There are alternatives to compulsory invention assignment practice–there’s still a voluntary aspect to nearly all university patent policies, already there, built-in–on the administrative side. There are often two mechanisms in policy by which patent administrators can implement a voluntary program of assignment, even within a policy that makes assignment mandatory:
- decline to assert ownership
- assign back to the inventors if assignment is required by policy.
We have looked at how such a practice can exist within patent policy at California, Iowa, and Kansas. Now we turn to the University of Florida. It will take more effort to work through the policy here. Not only are there multiple layers, including a collective bargaining agreement with faculty unions, but also we will examine how the policy plays out in sponsored research agreements and exclusive licenses. Even with the inconsistencies across these practices (and the attendant absurdities of inept drafting), a voluntary assignment practice is still very doable. It requires only the will to implement it.
University of Florida
The University of Florida patent situation involves state law, which authorizes the university to acquire patents, a university regulation (“Works and Inventions”), which lays out the implementation of the state law, and an “Intellectual Property Policy” that implements the university regulation and looks like a friendly informational marketing piece. There is also an intellectual property section in the faculty’s collective bargaining agreement which adds a few choice bits but mostly repeats the intellectual property policy.
I find the Florida policy amusing for the way someone worked in their creationist viewpoint to a formal university policy and got away with it. The Florida policy statement, not content with using terms of art, such as inventor and author, instead conflates and generalizes these into a new defined term, a “creator.” We thus get section titles such as this:
Some policies derive merely from the authority of a Board of Regents, or perhaps state law. But Florida goes to the top and deals with the Creator. Alas, there’s nothing metaphysical to learn there, as the policy is concerned, in practice, with mere inventors and authors–but it can’t bring itself to say that, leaving open the thought that a “creator” may be something other than a term of drafting convenience, and that “creators” might also be other than inventors or authors. Given the definition of “invention,” perhaps this is indeed the case, as I am left wondering, as you might soon be, too, what the right word for the maker of a “portion” is. Maybe they meant “potion.”
The patent policy defines invention broadly, to include material things:
An “invention” shall include any discovery, invention, process, composition of matter, article of manufacture, know-how, design, model, technological development, biological material, strain, variety, culture of any organism, or portion, modification translation, or extension of these items, and any mark used in connection with these items.
“Shall include” suggests that the definition here is an expansion on the general idea of “invention.” Naturally, consistent with poor drafting, we get the tautology that “invention” shall include “invention”–ah, but it is any invention. That must make some difference. There’s nothing in the definition of invention that limits it to inventions that are or may be patentable. Statutory subject matter of patentable inventions–process, composition of matter, article of manufacture (ignores machine)–is mixed in with a flood of randomness–know-how, design and model (design patents on inventions?), something as nebulous as a “technological development,” somethings even more nebulous called “strain” and “variety” (perhaps carelessly hoping “biological” earlier in the list can reach out and modify “strain” and “variety” can be understood as a plant variety), and then the truly remarkable extension of this flood to “portion, modification[,] translation, or extension” of these “items.”
Oddly, to the definition of invention is added “any mark”–perhaps meaning trademark, but even so, the cognitive dissonance at this point is enough to fuzz the mind. Perhaps that was the intended effect. Or maybe this is just clueless. Even if one wanted to make a list of possible things that a university might have an interest in–if only to have reported–this is a numbing way to go about it. “I’d like to report a portion, Sir. And a strain. Not a new portion or strain, of course. Just that there is one of each. Yes, here in my office. No, I’m not in any immediate discomfort. Thought I’d let you know.”
In establishing a policy on new technology, one might state a scope for the term and require that anything within scope be reported. Establishing ownership and control of some of what is reported is a distinct step. To make what is reported equivalent to what is claimed is to invite overreaching claims. It also makes a reporting step, which should be direct and forthright, carry with it the implication of “if it is reported, then I am agreeing that the organization will own it.” Some universities go so far as to require the use of a disclosure form, and to complete the disclosure form, one has to assign the ownership of whatever is reported, even if what is reported is clearly outside the scope of the university’s ownership claims. That’s ballsy. There is then the third step of reviewing a disclosure and asserting ownership in those things that the organization has an interest in–that is within the scope of the agreement the organization has with the inventor. Finally, one secures a written, signed assignment from the inventor that sets out what is being assigned. Keeping these steps distinct is a sign of a carefully implemented process.
Florida goes so far as requiring disclosure of all inventions (this form may not be the current form, which is password protected), regardless of the university’s ownership claims.
All inventions must be disclosed, even those believed by the creator to be unrelated to his or her University duties and not involving the use of University support.
