University of Utah’s Policy on State Control of Research Results

University patent policies these days typically contain a definition of “invention.”  Often they try to conflate copyright and patent matters and introduce a new definition, such as “discovery” or “intellectual property” in an attempt at administrative convenience.  These new definitions in turn add yet another layer of confusion into the mix.  It would be so much better to use the definitions of federal patent law, but no.

One thing that has happened over the years is that policies requiring disclosure for the purpose of ascertaining the equities of those involved have been turned into ownership policies.  The scope for disclosure under an equity approach might be necessarily broad.  Openness permits evaluation.   However, institutional claims of ownership were narrow, limited to work done in official duties, or when required by a sponsor of research, or when an agreement had been made with faculty regarding extraordinary commitment of institutional resources.  As policies moved toward ownership as an institutional solution to equity discussions, and especially after Bayh-Dole gave administrators a plausible front to require assignment of inventions made with federal support, the scope of claim came to be the scope of disclosure.  With this convergence has come some unexpected consequences.

A disclosure obligation may be very general.  It may apply to patentable inventions and to other intangible assets that may be created.  It may apply to everyone working in a university environment, whether an officer, appointee, employee, student, visitor, or volunteer.  A disclosure obligation carries with it no assumption of ownership, no premise of commercialization, no review for value, and no implicit request that the university take title.  A disclosure merely provides everyone notice of an asset’s existence, with an opportunity for anyone who has contributed and has not been acknowledged to come forward and get any concerns they may have addressed.  Disclosure is a way of keeping everyone together within a diverse community.  It’s sort of like knowing where the kid has been with the family car or who has put what in the lunch room fridge.  It’s that basic rule of working in a band, that band members bring in their new music ideas for consideration.  Disclosure is, in a way, fundamental to the function of a “household” or “commons”.  Thus, disclosure expectations can be broad.  It’s no big deal in a commons.

However, as the scope of disclosure comes to be conflated with the scope of ownership claim, strange things happen.  For one, the broader the ownership claim, the less likely someone is to comply with disclosure requirement, especially if the ownership claim is arbitrary, inequitable, or results generally in destroying the asset claimed as well as opportunities that might otherwise arise.  Thus, along with broader claims one has to add greater penalties and more efforts to ensure compliance.  This is the stuff of the police state, the dominance of order over opportunity, of authority over liberty, of grammar over meaning.

Another consequence, however, runs deeper.  Consider these definitions of “invention”:


Invention. Shall mean any patentable or potentially patentable idea, discovery or know-how and any associated or supporting technology that is required for development or application of the idea, discovery or know-how.

The expected construction would be “patentable or potentially patentable invention.”  That is, place a qualification on invention so that non-patentable inventions are excluded.  Or, one might recite the definition at 35 USC 201(d) or simply recite the conditions under which a patent is obtainable by an inventor, set out in 35 USC 101.  Instead, we find “idea, discovery or know-how.”  One might argue that ideas and know-how are never potentially patentable, and so are simply there for, dunno, to help meter of the prose and lend an air of gravity to the statement.  The definition goes further, however, and claims “supporting technology.”  The qualification is that such technology “is required” for the development or application of the invention.  That is, such technology is not integral to the invention itself, but to something that folks might do with the invention later.

There are two ownership theories under which an invention may be claimed.  One is patent.  For that, one owns an invention for the purpose of obtaining a patent.   Lacking the possibility of a patent, the invention is no longer ownable.  It is mere ideas and know-how and design.  The other ownership theory is trade secret.  Trade secret is created by promises not to disclose or use information that has independent economic value, is not generally known, and is subject to reasonable efforts to prevent disclosure.  An invention may be “protected” under trade secret as well, but if a patent issues, then the patentable bits of the invention covered by the patent are not trade secret, but are published for everyone.  That, indeed, is the grand bargain of patents.

In a typical corporate environment, a company will start with trade secret, add non-compete, and then in the context of these requirements include a patent agreement that claims inventions within the scope of employment.  The company has no obligation to pursue patenting, and can as well reasonably claim a lot of stuff that is not patentable.  Here, however, Harvard has no trade secret position, but asserts in what follows a “right to own” assets on a definition of invention broader than that of “is or may be patentable.”

