In Part I of this series, we looked at the University of Michigan patent policy from 1944, which was still in effect in 1962, its unsettled relationship to the Board of Regents Bylaw 3.10, and a present assignment form last revised in 2014, which makes a mess of Bylaw 3.10 even while citing it as the authority for its requirements. We noted that while a senior university official was happy to inform the Regents in 1985 that the university owned all faculty work, a court in California dealing with the University of California patent policy made it clear that a “true intention” that’s not expressed is “irrelevant” in the interpretation of a contract that incorporates the patent policy.
In this Part II, we will add the complications of the University of Michigan Technology Transfer Policy, which also claims its authority from Bylaw 3.10. There are multiple themes to explore. One is the layers of text, one piled on another, trying to do a single job. Greater bureaucracy creates inertia to change and buries change in ambiguity. This serves bureaucracies that control interpretation, but it does not provide the clarity and stability that written instruments claim will result from their existence. A second theme continues to be an exploration of how a policy document that binds an institution to patterns of dealing can become a contract that forces individuals to give up personal property to the state of Michigan as a condition of providing services desired by the state of Michigan.
A third theme, as you might have come to expect, is a meditation on the incompetence of the drafting that implements the whole elaborate scheme. The result is a complex document structure–but not a complexity worth understanding as a means to getting at technology transfer. Moving new technology from one practice area to another is often challenging enough. What university administrators have done is create their own nest of bureaucratic complexities that overwhelm any focus on the challenges that exist, and would be in evidence, were the university to have a simple, clear patent policy and be out of the business of being a monopoly-loving, inept, unaccountable technology rentier.
University policies typically consist of a stack of documents. At the top are regents bylaws and regulations. These are regulations embedded in the framework of the organization, usually a corporation, that operates the university. These documents establish the structure of the university and delegate powers and tasks to senior officers of the university. Below the regent documents come policies and executive orders. These instruments implement the functions of the university under the authority of the regents corporation. Policies provide the specifics of everything from the academic senate to purchasing to parking. The procedures that implement policies form a third layer of documents, often assembled into an operations manual. Procedures typically recite policies and set out how any given unit actually does things. Finally, at the lowest level–but at the level of actual practice–there are template documents that stand for the information forms, authorizations, reviews, approvals, understandings, agreements, appeals, and transactions by which the university carries out its functions.
Surrounding all of this may be informal restatements of any of these documents, in the form of helpful information, summaries, “plain English,” training and advice, and administratively convenient reference.
- Regents Bylaws and Regulations
- Policy and Executive Orders
- Operations Manual
- Templates and Forms
- Informal Guidance
In theory, these documents are consistent, show clear flow of authority and control, and if followed scrupulously, lead always to the proper conduct of the business of the institution, making it financially efficient, happy, vibrant, and effectively responsive to the competing interests of its diverse constituents. With formal processes, issues become settled before they even arise, the bother and uncertainty of negotiation is reduced, the potential inequality of inconsistent decisions is eliminated, and with it the institution may rely to a greater degree on the structure of its policy documents and less on the personal judgment and decisions of either its administrators or faculty committees. It all sounds good, if one believes in the power of sacred texts to communicate obligation. At the back of it all is Plato’s critique in Phaedrus, in the voice of Socrates, of the problem of writing:
Soc. At the Egyptian city of Naucratis, there was a famous old god, whose name was Theuth; the bird which is called the Ibis is sacred to him, and he was the inventor of many arts, such as arithmetic and calculation and geometry and astronomy and draughts and dice, but his great discovery was the use of letters.
Now in those days the god Thamus was the king of the whole country of Egypt; and he dwelt in that great city of Upper Egypt which the Hellenes call Egyptian Thebes, and the god himself is called by them Ammon. To him came Theuth and showed his inventions, desiring that the other Egyptians might be allowed to have the benefit of them; he enumerated them, and Thamus enquired about their several uses, and praised some of them and censured others, as he approved or disapproved of them.
It would take a long time to repeat all that Thamus said to Theuth in praise or blame of the various arts. But when they came to letters, This, said Theuth, will make the Egyptians wiser and give them better memories; it is a specific both for the memory and for the wit. Thamus replied: O most ingenious Theuth, the parent or inventor of an art is not always the best judge of the utility or inutility of his own inventions to the users of them. And in this instance, you who are the father of letters, from a paternal love of your own children have been led to attribute to them a quality which they cannot have; for this discovery of yours will create forgetfulness in the learners’ souls, because they will not use their memories; they will trust to the external written characters and not remember of themselves.
The specific which you have discovered is an aid not to memory, but to reminiscence, and you give your disciples not truth, but only the semblance of truth; they will be hearers of many things and will have learned nothing; they will appear to be omniscient and will generally know nothing; they will be tiresome company, having the show of wisdom without the reality.
I don’t know of a clearer classical description of the bureaucrat than that they are “tiresome company, having the show of wisdom without the reality.” For nearly two decades, I had to play the role of the bureaucrat within complex university policy structures, and the daily fight was to see things clearly as they are, not to attempt to make university life imitate, if not conform to, written policy. The aim was to follow policy, of course, but to make policy work for the living, not to stand as a memorial of the wishes of the dead. That’s a tough line to hold, and most administrators would rather hide behind policy than to be accountable for exceptions (unfairness, liability) or pressing for changes (five years or more of intricate fussing and politics). If any area of university life suffers from an overburden of policy, it’s the stuff of innovation, discovery, epiphany, social and technology change.