The patent policy establishes the university’s ownership claim:
An invention which is made in the field or discipline in which the creator is engaged by the University or made with the use of University support is the property of the University,…
Remember that random list–here, the policy asserts anything in that list–portions, strains, know-how–if it is “in the field or discipline” or made with “the use of University support” is the university’s property. Let’s unwind this a bit. The claim can’t decide between “field” or “discipline” and so gives both. A faculty member might be in the physics department and do work in the field of nanotechnology, so an invention “made in” either would qualify. There is a limitation, however–the field or discipline has to be one that the creator is “engaged by the University.” “Engaged” is a difficult term to use here. It’s not “employed.” The Business Dictionary has this to say about “employee engagement”:
Emotional connection an employee feels toward his or her employment organization, which tends to influence his or her behaviors and level of effort in work related activities.
That’s probably not what’s meant by the policy’s use of “engage.” Guidelines at a university on “engaging” contractors feature a checklist leading up to a “procurement instrument” that provides a statement of work and compensation. Perhaps this is closer to the meaning in the Florida policy. One would expect in an engagement, then, a statement of work. This approach would acknowledge that faculty members are, for much of their professional work, something of independent contractors, free to provide services, whether for a charge or voluntarily, to most anyone, subject to some limitations on time commitments and use of university resources.
But perhaps “engage” here is a generalism for “employ” and “appoint” and “contract with” and “allow to be a resident visitor” and “enroll as a student” and whatever else might come to mind as a form of relationship between the university and an individual. In this sense, “engage” is a special term for “any sort of relationship with the university.” That might be, but there’s nothing in the policy that provides any guidance.
In a way, the claim is stated backwards. The claim starts with an invention, and then looks to the field or discipline in which the inventor “is engaged” by the University. That is, it’s not an invention that the university has been promised, nor is it an invention that the university has commissioned work on. Nor is it even directly related to work the inventor is actually doing for the university (or even at the university). Rather, the review is whether the “invention” (again, a flood of random generality here) is in the same field or discipline as work the inventor has been “engaged” by the university to do. So, a physicist is “engaged” to teach graduate physics seminars and does work at the university in nanotechnology. On the side, she invents a novel sensor involving ladybug spittle for detecting radioactive decay. Since the discipline of the invention is physics (“radioactive decay”), the university claims ownership of the invention, even though the work is nothing that she does at the university. Apparently she can choose what she does at the university, but by policy she is not allowed to choose to do anything in “her discipline” or in “her field” and not at or for the university. Call it “Hotel Florida.”
One would think that the claim ought to start with documents that record what the inventor has been “engaged” to do at the university and ask whether any of those records anticipates the invention. If so, then the invention is within scope of a potential university claim, and the university may consider asserting a claim (though it might not want to, for various reasons). If not, then it does not matter what field the invention is classified in, or by whom. As it stands, the Florida claim is drafted to be a non-compete clause. The definition of invention is so broad (including “know-how” and “technological development” or “portion” thereof) and the claim of invention is directed to the “field or discipline” that an inventor works in, not the actual work the inventor does for (or at) the university, so the policy, as an instrument, aims to prevent anyone “engaged” by the university from working for anyone else (or even for themselves) in the same field or discipline in any capacity–not as a volunteer, not as a consultant, not for one’s own personal interests or professional development. That’s a pretty broad demand, something that no for-profit business could get away with. Why should a public university get to make such a demand?
As for “made with the use of University support,” there’s no guidance as to what it means to “use” “support” or what exactly “support” might be. If “support” means money, or money and special access to facilities or instruments, perhaps there’s hope for an interpretation. But leaving “support” as it is, a bland term that might comprehend anything from a dean’s encouragement to secretaries taking phone messages to work using library or internet services seems designed to be a catch-all to allow administrators to claim ownership of “inventions” at whim. Not that administrators have to work this way–they shouldn’t. But here’s the defect in a whimsy catch-all drafting strategy such as Florida has chosen to use: if administrators routinely don’t follow up on the claims of policy, then at some point soon in the game, those subject to the policy come to rely on the indifference and inaction of the administrators and the policy does not mean what the words permit, and administrators are constrained in popping up with sudden new demands–laches, for inaction, and inequitable treatment, for selective enforcement of the policy.
The regulation at this point, indicating that ownership claims made by the regulation are subject to review by administrators, hands things off to the Intellectual Property Policy:
The Office of Technology Licensing shall inform the creator of the University’s decision regarding ownership pursuant to the requirements of the University’s Intellectual Property Policy. Any invention shall be handled in accordance with the University’s Intellectual Property Policy
The Intellectual Property Policy outlines three possible responses that the “Office of the Vice President for Research of the University of Florida” may make with regard to an invention disclosure for something within the scope of the patent regulation’s claim: waive it, claim it, or send it back as incomplete or under developed.
