As American public universities ramp up their claims to own faculty inventions, software, works of authorship, and even know-how, all in the name of profit-seeking from “commercialization”–by which they mean something along the lines of “making money when speculative monopolists make money”–the framework of the implied innovation policy starts to become clear. It consists of three interrelated propositions:
- The state should own and control all faculty scholarship that is useful or valuable.
- Faculty are servants of the university as represented by administrators who assign, direct, and approve their work.
- A bureaucrat must be involved in the development of every opportunity for innovation.
If you think that these propositions are pretty good things, then you will be right at home with compulsory present assignments tied to public university patent policies. Otherwise, think about it, and then do something about it.
The state should own and control all faculty scholarship that is useful or valuable.
Public universities are instruments of the state. A claim to ownership of faculty work amounts to a taking of personal property by the government. If the claim were not shrouded in a claim of employment or a quid pro quo relating to access to buildings and lab equipment, it would be clearer that doing so is a version of eminent domain: government taking of private property for public use. If one can show that neither the employment agreement or the provision of access to buildings and lab equipment support the claim, then the shroud comes off.
There is no question that invention rights are personal property. That’s an anchor of the UC constitution and federal patent law. The issue in making a compulsory claim for ownership is the basis on which assignment can be compelled. There are three options: statute, contract, and threat. There is a fourth, outside the present discussion, which is to request ownership, rather than demand it. But the present assignment language is not being requested. It is being imposed. Thus, the policy motivation is that the state has the authority to take personal property.
Finally, there is the matter of scholarship. Scholarship certainly includes inventions and discoveries made in research. Just because there may be an intellectual property position attached to an instance of scholarship does not mean the instance is no longer scholarship. Wrapped up with scholarship are concepts of academic freedom and independence. Vannevar Bush, in Science the Endless Frontier argues for the importance of university faculty as independent agents. It is their independence that allows them to propose change to industry. It is their independence that justifies federal support for their work.
Universities made a case against the federal government’s policies on ownership of inventions made in extramural research. Thus, we have Bayh-Dole. But the public university administrators then amazingly reversed their arguments and have for thirty years made an increasingly strident case that it’s a really good thing for the government to own inventions–so long as it is the state government as represented by university administrators. The very practices they denounced at the federal level, they embraced at the state level. Who would have thought that Bayh-Dole was intended to resolve a dispute over whether the federal government or the state government should be entitled to strip inventors of their personal property? I would have thought that Bayh-Dole was about giving inventors working with government funds greater freedom within the funding agreement to choose the developers for their inventions. But no, apparently.
I won’t belabor the issue of government ownership of scholarship. It’s something folks can work out for themselves. Paul Feyerabend argued that separation of state and science was as important than separation of state and church:
And yet science has no greater authority than any other form of life. Its aims are certainly not more important than are the aims that guide the lives in a religious community or in a tribe that is united by a myth. At any rate, they have no business restricting the lives, the thoughts, the education of the members of a free society where everyone should have a chance to make up his own mind and to live in accordance with the social beliefs he finds most acceptable. The separation between state and church must therefore be complemented by the separation between state and science. (p. 299)
Dwight D. Eisenhower warned about potential adverse effects of government funding of research:
In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers. The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present — and is gravely to be regarded.
Matt Ridley gathers arguments in The Rational Optimist about the effect of bureaucracy on innovation: “governments gradually employ more and more ambitious elites who capture a greater and greater share of the society’s income by interfering more and more in people’s lives as they give themselves more and more rules to enforce, until they kill the goose that lays the golden eggs.” Ridley quotes Etienne Balazs, who speaks of a “Moloch-state”: “It is a regime of paperwork and harassment, endless paperwork and endless harassment.” (TRO, 182-83).
Faculty are servants of the university as represented by administrators who assign, direct, and approve their work.
