Source: https://www.aaup.org/report/defending-freedom-innovate-faculty-intellectual-property-rights-after-stanford-v-roche-0
Timestamp: 2019-04-20 20:27:52+00:00

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The report that follows, prepared by a subcommittee of the Association’s Committee A on Academic Freedom and Tenure, was approved by Committee A and adopted by the Association’s Council in November 2013.
Tensions over control of the fruits of faculty scholarship have been slowly building since the 1980s and have intensified over the last three years. There have long been differences of opinion over ownership of patentable inventions, but recently a number of universities have categorically asserted that they own the products of faculty research. And there is increasing institutional interest in declaring ownership of faculty intellectual property subject to copyright—most notably evident in demands that faculty members cede ownership of online courses and other instructional materials to their universities, a trend that began escalating in the 2012–13 academic year.
The AAUP is issuing this report in the midst of these fundamental changes in the character of faculty rights and academic freedom. Its purpose in doing so is to put the dialogue on intellectual property on a new path, one that leads to a principle-based restoration of faculty leadership in setting policy in this increasingly important area of university activity. Administrative efforts to control the fruits of faculty scholarship augur a sea change in faculty employment conditions, one too often imposed without negotiation or consent. Indeed, underlying these developments is an administrative conviction that faculty members are not independent scholars, teachers, and researchers but rather employees no different from those working in for-profit corporations that exist for the benefit of investors.
The topics addressed in this report are moving targets. New developments occur almost weekly. Thus, for example, in May 2013 the University of Pennsylvania issued a draft policy declaring that faculty members could not decide to design and offer an online course through an outside company without university permission. The draft policy makes it clear that Penn could refuse permission because it wants to curtail potential competition with its own online offerings. The same reasoning could be applied to a faculty member expecting to issue a potentially profitable book with a commercial press, since a university could insist that its own press publish the book instead or that it must negotiate the contract with the commercial press and take a share of the income for doing so. Penn’s draft policy also makes it clear that it wouldn’t matter if the faculty member designed the course on his or her own time. The mere fact of employment now apparently trumps the deeply rooted expectation of faculty independence.
This report begins with some basic definitions, then introduces the key issues at stake. A section summarizing the history of university policies on patentable and copyrightable intellectual property follows. Finally, the report offers eleven very specific principles that ought to be included in handbooks or collective bargaining agreements to clarify intellectual property policies.
Much of this report is adapted from Recommended Principles to Guide Academy-Industry Relationships, a book-length study that the AAUP Foundation published in 2014.
The management of inventions, patents, and other forms of intellectual property in a university setting warrants special guidance because it bears directly on the university’s core values, including academic freedom, scholarship, research, shared governance, and the transmission of knowledge. These core values distinguish university activity from that of government and industry, and they provide a basis for the argument for public support of research and the role of the university as an independent contributor to both policy and commerce. The negotiation and management of faculty-generated intellectual property can be complex and can carry significant consequences for those directly involved in negotiations (faculty investigators, inventors, and authors as well as companies, university administrators, attorneys, and invention-management agents) and for others who may be less directly affected (competing companies, the public, patients, and the wider research community).
Intellectual property refers broadly to patents, copyrights, trademarks, and (according to some definitions) trade secrets.1 In common usage the term also refers to the underlying subject matter that is controlled by the owner of these property rights (inventions, works of authorship, and identifiers that distinguish goods and services in the marketplace). Patents provide the owner with the right to exclude others from “practicing” (making, using, and selling) an invention. A patent, unlike a copyright, goes beyond the protection of written expression to accord an exclusive right to the operational principles that underlie the invention. Copyright prohibits unauthorized copying or modification of particular instances of expression; a patent permits the exclusion of work created independently, is not limited to the precise “expression,” and has no “fair use” exception, even for nonprofit purposes. Thus, patents may have an additional and potentially substantial impact on university research, may affect the value and role of scholarly publication, and may influence collaborations and the transfer of technology developed or improved in other research settings. Recognizing the potential for harm, the faculty of a number of medical schools for years prohibited the patenting of inventions pertaining to public health.
