University Patent Management, Part I

Posted on June 20, 2016 by Gerald Barnett

Should a patent on an invention made at a university be managed any differently from a patent on an invention made in a company or made by an independent inventor?

That’s a fundamental question, and one that shapes university patent policies with implicit answers. For most American universities, that answer appears to be “no”–there’s no difference. A patent is a money-making asset, and any way one can make money is fair game–licensing or trolling, it’s all fair game. There is nothing in university patent policies that places limitations on university administrator exploitation of a patent–nothing that, say, makes the default a royalty-free, non-exclusive license; nothing that limits litigation for infringement; nothing that sets requirements for offering an exclusive license or limits the duration of such a license.

There may be in university patent policy language allowing a company to own inventions arising in research (for a higher fee) or to expect at least a royalty-free, non-exclusive license when sponsoring research (if the company pays for the entire cost of the research). But these sorts of policy statements are restrictions on money-making efforts, not restrictions on the general idea of a university-owned patent. These sorts of policy statements are there to deflect claims that administrators failed to make the money they have claimed to be able to make (to other administrators, to the faculty, to inventors, to the general public–mostly informally, but given how much attention is giving to the royalty-sharing formulas, money is the key thing. There are no rights-sharing formulas; no public-benefits-sharing formulas).

As far as university administrators are concerned, there is no difference between a university-owned patent and any other patent. Patent policies, where they do appear to limit administrators, is to authorize administrators, in certain circumstances, to not attempt to make the maximal amount of money–the implied policy then is “You have a mandate to make as much money as you can from the exploitation of university-owned patents, but in some situations, you will not be disciplined by the university if you allow a research sponsor to own an invention or receive a royalty-free license.” Continue reading →

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Some Lessons Learned

Posted on June 12, 2016 by Gerald Barnett

Here are some things I’ve learned over the years working in university technology transfer:

University technology transfer is fundamentally instruction–“a classroom for companies.”

Technology transfer is a matter of instruction, opportunity, and goodwill. It is not a system that can be run as a machine, to be attended to only when there’s a problem. It is not a matter of  a confused “sales funnel”–treating a huge input of “inventions” as if they were the prospective customers, to be whittled down to a few “success stories.” And it is not a matter of “investment.” The university is not “investing” in inventions for a “return on investment.” These are buzzword formulas that technology transfer folks repeat to rationalize why they do so little with what their university policy demands that they own.

Instruction is aligned with a university’s core mission. No cultural change is needed. No-one questions whether a university should be teaching what its people have discovered. No-one questions whether a university should charge tuition for such instruction (“tuition” means, after all, “a payment for instruction”). Make income from new technology workshops part of the royalty-sharing policy. Now we’re talking alignment of inventor interests with university programs. If university extension can pay for teaching services on top of regular salary, well so can new technology workshops. And why isn’t university extension, then, supporting such workshops in the first place? Continue reading →

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Cockroach Living in Technology Transfer

Posted on June 9, 2016 by Gerald Barnett

I didn’t intend to end up in university technology transfer, but I fell down a rabbit hole and here I still am. I have seen university technology transfer from both sides now. For 12 years, I worked for the University of Washington licensing program. I spent 6 more years at UC Santa Cruz. Then 3 years on a Ewing Marion Kauffman Foundation grant back at UW, but in the College of Engineering. And for 5 years since, I’ve been an independent consultant, as well spending a couple of years as a part-time lecturer at the UW Bothell School of Business.

At UW I started a group specializing in software and digital media. Eventually there were six licensing professionals and one office manager in the group. We handled “almost anything not in cages or fridges.” We worked across copyrights, patents, and trademarks. We did open source licensing and venture-backed startups, patent licenses, and whatever else. We created new approaches and tried them out–sole licensing (neither non-exclusive nor exclusive), make-use commons, source-available, affiliate-label marketing, subscriptions, site licensing, development projects before there’s any IP. We were mindful of money, but our goal was to provide resources for our principal investigators, programmers, and developers that they could not get readily for themselves, and took it from there. And we did make money–$3m to $6m per year, on a budget that didn’t get over about $750K a year–and that’s salaries, legal, ops, the works. So we made enough to cover our costs, but especially we helped groups get their materials out, and develop user communities that relied on our research and clinical tools.  Continue reading →

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Conspiracy against inventors’ rights and 18 USC 241/42 USC 1983

Posted on June 9, 2016 by Gerald Barnett

University administrators have been fond to claim that the Bayh-Dole Act gives their universities ownership of inventions made with federal support–or a right of first refusal, or a prohibition on assigning ownership to anyone other than the university. This was nothing more than a self-serving “presumption” about the law, not to be found in the law at all. After the Supreme Court in their Stanford v Roche decision taught university IP lawyers how to read, there is no doubt about it.

