Penn State’s IP Protection Racket, 1: Working Through the 1991 IP Policy

Hey, let’s compare Penn State’s “Intellectual Property Agreement” from 1992 with the present version. I know, just what you were hoping to do today–identify  policy changes to see how Penn State created its IP protection racket. To get there, we’ll have to do some close reading. In formal policy and in binding contracts, words matter, so it’s best that words get used well and get read well. We will start with the 1991 Penn State IP policy. Then we will look at the related IP agreement that came along a few months later, in 1992. Then we will compare changes in both IP policy and the IP Agreement.

Penn State has had for some time an IP policy that states that personnel must sign an IP agreement and disclose certain inventions. The IP agreement, in turn, says that personnel must follow the IP policy in whatever form it happens to be. The basic requirement, then, is that personnel report inventions. But then Penn State administrators slip into the IP agreement whatever else they want to–since policy requires personnel to sign the IP agreement, administrators can–so the theory goes–put whatever requirements there that they want.

Here is Penn State’s patent policy (RA-11) as of 1991 (I use a 1998 version that according to the change history is the same as 1991 but for numbering). It requires individuals in various “classification categories” to “complete” an IP agreement:

Funny how folks can’t just write a policy that says, “you must agree.” That is, it’s not much of an “agreement” if there’s nothing to negotiate, nothing voluntary about it. But here, it’s just that one has to “complete” the “Intellectual Property Agreement.” It’s just a form, something that records information with blanks to be “completed.” Oh, yes, one of those blanks is for a signature rather than just your printed name. Oh, yes, and we’d like you to believe that when you sign, you are agreeing to give up a broad swath of your future personal property, made in the course of your scholarly work. But let’s just say the form is to be “completed” without belaboring the idea of a transfer of rights.

In any event, note that the categories include “academic” but not “faculty.” The focus of the policy, then, is to identify “classification categories” (an HR thing) for which one must complete an IP Agreement form. The premise is that some categories must not require an IP Agreement form to be completed or there would be no point making lists of categories–everyone receiving an appointment in a “classification category” would be required to complete the IP Agreement. Thus, we might expect that people in some classification categories don’t have to complete the IP Agreement. Notably, “faculty” are not mentioned. Just the ambiguous “academic” category. (In the current IP policy, circa 2002, “faculty” is added to the category that includes “staff”–in category 2 in the 1991 scheme. Policy HR76 parenthetically defines an “academic” employee as ” a person whose duties include instructional, research or creative responsibilities” and, clearly, is not also a faculty member.)

Note also the preambling sentence–“protection of concepts with commercial potential (inventions or creations).” This is bizarre stuff written by amateurs. Concepts aren’t protected by either patent or copyright. The subject matter of copyright is original works of authorship, not “creations.” And for that matter “protection” of things is not an “essential aspect of the technology transfer process.” Technology may be “transferred” without any “protections” whatsoever–by teaching, publication, open distribution. Commercialization via an investment that requires a monopoly might require “protection”–but that’s an almost entirely different issue. The policy recites technology transfer, however, not commercialization. So it’s just plain wrong. Even if one argued that “protection” might assist in technology transfer, it’s a long way to claim that “protection” is “essential.”

The preamble, however, does more than just state some nonage about protection and technology transfer. It creates a scope with regard to what follows. The IP Agreement, as far as policy is concerned, should focus on only “inventions or creations” that have “commercial potential”–whatever “commercial potential” might mean. We will come back to this point.

Finally, the policy asserts that “execution” (meaning, one figures, “completing”) the IP Agreement “is a condition of employment.” Employment, if it has the meaning of “working under the direction and control of another for compensation” then has a restrictive meaning here for faculty, who are not “employed” by the university for their research activities unless they expressly agree to such a thing. The university does not assign or direct faculty research activities. Faculty are not employed by the university for research unless in a particular circumstance they agree to work under the direction of the university. That is, in those matters in which the university does control the work (“employment”), the IP Agreement is required.

This, too, is funny with regard to copyright. If faculty are working within the scope of their employment to create original works of authorship, then those works are works made for hire under federal copyright law. One would expect a university policy on copyright then to manage what the university ownership position will be with such works for hire–do faculty or student authors have any interest in such works?

