The gulf between the Supreme Court decision in Stanford v Roche and the push in universities for present assignments is huge. The Court decided the question whether Bayh-Dole was a vesting statute. It said no. Wasn’t. By doing that, it confirmed that federal research innovation policy did not “rest on the vest”. Federal innovation policy, therefore rests on something other than outright university control of federally funded inventions.
Folks need to get this into their heads. Federal innovation policy does not rest on the vest. Lack of vesting is not a technical oversight. Vesting was not assumed in the law but somehow just not written that way. Vesting is not a good idea that was implicit in the law. Vesting was not a secret, fingers-crossed purpose of the law. There is no mandate to help the law out by implementing vesting privately. It is a virus-like idea infecting a class of administrators and the attorneys who love them that it’s government policy, or should be, that university inventors, especially, should have no rights in their inventions. It is not a really good thing for universities to strip inventors of their rights, whatever the rationalization about “public benefit” and “commercialization” and “we are more effectively greedier than faculty are”. It’s like robbing a person before they think to give you a gift, because, well, they might not give you a nice enough gift and thus the robbing is in the public interest, to ensure a really nice gift is received, and it is satisfyingly big enough. Some policy. It’s difficult, even, to see how it is so seductive.
The problem that university folks have has next to nothing to do with Bayh-Dole, but rather with the virus in their brains about vesting. Their problem is they have sponsored projects and licensing practices that grant exclusive licenses, first rights to negotiate, and upfront non-exclusive royalty free licenses. They also deal in background rights, improvements, ancillary rights, and know-how. For this, they have an ill-suited policy architecture of open labs, academic freedom, encouragement to publish, with next to no controls on visitors, disclosures, classroom instruction, trade secret, non-competition, consulting, assisting, nada. And they almost always start with a review + request policy architecture, one that they have typically tried to ruin with policy revisions, interpretations (“Bayh-Dole vests!”), and ill-conceived “public missions” (“make money to offset taxpayer subsidies!”). The policy architecture dictates that they will have–must have (it is a feature)– “title uncertainty” for everything until they review and request title, and then get title. The only thing they must have title for is what they contract to have title for. It is in their power not to contract to take title to anything! Any title “uncertainty” is an artifact of decisions regarding contracts made in the context of a policy and practice architecture that does not support an own-all + release-later practice.
Technology transfer administrators are now trying to change the entire university research enterprise to suit their convenience. And vesting, the comprehensive outright ownership of all assets available to the research enterprise, is the viral idea that seduces them. Ah, to have ownership of everything, paw through it at leisure, keep the things that will make money, and let folks beg back the rest–and make more money from them! It’s not just a bad idea–unless totalitarian practice is your thing–it also doesn’t create “title certainty” and doesn’t make a tech transfer operation any better. No, it makes things worse across the board. It breaks policy, it undermines university research mores, it takes in too much for its own good, it creates uncertainty about what is intended to be owned, it adds huge administrative burden, it creates ill will, it introduces delays, it suppresses initiative and collaboration and engagement, it separates ownership from capability. It’s bad. It’s dumb. It’s a fool’s dream. It will be a nightmare. It requires treatment, not advice.
The situation that bothers the patent administrators isn’t even in Stanford v Roche. It’s what Stanford just missed. It’s like being on the sidewalk and having a car rush by, a mere five feet away. What if the car had been on the sidewalk? Then we’d have gotten hit and terribly injured! Well now, what to do? Build a barrier to block all cars? Stay indoors and away from all sidewalks? Eliminate the cars? Or, just maybe, get used to the “risk”?
Here is the problem. Forget the promises to assign and present assignments. Universities allow consulting. They allow their key folks to choose what to work on, where, when, and with whom, for what purpose, with what funding, if any funding at all. This is the essence of university research, university scholarship. It is the university environment’s great strength in discovery, in questioning the conventional wisdom, in working off the beaten path, for the good of the community as expressed in individual initiative not central planning, for which it has been mocked since Gulliver’s Travels, at least, by practically minded folk. Now you take that independence, that collaboration, that consulting–call it “departmental research” and mix in extramural contracts and grants to fund research on independent budgets. Now make IP commitments. Now you have a potential for conflict between individual interests and institutional contractual interests. Now demand that all research–extramural and departmental–conform to the obligations you are making for extramural research. Bingo! you have to impose a new world order on everyone to salvage your bad licensing practice in extramural research.
If the institution contracts to deliver patent rights to a sponsor by license or assignment, then it has the contractual problem of getting those rights. But a university does not have to contract to obtain patent rights–it can use the (f)(2) approach and require its employees to agree to deliver whatever the sponsor wants. Or it can use the Wisconsin model: let the research investigators negotiate the IP deliverables, and then anyone who chooses to work with them signs on to that deal. No institutional ownership required.
Even if the university does contract in a way that requires university ownership of deliverables, it does not have to institute a policy that it owns everything going on in the university in order to comply with any one contract. If it *does* own everything going on in the university, then *it does have* a huge problem with background rights, with undocumented inventions, with implied licenses, with overlapping subject matter among labs. Ownership of everything is a huge nightmare created by a desire to have “certainty” of the wrong thing! Being certain of owning everything is to make licensing commitments, beyond the first one, horribly uncertain. It’s a bomb waiting to explode. It’s something to wake from screaming. Run away, run away.