Where an institution wants to conserve practice–granting “degrees,” for instance–a policy that sets out the rites of that practice is marvelous. However, where the practice itself depends on change, on the new upsetting the old, of stepping into a future that has not been anticipated, or has been anticipated and rejected by old money and old habits and old elites, then a policy that dictates process in the guise of offering stability and fairness is not merely ineffective, it is ludicrous. It is perhaps at the limits of the bureaucratic imagination to propose that innovation, too, is just another institutional process that may be run by most any capable mid-level manager, provided with the proper policy oversight, budget, and catchy unit name. As Calvin & Muad’Dib–a mash-up of Calvin and Hobbes and Dune (yes, really)–has it:
Now, with that excursus on policy and the tension between memory of the known and memory of the substituted sacred text, let’s look at more of the University of Michigan’s policy structure around IP and technology transfer.
We have looked at Regents Bylaw 3.10, which conflates two parallel paragraphs of the 1944 patent policy into one ambiguous paragraph, tosses in copyright with patent, qualifies everything with thoughts about resources and funding, and adds four more paragraphs to try to clean up the mess made by the first one. Now let’s look at the University of Michigan Technology Transfer Policy. The Technology Transfer policy claims to implement Bylaw 3.10 but adds the following:
The Policy further defines the ownership, distribution, and commercialization of rights associated with Intellectual Property developed at or received by the University of Michigan, and describes the general obligations associated with the technology licensing process. Substantive changes to this Policy, as long as consistent with Section 3.10 of the Bylaws of the Board of Regents, may be modified from time to time by the Vice President for Research in consultation with the President, with notice to the Regents.
It’s always worrisome when a formal document uses definitions as a way of broadening scope. The use of “further” indicates that the policy goes beyond 3.10’s treatment, and uses a defined term (“Intellectual Property”) even before the policy has got around to grappling with the fact that 3.10 concerns only patents and copyrights. In addition to announcing that the technology transfer policy can go beyond the authority of 3.10, the policy also announces that an administrative official can change the policy at will, without further action by the Regents. So the opening move of the policy is to set aside the scope of 3.10 and announce that a vice president can change the policy at will. That’s a pretty heady power move.
A second paragraph asserts the importance of “technology transfer.” Technology transfer is “integral” to the “University’s mission.” But the policy then moves from technology transfer to the licensing of IP, while reciting the goals of technology transfer. Just because a general area of activity is integral does not mean that a subsidiary part of that general area of activity is also integral. I may argue that my car is integral to my daily life, but racing the car on city streets, something altogether possible, may not be integral at all to my life (and of course, actually is not integral at all). Class inclusion fallacies are a typical way in which bureaucrats without an eye on reality spin their importance. The policy is titled “technology transfer” but an early move of the policy is to claim the “focus” is IP licensing. Why not label the policy “IP Licensing” and identify the benefits that might arise from licensing rather than from transfer?
Keep in mind that words mean things. Technology transfer involves the movement of capability from one group to another. The receiving group practices the new technology, does not merely receive it into a warehouse and store it. Licensing disposes of rights, but may not move technology, may not result in any new group using technology. There is an entire industry built around betting on licenses, and one may make good money putting licenses out on IP without ever seeing the underlying inventions being practiced.
Indeed, much of the university “spin out” business is built on making paper companies and selling them to investors hoping in turn to sell them to more gullible investors, having primped the company up. Often the exit, if there is one, is to have the new company bought out by a “whale”–a company that wants to get a potential competitive threat out of the way, and so shuts the company down on acquisition and absorbs the core team into its own operations. The technology does not get used as technology, though it is licensed. The technology gets used to manage investment bets by a chain of investors betting on the prospects of an exit–which means making the prospects for a product look rosy. But no product needs to happen for money to be made the investors and the university.
Licensing does not imply technology transfer. Technology transfer does not require licensing. These are skew terms that have moments of overlap. Anyone using the terms interchangeably does not care what words mean or does not have a working knowledge of practice and is babbling.
Let’s pause briefly to examine the statement of objectives for technology transfer. If a policy is going to state objectives, a good point of drafting is that subsequent policy directives refer back to those objectives to show how the directives accomplish those directives. Otherwise, the objectives are just there for a feel-good moment and really have little to do with what the policy actually aims to do.
We work through the objectives by quoting and commenting, so you see the flow of a close read. Again, in policy statements, words mean things and are chosen to convey that meaning. If the writer does not care much about meaning, then most anything can be written, and the writer may be dismayed if anyone thinks to rely on the meaning of the words. As Henry Frankfurt has observed, writing without a regard for the truth, without an intent to mean what the words mean, is, to put a technical term on it, bullshit. You decide what’s going on here.
“The objectives of technology transfer”–not the technology transfer policy–“include”–not “are,” as if there are other objectives not in the list–
1) “to facilitate the efficient”–facilitate means to make something easier, but here, what is to be made easier is not technology transfer but rather efficient transfer–that is, transfer without waste, or organized transfer–
“of knowledge and technology”–neither knowledge nor technology generally are the subject of Bylaw 3.10, which concerns patents, copyrights, and software, and while the addition of software might be construed as a form of technology, it is not included in Bylaw 3.10 as a metonymy–that is, “software” in Bylaw 3.10 does not stand for “any technology,” but that is what the Technology Transfer policy statement implies–the inclusion of “knowledge” suggests the policy extends its reach to expertise, information, and scholarship, and is not restricted to Bylaw 3.10’s scope of patent, copyright, and software–
“from the University”–that is, from the corporate entity rather than from the individuals within the university who have the knowledge and per federal law own as personal property rights to inventions and works of authorship–
“to the private sector”–as distinct from the general public, perhaps meaning “to investors and companies,” but if that’s the case, then the objective stated here is to prevent knowledge and technology from moving to the general public or to the broader research community in favor of making it available to investors and companies to be exploited, and this pathway, the policy asserts, is
“in support of the public interest”–implied here is an argument that it is in the public interest for the work of university faculty and students to be funneled to investors via institutional ownership positions rather than published and taught. It’s rather a brash and dramatic objective.
