The AUTM CEOs Speech, Fitt 1

As part of NIST’s recent symposium on “unleashing American innovation,” the CEO of the Association of University Technology Managers (AUTM) read a talk. Let’s work through his talk and see what we can learn. I have made a transcript so you can follow along.

All right. Thank you. As Marcia has mentioned, I’m the CEO of AUTM and we are the nonprofit leader in supporting the development and commercialization of university and nonprofit research that is changing the world.

It’s weird to hear someone claim that a professional lobbying organization is “the leader” in “supporting” anything. What does it mean to “lead” in “supporting” “commercialization” of “research”? It’s rather like a cheerleader taking credit for the football team by talking about being better at cheers than others. The strange word among all these strange words (and thus the quote marks) is “supporting.” One might think that “supporting” suggests that university inventors might turn to AUTM for assistance when they–the investigators–see a reason to develop or commercialize their “research” (or, perhaps, patentable inventions). That’s the idea of “support”: “It looks like we need some cheerleaders here, folks–let’s contact AUTM, the leader in that sort of thing.”

“Support” implies that AUTM is not the primary actor–that some non-AUTM actor makes the decision to develop and commercialize and some non-AUTM actor does the actual work. Since AUTM’s members are mostly university licensing officers, the AUTM CEO’s use of “supporting” further suggests that AUTM’s members are also involved in support, and aren’t the ones making the decisions and doing the work. In part, this suggestion is entirely spot on–AUTM’s members don’t, for the most part, have the standing to decide what “research” should be developed and commercialized. But in another part, this suggestion is almost entirely wrong, because many AUTM members will assert that they have the responsibility and authority under their universities’ patent policies to make such decisions on behalf of the university and therefore they do not merely “support” development and commercialization–they do the development and commercialization on behalf of their universities.

Perhaps the AUTM CEO means that AUTM the organization “supports” the AUTM members in their attempts to do it. AUTM cheerleads the cheerleaders who claim that they should decide what the football team will do next. After all, if one decides the play on the field, it is so much easier to plan out the proper cheers.

The CEO in fact has it backwards–universities pay the dues for their licensing professionals to join AUTM and attend AUTM’s conferences and those licensing professionals make most of the presentations. AUTM is the leader in extracting money from universities–the universities support AUTM, not the other way around. If AUTM went out and raised its own money, and used that money to assist universities, then perhaps we could talk about AUTM’s support.

And even if one allowed AUTM its claim that it supported “development and commercialization of university and nonprofit research,” we would still have to point out that virtually none of that “research” is in fact “commercialized.” Most of it stales behind patent paywalls, not available for direct access by industry, not even for research purposes. For AUTM, “commercialization” means creating patent positions and offering these for exclusive licensing. Supporting “commercialization” means encouraging universities to find ways to create more patent positions. What is “commercialization” where nothing comes out the other end? Constipalization?

As for the tag “that is changing the world”–what does that tag modify? Research? Or the development and commercialization (of research)? Or is it the act of  supporting? Perhaps it doesn’t matter–the AUTM CEO wants everyone to understand that AUTM supports stuff that changes the world. The implication, of course, is that those changes are a good thing. But the CEO could be correct in his claim and the changes in the world could be nasty ones. Continue reading

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A law firm opines about a NIST rule, and I opine about the opining

A law firm gives an overview of the new NIST regulations for Bayh-Dole. It leads with fake history. Not a good sign.

First enacted in 1980, the Bayh-Dole Act (as amended, the “Act”) for the first time permitted research institutions and other recipients of federal research funding (e.g. from the NIH, DOD and NSF) to retain ownership of resulting inventions and be able to license them to companies and other entities in exchange for royalties.