Supported Invention.  Shall mean an Invention conceived or reduced to practice by a person covered by this policy (whether alone or together with others) if conceived or reduced to practice in whole or in part:

  1. Under or subject to an agreement between Harvard and a third party; or
  2. With use of direct or indirect financial support from Harvard, including support or funding from any outside source awarded to or administered by Harvard; or
  3. With use (other than incidental use) of space, facilities, materials or other resources provided by or through the University.

“Under or subject to” may have been drafted to take in both funding agreements and license agreements.  That is, “under” would have the general sense of “in the performance of work”; but “subject to” is much broader–an agreement may cover work that otherwise was not externally sponsored, or supported by Harvard directly–all Harvard has to do is make an agreement with someone regarding the invention (or know-how, or whatever).  A licensing agreement promising improvements, for instance.

The “conceived or reduced to practice” language here does not track US general patent law but rather the definition of a subject invention under the Bayh-Dole Act (35 USC 201(e)).

The term “subject invention” means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement…

This is not a definition of an invention, but rather of how funding is used to limit policy interest to a specific class of inventions, based on use of funding. Further, actual reduction to practice has to do with making or practicing the invention.  Constructive reduction to practice has to do with preparing a document that meets the enablement requirement of the patent law (section 112).  That is, constructive reduction to practice, in an academic environment, is simply the teaching of the invention in a written document, such as a scholarly publication.  In essence, the Harvard policy, by omitting the “first actually” from the Bayh-Dole usage, extends the claim to inventions (and other assets) documented by Harvard personnel, even if those inventions were not “made” within any of the Harvard enumerated conditions for a claim.

The “conceived or reduced to practice” language is a typical claim trick introduced by AUTM to expand scopes of claim in inventions.  The argument is that such expansion is necessary “to comply with Bayh-Dole.”  But that’s of course nonsense.  First, because the issue for universities is the patent rights clause in a funding agreement, not Bayh-Dole.  Second, because the (f)(2) agreement when implemented applies only to inventions that are made, and only subsequently examines how the invention was supported to determine if the invention is “subject.”  The university only comes to have a compliance issue with regard to such inventions when the university comes to own them.  That is, until the university obtains assignment of such an invention, the compliance issues are entirely with the inventors, by means of (f)(2).

Harvard qualifies the nature of the funding at each point in its list of areas of interest:  “direct or indirect”; “support or funding”; “awarded or administered”; “by or through”.  These usages expand the reach of the claims.  What is indirect support by the University, as distinct from indirect funding?  What, for that matter, is “indirect funding”?  It would appear that Harvard claims the right to own inventions regardless of whether Harvard is acting as a trustee (“administered by”) or an employer (“direct funding” etc).  That is, even when Harvard agrees to manage funds on behalf of another, it claims the right to own the resulting inventions, taken broadly.

An invention is patentable when it has been *made*; that is, conceived *and* reduced to practice.  Both prongs must be true for the invention to be patentable.  See the MPEP (2138.04 and .05) for a discussion.  The usage here, however, imagines an invention as being made when it is conceived, or when it is reduced to practice.  That is, an invention, in the Harvard policy, includes an “idea or know how that is potentially patentable” quite apart from whether it is an invention that is potentially patentable.  What the Harvard policy claims is that an idea, that could in the future become the source for a patentable invention under US patent law, is claimable by Harvard.  That is, Harvard claims the “right to own” such ideas and know-how when they are “conceived” regardless of whether they are subsequently developed into inventions that are patentable.

Harvard shall have the right to own and each Inventor, at Harvard’s request, shall assign to Harvard all of his/her right, title and interest in a Supported Invention.

This is the classic promise to assign, built on a claim of equitable title (“right to own”), but expanded from patentable invention to include a range of assets that may not be patentable, or may have been made outside of Harvard acting as employer, and without reference to the relationship of the invention to Harvard’s business or future business. The effect is to appear to claim much more than simply inventions that are or may be patentable.

If a university wanted to use a “best practice” in dealing with such inventions, it would implement the (f)(2) agreement, which provides the required scope of disclosure, and then claim (if it was given over to compulsory assignments) title to subject inventions.   If a university wanted to cover as well for inventions that might be made that were for some reason not subject to the standard patent rights clause of a federal funding agreement, then the university would have an agreement to assign patentable inventions that the inventor wished to patent.  That is, the right to the invention would be established at the point that a patent application had been drafted, or constructive reduction to practice, after the invention had been made and it was possible to establish that the university had indeed provided support for some aspect of the invention’s conception or reduction to practice, and support sufficient to establish an equitable claim to ownership.

