Altering Bayh-Dole to allow inventor right to practice boosts mobility and fosters innovation

[Brenda M. "Preserving the Fruits of Labor: Impediments to University Inventor Mobility," Tennessee Law Review 89, no. 1 (Fall 2021): 1-66 heinonline gdi-tm]

One potential solution to address some of the issues related to university inventor mobility described previously would be to modify the Bayh-Dole Act. The proposed amendment would require universities to allow a presumptive right to practice for university inventors on payment of a reasonable royalty, or as otherwise agreed between the inventors and the parent university.

If an inventor is moving to another academic institution and the invention will be used for solely academic purposes, then an appropriate royalty for the presumptive right to practice could be set at zero. Imposing any royalty could discourage moves for academic purposes only. Alternatively, Congress or the courts could provide for a limited academic "reverse shop right" for inventors seeking to transfer between academic institutions. 348 A limited reverse shop

right would enable inventors to continue using their prior creations for purely academic use.349The traditional shop right doctrine holds that an employer retains a royalty-free, nontransferable license to practice an employee's invention when the employer's resources have been used. 350 Similar to the equitable principles justifying the standard shop right doctrine, a limited academic reverse shop right would recognize the importance of departing inventors' contributions, supporting the ability of university inventors to continue using their creations for solely academic purposes.351

Determining whether an invention will be used for academic purposes only can be difficult. For example, in the case of Madey v. Duke University, the departing inventor owned patents covering the invention at issue and sued his former university for patent infringement. 352 Duke attempted to rely on the experimental use defense. 353 The Federal Circuit explained that Duke's use of the invention in furtherance of its "legitimate business" of"educating and enlightening students and faculty" would not allow it to qualify for the experimental use defense, regardless of its non-profit status.354

To allow for greater discretion, universities could rebut the presumptive right to practice by demonstrating that allowing inventors to practice their inventions would undermine the public interest or that exclusivity is essential to commercialization. An inventor might not be acting in the best interest of the public, but may instead be motivated by vindictiveness or have conflicts of interest.M5 In those circumstances, a university justifiably might not want to share data with or license intellectual property. Similarly, sometimes an exclusive patent license is a necessary incentive for a firm to take on the costs of commercializing an invention, particularly in the pharmaceutical or biotechnology space. 356 In other technological areas, such as computer-implemented inventions, exclusivity may not be as essential for commercialization. For example, universities reported that they granted over 60% of patent licenses in a nonexclusive manner from 2009 to 2013.357 In circumstances where a university is already licensing an invention nonexclusively, allowing departing inventor use on payment of a reasonable royalty would be unlikely to adversely affect innovation incentives.