[Ip-health] Regeneron $450 million contract with Advanced Technology International has Patent Rights Clause that Narrows Government Rights in Patented Inventions

Claire Cassedy claire.cassedy at keionline.org
Thu Nov 5 07:22:28 PST 2020


https://www.keionline.org/34403

Regeneron $450 million contract with Advanced Technology International has
Patent Rights Clause that Narrows Government Rights in Patented Inventions

Posted on November 5, 2020 by KEI Staff

A contract between Regeneron and Advanced Technology International (ATI)
involving $450 million in taxpayer funding uses the “Other Transactions
Authority” or OTA, to avoid Bayh-Dole safeguards on patent rights. ATI is
entering into purchase agreements on behalf of the Department of Defense
(DoD) and the Biomedical Advanced Research and Development Authority
(BARDA) for technologies related to COVID-19.

The Regeneron-ATI contract narrows the public’s rights in the patents in
important areas. For example, 7.2.a, states, the government’s license to
use a patented invention it funded “does not include the right to use or
allow others to use the Subject Invention for commercial purposes.” The
agreement does include a compulsory licensing provision, in 7.2.h, which
has different and considerably narrower grounds than the Bayh-Dole Act.
Notably, the compulsory licensing is limited to cases where Regeneron is
“unwilling or unable to manufacture or supply” products, without regard to
the Bayh-Dole condition regarding making benefits of inventions “available
to the public on reasonable terms.” The agreement also limits to the
compulsory licensing option to a public health emergency, a limitation not
found in the Bayh-Dole Act.

This is a massive contract, with very limited public rights in inventions
it has funded, compared to the standard government rights in patents set
out in the Bayh-Dole Act.

-----------------------------------------------

https://www.sec.gov/Archives/edgar/data/872589/000180422020000030/regn-ex102x09302020x10q.htm

MCDC BASE AGREEMENT NO.: 2020-504

PROJECT TITLE: MCDC2008-005; Large-Scale Manufacturing of Antibodies
Directed to SARS-CoV-2

PARTIES: Advanced Technology International (“MCDC CMF”) and Regeneron
Pharmaceuticals, Inc. (“Project Agreement Holder”)

This Project Agreement is awarded under the authority of MCDC Base
Agreement No. 2020-504, and herein incorporates all the terms and
conditions thereof, as such terms and conditions are modified by the terms
of the Statement Of Work attached hereto as Exhibit A (the “Statement of
Work” or “SOW”). The parties agree that, to the extent any terms or
conditions of the Statement of Work conflict with the terms and conditions
of MCDC Base Agreement No. 2020-504, the terms and conditions of the
Statement of Work shall apply and take precedence.

. . .

4.TOTAL FIRM FIXED PRICE

The total firm fixed price for the services to be provided by the Project
Agreement Holder is as follows:
Total Firm Fixed Price $450,262,000

7.2 PATENT RIGHTS

a.Allocation of Principal Rights

The parties agree that the Bayh-Dole statute does not apply to this Project
Agreement. Ownership of inventions Made in the performance of this Project
Agreement shall follow inventorship, and inventorship shall be determined
in accordance with United States patent laws. With respect to any Subject
Invention Made (in whole or in part) by or on behalf of Regeneron, unless
Regeneron shall have notified the Government (in accordance with
Subparagraph b. below) that Regeneron does not intend to properly disclose
and elect title to a Subject Invention, Regeneron shall retain the entire
right, title, and interest throughout the world to such Subject Invention,
and the Government shall have a nonexclusive, nontransferable, irrevocable,
paid-up license to practice or have practiced on behalf of the United
States the Subject Invention throughout the world. This license does not
include the right to use or allow others to use the Subject Invention for
commercial purposes. If Regeneron does not properly disclose and elect
title to any such Subject Invention (in
[* * *]

accordance with Subparagraph b. below), then the Government may exercise
its rights to seek ownership of such Subject Invention, pursuant to clause
7.2.c. below.