Patent rights are personal rights in property established by federal law: “Subject to the provisions of this title, patents shall have the attributes of personal property” (35 USC 261). The U.S. Constitution permits the federal government to secure to inventors “the exclusive Right” to their inventions (Article 1, Section 8).

There are proper ways to go about obtaining ownership of patent rights in inventions. One way is by mutual agreement. An inventor agrees to assign title in exchange for some consideration–money, paying for patent prosecution costs, proper management of the patent, whatever. Another is an agreement tied to employment. In such an agreement, continued employment may be the consideration for the agreement to assign patent rights. Employment alone–or the pay that attends employment–is not sufficient. There has to be something more. As the Supreme Court put it: “No one would claim that an autoworker who builds a car while working in a factory owns that car. But, as noted, patent law has always been different: We have rejected the idea that mere employment is sufficient to vest title to an employee’s invention in the employer” (10). Continue reading →

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The Very Model of a Modern University IP Policy Preamble

Posted on June 8, 2016 by Gerald Barnett

Recently, I have worked through intellectual property policies at Michigan and Texas. No university administrator is willing to write “We demand to own your work to try to make money, preferably by partnering with monopolist speculators.” That would violate the first principle of modern university IP policy writing: never write directly what can be buried in an abstraction or hidden in a list.

Consider. Here are the first six sentences of the UNLV Intellectual Property Policy. Let’s work through them to see how it operates. Each sentence of the preamble presents a coordinate list–often multiple such lists. But in intent and practice, one item in each list matters way more than the others. They are not coordinate elements at all. They are, shall we call it, “disprioritized” lists. Drafting by dispriortized list is a basic method of obfuscation. Please, if you want to write modern university intellectual property policy preamble, read on and learn.  Continue reading →

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Subject Patent Exhaustion

Posted on June 6, 2016 by Gerald Barnett

Caltech has just sued Apple for infringement of a patent. The patent in question, “Serial concatenation of interleaved convolutional codes forming turbo-like codes” (US Patent No. 7,116,710) includes this statement of government interest:

GOVERNMENT LICENSE RIGHTS

The U.S. Government has a paid-up license in this invention and the right in limited circumstances to require the patent owner to license others on reasonable terms as provided for by the terms of Grant No. CCR-9804793 awarded by the National Science Foundation.

Yes, this is a patent for a subject invention and falls under the requirements of the standard patent rights clause authorized by the Bayh-Dole Act. No doubt Apple will defend itself using all the available tools at its disposal, and somewhere in Apple management there will be discussions about how to deal with universities that attack. One line might be, as HP once did after Cornell turned on them, to pull out of sponsoring university research lots of places. All those university researchers probably never knew quite what hit them, because they didn’t think that it was Cornell Research Foundation administrators. What Cornell did–in addition to the nine years of fighting for what must have included a hefty cash settlement, which they did not share with all the scientists at other universities damaged by their action–was to destroy the political credibility within HP of those senior executives that had advocated for building research relationships with universities. Continue reading →

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From provider to predator: University of Texas patent policy, Part 4

Posted on June 6, 2016 by Gerald Barnett

In 2005, BethLynn Maxwell, a patent attorney then in the Intellectual Property Section of the Office of General Counsel for the University of Texas System, published a brief article on the Bayh-Dole Act, “Twenty-Five Years After Bayh-Dole” in the Office of General Counsel newsletter.  We know more now about Bayh-Dole than this article evidences, since we have Stanford v Roche to set matters straight, but it’s useful to take a look the article to get a sense of what University of Texas System attorneys were thinking about Bayh-Dole and how such thoughts may have contributed to changes in Texas patent policy.

The general drift of this brief article is that Bayh-Dole has been wildly successful in getting university technology transferred to industry as the basis for commercial products. Bayh-Dole has done this by giving universities outright ownership of inventions made with federal support. The claim is, then, that university ownership and licensing of patents, especially exclusively, is a good thing, endorsed by federal policy and proven by all the reports of success.

The problem with this line of reasoning is that there’s little to show that Bayh-Dole has been wildly successful as advertised, and Bayh-Dole does not give universities ownership of inventions. Continue reading →

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From provider to predator: University of Texas patent policy, Part 3

Posted on June 4, 2016 by Gerald Barnett

In Part 2 of this series I compared the preambles of the 1977 and 1988 versions of the University of Texas System patent-cum-intellectual property policies. The 1946 policy was so straightforward that it did not need a preamble. It was clear what the policy did–it limited claims that administrators could make in the name of the university for the inventive work of anyone at the university. The university could make a financial claim–up to 20% of income–and the university could encourage non-exclusive licensing of patents for sponsors of research. Done. Makes sense. Smart.