At the heart of proposition 2 is a discussion of the nature of “employment” for purposes of intellectual property. A simplistic logic goes something like this: employers should have the benefit of the employee’s labor; faculty are employees; therefore, faculty owe their employer, the university, their inventions–and should be joyous and make glad that the university is generous and does not take everything that they produce, though it rightfully could, and is even so willing to share profits from these inventions with them. This is not only a simplistic logic, but it is flawed. While it is true that faculty are called employees, it is not true that the scope of their employment reaches to their scholarship. To get at that, one has to understand “employment” to be more than receipt of pay, but also in terms of agency, scope, and mutual understandings.
While a university may hire faculty to do research, universities do not assign, direct, or approve that research. The research is not conducted for the benefit of the university. The university and its administrators have no pressing problems that must be solved. They have no business interest that is to be advanced by the results. They do not expect to use the results of faculty research in university operations. Except of course, that if they can make money from patent rights, then of course there is an answer to each of these questions that says–yes, faculty work for the benefit of the university because the university can benefit from selling patent rights to speculative investors. The rest follows. There are laws in some states forbidding just this sort of employer reasoning, that by declaring one’s business to be making money off of anything one’s employees happen to discover or invent, one can claim everything, not just those things that are clearly business-related.
Faculty are not employed, as to their research and scholarship, by the university, even if their advancement depends on an evaluation of how well they have conducted their research and scholarship. The same is true when it comes to sponsored research. When a faculty member gets an idea for research, writes a proposal, submits it for funding, and receives an award of funds, the activity is outside of any university-assigned duties. One has to ask for permission from the university to be released from other duties, such as teaching, to do the work. Even then, one is not working for the university, but for oneself, one’s sponsors, and the beneficiaries of the work. The university may hold the grant money, and do grant financial reporting, but the university does not decide how to spend the grant money or what constitutes reportable results. Even in sponsored research, faculty are not employed by the university, though they are called employees.
In copyright practice, this distinction becomes operative in the question of work made for hire. The copyright law defines work made for hire as “a work prepared by an employee within the scope of his or her employment.” The Supreme Court ruled on what is involved in this definition (CCNV v Reid) and found that employment was not mere pay for work but involved a multiple point test for agency. That is, did the employer behave as an *author* and control the work as an author would. If so, then the work is a work made for hire, the employer is the author, and therefore the copyright vests with the author–employer. In another case involving videography of the wreck of the Titanic (Lindsay v. Titanic), the courts found that a videographer who designed the camera angles for video of the wrecked ship, and reviewed daily the work of the photographers operating the submersible’s cameras to decide what and how to film indeed acted in the capacity of author, even though the photographers were working “for hire”–employed by–the salvage company with exclusive rights to the wreck. Even though the photographers were employed by the salvage company crew, the copyright in their work was owned by the author of the work, not the employer.
From these instances one can see that employment in the HR sense is not sufficient to determine the disposition of ownership of copyrights. The situation for patents is even more distant. There is no “invent for hire” statute. While patent practice recognizes equitable ownership in those cases where there is an express arrangement to invent, there is little in faculty work arrangements that would evidence such an express arrangement. Faculty are not, for the purposes of their scholarship, employees of the university within the scope of intellectual property law. The university is no author of the works they prepare, nor is it the inventor of what they conceive and reduce to practice. Proposition 2 is a work of fictive desire: it is clear that administrators very badly want control of faculty inventions, and Proposition 2 is one of the easy ways of going about gaining that control. Pushing back on it does not eliminate the urge, but rather forces it to other channels.
One of those channels involves the use of university facilities or “resources”. In an employment situation, an employer can enter into an agreement with employees with regard to inventions and patents, even when the employee is not expressly hired to invent. That agreement can require that inventions made using the employer’s facilities–or trade secrets, or equipment, and the like–will be assigned to the employer. University administrators intent on claiming ownership of everything they can have latched onto the use of resources argument.
Yet here, too, we find an odd disparity. Most university invention disclosure forms do not even ask how university resources were used. An invention may be conceived of without using any resources. Location does not really matter for conception. The research leading to conception may be entirely unrelated to the subject of the invention. Even research focused on understanding the basic science cannot be said to encompass realizations about possible applications. Even federal regulations on the matter confirm such a separation–see 37 CFR 401.1, for instance. The use of facilities for reduction to practice is another matter, where it makes sense that a university might incur costs, and therefore have a financial interest in the exploitation of an invention. But a financial interest in exploitation is not the same thing as an ownership interest. The University of California patent policy from 1943 is a good case in point, where the distinction between ownership–undesirable for a university generally–and a financial interest–based on the circumstances of development–are well managed.
