Penn State’s Protection Racket, 14: Assignment and Present Assignment

Here’s Penn State’s current IP Agreement’s sort-of assignment clause:

In so agreeing, I especially acknowledge my responsibilities:

(1) to assign and do hereby assign to the University (or its designee) all rights which I have or may acquire in inventions, discoveries, rights of patent therein, software or courseware which are conceived, reduced-to-practice [sic], or authored by me to the extent specified in University policy: 

(a) with the use of University facilities or resources, or

(b) in the field of expertise and/or within the scope of responsibilities covered by my employment/appointment/ association with the University (hereafter PSU IP)

Especially. Where to start with this nasty mess? “Especially” is funny. Apparently though all responsibilities are required, some are “especial.” What is the difference?

Present assignment. The words “do hereby assign” are an effort to implement a “present assignment”–that is, an assignment now of a yet-to-be-created future asset, here represented as “all rights.” There are myriad problems, but university administrators don’t know them or don’t care so long as they create a claim to ownership that is expensive for anyone to object to. If a university by policy agreed to pay the attorneys’ fees of anyone challenging a university policy or practice on the basis that it was unauthorized or an abuse of authority, there’d be a lot less of this kind of bombast drafting.

One problem with this implementation of present assignment is that it is ambiguous–it covers “all rights” in a host of things, but then only those things “to the extent specified in University policy” and then reciting restrictions placed on the disclosure of stuff rather than the assignment of stuff. University policy specifies the assignment of exactly nothing, so the present assignment here doesn’t operate.

A second problem with this implementation is that because there subject matter of the present assignment is ambiguous, there is no way of knowing what exactly has been presently assigned. There will have to be a review to determine whether any given “rights” are within the scope of the assignment before it can operate. For original works of authorship and copyright, that review will have to look at the scope of employment (no assignment necessary–work for hire) and then at work not prepared within the scope of employment and for which there is a written agreement that the work will be prepared as a work for hire (again, no assignment necessary), and thus we are left with work prepared outside the scope of employment and for which there is no written agreement that the work will be a work for hire but somehow the university claims it anyway. What works might these be, that the university here claims employees (and appointees and associatees) must assign the rights to upfront even though the works are not within the scope of employment and before the works are specified or made?

For inventions that are or may be patentable, the review will have to work through the horrifically ambiguous scope and claims of IP policy and the IP Agreement. IP policy claims nothing. The IP Agreement appears to intend to claim most everything, except formally it doesn’t. The present assignment cannot possibly give the university any more rights in an invention than would a promise to assign, since the essence of any assignment of property is that the property is clearly defined. “I hereby assign all those things that are not in existence that were they to come into existence would be mine, but only to the extent required by a horrifically ambiguous policy that read slowly and carefully does not require anything to be assigned.” We might add that the university is not at liberty to change the definition of what has been “hereby assigned” after the fact–not to “clarify” the wording or to reveal the university’s “true intent” or even to push the interpretation of the definition through an appeals process that it entirely controls and asserts the final word on. Either the assignment operates with the use of “hereby” or it fails for lack of specificity or lack of agreement with the assignor with regard to the subject of the assignment.

A third problem with the present assignment is that it won’t hold up in this form for any filing with the USPTO. An assignment specific to a given invention will have to be executed, preferably after a patent application with claims has been prepared, laying exactly what rights are to be conveyed by assignment. Thus, the assignment does not take place when the IP Agreement is signed, nor even when any particular invention is conceived or actually reduced to practice–but rather only after a review of the invention with regard to the IP Agreement’s stipulation of what must be assigned–nothing, actually, but otherwise only if the invention meets the rest of the ambiguities put forward as limitations on the scope of assignment. So, the present assignment is wasted and does no more than offer the prospect of equitable ownership of such inventions.

If the present assignment operates immediately, then there’s another problem–that of timely recording the assignment with the PTO. If an assignment is not timely recorded, then an inventor is free to make an assignment to another party, and if that other party does not have notice of the prior assignment, and provides valuable consideration, then the first assignment is void (see 35 USC 261):

An interest that constitutes an assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.

Thus, universities still have a problem. They fail to record the present assignment. The inventor assigns to a company, say, that has no notice (say, from the university or by means of recording the assignment with the PTO) with regard to the present assignment. The present assignment is void. A big apparatus that does nothing or next to nothing, readily circumvented. A best, the university might claim it has an equitable interest in the invention the inventor has assigned, but that ends up being a cause of action against the inventor for breach of promise, and does not get back ownership of the invention–the assignment to itself that the university demanded can be made void as a matter of federal law.

Present assignments became the vogue in university patent policies after the Stanford v Roche decision. The Supreme Court ruled that the Bayh-Dole Act did not vest ownership of inventions made with federal support in the universities that hosted the research leading to these inventions. A minority opinion worried the issue of whether the Supreme Court should let stand a lower court ruling that a present assignment (“hereby assigns”) should have an effect different from a promise to assign (“I agree to assign”). There’s merit in the worry, but the worry had nothing to do with the circumstances in the Stanford case, once the Supreme Court had ruled on Bayh-Dole. The lower court analysis would have changed and there would have been no need to differentiate present assignment from promise to assign. But that did not stop university administrators and complicit lawyers from using the minority opinion to argue that universities must implement present assignments to prevent the problem that Stanford faced. It is all bogusness, but try to explain that to university attorneys. For them, any complication in policy or practice is yet another barrier to anyone understanding the policy or practice in the first place or successfully objecting to the policy or practice once it is revealed for what it is.

To the extent specified. There’s a way to read the colon in this construction that makes what follows appear to be a restatement of what is in university policy. “I acknowledge my responsibility to assign all rights in inventions to the extent specified by University policy: [namely,] (a) with University resources and/or (b) within field of expertise or scope of employment.” But this is not a restatement of university policy, because in policy this statement of scope pertains to disclosure, not to assignment. There is no requirement in university policy to assign anything. The “extent specified” must refer to something specified in policy, not something extracted out of context from policy and used to specify. Perhaps the administrative intent behind the IP Agreement is to induce all employees to agree to this twisted interpretation of IP policy. But even that is not an express intent, and is irrelevant to an objective interpretation of the IP Agreement. If the IP Agreement did not have the “to the extent specified” language, one might interpret the assignment language here as an outright assignment. It would be easier for an administrator then to recite the IP Agreement out of context and simply claim that the employee agreed to this deal, no matter what the IP policy states. The contract controls. But with the “to the extent specified” in the IP Agreement, it is much harder to claim that the stated scope actually operates for assignment rather than for disclosure.


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