Regulatory limitations on fun-lovin’ university patent administrators

My argument is that university patents aren’t like other patents–not like corporate patents, not like entrepreneur patents, not like speculator patents. My argument also is that universities are limited in how they manage patents, and therefore they are not in the same position as companies or entrepreneurs or speculators, and cannot simply adopt the methods of companies, or of inventors, or of patent trolls.

Here is a list of regulatory limitations on university management of patents:


Grants funding agreements (2 CFR 200.316) (Must act as trustee of patents for grant beneficiaries–patents acquired or improved with federal funds)

Patent rights clauses (37 CFR 401.14(a)) (Must give preference to small business licensees; must require substantial manufacturing in the U.S. for exclusive licenses–patents on subject inventions).

Bayh-Dole Act (35 USC 200, 203, 261) (Must conform to the stated objectives of the law or fall outside the scope of rights or, for certain failures, be subject to federal march-in procedures–subject inventions)

University Policy Statements and Agreements

Articles of incorporation (May set conditions for property ownership and public mission–may not authorize all uses of a patent)

Tax designation documentation (such as 501(c)(3) and Rev Proc 47-2007)(may make formal representations regarding university activities that do not include all uses of a patent–misuse could jeopardize non-profit status or tax-free status of bonds)

Mission statement (establishes foundations for actions–actions outside mission statement are not institutionally authorized)

Patent policy preamble and statement of purpose, among other sections (provide institutional authorization for owning and managing patents–failure to conform to stated purposes exceeds institutional authority–or, if administrators can exempt themselves from the policy, how is the policy binding on anyone?)

Policy on academic freedom (statements that academic freedom of faculty to teach and conduct research are fundamental limit some patent actions–if university administrators can exempt themselves, how is the policy binding on anyone?)

Policy on Not Competing with the Private Sector (often a limitation at public universities–may limit patent actions by instruments of the state as anti-competitive or misuse of governmental authority)

Agreements and Contracts (faculty appointments, collective bargaining agreements, special agreements with faculty and others, restrictions or agreements on donations, extramural funding agreements, invention assignment documents, and licensing agreements all may contain commitments that limit patent actions)

All of this may seem like complication, and to some extent it is. But it is complication that matters. A university administrator that scoffs at these regulatory and policy statements is running fast and loose–figuring that university legal counsel will defend the administration at all costs. (I have yet to find a university-paid attorney who takes the side of any non-administrative employee in a dispute with the administration. Some university employees, clearly, are more important than others. It would be interesting if university patent administrators had to hire attorneys out of their own pockets to take on other university employees–and it was those other employees who got the benefit of paid-for university counsel!)

One compelling reason for patent licensing to take place outside the university is that the university then recovers its oversight role for patent management, something that is otherwise easily compromised. It’s not that all university internal operations are corrupt–it’s that they are readily corruptible. All it takes is a dissatisfied vice-provost or dean or department chair or major donor or regent throwing a hissy fit about licensing income or management decisions to drive out the licensing folks who would pursue social purposes in licensing before money or institutional ownership.

We might summarize. University administrators, for most patents, by policy or regulation or agreement:

  • cannot withhold inventions from all use
  • cannot troll industry once industry is using inventions
  • cannot license exclusively to others to withhold or troll
  • cannot license exclusively and fail to address nonuse or abusive use
  • cannot license for anti-competitive uses or uses that disrupt research

We might say administrators lack standing to do these things. We might say they violate policy and regulation and agreement when they do these things. We might say they should be held personally liable if they have negligently or willfully violated policy and regulation and agreement. We might say that if the university defends such administrative actions, then the university’s own policies regarding inventions are unenforceable–if the university can give a free pass to its own administrators on such fundamental matters when the whimsy strikes, then how can those same policies be binding on anyone else?

But of course we know that university administrators do do all of those things I just wrote that they cannot do. They do withhold inventions from all use by not licensing them and by licensing them exclusively for all claims but ignoring non-development under all claims; do troll industry, but behave as if they have a moral mandate to do so–which makes their trolling all the more immoral; do license exclusively to others who then troll or withhold; do fail to address nonuse or abusive use; do license for anti-competitive uses and do license to disrupt research–such as exclusively to shell startups. Any audit of most any university (there are a few exceptions) will show these results. There are presently virtually no universities with express patent policy restrictions on licensing exclusively, on licensing promptly, on enforcing licenses, or avoiding anti-competitive licensing. What’s not restricted is possible, if not endorsed.

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