The IP policy then concerns itself with getting the IP Agreement signed:

A “budget administrator” is designated to get IP Agreements signed. “Signing” the IP Agreement is “a condition of employment.” Still no one can bring themselves to lay out just what the agreement entails–the policy emphasis is on completing a form, not in reaching an agreement.

And yet more fuss about signing the IP Agreement:

“Personnel actions” won’t be “processed” until the IP Agreement is signed. So we are clear on this point in policy. Completing the IP Agreement is a requirement before employment can begin.

We now get the second requirement of the IP Policy, an obligation to disclose inventions:

We note that there is no obligation to disclose “creations” here. Wait for it. But first, inventions, but restricted to those “developed” with “University resources” or “developed” in certain fields or scope. “Developed” is not “conceived” or “made.” What is meant? In commercialization speak, an invention is “developed” after it has been made in an effort to make it commercially viable. The invention must be tested for safety and efficacy, ways must be found to manufacture it efficiently, designs have to be improved for reliability and the like. That’s development of an invention. The policy here reads–“if you use university resources or work in an assigned job to improve an invention, you must report those improvements to the university.” Perhaps administrators meant–“if you make a patentable invention with commercial value using university resources or in a task assigned by the University, then you must report it.” But that’s not what the administrators chose to write. As the Shaw court observed, “the true intent of a contracting party is irrelevant if it remains unexpressed.”

We will have to deal with that. There are two parts, with an ambiguous terminal restriction. First part: “within the fields of expertise” . . . “for which they are retained by the University.” What does “retained” mean here? If it is to mean “employed,” why then isn’t “employed” used? To “retain” a professional (as an attorney) is to secure their future services for one’s benefit. University faculty are not, generally, “retained” by a university–they are “appointed” and for some duties are even “employed.” But here, in a scoping statement for what must be disclosed, inventions are limited to those in “fields” the university “retains” people for.

Second part: “within the scope of employment” . . . “for which they are retained by the University.” Thus, “fields of expertise” is not “scope of employment.” Let’s try an instance. An individual is appointed an assistant professor of English, specializing in medieval English literature. What “field of expertise” is represented by this appointment? Is it “anything to do with English language and literature”? Or is it “only those things having to do with “medieval English literature”? Or is it “anything having to do with culture, generally”? Perhaps what matters is what the university expressly “retains” a faculty member for. If nothing expressly, then the appropriate interpretation is “nothing at all” rather than “everything that you are professionally good at.” We will come back to this point, too.

The terminal restriction is (as is typical with amateurish drafting) ambiguous–does it modify only the last element (“scope of employment”) or both elements in the coordinated series (“fields” and “scope”)? From the amateurish administrative perspective, of course, it doesn’t matter because administrators tolerate ambiguities in policy so they can decide what the policy means later, in the moment, as it suits them. But if the policy here establishes administrative authority to enter into contracts with employees regarding intellectual property, so administrators are not at liberty to exploit ambiguities any way they wish–if administrators act outside their delegated authority, then what standing does any contract have that they force on employees?

Thus, we might posit that a reasonable interpretation of the IP policy at this point is that the obligation to disclose inventions is restricted to only those patentable inventions with “commercial value” that are “developed” (improved) with university facilities, funds, or equipment or are within the scope of work assigned (“retained”) by the university. Not that any university administrator would accept such a reading–but those administrators also would find no support for expansive readings, other than that most anything can be asserted (and defended by lawyers), and most faculty don’t have the resources to fight back. In a fair debate, the university would pay for legal counsel to represent faculty in disputes over policy, so that the outcome would represent better policy and practice, not just the dominance of administrative power. Alas, for the day that happens.

There are a couple of further matters. Copyright is one:

That the university encourages this sort of thing is like ornithologists encouraging birds to fly or gravity to pull things to earth. Faculty create scholarly things regardless of administrative “encouragement.” What’s interesting is that the university also “encourages” staff to create scholarly works. Apparently encouragement, in this context, means to “work outside the scope of university employment.” This idea becomes clear with the next sentence, which restricts the university’s ownership interest to scope of employment, plus two other situations not so easily handled. The first is commissioned work–the policy thus distinguishes three kinds of work environment: (i) encouraged work; (ii) scope of employment work; and (iii) commissioned work.