University of Michigan

“Intellectual Property” means inventions, processes, compositions, life forms, computer software, copyrighted works, mask works, research tools and data, certain defined trade and service marks, Tangible Materials, and legal rights to the same.

The definition here is a disordered mix of intangible and tangible assets, turning “intellectual property” from a reasonably well defined set of assets to a jumble.  The definition may as well read “Crapload of Cats” or any other random tag.  At least then no one would be confused.   Inventions may be processes or compositions of matter, but here invention is listed separately, as if it is distinct from these other assets.  We encounter as well “copyrighted”–that obsolete usage that suggests ignorance with regard to copyright law.  Copyright vests in original works of authorship when they are fixed in a tangible medium of expression.  There is no verb form.  One does not “copyright” a work.  That language went out when the US joined the Berne Convention in 1989.

Further, the definition provides no distinction for many of the listed items whether novelty or originality has anything to do with them.  A patentable invention is a particular class of invention.  That the invention is expressed in software or in tangible materials is beside the point.  Yet here the definition ignores all this and simply claims a broad scope.  It is a habit of scope left over from the days of disclosure, reduced to a nearly random list of assets, not even qualified with a hopefully expansive “including but restricted to.”  What does one do with technical information that is not “data”?  Is a DNA sequence a “life form”?  A “Tangible material”?  Not really:  it is a sequence.  Is data dictionary “software”?  Not really:  it is an implemented design.

Intellectual Property made (e.g., conceived or first reduced to practice) by any person, regardless of employment status, with the direct or indirect support of funds administered by the University (regardless of the source of such funds) shall be the property of the University, except as provided by this or other University policy.

We see again the “conceived or first reduced to practice” drawn from Bayh-Dole, but failig to draw it correctly, with the further lapse of equating “made” with either conception or reduction to practice, when “made” requires *both*.  But here, the problem is not that this is an effort of incompetent drafting but rather that Michigan is creating by policy its own world of definitions and claims, and setting these up as requirements for an assertion of claims.  Amazingly, the policy disclaims employment status.  Thus, the claims do not arise from employment, but from use of funds (with the usual “direct or indirect” and “administered” to include funds held in trust by Michigan rather than concerning only Michigan’s own funds.

Rather than Harvard’s “shall have the right” to request assignment, Michigan policy merely proclaims that such Intellectual Property “shall be” Michigan’s.  It is not stated how this “shall being” will come about.  By assignment following request?  By vesting of equitable title, in defiance of federal patent law?  By eminent domain, a taking of private property for public use?  If the latter, then where is the due process and the just compensation for the owners of the property?

Just to show how silly Michigan’s statement is, consider this bit further on:

The University will own Intellectual Property made by a former University employee if the Intellectual Property was made both (1) with substantial University faculty guidance or University resources and (2) during activity directly relating to and closely following employment.

Note, this is not a claim merely about inventions that were made in the course of employment because Michigan’s general policy claim expressly disclaims employment as a condition.  Instead, it has to do with “substantial faculty guidance” or “substantial resources” and either “relating to” (subject matter) and “closely following” (time) employment.   This claim could apply to any student who happened also to work for the university (such as a teaching assistant).  The faculty guidance is not limited to employment supervision.  The Intellectual Property could be anything–from a work-around, to an improvement, to simply building something based on, say, a capstone course.  It’s nuts.  But it’s not as nutty as others.

University of Utah

Inventions” shall mean and include: inventions, technological advances, scientific discoveries and improvements (whether or not patentable); all trade secrets and know-how; trademarks and service marks; and the tangible and intangible results of research (including, for example, data, lab notebooks, charts, biological materials, cell lines and samples). “Inventions” shall also mean copyrightable works that include subject matter that is also patentable, as determined by the TCO Director, and software, notwithstanding the extent to which software may be governed by University Policy 7-003 (Ownership of Copyrightable Works and Related Works).