Patents may cover new, useful, and nonobvious inventions, which are categorized by patent law as processes, machines, manufacture, and composition of matter. Patentable inventions thus may span a wide range of results of academic work, including devices, chemical compounds, biological materials, research methods and tools, production processes, and software. Design patents cover new designs of useful articles. Plant patents and related plant-variety protection laws cover reproducing, selling, or using patented plants. Patents are acquired by an application that is reviewed by a patent examiner; the process may take up to three years. A patent has a term of twenty years from the date of application.
Trademarks distinguish goods and services in the marketplace and are classed as trademarks, service marks, certification marks (showing testing by an independent laboratory, for instance), and collective marks (identifying membership in an organization, such as real estate agents). Trademarks may be common law—that is, acquired by use in commerce—or registered at the state or federal level. A trademark remains in existence as long as it is being used. In academic settings, names, logos, and tag lines for assets such as software programs, research laboratories, new techniques, services offered by departments, websites, and programs of research may all come to have trade¬mark status.
Copyright encompasses original works of authorship fixed in any tangible medium of expression. Copyright vests in a work when it meets these requirements of the law; no application or registration process is now required. Classes of copyright-eligible subject matter include literature and other printed matter, architectural or engineering drawings, circuit diagrams, lectures and other instructional materials, musical or dramatic compositions, motion pictures, sound recordings, choreography, computer software and databases, and pictorial and sculptural works. Copyright now has a term of the life of the author plus seventy years, or, in the case of work made for hire, ninety-five years from the date of first publication or 120 years from the date of creation of the work, whichever is shorter.
These lists are not exhaustive. The scope of work subject to intellectual property claims has expanded considerably over the past thirty years as a result of both changes in law and changes in university policies. Additionally, the term of copyright has been extended and registration formalities removed. Thus, even where university intellectual property policies have not changed, the range of faculty-led work subject to these policies has expanded, complicating the landscape for discussions of the appropriate role for institutional controls on scholarship and the responsibilities to the public of faculty authors, inventors, and entrepreneurs.
II. Why Does Intellectual Property Matter?
Whether ownership of a particular invention resides with the inventor or is assigned by the inventor to a university technology-transfer office, a university-affiliated foundation, or an independent invention-management agency, all those involved need to recognize the distinctive role played by inventions emerging from scholarly research. Faculty investigators and inventors, together with university administrators, must shape policies that govern the development and deployment of patent rights accordingly.
One fundamental principle should be clear: inventions are owned initially by their inventors. That principle is established in both the US Constitution and federal patent law. As the US Supreme Court affirmed in its 2011 decision in Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc. (Stanford v. Roche), federal funding of faculty-led research does not change this principle: inventors in a university setting using federal funds are also the initial owners of their inventions. Universities, as hosts of federally supported research, have neither an obligation nor a mandate under federal law to take ownership of faculty inventions made in such research. Ownership of patent rights attached to an invention, however, may be transferred to another party by a written instrument signed by the inventor. Control of patent rights can be distinguished from ownership. A patent owner may contract with (or transfer title to) another entity that manages those patent rights on the owner’s behalf. Furthermore, a patent owner’s invention may include elements that are subject to the patent claims of others, and therefore the owner and any of the owner’s licensees may not be able to practice the invention without a license from other patent holders. A university may become the owner of patent rights through voluntary assignment by a faculty inventor, as was the case at most universities prior to the Bayh-Dole Act of 1980.
Some universities have sought to make their ownership of all faculty patent rights a general condition of employment, which implies that the university controls faculty scholarship as an employer and that faculty members are expressly hired to invent. Some cite use of university facilities as a justification for asserting their ownership or claim that participation in externally funded research requires that the university own the resulting intellectual property. Though these strategies are increasingly preferred by many universities, there is little to indicate that such ownership claims advance university interests, whether taken narrowly as the pursuit of income from patent licenses or broadly in terms of the social value of research and broad access to its results.
One fundamental problem with university ownership of patent rights to faculty inventions is that it creates institutional conflicts of interest between the university’s governance role and its own financial and competitive interests in exploiting patented inventions. It is all too easy for universities to conflate royalty income from the use or manufacture of patented inventions with their public service mission to enhance economic growth while failing to perceive, or to acknowledge, the conflict that arises with respect to other institutional responsibilities and the university’s long-standing commitment to the broad dissemination of knowledge.
