Tucked into Congressional testimony in 1978 on expanding the Institutional Patent Agreement program is the 1969 University of Wisconsin patent policy. This policy is notable for a number of reasons. First, because it is an actual policy statement on patents, where for a long time Wisconsin refrained from having a formal patent policy. If the university had no interest in the patents of its personnel, why should it have a policy about it? After all, the university has no ownership interest in the cars or houses of its personnel, and has no need of a formal policy to disclaim that interest, or to try to find strangely curious situations in which it might end up with an ownership interest anyway. So why patents?
Here is a statement of Wisconsin’s “unofficial” patent policy, from about 1960:
Faculty inventors have “full possession of patent rights unless … financed by grant funds where certain patent rights must be assigned or given to the grantor, such as … the Federal government.”
The 1969 Wisconsin patent policy is interesting for a second reason. The Wisconsin Alumni Research Foundation’s Howard Bremer was one of the primary players behind the efforts to make the IPA program government-wide. That effort failed but in its place came an even rougher beast called Bayh-Dole. In 1968, Norman Latker at the NIH had revived the IPA program, following on the Harbridge House report regarding federal government patenting activity and policies. The next year, in 1969, Wisconsin’s new patent policy includes an account of how the IPA program affects university researchers and inventors.
The new patent policy opens with a typical preamble–creativity is important, inventions happen. The university asserts a say in how inventions are managed:
The policy repeats the traditional Wisconsin expectation: inventors own all rights in their inventions unless there’s a contract otherwise.
It is the rise of extramural research contracts that creates a need to monitor inventions, which may be deliverables in these contracts. And more particularly, it is the rise of extramural research contracts with the university itself rather than with faculty personally that creates the need for institutional intervention–when the university handles the contract and the money, the university rather than the faculty investigator becomes responsible for compliance.
The presence of a contract for research rather than a donation agreement is also worth noting. If research support comes in the way of a donation, then there are no deliverables to the sponsor, though there might be conditions on the use of the donation (and that might include a requirement, say, to make any inventions freely available–essentially, forbidding any inventor using the donated funds to claim a personal ownership interest in any invention and as well forbidding the university to claim such an interest). Something about contracting with research sponsors leads toward the idea of delivery of invention rights–whether title or a license–as if research sponsorship is a form of procurement.
But federal contracting has created problems, or so the policy asserts. Some federal agencies require assignment of patent rights while others require only a non-exclusive license. Such requirements are entirely consistent with research agreements from all sources, not just federal agencies. Some sponsors–companies, foundations, state governments–require assignment of inventions and others ask only for a non-exclusive license and some don’t care at all. This is the usual situation. That some federal agencies vary in just this same way is entirely without interest for research management, except for one thing–because federal agencies are all parts of the federal government, it is easier to mix funding from different agencies through informal collaboration or even joint funding. If different agencies have put different invention management requirements in their funding, then there may be conflicting requirements. In one agreement, inventors might own inventions outright; in another, the government asserts a royalty-free license; in yet another, the government requires assignment of all inventions.
Even here, however, there’s not really a problem. If the government asserts in one funding agreement assignment of title, then that requirement spreads to all other federal work that’s mixed in with that obligation. There’s typically no requirement from the federal government that money from one agency must be mixed with money from another agency, so whatever mixing happens as a choice by university researchers and administrators. The fund mixing problems become more intense if federal money is mixed with industry or foundation money, if the sponsors have incompatible requirements. For instance, if a company sponsor expects a non-exclusive license and the federal agency sponsor demands assignment, then the university is caught in a double license (not really, at the time, since the government’s default was to grant non-exclusive licenses, so the company would be fine in this case, but the contracting wouldn’t show that). Or worse, the company expects assignment and the federal government wants a non-exclusive license (or assignment). That condition is not so readily navigated.
But this sort of problem goes on all the time in extramural university research anyway–for instance when two companies support research at a university. Sure, the research might be different laboratories, but people at universities talk to each other, wander into and out of labs, drink coffee together. Such interactions are one of the strengths of university research, that folks aren’t working in enforced silos. Thus, mixing of funding with conflicting requirements must be managed, whether for inventions or for mileage reimbursements.
There are various measures administrators might take. They can refuse to accept research terms that require assignment of inventions. They can make any invention obligations conditional on no mixing of funding (and so they might require “you will get assignment of any inventions, subject to the rights of the federal government in those inventions, which may mean you get nothing at all, but you don’t have any control over it, so play nice and hope we don’t mix funds to screw you out of whatever you hoped to get”). Well, they would use more abstract lawyerly language, but with roughly this meaning. One practice, if used consistently, mitigates mixing requirements–and that is to allow only a non-exclusive license to inventions upfront in a funding agreement. Non-exclusive commitments are generally compatible with each other and are compatible with funding that carries no obligations (such as donations), as long as the non-exclusive commitment does not involve a “first right” to a non-exclusive license.
