The current Penn State IP Agreement preserves many of the problems of the 1992 version, which we have previously discussed. Let’s look at the new, modern problems that the current IP Agreement adds to the mess.
PSU IP–The IP policy concerns with regard to disclosure and an IP agreement are specific to research intellectual property, for which it provides a definition. But the new IP Agreement conflates all forms of IP–research, instructional, and scholarly–and bundles these as “PSU IP,” for which the IP Agreement states an expansive claim of institutional ownership, even though this claim is itself outside of the IP policy’s authority. The substitution of PSU IP for RIP is particularly nasty, expanding the institutional claim of ownership far beyond what previous policy concerned itself with, namely, compliance with extramural research contracts.
In fact, the entire section of the 1992 IP Agreement pertaining to research contract compliance has been removed. For the 1992 IP Agreement, there were two drivers for institutional ownership. The first is whatever has been commissioned or otherwise expressly contracted for the by university. That part has no need of a generic IP Agreement. All that’s needed is for the policy to authorize the creation of a standard IP Agreement to be used in all such situations involving special commissioning of research work that might lead to inventions, where the inventions to be assigned are those that are deliverables of the commissioned project (“find a way to improve the air conditioning in the big lecture hall”). Rather than draft a generic IP Agreement with nebulous definitions and requirements, draft a base IP Agreement and supply the specifics at the time of commissioning, reducing the ambiguities, uncertainties, guesswork, and opportunities for administrative bombast and abuse of authority.
The second driver was sponsored research contracts with special IP requirements. For industry, those requirements often involved assignment of patentable inventions, or a non-exclusive, royalty-free license to patentable inventions (and any other specified deliverables), or a first right to negotiate an exclusive license, or a license on terms no less favorable than the most favorable terms offered. None of these industry requirements force the university to take ownership of research deliverables. What the university does have to do is ensure that inventors and authors–those who would have the initial rights in deliverables, promise to comply with the requirements on those deliverables. For this, an IP Agreement may run in parallel with each contract that has special IP requirements, again tailored to be specific to the contract for which it is needed. No one participates in the sponsored project without agreeing to comply with its IP requirements. These are personal obligations, arising because initial rights in deliverables in university research that is not assigned and controlled by the university are personal rights.
“As a condition of participating in research activities with special IP requirements, you agree to comply with those special IP requirements [list of IP requirements, list of deliverables]; “as a condition of receiving payment for participating in research activities with special IP requirements, you agree to comply with those special IP requirements [list of IP requirements, list of deliverables].”
Such an IP Agreement may then be approved in advance by the sponsor as meeting its requirements for deliverables, further reducing any uncertainties with regard to contractual compliance.
If a university intends to operate an open research environment, and is willing to permit its research personnel to receive sponsorship for the research activities they choose to take on, then it is impossible for the university to accept research contracts that demand the university expand its claim to ownership (and control) for contributions to that research made by collaborators or volunteers. Even the standard patent rights clause authorized by Bayh-Dole extends only to employees “other than clerical and nontechnical workers” and is silent with regard to non-contracted collaborators, students, visitors, volunteers, and the like. If a sponsor demands that supported investigators do not disclose their findings or involve anyone else in their work–that is, operate a secret research program–then the research ceases to be “fundamental” research as defined by export control law and foreign nationals are subject to export license requirements (and other forms of discrimination) if they are to participate in the research. A university administration may set up closed laboratory areas for such work, but it comes at substantial expense and need for diligence in who is allowed access to the research prior to publication.
It appears the driver logic works like this in an administrator’s brain: “sponsors of research require IP deliverables; therefore, the university must take ownership of all IP to assure that the university does not breach its contracts with sponsors.” Or, in the case of federal funding: “the federal government requires universities to take ownership of IP made with federal support [utterly untrue, but we are considering the logic in administrators’ brains, not reality]; therefore, the university should take ownership of all IP to assure that the university does not violate federal law AND since the federal government has endorsed institutional ownership of IP as a good thing, to be fair to all inventors and authors, the university should take ownership of all IP, not just federally supported IP.” More pragmatically, the logic goes something like this: “if we are going to have jobs in IP management, then we must get all the valuable IP we can, and thus we cannot let any IP escape; therefore, the university must claim all IP” or “if we are going to make money from IP to support expansion of administration, then we must own all IP and pick it over for possible money-making positions; therefore, the university must claim all IP.” No matter that the premises are largely false and the reasoning is largely fallacious. These are the administrative thoughts that bounce around in administrators’ brains, when there are thoughts at all, and when any given argument is presented with a firm belief rather than as whatever is necessary to keep doing whatever it is that’s being done.