This is nutty.  Invention means invention.  That’s a good start, if only invention meant patentable invention under federal patent law, invention meant “anything new that sparkles in an administrator’s eye.”  But here, it’s a meaningless tautology, but there’s more.  We find also “technological advances” and “results of research” all bundled together, whether or not patentable.  That is, regardless of whether there is a theory of ownership.  “All” trade secrets and know-how are also included.  Whose trade secrets?  The university’s?  No, cannot be, because in the next section, the employees are required to assign their inventions to the University, so these trade secrets must be the employees’ trade secrets–that is, what they know that they keep to themselves, along with their “know-how”–what they know regardless of whether they keep it to themselves.  By defining invention to include results of research, the University sets up to claim to own scholarship but for the mere expression of scholarly reporting and opinion.  It reduces faculty publications to happy personal endorsements for Utah products.

The reference to “copyrightable” signifies ignorance, for the usual reasons.  But the inclusion of works of authorship within the definition of invention is more along the lines of incompetence.  What does it mean for a work of authorship to “include” patentable subject matter?  Is the intent to cover patentable expression?  Or is it to claim ownership of copyrights in manuscripts that describe something patentable, regardless of whether the author of the manuscript is an inventor of that something patentable?  Or both?  The reference here is not software, because software is treated separately next.  The reference is to other things that might be works of authorship and patentable, such as, perhaps, designs.

Further, what exactly is the TCO Director delegated the authority to determine:  that something is patentable?  Is the TCO Director qualified to make that determination?  Here, the delegation does not make something patentable, but rather serves to bring anything descriptive or expressive that the TCO Director declares is “patentable” within the scope of the definition of “invention” and therefore assigned to the University.  Contemplate this:  the Utah policy delegates the TCO Director with the unilateral authority to determine what is assigned to the University.  Simply declaring a manuscript “including” “patentable subject matter” results, by operation of the present assignment we will discuss next, to become the University’s.

Upon agreeing to be bound by University Policy, and as a condition of the University’s provision of employment, services, facilities, equipment or materials to faculty, non-faculty academic employees, staff and student, (a) each faculty, non-faculty academic employee and staff member (including a student-employee having invented in his or her capacity as an employee) agrees to assign and does assign to the University title to all inventions he or she conceives, develops, reduces to practice or creates (1) that are within his or her area of expertise (as defined below), (2) in the course of University research, or (3) with non-incidental use of University resources, and (b) each student agrees to assign and does assign to the University title to all inventions he or she conceives, develops, reduces to practice or creates (1) in the course of University research or (2) with non-incidental use of University resources.

This is a fascinating construction of lists.  It is a list sandwich.  First, a list of rationales, at least one of which it is hoped is sufficient to justify the obligation to assign such a broad set of assets to the University.  It is a “thicket of rationales.”  One might think it is the result of clever drafting.  I think it is incompetent and the sign of malpractice and bad faith.  I wonder what faculty at Utah think about it.

Notice that the policy does not state that assignment is a condition of employment, that is, part of the bargain by which someone agrees to be employed, but rather assignment follows from the University’s “provision of employment” as if employment were a service made in exchange for assignment, as if the University then had a duty to deliver employment to the employee.  It’s nutball.  But there’s more.

The list adds “students” as recipients of one or more things in the list, like facilities, equipment, or materials, as if such provision might create an obligation for, say, faculty to assign inventions to the University.  Again, look at the logic.  It can read:  “As a condition of the University’s provision…of materials…to students, each faculty agrees to assign and does assign… [bottom list of the sandwich].”   If this is intended, it’s horrible.  If it’s not intended, then there is no way to get at what the University really does intend.  The policy may as well read, “we take ownership of whatever we decide to take ownership of, when we see it, at the time it was made even if we see it a long time later.”

Now the rest of the list sandwich.  The inventions to which Utah makes a claim are any “in his/her area of expertise.”  The policy promises a definition of area of expertise “below” but it is in fact “above.”

Area of expertise” means, with respect to a faculty member (including regular faculty members and auxiliary faculty members), his or her specialized skills or expertise, as indicated by the instructional, clinical and research activities the faculty member performs, or has performed, on the University’s behalf.

Another fine tail-biting definition, roughly: “Area expertise means … expertise … performed… on the University’s behalf.”   The whole line of claim falls back on the qualification of what is done “on the University’s behalf.”  There is no guidance in the policy for what that means.  Is it a statement of intention?  That one uses one’s skills to benefit “the University”?  Or is it something expressly assigned and directed by the University’s administration, distinct from one’s normal activities?  Clearly, if one performs some activity with the intent that the University should own, then that’s fine.  And if one performs some activity knowing that the University expects the benefit, then that might also be “on the University’s behalf.”  But if the only expression of the matter is an assertion of ownership, and that is in fact the basis for what is on the University’s “behalf” then the block of text is, well, mealy-mouthed.  It would be as if faculty are hired exclusively to benefit the University by their, uh, inventions, and thus it is fitting for the University to memorialize this agreement in written policy.  It is as if the University is merely a corporation, existing to be served by its employees, claiming everything they do for its own benefit.  Expedient, maybe.  But if it is true, then the state is claiming control of scholarship, and the university is merely a company operated by the state that exists to sell off faculty work to speculators.  Why should anyone fund it?  Why for that matter should the public?