When faculty inventors and university administrators agree to use patents only for defensive purposes and to allow general access to technology platforms and make them readily available for adoption, there is generally minimal institutional conflict of interest. But when an invention is used to seek financial gain by exploiting monopoly marketplace positions—as necessary as this may be at times—faculty inventors and administrators alike find themselves in a far more conflicted position. In these situations, it may be beneficial for the university and the faculty inventor to use an external invention-management agent to promote development of the underlying invention while simultaneously protecting continued use of the invention in ongoing research and education.
Despite distinctions often drawn in university policy statements, inventions are a natural outgrowth of scholarly activities and have enjoyed a symbiotic role in faculty research for more than a century. As patent law has expanded what is patentable to include software, business methods, and biological materials, results of scholarly activity have become more exposed to ownership claims based on patents. The scholarly nature of university-based inventions does not disappear with the addition of a potential patent or other intellectual property rights. A patent is simply a specialized way of transmitting knowledge to society, of sharing a new invention with the world in exchange for limited rights to exclude others from practice in order to promote investment, development, and exploitation of the invention. Thus, patented inventions and other discoveries subject to intellectual property protection should properly be viewed as extensions of scholarship subject to the principles of academic freedom and faculty rights, just as are copyrights in manuscripts prepared by faculty members. Patents are regularly used in industry to exclude others from using inventions. But faculty members should often be focused instead on creating conditions that give the public access to inventions, regardless of the possibility that a monopoly position might attract more payment to the university for granting an exclusive license. It is a rare university-hosted invention that absolutely must enjoy a monopoly in order to attract the investment necessary to be used and developed.
Commercial development of university knowledge to stimulate economic growth and bring public benefits is unquestionably good. But some administrative practices associated with patenting and licensing operations may negatively affect economic growth as well as scholarship, the public interest, and the university's educational mission.2 These include narrow exclusive licensing, speculative reselling and relicensing of patent rights, “assert licensing” (in which an offer to license is preceded by a claim of possible infringement), trolling activities (in which litigation is considered the primary means to realize the value of a patent), and aggressive reach-through provisions (which claim an interest—ownership or license—in inventions and other developments made with the use of a licensed invention). Other activities associated with commercialization may be consistent with scholarship and academic norms, particularly when broad access to university inventions and research is protected through fair, reasonable, nonexclusive licensing and where practice of the invention does not require any product to be developed, as is the case with many inventions that are methods. The university or other licensing agent should make an explicit dedication of rights for research and experimental practice. Faculty investigators and inventors must have a strong voice in decisions involving patent management. A university administration and its faculty collectively also have an obligation to ensure that both institutional and individual interests in using patents to seek financial and logistic advantages are pursued within the context of (and remain subordinate to) the university’s broader scholarly and public research missions.
Both contracting and licensing of intellectual property may be managed directly by the university or through one or more outside agents (such as a research foundation working under contract with the university or a private invention-management agency). Licensing is also regularly undertaken by inventors acting privately, as with open-source software. When negotiating sponsored research agreements, a university administration and its invention-management agents must address the management of intellectual property and proprietary matter that may be provided by the sponsor as well as the disposition of any inventions or discoveries that may arise in the course of the sponsored project (including intended deliverables, unexpected discoveries, or findings entirely unrelated to the sponsor’s commercial goals).
University administrators and faculty members can also make research funded by the federal government and other sources available for public benefit. This might occur through broad dissemination of the research (as happened with the Cohen-Boyer gene-splicing technique, developed at Stanford University and the University of California, San Francisco, which launched the biotechnology revolution) or through more targeted exclusive licensing, which gives one firm—say, a pharmaceutical company—monopoly rights to a discovery provided that the company invests the substantial resources required to develop the discovery into a viable new drug.
Finally, a university’s nonprofit status and its reliance on public funding mean that its management agents are responsible for upholding high academic, educational, and research standards. The obligations of nonprofit institutions necessarily shape the opportunities that may be considered by faculty members and administrators in choosing licensing models, invention-management agents, and acceptable licensing terms and practices.