b.Invention Disclosure, Election of Title, and Filing of Patent Application

i.Regeneron shall disclose in writing each Subject Invention to the OTTR
within 12 months after the inventor discloses it in writing to Regeneron
personnel responsible for patent matters. The disclosure shall identify the
inventor(s) and this Project Agreement under which the Subject Invention
was made. It shall be sufficiently complete in technical detail to convey a
clear understanding of the Subject Invention. The disclosure shall also
identify any publication, on sale (i.e., sale or offer for sale), or public
use of the Subject Invention, or whether a manuscript describing the
Subject Invention has been submitted for publication and, if so, whether it
has been accepted for publication. In addition, after disclosure to the
Government funding agency (HHS/BARDA), Regeneron shall promptly notify the
OTTR of the acceptance of any manuscript describing the Subject Invention
for publication and any on sale or public use.

ii.Regeneron shall elect in writing whether or not to retain ownership of
any Subject Invention by notifying the OTTR within 2 years of disclosure to
the Government funding agency. However, in any case where publication, on
sale, or public use has initiated the 1-year statutory period during which
valid patent protection can 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 calendar days prior to the end of the statutory period.

iii.Regeneron shall file either a provisional or a non-provisional patent
application for an elected Subject Invention within 1 year after election
of title. However, in any case where a publication, on sale, or public use
has initiated the 1-year statutory period during which valid patent
protection can be obtained in the United States, Regeneron shall file the
application prior to the end of that statutory period. If Regeneron files
an initial provisional application, it shall file a non-provisional
application within 10 months of the filing of the initial provisional
application. Regeneron shall include a Government Support Clause (GSC)
within the specification of any United States patent applications and any
patent issuing thereon covering a subject invention.

iv.Regeneron may request extensions of time for disclosure, election, or
filing under subparagraphs (b)(i), (b)(ii) and (b)(iii) of this clause. An
extension of time for each deadline, may be granted at the discretion of
the Government funding agency.

v.If Regeneron determines that it does not intend to elect to retain title
to any such Subject Invention, Regeneron shall notify the Government, in
writing, within two (2) years of disclosure to the Government. However, in
any case where publication, sale, or public use has initiated the one
(1)-year statutory
[* * *]

period wherein valid patent protection can still be obtained in the United
States, the period for such notice may be shortened by the Government to a
date that is no more than sixty (60) calendar days prior to the end of the
statutory period.

c.Conditions When the Government May Obtain Title

Upon the Government’s written request, Regeneron shall convey title to any
Subject Invention to the Government funding agency if Regeneron fails to
disclose the Subject Invention or elects not to retain title to the Subject
Invention within the times specified in Subparagraph b of Section 7.2. The
Government may request title after learning of the failure of Regeneron to
disclose or elect within the specified times for an unlimited time. The
Government funding agency may request title upon Regeneron’s omission to
timely file patent applications in any country. The Government funding
agency may request title in any country in which Regeneron decides to
discontinue prosecution.

d.Rights to Regeneron and Protection of Regeneron’s Right to File

Regeneron shall retain a fully paid up, sub-licensable, nonexclusive,
royalty-free license throughout the world in each Subject Invention to
which the Government obtains title. Regeneron license extends to
Regeneron’s subsidiaries and other affiliates (outside this Agreement), if
any, within the corporate structure of which Regeneron is a party and
includes the right to grant licenses of the same scope to the extent that
Regeneron was legally obligated or permitted to do so at the time the
Project Agreement was executed. The license is otherwise transferable only
with the approval of the Government, except when transferred to an
Affiliate or successor of that part of Regeneron’s business to which the
Subject Invention pertains. The Government approval for license transfer
shall be provided on a timely basis (and in no event later than 90 calendar
days following Regeneron’s request) and shall not be unreasonably withheld.

i.The Regeneron license may be revoked or modified by the Government to the
extent necessary to achieve expeditious Practical Application of the
Subject Invention pursuant to an application for an exclusive or
nonexclusive license submitted consistent with appropriate provisions at 37
CFR Part 404. Regeneron’s license shall not be revoked in that field of use
or the geographical areas in which Regeneron has achieved Practical
Application of the Subject Invention and continues to make the benefits of
the Subject Invention accessible to the public.

ii.Before revocation or modification of Regeneron’s license, the Government
shall furnish Regeneron with a written notice of its intention to revoke or
modify the license, which notice shall include a detailed explanation of
the reasons for such revocation or modification, and Regeneron shall be
allowed thirty (30) calendar days (or such other time as may be authorized
for good cause shown) after the notice to show cause why the license should
not be revoked or modified.