Again, we find the echo of a scope of disclosure being used to demand ownership.  One’s “expertise” is well beyond “scope of employment.”  Of course, employment doesn’t appear to be a controlling concept, as it is treated as something of an optional perk rather than the substance of the relationship, though by the end, assignment will also be made a condition of employment, along with employment being asserted as consideration in part for assignment.

“University research” is not defined.  It is merely here a proper adjective ahead of a noun.  What makes research “University” research?   University research is not necessarily research that results from employment or sponsored funds, because the top list of the list sandwich is set up to be perks, not conditions precedent.  That is, the University claims everything it claims not because these things come within the scope of employment and agreements on use of resources, but because of the provision of such things.   That is the mandated bargain, the purported thing that everyone agrees to.  The scope is outlandish.

Language such as “non-incidental” resources appears to come from conflict of interest policy rather than invention policy.   In past patent policy practices, the standard was something more along the lines of a “normal academic environment.”  The bargain was that the state provided such resources to faculty and students so that they could facultate and studentate.  The provision of such support was to enable teaching, research, and learning; to stimulate such activity for the general good; not as part of a bargain to take the results of this activity as a condition of support.  It is as if the University of Utah has rewritten its charter so that the reason for state funding is to take ownership of the creative work of whomever is fool enough to stumble into a non-incidental use of resources, or merely to have an area of expertise.  One wonders if it is merely an offensive gesture aimed at faculty and students perpetrated by minor administrators in the darkness of their incompetent malfeasance or is rather a part of a clever plan devised by senior leadership to get out from under the charter and run like a corporation rather than a public institution.

In the middle of the sandwich we find the present assignment, which purports to transfer ownership prospectively all this mass of “inventions” under Utah’s broad random mix.  That is, the University has set this up as “equitable.”  That regardless of the actual circumstances, because the University has provided facilities or materials to a faculty member, the University equitably has ownership of anything the faculty member “creates” within “his/her area of expertise.”  Utah underscores all this by attempting to further claim that the ownership transfer takes place with the present assignment buried in policy.  First, an attempt to void any other assignment:

No inventor of an invention described in the foregoing paragraph has the authority to assign, license, or otherwise dispose of such invention except to the University or its designee pursuant to this policy.

For federally supported work, this statement breaches the standard patent rights clause.  Under 37 CFR 401.14(a)(f)(2), inventors must have the authority to assign or license to the government, not because the University designates the government for this purpose, but because as a condition of funding the University releases inventors from any other claims.  This is nonsense.

Under federal patent law, inventors own their inventions.  Assignment of title in inventions–that is the exclusive right to apply for a patent–requires a written instrument signed by the inventors.  See 35 USC 261.  The aim here by the University is to create a written text that creates a claim to equitable title to patentable inventions–and to a lot more.  But the claim to equitable title is not sufficient to void an actual assignment in writing signed by the inventor.  Nor is merely pronouncing that inventors have no authority to assign.  They do have the authority to assign, by federal law.  Nothing can change that.  They might agree to assign to the University, but that’s a different thing.  The Supreme Court in Stanford v Roche was clear on this point:

In accordance with these principles, we have recognized that unless there is an agreement to the contrary, an employer does not have rights in an invention “which is the original conception of the employee alone.” Such an invention “remains the property of him who conceived it.”  In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights.  (7-8)

Utah appears to be trying to use the idea that by piling on provision of facilities and whatnot along with employment, somehow Utah can overcome all this.  That is, rather than authorizing University administrators to make such an agreement to the contrary, the policy claims that the policy must prevail because it offers more than mere employment–that is, it offers all the stuff that comes with a university appointment, such as use of facilities.  It’s just that faculty are not employed for invention (but for this policy claiming otherwise).  They are not directed to invent.  There is nothing about “employment” for a faculty member that gives rise to an administrative claim to title short of an express agreement under which something other than agreed-upon salary is provided in exchange for ownership of inventions.  There is nothing about “equitable” title in the Utah policy that is equitable.  The Supreme Court continues:

