[Ip-health] Diversity of contract terms illustrates need for transparency of Covid-19 contract

Luis Gil Abinader luis.gil.abinader at keionline.org
Fri Nov 13 12:14:26 PST 2020


Link: https://www.keionline.org/34543

Diversity of contract terms illustrates need for transparency of Covid-19
contract

Posted on November 13, 2020 by Luis Gil Abinader

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 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)
HHS/ASPR/BARDA
HHSO100201800012C

“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.”

Novavax
ATI/HHS/ASPR/BARDA; DOD/Army/JPEO-CBRND
W15QKN1691002, MCDC2011-001

“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)
ATI/Army/JPEO-CBRN
W15QKN1691002-P00081; MCDC2011-004

“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.”

Regeneron Pharmaceuticals
HHS/ASPR/BARDA
HHSO100201700020C

“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.


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