There has been some discussion going on about the recent UC requirement that everyone sign a new patent acknowledgement, this one with a present assignment in it, with the claim that this change is needed to respond to the Stanford v Roche decision and that it is not a change in policy. Here are seven points about all this. I can elaborate, but why
- The UC requirement is clearly a policy change
- The change does not appear to have gone through proper processes for changing policy
- The change does not apply to folks still under the pre-1997 UC policy anyway
- The change does not address the Stanford v Roche situation though it claims to
- The change does not address title uncertainty because scope is still totally open
- The change positions the present assignment in the wrong place–at employment instead of at the point of joining a controlled-IP project
- The change damages the review and release portions of UC policy by taking ownership prior to review
- UC’s prior practice was entirely consistent with Stanford v Roche
- UC like many other schools has failed to implement (f)(2)
- Implementing (f)(2) for each funding agreement would address Stanford v Roche
It would look like this:
You have chosen to join a project supported by the Federal government. As required by the patent rights clause in the funding agreement, the University requires you to make the following agreement to protect the government’s interest in subject inventions, that is, inventions that you may make within the planned and committed activities of the government-funded work:
I agree to disclose promptly in writing to my campus technology transfer office using the provided disclosure form each subject invention made under this contract in order that the University can comply with the disclosure provisions of the patent rights clause of the funding agreement, and I agree to execute all papers necessary to file patent applications on subject inventions and to establish the government’s rights in the subject inventions.
Signed: __________________
This is not a change in UC policy, though it would be a change in practice. Note that this (f)(2) agreement carries with it a conditional promise to assign to the government. That’s a requirement of the standard patent rights clause, that the contractor release its research employees to assign or grant a license to the government, if things work out that way. That could require a change in UC policy, depending on what makes of the guidance in the UC Grants and Contracts Manual.
With few exceptions, nonprofit organizations and small businesses who perform work under federally funded research agreements may now elect to retain patent rights to inventions arising from the sponsored research, subject to granting to the government a “nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject inventions throughout the world.”
That’s from section 11-321. Here we have the typical potential confusion over what is meant by “elect to retain patent rights”. This is the “elect to retain title” to inventions in the standard patent rights clause (and in Bayh-Dole proper). Stanford v Roche made it clear that this means that if the university owns title, then it can retain title, subject to various conditions. The policy statement also states only one part of the deal–that if the university obtains title, and chooses to retain that title, then it grants the government a non-exclusive license. The other part of that deal is–if the university does not choose to retain title, or doesn’t get title in the first place, then it is the inventor who is required to grant the license to the government if the inventor is allowed to retain title, and the inventor grants the license in fulfillment of the (f)(2) agreement the university is required to require the inventor to make.
The UC policy statement goes further to make it clear it intends to block the potential of Bayh-Dole:
It is University practice for campus-based research to accept Federal grants and execute Federal contracts only when the patent rights given to the Government in such a grant or contract provide a non-exclusive, royalty-free license to the government for governmental purposes.
That is, the only ways this can be so is that the University claims all inventions and elects to retain title in them, assigns this duty to an agent, or the inventors are allowed by the agency to retain title. In either case, all the government gets is the non-exclusive license. But the (f)(2) agreement says that the inventors may also assign to the government. That’s the choice that UC policy aims to prevent.
The whole deal should start to become very clear to all. The standard patent rights clause requires the contractor to require of the contractor’s research employees a commitment to the government. When an invention is made, if nothing else intervenes, the inventor has a choice: deal with the government or deal with an agent designated by the contractor. If the inventor deals with an agent designated by the contractor, then that agent has the first option to retain title it receives from the inventor, subject to the various conditions on promoting practical application, favoring US industry in exclusive licenses, and all things being equal licensing to small companies. If the inventor chooses an agent, then the agency stays out of it but for these conditions. If the inventor chooses the agency, however, then the agency can require assignment and file patent applications, can require assignment and let the invention hit the public domain, or can allow the inventor to retain title, treating the inventor as a small business for contracting purposes–independent of the inventor’s employer. The inventor has become–and is from the time a researcher signs the (f)(2) agreement–a small business contractor for the purpose of invention rights only.
