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Federal Circuit upholds government march-in rights in Alzheimer’s mouse patent case

The U.S. Federal Circuit recently upheld the government’s royalty-free license rights over an Alzheimer’s research patent under the Bayh-Dole Act.

The dispute is centered on U.S. Patent No. 5,898,094, which covers transgenic mice expressing mutated genes linked to the degenerative disease. Researchers at the University of South Florida (USF) and Mayo Clinic developed and patented the mice with partial funding from a National Institutes of Health (NIH) grant.

USF sued the government for infringement after a government contractor used the mice without authorization. The government responded that the work that led to reducing the patented invention to practice occurred “under” its grant funding agreement with Mayo Clinic. Under the Bayh-Dole Act, federal funding agencies like NIH are given certain rights over federally funded inventions including “a nonexclusive, nontransferrable, irrevocable, paid-up license” under 35 USC §202(c)(4).

On appeal, USF argued the statute requires the funding agreement to predate the inventive work, whereas the subcontract between Mayo and USF was not executed until months after the critical experiments. But the Federal Circuit held that, based on the statutory language of the Act, a subsequent agreement can cover prior work, if payment for the prior work is within the grant’s scope.

Dennis Crouch, professor at the University of Missouri School of Law, says the Federal Circuit’s decision confirms the broad scope of the government’s licensing rights under the act, “namely that it can include work that predates the funding agreement.”

“The court refused to impose strict timing requirements not evident from the statutory text. As government witnesses observed, delays in memorializing inter-institutional agreements are commonplace in collaborative grant projects,” Crouch says.

“The case here highlights that the Government has broad power in situations where parties have accepted federal funding,” adds Crouch. “It does not, however, answer when exertion of that power is sound policy. Read the decision here.

Source: Patently-O

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