The keys to proper intellectual property management are consultation, collaboration, and consent. Consultation does not guarantee that invention licensing and management negotiations will be easy, but it does promote a system of checks and balances that can potentially produce better overall results. Any of the parties to such negotiations can exercise bad judgment. Faculty members may have a sound understanding of the science and technology underlying their inventions but be unable to gauge their usefulness to industry or their marketability. University technology-transfer officers, by contrast, may understand the legal and technical aspects of an invention but not the underlying science with its uncertainties and thus may overstate an invention’s commercial value and misjudge how to disseminate it most effectively. Each party in these negotiations (a university technology-transfer office and a sponsoring company or a faculty member) can be motivated by the narrower goal of maximizing profits and fail to consider the best interests of the public. That is one reason why faculty members collectively, through their governing bodies, need to be involved in setting policy.
The dangers in having institutions or their agents exercise unilateral authority over patenting and other intellectual property decisions are illustrated in a cautionary tale summarized by Siddhartha Mukherjee in his 2010 book The Emperor of All Maladies: A Biography of Cancer. In the late 1980s, Brian Drucker, a young faculty member at Boston’s Harvard University–allied Dana-Farber Cancer Institute, was investigating chronic myelogenous leukemia (CML), a disease that affected only a few thousand people annually but was incurable, leaving those it did affect with a life expectancy after diagnosis of only three to five years. Drucker wanted to determine whether drugs might intervene in the cancer’s genetics. Scientists at the pharmaceutical company Ciba-Geigy had synthesized a number of promising compounds, which were held in the firm’s freezer in Basel, Switzerland. Drucker proposed a collaboration between Ciba-Geigy and the Dana-Farber Cancer Institute to test those compounds in patients, but, according to Mukherjee’s account, “the agreement fell apart; the legal teams in Basel and Boston could not reach agreeable terms. . . . Scientists and lawyers could not partner with each other to bring these drugs to patients.”3 It was not until Drucker moved to Portland’s Oregon Health and Science University in 1993 that he was able to get independent authority from an academic institution to move his research forward.
As this account reminds us, faculty members and administrators can fulfill an important shared governance role by collaboratively establishing the university-wide protocols for managing faculty inventions that will protect the best interests of the faculty, the university, and the national science and research communities while also promoting technological innovation, public health, economic development, and the public good. The AAUP recommends that faculty senates, together with their university administration, consider adoption of principles 11–21, delineated below in section V, to ensure that academic inventions and intellectual property management advance all these goals while protecting academic freedom.
Current disputes over faculty intellectual property have their roots in several trends and events. Declining state funding for higher education has led public universities to seek new revenue streams, including royalties from the licensing of faculty inventions. Unfortunately, many universities do not break even, and where there is licensing income, it is used not to offset costs in education but rather to supplement research budgets, which may actually create even more demands on administrative resources. More recently, the impulse to seek profits from faculty work has been extended to instructional materials. The long-term effects of landmark congressional legislation designed to stimulate campus-based research and development have also come to a head over the last two years, dramatically increasing administrative efforts to control faculty intellectual property. Legislation in this area began with a 1980 bill sponsored by Senators Birch Bayh and Robert Dole, known as the Bayh-Dole Act. Although it continued with a 1981 tax credit for research and development (enhanced in 1986) and relaxed antitrust rules for joint research and development ventures passed in 1984, Bayh-Dole remains the key piece of legislation in current controversies.
The Bayh-Dole Act addresses inventions and associated patent rights, not other forms of intellectual property. It established a uniform policy across all government agencies with regard to the use of inventions by federal agencies in federally supported research at universities, nonprofit organizations, and small businesses. The act did not mandate that universities own or that they have a first right to own inventions made with federal support, nor did it require that they commercialize such inventions. It did require universities to honor the conditions of a standard patent-rights clause to be developed by the Department of Commerce for use in all federal funding agreements. That standard rights clause instructs universities to require their research personnel to make a written agreement to protect the government’s interest in any inventions they may make.
The written agreement—under the standard patent-rights clause, to be required by universities of their research personnel—provides (1) that faculty members notify their university when they have made an invention with federal support; (2) that faculty members (as initial owners of their inventions) sign documents allowing patent applications to be filed when the owner of the invention, which may be the government or an invention-management agent, desires such an application to proceed; and (3) that the inventors sign documents that establish the government’s rights in their inventions, which may include assignment of ownership or a grant to the government of a nonexclusive right to use an invention developed with federal funds. The latter requirement assures federal agencies that they have access to federally funded inventions for government purposes.
