Penn State’s IP Protection Racket, 7: Expanding Categories

Let’s move to the second paragraph of the Penn State’s current IP policy, which continues the university’s fixation with categories of personnel who must “complete and sign” an IP Agreement:

As a condition of employment, the Intellectual Property Agreement is required to be completed and signed by individuals first appointed or transferred to the following classification categories:

(1a) executive, administrator, academic administrator, and academic throughout the University; (b) faculty, staff exempt, staff nonexempt, and technical service in academic or academic service units throughout the University;

(2) for any existing employee in the above classification categories who has not previously signed this IPA;

(3) graduate assistants/fellows/trainees at the time of their first appointment; and

(4) undergraduate/graduate students, postdoctoral trainees/research associates, wage payroll employees, visiting scholars/scientists/students, emeritus/retired faculty and others who may be in a position to make, conceive or reduce to practice inventions or otherwise develop technology.

Here’s the 1991 version:

Therefore an Intellectual Property Agreement (page 4.04 in the General Forms Usage Guide) is required to be completed by individuals first appointed or transferred to classification categories as follows:

  1. For Executive, Administrator, Academic Administrator, and Academic throughout the University.
  2. For Staff Exempt, Staff Nonexempt, and Technical-Service in academic or academic service units at University Park and the Hershey Medical Center.

For these individuals, the execution of the University Intellectual Property Agreement is a condition of employment.

Things that are the same: signing the IP agreement is a condition of employment; a list of categories of employment for which the requirement applies. Let’s look at the things that are different. First, we see that “faculty” have been added to new category 1b, previously part of category 2–staff and technical service personnel. Thus, we might observe that the “Academic” category in the 1991 policy did not include “faculty”–or it still would in 2017 and there would be no need to add “faculty” as a separate item, and not even connected to “academic.”

Penn State’s appeals process policy (HR 76) for situations in which faculty believe their academic freedom (or other rights) has been violated has this to say about “academic” employees:

a University academic employee is a person whose duties include instructional, research or creative responsibilities

By contrast, “faculty member” is defined as

members of the University faculty as defined in the University Faculty Senate Constitution (Article II, Section 1) plus any other University employees in academic positions which lead to permanent tenure.

The policy then distinguishes faculty from academic employees and graduate students:

The Committee on Faculty Rights and Responsibilities will normally consider only petitions which involve, as a direct party, faculty members as defined above. Exceptions to this restriction apply to University academic employees (a University academic employee is a person whose duties include instructional, research or creative responsibilities) as follows:

NOTE: This definition of academic employee excludes graduate assistants.

It is clear, then, that academic “category” employees are not faculty. In the 1991 IP policy, faculty are not subject to the requirement that they complete the IP Agreement, but here in the current policy, perhaps dating from 2002, they are. Interesting.

Three new categories are added to the new IP Agreement. First, everyone who signed a prior IP Agreement is made to sign a new agreement. That’s interesting, especially in light of the Shaw decision. In the Shaw case, the University of California attempted to change its royalty distribution formula and in doing so take a greater share of revenue from the licensing of strawberry varieties created by Doug Shaw’s strawberry development program. Shaw objected, arguing that the university’s IP Agreement formed a binding contract. The court agreed:

We find no merit in the University’s suggestion that, as a public employee who is employed pursuant to statute, not contract, Shaw has no vested contractual right in his terms of employment, such terms being subject to change by the University.

When a public employer chooses instead to enter into a written contract with its employee (assuming the contract is not contrary to public policy), it cannot later deny the employee the means to enforce that agreement.

We also reject the University’s argument that the Patent Policy is a mere personnel policy which it may modify unilaterally.   Although the University is entitled to revise its Patent Policy, it cannot do so with respect  to Shaw because of its written agreement with him.

We might find that while Penn State may change its IP policy and even create a new IP Agreement, it cannot impose either on those employees who have previously entered into an IP agreement with the university. An employee who objects to signing a new IP Agreement is not even acting outside of university policy. But it is possible that university administrators insisting that an employee give up a prior agreement or be fired are acting outside of policy–and they should be the ones being fired. Even in those cases in which an employer imposes new conditions on employees, for the agreement to be binding, there must be consideration. If that consideration is, say, continued employment, then we have to consider whether refusal to accept unilateral changes in IP policy form sufficient grounds for termination. In the case of tenured faculty, that would be not appear to be the case.

Here, in the Penn State IP policy, we find a requirement that employees have to agree to a new IP Agreement as a condition of continued employment. The university can find a reason to fire anyone, apparently, simply by creating an abhorrent new agreement and terminating anyone who refuses to let go of any prior agreement. We might say, the IP Agreement is not an enforceable contract if the university can revise it at whim. Nor is such a contract any more enforceable if the university claims that employees have agreed to any future policy revisions or future IP agreement. An agreement to agree isn’t enforceable, either. It sure looks like proper policy here, doesn’t it? But it is garble.

The next two categories stray from employee altogether. In some circumstances, graduate assistants may be considered employees. Universities resisted unionization of graduate assistants with the argument that they weren’t employees. Universities lost that argument and the upshot is that the IP bureaucrats have exploited the decision to argue that if graduate students are employees, then they must be subject to the same IP conditions as other employees. Again, much depends on an unclear, happily garbled treatment of the difference between being an employee for purposes of liability or labor law and employment in a university for IP law.

