# Presentation: 719519

## Extramural Intellectual Property 

- SBIR/STTR Inventions:
- Meeting the Objectives of the Bayh-Dole Act

- John Salzman
- Assistant Extramural Inventions Policy Officer
- Division of Extramural Inventions and Technology Resources, OPERA, OER, NIH

## Stewardship of Federal Funds

- How funds will be expended
- Fiscal management
- Programmatic assessment
- How research will be conducted
- Research integrity
- Conflict of interests
- How research outcomes will benefit the public
- Share outcomes to spawn new research ideas
- Encourage application of intellectual property

- Practical Applications are an Important Part of Stewardship

## Three Phase Structure of SBIR/STTR Funding

- Phase I
- ... to establish the technical/scientific merit and feasibility of the proposed R/R&D efforts.
- Phase II
- ... to continue the research or R&D efforts initiated in Phase I. Funding shall be based on the results of Phase I, scientific and technical merit, and commercial potential of the Phase II application.
- Commercialization Plan Required
- Phase III
- An objective of the SBIR/STTR Program is to increase private sector commercialization of innovations derived from Federal R/R&D. During Phase III, the small business concern is to pursue commercialization with non-SBIR/STTR funds (either Federal or non-Federal).

## What Are the Main Provisions of the Bayh-Dole Act (1980)?

- Provides title of Federally supported inventions to vest with the grantee/contractor organization
- Requires all grantee/contractors to demonstrate progress toward transfer of the technology
- Requires acknowledgment of the government’s involvement and license
- Government use license
- Federal support clause in the patent
- Provides incentive to inventors and more rapid development and commercialization
- Applicable to ALL U.S. Government-funded grantees and contractors:  Domestic and Foreign

## What is an Invention (per Bayh-Dole)?

- 37 CFR Section 401. 14 Standard patent rights clauses.
- (a) Definitions
- (1) Invention means any invention or discovery which is or may be patentable or otherwise protectable under Title 35 of the United States Code, ...
- (2) Subject invention means any invention of the contractor conceived or first actually reduced to practice in the performance of work under this grant or contract,...
- Does not include solely copyrightable materials, e.g. books
- Includes software; deemed patentable as of late ’90s

## Implement Employee Agreements  as needed
Disclose Each Invention  within 60 days
Resolve Election or Waive of Title  within 2 years 
File Patent  within 1 yr. of election
Provide License to the Govt.  upon title election
Indicate Govt. Support on Patent  with patent appl.
Product Manufacturing in U.S.  required
Report on Invention Utilization  annually
Final Invention Report  at award close out

- Disclose Each Invention  within 60 days
- Resolve Election or Waive of Title  within 2 years
- File Patent  within 1 yr. of election
- Provide License to the Govt.  upon title election
- Indicate Govt. Support on Patent  with patent appl.
- Product Manufacturing in U.S.  required
- Report on Invention Utilization  annually
- Final Invention Report  at award close out

- Invention Reporting Requirements
- of SBIR Grantee/Contractors
- Administrative Requirements (per 37CFR, 401.14)

## Annual Invention Utilization Reporting is Required for NIH

- NIH Grants Policy Statement, 12/03 Revision, Page 119:
-     “Grantees (and, in some cases, employee inventors) have rights to inventions (“subject inventions”) conceived or first actually reduced to practice in the performance of work under an NIH award. Grantee organizations must fulfill the following requirements:
- Submit an annual utilization report for all inventions where election of title is made and for unpatented, yet licensed, inventions (37 CFR 401.14(h));...”

## Utilization Report Requirementshttp://www.iedison.gov/Edison/utilization_reporting.html

-       **Report according to grantee/contractor-defined 12-month reporting cycle**
- 1.      Please indicate the latest stage of development of any product arising from this invention according to the following categories: Not Licensed/Licensed/Commercialized
- 2.      In the designated reporting period, what was the total income received as a result of license or option agreements? Do not include specific patent costs reimbursement.
- 3.      If any product arising from this invention has reached the market, what was the calendar year of the first commercial sale?
- In the designated reporting period, did the grantee organization/contractor or any of the exclusive licensees request a waiver of the U.S. manufacturing requirements? If yes, how many such waivers were obtained?
- 5.      In the designated reporting period, how many licenses and/or options of any type were awarded to small businesses (< 500 employees)?
- 6.	In the designated reporting period, how many exclusive licenses and/or options have been awarded?
- 7.	In the designated reporting period, how many non-exclusive licenses and/or options have been awarded?
- 8.	Please provide the commercial name of any FDA-approved products, utilizing this invention, that have first reached the market during the designated reporting period.

## Noted Misconceptions

- The government owns my invention.
- If I report an invention, NIH (the government) will take my invention.  ***No, ***
- By not reporting my invention to NIH, I will secure rights to an invention.

