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Bayh-Dole Compliance for Tech Transfer: Questions and Answers

Although it’s been more than a year since new Bayh-Dole reporting requirements were announced, we continue to see our clients challenged with the best process and tactics to implement the changes going forward. And with the recent news that NIST will take over the iEdison system from NIH and further regulatory updates to 37 CFR 401 coming down the pike, now is the time to put a laser focus on accurate Bayh-Dole compliance.

More often than not we find that the biggest impediment to Bayh-Dole compliance is bad data. Poor data quality becomes an administrative nightmare for office staff that is stretched to handle invention disclosures and clear a backlog of iEdison notifications that never seems to go away.

Here are several questions we have received in recent months that are relevant under the new and old Bayh-Dole regulations:

1) What is the best action to take when finding an issued patent that has a government support clause that has not been reported?

It is always best to report inventions to the government at any stage that you become aware of federal funding. In the case of iEdison, you can enter a note indicating the date that you became aware of the funding.

2) What happens if we are late in providing utilization reports? Can we lose title?

Utilization reports are due upon request from the federal agencies. At this time, NIH and DOE require utilization reports. You should assume that iEdison agencies expect utilization reports from grantees. More recently, in July 2019, NIH updated the utilization module in iEdison to include additional utilization data that DOE is now requiring. While there is no data available to indicate that grantees will lose title for not submitting utilization reports, it is possible that some agencies (such as NIH) could stop grant funding on certain awards until utilization reports are submitted.

3) How and when do you need to request a one-year extension to convert a provisional patent application pursuant to the associated Bayh-Dole 2 reporting requirement?

If the federal funding is from NIH, you need to email with the EIR number and funding periods of the NIH grant(s). The extension request is required for inventions funded under grants with an award date on or after October 1, 2018. For all other grants the extension request needs to be emailed to the particular agency contact. The extension request is required for inventions funded under grants with an award date on or after May 14, 2018.

4) If you report an invention after the 60-day deadline, can the Government take title?

Yes, the Government can come in at any time and take title if compliance is not completed. Most agencies require that you report invention disclosures within 60 days of receipt, or as soon as you become aware of federal funding thereafter. Regardless of when the disclosure is reported, it is critical to elect title upon the filing of the first U.S. filing (which is considered to be the provisional filing as of May 14, 2018). It is always better to report late than not at all.

5) What happens if you are late in submitting utilization reports?

While we are not aware of any instances in which the Government has asserted rights to an invention based on missing utilization reports, it is possible that they could do so in the future. Government agencies (and Congress) want to collect data on the licensing and commercialization activities for federally funded inventions. Just recently NIH has targeted some institutions with a large number of outstanding utilization notifications. The notification includes a deadline for remediating notifications within a short period of time, with a warning of loss of grant funding if compliance reporting is not completed.

6) If disclosure is rejected for lack of description, does that delay the 60-day reporting requirement?

Yes, if a disclosure is rejected for lack of description it will delay the 60-day reporting requirement. Often it takes time to gather the appropriate disclosure documents. If this is the case, it is best to elect title if you have filed, enter the patent filings, and complete all other compliance while you work on clearing the disclosure rejection. Keep in mind that if you have not filed a patent application and you need to waive the invention, it cannot be waived until the disclosure is accepted.

Need help with Bayh-Dole compliance? Call (508) 294-1402 or drop us a line at Borman & Company anytime.

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