Transmogrifying Bayh-Dole into University Self-Interest, Wisconsin-style

The University of Wisconsin system provides a template agreement that is meant to satisfy the (f)(2) requirement.  Let’s work through it to see what parts are required by the standard patent rights clause in Bayh-Dole, what parts are inserted by the University for its own purposes, and what’s been left out.  We will work through this line by line, with points of comment marked in red.

UNIVERSITY OF WISCONSIN-________________ Invention and Patent Agreement*

    ______________________________________________________________________
    Name (Last)     (First)     (Middle Initial)    SOCIAL SECURITY NUMBER

As a condition of and in consideration of my participation in any extramurally sponsored research or other extramurally supported activity at the UW-__________________, I hereby agree to disclose promptly to the Chancellor (or designee) any invention conceived and/or reduced to practice by me, whether solely or jointly with others, resulting in whole or in part from such extra-murally supported activity. I further agree that I will comply with the provisions of any agreement between the University and any sponsor pertinent to the particular activity supported by that sponsor in which I am involved, and will cooperate in assuring that the sponsor’s rights, including rights in inventions and patents, are fully protected.

If I am the Principal Investigator of any extramurally sponsored project, I shall require that each participant in such project sign this Agreement and become familiar with the provisions in the agreement between that extramural sponsor and the UW-_______________________ pertinent to participation in the project, including invention and patent provisions, and with the UW – _______________________’s policies concerning inventions and patents.

   __________________________
           Signature

   _______________________________
           Date

*The Office of _____________________________ will assure that this agreement is on file for each Principal Investigator. The Principal Investigator is responsible for filing the agreements of the project staff with the ____________________.

Comments.

Social Security Number. Not required by Bayh-Dole.  An insertion by the University.  It already has the SSN, because this agreement under BD is only required of employees, and the SSN is the tax ID necessary to issue pay checks.   Put here, perhaps, because technology transfer offices are responsible for issuing royalty sharing checks, and this is an easy place to collect the information.  Downside is that the tech transfer office is collecting information on many more employees than will ever disclose an invention, and is then responsible for holding this protected information securely for a long time.  A better practice is to route the issuance of royalty checks through the existing pay system, when there is something to pay out.  For Wisconsin, the odd thing is, WARF handles the patent work, so let WARF collect the SSNs.

in consideration of.  This is language of contract, suggesting that the patent agreement is part of the employment agreement rather than a requirement of a funding agreement accepted by the university.  The mental gesture is that somehow the university is providing a benefit to the employee (allowing participation in extramural research) for which the employee must provide back this agreement.  The “consideration” bit is perhaps an attempt to make the agreement “binding”.  The big problem here is that the (f)(2) agreement is a federal agreement–it is an agreement directed at the funding agency, with the university as a third-party beneficiary (the university gets disclosures so it can comply with its obligation to disclose under a funding agreement).   If consideration is needed to make the (f)(2) agreement binding, it is the funding provided by the agency to the university, that goes to pay the participating employees for their work on the government supported project.  There is no university pay here.  It is government pay.  There is no university “consideration” such as permitting the participation of the PI.  Without the PI, there would have been no award in the first place.  The award is almost always conditioned on the special performance of the PI–it is the PI’s credentials that form part of the review that leads to award of the funding.  This little phrase “in consideration of” is clearly lawyer weedling to subvert the process and make it out to be one controlled by the university as part of employment, when it is not.

any.   This is added stuff.   The (f)(2) agreement is particular to federal awards.   Other sponsors have their own requirements.  Philanthropic organizations may not require any such disclosure requirement.   In that case, the research would be “non-restricted” under Wisconsin policy.  But this “invention and patent agreement” forces the issue, by broadening the scope of policy claim beyond the federal.  Similarly, industry sponsors may require disclosure of a broader set of assets than just inventions.  In that case, this agreement borders on inadequate.   Notice the overall strategy–take a federal requirement, broaden it for administrative convenience, and impose the broader condition on everyone as if it is required by all sponsors.

or other extramurally supported activity.  This is too broad.  The effort must have been to include more than “research”, but instead they expanded “extramurally supported” to any “activity”.   Gift funds can support “activity” but generally do not carry IP obligations to the donors.  This addition makes the agreement appear to extend well beyond research matters.

and/or.  The (f)(2) requirement is for subject inventions, and there the definition reads “conceived or first actually reduced to practice.”  The “first actually” is left out, again expanding the requirement for disclosure beyond what the federal interest is.  This expansion is purely an administrative claim without any backing.  But one can see how it easy it is to demand more than Bayh-Dole requires, and exploit that to gain control of inventions that otherwise would not be in Wisconsin’s “restricted” category.   The addition of “and” to “or” is odd.  It’s as if the “or” is read as an exclusive or and somehow needs to be supplemented for the sake of completion.