The cultural change in universities has largely been led by the inclusion of administrators representing Moloch IP culture. Originally administrators supported open research and innovation (before the terms were trendy). Research policies and patent policies identified the limited situations in which the university commissioned work (such as hiring people assigned to specific research projects) or an investigator negotiated special IP terms with a sponsor. Where money was made from patent licensing, it was made by agents outside the university. Money might be returned to support more research nationally, as was the case initially with Research Corporation.
The Wisconsin Alumni Research Foundation created an alternative approach in which a particular university, the University of Wisconsin, was the target of an annual donation, for which, in return, the university recommended that all inventors use the Foundation. WARF invested licensing income in the stock market, the stocks made money, and WARF donated a share of its earnings to the university each year, with the requirement none of the money was to go to the humanities or social sciences (and hence, Bayh-Dole’s later restriction on the use of royalties to “scientific research or education”).
Once Moloch administrators saw that money could be made from IP and used to expand research that might lead to more IP and thence more money, they started to take IP licensing in house–first the University of California and MIT, then Stanford, and then with Bayh-Dole university after university broke with Research Corporation, and then with their own foundations, and started their own licensing operations. Once they were in the business of IP licensing, it was easy for university administrators to demand institutional ownership of all IP. How else to make internal licensing operations successful? How else to demonstrate that institutional ownership of IP is a wise administrative decision? Of course, in practice, institutional management of IP to make money for universities has been largely a dismal failure. But you wouldn’t know it from the glossy brochures, the success stories presented as if chosen from innumerable examples (rather than being mostly all there are, and even then many of the stories are fake news).
PSU IP represents Penn State’s effort to claim all IP, with whatever rationalization anyone will accept–to comply with research contracts, to comply with federal regulations, to work in the public interest. Except it is all a crock and the institutional claim happens because administrators can manipulate policy to create the claim, even when the policy formally does not authorize the claim. There’s no justification other than administrative urge combined with misinformation and spin. The effect is, however, clear: dismantling the university research enterprise as an open activity. That’s the essence of Moloch administration, to control as much as possible to ensure that if there is to be any benefit, it come first to the administration.
Expansion of assistance. The new IP Agreement
To do whatever is required to enable the University (or its designee), at its expense, to protect PSU IP whether by patent, copyright or otherwise; including:
Compare with the 1992 IP Agreement:
To do whatever is required to enable the University (or its designee), at its expense, to obtain a patent upon any invention or discovery conceived or first reduced-to-practice by me
In 1992, the purpose was clear–obtain a patent. But now the assistance is generalized to any sort of “protection”–including by the use of “otherwise,” the most powerful form of protection available, so powerful that university administrators cannot conceive of what it might be, or if they do, they cannot bring themselves to provide the true name for “otherwise.” By the time one has designated “otherwise” protection in addition to patent and copyright, one is far afield from an intellectual property agreement. Consider: if “otherwise” includes “trade secret,” then the IP Agreement here purports to require faculty inventors not to publish or disclose their inventions or scholarly works until the university says they may. If that’s the case, then Penn State by policy formally invokes export control law on its operations, since it is then outside the exception for fundamental research provided in the export control regulations. No doubt no administrator at Penn State gives a rodent’s posterior about such a thing. The law only matters if someone is ready to enforce it.
In the new IP Agreement, there’s a list following the colon that itemizes some forms of assistance. In the old IP Agreement, there’s a list following the semi-colon that addresses the scope of the inventions and discoveries for which assistance is required. Again, very different treatments.
(a) making myself available for meetings and providing necessary documentation, data and research results to support the filing or prosecution of patent applications covering PSU IP,
(b) reviewing and signing documents from PSU or from patent attorneys retained by PSU (or its designee) to seek protection of PSU IP, and
(c) assisting the University (or its designee) in seeking licensees to commercialize PSU inventions;
Item (b) is roughly the assistance provision that one would include in a patent assignment. It is also roughly what is required by the (f)(2) written agreement in the patent rights clause authorized by Bayh-Dole. Item (a) compels the disclosure of “necessary documentation, data and research results”–even though there is nothing in IP policy that expands disclosure beyond that of the invention that has been made. Notice as well that while the definition of PSU IP is broad, what is actually addressed here is patenting. The broad definition does nothing at all to improve clarity.