Most resources at a university made available to faculty are done so without an express claim that the condition of access involves assignment of inventions. This is certainly true for copyrights, where university policies may have a requirement that the university be reimbursed for certain uses of facilities but do not make a claim, generally, to own faculty work merely because university facilities (faculty offices, a desktop computer, the library, a cafeteria) were used in the making of the work. As the policies slip toward software and digital media, however, they may get up the gumption to make ownership claims, though the reasoning is impossible to follow. If it were about the money, then administrators also would be claiming film rights for novels and performance rights for plays written by humanities professors, but that’s not the case. The only express claim for resource use triggering invention ownership typically comes in the university patent policy. There, it is often included with a statement about employment. Example:
As a condition of employment, and even if a specific patent agreement is not signed, University employees agree to assign all inventions in which the University has an interest to the University….
The university then goes on in a roundabout inept way to get at what inventions it might have an interest in by reciting a state law designed to protect employee inventors from the marauding overreach of employers with the implication that the university claims everything except what the law prevents it from claiming. But the policy never addresses a) what the policy claimed before the state law went into effect; b) whether the new implied claim is authorized by that prior wording and intent; and c) what actually is being claimed, given that university employment of faculty is utterly unlike the typical company employment situation.
The use of “condition of employment” of course brings us right back to the problem of HR employment vs patent employment. If faculty are hired to invent, then fine. But that’s not the case. Here, “condition of employment” in the context of university faculty, makes a huge restriction on the scope of any possible claim. There is no “patent employment” in most faculty appointment letters. If the obligation to assign is a condition of employment, and employment means “what the university directs you to do, for its own use, and with its supervision and control” then next to nothing faculty do is claimable under this policy. Of course, the university doesn’t see it this way and uses the policy statement to *claim everything*. This puts a particularly strange slant on the practice by risk-worried IP administrators of claiming everything and releasing the unworthy. Here, in essence, the university appears to claim everything but in the claiming all but releases everything. Why word it in such a silly, awkward way? Why not just write: “The University claims only those inventions that it is required to claim as a result of agreements made with the concurrence of the faculty, or as required by law”?
A university employing faculty is rather like a state employing legislators. It is true that the state pays each legislator for his or her service, but it is not true that the state has any control over what that legislator produces. The senator is not a state employee for the purpose of senatorial activity. The state does not control the work product of the legislator–at least not in a non-corrupt state–though the state may regulate the conduct of the legislator. Same for faculty, especially faculty at state universities, who are truly the unacknowledged legislators of scholarship. The use of resources provided by the state does not change this outcome. Faculty have every reason to own the inventions they make with the use of the resources provided to them, unless there is an express arrangement for additional consideration, under which there is an agreement that the state should own inventions.
For sponsored research, the situation is even yet more odder still, since it is the sponsor that is paying for the research and the use of facilities. The university, in charging indirect costs, is in essence renting out the facilities to the faculty for the benefit of the sponsor. The facilities, while they may be owned by the university, are, during the course of such sponsored research, in the quiet possession of the faculty investigators for the benefit of the sponsor. It is as if the sponsor has rented the facilities and asked the faculty investigators to have the benefit of tenancy. Administrators–at least some with the deep urge to own everything–must hate this line of reasoning. What they ought to expect, but cannot bear to consider, is 1) a “shop right” to the extent that the university desires to actually use the results of research in its own administrative operations; and 2) a financial interest in inventions reflecting university resources–as distinct from grant resources–provided to support the effort to invent, reduction to practice, and subsequent development. There is no basis for a demand for ownership, however, unless there is a voluntary arrangement, not dependent on employment, that calls for assignment.