With all due respect, total nonsense. The PHS IPA program started in 1953, lapsed in the late 1950s, was revived in 1968 and ran until it was shut down in 1978 for being ineffective. Under the IPA program, nonprofits could own inventions made with federal support and do exclusive licenses, even for royalties. There were over 70 nonprofits in the NIH’s IPA program by 1978. The NSF also ran its own IPA program. Norman Latker claimed Bayh-Dole was based on the IPA program (and he ought to know, since he drafted both). The Department of Defense had a long-standing policy of allowing contractors to own inventions made with DoD funding. The issue of ownership was *not* with these federal agencies in their contracting for research–the problems were with the Department of Energy, which apparently took a long time to make determinations to allow contractors to own inventions, and with the Department of Health, Education, and Welfare policy of not granting exclusive licenses to inventions that HEW owned. Continue reading

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Best practices in university invention management, 10

We have reached the last installment of our work with the ipHandbook’s model invention assignment agreement. We started this journey making note of how university patent administrators make things more complicated than they ever need to be. The basic approach is simple. Introduce cluelessness into a challenging situation to make it incomprehensible and unreasonable, and then make it all sound legal and authoritative, and then you have best practice.

We are into a list of things that in addition to assigning all future inventions within scope to the university, a faculty member or other unfortunate also agrees to do.

There follows another hopeless demand (under threat of job security, natch):

will not to disclose to UNIVERSITY or use in my work at UNIVERSITY (unless otherwise agreed in writing with UNIVERSITY):

(i) any proprietary information of any of my prior employers, or of any third party, such information to include, without limitation, any trade secrets or confidential information with respect to the business, work, or investigations of such prior employer or other third party; or

Meaning, apparently, that faculty coming from other universities cannot use any research work –the “investigations of such prior employer.” Or perhaps that means “documents investigated by the prior employer.” Yeah, maybe that. Notice that “proprietary information” ends up having a definition of the form “proprietary information and non-proprietary information.” Again, inducing hopeless cognitive dissonance. “Without limitation” just ices the cake’s icing. “Or other third party” is full bombast–is that “proprietary information of any of my prior employers or other third party” or is it “investigations of such prior employer or other third party”? Or do you care at all at this point? I don’t because the model IAA is just stupid, but on we go.

Either way, the IAA claim here reduces to a demand that faculty not use any proprietary information in their work at the university. Let that sink in. We are not talking merely about university-commissioned production of original works of authorship. We are talking all aspects of scholarship. No pre-publication access to research findings. No collaboration with faculty at other universities. The IAA here is so far afield it truly is bombast. It’s the dag wagging the dog. To make this whole crazy invention ownership scheme work, all a university has to do is repudiate being a university. Yeah. Owning inventions is more important than some cruddy university tradition of gathering a faculty to do what they do. Continue reading

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Best practices in university invention management, 9

We are deep into the ipHandbook’s model invention assignment agreement (IAA). We have hit the basic disclosure and assignment clause that depends on a restrictive clause with three parts that together establish the scope of the present assignment. Part (i) deals with sponsored research; part (ii) deals with significant use of university funds or facilities. Here’s part (iii):

(iii) result from a work for hire funded by UNIVERSITY, as defined in Paragraph X of the UNIVERSITY Technology Policy Guide; and

A punch line here. Finish laughing and we’ll try to get through it. Hawhr, hawhr–no really, haw! hee! Oh, stop. Heh. Let’s go slow:

all inventions (and copyright materials, and laundry list) that . . .

  • result
  • from a work for hire
  • funded by UNIVERSITY
  • as defined in . . . Policy Guide

“Result” is crazy broad, as in the previous paragraph of the restrictive clause.

A “work made for hire” is an original work of authorship fixed in a tangible medium of expression made within the scope of employment or subject to a written agreement signed by the author with a commissioning party, with the subject work falling within a list of qualifying categories. If a work is made for hire, then it is owned by the employer or commissioning party. There is nothing to assign. The producer of the work is *not an author* as a matter of federal law. Remember, this whole IAA cites authors. Continue reading

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Best practices in university invention management, 8

We are working through the model invention assignment agreement proposed by the ipHandbook as a university “best practice.”

Now we get the present assignment:

agree to disclose promptly to UNIVERSITY and hereby assign all rights to all inventions, copyrightable materials, computer software, semiconductor mask works, tangible research property and trademarks (“Intellectual Property”) conceived, invented, authored, or reduced to practice by me, either solely or jointly with others, that:

First, note the form: a broad statement, to be followed by a restrictive clause (“that”). Second, note the gawd awful grammar: “agree to disclose . . . and hereby assign all rights . . . .” Yes, the direct object of disclose is rights, not inventions. Botchery must be a best practice! Certainly it is a ubiquitous practice. Why does university invention management attract such incompetent legal work product? Is it the cesspool of university lawyering? And what is so attractive about the cess?