If one isn’t shaping the funding agreement to avoid mixing conflicts, then one has to shape research practice. Funding agreements that require assignment have to be isolated from other research work that carries conflicting obligations. One simply cannot mix–not formally, as in sharing personnel, laboratory space, supplies, and objectives–and not informally, as in having a chat over coffee about research problems and discoveries. One has to silo research that carries incompatible terms. That might mean requiring all personnel on the incompatible project to sign non-disclosure agreements, to secure the laboratory space, and allow access only to personnel employed under the grant–no volunteers, no students, no visitors loping through. Such things can be done–the government requires such practices for defense classified research. But many universities resist performing such work for the government, and when they do, they isolate the work in secure buildings.
Often, university administrators are not able to do either–they don’t resist entirely research agreements that require assignment and they don’t manage research practices with such assignment-based funding floating around the university. They rely, instead, on the thought that there are only a few of these assignment-required research agreements and so there’s little likelihood that there will be mixed inventions. Such thinking might be true if there are only a few extramural research agreements a year, and even fewer reports of inventions. However, if extramural research overtakes donation and departmental research programs, and inventions become routinely reported, then this thinking turns into restless administrative sleep, and restless administrative sleep breeds the desire for formal policy to defend, at least, administrators from blame if something goes terribly wrong.
It’s the decision to mix–or rather an administrative decision not to manage mixing–that creates the invention management problem. It is, in its way, another Pigpen problem created by administration but ascribed to those dratted non-uniform federal agencies who have not figured out that arbitrary is better than flexible.
The Wisconsin patent policy asserts that the “University,” and not faculty investigators, is responsible for compliance with contract provisions–and thus also with contract provisions having to do with inventions:
While this policy statement appears obvious, the statement is doing much more. The university could, for instance, delegate compliance for the invention portion of research agreements to investigators. That, in effect, is what Bayh-Dole’s standard patent rights clause requires universities to do with its (f)(2) written agreement requirement. But the Wisconsin policy here insists that university administrators, not faculty investigators, must have the “primary responsibility” (and hence the primary authority) for determining how to manage inventions in order to comply with sponsor requirements. This is a subtle shift, you say. And it is. But to assert responsibility is to assert authority, and to have authority to decide whether a given invention is within or outside the requirements of a given sponsored research contract then can be used to decide whether inventors have an obligation to assign their inventions to the university.
Given that the long-standing Wisconsin patent policy is that inventors decide whether to assign their inventions to the university (or to WARF), this change in policy is huge, even if it is presented subtly.
Under Wisconsin research policy, investigators also negotiated the IP terms of their research agreements. That is, since the university did not have an interest in IP of its personnel, it also had no basis to dictate to its personnel what the IP terms of any research contract must be. The university did not assert that it must own all inventions, for instance. It might, perhaps, veto funding that carried conditions that ran against academic mores, such as precluding publication or preventing the participation by non-US nationals. Thus, in this bit of policy, the university asserts that it must comply with the IP requirements of research agreements, even if chosen and negotiated by university faculty investigators.
The challenge with federal funding agreements, however, is that they are not in general negotiable. The federal agency announces a funding program and with it announces the contracting requirements. Take it or leave it. But it’s not actually that simple for inventions. There are two areas of flexibility. The first is that a funding agreement may reserve options for the federal agency–so, in the case of inventions, the agency may release its claims on an invention or might not. It’s up to the federal agency what it will do. There’s nothing particularly hard about such an option, other than if one really wants to do the patent work oneself, and a federal agency futzes around about whether to give up the government’s option to own the invention and prevent it.
The second area of flexibility involves waiver of compliance requirements. Yes, there may be a non-negotiable clause in a federal funding agreement, but the federal agency does not necessarily have to enforce the provision, especially if the university doesn’t require enforcement. Thus, a federal agency can simply ignore what it otherwise might require and let the university go off and do whatever it will, short perhaps of embarrassing the federal agency into action. If the university has an institutional conflict of interest with regard to the clause–enforced, the university does not get ownership of inventions, say, but unenforced, the university does–then the university’s refusal to insist on federal compliance with clauses favoring the federal government ends up serving an institutional self-interest at the expense of the relationship inventors would otherwise have with the federal government.
In that relationship with the federal government, inventors might be allowed to retain title to their inventions, might be allowed to publish their inventions openly without patents (and without having to assign patent rights to their university), and even if the federal government obtained assignment, the inventors could expect everyone, including themselves, to have access without charge to their inventions for private use and development. If the inventors were required to assign to their university, so that their inventions became grist in a “commercialization” program, then they may well not have access to their inventions, nor might anyone else if no one is willing to pay the price the university patent licensing operation asks for a license.
One can see how anyone with a love for an single, stone-set administrative process might chaff at the idea that there might be flexibility within a funding agreement. Administrators like the “terms” part of a sponsored research contract and don’t care for the sponsor’s “conditions” part. All those “In the event thats” pile up and cause restless administrative sleep that leads to more administrative policy. Thus, “uncertainty of title” became one of the mantras of university administrators who focused on the idea that patents were a way to make money for the university while selling the public on the idea that patents were a necessary precondition to beneficial products or any benefit from university research at all, really.
This article has 14 installments and continues here.