Inventions in the Field in Which the Creator is Engaged or Made with University Support
If, after a full disclosure of an invention and review in accordance with section D of this policy, the invention is determined to have been made or developed in the field or discipline in which the creator was engaged by the University to teach, do research, or to perform other duties, or the invention is determined to have been made with University support, VPR may, on behalf of the University:
We should stop right here for a moment to see that the Intellectual Property Policy expands the claim made by the university regulation. The regulation provides for inventions “made” (not “made or developed”), and there is nothing in the regulation regarding teaching, research, or performing other duties–the formal policy is the “field or discipline in which the inventor is engaged by the University.” It is not about the nature of the duties–it is whether the inventor has been engaged (and all the ambiguities that go with that usage). The addition of “duties” and expanding to include “teaching” and “research” makes it appear that anything in the category of these things is claimable. If the inventor was “engaged to do research” then anything that might otherwise involve research (extracting ladybug spittle for use in a sensor, say) is within the scope of the claim simply by being characterized as “research.” The expansion here is simply not authorized by the regulation. It may be administrative wish fulfillment, but it does not respect the policy authority under which it operates.
In any case, the Office (it’s sad, these days, when a university cannot name an actual position title, let alone a specific person, as responsible for a decision; perhaps that is to be expected from a university that can’t use “money” either–it’s as if there’s nothing about technology transfer that can bear the light of plain, direct language) can choose to waive rights:
(i) elect to waive the University’s rights to the invention, thus allowing the creator to protect the invention creation as he or she may wish.
Right here is the path to voluntary assignment practice. There’s nothing that obligates the university to claim title, and no conditions placed on the decision not to waive title. There’s just the review required by Section D:
VPR, through OTL, will conduct a review of the disclosure which shall assess the respective equities of the creator and the University in the invention or work and determine its importance and the extent to which the University should be involved in its protection, development, and promotion.
OTL shall recommend whether the University should assert or waive its interest in the invention or University-supported work, based on a determination of potential technical and market value.
The OTL is the Office of Technology Licensing. The review requirements bounce all over the place–typical carelessness. The review will (1) “assess the respective equities” in the invention, (2) determine “its importance,” (3) determine the “extent to which” the University should get involved, (4) determine the potential technical value, and (5) determine the potential market value. However, only potential technical and market value should form the basis of the OTL’s recommendation. The Office, however, is not constrained to accept the OTL’s recommendation. It’s just that the OTL’s recommendation must be based on these considerations.
Above all this, there is nothing in the review requirements that says that the university must claim ownership of inventions that it determines are important or have high market value. The policy just requires a formal review that establishes these points. One would think the determinations would be in writing, supported by documentary evidence, and not just be whimsies pulled out of the air or other regions by administrators.
Here are the purpose statements of the Intellectual Property Policy:
The University of Florida believes that a university has an obligation to serve the public interest by insuring that such intellectual property is appropriately developed.
The University of Florida Intellectual Property Policy is meant to encourage and enable technology development and transfer for the benefit of the public.
The Collective Bargaining Agreement adds an important additional element:
The research and teaching missions of the University always take precedence over patent considerations. While the University recognizes the benefits of patent development, it is most important that the direction of University research not be established or unduly influenced by patent considerations or personal financial interests.
At first, this clause appears to set up a requirement that the university not put patenting and money interests ahead of research. But it turns out that the clause is aimed at the faculty, not the university practice. Faculty, the clause argues, should not be so concerned about patents and money that it affects “the direction of University research.”
How strange! So the “most important” thing turns out not to be the “research and teaching missions of the University” but rather that the University not allow patents and money to influence faculty research. The thing to do, in such a case of inventor loathing, is to take away patent rights and licensing activities, so faculty have no direct role in how their research work that’s inventive gets developed. How not owning a patent changes the “establishment of direction” or would “unduly influence” that direction is mystifying. It is as if here there’s an implied assertion that patents and money will influence faculty in their research, but the university owning these same patents and seeking money for them–and sharing that money with the inventors–won’t have any influence on either the faculty or on the university administrators charged with overseeing the research.
Following these preambulations are the usual disconnects regarding giving incentives to inventors and sharing the “financial benefits”–money from asserting monopoly positions against industry, essentially (in a dual monopoly approach that defaults to patent flips and does not disclaim trolling). One would think, if these statements mean anything, that the Office’s decision on whether to waive the university’s ownership claim should be based on whether a claim of ownership will “insure” that the invention is “appropriately developed” and that any decision will “encourage and enable” that development “for the benefit of the public.” Notice that these purpose statements do not state “for the benefit of the University”–rather, what matters is the development of the invention, and the benefit to the public of that development.