This is entirely consistent with the practice of universities at the time of Bayh-Dole, which was overwhelmingly for universities to take a hands off approach to inventions made with federal funding unless the inventors requested an exception to agency requirements. The research deal with regard to inventions was between the agency and the investigators, and if the agency wanted assignment of inventions, it got that assignment directly from the inventors, not by the inventors assigning to the university (or research foundation) and then that organization assigning on to the government. That would be a needless bureaucratic step, but oddly one that I have heard some folks arguing for, even though it would appear to fly in the face of the last of the objectives enumerated by Bayh-Dole.
If the inventors are given to understand that the agency will not allow them to retain title, then if they want their invention to be developed privately, under patent, they have to find an agent. That agent has to meet the requirements of the standard patent rights clause or be approved by the agency–that is, the agent has to have as one of its primary functions the management of inventions. Furthermore, the agent has to be acceptable to the university, since it is the university that agrees to the funding agreement and therefore accepts the requirements of the standard patent rights clause. It is the university that has to assign the patent rights clause “wrapper” to any other agent, just as it has to do so in the case of subcontracting research to another organization. The university is, in essence, the steward of the agent decision. If the inventor’s choice of agent does not meet with university approval, then the inventor’s alternative is to accept an agent the university will approve, or pass the rights to the funding agency, which will file or fold the rights.
There is this cascade of choices. It should be clear, then, how a university intervening and demanding that it be the agent and that the inventor assign is a problem. If the university made the assignment conditional, at least there would be a choice: agency or university-as-agent? What the demand to assign does is preclude the inventor’s choice in allowing the agency to own (and file or fold), and the agency’s choice to allow the inventor to retain title and do its own thing. It is these two choices that Bayh-Dole contemplates, and which are enabled by the (f)(2) agreement. Refusing to implement the (f)(2) agreement is not merely an oversight or a confusion, it is a very political decision to disable these parts of the Bayh-Dole Act and the underlying federal research contracting philosophy that goes with them.
The university’s role, under Bayh-Dole, is to be a steward of the inventor’s choice of agent. For a small company, this does not have to be the case. The company is in business, and makes its claims on employee inventions based on that business, in some cases limited by state labor laws limiting the scope of its claims, but in most all cases, limited by practical reason–there’s no point taking on inventions that are not within the capability of the company to exploit. One doesn’t need a lot of rules for business folks. If they are too thick headed and greedy about stuff, they won’t be able to promote the inventions per Bayh-Dole and will face march in, or they will waste their small business money on stuff they can’t develop, or they will go off and try to license it to someone else, who if they don’t have that someone else in hand pronto, they will waste even more time and money and won’t be in business all that long. So business folks get this. Develop it or forget it.
Universities, however, have no such practical reason about them. They have set up the proposition that if it can be patented, then there is money to be made licensing it. The basic proposition is that each patent ought to be worth at least its full cost–legal plus office expenses. In practice, however, the proposition is that winners pay for losers, or more nearly, one or two big winners pay for the losers for the next decade or so, in principle, anyway, if one has one or two big winners. Otherwise, in practice the actual proposition is that one or two of these losers may some day be a winner, and so you should pay for these with whatever funds you have and someday there will be that winner that reimburses you for that budget outlay that otherwise might have gone to, dunno, janitors or student advisors or scholarships or adding another language course. Without practical reason, they are tempted to claim everything, try to make money off each thing, and declare success for the program from those that they manage to license, whether for a profit or not.
Thus, the proposition for compulsory ownership of federally supported inventions is not at all the same as a small company doing this. These are not the same thing at all, aside from the abstract, and empty, comparison of an employer requiring assignment as a condition of employment. The university is a very different sort of employer, the work done in university research is a very different sort of work, and the conditions of employment regarding inventions are, as well, very different from those of a small company. Even if a university tried to do everything else just the same way a small company might, it lacks the limitations of business interest that a small company has.
When a university demands that inventors assign, and demands that the university act as agent, it is disabling Bayh-Dole–it is a rejection of the very flexibility that is built into Bayh-Dole precisely to respect the inventive activities at universities. They are the primary object of Bayh-Dole. The nonprofits mentioned are primarily the university affiliated research foundations, along with the national research foundations, such as Research Corporation. It’s all part of the same complex, and the compulsory assignment + university-as-agent move is a rejection of Bayh-Dole while exploiting a tiny portion of it–what no one expected, that the universities would abandon their open policies, treat their faculty and students as employees working for university administrative and financial benefit in their inventing, and make inoperative the flexibility of choices that Bayh-Dole offers to inventors and to the contractors that employ inventors.