These requirements were spelled out in a patent-rights clause that Bayh-Dole authorized the Department of Commerce to create. Universities—including the entire University of California system—have tried to claim that the only way they can guarantee that faculty members will honor these responsibilities is by taking ownership of all faculty inventions, but obviously there are contractual alternatives to what amounts to a wholesale institutional grab of significant developments of faculty scholarship. Indeed, faculty members have long been able to honor these requirements without assigning their intellectual property rights to the university. Bayh-Dole also carefully avoided dictating to universities and faculty members alike what patent rights they might be interested in or how these rights might be used—whether dedicated to the public, licensed nonexclusively, licensed exclusively, or held so the university could develop an invention directly.
Nowhere does the act mandate university ownership of faculty inventions. Indeed, until a university intervenes—except for the requirement of the written agreement, which confirms the delegation of personal responsibility to potential inventors—the operative relationship is between the government and the inventor. It is only when a faculty member chooses to assign rights to another agent, such as the university, that Bayh-Dole’s complexities come into play.
But the Supreme Court in its ruling refuted this interpretation of the law. For while Bayh-Dole requires universities to secure faculty agreement to protect and honor the US government’s interest in federally funded inventions, the Court concluded that there was nothing in the act that automatically vested title to faculty members’ own inventions in their university employers. Nor does the act require faculty members to assign their inventions to their universities or any other agent for management.
In its own successful amicus brief, the AAUP elaborated on this very point, arguing that Bayh-Dole does not alter the basic ownership rights granted to inventors by law. Rather, it helps bring inventions forward to benefit the public by clarifying that government agencies are to allow certain assignees of federally funded inventions to retain ownership, if and when they come to accept ownership, provided they meet various requirements to protect the government's interest and the public interest.8 The high court agreed, ruling that US patent law has always favored, and should continue to favor, the rights of individual inventors and that universities need a written assignment from researchers to establish ownership of their inventions.
The AAUP considers Stanford v. Roche an important victory for faculty rights. The Supreme Court decision demonstrates once again that academic researchers and inventors remain, as they have traditionally been, much more than mere employees of their institutions, a conclusion underscored by the respect afforded them by the federal government in its contracting with universities. Arguments underlying the compulsory assignment of faculty intellectual property to university employers (which continue to be advanced by Stanford, the Association of University Technology Managers, the Association of American Universities, and many university administrations) begin with the assumption that faculty members are no different from corporate employees who owe their employers the fruits of their labor. But the AAUP’s 1915 Declaration of Principles on Academic Freedom and Academic Tenure anticipated and firmly disputed that claim. The declaration observed that faculty members could not maintain academic freedom and the ability to serve the interests of society as truly independent experts and academic scholars unless they were recognized as “appointees,” not corporate employees.
Few academic administrators would now disagree that academic freedom firmly secures faculty members' rights to direct and control their own scholarly research and classroom instruction. By attempting to assign ownership of faculty research inventions (and, more broadly, intangible assets in any form) to institutions, university administrations are effectively arguing that faculty members lose academic freedom the moment they become inventors, at which point their scholarly autonomy disappears and they become mere employees. The argument amounts to an assertion of employer control over faculty research, including the dissemination and possible future uses of academic research discoveries and results. Such a claim is as objectionable for faculty research as it is for classroom instruction. It is also objectionable to postdoctoral fellows and students, who should never be expected to give away their rights as inventors to their universities.
Of course, professors (and other kinds of academic investigators) may choose to negotiate separate contractual agreements with their universities outside of their normal teaching, research, and scholarly responsibilities. These agreements typically involve the performance of optional tasks that may be expressly identified in advance as “works for hire,” in which university ownership claims to resulting intellectual property may be reasonably included by mutual agreement. Such a situation might arise, for example, if a professor voluntarily consents to signing a discrete work-for-hire contract to develop a new online course. This kind of arrangement—which permits a university to own and distribute a course through its online education division—is altogether different from university claims to automatic, broad ownership of all intellectual property developed in the course of ordinary and continuing faculty research, scholarship, and teaching. Such claims pose a direct challenge to academic freedom because they undermine faculty members’ ability to control and direct the dissemination of their research.
