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On January 4, 2021, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) announced that they are seeking comments on proposed changes to the regulations entitled, “Rights to Federally Funded Inventions and Licensing of Government Owned Inventions” that support the University and Small Business Patent Procedures Act of 1980, commonly known as the “Bayh-Dole Act”.  Comments on the proposed regulations can be submitted via the Federal e-Rulemaking Portal using the docket identification number 201207-0327 and must be received no later than April 5, 2021. NIST held a public webinar on February 25, 2021, on the Notice of Proposed Rulemaking.  The proposed changes are intended to further the Return on Investment (ROI) Initiative for Unleashing American Innovation, which was published in April 2019. 

As provided in the Federal Register, these proposed changes would:

  • make technical corrections;
  • reorganize certain subsections;
  • remove outdated and/or unnecessary sections;
  • institute a reporting requirement on Federal agencies; and
  • provide clarifications on definitions, communications, scope of march-in rights, filing of provisional patent applications, electronic filing, the purpose of royalties on government licenses, and the processes for granting exclusive, co-exclusive and partially exclusive licenses and for appeals.

The proposed changes related to the scope of march-in rights have received the most attention to date, and have been the subject of commentary in trade journals, blog posts, law firm alerts, and from AUTM CEO Stephen Susalka.  Briefly, these proposed changes would clarify 37 CFR § 401.6 to include a provision that march-in rights would not be exercised by an agency exclusively on the basis of business decisions of a contractor regarding the pricing of commercial goods and services arising from the practical application of an invention.

This post, however, will focus on changes related to the filing of provisional patent applications.  The proposed revisions to 37 CFR § 401 will, in part:

  • update the definitions of a patent application and initial patent application in § 401.2(m) and (n) to encompass U.S. provisional and nonprovisional applications, applications filed in a foreign country or international patent office directly, PCT applications, and applications for Plant Variety Protection certificates; and
  • revise § 401.14(c)(3) to clarify the procedures for filing more than one provisional patent application on a disclosed subject invention

More particularly, 37 CFR § 401(m) and (n) would be revised to read as follows (changes from the previous version are shown with additions underlined and deletions in brackets):

(m) The term patent application or ‘‘application for patent’’ [includes a provisional or nonprovisional U.S. national application for patent as defined in 37 CFR 1.9 (a)(2) and (a)(3), respectively,]  may be the following: (1) A United States provisional application as defined in 37 CFR 1.9(a)(2) and filed under 35 U.S.C. 111(b); or (2) A United States nonprovisional application as defined in 37 CFR 1.9(a)(3) and filed under 35 U.S.C. 111(a); or (3) A[n] patent application [for patent] filed in a foreign country or an international patent office; or (4) A patent application filed under the Patent Cooperation Treaty as defined in 37 CFR 1.9(b) which designates the United States; or (5) An application for a Plant Variety Protection certificate.

(n) The term initial patent application means, as to a given subject invention[,]: (1) T[t]he first United States provisional [or non-provisional U.S. national] application as defined in 37 CFR 1.9(a)(2) [and (3), respectively,] and filed under 35 U.S.C. 111(b); or (2) The first United States nonprovisional application as defined in 37 CFR 1.9(a)(3) and filed under 35 U.S.C. 111(a); or (3) The first patent application filed in a foreign country or an international patent office; or (4) The first [international] patent application filed under the Patent Cooperation Treaty as defined in 37 CFR 1.9(b) which designates the United States[;], or (5) The first application for a Plant Variety Protection certificate [, as applicable].

The changes to 37 CFR § 401.14, however, would have the most potential impact on operating procedures for technology transfer offices and in-house and outside counsel.  The revisions to 37 CFR § 401.14(3) include (changes from the previous version are shown with additions underlined and deletions in brackets):

(i) The contractor will file its initial patent application on a subject invention to which it elects to retain title within one year after election of title or, if earlier, prior to the end of any statutory period wherein valid patent protection can be obtained in the United States after a publication, on sale, or public use. Subject to the grant of an extension by an agency under paragraph (c)(5) of this clause, if the contractor files a provisional application as its initial patent application, it shall file a non-provisional application within 10 months of the filing of the provisional application.   (ii) Each provisional application filed following the initial patent application must contain additional written description of the subject invention not previously disclosed in a patent application. The contractor shall file or notify the government that they do not intend to file a non-provisional application within 10 months of the last filed provisional application that is consistent with this section. (iii) The contractor will file patent applications in additional countries or international patent offices within either ten months of the first filed patent application or six months from the date permission is granted by the Commissioner of Patents to file foreign patent applications where such filing has been prohibited by a Secrecy Order. (iv) If required by the Federal agency, the contractor will provide the filing date, patent application number and title; a copy of the patent application; and patent number and issue date for any subject invention in any country in which the contractor has applied for a patent.