The purpose of the review is not to determine if the university can make a ton of money from trading on monopoly patent rights, but rather to determine the gravity of the decision–is the invention important, is it valuable, does it represent an important advance? The decision itself is based on where development will happen best–“insuring” appropriate development–and that development leads to public benefit.
The Office, then, is well within its policy authority to implement a voluntary assignment practice. The OTL makes determinations on the importance and value of the invention, and the Office decides whether to waive or own based on insuring appropriate development and benefits to the public. Inventors can provide the Office with the reasons it needs to waive by providing a plan for the appropriate development of the invention and the benefits anticipated for the public. The OTL, too, might submit a plan, and the Office could then consider which plan has the stronger profile within the requirements of policy. The Office might take into account the OTL track record with similar inventions in considering any OTL plan. Without such presentations from inventors (or their preferred invention management agent) and the OTL, it would appear the Office bases its decision on whimsy.
The Intellectual Property Policy then moves to worries about special conditions on a waiver, including some nonsense regarding federally funded inventions, and a claim to a royalty-free use:
If outside funds supported the work leading to the invention, this waiver is subject to any provisions in sponsoring agreements. In cases in which the University has waived its interest and the invention was supported by federal funding, any waiver must be to the supporting federal agency, rather than to the creator(s). In addition, the waiver shall not affect the right of the University and the State of Florida to royalty-free use of the invention, nor shall such a waiver be granted until any pre-existing commitments to sponsoring agencies with regard to inventions are cleared.
Inventions made with federal funding are subject to the (f)(2) requirement in the standard patent rights clause authorized by Bayh-Dole and included in most funding agreements with universities. A university does not have to offer rights to the federal government unless it has already acquired title to the invention. At this point in the Florida policy, we have had an invention, a report of that invention, and a review by the OTL, leading to a decision by the Office regarding whether or not to claim title. No assignment has been made at this point. Thus, the invention is owned by the inventor. The relationship between the inventor and the government is governed by (f)(2) and 37 CFR 401.9, the patent rights clause that applies to inventions that a university does not acquire. The policy at this point should say that any waiver entails the possibility that a federal agency will require assignment to the federal government. That’s the deal.
Now we arrive at the crux, for Florida implementation of voluntary assignment practice. After all the review, recommendations, and prospects, we read:
In general, the University will not waive its rights to inventions of creators who are full-time employees or appointees of the University.
We encounter here “employee” and “appointee”–terms that are not in the university regulation. The Intellectual Property Policy defines “university personnel”–full-time and part-time employees, appointees, volunteers, fellows, persons “paid by or through the University,” and “anyone working under University auspices.” Here, however, only full-time employees and appointees are identified. Since most faculty are on nine-month appointments at the University of Florida, it would appear that the “general” refusal to waive invention rights is directed at staff employees, not to faculty.
Otherwise, it is not at all clear why full-time status should disqualify someone from continuing to hold title to their inventions–inventions that the university otherwise chooses to waive a claim to and won’t file a patent application for. The result of such a policy is that the university demands that the inventions of full-time employees must enter the public domain if the university does not care to file a patent application. It’s a bizarre result, given that federal patent law provides for inventors to own their inventions and that ownership of an invention, of itself, has nothing to do with conflict of interest or use of university resources, just as owning a house, car, or vacuum cleaner does not. Why this bit of spite aimed at full-time employees? It’s a mystery, somewhat like why the Florida uses “Creator” throughout the policy with no apparent sense of irony or humor.
The Intellectual Property Policy does provide another pathway, as well, for inventors to own and manage their inventions, but with more bureaucracy involved. The university may license the invention back the inventor:
In certain cases, the University may elect to license the Invention to the Creator for a minimal royalty, and the Creator may elect to obtain patent protection.
It may that this situation anticipates licensing to a startup company created by the inventor, but if that were the case, the university would likely license directly to the startup. The provision is twisted in a number of ways. First, if the invention is licensed to the inventor but the inventor isn’t required to seek a patent (the weird “may elect” wording), then what is the basis for the license? Clearly, if the inventor does not obtain a patent, then what rights in the invention does the university administrators think they obtained, that then were licensed back to the inventor? Sounds like the smile of a Cheshire cat. No patent, just the smile of a patent, to license.
And if the university is so worried about full-time employees and appointees continuing to own rights in their patentable inventions, per the US Constitution and federal law, why is it that the university would contemplate taking ownership of these same inventions and licensing them back to the inventors “for a minimal royalty.” We might worry what a “minimal” royalty is for a while, but it must be more than nothing, and not close to “market rates”–perhaps more like a “token” amount. Is this financial requirement all it takes to separate an inventor continuing to own an invention and getting it back under license (with the right to file a patent application suggests an exclusive license, which operates as an assignment)?
