The Enforcement Of Patent Rights In Government Funded Inventions

• Published date: 12 September 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Mr Brandon T. Andersen, J. Derek McCorquindale and Daniel Cooley

In recent days, increased attention has been given to government funding on the national and state level, for example, through investment in our country's infrastructure. Some of those resources may be directed to research and development, spurring innovation in the private sector. The parties who accept government contracts or other federal grants should consider how such funds could lead to the development of patentable inventions and how patents obtained on those inventions may ultimately be enforced. This article is the second installment in a two-part series addressing the acquisition and litigation of patent rights directed to inventions developed with the support of government grants or contracts.

In the first article, we provided a brief overview of the Bayh-Dole Act, which controls the allocation of intellectual property rights in inventions developed using federal funding. In this second article, we explore the considerations and requirements when bringing or facing an enforcement action based on those patents.

I. Infringement Actions

A. Enforcement

The Bayh-Dole Act provides a path whereby a recipient of government funding may "elect to retain title" to "any invention . . . conceived or first actually reduced to practice in the performance of work under a funding agreement."² After retaining title to such a governmentfunded invention, the owner may pursue a U.S. patent, and if successful, obtain the right to exclude others from practicing the invention.³ The federal government, however, is granted "a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world."⁴ Further, if the owner fails to comply with the requirements of the Act, the funding agency has discretion to take title.⁵

Nonexclusive license holders generally have no standing to bring an infringement action. As the Federal Circuit has explained, "[w]here a patentee makes an assignment of all significant rights under the patent, such assignee may be deemed the effective 'patentee' under the statute and has standing to bring a suit in its own name for infringement," but "[a]ny other party seeking enforcement of the patent can sue, if at all, only with the patentee or in the name of the patentee."⁶ With respect to nonexclusive license holders, such as the funding agency, "[i]t is well settled that a non-exclusive licensee of a patent has only a personal and not a property interest in the patent."⁷ For this reason, private patent owners under the Bayh-Dole...