That said, it is altogether inappropriate to require a faculty member to cede ownership of a course to the university merely because the course is prepared in a format suitable to online presentation. Faculty members who do so should realize they may be signing away to the university their right to modify the course or control its performance. The university may modify the course, assign it to someone else to teach, or change the attribution of authorship. The major national outlets for massive open online courses (MOOCs) are so far apparently not demanding ownership of university-based courses. Nor do they require universities to assert ownership. University administrators are simply exploiting the situation as an opportunity to take ownership of instructional intellectual property, when all that is needed is for a faculty member to grant permission to the university to host a course in an online program.
The faculty member shall retain ownership of all works he or she produces for . . . online instruc¬tion. Thus, in the absence of a separate, written “work-for-hire agreement” which may supersede this agreement, the undersigned faculty mem¬ber shall be deemed to be the sole owner of all intellectual property rights in his or her course materials, even though the faculty member is receiving a financial stipend to support the cre¬ation of online lectures, electronic presentations, podcasts, quizzes, tests, readings, simulations, including development of software, and other teaching and learning activities or material. The fact that the faculty member might use common campus resources (e.g., computers, library books, library databases, software licensed to CSULB for faculty and staff use, consultations with reference librarians, assistance from the Faculty Center for Professional Development and Instructional Technology Support Services staff) shall not alter faculty ownership of the works produced by the faculty member.
The university shall make no claim of ownership or financial interest in course materials prepared under the direction of a faculty member unless the university and faculty member have so agreed in a separate, voluntary agreement. Payment of a financial stipend, use of university resources, or release time to develop course materials shall not be construed by the university as creating a basis for a claim of institutional ownership of such materials, nor shall it be assumed that a work-for-hire relationship exists between the university and the faculty member with regard to the preparation of any such materials.The faculty member shall retain ownership of all works he or she produces for . . . online instruc¬tion. Thus, in the absence of a separate, written “work-for-hire agreement” which may supersede this agreement, the undersigned faculty mem¬ber shall be deemed to be the sole owner of all intellectual property rights in his or her course materials, even though the faculty member is receiving a financial stipend to support the cre¬ation of online lectures, electronic presentations, podcasts, quizzes, tests, readings, simulations, including development of software, and other teaching and learning activities or material. The fact that the faculty member might use common campus resources (e.g., computers, library books, library databases, software licensed to CSULB for faculty and staff use, consultations with reference librarians, assistance from the Faculty Center for Professional Development and Instructional Technology Support Services staff) shall not alter faculty ownership of the works produced by the faculty member.
The university shall make no claim of ownership or financial interest in course materials prepared under the direction of a faculty member unless the university and faculty member have so agreed in a separate, voluntary agreement. Payment of a financial stipend, use of university resources, or release time to develop course materials shall not be construed by the university as creating a basis for a claim of institutional ownership of such materials, nor shall it be assumed that a work-for-hire relationship exists between the university and the faculty member with regard to the preparation of any such materials.
The faculty member shall retain ownership of all works he or she produces for . . . online instruction. Thus, in the absence of a separate, written “work-for-hire agreement” which may supersede this agreement, the undersigned faculty member shall be deemed to be the sole owner of all intellectual property rights in his or her course materials, even though the faculty member is receiving a financial stipend to support the creation of online lectures, electronic presentations, podcasts, quizzes, tests, readings, simulations, including development of software, and other teaching and learning activities or material. The fact that the faculty member might use common campus resources (e.g., computers, library books, library databases, software licensed to CSULB for faculty and staff use, consultations with reference librarians, assistance from the Faculty Center for Professional Development and Instructional Technology Support Services staff) shall not alter faculty ownership of the works produced by the faculty member.
A provision like this would be especially relevant to the creation of MOOCs, where the use of university resources—especially assistance from staff—tends to be greater. One might note, however, that universities do not typically ask for an actual accounting of resources used.
The Stanford v. Roche decision challenges a number of practices university administrators have imposed on faculty members since Bayh-Dole, practices that lack legal standing. Soon after the Supreme Court’s ruling, intellectual property experts predicted that US universities would respond defensively by incorporating new clauses in faculty employment contracts that assign ownership of faculty inventions to the institutions automatically.9 The University of California is acting comprehensively with a different strategy: at the end of 2011 it began demanding that current faculty members sign a letter assigning ownership to all their future inventions to the university.10 Such an arrangement is called an assignment of expectant interests, or a “present assignment.” The claim made for such assignments is that they become effective the moment an invention is made, without the need for notice to the university, review of circumstances, or a determination of the university’s proper interest in the invention as provided by policy.
