10 MONTH CONVERSION DEADLINE?? New Bayh Dole Regulations a Trap for the Unwary

July 18, 2018
Post by Heidi S. Nebel

Under the Bayh-Dole Act, businesses and nonprofit organizations that receive federal government funding, such as the National Institutes of Health (NIH), the United States Department of Agriculture (USDA), or Small Business Innovation Research (SBIR) grants, may retain ownership of inventions and patent applications that have been made with such funding.

The requirements to retain ownership include:

  • disclosing the invention to the federal agency within two months of learning of it;
  • electing title to the invention by notifying the agency in writing within two years of disclosure; and
  • filing a patent application on the invention within one year after election of title, or earlier if necessary to avoid forfeiture of patent rights. 

If these and other requirements are not satisfied, a company or university may not have title (ownership) of the invention and associated patent rights.

Important and new regulations have become effective for all federal funding agreements executed or modified after May 14, 2018. These new regulations are continued evidence of the Federal Government’s heightened scrutiny and monitoring of patent filings. The most stringent of the new regulations requires that a conversion non-provisional filing MUST be completed within a new “early” filing requirement -- 10 MONTHS from the priority deadline. This early deadline is mandatory unless an extension of time for an additional two months (to the traditional 12 month deadline) is obtained. This extension is said to be automatically granted and the applicant is notified within 60 days of the request. If no request has been granted and the filing occurs after the early deadline, the government may retain title to the invention. Requests for the extension may be made at the time of disclosure, election and/or filing and we recommend that all clients with federal funding seek this extension as early as possible.

The purpose of the Bayh-Dole Act was to increase commercialization of federally funded research by allowing recipient institutions to obtain title to and thus commercialization rights to inventions. This purpose seems frustrated by the implementation of arbitrary deadlines, inconsistent with United States Patent Law which cast uncertainty about clear title to Intellectual Property.

For more information, please see the final rule and response to public comment.

Heidi S. Nebel is the Chair of the Biotechnology & Chemical Practice Group at MVS. She serves as the Managing Member of the Firm and has been assisting clients with intellectual property matters for over 25 years.

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