Policy in a university distributes authority, identifies purposes, and establishes procedures. Policy, for instance, establishes the conditions for faculty appointments. But the actual appointment of a given faculty member requires an act by an administrator on behalf of the university. The policy does not replace the executive action–someone still must act on behalf of the university. The policy identifies who may act and in what ways. No one is appointed by rule, only by an executive action.
Similarly, IP policy may establish the authority of administrators to require assignment of patentable inventions, but the policy itself cannot simply take ownership of patentable inventions by rule. Administrators, if authorized to contract with individuals with regard to rights in patentable inventions in certain situations, must then negotiate such contracts to establish the university’s rights (or any other party’s rights). Absent such a contract, rights vest as provided by law (common law generally; some states have laws that appear to disrupt common law).
We might say, university IP policy then establishes a basis for changing by contract the defaults of patent and copyright laws. The reasons for doing so, apparently, rest in arguments that public policy of patent and copyright law defaults is not acceptable, without modification, to the operation of the university, and that required changes to those defaults creates IP management more favorable to the public interest (or to the university, at least, as a stand-in for public interest). In this argument we see the outline for a claim to a public covenant that runs with patents and copyrights attached to work produced at a university. It’s just that the public covenant arises on the university policy side rather than on the federal patent law or federal copyright law side.
Of all the things that we could discuss that might be wrong with federal patent law, it’s rather quite amazing that the things that university administrators assert are that ownership of inventions should be institutional rather than personal (despite the Constitution) and that the purpose of patents should be to generate money for institutional use (despite the claim of developing inventions in the public interest) through the creation and sale of monopoly positions for commercialization of inventions (despite insisting on open publication of research), regardless of whether such monopoly positions are in fact necessary for commercialization. What a strange world. One might think that the primary issue might be whether to charge a royalty in non-exclusive licensing or whether patents are all that effective in improving the contributions university research makes to industry.
Instead of any of this, university patent policy is drafted as if it is private law–the assertion of the private law is sufficient to bind all who come within its scope–employees, appointees, associatees, students, visitors, collaborators, whomever. “Ignorance of the policy is no excuse.” And yet there’s not much that makes such private lawing valid–one can assert that by using a university’s library, the university owns any inventions one might make while there, but that’s not the law of the land. Just the law of a nasty little hell hole in which university administrators write stuff that backs up their urge to appropriate what federal law provides should be the property of inventors and authors.
For state universities, this private law might be construed to be “mandamus”–an administrative declaration in the form of a command. Here’s a brief statement of mandamus (there is all sorts of complexity, too):
The University of California asserts that university policy has “the force of law”–here’s an instance regarding conflict of interest (which increasingly is used in IP settings):
The University’s approved Code has the force of law and any violation of the Code by a designated employee is deemed a violation of the Political Reform Act.
That simply by stating a requirement in policy, the university creates private law. In Shaw, the court acknowledged that mandamus was indeed an appropriate way for a public university to manage the duties of faculty, but that mandamus did not apply when the university entered into private contracts with faculty (citations removed):
While it is true the University’s administrative decisions regarding its faculty are properly reviewed by writ of mandate, Shaw does not challenge an administrative decision of the University. He seeks an interpretation of his existing written contract with the University.
As a general proposition, mandamus is not an appropriate remedy for enforcing a contractual obligation against a public entity.
The strange gist of an mandamus IP policy strategy is that if university policy has the force of law, and university faculty are public officials, then the university administration can go to court to get a writ of mandate to force faculty to do their legal duty as public officials–which would mean, according to this clever scheme, having to sign over their private inventive property to the state. The claim is–apparently–that the IP policy requires public officials to “take” their own personal property for state uses. It’s an odd sort of eminent domain “taking” in which policy is drafted to require people to turn over for public uses their private property, simply by being appointed faculty members at a public university. No “fair consideration” is required because turning inventions over to the state has been set out as an official duty for faculty, so it must be included in whatever value faculty might get from being appointed–salary, reputation, freedom to mess around with stuff in labs.