2) “to support the discovery of new knowledge and technology”–the policy is about the transfer of technology, but this objective has to do with how technology is produced, not how it is transferred, so we must consider what is meant by “support”–one might think that
“support” means “encourage” or “add expertise” but these could not be the meaning, as it’s unlikely that technology transfer administrators are meant to join research teams to help in creating new ideas–so we turn to the old standby that “support” is administrative code for “provide money,” which at least makes some sense, given that at least for federally supported projects the standard patent rights clause in funding agreements requires the university to use income after expenses for “scientific research or education”–if so, then the policy expressly states here that the university will use proceeds from licensing only for research and not for education–which is within the requirements of federally funded projects, but a loss to the use of proceeds to fund instruction and offset the costs of instruction to students–so the statement here, under the auspices of the Vice President for Research, is that purpose of technology transfer is to serve the research enterprise only and not the broader university enterprise–or, the rich get richer, or in the case of university research (which costs about 20% more to conduct than it brings in–so, yes, the big number that the university does not announce along with its grant income is the cost to spend that grant income–in the case of the University of Michigan, that cost is likely in the hundreds of millions that comes from somewhere other than research)
3) “to attract resources for the support of University programs”–here, “support” must mean “providing money” and “resources”–such a bland abstraction–must also mean “money”–“attract” then is abstract to suggest that the money could come in the form of licensing (the stated focus of the policy) or grants or donations or state allocations–that is, an objective of technology transfer is to make the support of “programs” (not students, not faculty, not the public) attractive to interests outside the university–we might recast this in plain language as “to promote the successes of the licensing program as evidence for the excellence and potential of the research programs, further enhancing the ability of those programs to land grants, contracts, and donations”–so the parts 2 and 3 reduce to “making money from licensing” and “using licensing success to make money from grants, donations, and enhanced state funding”
4) “to provide services to University Employees”–here “technology transfer” shifts from a general activity to a programmatic activity of a university office, so that this is an objective of the Technology Transfer Office, rather than an objective of technology transfer–
“University Employees”–is a defined term as well, meaning in short “employees and non-employees” and thus must be capitalized, to indicate that words are being used, at least here, in ways that mean something other than what one might expect them to mean–
“to facilitate their efforts to carry out the University’s mission”–the university’s mission statement is:
The mission of the University of Michigan is to serve the people of Michigan and the world through preeminence in creating, communicating, preserving and applying knowledge, art and academic values, and in developing leaders and citizens who will challenge the present and enrich the future.
The Office’s objective is to make this work easier (“facilitate”)–so we will look for how anyone at the university might say, “Wow, it sure is good to have the Office around, my work is so much easier now.”
5) “to promote local, state, and national economic development”–that is, not foreign economic development–but the open question is whether this objective is one for the Office or of technology transfer as an activity, that is, is the Office to “promote” economic development, or should technology transfer be conducted so that a result of the activity is the promotion of economic development?–the answer turns on what is meant by “promote” which can mean either to “rally efforts, encourage, advertise” or “advance, contribute to”–so is the objective here to advertise or to participate helpfully in?–perhaps the primary purpose of adding economic development here is to make it clear that the Office will not restrict its licensing to local and state-based investors and companies, but by policy may do business anywhere in the country.
You might think it is easy to pick apart writing of this form because it is somehow not intended to be read carefully–but then why even include it in a policy statement, if one cannot write clearly and think clearly before writing? How difficult is it to write: “The objective of this policy is for the University to make money for university research programs by licensing intellectual property claimed by the University in the hope that licensed rights will also benefit companies, investors, and the general public.” At least then we could have a discussion about how best to do this.
The third paragraph of the policy enunciates the scope of the policy (“all units” and “all Employees”)–another instance of “employee and not-employee.” The policy describes how the policy authorizes even more rules as needed. The paragraph ends with an important statement regarding precedence–“applicable law” takes precedence over the policy (which is a relief, because otherwise the policy would claim to be above the law–so strange that law is even mentioned), but also any “sponsored research agreement” or “contractual arrangements” takes precedence over the policy. This is huge–this is different from a research policy that sets a default but allows the university to accept sponsor terms that differ from the default. Instead, here, the policy authorizes the university to permit any contract to change the policy.
That is, in addition to amending the policy through the rule-making authority of the Vice President in consultation with the President and notice to the Regents, any unit of the university can change the policy by introducing the changes into a contract accepted by some outside entity. That is, so long as a unit “in good faith” (what other form of valid contracting can there be?) gets someone outside the university to accept different terms, then those differing terms take precedence over the policy.
As an example, someone wanting the university to own a broader swath of assets than those set out in the technology transfer policy simply makes the ownership claim a condition of a funding agreement, and for that agreement, the university now (so it claims) has the right to take ownership of those assets–without notice or other due process or compensation to those involved.
Rules of precedence aim to guide interpretation of written instruments. But here the rule allows one to change the policy itself, rather than decide how to interpret the policy. The actual rule of precedence, which the policy fails to state, is that anything inconsistent with Bylaw 3.10 is void. But the policy has already asserted it can do anything that is “consistent with” Bylaw 3.10–a much different reading of the scope of authority delegated by 3.10. What’s odd, then, is that this very rule of precedence, by allowing any contract to supersede the policy, leaves open whether the contract can be approved if it is not consistent with 3.10. Apparently the answer is, it can. In which case, all the apparatus boils down to “university officials can construe policy any way they wish, so long as the Regents do not object and other parties agree.” Thus, one can do whatever one wants in, say, a Supplemental Information Form, so long as the person signing the Form (and therefore making an assignment of rights, as an outside party, as if in a contract) is witless enough to agree to it.