All this discussion amounts to a simple, substitute proposition: university faculty are not employed by their university for the purpose of their scholarship and research unless each so decides that this is the case. At issue is why administrators are so adamant at demanding that employment equates to a claim of ownership of scholarship when that scholarship takes the form of an invention, which brings us to the third proposition.
A bureaucrat must be involved in the development of every opportunity for innovation.
No matter how sincere, well trained, capable a person might be, when employed by an institution, to represent institutional interests, one becomes a bureaucrat. An administrator in the furtherance of the Moloch-state–bringing endless paperwork and harassment. One may call this person an “administrator” or a “licensing associate” or a “innovation broker” but the label really doesn’t matter–it is the function that counts. I know. I was in such a role for a long time. There is a way out of it, of course, and that is to reject the idea that “employment” means “represent the will of the institution against the personal and collective interests of the faculty” but that takes a kind of independence if not rebelliousness not common among administrators.
When an institution makes a compulsory, comprehensive claim to own the scholarship of faculty, it is also making the claim for institutional incursion into everything so claimed. When the scope of claim is, like the university policy cited above, “everything we can legally claim, whatever that may turn out to mean,” then the consequence is that for all such stuff, permission of a bureaucrat is required before anyone can use what has been taken up by the institution. The need for permission, in turn, is a consequence of scholarship becoming property, with ownership and title. Intellectual property–at least patents and copyrights–turn certain intangible assets (inventions and works of authorship) into personal property.
Other intangible assets do not have such social conventions about them. Thus, centrality in a network–quite a valuable intangible asset–is not subject to an IP ownership theory. Same for a network externality, which may be a highly desirable property of a distribution program, but by its nature such an externality is not owned by anyone. It is an intangible asset that can be exploited, but not owned. Ideas are also intangible assets. Before an idea moves to a particular manifestation as, say, an invention, it is just an intangible asset. It is possessed but not owned. Universities make no claims on ideas. Thus, a faculty member is free to decide whether to pursue an idea or not, and if so, whether to do so within the context of the university or outside, and if within the context of the university with university resources with an understanding of some obligation to repay the university or share with the university future income, or not. A faculty member can publish ideas continuously and thus never create a patentable invention because any such invention is subject to the patent bar created by the continuous publication ahead of conception of an invention in all its parts. There is nothing in university policies to prevent this: universities do not demand faculty ideas as trade secrets. Whatever a faculty member decides to hold tight is entirely a matter of that person’s judgment, not an institutional policy, an employment contract requirement, nor a matter of a bureaucrat’s permission.
Similarly, a faculty member can decide on the location and forum for work that might lead to an invention or discovery. That may be a university lab, but it also may in the context of private consulting work, and it may be in informal discussions entirely outside the university, and not for any pay at all. Again, the choice is entirely up to the faculty member. The university does not dictate that all professional work must take place in its facilities, with its resources, talking only to its own personnel. Doing so would be diametrically opposite of historic practice and would teach away from the great strength of the American university, which is just this kind of openness based in the personal choices of the members of its faculty. No bureaucratic interventions required. No paperwork, no harassment. Yet the moment that a faculty member invents, the university shows up with a form for that!
The result of the demand for ownership of inventions (and often a lot of other stuff, too) is that university administrators operate with the claim that all university-hosted, -supported, -assisted, and -related innovation ideas have to receive the approval of a bureaucrat. No use of such work without a bureaucrat’s permission. To do otherwise is infringement, conversion, misappropriation–pirate! criminal! immoral! That’s the claim, anyway. It’s hard to fathom who actually would advocate such stuff. Yet this is inherent in the drive for compulsory ownership of all inventions (and other stuff) by university administrators. It is behind the faux Bayh-Dole Act scheme to make federal law into the agent of vesting ownership with universities for the convenient profit-seeking of university administrators. It is a high point of the export of the Bayh-Dole Act around the world–
“Here is a federal law that strips faculty inventors of their rights and hands those rights to the university. You Norway, Denmark, Germany, and other countries should emulate this law, as it will put your universities in a position to make big money when speculative monopolists make big money, and we all like to have big money! All you need to do is have a bureaucrat touch every invention on the way out the door.”
