We have looked at legacy Penn State IP policy–from 1940 and from 1991. And we have worked through an especially bad piece of drafting in the Penn State IP Agreement, which ignores IP policy, conflates patents and copyrights, garbles Bayh-Dole compliance, and generally evidences the work of amateurs and incompetents. Oh, for any Penn State legal counsel involved–malpractice.
But perhaps things have gotten better. One doesn’t have to stay a newt just because a witch has cursed you into one. Let’s have a look at current Penn State IP policy. We’ll also have a look at Penn State’s guidance on various IP issues, such as federal contracting. WARNING: Not for the faint of heart. Penn State has changed its policy labels, so current IP policy is IP01 “Ownership and Management of Intellectual Property.” There are other IP-related policies as well–adding a separate layer of conflict of interest claims to reign in entrepreneurship–but let’s stick to IP. The complications don’t show sophistication but rather compound the muddle that ends with the proposition that administrators can make anyone at the university do what they say the policy requires. That simple proposition runs behind the muddle, behind the garble of inconsistent and ambiguous drafting, the misrepresentation of Bayh-Dole, the absurd definitions, the fake legal precision.
But let’s work through the formal IP policy anyway, treating it as a document in which words should mean something and not just stand as emblems for bureaucratic control of research discoveries and inventions, for the purpose of making money from patent positions while passing it all off as being in the public interest that such a thing happen.
IP01 starts with a new heading–Research Intellectual Property. The 1991 IP (called RA11 in 1998) policy starts with a treatment of the IP Agreement. We will look at how the preamble has been altered and then at the strangely ironic new definition of “RIP.” Here’s a text compare in Word markup for the two versions of the preamble:
The silly claim that protection is essential to technology transfer remains, but has been edited (“protection” is essential to dealing in patent monopolies for financial return, not for the transfer of technology). “Concepts” has been replaced by RIP, still restricted to “with commercial potential” and the stuff to be protected has been removed. Gone as well is the logical connection (“Therefore”) between the claim that protection is essential and the need for everyone to complete the IP Agreement form. In its place we have an assertion that rights in RIP are “governed” by the IP Agreement and that this agreement “assigns such rights to the University.”
Poke almost anything here and you can see the puffy cheeks of bureaucratic foolishness. Let’s start with the definition of RIP:
Research intellectual property
is the term used to describe the discoveries, inventions and creations with potential commercial value that result from research activities.
Most research intellectual property developed at the University can be protected by patents, but some University research intellectual property (i.e. software) is more appropriately protected by copyright.
Although some research intellectual property may be protected by trademark or trade secret, it is rare for the University to utilize these methods of protection.
What a strange definition, conflating statutory intellectual property with the subject matter addressed by intellectual property, combining popular usage (anything intangible that might be claimed can be called, loosely, intellectual property) with terms of art for the forms of ownership for such subject matter.
It is nonsense that most “things with potential commercial value” can be “protected by patents.” Or that copyrights in software are a matter of “appropriate” protection–good grief, copyright happens when a work of authorship meets the definition of the law. And for all that, there is way, way, way more stuff that might be commercially published on a university campus than might be commercially developed into products via monopoly patent positions. The statement here is simply clueless.
As for software “protection”–it’s also clueless to treat “software” as a generic category. Some code implements patentable processes. Some code doesn’t. Some code might be “protected” by being kept a secret; some code might be “protected” by patenting; some code might be “protected” by copyright, or by a license that invokes copyright to prevent others from invoking copyright in derivative works, except to prevent still others from invoking copyright… So the statement is clueless garbage with regard to software “protection”–if software needs “protection.”
If we want to rescue the point, we would have to argue that the definition of RIP is so narrow that only a very few things actually meet the requirements for a university claim. But for that, we would have to navigate such a bozo complexity that we would have to write a book on just this little bit. Good gawd, it’s already nearly a book as it is.
We may observe that the “discoveries, inventions and creations” that are the concern of the policy are restricted to those “with commercial potential” and further restricted to those “that result from research activities.” If an invention does not have “commercial potential” or “result from research activities,” then it is not within the scope of the definition of RIP. Of course, even here we have problems–the policy preamble uses “commercial potential” but the definition of RIP uses “potential commercial value.” Which is it? These are not the same thing. “Commercial potential” refers to the possibility of sale in commerce. “Potential commercial value” refers to a financial return on the sale. Or perhaps not anything like this. Perhaps the policy’s use of “commercial potential” and “potential commercial value” simply means “anything we can make money on” or “anything that someone is willing to pay us for” or perhaps “potential” means “anything that no one can prove will never be worth anything.”