With regard to a policy on intellectual property, the only part of the policy that might reasonably be subject to a superior claim by contract would be on matters of ownership. The conventional language in the pre-Bayh-Dole world ran in the form “employees own their inventions unless the university has agreed otherwise to the requirements of an external sponsor of research (and the employee has agreed to participate in that research).” In some cases, such as at the University of Wisconsin, the employee was expected to negotiate the IP terms with the external sponsor. As university administrators slipped under the intoxication of a misrepresented, misunderstood Bayh-Dole Act, they changed the default to university ownership. Then the exception clause read “the university owns employee’s inventions unless the university has contracted otherwise with an external sponsor of research to permit the sponsor to own the employee’s inventions (and employees don’t have any say in the matter).”
In the Technology Transfer Policy, a version of this latter form shows up as Paragraph II.F:
All Intellectual Property made under sponsored research agreements and material transfer agreements shall be owned by the University except where previously agreed otherwise in writing based on the circumstances under consideration. Such exceptions shall be approved and negotiated by OVPR; Intellectual Property subject to such an exception shall nevertheless be subject to the disclosure requirements of this Policy.
This provision is a much reduced form of the broader policy mandate that permits any official in good faith to make any change to the policy via contract. The provision quoted above is almost unreadable: “except where previously agreed otherwise in writing based on the circumstances under consideration.” The clause is unparseable. The university owns IP unless previously (to what?) it has agreed it doesn’t (in writing) and (the writing? the agreement?) is based “on the circumstances under consideration” (what other basis would there be?). If you can make sense of what is meant here, you are a gifted policy reader.
At best, this is another gesture to empower the Office of the Vice President of Research (here, the “Office” is given the power, not the position or the person) to do whatever it wants, so long as it does it in writing. The ordering of “approved and negotiated” adds dissonance. One would expect that an exception is first negotiated, then approved in final form. But here, it appears that one approves the exception first, and then goes out and negotiates it with employees or sponsors of research or whomever the Office chooses to enter into an agreement with. This writing is that of unconstrained bureaucrats creating a nest, protecting themselves from accountability, even to the policy they have drafted in their self interest.
The University of Michigan clause goes further and allows university officials to change any part of the technology transfer policy by simply introducing the change into a contract. Here, the pressure on “in good faith” becomes apparent. What possibly could the insertion of “in good faith” mean, since it is assumed in contracting? One interpretation is that university officials, unaware of the requirements of the technology transfer policy, might contract in violation of it, and if they weren’t willfully intending to violate policy, then no harm, no foul. That is, the policy in this reading creates an incentive for administrators not to know the policy, even as the policy makes efforts to make sure faculty and staff do know the policy. A second interpretation of “in good faith” is directed at the intentions of the administrators–if they believe they are doing something for the good of the university, to “facilitate” its mission, then that intention takes precedence over the written policy. If such an interpretation were held, the purpose of a written policy is largely abandoned. Anything goes, so long as there is a covering rationale directed at an intent to benefit the university.
How any of this could be consistent with Bylaw 3.10 is beyond me. In another article, I will discuss how administrators and attorneys set up overreaching claims in policy and in contract negotiations, and then try to have those settle to the greatest extent possible by asserting that they only meant what was allowable by law or allowable within the scope of their authority but to “the greatest extent possible.”
The point of fussing with these prefatory paragraphs is not merely to point out how ambiguous and brash they are, but also to show how difficult it is for language deployed in this way to come to form any sort of contract, adhesion or otherwise, with anyone in the university. The statements lack definition (even where there are definitions) and can be changed at will. The university clearly does not intend to be bound by its own wording–but then, other than by assertion, how can it then reasonably expect that its employees (and not-employees) must be bound to that same policy?
Now on to our primary destination, ownership of intellectual property in the Technology Transfer Policy. There are six paragraphs to cover. We have dealt with F already. Let’s start with the defined term “Intellectual Property.” Keep in mind that statutory intellectual property is quite simple: patents, copyrights, and trademarks. Quasi-intellectual property expands the list to trade secrets, performance rights and rights of privacy, anti-dilution rights for famous marks, and internet domain names and linking rights. In folk usage, intellectual property might also mean whatever intangible asset one thinks can be possessed in some form regardless of whether there is a statute establishing ownership.
University policies in this area began with patent policies. Unless a patent was sought, the matter was moot. If a patent issued, what mattered was how the university overtly contributed to the invention and/or the patenting effort. For that, largely faculty committees examined the circumstances and made a recommendation regarding the degree of university interest in the outcome. By restricting attention to patents and focusing only on equitable treatment, universities avoided inventions and ownership issues for nearly all situations. Remarkably astute. We often ride on the shoulders of giants because, intellectually, we are pygmies by comparison.
The policy term “Intellectual Property” gets its definition in Section IX:
“Intellectual Property” means inventions, processes, compositions, life forms, computer software, copyrighted works, mask works, research tools and data, certain defined trade and service marks, Tangible Materials, and legal rights to the same.
This is a very strange definition. First, it has nothing to do with Bylaws 3.10, which expressly addresses patents, copyrights, and software. Now we have a laundry list, and it is almost random in what is chosen and what is left out. “Inventions” might be “potentially patentable inventions”–that would at least get at the idea of a “patent.” But here, invention is given no such qualification. Similarly, “processes” is mentioned but not “methods” or “algorithms.” A “process” is one of the four conventionally described forms of invention, the others being “machine,” “manufacture,” and “composition of matter.” (There are also plant patents and a plant variety protection act. The Supreme Court made it easier, affirming the scope of patentable subject matter to be “anything under the sun made by man.”) If “process” here is lifted from patent law, then what do we make of “compositions”–this is not, apparently, “compositions of matter.” “Composition” is used with reference to musical works and to written works, not to the chemistry of materials. So who knows what is meant.