It is as if Bayh-Dole became a law to give work to bureaucrats, and that was its inspired moment. This, of course, is not the case. Bayh-Dole does not vest ownership of federally supported inventions with universities that host the inventors, states no case for the need for more bureaukeptic administrators, does not even require creation of a patent policy or even the need to revise employment agreements. One of the stated objectives of Bayh-Dole is to “minimize the costs of administrating policies in this area” and for that it does a pretty good job. It is unfortunate that university administrators could not help themselves and exercise similar restraint.
While institutions are important for much of what we have by way of society, they also are not necessarily the best friends of innovation. Where institutions excel, they are generous, promote freedom, and offer assistance. Where institutions work poorly, they aim to accumulate and control new ideas. Keep them “in the box” so to speak. Make sure none “get out the back door.” “Monetize for the public benefit.” “Capture revenue streams arising from commercialization.” This is all the stuff of the Moloch-state in development. Thus, the institutional role in innovation hangs in the balance. Order, process, and ownership can be a good thing, or it can be harassment. Certainly institutional ownership of inventions is not an unqualified public good.
Institutional ownership carries substantial overhead. The deal-making an institution does means pages of documentation, reviews, approvals, lawyering, and contracting. It means big disclaimers of risk, checks against all other outstanding contracts and commitments. It means ensuring that the deal one intends to do is the best deal possible because if there is a better deal offered tomorrow then it’s a huge embarrassment. It means failure is not an option, in that bureaucratic sense of cover up not aspiration. It means policies, procedures, check lists, databases, training materials, web sites, program managers and HR definitions for program manager job descriptions and pay scales normalized to the job descriptions and pays scales of others in similar program manager positions in the institution. It means demands in licenses to protect the interests of the institution. It means a check to ensure that no asset of the state (for public universities) has been given away at below market value, which if done would cheat the taxpayers of their profit and be a form of corruption–when one might think running up the price of access to university scholarship would be closer to corruption! It short, institutional ownership means bureaucracy. It is no wonder that a bureaucracy finds such a need for efficiency. A bureaucracy is often keenly aware of how far it is from getting done what it has set itself to do.
Why, one might ask, would it be really keen innovation policy to ensure that bureaucracies grow up around sources of innovation and that the key agenda in university policy should be to ensure that everything that can be stuck with an institutional ownership claim is so stuck, as early and often and comprehensively and expeditiously as possible? Why? One can ask it again and again and not get a good answer. Compulsory institutional ownership is counter-indicated for most everything that would benefit from networked, non-market innovation. Compulsory institutional ownership is counter-indicated for faculty scholarship, regardless of the theories of ownership–patent, copyright, trade secret–that might arise. The innovation that is desired is that of independent faculty supported by institutional resources operating on personal objectives and commitments, with institutions playing the role of steward or trustee to keep the focus on outcomes, use, and integrity, not speculation, hype, and money.
Thus, we arrive at a coherent understanding of the national innovation policy at work in America, as articulated by public university patent administrators: comprehensive, compulsory state control of scholarship, with faculty working as institutional servants to produce monetizable inventions, with a bureaucrat’s thumb baked into every innovation pie to ensure a tasty treat for all. If such a regime were to be imposed by an outside agent, imagine the outrage. Yet this is what we have got, plain as day. Spin it however you want, it comes back to these three propositions, which run against good sense, policy, and the value of an independent faculty. The sacrifice of faculty scholarship, inventions, and expertise to the service of a bureaucracy intent on making money and making a show of its own importance is a huge, and needless, sacrifice. There are better ways to live, and to innovate.
If universities want to revitalize their role as centers of innovation through discovery, then the first order of business is to challenge the rascals that think these propositions are a pretty keen thing. No amount of designing models of innovation or raising money for a faux “funding gap” will do a speck of good until the house is cleared and a new attitude prevails. Moloch demands sacrifice. But one does not have to serve Moloch. And not to do that, folks, will feel fresh and new, and will have a sense about it of, well, possibility, of excitement, and yes, of innovation.