But, as noted, patent law has always been different:  We have rejected the idea that mere employment is sufficient to vest title to an employee’s invention in the employer. (10)

Utah is trying to do just what the Supreme Court rejects.  The only variations are that Utah throws in a list of stuff that attends employment, as if employment is distinct from these things and so there is more than mere employment, and that somehow by agreeing to “be bound by University Policy” one has also entered into an enforceable contract that meets the requirement of an “express” grant of invention title.

Each faculty member, non-faculty academic employee, staff member, student-employee and student may be asked to execute an assignment of such inventions, to the University to confirm the University’s rights and shall do so on request.

The signing of an invention assignment is an administrative convenience for confirming technology ownership rights, but the terms of this Policy are controlling and as with other University policies, constitute conditions of employment and participation in research.

It’s clear the strategy, but the strategy is not sufficient.  The Policy is not controlling, and cannot both cite the provision of employment as consideration and then claim that assignment is a condition of employment.

To overcome the provisions of 35 USC 261, not only does Utah have to have “equitable” title–that is, a claim based on something other than mere employment–and here, that something is, apparently, a “Policy” attempting to be that express agreement–but also that the assignment has to be recorded in the Patent Office “within three months from its date or prior to the date of such subsequent purchase or mortgage.”  So the present assignment buried in the Utah policy does not satisfy the requirements for assignment until the assignment is recorded.  For that, Utah has to have a written instrument signed by the inventor, and for that, needs to know what the invention is to be able to identify it to the Patent Office.   If an inventor at Utah assigns an invention to anyone else, despite the Utah policy, then three months later, if (1) Utah has not recorded its assignment, (2) the assignee did not have notice of Utah’s claim; and (3) the assignee paid a “valuable consideration” for the assignment, then Utah is out of luck.

All the bombast of its policy not withstanding, the University still does not get title to the invention.  It can fuss all it wants to the inventor, but that’s a separate issue from the status of the assignment itself.  The assignment document is not an “administrative convenience.”  The assignment document is essential.  A valid present assignment–one that is enforceable, not ambiguous, not unreasonable, one that represents a meeting of the minds, for which there is real consideration–may give one equitable title, but it does not give one legal title.   Here, the Utah attempt at a present assignment is indeterminate, overreaching, runs counter to academic freedom, and if anything, inequitable and contrary to public policy.

For a discussion of what needs to go into a patent agreement running alongside employment, this paper by law student Parker A. Howell is helpful:

… [T]he existence of a pre-invention employment agreement does not guarantee employer ownership of an invention.  Employees may challenge the validity of such an agreement on traditional contract grounds, such as unconscionability or ambiguity. . . .   Agreements thus must be “reasonable” and not unconscionable or against public policy.  Reasonableness standards “ordinarily parallel those used for noncompetition agreements,” focusing on the “scope of what type of invention or authorship [is] in question and the duration of the obligation to assign.” [Quoting Nimmer, Law of Computer Technology, Section 4:9]

One might be struck by the ambiguity of the University of Utah’s policy, along with the unreasonableness of claiming so broadly inventions so defined.  But there is yet more. Utah, like a number of other states, has a law that aims to protect inventor-employees (Utah Code 34-39-2 and -3). It is worth quoting in full so one can see the full extent to which the University of Utah aims to game the system.  My bold, as with all of the quotes in this essay.

(1) An employment agreement between an employee and his employer is not enforceable against the employee to the extent that the agreement requires the employee to assign or license, or to offer to assign or license, to the employer any right or intellectual property in or to an invention that is:

(a) created by the employee entirely on his own time; and

(b) not an employment invention.

For a university faculty member, what constitutes “his own time”?  What is an “employment invention”?  What is meant by “intellectual property”?  There is no way to know.  The University does not set work hours for faculty, as far as I know.  The definitions provided by the law at 34-39-2 is not much help, either:

As used in this chapter:

(1) “Employment invention” means any invention or part thereof conceived, developed, reduced to practice, or created by an employee which is:

(a) conceived, developed, reduced to practice, or created by the employee:

(i) within the scope of his employment;

(ii) on his employer’s time; or

(iii) with the aid, assistance, or use of any of his employer’s property, equipment, facilities, supplies, resources, or intellectual property;

(b) the result of any work, services, or duties performed by an employee for his employer;

(c) related to the industry or trade of the employer; or

(d) related to the current or demonstrably anticipated business, research, or development of the employer.