The AAUP has in its files copies of letters from senior UC administrators informing UC faculty members that the university will refuse to approve their grant applications if they have not signed the new patent/invention assignment form. Indeed, the university is withdrawing already-submitted applications if faculty members refuse to comply.
In requiring present assignment of all future patent rights from current faculty members, the UC system is effectively violating the agreements faculty members made when they were appointed, for it had long followed a policy of evaluating inventions on a case-by-case basis. If that long-standing policy had contractual status, then the new requirement effectively modifies a contract without negotiation or consent. At the same time, institutions like the University of Illinois that have responded to Stanford v. Roche simply by posting a universal claim to institutional patent ownership on the university website are no better observers of academic freedom and faculty rights. They are imposing an objectionable condition of employment without a contract at all.
These deliberate strategies represent a disturbing, ongoing trend. Most of the developments in university research and invention policies over the past thirty years have significantly limited or even ended opportunities for faculty investigators and inventors to control the disposition of their research results and instructional materials, whether prepared for their colleagues, for a research sponsor, for industry, or for the classroom. Some universities, such as the University of Washington, invoke state ethics laws to exclude faculty investigators from participating in intellectual property and invention-management transactions involving the state because, the universities argue, the faculty members might receive pay and other financial benefits from such negotiations (such as summer salary, which would not otherwise be allocated) and might therefore have a personal interest in the research agreement.
Universities also now sometimes insert automatic institutional ownership clauses into standard sponsored research agreements with industry and private foundations, claiming title and management rights to all faculty inventions created under the agreement even when the sponsor does not require such institutional interest. Faculty members with little bargaining power, including PhDs in their first tenure-track jobs, are particularly vulnerable to pressure to sign away their invention rights, possibly for their entire careers.
Many current university policies distinguish between faculty intellectual property that can be protected by copyright and intellectual property that is patentable, with universities commonly asserting automatic institutional ownership claims only on patentable intellectual property. This distinction is fundamentally flawed and should not be used in determination of ownership rights: it is not based on any rational analysis of the nature of faculty research and productivity, and it violates academic freedom. Indeed, the possibility arises that universities will expand their intellectual property ownership claims to copyrightable faculty work as well, given that the distinction in this context is arbitrary.
Since 2007 the National Association of College and University Attorneys (NACUA) has promoted university ownership of both patentable and copyrightable intellectual property. That year, four attorneys delivered a paper, “Creating Intellectual Property Policies and Current Issues in Administering Online Courses,” at NACUA’s annual meeting, and NACUA posted the paper on the members-only section of its website. The AAUP obtained a copy in 2012, and Inside Higher Ed subsequently obtained permission from NACUA to make it public.11 The authors call for comprehensive university ownership of faculty intellectual property whenever its creation has involved substantial use of university resources. “Substantial resources,” they argue, “might include specialized computer resources or other equipment and significant use of student or research support.” A large number of income-producing activities, including textbook authorship, would readily fall under this broad definitional umbrella.
The NACUA paper also stipulates that institutions may claim a share of faculty consulting income if “the faculty member is involved with university research in the same area as the consulting” or if the consulting is in the same general area in which the faculty member teaches. Both conditions are widely applicable to faculty members consulting across numerous academic disciplines. Indeed, it is improbable that faculty members would be consulting in areas for which they have no demonstrated expertise as scholars and teachers. The NACUA paper further recommends that faculty members’ right to make any software they have created freely available through open-source licensing should be subject to review to determine whether “the goals of the institution would be better served through commercialization.” Such positions are serious challenges to academic freedom; from the perspective of universities’ long-standing commitments to broad public dissemination of new knowledge, they are all the more troubling. If a professor judges that his or her research would be more broadly used in continuing research or commercial applications if it were freely disseminated through “open sourcing,” why should that professor be compelled to adhere to the dictates of the university’s technology-transfer officers, who typically have far less insight into the technology in question and its possible applications? Why, furthermore, should faculty members lose the right to provide open access to their research if the technology-transfer office’s preference for control—and the imposition of licensing fees—stems principally from a desire to maximize revenue for the university rather than a desire to maximize public use of the invention? Such preferences for profit seeking undermine claims that institutional ownership is the best route to serving the public good.