The Shaw court acknowledged one might have such clever schemes, but set all that aside–once there’s a contract between the state and an employee, common law rules of contracting apply, not mandamus. That is, the state cannot use mandamus to require employees to perform under a contract, nor to require employees to accept an altered contract, nor require employees to accept the state’s interpretation of the contract.
Thus, when Penn State implements the IP Agreement to bolster its IP policy, it also stumbles into this problem of having contracted with employees, the university is not a liberty to manipulate policy with regard to those employees, nor use policy demands as a basis for enforcing actions by faculty as public officials who must follow policy–they must follow the common law of contracting. The question then becomes, what is in the contract? What have faculty agreed to? For that, the university is not free to dictate what the contract must mean, nor even what the policy must mean. Nor is an appeals process the final say in any dispute. It is merely a form of alternative dispute resolution before moving to litigation. Runs up costs, delays outcomes–the sort of thing that might work in the favor of university administrators, since they have all the time in the world and robust budgets compared to faculty inventors–especially if the dispute is at the start of an appointment rather than after some potentially lucrative invention has been made.
There’s another confusion going on between acknowledgement and agreement. The University of California produced this confusion in its failed arguments in the Shaw case. In Shaw, lawyers for the Regents argued that the “Patent Agreement” everyone was required to sign (even I signed it) was an administrative action. When the Shaw court ruled against the university’s scheme, asserting that the “Patent Agreement” created a contract, the university changed the name of the form to “Patent Acknowledgment”–as if changing the label on a written instrument changes what the instrument does.
If a written instrument merely “acknowledges” duties, its role is that of “putting someone on notice” so that they could not later argue “I didn’t know.” But that’s different from requiring someone to sign over their personal property (patentable inventions, works of authorship), or having that someone agree that they already have assigned what they haven’t yet made. The Penn State strategy was put in place in 1991 and 1992, before the Shaw decision in 1997. We might then expect that Penn State never got the memo about IP Agreements displacing administrative prerogatives.
Put it another way. If to get the upper hand to assert a demand to own inventions made by faculty, faculty have to be depicted as “employees,” then those “employees” cease to be, for IP purposes, public officials. If, however, faculty are public officials, then there is nothing in their official duties that requires them to turn over their personal property to the state for public uses. For decades, the reason for any assignment of inventions by faculty was that they voluntary agreed to do so as a condition of receiving external funding or agreeing to do special work for the university entirely unrelated to the conditions of their “employment/appointment/association.”
Bayh-Dole–in its faux, misrepresented form–gave university patent managers a rationale to insist that assignment of inventions should be a condition of employment. Faux Bayh-Dole insists that a better patent law is for nonprofit institutions to own the work of inventors working with federal funds. That’s strange enough. That the nonprofit institutions are then given a (faux) mandate to commercialize inventions is stranger yet. That the means to commercialization is for nonprofits to deal in patent monopolies in cahoots with speculators is beyond strange. Perhaps if such strangeness was wildly successful, people might tolerate it. But there’s no evidence for such wildness. It appears, rather, that this approach is 80x less effective than the approach it destroyed. Faux Bayh-Dole persists only because universities refuse to report honestly what they are actually doing, and federal agencies go along with them in order to preserve the public impression that federal research is producing great results.
The bigger picture is that the agreement takes the form of an acknowledgment of responsibilities. That means the agreement documents an acknowledgment rather than creates an obligation, other than to “abide by” the IP policy. The IP policy, as we have noted, requires the IP Agreement and disclosure of inventions–and in its current form also asserts that the IP Agreement requires assignment of inventions, but only after the IP policy has created restrictions on what inventions might be assigned–those having “potential commercial value” that result “from research activities” (from the definition of Research Intellectual Property) and conceived or reduced to practice (patent terminology) or created (random terminology–no, it is not copyright terminology) “with University facilities or resources (where “resources” already includes “facilities”) or not using any University facilities or resources but in that bit of expertise or responsibilities “covered” by “employment/appointment/association.” For something to be “covered,” we would expect a written statement of scope. Absent that statement of scope, nothing is “covered.” Thus, whatever one’s “responsibility” under the IP policy to assign inventions, the IP policy has already made restrictions. The text that follows (1) and (a) and (b) is expressly limited to “to the extent specified in University policy”–and in the IP policy we find that there is no such extent specified. The extent specified in policy pertains to what the policy “governs” and what must be disclosed, not what must be assigned.
