the federal agencies are wrong, they do provide insights to policy-makers, advocates, and the public in general. In contrast, a great portion of the language in the COVID-19 agreements is unique. This forces the public to second guess the meaning of those provisions on a case-by-case basis. Redactions make it even harder for the public to understand their rights in connection to these inventions. This calls for greater transparency around these contracts, including having unredacted copies but also guidance around their meaning and any other additional information that the public can use to understand their rights, such as a list of the patents and applications that fall under the definition of subject inventions.