(2) “Intellectual property” means any and all patents, trade secrets, know-how, technology, confidential information, ideas, copyrights, trademarks, and service marks and any and all rights, applications, and registrations relating to them.

Here we get a truly odd definition of “intellectual property,” which anchors what an employer may own that an employee may rely upon to trigger the validity of a invention agreement.  This definition is not the same as that of “invention” in the University of Utah policy, but shares some similarities in the mix of statutory intellectual property and a random list of other intangible assets.  How strange to include “ideas” and “know-how” as if these can be owned by an employer, as distinct from trade secrets.  One wonders why the University of Utah, as an instrument of the state, didn’t bother to make use of the state’s definition of intellectual property, goofball as that definition is.   But then, one wonders a lot about all of this.

One way of viewing the conditions here with regard to faculty work is that there’s an impenetrable tangle of claims:  scope of employment or on employer’s time or with the aid or use of employer’s stuff; performed for the employer, related to the employer’s trade or business.  How could faculty not be involved in some bit of this for everything that they do?  Clearly, that is a purpose of the Utah policy.  Just make a wild mess of things, leaving administrators lots of places to rationalize a claim of ownership.

From another perspective, however, we have academic freedom, the university accepting management of grant money as a trustee rather than owner, and we have the fact that for nearly all faculty-led research and inventing, the university exhibits none of the functions of an employer.  Much of the inventing is not done by the employee for the employer, and in the case of sponsored research, the employer is compensated for the release of employees from their official duties and its provision of resources for them to undertake the work.  For the University to sustain the tangle, it has to argue that its faculty have accepted work conditions that other portions of University policy disclaim or that simply do not coincide with actual practice.

Returning to the Utah law on employee inventions:

(2) An agreement between an employee and his employer may require the employee to assign or license, or to offer to assign or license, to his employer any or all of his rights and intellectual property in or to an employment invention.

If the agreement is not based on employment, then whatever is fine.  Note, the obligation to assign is not merely to invention, but to everything that might pertain to an invention–including ideas, know-how, confidential information, patents–uh, forget that the logic is off, with the patents to an invention getting assigned before there’s even a patent application.   Ghost patents in the sky.  Of course, such an agreement has to carry its own consideration, not stuff that comes with employment.  Backing away from the rights of inventor-employees still further:

(3) Subsection (1) does not apply to:

(a) any right, intellectual property or invention that is required by law or by contract between the employer and the United States government or a state or local government to be assigned or licensed to the United States; or

This appears to be a gesture toward Bayh-Dole, but is badly drafted, as Bayh-Dole does not apply to “intellectual property” as defined by the state law, but applies specifically to subject inventions, and the law does not come into it, and neither the law nor federal funding agreements require assignment to the federal government–any assignment is by request following on an agency decision that relies on the funding agreement.  So Utah state law has got Bayh-Dole backwards.  The requirement to assign to the employer should be void if federal contract (the standard patent rights clause) requires the employer to permit the employee inventor to negotiate with the federal agency over title (for which see, 37 CFR 401.9).

(b) an agreement between an employee and his employer which is not an employment agreement.

Thus, if an agreement is not an employment agreement, then everything is fair game.  The University of Utah claims that its policy is a condition of employment.  That rules out the effect of (b).  I would think that (b) would be the place a university would want to end up, if the university were in Utah and fixated on getting everything it can.

(4) Notwithstanding Subsection (1), an agreement is enforceable under Subsection (1) if the employee’s employment or continuation of employment is not conditioned on the employee’s acceptance of such agreement and the employee receives a consideration under such agreement which is not compensation for employment.

While this backs away still further from protecting employee-inventors, it doesn’t help the University of Utah much either, as the Utah policy states that the agreement is a condition of employment and that employment has been “provided” by the University.  The odd thing is that Utah attempts to add various things that come with employment as if they are additional consideration for the agreement imposed by policy, rather than the rattle that comes with employment.  What other consideration does the inventor receive?  We can look at the Utah royalty sharing policy, but it’s not clear at all that the existence of a royalty sharing policy is itself consideration.  Unless Utah subsequently licenses an invention and receives payment which it then shares, there is no consideration for the assignment.