Item (c) is the stinker. Why should any inventor be required to “assist” anyone in “seeking licensees to commercialize PSU inventions? The requirement isn’t even restricted to the inventions that the inventor has made. Any inventions, all inventions. That’s nasty. Further, what if the inventor professionally disagrees with the use of a patent to “commercialize” an invention? Why should the inventor be bound to “assist” in an activity that he (or she) fundamentally disagrees with? Here, the IP Agreement essentially demands that inventors do the job of administrators. If Penn State administrators are so hot and lustful to appropriate all faculty inventions, then why do they then have to insist that the faculty help them “seek” licensees?
In a voluntary IP practice, in which inventors offer invention rights to an agent, all of these matters are subject to negotiation and would be memorialized in an agreement. In some cases, a licensing agent might not want the assistance of inventors in seeking licensees. In others, the inventor’s involvement is essential.
There’s one more consequence to this (c) stinker. It not only obligates the inventor to assist but also obligates the university to allow the inventor to assist. There’s nothing here about “assist as requested by the University”–it’s a general statement that the inventor will assist, and not just with the inventor’s invention but with “PSU inventions” generally.
Full access to PSU IP policies. The new IP Agreement inserts a statement regarding access to IP policies and the employee’s obligation to “read, understand and abide” by them. This is bizarre. It is one thing to agree to abide by a policy, but it is another to agree to “understand” the policy. What does that mean? Given the drafting condition of the policy, one might take “understand” to be next to impossible. Here’s an IP policy that requires an IP Agreement to be signed that demands that people “abide” the IP policy, which other than making handwaving gestures toward precision only requires that people disclose certain inventions. Everything else that matters is continent, ambiguous, overclaimed, or unauthorized. It would take someone special to understand the policy. Heck, it’s clear Penn State administrators don’t understand their own policy. How could anyone else?
The purpose of such “read and understand” declarations is to set up a court claim that the employee knew the requirements. In liability situations, the purpose is to transfer blame (and responsibility) from the corporation to the individual: “She acted outside policy, knew the policy, understood the policy, and therefore was acting personally, rogue–so sue her.” Here in the IP Agreement, the “read and understand” declaration would appear to set up a claim of corruption, that the inventor who fails to disclose, assign, or assist is not merely ignorant but, because of this declaration, also violating ethics rules. “If you do not cooperate, we can destroy your reputation, your employment, your career, your finances–this is how determined we are to get your inventions and works of authorship.” That’s what someone should understand about the purpose of this provision.
Given, however, that the IP Agreement is an adhesion contract to be interpreted where ambiguous against the university, it is entirely possible that “understand” here expressly gives control of “understanding” the policy to the employee. It is up to the employee, as a condition of employment, as a contractual obligation to form a reasonable understanding of the policy. In that case, “understand” means, objectively and reasonably: “the policy requires me to disclose Research Intellectual Property and nothing more.” That, then, becomes the meeting of the minds in an adhesion contract, the basis for offer, acceptance, and consideration, the scope of the enforceable promise.
Legally bound. The new IP Agreement adds as a final line:
I intend to be legally bound by this IPA.
The 1992 IP Agreement lacks this line. Does this mean that those signing the 1992 IP Agreement did not need to intend to be “legally bound”? That is, is adding this declaration a material change to the IP Agreement? In both versions of the IP Agreement, the fundamental commitment is to “abide by” the IP policy. That requirement is already present elsewhere in university policy. Thus, to what extent does the IP Agreement even operate, if it requires what is already required by policy? For instance, if I happen to owe you $100, I cannot then contract with you to do some work for me and use payment of that same $100 as consideration for the contract. I already owe you the $100, so it cannot be consideration to make the new contract binding. Same here. If you already owe the university your agreement to follow the “regulations” of the university, then you can’t here in the IP Agreement offer as “consideration” for your employment anything that you already owe. You have to come up with something that you don’t already owe. And if assignment of IP isn’t owed by policy, then it isn’t owed as a condition of employment either, and thus if assignment is going to be owed, there has to be consideration other than employment for the promise to assign to make that assignment contractual and “legally binding.”