The appropriate pattern of approach to the problem of title in a university with an open architecture is to check outstanding commitments upon entry into a project that intends to make commitments with regard to IP. It doesn’t really matter what these commitments are–they could be exclusive licensing to a venture-backed startup, or could be dedication to the public domain, or open source/open hardware/open wetware licensing to the public. What matters if that one recognizes a project that has groundrules. If someone wants to join, they bring their IP into the deal. If they cannot do this, they don’t join until they arrange things so their IP commitments comply with the project’s expectations. The university’s role is to ensure that projects make acceptable IP expectations, and that participants honor these expectations. It is not a matter of employment, or use of facilities, or source of funds. It is a matter of how collective choices about IP are developed and supported.
If one wants a present assignment, or a promise to assign, put it at the point that someone wishes to join a controlled IP project. That is what companies do with their consulting agreements–another controlled IP project. At some point, individuals have only so much carrying capacity for joining such projects. A limit is reached. They can do only so much non-overlapping work. University universal claims of ownership won’t help them at all, just as university universal indifference to ownership won’t help. A university cannot scale its research operations past the carrying capacity of individuals to make commitments. Claiming ownership of everything does not change this–it just moves the problem from an individual, who typically can keep track of his or her contractual promises, to huge central filing cabinets and databases, where such things are broken into field-pieces and can barely be put back together–if anyone ever bothers to look.
At the University of Washington, in another time, we used this project approach for a decade. For a number of efforts (like this one and this one and this one), it worked well. The Rosetta Commons was a natural extension to a multi-institutional setting, where the institutions joined the project along with the individuals.
The project turns out to be more extensible, with a more workable IP border, than an institution can provide beyond one or two deals at a time. The project also turns out to be an innovation platform often superior to the institution, able to work across a range of publishing, service, and licensing arrangements that a patent licensing group cannot consider, let alone imagine or implement. The project turns out to be a strong candidate agent for invention management and an effective alternative to university “ownership”.
The project approach renders university “title certainty” moot. It is not the university that has to worry its title, but the individuals who participate who must pay attention to their title and license commitments. Whether they commit their IP to the university or to anyone else, their participation in the project is predicated on whoever has an interest in their IP, expectant or otherwise, confirming the groundrules of the project. All these things are especially true as an institution scales its licensing practice from one or two things a decade to many things a year. This stuff is not linear. Doing an exclusive deal once does not mean that hundreds more exclusive deals can be done from the same ownership portfolio–unless every piece of IP–present or incoming–is independent of the others. Otherwise, more activity means more likelihood of breach of contract, double licensing, messing up. There is no way to cover this reality with paper, policy, diligence, re-organization, or protestations of public good.
In Stanford v Roche, an employee comes back from consulting with IP obligations. He joins a project working in the same area. People in the project want the university to own. The university sells them on the idea of licensing the invention for profit. The consulting employee’s obligations limit how the university can license–it can license certain inventions only non-exclusively (the ones made by the consulting employee and within scope of his prior obligations). To get “title certainty” to inventions made in the project, the university would have to exclude the consulting employee or have the employee’s obligations renegotiated, or set up a business deal with the company on the other end of the employee’s IP obligations.
Trying to make a stiffer claim of ownership at employment won’t do this unless you ban consulting, treat any private IP commitments as tortious interference, and demand all assets made by employees are trade secrets of the university not to be used or disclosed or obligated without authorization. Not a university, at that point. Just another big, boring corporation amassing assets it cannot possibly work. A kind of institutional covetousness that grinds down personal insight and initiative under the weight of central planning, proper institutional controls, and a respect for authority and duty to the borg that dominates all other commitments. Put bows and ribbons on it, and it’s still a big, boring bureaucratic mess.
To get at university management of title, given their policy architecture and practice, administrators need to check IP commitments upon entry into an IP-controlled project. Administrators can make their lives easier by limiting institutional obligations in such projects, and limiting the number of exclusive commitments that the university makes. Only a few at a time can be tolerated. Exclusivity does not scale in an open architecture. This is what Bayh-Dole recognizes. It is what agent-based university invention management is all about, and has been since faculty invented this way of doing things a century ago.
The answer is not to close down the university’s open architecture. The answer is to move exclusive deals out of the institution. And that, my friends, means using agents–assigning title to agents, not “licensing” rights to agents for “sublicensing”. And it also means, using more than one agent–because putting all title in the agent merely transfers the problem rather than addresses it. A few agents rather than one. A few agents rather than hundreds or thousands. That’s the recipe for technology transfer growth while managing liability and title certainty, with the university remaining, predominantly, a steward of the activity rather than a me-first, self-interested, bureaukleptic party.
The answer to Stanford v Roche is to recognize IP projects, to establish their groundrules, whether set by a sponsor, a donor, an investigator, or a collaborator. Then check IP obligations of participants as they request to join. Make that the place to deal in title certainties. Now add agents to deal with those projects that make exclusive commitments. Let the agent handle title. Do a deal with the agent for a financial interest if that’s the thing you need. Stay out of title and licensing. It’s not a service to the public that a university has to do directly, and it merely runs up costs, adds delays and institutional overheads, creates liabilities, and makes the university the butt of everything that goes wrong. And administrators can’t for the life of them figure this out. Must be the frickin’ virus in their heads about ownership and wealth.