“Life forms” perhaps is intended to recognize the Diamond v Chakrabarty decision, but “life forms” is much broader. You are a “life form,” and so are (presumably) all the first born children of university employees. By this point, it is clear that the drafters are fools or incompetent or just don’t care how they form the list. At any rate, the form of intellectual property (a patent, and the patentable invention that underlies it) is lost in a fuss over objects in the world. It’s one thing to claim an interest in a patent on an invention; it’s another thing to claim anything in which an invention might be made.
The list then drifts off into “computer software” (but ignores algorithms, firmware, pseudocode, macros, programming languages, and data structures and data dictionaries, and the like), and then into copyrights–“copyrighted works” makes no sense. A work is not “copyrighted”–copyright vests in original works of authorship when fixed in any tangible medium of expression. It’s even more absurd if we skip to the end of the definition and see the tag “and legal rights to the same.” So “copyrighted works and the legal rights to the same”–meaning, exactly, what? Copyrights in copyrighted works? Sigh.
Mask works are one of a multitude of types of works listed by the Copyright Act that may enjoy a copyright. A mask work therefore is within the scope of “copyrighted work,” so why call out mask work and not, for instance, choreographical works? In copyright practice, at least, if you list what you care about, you get that, and nothing else. Here, one could argue against the drafting party that the only “copyrighted works” that the policy takes an interest in are software, compositions, and mask works. The general term “copyrighted works” might be read to refer to works published before 1988, when registration was still required to secure a federal copyright in a published work. Or it might be read as a general term for the three listed forms of work in which copyright might vest.
The definition then turns to “research tools and data” and leaves many questions. Does “research” modify both tools and data, or only tools? What about tools and data that do not arise in research, but rather in testing or in making things? Is a photographer messing with a new form of tripod doing “research” in making a new tool? It’s hopeless to know what is meant. When does information become data? When someone calls it data? Is technical information “data”? Are design specifications “data”? Or is “data” restricted to the evidentiary information generated by experiment to demonstrate or disconfirm a hypothesis?
The list is nearly done: “certain defined trade and service marks”–that is, some forms of trademark. There are also collective marks and certification marks, but these are not mentioned. The use of “certain” is no doubt intended as a gesture to paragraph II.G, which acknowledges that the university has its seal and emblematic marks, and these are covered by a separate policy. There’s nothing in Bylaw 3.10 that authorizes the university to have an interest in certain trade and service marks. It’s a stretch to argue that adding trademarks is at all an “implementation” of Bylaw 3.10, or that adding trademarks could be a “substantive change” in the policy “consistent with” Bylaw 3.10–unless by “consistent with” one means “we may do anything that Bylaw 3.10 doesn’t address,” in which case there is no reason whatsoever for Bylaw 3.10. It is a pebble in a stream, over time to be rounded and ground down to bits of sand.
The penultimate item in the list is itself a definition, “Tangible Materials.” Tangible Materials receives an implied definition not in the list of definitions, but buried as Paragraph D. of the section on “Commercialization”:
Tangible property, including models, devices, designs, computer programs and other software, cell lines, antibodies, recombinant materials, laboratory animals, chemical compounds, compositions, formulations, plant varieties, and records (“Tangible Materials”) that comprise University Intellectual Property may be distributed outside of the University consistent with applicable laws, policies, and existing license agreements. OVPR shall set and administer rules regarding transfers of Tangible Materials.
Here, remarkably, if we ignore the ghastly list, the sentence reads, “Tangible property that comprise University Intellectual Property may be distributed.” “Comprise” is a difficult word here. “Comprise” means “to consist of, to constitute, to be made up of.” As Garner has it, “The parts compose the whole; the whole comprises the parts” (See Garner’s Modern American Usage). “Our goofy definition of Intellectual Property comprises a random bunch of things and Tangible Materials.” If we follow established usage, this bit of definition reads in its twisted state, “Tangible property that is made up of the forms of intellectual property claimed by the University.” This, of course, is nonsensical. No tangible property could possibly comprise that set of both tangible and intangible items, because tangible property, by its very nature, may only be tangible.
So we are left following non-established usage. As Garner puts it, “is comprised of” is “erroneous usage” and “has always been considered poor usage”; “replace it with some other, more accurate phrase.” Perhaps the writers meant that if tangible property was university property, then it could be distributed. “Tangible property owned by the University may be distributed, but only if the distribution is legal and follows policy. Um, gosh, does policy need to restate that distributions should be legal? Could distributions not follow policy, but for this demand that distributions follow policy? If there are other policies that cover distributions, don’t those policies actually control, not this policy? Is this policy just in case those policies for some reason don’t control though they should?
What is going on? At best, only the last sentence matters–the Office of the Vice President for Research claims control over the rule-making for distribution of tangible property. This, too, is nuts, as there are many forms of tangible property owned by the university that the Office of the Vice President for Research has nothing to do with–surplus computers, scholarly manuscripts (the paper, the paper!), cupcakes, and coffee mugs. A great deal of university tangible property is distributed directly to the trash bin.