.Action to Protect the Government’s Interest
Regeneron agrees to execute or to have executed and promptly deliver to the
Government all instruments necessary to (i) establish or confirm the rights
the Government has throughout the world in those Subject Inventions to
which Regeneron elects to retain title, and (ii) convey title to the
Government when requested under Subparagraph c of this Section 7.2 and to
enable the Government to obtain patent protection throughout the world in
that Subject Invention.
i.Regeneron agrees to require, by written agreement, its employees, other
than clerical and non-technical employees, to disclose promptly in writing
to personnel identified as responsible for the administration of patent
matters and in a format suggested by Regeneron, each Subject Invention made
under this Agreement so Regeneron can comply with the disclosure provisions
of this Section 7.2. Regeneron shall use reasonable efforts to instruct
employees, through employee agreements or other suitable educational
programs, on the importance of reporting inventions in sufficient time to
permit the filing of patent applications prior to U.S. or foreign statutory
bars.
ii.Regeneron shall notify the Government of any decisions not to continue
the prosecution of a patent application for a Subject Invention, pay
maintenance fees, or defend in a reexamination or opposition proceedings on
a patent of a Subject Invention, in any country, not less than thirty (30)
calendar days before the expiration of the response period required by the
relevant patent office.

Regeneron shall include, within the specification of any United States
patent application and any patent issuing thereon covering a Subject
Invention, the following statement: “This invention was made with
Government support under Agreement MCDC2020-504, awarded by the U.S.
Department of Health and Human Services. The Government has certain rights
in the invention.”

f.Lower Tier Agreements
Regeneron shall ensure that its Affiliate agreements and Sub-Recipient
Agreements regardless of tier, for experimental, developmental, or research
work entered into after the Effective Date and submitted for reimbursement
under this Agreement, contain invention reporting and assignment
requirements sufficient to permit Regeneron to comply with this Section 7.2.

g.Reporting on Utilization of Subject Inventions
i.Regeneron agrees to submit, during the term of this Project Agreement, an
annual report on the utilization of a Subject Invention or on efforts at
obtaining such utilization that is being made by Regeneron or its licensees
or assignees. Such reports shall include information regarding the status
of development, date of first commercial sale or use, and such other data
and information as the agency may reasonably specify. Regeneron also agrees
to provide additional reports as may be requested by the Government in
connection with any march-in proceedings undertaken by the Government in
accordance with Subparagraph h of this Section 7.2. Consistent with 35
U.S.C. § 202(c)(5), the Government agrees it shall not disclose such
information to persons outside the Government without permission of
Regeneron.
ii.All required reports shall be submitted to the e-room, OTAS, OTAO, and
OTTR.

h.Compulsory Licensing Rights

Regeneron agrees that, with respect to any Subject Invention in which it
has retained title, the Government has the right to require Regeneron, an
assignee, or exclusive licensee of a Subject Invention to grant a
non-exclusive license to a responsible applicant or applicants, upon terms
that are reasonable under the circumstances, and if Regeneron, assignee, or
exclusive licensee refuses such a request, the Government has the right to
grant such a license within the Field itself only if the Government
determines that:

i.Action is necessary to alleviate the following health or safety needs
that may affect the United States and Regeneron (itself or through its
assignee, subcontractor or licensee) is unwilling or unable to manufacture
or supply the Subject Invention to address such needs:

a.Declaration for Public Health Emergency by the Secretary of HHS;

b.Determination that there is a significant potential for a public Health
emergency that has a significant potential to affect a national or health
security of U.S. citizens as determined by the Secretary of HHS; or

c.Declaration by WHO Director General of a public health emergency of
international concern.


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