Beyond this, however, is a deeper problem with how university administrators understand inventions.    Under patent law, an invention is made when it is “conceived and reduced to practice”.    Bayh-Dole reflects this language.  The problem arises when folks think that this language depicts a chronological sequence–that someone has the idea, then builds a widget.  But that’s not the case.   I won’t go into all the gory details here, but you can’t have a patentable invention that’s conceived and not reduced to practice–either constructively, as in the filing of a patent application, or actually, in the form of demonstrating the invention in action in all its elements functioning for their intended purpose.   The “and” suggests folks aren’t thinking clearly about inventions, are worried about compliance, and in that worry conveniently (and full of institutional conflict of interest) expand the scope of their claims on employees.

by me, whether solely or jointly with others. This is also added.  The (f)(2) agreement is not restricted to inventors.  All qualified employees (not clerical or non-technical workers) are required to disclose subject inventions made with federal support.   Not just the inventors of those inventions.  The obligation in (f)(2) would commit the principal investigator to report an invention made by a research assistant working on the same grant.  The Wisconsin contract demanded by Wisconsin policy turns this into an obligation for each inventor to report his or her invention.

I will comply with the provisions of any agreement.  This sentence is fraught with issues.  Let’s pick them off one by one.  First, most universities exclude faculty from being parties to agreements made by the university.  Some even invoke conflict of interest laws to argue that faculty cannot even voice a preference in these agreements, since they so obviously have an economic interest in the outcome.   In the case of Bayh-Dole and its standard patent clause, the problem is that the (f)(2) agreement does not require employees of the universities to comply with the funding agreement.  The university must comply with the funding agreement by requiring the (f)(2) agreement–but that agreement is directed to the Government.  In the Wisconsin formulation, this is transmogrified into an obligation of the employees to meet the university’s obligations to the Government, which is a related but very different thing.   The standard patent rights clause requires the university to require the (f)(2) agreement.  The university fails to require the (f)(2) agreement and instead substitutes a general statement that the employees have to comply with any provisions that the university might agree to with a sponsor.

The logic is twisted here:  the employees have to agree to require of themselves on behalf of the university what the university cannot bring itself to require of them directly, per the federal funding agreement.   Here we have a document that aims to implement Wisconsin practice under Bayh-Dole–Wisconsin, one of the great power centers of the Bayh-Dole legislation–and they cannot get it right.   Employees are to comply with the provisions of agreements even if the university fails to comply with the provisions of the agreements.  Either the employees are therefore authorized to act on behalf of the university (every bit the equal of administrators in these matters) or they aren’t.  If they are, then this clause gives them the authority to grant licenses on behalf of the university and assign to the Government title to inventions (because that is what Bayh-Dole’s standard patent rights clause *says* they are supposed to agree to do).   It’s hard to believe, however, that is Wisconsin’s intent here.  Rather, one might expect that Wisconsin’s intent is to have an omnibus statement that says that if the university messes up and doesn’t inform employees of their obligations, or informs them wrongly, it is technically still the employees’ fault because this clause committed them to comply with all requirements of the contract without any such qualifications regarding the requirements.

Once this language is in place, it is also easy to see how it can be exploited by introducing requirements into a contract from Wisconsin’s side of the negotiating table, even requirements that run against its own policy statements.  Want to own employee inventions?  Insert a university-ownership requirement into the contracts you send out to industry sponsors.  The sponsor is not asking for that–the university is!  Now use the “comply with provisions” clause to void the general statement of unrestricted inventions and substitute a university claim.  It’s very clever, and insidious in its disrespect for inventor property rights.  One can pile up expedient rationales after the fact, but there’s no getting around the fundamental fraud at the heart of this kind of dealing–and it is a fraud to say the university has a policy of inventor ownership except when sponsored research agreements require otherwise and then insert that otherwise on one’s own.   It’s just such a clever, practical, rationalized fraud that no one is supposed to be bothered by it.