The scope of the assignment is broadened beyond invention to include “copyrightable materials” (which is nonsense wording anyway–materials aren’t “copyrightable”–copyright vests in original works of authorship when fixed in a tangible medium of expression; there’s nothing “copyrightable” about it–that’s obsolete usage from the 1909 copyright act.) Mask works are subject to copyright. Software is treated as literary work by the Library of Congress–so, more copyright. Tangible research property is not “intellectual property” at all–it’s chattels. And one invents a patentable invention by both “conceiving” it and “reducing to practice.” If the university claims inventions (and non-inventions) that are merely “conceived,” then the university is claiming pretty much anything and everything. There’s no real limit to what’s called an “invention.” The model assignment agreement botches all this in an effort to sound legal and comprehensive. Continue reading

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Best practices in university invention management, 7

Let’s have a look, then, at the invention assignment agreement that ipHandbook recommends that universities should use with their faculty. We start with the “consideration”:

In consideration of the sum of One Dollar ($1.00) and:

  • my past, present, and/or future employment at UNIVERSITY; and/or

Skip the one dollar part for now. The big idea here is that the assignment agreement appears to assert that a faculty member’s employment depends on assigning inventions. That is–the university repudiates tenure. Check the university’s policies on tenure (we can’t of course, for the university of this “model” agreement–it’s a fantasy). You will find that refusal to assign inventions is not a condition for termination.

But the worser thing is the “and/or”–the assignment agreement cannot even state whether future employment is or is not a “consideration” for the assignment. That is, if this is a contract and the inventor assigns, then the university’s offer of “future employment” has been accepted. Well, that’s a big blank check. But wait–the university has hedged that offer with “and/or,” so perhaps nothing has been offered here at all. Continue reading

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Best practices in university invention management, 6

We reach the ipHandbook article’s “conclusions.” Suddenly, we return to the land of reason:

The principles underlying this policy have evolved from the line of court cases that, in the absence of a written agreement, hold that an invention belongs to an employee-inventor unless the employee was hired to invent or assigned to solve a particular problem (Standard Parts Co. v. Peck). 

That works. Things are easy. Don’t have a written agreement unless you absolutely need to have one (such as to comply with a research contract or is required to commit unusual facilities or funding).

Where no written contract and no implied contract to assign is found, the inventor owns the invention, subject to the employer’s shop right to use the invention if it was made with the employer’s resources or facilities.

The university gets a shop right. That’s its equitable compensation for providing resources. Things are still clear as day. Ownership is not in doubt. The only question is whether the inventor can sue the university for infringement. At public universities, the answer is already “no.” Sovereign immunity. Continue reading

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Best practices in university invention management, 5

More fun examples from the ipHandbook to demonstrate, ahem, best practices in university ownership of inventions.

The visiting scientist. Professor from another university visits and invents.

He is compensated through funds from Professor Z’s federal contract.

That is, if he is “compensated” with federal funds, then he has signed paperwork that adds him as a party to the funding agreement–either via a subcontract to his university or as a paid independent consultant. End of example. But, of course, not in administrative fantasy land, where nothing can be done properly. Here the complication is two non-compliant, incompetent, and overreaching universities! Plenty of room for complexity!

He reduces his idea to practice that summer, and the invention is clearly novel and patentable. But he did not sign the visiting scientist IAA from Professor Z’s university. His university is claiming ownership and produces a valid, unambiguous IAA, which covers all inventions made during his period of employment, regardless of where conceived or reduced to practice.

Two universities fight over what is neither’s. What assholes a mess! It’s pretty broad to claim ownership of inventions merely because they are made “during” employment–but not with university resources, not in university-sponsored research, not within assigned duties. Utterly hopeless. It’s worth considering such scenarios because they do happen. University patent administrators are often assholes, and their legal advisors are fine with helping them to become better assholes limit the damage of their conflicting, complexity-creating policies. Complications follow, of course.

Again, the university is in a bit of trouble under its federal contract because this researcher did not sign an IAA.