What is the difference between this scenario and allowing an inventor to retain ownership in the first place, other than that the university claims a “minimal” financial interest? Why not save the bureaucratic steps of taking assignment and assigning back but calling the assignment a license and just approve the inventor’s continued ownership and charge a fee of $1,000 if the inventor ever makes more than $100,000 over costs of patenting. And for all that, what is the basis of the fee, if not to account for the inventor’s use of university resources? And if that, is this option to license/assign back only for those instances where “minimal” resources have been used? It’s hard to say, but then it’s hard to understand why such silly complications have been introduced into the policy in the first place. To my mind, it is another indication of people who can’t think square about what they are doing, but are determined to address things they randomly worry about.
There’s more. Even if the university takes title to an invention and files a patent application, it still gives itself the right to pull out. The policy does not require the university to have a reason for pulling out. So after all that review and determinations and recommendations (with so much policy fuss about what and why and when), at “any stage” the university can just “withdraw”–no public purpose reason, no institutional reason, could be just whim:
At any stage in the commercialization of an Invention or Work, the University or UFRF through OTL, may elect to withdraw from further involvement in the protection or commercial application of the Invention or Work.
At that point, the inventor can request “transfer” of the invention back. The policy here does not say “assign” or “license”–so it is not clear what “transfer” means. Again, if the university at any time can “withdraw” from “commercialization” at “any stage,” then it can withdraw at the stage in which it considers requiring assignment of the invention in the first place, the fuss about full-time employees and appointees not withstanding. Nothing in policy prevents the university from implementing a voluntary assignment practice. Crux resolved.
There are complications, of course, with any transfer back:
At the request of the Creator in such case, OTL shall transfer the Intellectual Property rights to the Creator, subject to the ownership rights of a federal agency or other research sponsor.
Here, a bit more absurdity. Generally universities don’t grant ownership rights in university inventions to research sponsors other than the federal government. Here’s the definition of “Intellectual Property” in the university’s standard research agreement:
“Intellectual Property” means discoveries, inventions, improvements, and prototypes whether patentable or not, including, software, copyrighted and copyrightable works other than publications and reports, trademarks, and service marks, which are conceived or made during performance of the Project.
Sigh. The definition has nothing to do with the definitions of “invention” or “works” in the Intellectual Property Policy. So it’s at best “skew” from policy that provides for what the university might claim from its employees (and appointees, and fellows, and visitors, and auspiciers). Worse, the definition of “Intellectual Property” disclaims intellectual property–“whether patentable or not,” not to mention the utterly absurd “copyrighted and copyrightable” works. There is no such thing. We are in the presence of the clueless at this point. Excluding “publications and reports” from the definition must also cause moments of dismay among sponsor legal counsel trying to review this document.
Finally, having defined “Intellectual Property” to include non-intellectual property, the definition ends with a “conceived or made” provision–that is, we are dealing with any ideas, portions, developments, strains, whatever, not with intellectual property in the form of patents and copyrights pertaining to inventions and works of authorship. Worse, the definition uses a time constraint rather than a scope constraint: “during the performance of the Project”–one would expect, in a less clueless world, that the word of choice would be “in” not “during.” The federal government (37 CFR 401.2) uses “in the performance of work” and, in reference to other work (37 CFR 401.1), “outside the planned and committed activities” of the federally supported project. Using “during” makes a difference. If university personnel “during” the Project make inventions and non-inventions, the university here is offering these to the sponsor. Perhaps the university template drafters felt generous. More likely, they had no idea what they were doing.
Here then is the claim the university makes about ownership of “Intellectual Property” in the template research agreement:
University owns Intellectual Property that is conceived or made by employees of University.
This statement is also skew from university patent policy. Given that the definitions of “Intellectual Property” and “invention” are skew, it is not at all clear how the university navigates the potential for claims that differ between the two documents. The patent policy concerns itself with “University personnel” and with appointees, fellows, students, and others. The patent policy provides for the university to require assignment or waive assignment, so the university does not own until it determines that a given “invention” is within scope of the claims and receives assignment of title from the “Creator.” Perhaps the drafters here assume (or could trace some tangled thread of logic) that if the university inserts clauses here regarding the definition of intellectual property and what the university owns, that these supersede anything in formal policy. That is, anything the university chooses to put in a contract makes meaningless anything in formal policy or in a collective bargaining agreement. If so, then what is the status of these formal documents? All the university has to do is contract with another entity and force everyone to accept whatever the contract requires.