As a practical matter, no one should sign such an agreement regarding future provisions without seeing what those provisions actually are and knowing who required them.   Further, this agreement has to sort out whether it is an administrative document dealing with the scope of duties–adding those duties indicated by the funding agreement–or a private deal with each individual, amending their employment agreement (fun times, if the faculty is unionized) or existing outside the employment agreement as a distinct matter dealing with future patent rights (and any other matter of compliance).   These issues pertain to an agreement between the university and the individual.  For the individual to have standing  to sign off on the agreement would appear to make this outside the bounds of administration–it’s a personal deal.   This stuff wouldn’t matter if the university saw that it was a third-party beneficiary and the primary deal was between its qualified employees and the Government.

In all, it is a confused noise. A kind of hand-waving that imposes an unspecified set of obligations as employees as individuals, makes them responsible if not complicit in problems arising in research contracting.   The primary gesture is to “cover all possible issues for the university, without knowing what those issues might be”.  The secondary gesture is to “create a basis for making any demand of employees that the university might choose to make”.   A tertiary gesture is to “shift liability from the university to individuals”.  None of this is required by Bayh-Dole or the standard patent rights clause.  All of it is administrative intrusion running counter to the stated fundamental of Wisconsin invention policy.  It’s backhanded, misinformed, and poorly constructed.   And this is one of the foundational documents of American university implementation of “innovation policy” in response to Bayh-Dole.

will cooperate. This is typical language that often accompanies a patent agreement, since in receiving title to an invention, the new owner will still need the inventor’s cooperation to file patent applications (these are in the name of the inventor and require, with a few exceptions, the inventor’s signature on various documents).  The problem with this as an (f)(2) agreement is that it isn’t cooperation at all that is required, but a commitment to do those things that are requested by the Government–sign paperwork for patent applications and establish the Government’s rights.  The wording here, however, is directed at cooperating with the university, and the gesture is to “protect” the sponsor’s rights (which in Bayh-Dole is an obligation of the university contractor).

participant. The requirement in the standard patent rights clause is directed at employees other than clerical and non-technical workers.  It does not extend to volunteers, to students, visitors, folks that one meets at conferences, or (via this mechanism at least) independent contractors.  Again, the language here is an expansion of the federal requirement, and is passed to Principal Investigators to require of others.  What is a narrow Government interest with a high standard is turned into a broad university interest with a lower standard, all under the guise that this is a required obligation and therefore trumps other statements of institutional policy regarding inventions.

Where does this get us?  This document does not implement the (f)(2) agreement but rather substitutes a university interest for that agreement, broadens this interest to apply to a host of sponsored activities, and requires individuals to agree to this broadened interest as if it were a requirement of federal funding (this agreement is expressly called out in paragraph 8, describing federal funding requirements), when it is, generally, not fulfilling the federal requirements.   Furthermore, it creates an open-ended obligation for individuals to comply without notice with whatever the university might agree to, or insert into, any extramural agreement, creating an easy way for administrators to circumvent the stated policy to allow inventors to own their inventions unless sponsored research obligations require otherwise.

If we wanted to make an (f)(2) compliant agreement out of it, it might look like this:

Federal Funding Invention Agreement

As a condition of my participation in federally sponsored research at [University] I hereby agree to disclose promptly to [personnel responsible for patent matters] subject inventions and to execute all papers necessary to file patent applications on subject inventions and to establish the Government’s rights in the subject inventions.

I understand that subject inventions are those inventions defined in 37 CFR 401.14(a)(a):

(1) Invention means any invention or discovery which is or may be patentable or otherwise protectable under Title 35 of the United States Code, or any novel variety of plant which is or may be protected under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

(2) Subject invention means any invention of the contractor conceived or first actually reduced to practice in the performance of work under this contract, provided that in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during the period of contract performance.

I understand that the disclosure should permit the University to comply with 37 CFR 401.14(a)(c)(1):

(1) The contractor will disclose each subject invention to the Federal Agency within two months after the inventor discloses it in writing to contractor personnel responsible for patent matters. The disclosure to the agency shall be in the form of a written report and shall identify the contract under which the invention was made and the inventor(s). It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention. The disclosure shall also identify any publication, on sale or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication at the time of disclosure. In addition, after disclosure to the agency, the Contractor will promptly notify the agency of the acceptance of any manuscript describing the invention for publication or of any on sale or public use planned by the contractor.

Signed  _______________________

Name   _______________________

Date     _______________________

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