Nonsense. No university I know of has been required to comply with the (f)(2) agreement requirement. There is no penalty in Bayh-Dole for a failure to comply, for that matter. And the IAA is entirely distinct from the (f)(2) written agreement. These are entirely different instruments. In fact, the (f)(2) agreement knocks out scope of any IAA, and federal funding does not require any IAA, and creates no special privilege for a contractor to acquire inventions under an IAA. Continue reading

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Best practices in university invention management, 4

We are working through examples from the ipHandbook‘s advice on best practices for university ownership of inventions. All the examples feature a professor who finds ways to stick it to the university and wise words about how university officials could have stuck it to the professor if only they had been vigilant and pro-active. Yes, best practice is to stick before getting stuck. Ownership of inventions is assumed to be the goal. Why on earth would ownership be the goal, and not something more interesting, like public benefit, or widespread use of the invention, or, heh, making money?

Saturday afternoon conception at home. This one sounds like fun!

Ownership, in this case, would depend on the exact wording of the IAA. As a matter of policy, each university must decide what is fair and what is beyond the scope of the IAA.

Ah, snap. Not what I thought.

The analysis here stumbles. If the university must decide, then the inventor assignment agreement cannot be a contract. It is more like a statement of inventor’s submission to whatever the university decides. If the “principles of ownership” set out in the patent policy are so unclear that magical wording is needed in an IAA, then all hope of clarity is lost, and the contract fails for lack of specificity. “We made it certain that you agreed to something–we just haven’t decided what.” Oh, geez. This is best practice?

A faculty member invents at home, rolling in the hay with, er, an idea. If only magically precise language in an invention assignment contract can determine the outcome, the policy has already failed. If an invention is a deliverable under a sponsored research contract, then it is the terms of that contract that control, not some university policy statement. If the invention is not a deliverable, then what is the university’s basis for a claim? Nothing equitable, that’s for sure. Continue reading

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Best practices in university invention management, 3

We are working through ipHandbook’s discussion of best practices in university ownership of inventions. After a clear discussion of invention ownership–inventors own their inventions unless they have agreed to assign them or it is equitable to find that circumstances imply they agreed to assign (such as if they are hired to invent).

Here’s the fantasy university patent policy used in a series of examples created to illustrate the problems with university policy, invention assignment agreements, and those pesky things call circumstances (my emphasis):

It is the policy of the university that individuals, through their employment by university, or by participating in a sponsored research project, or using university-administered funds or facilities, thereby accept the principles of ownership of technology as stated in this policy. In furthering such undertaking, all participants will sign invention assignment agreements …

In typically sneaky fashion, this fantasy patent policy attempts to construct an implied contract between “individuals” and the university. If you use university resources, say, our policy asserts that you agree to our “principles of ownership.” The policy cannot even state directly the ownership claim and the basis for the claim–it just asserts “principles” apply. But as we will see, the fantasy policy does not even set out principles.

Why such subterfuge? Universities generally assert that their policies apply to everyone at the university, and university employment offers routinely make the offer conditioned on acceptance of university policy. Patent policy, however, routinely asserts that the policy is a condition of employment, as if the other parts of university policy aren’t. And there’s more. A university patent policy that requires assignment is not directed just to employment: it demands that employees give up ownership of personal property–and inventions are personal property. But no, a university patent policy typically also demands that non-employees give up ownership of personal property. And for faculty, it demands that they give up ownership of personal property even when the university does not act as their employer–such as any inventions “related” to their field of expertise–not even to their personal expertise. What could possibly be equitable about such a demand? Right! Nothing.

The only way such a policy looks even remotely proper is if it is represented as required by law–Bayh-Dole (utter nonsense), say, or state conflict of interest law (for public universities–more utter nonsense). “You have to give up ownership of your inventions or you break the law.” Once the policy is in place–this is the clever part–the rationale for the policy can be dropped. The policy now dangles free from any need for justification. It just is. “You have to give up ownership of your inventions or you violate policy.” And if you violate policy, university officials have the freedom, apparently, to threaten you, ruin your reputation, fire you, sue you.

So why should the patent policy condition its application only on employment, participation in sponsored research, or use of resources? And if the policy already cites employment, then what is added by participating in sponsored research? Ah, someone might not be employed who participates in sponsored research. But “participate” is broad–it doesn’t mean only that someone has been hired to conduct sponsored research (“employed,” “hired to invent”). One could have a chat at a conference about someone’s research project and that chat might be construed as “participating” in the research. Just saying. Continue reading

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