But there always seems to be someone who wants a preamble, just like there’s always someone who wants a mission statement–wasting hours and hours to produce something ghastly. So the preamble in 1977 was:

While the discovery of patentable processes or inventions is not the primary objective of the System, for any such discoveries made, it is the objective of the Board to provide a patent policy which will encourage the development of such inventions for the best interest of the public, the inventor, and the sponsor whenever an invention occurs, and will permit the timely disclosure of any patentable discoveries, whether by patent, publication or both.

The thrust of the 1977 preamble is (a) to encourage development of patentable inventions while (b) addressing the interests of the public, inventors, and research sponsors, and (c) ensuring timely disclosure of patentable inventions to the public.

Implicit in these points are administrative worries. Continue reading →

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From provider to predator: University of Texas patent policy, Part 2

Posted on June 4, 2016 by Gerald Barnett

In Part 1, we considered the 1946 University of Texas patent policy–clear, simple, smart–and the 1977 revision that grew more complicated but retained a focus on patents and the rights of inventors to decide whether to seek patents or just to publish. Now we consider how Texas turned its policies from providing resources to enable innovation to becoming an institutional predator on creative work of all kinds.

The 1988 Texas Patent Policy

The patent policy undergoes another revision in 1988. The form of the preamble is retained, but the policy is re-titled “Intellectual Property Policy” and “inventor” is replaced with “creator”; “invention” with “creation.” Immediately, we are in a different world. Inventor has a well defined usage, and to own an invention means to have rights to secure a patent on it. What one owns is a patent right. In the 1977 policy, this all makes sense: inventors decide whether they want to own (that is, patent) their inventions, and if so, then they work out the deal with the patent committee based on the circumstances. Otherwise, they publish and everyone is done with it.

But in 1988, things are different. The changes make nonsense of the preamble:

While the discovery of patentable processes or inventions and the creation of other intellectual property is not the primary objective of the System, for any such discoveries or creations, it is the objective of the Board to provide an intellectual property policy which will encourage the development of inventions and other intellectual creations for the best interest of the public, the creator, and the research sponsor, if any, and that will permit the timely protection and disclosure of such intellectual property whether by development and commercialization after securing available protection for the creation, by publication or both.

Take a look at a file compare between the 1977 preamble and its 1988 doppleganger:

Texas77-88

Continue reading →

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From provider to predator: University of Texas patent policy, Part 1

Posted on June 4, 2016 by Gerald Barnett

I have previously looked at the University of Texas System intellectual property policy (“Texas wants you anyway“; “The most wonderful thing in the world“). I find myself drawn back to it again and again. In its 2012 version, the Texas policy is full of contradictions and inconsistencies, all written up in the finest legalese. Everything is bigger in Texas, including patent policy bombast. Broadly, Section 2 of the policy states a general claim of ownership, except for Section 5, which is about stuff not claimed, but Section 2 does not notice that Section 7, having to do with copyrights, also restricts the claim in Section 2, but is itself subject to Section 12, which allows for contracts to alter policy and so perhaps to override Section 7 and all the other Sections, too. “We compel you to follow policy, but we are not bound to follow the same policy, and if we change our minds, you have to change, too.” Follow that?

If a policy is not mutually enforceable, it’s not a contract, and so cannot be enforced in court. And if it’s not law, then it does not have the backing of the power of the state to prosecute it. It’s more like “guidelines.” If it is not a contract and not law, then it must operate as a delegation of authorities within an institutional framework, and not as an instrument that can extract private ownership of anything from anyone unless they choose to comply (or, in the abstracted world of administrative politics, are deceived or coerced into complying). A delegation of authority within an organization does not carry with it the power to compel–all it can do is confer standing to act on behalf of the organization (fictional but helpless and conscience-less thing that an organization is) and offer organizational benefits and sanctions. That is, “if you refuse to assign your personal property to us, we can fire you” but not “we can sue you to obtain ownership of your personal property” (which would appear to require a theory of contract or law somewhere to sustain).

The typical primary benefit in companies for following a policy guideline is continued employment. In a world of academic tenure, however, ignoring guidelines is not necessarily a sufficient cause for termination. Of course, university administrators packing lawyers with nearly unlimited legal budgets can attempt to impose their will on most anyone. Continue reading →

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