We might then ask what inventions (or discoveries, or, um, creations) “have potential commercial value” and how commercial value differs from any other sort of value. Commercial value need not be financial value–that is, an invention may be financially valuable and not have any value as a product offered for sale, if “commercial” here means “to be introduced into commerce” rather than, say, “used by companies otherwise engaged in commerce” or “used for research purposes.” We might say “commercial value” is ambiguous. “Potential [ambiguous] value.” We don’t even know who it is who determines whether some new thing has this “commercial potential” or when. At the time that something is invented, it may not have “commercial value” or even “potential,” but after years of development, research uses, DIY use in companies, there might be opportunities for that something to be included in product that is sold. Does that bring the invention within the definition of RIP?
Does “potential commercial value” then mean “anything that an administrator might imagine could in the future have commercial value”? Or, more specifically, “anything that an administrator might imagine could be dealt for money to a speculator (or investor, or company) on the premise that the something could have in the future commercial value, or if not commercial value then financial value in demanding royalties from users (and sellers) of that something. Push this: does suing companies for infringement of a patent right on the something constitute “commercial value”? Does imagining suing companies for infringement establish “potential commercial value”? We might argue no. Commercial value lies in the value of placing the something into commerce–that is, selling the something as part of product. The potential for doing this is not merely the “possibility” that someway, somehow something might one day be sold. There could be tractors built for squirrels. That’s possible. But a squirrel tractor is nothing with “potential.” We might observe, then, that “potential” is also hopelessly ambiguous.
Value from licensing a patent right is not “commercial value” unless the something enters commerce. Thus, trading on the monopoly value of a patent on the something is not “commercial value”–the “commercial value” would derive from a royalty on sales–and nothing else. Equity positions, for instance, because they are disconnected from income from sales of licensed product, do not in general reflect “commercial value” but rather “value realized by increase in the expected future value of a company that also happens to hold a license to patent in an invented something that may never be used or sold.”
What a bother, I know, to examine “potential commercial value.” But it’s Penn State administrators that have come up with this definition of RIP, put it in formal policy, and made it a basis for establishing a claim of ownership by the university, and put that claim of ownership into what the university expects to be a binding contract with employees, in the form of the revised IP Agreement. If words mean things, then “commercial value” ought to mean something–not any value (no need for “commercial”), and not merely financial value derived from exploiting an IP position. Given that Penn State sets up an adhesion contract that employees must sign and cannot (apparently) negotiate, ambiguities should be interpreted against the drafting party–the university. In this case, a reasonable interpretation is that inventors are obligated to assign only that which they choose to assign. Inventors decide what has commercial potential; inventors decide what has potential commercial value; inventors decide what makes something have “potential” in this way–the inventor decides to pursue product development, or decides that someone should pursue product development, or agrees that someone should pursue product development. That decision establishes “commercial potential.”
I expect that Penn State administrators might argue that “commercial value” means something like “any value an administrator asserts an invention has” or “anything that might be of value to a company or investor in a company or entrepreneur aiming to create a company.” If so, then the argument actually is that “commercial value” doesn’t mean what the words suggest, but rather is merely an emblem for administrators to point to as a reason to own the work of faculty, students, and staff. It is, actually, a fantasy statement, a statement of administrative intent–that anything the university claims to own might be made into something of “commercial value.” But such a fantasy, should it come to that, makes nonsense of the policy statement itself.
We might ask why a university would focus on “commercial” value of inventions and discoveries, rather than, say, social value or public interest. Why should the focus of university IP policy–and therefore the focus of the university’s research programs–be the production of things with “commercial” value? When did the university accept a mandate to divert its efforts to a fixation in formal policy with giving preference to helping people who want to sell things to sell new things–provided they cut the university in on the action? One could imagine a university IP policy that was built the other way entirely, to protect public interest activities from immediate claims to institutional profit-seeking or from giving preference to commercial speculative interests in those cases in which an invention might be used for research purposes or for DIY application or might be involved in commercial sales without the need for any monopoly position. In such an IP policy, “commercial value” would be of interest only when “commercial value” was the only way to realize “any value whatsoever.” That is, only in the special special case, the new class of compounds whose only use is as a therapeutic. And even there, it takes a deep breath and a looking away to argue that universities should exploit these special special cases to ensure that there will be a speculative market in exploiting monopolies on things that might reduce acute human suffering, so that these speculative markets remain lucrative. Why should universities commit their public purposes to such a thing? Well, they shouldn’t. That they do is awful. That they claim their doing so is the height of social virtue is corruption. But hey, let’s not just call things by their proper names.
The effect of such an IP policy would be to prevent the very kind of krakken program that has settled in at Penn State (and at many other universities) to steal IP from individuals, to bury inventions and discoveries behind institutional bureaucracies and paywalls and threats of legal action, and to still have such disregard for the truth to claim that krakken programs are somehow in the public interest.