However, for “fellows” and “trainees” we move away from employment. Fellows–those receiving fellowships–are provided with financial support. At Penn State, fellowships are used to recruit graduate students who might otherwise attend a different school. Think scholarship or subsidy in the form of award rather than “new hire.” Fellowships are also used to support visiting scholars. The Center for Humanities and Information, for instance, uses fellowships that encourage the use of university resources:

Each year CHI offers up to six visiting fellowships to scholars from outside Penn State, as well as internal faculty fellowships and predoctoral fellowships for Penn State graduate students. Fellows pursue their own research and writing, while helping to create a vibrant intellectual community.

All Fellows meet, during their initial weeks at the Center, with librarians and colleagues in their field of expertise, whose goal it is to help them establish a productive research program, and to take advantage of the resources of the Penn State University Libraries . . . .

Perhaps no one tells them that the university intends to own everything they create under the iffy policy theory of “potential commercial value.”

Even Bayh-Dole, that law horrible, exempts “educational awards” from its invention management requirements (35 USC 212):

No scholarship, fellowship, training grant, or other funding agreement made by a Federal agency primarily to an awardee for educational purposes will contain any provision giving the Federal agency any rights to inventions made by the awardee.

Penn State, however, has a policy that all fellows must sign the IP Agreement. If Penn State receives federal money for fellowships, then perhaps the university is not in compliance with the law–or it must waive its own policy to remain in compliance. A similar observation may be made with regard to “trainees”–these are individuals receiving training (with or without financial support) and clearly do not become “employees” as a result of any stipend they might receive.

Perhaps the “use of facilities or resources” triggers the demand for assignment. In the 1991 IP policy, the use of resources (facilities, funds, or equipment) was not just any resources, but resources connected with a special allocation. Otherwise, the university ends up with a claim that any use of resources results in a claim to own inventions (there, defined goofily broadly). Reading articles in the library, sitting in an office, talking in a university cafeteria, writing on a university dry erase board–any such thing might be a basis for a claim to ownership, but all such claims had nothing to do with the premises of the 1991 IP policy. But in the current IP policy, apparently the university makes none of its resources available for use but for a claim to own any RIP that might result.

We might consider, for just moment, the delicious irony of the premise of Bayh-Dole, that the federal government should make resources available and have no ownership interest in anything that results, if universities wish to prevent that ownership. But universities themselves do not treat their own personnel with the same respect–even with federal money. Instead, they do just the opposite of what they say was brilliant about Bayh-Dole and make an institutional ownership grab for anything they can get, regardless of how well they manage their IP (and most manage it awfully).

And then the catch-all category of mostly non-employees:

undergraduate/graduate students, postdoctoral trainees/research associates, wage payroll employees, visiting scholars/scientists/students, emeritus/retired faculty and others who may be in a position to make, conceive or reduce to practice inventions or otherwise develop technology.

Students, trainees (again–it wasn’t enough to include them in the previous category), visitors, retired folk, and “others.” In a show of consistently bad drafting, we encounter yet another ambiguous terminal modifier–“who may be in a position to . . . develop technology.” Does this modify “others” or does it restrict who is required to sign the IP Agreement among all the rest? Who could possibly know, from a reading of the policy itself. No, someone would have to tell you what the words are to mean, because reading the words would not be sufficient.

These folks, other than the “wage payroll employees,” appear not to be employees at all. Thus, “as a condition of employment” they have no obligation to sign any IP Agreement. Again, even Bayh-Dole’s standard patent rights clause excludes from a written agreement to protect the government’s interest” (37 CFR 401.14(a)(f)(2):

The contractor agrees to require, by written agreement, its employees, other than clerical and nontechnical employees, to disclose promptly in writing

We might read this provision to be: the contractor may not require clerical and nontechnical employees to make such an agreement. Again, Penn State’s policy would appear to breach Bayh-Dole’s standard patent rights clause (but do they care?).

The terminal constituent has many attributes worth noticing. It is placed in the subjunctive–any others (“all those we can’t be bothered with trying to recognize”) may be in a position. What position? An employment position–then they will show up in a prior category. If “in a position” just means “have the potential to” or “could perhaps develop something,” then the claim here is based on an administrator determining that someone is capable of inventing or developing technology. That’s a broad, unbounded delegation of authority.

Adding “make” to the mix appears superfluous. We already have “develop” in the list of verbs. It would appear that to “make” technology or an invention must be distinct from “developing” an invention or technology. Indeed, we argued as much with regard to the 1991 IP policy’s use of “develop.” Further, to make an invention is to both conceive it and reduce it to practice. Thus, if that is the meaning of “make,” the policy reads to “make an invention or to conceive of an invention but not make it or to reduce to practice an invention conceived of outside of employment or the IP Agreement or conceived by someone else.” The use of “conceive or reduce to practice” with respect to “technology” borders on nonsense. Again, curiously broad language. It its utterly unclear how, as a condition of employment, any of those listed in this fourth category should have to sign the IP Agreement or how that agreement could be given any effect, given the IP policy and its own premise with regard to employment. “Even though we don’t employ you, you must the sign the IP Agreement in case at some later time we do employee you and don’t have you sign the IP Agreement then” or “Even though we don’t employee you, we use ‘condition of employment’ to mean “condition of using any resources of the University” and thus you must sign the IP Agreement with the understanding that “employment” means “use of resources.” That is some fine drafting there.

If everyone must sign the IP Agreement, what is the point of enumerating categories of employment and non-employment? In the 1991 policy, there was still an air that employment meant those individuals that the university controlled and directed–not faculty acting as faculty, for instance, and not students acting as students. Not now, though.

This entire bit of listing and non-listing comes down to something simple and ugly:

The Intellectual Property Agreement is required to be completed and signed by individuals who are in a position to develop technology.

It doesn’t matter whether the technology is inventive or not, patentable or not–the university makes a claim to it–or, as we will see, actually makes bombast to it.


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