Thus, all there is in IP policy is a statement that the IP Agreement requires inventions to be assigned, but the IP Agreement requires only those inventions to be assigned that IP policy requires. Somewhere in this circular logic, someone was unable to state directly in policy what inventions must be assigned. Perhaps no one was willing to lay it out directly for the Trustees. Or perhaps no one was competent to draft. Or–my secret hope, here revealed–is someone was competent and chose to thwart the folks who wanted to appropriate the personal property of inventors and authors to try to make a buck by feeding monopoly positions to speculators on the premise that only speculators might make commercial product and only by means of commercial product so developed might the public realize any benefit from federally supported research.
Thus, there’s really no point to adding the IP Agreement to the IP policy apparatus. The IP Agreement by creating a private contract undoes mandamus, restricts the university in interpreting policy, limits the effect of changes in policy, and for all that all it does is add a double helping of the requirement that inventors disclose their work to the university. No doubt administrators insist that the IP Agreement does more, but that’s the case only if one doesn’t read it or thinks that words should not mean what they say but instead stand as emblems for whatever it is administrators want the words to mean. “Glory,” as Humpty Dumpty puts it.
It is clear that the IP Agreement attempts to do more than IP policy authorizes–more the drafting to include requirements that appear expansive and firm, only to be voided by the requirement “to the extent specified in University policy.” Consider:
abide by the terms of the University’s Intellectual Property Policies and Procedures currently in effect.
Penn State’s IP policy does not provide any authority to include “procedures” that aren’t in policy. Procedures don’t take Trustee action; procedures can be most anything administrators want. The IP Agreement itself does not “abide by” the IP policy! At best it represents a private contracting to circumvent the IP policy.
If we want to pound home how clueless the IP Agreement is, we might observe that the one thing an IP agreement ought to do is to provide for the assignment of patentable inventions that the university has an ownership interest in. IP policy does not specify any such inventions. The issue comes up when the university commissions inventive work or a sponsor supports inventive work. Nothing in IP policy precludes such arrangements, and when those arrangements arise, the university may expect to obtain an interest in patentable inventions. The IP Agreement might reasonably then be directed to those situations:
I agree that if I participate in a research activity commissioned expressly by the University or supported by a sponsor under an extramural funding agreement, I will disclose each patentable invention that I make in such activity and if required by the commissioning or sponsoring agreement, assign the invention as provided by that agreement.
Or something like that. With such language, the IP Agreement attaches itself to each special project that carries IP requirements other than those provided by federal defaults of patent law and copyright law and provides the necessary contractual connection between the university’s agreement with a sponsor (in the case of extramural work) and the university’s agreement with a principal investigator (in the case of a commissioned project). No need to make the IP Agreement a condition of employment/appointment/ association. The deal is–“if I choose to participate in a project that has as a condition of participation that inventions I make will be assigned or licensed to someone other than me, then I promise to comply with that condition and assign or license to that someone.” Essentially, this what the (f)(2) written agreement in Bayh-Dole’s standard patent rights clause requires (along with disclosure and assistance).
Of course, a university could simply implement a patent agreement for every such project and not bother with trying to make something general and catch-all. It would not be that much of a bother–whenever there is a funding agreement, the principal investigator agrees to the IP requirements and anyone joining the project signs an IP agreement reflecting the requirements of the funding agreement. In such practice, everything is as clear as the funding agreement requirements–likely much clearer than generic, overbroad claims created by administrators trying to avoid being diligent but having no clue how to go about it.