We worked through Penn State IP policies past (1940, 1991) and current, looked as well at the weirdness that is the IP Agreement (from 1992 and current), and discovered that for all that apparatus–poorly conceived and drafted–the only formal requirements are that inventors disclose an ambiguously broad set of things they make and that they sign an IP Agreement that purports to assign all these things to the university outright, before they are made, except only “to the extent specified” by policy, and that is, exactly nothing because policy does not specify anything to be assigned.
The IP Agreement turns a policy requirement into a private contract and, as an adhesion contract, favors the non-drafting party in any ambiguities. Where there are ambiguities, it is what an inventor reasonably determines that she or he has agreed to that makes a “meeting of the minds” that in turn makes an agreement “legally binding.” That’s where the Shaw court went, at least.
If all the IP Agreement does is claim that each potential inventor has agreed to whatever administrators say they have agreed to, then the IP Agreement is not a contract. If the IP Agreement claims that potential inventors have agreed to whatever the university subsequently puts in policy (or procedures), again, that’s an agreement to agree and not generally enforceable (though the Fenn court decided otherwise). For all that, university policy already provides that faculty will follow “university regulations.” So what does an IP Agreement (thus drafted) do beyond what’s already in policy? Nothing but add ambiguity and limit the university’s ability to manage policy as a means of distributing administrative responsibilities.
If Penn State administrators had their way, the IP policy and IP Agreement would be read to mean that the administrative responsibility of anyone who makes anything is to assign personal rights in that anything to the university, even when the university has not hired that anyone to make that anything. Put this way, it sounds like bombast. Perhaps the thing that is happening here is that university administrators hide what they are doing in legal-sounding complexity, argue then that only specialists can understand what they are doing, and then offer their services to explain the difficulties of their policy text in the moment, using whatever words come pleasantly to their mind to reflect what they want. To enter the complexity and show that it is bombast, or nonsense, or an incompetent mess is not what administrators (and their lawyer friends) want. We can expect, then, that despite showing that Penn State’s IP policy is just such a mess, Penn State administrators won’t go, “Yes, you are right, the ruse is up, we will have to start afresh with competent folk drafting policy that reflects the realities of IP, of faculty appointments, of what works well for innovation and for research and for industry and community.” But wouldn’t that be a refreshing change, if it did happen?
The driver for the argument that the institution should own anything that someone might pay money to license comes from the misguided, inept (if not corrupt) technology licensing operation. But it also comes from people reasoning about this same technology licensing operation.
Administrators believing that technology licensing turns university assets into discretionary money to fund their projects and pay their salaries and expand their empires then aim to make sure that university resources must be used only to feed the technology licensing operation. Anything else is corrupt. Some faculty, thinking that most research results might be licensed for huge value, become determined that faculty inventors must assign all such inventions to the university, so that everyone shares in the largesse–not imagining for a moment that many research assets, patentable or not, simply will not and cannot have an economic life as a monopoly commercial asset. These faculty, it appears, believe the misguided claim from the technology licensing operation that it is virtuous and successful to establish IP monopolies on research (and any creative) assets and then offer these monopolies to anyone willing to pay to take them. In some cases, university administrators outside the licensing operation have greater expectations for the profit-making capacity of a licensing program and figure that making the university’s IP ownership claims expansive and compulsory is just the thing to increase the profits derived from IP licensing. It turns out that the dual monopoly approach–compulsory ownership and licensing via assignment masked as exclusive license–is about the worst possible licensing program a university can have. And yet it presents as the best possible approach by administrators who are otherwise clueless with regard to IP or licensing or technology transfer or research dynamics or economic development dynamics.
Thus, an ideal gets established in policy that is attractive to inexperienced, thoughtless university administrators as well as to some faculty who believe the inexperienced, thoughtless university administrators that the IP program will generate huge profits for the university. Once that ideal is pitched as in the public interest, mandated by federal law, and wildly successful, it is next to impossible to displace–even though the pitch is merely aspirational and there’s no evidence that the pitch is true generally: monopolies on research findings don’t turn out, generally, to be in the public interest; federal law does not mandate university ownership or commercialization of anything; and while there are indeed success stories involving university IP licenses, there’s little to show either that the successes were the result of university monopoly policies rather than despite these policies or that the successes that are reported stand for many successes that aren’t reported rather than that these successes are the only successes at all and what isn’t reported is the 99.5% failure rate for all the other research findings that have been withheld from public use behind an administrative paywall.
It’s not enough that the university offers a service (like a library, or a university press) that inventors and authors might choose to use when they had material that matched the expertise and market for the university’s services. The licensing operation has to demand to see all materials created and then has the audacity to demand that all the materials it has a right to see should be assigned to the university before they are even made. It is a corruption of the university as an open environment for research, teaching, and public service.
In the old days, faculty were appointed to teach, to conduct research, to serve the public. The institution’s role was to assemble and manage the resources put at the service of the faculty to do their work. Faculty decided what to teach and taught. Faculty decided what to study, and conducted research. Faculty decided what to publish, and how, and who to work with in the broader community. In the reptilian brain of the technology licensing office, however, it is the institution that does these things, with faculty merely being the hired workers who supply the labor to produce the university’s work product, for which administrators then are responsible. That’s a grand vision, in it’s way. No wonder university administrators are fond of it.
To see how administrators have turned this idea that the institution does the research and the “public service,” we need to look at Penn State’s conflict of interest policy regarding technology transfer, IP06, “Technology Transfer and Entrepreneurial Activity (Faculty Research).” The stated purpose of the policy is:
To establish appropriate policies for technology transfer activities, including the establishment of faculty companies and consulting; and identifying and reducing the potential for conflicts of interest.
The policy’s purpose is to establish policies. Sigh. Can no one draft anything lucid about IP at Penn State? And let’s be sure the policies established by policy are “appropriate” policies and not inappropriate policies. What makes a policy “appropriate”? Well, at Penn State, they don’t care, because they let clueless folks draft WTF they want.
The purpose statement practices a typical ploy–rather than stating what it does cover, such as faculty companies and faculty consulting, it claims “technology transfer activities” and makes the startups and consulting merely instances that motivated the policy but are not its scope. This ploy itself is inappropriately general.
The purpose statement then adds “identifying and reducing the potential for conflicts of interest.” We will see that it is a narrow idea of conflict of interest that drives the entire policy statement, though conflict of interest appears to be tacked on to the end of a purpose statement that is all about “appropriate” policies for “technology transfer activities.”
Let’s turn to the argument of the policy. Opening premise:
Technology transfer must be effected within the framework of an individual’s obligations to the University.
This is a strange argument. First, people are stripped of their institutional roles. Faculty members, for instance, are assured of their freedom to conduct research and publish as they please–academic freedom in its more modern formulation. Students, too, have special standing–the classrooms, laboratories, libraries, computer systems, and rows and rows of administrators in their office cages are assembled so that students may have expeditious access to faculty instruction. We might say that a university is an organized subvention, a donation of resources to enable a desired activity. We might think of it as a public square, made available so that a farmer’s market might assemble.
The university, if you will, exists to bring faculty and students together. Research and public service arise because faculty engage students. Research might spin off and become a largely independent activity, but there’s still a residual argument that faculty active in research translate that experience into better instruction, if not for students then for industry or the community.