But “at best” is too much to hope for. Let’s deal with the embedded definition, because it is the laundry list here that is incorporated by reference into the definition of “Intellectual Property”:
models, devices, designs, computer programs and other software, cell lines, antibodies, recombinant materials, laboratory animals, chemical compounds, compositions, formulations, plant varieties, and records
We will deal with the prefatory “including” in a minute. First, the list. Here we have a couple of overlaps with the list defining “Intellectual Property”–computer software (but here, also computer programs as a subset of software, and all other software that isn’t computer software–whatever that other software might be), compositions (here, however, distinguished as a kind of tangible property, so not musical but then also not what is meant by a composition of matter, as that refers to the way in which matter is constructed, not the tangible thing that might also be owned. Similarly with “formulations”–which would suggest a recipe for chemical mixtures, not the tangible thing actually so formulated, which might be a liquid or a solid or a powder or whatever.
Indeed, designs, formulations, compositions are all mostly if not entirely intangible. On their own, they don’t form property. Any property right arises via copyright (a design may be an original work of authorship, for instance) or trade secret (a formulation may not be generally known to the public, etc) or patent (a new, useful, and non-obvious composition of matter may be inventive). The things, the chattels, that might embody forms of intellectual property may themselves be “tangible property.” But there’s no way to know whether such property is the university’s. A person may use her own, privately acquired chemicals to formulate something new and wonderful. The university may (with its penchant for overreach) make a claim on the patentable nature of this wonderful something, on the invention. But how does the university as well by policy confiscate the physical embodiment of the formulation, something it has not bargained for, something it never purchased, something that it never restricted or required, something not even in its Supplemental Information Form assignment?
“Models” may be tangible (as in architectural models) or intangible (as in algorithms). Various “life forms” come in a clump: “cell lines, antibodies, recombinant materials, laboratory animals”; but a “plant variety” is not a tangible plant–it is a differentiation of one form of plant from another, a relationship–this form of striped, tasty, fragile tomato with few seeds, not that form of red, tasteless but easily harvested and shipped tomato with lots of seeds. Not the tomato, but the variety of tomato.
Finally, “records.” Just “records” as a form of tangible property. That would be, perhaps, the physical notebooks, journals, ledgers, books of account, gradebooks, video tapes in which things are recorded. “Records” is a broad term, given no limitations–not records of invention, not records of official university business, not records of English professors’ musings on the purported multiple authors of Piers Plowman. In any case, the burden of the paragraph is that tangible property somehow associated with “Intellectual Property” (because it is one and the same thing in both definitions, because the tangible property comprises the Intellectual Property, because the tangible property is a physical embodiment of a claimed intangible asset) may be distributed. Big whoop. Scholarly materials are exchanged daily by the boxcar, causing no end of worry to the folks in export control compliance. The paragraph here is rather late to the party, like a badly conceived Spanish Inquisition.
Now, what to do with this fuddled list that mixes intangibles and tangibles, duplicates some items in the list of Intellectual Property but not others, muddles still others with distinctions, and suggests yet others “life forms” might not be so broad as to include first born children of hapless Employees? The list is given its own status as a defined term, “Tangible Materials.” Tangible property includes Tangible Materials. Tangible property associated with (er, that comprise) University Intellectual Property may be distributed. But Tangible Materials are made part of the definition of Intellectual Property. So how does that work, logically? “Tangible Intellectual Property may be distributed.” There’s a deep cognitive dissonance here, as intellectual property is a form of intangible asset, but anything less would be too simple to be within the grasp of such a sophisticated policy.
Finally, “including.” In the usage here, “including” suggests a subset of “tangible property”–the list does not indicate if “including” means “this is all” or means “this is an illustrative list.” If the latter, one usually finds something like “including but not limited to” or “or not necessarily limited to” or “such as, for the sake of illustration only.” Not here. One might reasonably conclude (though reason here has already taken a beating) that the list is inclusive, not illustrative. That is, these are the forms of tangible property that may be distributed, if they are also Intellectual Property, which they have to be, by tautology, because this list is part of the definition of Intellectual Property. So the “including” could just as easily have been edited out, along with “tangible property”: “Tangible Materials may be distributed” and the list of tangible materials removed to the definition of Intellectual Property, or given its own definition, along with the other definitions, in proper location in the policy.
We may reasonable have a confirmed sense, at this point that we are dealing with incompetent writers. But we are not done with the depth of the incompetence. Push on.
Again, in formal lists in adhesion contracts (and similarly minded adhesion policies) where it’s clear someone is capable of stating their interest, they tend to get what they state, and only what they state. Such stuff is interpreted against the drafting party. The drafting party had better get it right. Having a strong desire, but being incompetent or indifferent with words, does not create an enforceable claim on anyone else. Perhaps having a million dollars to spend on attack attorneys can enforce most such claims, but then it’s not the policy or language or meeting of minds or reason that controls the situation. It’s the threat. In other circumstances, it might be considered abuse of power, or bad faith, or racketeering.
We have worked through the definition of “Intellectual Property” given by the technology transfer policy, and that took us to the definition of Tangible Materials so we could watch two definitions biting each other’s tail. Now come back around, steeled to read the spritely opening sentence, now with some knowledge and care:
Intellectual Property made (e.g., conceived or first reduced to practice) by any person, regardless of employment status, with the direct or indirect support of funds administered by the University (regardless of the source of such funds) shall be the property of the University, except as provided by this or other University policy.
Let’s cut through the qualifications and look first at the core structure:
Intellectual Property made with support of funds administered by the University shall be the property of the University.
That much is clear, even if objectionable. Pity no one at the university has the capacity to write with any clarity. That aside, let’s compare with the core structure of Bylaw 3.10:
Patents and copyrights issued or acquired as the result of or in connection with educational activities supported by funds administered by the university and all royalties or other revenues derived therefrom shall be the property of the university.
