15 Section 203(1) states in pertinent part:
[w]ith respect to any subject invention in which a [grantee] has acquired title under this chapter, the Federal agency under whose funding agreement the subject invention was made shall have the right ... to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee or exclusive licensee refuses such request, to grant such a licensee itself, if the Federal agency determines that such--
- action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;
- action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees;
- action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the contractor, assignee, or licensees ....
Rights of Government Agencies
Another legal authority, unrelated to the Bayh-Dole Act but available to the NIH due to its status as an agency of the Federal government, is the limitation on remedies for patent infringement against the government under 28 U.S.C. §1498. Section 1498 gives the Federal government the right to use and manufacture any patented invention, whether or not developed with federal funding, without a license, subject to liability for money damages. Section 1498 states:
[w]henever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture....For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.
This differs from the government use license under the Bayh-Dole Act in several important respects. First, § 1498 is not limited to the funding agency, nor even to patents funded by the Federal government. In effect, it provides the government with a compulsory license under all U.S. patents. Second, § 1498 requires payment of reasonable compensation to the patent holder, while the government use license for subject inventions under the Bayh-Dole Act requires no further payment (presumably in consideration of the fact that the agency funded the invention in the first place). Third, § 1498 specifically contemplates that the Federal government may provide authorization and consent to others to practice the patent. This language is more amenable to a construction that extends to grantees than the narrower language of the Bayh-Dole Act that restricts the government use license to activities "by or on behalf of the government."
However, the exercise of this authority entails significant costs. The most obvious of these is the requirement that the government pay "reasonable and entire compensation," which could be a staggering amount if NIH were to exercise its rights under § 1498 on behalf of all its grantees and contractors. A less obvious, but perhaps more serious, cost is the potential to undermine the value of patents in the hands of private owners, which could have a chilling effect on the future willingness of private companies to develop, publish, or commercialize research tools. Nevertheless, § 1498 might prove useful in highly extraordinary circumstances, if the need is critical enough to override these concerns and a license on reasonable terms is not otherwise available.
Rights of All Persons
Reexamination. Another legal option, available to NIH or to any party that believes that certain claims of a patent should not have been allowed, is to cite prior art to the PTO and seek reexamination of the patent under 35 U.S.C. §§ 301-307. These sections of the patent statute allow any person to cite prior art "which that person believes to have a bearing on the patentability of any claim of a particular patent," and to "file a request for reexamination by the Office of any claim of a patent on the basis of the prior art cited." Such a request initiates a proceeding by the PTO to determine whether the prior art cited raises a "substantial new question of patentability," and if so, to order a reexamination of the patent. The reexamination procedure concludes with the issuance and publication of a certificate "canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent any proposed amended or new claim determined to be patentable." 35 U.S.C. § 307.
This legal authority could be useful in cases where a patent on a research tool has claims believed to be overly broad or otherwise invalid in light of prior knowledge in the field. At present, there are patents covering research tools which may be overly broad and vulnerable to such a challenge. However, the reexamination procedure has certain disadvantages for those who would challenge the validity of an issued patent that limit is usefulness. Reexamination is generally done by the same examiner who initially allowed the claims and may be disinclined to find error in his or her own prior decision. Moreover, once reexamination is ordered, the proceeding is conducted on an ex parte basis between the examiner and the patent holder with no opportunity for further involvement by the party challenging the patent. As a result, private firms typically avoid reexamination in the PTO, believing that their prospects for successfully challenging invalid claims are greater in an infringement action.
Research Exemption. Finally, any discussion of legal authorities for improving access to proprietary research tools should include the so-called "experimental use exemption" or "research exemption" from infringement liability. The U.S. patent statute does not appear to permit any unlicensed use of a patented invention, in research or otherwise, but language in some early judicial opinions nonetheless suggests that use of a patented invention solely for research or experimentation is, in principle, exempt from infringement liability.
Although many researchers in non-profit settings believe in and rely on this exemption, there is little legal authority to justify this reliance. The cases that have recognized the existence of a research exemption in theory have typically not applied it to the facts of the cases before them, noting that the defense is "truly narrow." Foreign patent systems that recognize a research exemption typically distinguish between experimenting on a patented invention--i.e. using a patented invention to study the underlying technology or perhaps to invent around the patent, which is what the exemption covers--and experimenting with a patented invention to study something else, which the exemption does not cover. So construed, the exemption would not be available for researchers who make use of patented research tools in the course of investigating something else, as opposed to those who are studying the research tools themselves. This is a sensible distinction. It is difficult to imagine how a broader research exemption could be formulated without effectively eviscerating the value of patents on research tools. Researchers are ordinary consumers of patented research tools, and if these consumers were exempt from infringement liability, the patent holder would have nowhere else to turn to collect patent royalties. An excessively broad research exemption could eliminate incentives for private firms to develop and disseminate new research tools, which could on balance do more harm than good to the research enterprise.
In summary, NIH has numerous legal authorities available to assist in improve access to research tools. The exercise of some may be welcomed by the extramural community and viewed as a positive source of guidance. The exercise of others may be perceived as extreme, and may implicate other issues with far-reaching and perhaps unpredictable consequences.