[Ip-health] KEI Briefing Note 2020:2 The Federal Government’s Authority to Restrict or Eliminate Contractors’ Rights to Federally-Funded Inventions in “Exceptional Circumstances”

James Love james.love at keionline.org
Fri May 1 13:42:05 PDT 2020


KEI Briefing Note 2020:2 The Federal Government’s Authority to Restrict or
Eliminate Contractors’ Rights to Federally-Funded Inventions in
“Exceptional Circumstances”

Kathryn Ardizzon
May 1, 2020.

The exceptional circumstances clause is a provision of the Bayh-Dole Act,
35 U.S.C. §§ 200-212, that allows the government to restrict or eliminate a
contractor’s right to elect 2 title to federally-funded inventions “in
exceptional circumstances when it is determined by the Agency that
restriction or elimination of the right to retain title to any subject
invention will better promote the policy and objectives of [the statute].” 3

Stated otherwise, the clause authorizes the federal government to exert
greater ownership over intellectual property (IP) that was developed with
federally-funded research, including by retaining title to the IP, if
exceptional circumstances are present and doing so would better promote the
objectives of the Bayh-Dole Act. This memorandum explains the exceptional
circumstances clause, discusses why it merits consideration as a policy
tool for addressing the COVID-19 pandemic, and shares some examples of how
agencies have utilized it.

The upshot is that the exceptional circumstances clause, like march-in
rights, is an important safeguard to protect the public interest in
federally-funded research and development (R&D). Unlike march-in rights,
however, the exceptional circumstances clause:

* Has been utilized a number of times, by federal agencies such as the
National Institutes of Health (NIH) and Department of Energy (DOE);

* Is not subject to an automatic stay pending appeal, if a contractor
challenges it;

* Offers the government unlimited flexibility in how it exercises ownership
of IP; and

* Is prospective, rather than retroactive, and must be implemented in a
funding agreement.

  [SNIP.... full text at: https://www.keionline.org/BN-2020-2]

Conclusion and Recommendations

The exceptional circumstances clause of the Bayh-Dole Act is an important
legal authority that enables the federal government to assert ownership
over federally-funded inventions where doing so would better promote the
policy objectives of the Act, which include “to ensure that the Government
obtains sufficient rights in federally supported inventions to meet the
needs of the Government and protect the public against nonuse or
unreasonable use of inventions[.]” 46

With the rapidly escalating coronavirus pandemic threatening public health
and our nation’s fiscal future, the country undoubtedly faces exceptional
circumstances, and policymakers need to ensure that federally-funded
coronavirus tests, treatments, and vaccines are made available as rapidly
and widely as possible, and undertake the following measures:

* The federal government should undertake the administrative measures
necessary to issue a Declaration of Exceptional Circumstances with respect
to coronavirus funding agreements;

* Congress should require, in appropriations legislation, that agencies
incorporate Declarations of Exceptional Circumstances into funding
agreements that award coronavirus stimulus funds; and

* Congress should request the Government Accountability Office to provide a
report to Congress on the use of past uses of a Declaration of Exceptional
Circumstances by all federal agencies.

James Love.  Knowledge Ecology International
U.S. Mobile +1.202.361.3040
U.S. office phone +1.202.332.2670
http://www.keionline.org <http://www.keionline.org/donate.html>

More information about the Ip-health mailing list