Patents and copyrights has been broadened to an ugly list that mixes forms of intangible assets and tangible assets with bits and pieces of intellectual property and any other “legal rights.” “Issued or acquired” has been replaced by “made.” Support of funds has been shifted from activities to the making of the Intellectual Property. The claim on royalties has been dropped. We may observe, then, that the policy on technology transfer ignores the acquisition of patents and copyrights, something that Bylaw 3.10 yet retains from the patent policy of 1944. In 1944 and up through at least 1962, “acquisition” would have meant “acquired by the university, as from faculty inventors or extramural sources, when so negotiated.” In other words, even in Bylaw 3.10, the wording does not support the immediate connection that because an invention has been made, the university asserts a property claim on it.
The purpose of Bylaw 3.10, positioned at the Regents level, is to confirm that the Board of Regents is authorized to acquire patents and copyrights, and it may do so either from others who have obtained patents and copyrights (“acquire”) or it may seek a patent or copyright (seek is the wrong word for copyright, but we work with the conflation we are presented with) on its own, so that the asset “issues” as a property right. Bylaw 3.10 limits the Regents’ interest in securing patents and copyrights to funded activities–again, not funds dedicated to employment, but other funds for those activities (as is clear by the language of paragraph 4).
There is no expressed claim in Bylaw 3.10 that the university owns every invention made by university employees (or not-employees). The Bylaw authorizes the Regents to obtain patents and copyrights either before the property right is perfected or afterwards, in connection with activities the university funds beyond those of employment. The proper purpose of a lower-level policy is to implement the procedures for doing so. But the Technology Transfer policy, despite its claim to implement Bylaw 3.10, does something very different: it claims university ownership of a chaotic, conflicting list of intangible assets, tangible assets, intellectual property, non-intellectual property if any university-administered funds have supported the making of anything in this list.
One might conclude that the Technology Transfer policy is unenforceable, void, inconsistent at its heart with Bylaw 3.10, a fatally ambiguous, overreaching abuse of authority and embarrassment to serious practitioners of the art of University of Michigan governance and should be instantly withdrawn. Alas.
Now let’s add back in the qualifications to the Technology Transfer policy claim and see what happens. This is where it gets rich, and I will apologize in advance for dragging you through all those details. I had to work through them, so it’s only fair that you see that I did. What’s not fair is that any University of Michigan employee who wanted to understand the policy would have to do roughly what I have done. Most won’t. Most will simply hear the policy as a threat, and do whatever those in power say the policy requires. The job is more important than the fight with petty bureaucrats. Sometimes, even, the vision of unicorn royalties (it’s less than once in 2000 inventions–once at decade–at the best, luckiest schools) will persuade some that it’s better to empty one’s pockets than to get shot. Imagine, being mugged on a dark street by a civic-minded investment banker: “You poor fool, give me all your assets so I can invest them, take a share, but perhaps make you very, very, very rich, or sadly, if you refuse, I am forced to shoot you to make an example for other poor people, so they will not resist such a generous offer.” In a later interview, the investment banker laments that making people rich is a worthy public mission, and sometimes one has to use threats and force and subterfuge to get the poor to loosen their grip on what little they have, so wealthy organizations can make them richer–at least some of them.
Here’s that first sentence again, with all the qualifiers replaced:
Intellectual Property made (e.g., conceived or first reduced to practice) by any person, regardless of employment status, with the direct or indirect support of funds administered by the University (regardless of the source of such funds) shall be the property of the University, except as provided by this or other University policy.
We notice that “made” is immediately given a qualification, a “for example”: conceived or first reduced to practice. As we saw in Part I, these terms come from patent law and the “or” indicates that they come from the definition of subject invention in the part of patent law created by the Bayh-Dole Act. An invention is made when it is conceived and reduced to practice. Here, we have the dissolution of the idea of a patentable invention into the components of such an invention, but existing independently. So here we have an invention when only partly made, or more accurately, when not made at all. Making means not making, just as employee means not employee and intellectual property means not intellectual property. Gosh, was this policy written in 1984? The irony is just too rich. Life does imitate art, even the freaky parts of art meant to warn us off the desire for order provided by an all-controlling state.
A reasonable consequence of introducing the example of “conceived or first reduced to practice” is that the entire policy’s ownership claim, despite all the definitional madness, is constrained to patentable inventions. Indeed, that is all that the Supplemental Appointment Information Form requires–an assignment of inventions, not “Intellectual Property,” using the same goofy–for an assignment document, potentially fatal–“e.g.” to illustrate the meaning of “invention.” All the “Intellectual Property” apparatus falls away, with its random wish list of copyrights and Tangible Materials. In its place, at the level of practice, is a present assignment to patentable inventions (for which patent rights may be owned) and to not-patentable inventions, inventions for which there are no patent rights, and therefore nothing to assign. Make a list, get a list.
The apparatus reduces to assignments of patentable inventions that meet the two-pronged “or” test. The problem is, if the definition of “invention” is so vague that all it can offer is a “for example” that does not even recite the conditions for a patentable invention, what possibly could form a meeting of minds between inventor and university officials such that it would be clear to any reasonable observer what was committed to be assigned. If the inventor says, “I never agreed to that”–there’s nothing for it. That’s the deal. No meeting of minds. Interpret against the drafting party. University officials cannot say, “Because we intended you to assign (in the future) something just like this thing under debate, you must have agreed back then to assign it, too.” All the university has is a signature to an ambiguous document, without anything to show a reasonable bound to the obligation being asserted.