The right way to handle the research exception protocols for a patent policy is (1) to prepare a template research agreement consistent with policy; (2) any changes in the IP terms must be proposed by either the sponsor or the principal investigator. The university, if it is going to grant an exception to policy, should then do so only with the approval of the principal investigator, and everyone who participates in the sponsored project should also agree to the change. That’s the right way. The way Florida has it, policy and collective bargaining agreements don’t matter. Florida’s way is crude, perhaps, but that’s the way of nonchalant administrative power.
The actual purpose of the ownership clause is to indicate that the sponsor is not offered any ownership position in inventions (and works of authorship, but that’s another story) made in the performance of the sponsored project. Similarly, that the university does not gain any ownership position in inventions not made by university personnel. There need be nothing about what the university owns or what the sponsor owns.
The university then offers the sponsor only the first right for six months to negotiate an exclusive “worldwide, royalty-bearing” license to “Intellectual Property.” Such an offer appears to create the requirement that the university impose confidentiality and non-use on all things that are subsumed by the definition of “Intellectual Property”–non-patentable inventions, things only conceived, portions, strains, developments–just not “data” or “technical information” which are defined as “Results” and excluded from the definition of “Intellectual Property.”
There appears to be no option to negotiate a non-exclusive license. Poor sponsor. Must take an exclusive license or nothing. Some exclusive licenses are assignments–ones that involve substantially all the patent rights–make, use, sell, import; all fields; all territories; right to sublicense; right to sue for infringement. However, it is unlikely that this is what the university means in mentioning the “ownership rights” of research sponsors. In any case, the option to license runs six months, and during that time, the university is obligated to file patent applications at the sponsor’s request and cost, so there doesn’t appear to be any way for the university to “withdraw” from “commercialization” at this stage, no matter what the university’s own policy provides. Again, it appears the university can contract to change its formal patent policy with what appears to be professional indifference.
It is perhaps interesting that the university also is willing to contract policy positions away in its collective bargaining agreement with university faculty unions:
The University has the authority to agree to the terms of this Article [22, Intellectual Property], and any regulations and procedures applied to in-unit faculty shall be consistent with the terms of this Article.
If the university can negotiate away policy positions to a group of faculty, once organized, why cannot the university also negotiate policy positions away to any one faculty member? That is, why is the patent policy not just guidelines, or a default starting position, with the actual arrangements for any given invention worked out by negotiation? That’s the fundamental premise of a voluntary approach to assignment–the university can state its offer to manage, can negotiate that offer, and if the inventor wants to take it, fine. If not, then the inventor can take her work elsewhere. The university’s concern is not that it might “lose money” or that the inventor by owning work is “unethical” or “conflicted” but that inventors determine who might be the best help to them in managing a patentable invention. When a university provides help in making those decisions, it is doing what it should do.
How does the university’s policy that it can “withdraw” at any stage of its ownership of an invention acquired from university inventors play out in university exclusive license agreements? Florida does not make a template agreement available on the web, but the SEC published one in 2015 that we can examine–“Exclusive License Agreement With Know-How” (which should raise concerns). Start with “know-how.” We know that “know-how” is expressly within the definition of “invention” in Florida policy. So the university does claim to own know-how, but how such an asset is defined and how it comes to own know-how is another thing. In a company environment, know-how might be considered a trade secret, and there would then be a confidentiality agreement in place between the company and each employee. That confidentiality agreement would then include a definition of what information was controlled, for how long, and the nature of the control–typically including non-disclosure and non-use but for company purposes. In the exclusive license, however, we find this:
“Know-How” means unpatented technology/information/ materials, described in Exhibit A, to the extent wholly owned and wholly controlled by UFRF.
Perhaps the limitation “to the extent wholly owned” is the out–it may be that the research foundation does not “wholly own” and “wholly control” any such information ever because it does not have a policy or contractual basis to compel faculty not to disclose or use what they know outside the university.
There is no “Exhibit A” in the agreement. But there is an “Appendix A” that lists know-how, with some elements redacted:
Information related to development of AAV technology for Pompe disease. The below table includes published materials or already available study reports.
Further information related to development of AAV technology for Pompe disease.
Materials, records, and assay results required for manufacture of AAV for Pompe, as well as the vector construct itself, controlled by UFL, as follows:
*Confidential Treatment Requested.
In any event, the license conflates know-how with information–which, for the research agreement (in the form of technical information) is excluded from the definition of “Intellectual Property”). The license is for patent rights and a plasmid directed at treating Pompe disease, a form of muscular dystrophy. It appears that the patent rights are licensed exclusively, while the know-how is licensed non-exclusively. Why the know-how is not simply reports and technical information reduced to writing–which would make them “works” under policy–is an open question. The further oddity is that the plasmid is licensed under “know-how” rather than under “invention”–where it would be as a biological material in the policy definition of “invention.”