(5) Employment of the employee or the continuation of his employment is sufficient consideration to support the enforceability of an agreement under Subsection (2) whether or not the agreement recites such consideration.

So if the invention is an employment invention, then employment is sufficient.  This is as much as to say that an employer has the right of equitable title to an employment invention.  The big problem is whether such a thing applies to the state itself, in the form of a university, in dealing with faculty.

(6) An employer may require his employees to agree to an agreement within the scope of Subsection (2) as a condition of employment or the continuation of employment.


(7) An employer may not require his employees to agree to anything unenforceable under Subsection (1) as a condition of employment or the continuation of employment.

Nope.  But what if the employer does require agreement anyway?  In particular, what happens with a policy that claims a condition of employment, does nothing to limit the claim to employment inventions (“related to expertise”–remember that?), and inserts a present assignment to make it appear that title to the jumble that is “inventions” passes immediately to the University?  Is that present assignment provision unenforceable?  Or does it simply not operate?  It would take an attorney with a paying client, I’m sure, to get to a definitive answer.  My thought is that the entire Utah patent policy statement should be thrown out as an embarrassment of practice that runs against public policy, but then, that’s something that the faculty at the university ought to do.

(8) Nothing in this chapter invalidates or renders unenforceable any employment agreement or provisions of an employment agreement unrelated to employment inventions.

So if the agreement is over something not pertaining to employment inventions, folks can deal as they may, subject to whatever law might constrain their dealings, just that it isn’t this law.

All this long discussion to illustrate how defective university patent policies can be about stating the subject matter and setting out the basis for a claim of ownership.  But now about the deeper consequence that I alluded to at the start of all this.

First, eliminate trade secret from the university mix–that is, that a university administration does not hold faculty work as a trade secret, since it does not generally require such secrecy agreements from faculty, and if it did, it would blow its fundamental research exception under export control law and bring down a ton of hurt for failure to follow proper licensing procedures with regard to foreign nationals participating in such secret work.

Now, what is left for the theory of ownership to inventions made by university faculty?  Obviously, there is patent law, and if “invention” is taken broadly to be just about anything, then perhaps one also might reach to copyright, in the case of software or a design.   If we eliminate patent law, however, as well, for the “inventions” that are not patentable, we are left with an ownership claim that has no ownership theory.   That is, it functions as a restraint of trade, a non-compete covenant, an assertion of control over the behavior of the “inventor.”   Is it reasonable when applied to university faculty?  In Utah, who knows.  In California, it would appear to be void, but then the University of California cranks on with their policy, apparently betting that faculty won’t sue to challenge their practice, so again, the world isn’t what I expect it to be.

If a university patent policy is ambiguous, or it overreaches, or it is otherwise unreasonable, or it implies work conditions that do not exist in practice, then it acts as a non-compete covenant.  But more, it acts to undermine the independence of faculty and their scholarship.  The university by claiming to own “inventions” that are not patentable, and cannot be held by trade secret, is claiming state control over the faculty members directly–they cannot practice what they discover without state permission, they cannot teach others how to practice without state permission, they cannot leave the university and practice what they have done without state permission.  And we are not talking merely about inventions for which patents have been obtained by the state.  We are talking about a policy that claims the standing of an agreement under which faculty are required, to be faculty at all, to give up control of the “tangible and intangible results of research” to the state, which delegates to a minor official in an office set up to seek profits from ownership positions the right to determine what faculty can and cannot do with their own work.

Talk about a police state.  If the agreement is no agreement, but merely an assertion of the power of the state, then any taking of faculty work is a taking of personal property by the state.  That ought to require compliance with the Takings Clause of the Fifth Amendment.  There ought to be some concern over all this among university administrators.  The pursuit of windfall profits by means of licensing faculty work to speculators surely cannot take precedence over academic freedom, an independent faculty, and the restraint of the state–even the state-as-employer–in fostering innovation.  Much as state governments can support innovation when they adopt it, they work against innovation when they demand to own it.  And in making such demands, they also undermine the integrity of the university.  It would be well, then, for state legislatures to revisit public university practices with regard to faculty scholarship.  If a state wants innovation from university research, the first place to start is re-affirming, if not restoring, the freedom of faculty (and students and staff) to innovate.
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1 Response to University of Utah’s Policy on State Control of Research Results

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