In Bayh-Dole, if either prong is in the planned and committed activities of a funded project, then the invention, if it is made (that is, both prongs are satisfied), is within scope of the patent rights clause. An exact parallel may be constructed here, despite all the bad drafting. The policy is the patent rights clause. The existence of university-administered funds is the funded project–and we can chase that usage all the way back through Bylaw 3.10 to the 1944 patent policy. The scope is a patentable invention, where funding was intended to support at least one prong of the test for patentability. Despite all the sticks and leaves tossed into the air by the drafting, this is a straightforward, reasonable reading of this first sentence. Put in common language: When the university provides special funds that result in a patentable invention, then the university will own the patent rights in that invention. Everything else is a fuss about where the funds come from, whether the provision is direct or indirect, and whether funds paid for employment count (they don’t, per Bylaw 3.10, paragraph 4).
The entire policy, bombast and all, reduces to the core of the 1944 patent policy. It’s a shocking result. Why all bombast then? Why make it appear that the university claims a broad swath of stuff, with an idiosyncratic, if not crazy, definition of “Intellectual Property”? I don’t have a good answer. I expect that folks in the tech transfer office wanted to create the illusion that the university claimed more than the policy authorized. They wanted to believe with Dr. Sussman, who as a botanist and not an IP expert, must have been told by technology transfer “experts” that the university owned all faculty work (i.e., more crap about Bayh-Dole), and dutifully repeated this to the Regents, as if the Regents, who approved Bylaw 3.10 did not actually know what they intended.
A reading of this first sentence of the ownership statement does not end with our initial shock. We can consider “shall be”: it expresses a future condition. When the qualifications given in the claim are met, university officials are authorized to secure ownership of the asset. The policy does not secure that ownership. It merely sets the conditions of scope for claims and authorizes officials to go get ownership. We can consider the status, too, of the Supplemental Appointment Information Form wording–a present assignment to future inventions. We can see that “made by me as a University employee” is inconsistent with Bylaw 3.10. Bylaw 3.10 expressly disclaims employment as a basis for claims of ownership. The funding has to be other than “as an employee.” The effect of the language in the Technology Transfer policy, however, is to claim that if a witless employee signs this form, then the form’s contract supersedes policy requirements. The witless employee has signed away rights that policy otherwise would not claim, because a unit of the university “in good faith” has contracted for those rights. It will be the language of the Supplemental Appointment Form that the university will trot out in court, and claim that no matter what else, this was the deal, mutually entered into, perhaps a generous gesture on the part of 99.9% of all employees, and here, contesting it, is one bad apple which the university regrettably must make an example of.
I won’t spend much more time on the Technology Transfer policy. The rest of it reads in a manner similar to the parts I have worked through. It is an incompetent jumble. Somehow the institution survives. An “Employee” “receives a salary or other consideration from the University for performance of services”–but that would appear to reach through to independent contractors. Pity any janitors working for a contractor providing services to the university. Much worse, however, is the extension of the definition of “Employee” to students:
A student that is compensated (e.g., financially through a stipend, tuition, etc., including graduate student research assistants and graduate student instructors) is considered an Employee under this Policy.
Here the statement of scope grossly overreaches–the “etc.” is telltale, but so is the omission of “for services.” The list of examples is itself incomprehensible, though its presence suggests that those drafting did not quite know what they meant by “compensated.” Even the standard patent rights clause authorized by Bayh-Dole expressly excludes “clerical and non-technical” employees, and does not seek to include anyone who is not an employee–not visitors, not independent contractors (who should be subject to the subcontracting provisions), not folks not qualified or expected by the funding agreement to invent. Yet the policy here seeks to reach to students, if they are “compensated.” What about scholarships, for instance? Further, look at the loaded word “financially”–suggesting that “compensation” can include non-financial benefits. What might those be? Access to a lab? Invitation to a talk? A loan of equipment to try something out? And if so, is the university violating employment law by not reporting such benefits and granting rights to these “employees for Intellectual Property purposes” as formally employed? What, might that do, for foreign students not eligible to work in the US?
It’s stupid drafting, really. Even if one wanted to abuse one’s power, violate Bylaw 3.10, and bamboozle folks into signing away their IP, all one has to do is write “students also must assign their rights in Intellectual Property to the University when their activities are supported by University-administrated funds.” Or something like that. There’s no need to try to put non-employees under the heading of “Employee”–making garble of the definition, and all that is ignoring the problem that for patents and copyrights, mere compensation is not sufficient to sustain an employers claim to ownership.
Finally (and I wish I could swear I was done with this, but I’m not as there is still the copyright bombast to get to), look at the last bit of that first sentence:
except as provided by this or other University policy
We get through this whole first sentence only to find an insertion of ambiguity. The fundamental statement of university ownership of “Intellectual Property” is expressly subordinated to any other statement of the policy, and to any other policy of the university. Can it get any worse? (Answer, Yes!, wait for the copyright discussion). But this is worse enough. A policy in its fundamental claim subordinates that claim to the rest of the policy and to any other policy. The drafters were serious about this, as two sentences later they make it clear with regard to copyright:
Rules in this Policy regarding ownership of copyrights are subject to ownership rules directly addressed in the University’s copyright ownership policy, entitled “Ownership of Copyrighted Works Created At or In Affiliation With the University of Michigan” or successor Policy that is approved by the Regents.
So all the blather about copyright has to be understood in the context, first, of a copyright policy, and only then can the bits of the technology transfer policy be applied to figure out just what it is the university claims and what it doesn’t claim. It is funny, of course, that the Technology Transfer policy asserts that changes in its policy statements do not require the approval of the Regents, but somehow, the copyright policy must have such approval to enjoy precedence. The University of Michigan is a strange, ugly, incompetent world when it comes to intellectual property policy management. One cannot take a step in policy without regretting it. Perhaps the only folks happy about it all are patent administrators, who perhaps see this policy as their life blood, as ticks think their hold on the hole they have made in the back of your neck is their purpose in life, which, of course, it is.