***No, rights vest with the SBIR/STTR organization***
***NIH is not in competition with recipients.***
***No, there is a greater risk of loss of rights by not reporting.*****                                                                                                                       **

## Bayh-Dole IP Rights to Foreign Grantees/Contractors

- NIH Guide September 4, 2003 (Extension of Deferral) _[http://grants2.nih.gov/grants/guide/notice-files/NOT-OD-03-063.html](http://grants2.nih.gov/grants/guide/notice-files/NOT-OD-03-063.html)_

- Deferral of the implementation of this policy has been extended beyond the original 12 months.

-  - Proposed plan to adjust Bayh-Dole intellectual property rights of foreign grantees to further protect investment of U.S. taxpayers

-  - All foreign grantees, contractors, consortium participants and/or subcontractors are reminded that they _must_ comply with Bayh-Dole invention reporting requirements

**Notes:**
After consideration of comments, NIH has decided to defer implementation for twelve months, in order to explore more fully the ramifications of the policy change, and to consider alternatives that meet the NIH's need to protect the U.S. public's interest.

The NIH continues to be committed to protecting the U.S. public's interest and improving public health worldwide through effective handling of intellectual property rights for foreign grantee/contractors. Based on the various comments contributed by the foreign grantee/contractor community, NIH is working on the development of a specific approach to affect this control without impacting the unquestionable benefits of the Bayh-Dole Act. To address this complex issue, several alternative approaches are currently being vetted at the NIH and through the Department of Commerce in consideration of the need to protect global research collaboration, commercialization, and trade. 

## 1994 Congressional Inquiry
1995 Follow up compliance study
1997 GAO Audit
Bayh-Dole Administration
1998 GAO Audits
E.O. 12591
Confirmatory licenses/Gov’t support clauses
1999 IG and GAO Audits
SBIRs
Grantee compliance
5 year follow up to 1994 Report
2000 – 2001 OIG: Further Revision of 1994 Report
2002 GAO - Use of Confirmatory Licenses 
2003 GAO – Government Involvement in Taxol IP

- 1995 Follow up compliance study
- 1997 GAO Audit
- Bayh-Dole Administration
- 1998 GAO Audits
- E.O. 12591
- Confirmatory licenses/Gov’t support clauses
- 1999 IG and GAO Audits
- SBIRs
- Grantee compliance
- 5 year follow up to 1994 Report
- 2000 – 2001 OIG: Further Revision of 1994 Report
- 2002 GAO - Use of Confirmatory Licenses
- 2003 GAO – Government Involvement in Taxol IP

- The Importance of Invention Reporting:Constant Scrutiny of NIH and Grantees

## Secure, Interactive Web-Based System for Bayh-Dole Policy and Reporting Compliance

- Didactic Content to inform investigators & grantee/contractor organizations
- 37CFR 401
- Invention Policy Issues
- Invention Reporting Procedures/forms
- Current submission of Invention Report Records to any of 23 participating Federal Agencies
- Submission via browser or computer-to-computer datastream
- Used by ~550 grantee/contractor organizations

|   NSF |  |   NAVY/ONR |   USDA/CSREES |
| --- | --- | --- | --- |
|   HHS/FDA |  |   USAF/AFOSR |   USDA/Forest Service |
|   HHS/CDC |  |   DOC/NOAA |   USDA/ARS |
|   USAID |  |   EPA |   USAF/ESC |
|   HHS/ATSDR
  HHS/IHS                           |   HHS/AHRQ (AHCPR)
  Army/SSC |  |   Army/MRMC
  NIH |
|   AFRL/IF |   Army/SMDC |  |   DOD/DMEA |
|  |  |  |  |

**http://iedison.gov**

## Why Use iEdison?

- Secure, relational, real time database with all invention reporting business rules built in
- Offers reminders of time critical reporting obligations
- iEdison supports full electronic reporting: no paper is needed if you have the information electronically.
- Requires minimal hardware/software
- Internet connection
- Browser
- Meets invention reporting requirements for diverse population of interagency grantees/contractors
- Provides single gateway for invention reporting to 23 government agencies

## NIH Resources for SBIR/STTR Grantees/Contractors

- Interagency Edison  http://iedison.gov
- Extramural Inventions Policy
- John P. “J.P.” Kim
- 	Director & Policy Officer
- 	Division of Extramural Inventions & Technology Resources, OPERA
- 	Office of Extramural Research, NIH, HHS
- John Salzman,
- 	Assistant Extramural Inventions Policy Officer
-    	Division of Extramural Inventions & Technology Resources, OPERA
- 	Office of Extramural Research, NIH, HHS
- 	(301) 435-1986
- iEdison User Support
- Charles Smith
- edison@od.nih.gov
- (301) 435-1986 x 1