We’ve already discussed scope of employment. This bit on copyright makes it clear that scope of employment is a narrow concept relative to all the things that faculty and staff might do during their work days (and nights). “Commissioned” work would be work that the university requests (for separate compensation) that would not be within the scope of employment–otherwise, there would be no need to commission it. The university could simply direct someone (faculty, staff) to do the work. “Encouraged” work is neither within the scope of employment nor commissioned. But it is work that the university permits–indeed, encourages. For literary, scholarly, and artistic works, there is no limitation with respect to “university resources” either–at least use of facilities or equipment.

This treatment of employment with regard to copyright is instructive in understanding the overall IP policy approach to employment. The same thinking holds for the invention portion of policy, but using different wording. Instead of “commissioned” we have “retained” and “developed with University resources.” Unstated with regard to inventions is “encouraged”–but if the university does not even require the disclosure of inventions that are not developed with university resources or within scope of “retained” employment or fields of expertise, it is clear that the university makes no ownership claims with respect to such inventions. No doubt university administrators will still assert such ownership claims, but they will do so without policy authority.

Here are the definitions that go with the IP policy. We find the usual bungling of inventions and intellectual property:

For inventions, we get merely a statement that “inventions” is [sic] a general term and then a list that’s illustrative (“includes,” “etc.”) without anything at all to indicate what the policy means by invention or why the policy requires a definition that turns out not to be a definition at all. The definition conflates inventions with works of authorship and all sorts of other things–methods, processes. This is a bother. Worse, the term used initially by the policy is “concepts” not “inventions.” Thus, to read “invention” in this IP policy means one has to substitute “inventions and non-inventions.” The definition makes nonsense of the ordinary sense of the word “invention.” A meaningful definition of invention would be that of Bayh-Dole:

The term “invention” means any invention or discovery which is or may be patentable or otherwise protectable under this title or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.)

The effect of such a definition is to exclude non-patentable stuff. How are non-patentable inventions owned? The IP policy’s stated purpose is

But in the definition of invention, which ought to be fundamental to the policy, instead we get a non-definition that appears to include most anything, almost with indifference–you know–“etc.” The IP policy fails its basic purpose by conflating stuff that can be owned with stuff that cannot. If the policy were just a patent policy, then it would be all the more evident that the definition should restrict disclosure obligations only to inventions that are or may be patentable. But no. University administrators (and their legal advisors) were not competent even to do something as simple as this, and so they attempt to create a single “IP” policy to cover everything without regard to whether everything can be owned as intellectual property.

We come then to the definition of “intellectual property.” Statutory forms of intellectual property are patents, copyrights, and trademarks. But in an IP policy, there is no particular need to define “intellectual property”–one treats each form of intellectual property according to institutional requirements. Patents are not copyrights are not trademarks. The Penn State IP policy, however, goes the other way and conflates things. Now for the truly bizarre bit–you may have guessed it already. The IP policy does not use “intellectual property” other than in its statement of purpose, and in the name of a form agreement personnel must sign. The policy instead talks about “concepts” and “inventions” and “works” and “patents” and “copyrights.” What is the point of giving scope to a term used only in a purpose statement and never used in the substantive text of the policy itself? Useless. Meaningless. Incompetent. But, hey, it was 1998. The #1 pop hit was “Too Close” by Next. Perhaps university administrators were confused about which way was right.

The definition of intellectual property then states that “intellectual property” is a term (we needed that) “used to describe” a list of things “that cover or pertain to inventions.” On the face of it, this is a false definition because it uses “inventions”–which is a defined term in policy and unlike any normal definition of invention. No one uses “intellectual property” as such a term to describe such a bespoke notion of invention. I doubt even Penn State administrators, still reeling from the need to breathe, use intellectual property in such a way. This stuff must be too difficult for university administrators. The biggest problem in the list is that of “trade secret.” Trade secret is not generally intellectual property. One creates a trade secret by securing information with independent economic value from disclosure to the public. How is it that the university will assert trade secret with regard to inventions made by faculty? Why does not the IP policy discuss how institutional trade secret claims interact with the universty’s policy on academic freedom and expectations for publication?

Let’s review. The Penn State IP policy requires an IP Agreement to be “completed” as a “condition of employment” and states that personnel have an obligation to report inventions developed with university resources or within a field of expertise or scope of employment for which personnel have been “retained.” These are the two requirements of the IP Policy. That’s it.

Next we will look at the IP Agreement that runs with this policy. One might expect that the primary requirement of the IP Agreement would be to implement the IP Policy. Har, har, har.

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