The exclusive license grants the right to sublicense, reserves only the right to use for “non-profit research, clinical care…, and educational purposes” at the university and research foundation, plus federal government rights. The license also allows the licensee to “prosecute … any alleged infringement.” The exclusive license on the face of it appears to convey substantially all patent rights to the company–it appears, then, to be an assignment of ownership.
It is then possible for the university to grant ownership rights in inventions to licensees (though it is not clear whether the company in the published license was a sponsor of research before acquiring ownership of the patent). But even here, the university has not withdrawn from commercialization, and so such ownership rights would not be a contingency on the re-assignment of an invention to the inventors.
The ownership rights of the federal government do represent a contingency, subject to the standard patent rights clause, compliance with the (f)(2) clause, and federal agency decisions under 37 CFR 401.9, the patent rights clause that pertains to ownership by inventors. I will discuss this situation in depth in another article.
The university’s policy on return of inventions already assigned then continues with an assurance that the university won’t “assess” “costs” “against” the inventor, which is a nice gesture. The university also retains a royalty-free license to the invention, not only for itself but for the state, but limited only to the “use” of the invention–not making, having made, selling, or importing, apparently. (For copyright, “use” is a potentially inflammatory term, as “use” could mean most anything–distribution, making derivative works, and the like):
If the property rights are transferred to the Creator, none of the costs incurred by the University or on its behalf shall be assessed against the Creator unless they are Development Expenses deducted from Gross Revenues received by the University or UFRF prior to the transfer. The transfer shall not affect the right of the University and the State of Florida to royalty-free use of the Invention or Work.
We are almost done, but not quite. The university cannot just leave the idea of inventor ownership alone. Ownership must carry with it an assumed conflict of interest, but only in research:
If the University’s ownership interest is waived to the Creator(s), it is the policy of the University that the Creator(s) must disclose the potential conflict of interest created by the ownership interest when proposing research to be conducted using University resources that could reasonably appear to influence the financial value of the Invention. In such cases the University, through the Creator(s) and appropriate administrators, must have established the means to manage the conflict prior to conducting the research.
At least there is a provision to manage the conflict of interest. There is no such provision (or even notice) of the institutional conflict of interest in the administration of research that necessarily arises when the university takes ownership of patents and dedicates their exploitation to “commercialization.” The Collective Bargaining Agreement, even, does not take this issue up. How can the university in seeking to make money from patent licenses–and therefore happy for research that “could reasonably appear to influence the financial value” of an invention–be in an unbiased position with regard to research administration, press releases, matters of compliance, including patient care and environmental concerns?
Further, there is no policy concern regarding ownership and research for inventions that are not made within the scope of university claims. Why should there be a concern about use in research for inventions that are made within the scope of the university’s claims but are waived but not those inventions that are outside the scope of the university’s claims or are licensed to the inventors for a “minimal” royalty? And why should research that might “appear to influence the financial value” of an invention be singled out? Is the concern “appearances”? And what does it mean to “influence” the financial value of an invention? How does research on an invention, using an invention, or to find new inventions (that might obsolesce the present invention) “influence” financial value? Is “influence” the same as “change”? That is, apparently the drafters of policy here imagine that it is a conflict of interest for an inventor, owning an invention, to conduct research that might appear to try to change what someone might pay for patent rights–either up or down. Research that does not appear to try to change what someone might pay for patent rights is, then, apparently just fine.
All of this comes off as prissy and misplaced. First, there are huge gaps in where the worry about conflicts of interest might arise. Second, the worry focuses on appearances not actual conflicts. Third, the worry ignores the university’s own conflicts of interest–that of administrators when they own patents, where they have a declared interest in “commercialization,” where inventors have made no such formal declaration. Fourth, there’s no apparent conflict of interest in conducting research that would change the monetary value of an invention.
The conflict of interest, if there is one, would be in how such research is published (or withheld from publication), not in how it is conducted. But that’s the same problem for any investigator taking money from a sponsor, even when the sponsor is the federal government. So there’s no particular need to address such issues when an inventor owns an invention, any more than when an author owns a copyright. Is it a conflict of interest to conduct research that might appear to influence the value of a written work? A work of authorship? A report? A novel? A painting? This is a silly line of discussion that requires one to consider the university a place of moralizing administrators thinking that all work at the university must be only in the interest of how administrators make money. That faculty work for the university, which as an instrument of the state (in the case of public universities) must mean that faculty cannot own any invention (and remember, at the University of Florida, “invention” means things like ideas, know-how, and portions) and work with it at the university, without the permission of administrators.