If a university wanted to promote the potential of Bayh-Dole, it would reverse course and rescind any claim to title to federally supported inventions. It would implement the (f)(2) agreement. It would allow itself to be an agent, but it would also allow the inventor to propose other agents. It would encourage the inventor to inquire to the agency whether the agency would permit the inventor to retain title. If so, then the inventor has the choice of self or agent. If not, then the inventor has the choice of agent or government. If the inventor wants the university to act as agent, then there can be a discussion of how that would work, based on the circumstances–the invention, the collaborators, the inventor’s intentions and expectations, the time frame, the costs, the risks, the objectives. Yes, all these can be flattened into an administratively convenient take-it-or-leave-it set-by-committee in 1992 set of policy statements, but that, too, doesn’t look a lot like progress in developing Bayh-Dole’s potential. It looks rather like “we don’t want to be bothered” or “we know we are fools when it comes to dealing with circumstances” or “we don’t have any confidence with the tech transfer people or the faculty” or “we believe that innovation can be reduced to an efficient process whose primary characteristics are consistency and subordination to officious authority”. None of these bode well.
It is the engagement with invention that matters. The first responders are critical. You stand at the edge of a rocky shore, with the surf rising up beyond you, the ocean stretching away in its vastness, the sun spreading reds and oranges against distant clouds as it sets, and the person that comes to your side is a) your life’s love or b) five tech transfer officers reciting policy regarding why they, rather than your life’s love, are more suitable companions for these next few moments. Unless your tech transfer officers are unbearably sexy, in an innnovation development kind of way, there’s no way you are going to make the moment memorable. Perhaps a good buddy or two might substitute.
It’s not so far-fetched. A moment of invention is a bit of what’s called the sublime. That comes in two conventional forms (following Kant): the mathematical sublime, in which one gets a glimmer of the vastness of possibility and operation; and the dynamical sublime, in which one senses the power of natural forces operating on their own. These senses of sublime are not those responding to fear, but lie beyond it in the power of the particular mind to grasp the significance of the recognition–the scene, the circumstances, the action, the realization.
To recognize the sublime, one has to have the mind for it, the reason, the experience that permits the recognition. This is what happens in invention, one sees into things and gets a glimmer of the idea that there is a lot going on there, and it can be explored, and exploited, and developed. The five technology transfer folks who show up do not necessarily have the capability to sense that sublime. Nor does one’s favorite drinking buddies. Nor does someone who is just sexy, but not in an innovation sort of way. No, at the point of invention, looking out over that spray-strewn shore, one wants for someone who can share that sublime sense of the world. A good university policy might say, if you are reading this, then clearly you have not found your best hope in the moment, but there are folks who might help you retain that savor of epiphany and respark it, and there may be some folks on staff that can help you seek them out, or help them find you, or help you create them–by showing them what to look for, why it matters, how that sublime feeling feels.
Yes, that is what poets do, or did. The university administration taking inventions away and assigning them to an administrative unit is just this sort of anti-poetic thing, that everything new is reduced to dull process, frozen in an invention disclosure so it can keep that glimmer of the sublime for marketing purposes. If one abandons efficiency, consistency, and process as the first virtues of innovation engagement, then it is possible to recognize the tremendous opportunity–and responsibility–that first responders have to a moment of insight. We report accidents and disasters and train people for these. But what about epiphanies and insights and inventions? Are these just the same, to be put on a gurney and brought to an institution for treatment. Are disasters and epiphanies all the same thing, as far as administrators are concerned? If that’s the case, then we have something very challenging to deal with in university innovation policy, and that is how to get the dullness out of the first responses to discovery, while still providing engagement that cultivates and builds on the insight, to create, if you wish, a kind of poetry rather than a process.
By poetry, we are not talking about rhyming stuff made for fluffiness or death. We are talking about a condition of attitude that arises from a recognition of things. Poems can be good for that, but poems are generally not all poetry, and not all poetry is found in poems. Some poetry is found in discovery, recognition, epiphany about the way things go together. University stewardship of inventor choices is about how the academic environment responds to discovery, whether that response is a matter of indifferent process, duty, greed, selfishness, fawning celebration, or an excuse to try to raise contributions from donors for the new building fund–all that is in play when there’s an invention. To make a claim against it, and send in the folks who don’t understand, is not the best role for a university. Bayh-Dole imagines for the university another sort of role, one that helps to frame the choices inventors might make, and then based on the choices, to participate, or leave well enough alone.