Of particular concern are the proposed revisions under 37 CFR § 401.14(3)(ii), which provide that “each provisional application filed following the initial patent application must contain additional written description of the subject invention not previously disclosed in a patent application.” (emphasis added).  The proposed revision does not define what is meant by “additional written description” or what, at a minimum ,would be sufficient to satisfy this requirement.  Does “additional written description” require inclusion of additional features and/or embodiments not previously disclosed in the initial patent application or would merely revising a paragraph disclosed in the initial patent application to add further clarifications or discussion about the invention be sufficient?

In practice, it is not uncommon to abandon a first filed provisional application, either expressly or naturally by not filing a non-provisional application on or before the one-year anniversary of the priority date.  This strategy often is adopted when sufficient progress has not been made on the invention to merit the filing of a non-provisional application and no public disclosure has occurred or to delay the expense of preparing and filing a non-provisional application or the start of potential patent term.  In these circumstances, the first filed provisional application is often refiled “as is” one day after abandonment.    

Under the proposed changes, however, any provisional applications filed after the initial patent application would need to contain additional written description of the invention that was not contained in the previously filed application.  In practice, however, this is often not the case and would create additional burdens on technology transfer offices and their counsel regarding what would be sufficient to constitute “additional written description.”   For example, if sufficient progress has not been made on an invention during the provisional filing year, the inventor, technology transfer office and their counsel will need to spend precious time and resources determining what additional written description would or could be needed to be added to the application.  This begs the question of whether the time and resources being expended on trying to find additional (and sufficient) written description for refiling a provisional might be better spent on assisting an inventor on making progress with his or her invention and developing a patent filing strategy consistent with the current state of the research and potential licensing opportunities.  

Also of concern is the provision under 37 CFR § 401.14(3)(ii) that “[t]he contractor shall file or notify the government that they do not intend to file a non-provisional application within 10 months of the last filed provisional application that is consistent with this section.” (emphasis added).  This provision seems to be inconsistent with 37 CFR § 401.14(3)(i), which provides that “if the contractor files a provisional application as its initial patent application, it shall file a non-provisional application within 10 months of the filing of the provisional application.”

In practice, it is not uncommon to file more than one provisional application during the one-year pendency of the initial patent application, e.g., the first filed provisional application.  This strategy often is referred to as “rolling provisionals,” or “serial provisionals” in which new data, additional description, and potentially new claims, are added to the first filed provisional application as the inventor(s) generate new experimental results.  Under this strategy, a non-provisional application is filed on or before the one-year anniversary of the filing date of the first filed provisional application, including all of the subject matter included in any subsequently filed provisional application in this series. 

Under the proposed changes, however, the contractor would need to file a non-provisional application or notify the government that they do not intend to file a non-provisional application within 10 months of the last filed provisional application.  In practice, this most likely would never be the case as the decision to file a non-provisional application is based on the filing date of the first filed provisional application not the last.  Further, filing a non-provisional application based on the filing date of the last provisional application would run counter to the definition of the “first application” as provided Article 4(c)(4) of the Paris Convention.  This inconsistency should be addressed by the rulemaking body.

Finally, in the public webinar conducted by NIST, slide 21 provides that revisions to 37 CFR § 401.14(c)(3) include that “the filing of serial provisional applications on the same subject invention – must be approved by agency, ….”  (emphasis added).  This language, however, is not mentioned in the materials published in the Federal Register.  To our knowledge, agency approval to file a patent application has not been required by previous regulations and the filing of a patent application has been at the discretion of the contractor, e.g., the tech transfer office.  If adopted, this language would place additional burdens on technology transfer offices and would be impractical as provisional filings typically must be made in a timely manner, for example, prior to a public disclosure.  It is unlikely that approval from the funding agency could be received before the provisional application would need to be filed prior to such disclosure, which could result in the forfeiture of foreign patent rights and negatively impact the commercial value of the invention.  This approach would run counter to the express goals of the Bayh-Dole Act.

Please continue to watch BRICS & Beyond for updates on the proposed changes to the Bayh-Doyle Act.

This post was written by Lisa Mueller & Jeff Childers.

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