These concerns about personal conflict of interest are actually statements about administrative control of personal choice in the university. They indicate a kind of paternal statism–one might say “fascism” if that wasn’t so loaded a term. The state is all, and no use of state resources can result in anything other than state ownership, control, and benefit. In this view, an English professor cannot use university resources to write a novel that includes references to her VW minivan because such references might appear to influence the financial value of her minivan. A mathematics professor who develops a new algorithm for finding prime numbers cannot use that algorithm (an invention, by the university’s definition, not patentable) in university research because doing so might appear to influence the financial value of that algorithm. A biology professor cannot use his collection of snail shells to do research on evolution of shell structure because doing so might appear to influence the financial value of his shell collection.
Utterly lost is the idea of subvention, that a university appoints faculty and provides them with a stipend that permits them to pursue their professional interests without having to grub for work on the side to make ends meet. That is, the “salary” paid to university faculty is to permit them *not* having to be employees of private concerns, not having to be proprietors of their own businesses, not having to be contractors to others because they are in need of money. The statists turn this salary into a form of employment, in which faculty must serve the master, the university as an instrument of the state. They imagine a special form of employment, in which the master permits the servant to do anything the servant wants, with the deal being the master owns everything that the servant does and generously offers to share money from the exploitation of any of these things with the servant.
It is certainly possible to have this view. Public university administrators hold this view without reserve. I call it “inventor loathing,” since it denies the idea that faculty are appointed, not hired to serve a master, and denies the idea that the university provides resources on behalf of faculty opportunities to conduct research and to teach and to assist the public, not in a barter to own anything that faculty might do not only with those resources but also to own anything that results in their field of expertise. It is this claim that there has been, and for ethics purposes must be, a barter that underlies the compulsory assignment of assets grouped under the heading of “invention, whether or not patentable.”
I will put it a different way. This demand for a barter, using the state as leverage and “employment” as a substitute for “appointment,” is unethical. It is unethical to demand that faculty hand over their most important work to administrators to paw through in the hopes of making money. Those administrators necessarily have a personal interest in such income and therefore in making demands to own the personal property of inventors. They have a greater personal interest in ownership of patents than even any inventor: licensing income likely pays their salaries and enhances their salaries and puffs up their reputations and careers.
Even the prospect of licensing income influences their salaries, as does increased work load, increased complexity of the work, and increased liability they create in their choice of work. Administrators have a deep, substantial personal conflict of interest in making the university’s patent licensing program appear important, complicated, full of potential to make money, and in the interests of the public and the state. If someone proposed a simpler, ethical approach, these administrators would oppose it–not because a simpler, ethical approach “wouldn’t work”–but because it would challenge their position in the university. University patent policies drafted or influenced by these administrators represent a much greater personal conflict of interest–unmanaged, unethical–that that of whether university faculty, in owning what federal law provides that they may own by inventing and authoring, might do something unethical with their ownership.
Not every university administrator, and not every university patent administrator, suffers from these delusions that all faculty must hand over their work to the university to be sold off to speculators, trolls, investors, and corporations, and that doing so is somehow in the public’s interest. But there is enough of these administrators that it is darned hard to open a reasoned discussion of patent policy. But look at their policy work, their research agreement work, their licensing work. Consistently it is a garbled mess. It is incompetent, malpractice, self-serving, unethical–though clever and complicated. If you didn’t know anything about intellectual property, licensing, law, university research, history, or what’s possible, you might be taken in, that these folks are “experts.” Well, the sad story is they aren’t. Look at their work. It’s crap policy, crap drafting, crap reasoning. Why do people put up with it? Entrepreneurs, company officials, investors, and faculty spend countless hours trying to get these folks to reason to sound practice, but they often fail.
Demanding ownership of inventions is a poor substitute for establishing equitable interest in inventions. Equitable interest arises from actions and agreements regarding use of resources, time spent away from other tasks, and commitments. The neat thing about equitable interest is that the university does not have own anything, apply for patents on anything, market anything, license anything, police anything. All it asks is a share of any net income based on its contributions. A university’s business in such an approach is making evident its contributions. But even equitable interest on deals with a university’s contributions, not to the “progress” of an invention to public benefit.
The public interest in seeing the benefits of research inventions (and portions, strains, developments, and whatever) has little to do with either ownership or equitable interest determinations between university inventors and university administrators (or other faculty). The public interest does not require patents at all. The challenge for universities is moving from a policy of demands, or even one fussing over the allocation of spoils, and considering what it should mean to hold a patent at a university or suppress discoveries, whether the university does the holding or suppressing or an inventor or agent or company does the holding or suppressing. And that’s a matter of establishing a public covenant that “runs with the patent” when a patent is sought based on work done at the university. If being at a university to do research and to teach means something distinctive, different from a corporation or a government, then we should see that difference in a patent policy–one that everyone in the university is committed to, regardless of who initially owns (or who later obtains) patents on inventions made at the university.