The recommendations contained in the 2007 NACUA paper violate the fundamental principle that faculty members should control their own research, and they further encourage universities to assert control over all potentially profitable faculty research products, regardless of whether those products are subject to copyright or are patentable. Indeed, one attitudinal survey of university technology-transfer officers, conducted by researchers Jerry Thursby, Richard Jensen, and Marie Thursby, found that most such individuals assume that comprehensive institutional ownership of faculty inventions is already the norm.12 In response to the question “Who owns inventions and materials made or developed by faculty members or other personnel in your university?” all but one technology-transfer officer in the sample asserted that the university owns patentable inventions and materials. For copyrightable inventions, 66 percent stated that the university was also the owner.
A compulsory ownership claim changes the relationship between the faculty and the administration from one of administrative governance and support to one of an employer with authority over the disposition of work of employees. However routine in companies, such a relationship is neither routine nor acceptable for university faculty members.
The policy for the University of Texas, adopted in 1945, similarly asserted that “the title to a patent for any discovery or invention made by an employee of the University of Texas belongs to the said employee and he is free to develop or handle it in any manner he sees fit.” The University of Arizona in 1939 also declared that “no inventor shall be compelled to submit an invention to the Patent Committee.” Princeton adopted its policy in 1938: “If a member of the University desires to obtain a patent on his own responsibility he may do so.” All three institutions did mandate modest profit sharing, which remains an appropriate and reasonable practice today. These university policies demonstrate that faculty research ownership and intellectual property rights do not have to be invented; they merely need to be revived, publicized, and reinforced.
The Stanford v. Roche decision opens the door for faculty members and their governing bodies to press for a return to the far stronger faculty inventor rights that led the development of new technology in the decades prior to the passage of the Bayh-Dole Act, and it highlights the need for more visionary shared governance systems around intellectual property and invention management. The Supreme Court’s ruling strongly bolsters the AAUP’s position that faculty members should be free to control the disposition of their scholarship without interference by university intellectual property administrators. It logically follows that faculty members should be free to choose how their inventions are managed, including how best to disseminate, license, or develop their discoveries, as well as which management agent is best equipped to work with them to handle the patenting and license negotiations. As a university makes disposition of these rights a condition of employment, these rights could be secured for faculty members in collective bargaining agreements.
Under such a system, professors might very well choose to grant invention rights to their own institutions. But those institutions would have to compete for faculty business on a level playing field; they could not simply claim automatic monopoly control over faculty research. Instead, they would have to offer services consistent with faculty investigator objectives and be held accountable for the commitments made to support licensing of the invention. The institutions would also, then, have to show how their program of invention deployment better served the public than comparable services offered by private invention-management agents. Faculty members could choose instead to work with an outside intellectual property expert or management agency (unless they had previously agreed otherwise).
The AAUP agrees with the US Supreme Court that universities have a legal obligation to honor faculty inventor rights and to respect the central role of faculty members in the disposition of intellectual property deriving from their own research. The strongest opposition to this position is likely to emanate from the technology-transfer offices themselves, which have a vested interest in the status quo. In a written public comment submitted to the AAUP on July 17, 2012—after the Supreme Court’s Stanford v. Roche ruling—AUTM’s board of directors continued to proclaim that as “employees of a university, faculty members are subject to employment contracts like any other profession” and should not be granted “free agency” when it comes to the ownership and management of their research discoveries and inventions.
AUTM provided no evidence to support its assertions, but most data on the management of campus-based research and inventions would counter the claim that technology-transfer offices are neutral and unbiased guardians of the public interest. Most universities expect these offices to be financially self-sustaining, which, given their operating costs, creates a strong incentive for their officers to put institutional revenue generation ahead of competing public interest goals. The survey cited above found that university technology-transfer officers rank revenue generation (from licensing royalties and fees) as their top priority, valuing it over widespread use of faculty inventions and even effective commercialization.
Yet there is one general caveat that applies to all invention-management negotiations: no party to a contract is inherently immune to disabling motivations and biases. Faculty inventors and administrators alike may be biased by the apparent opportunity for substantial profit when negotiating intellectual property and research contracts. The reality of such influences strengthens the argument for collectively defined university intellectual property protocols, such as the ones we recommend. These protocols could benefit the public by clarifying institutional support for procedures by which creative workers hosted by a university may transfer academic knowledge to society. When universities assume monopoly ownership over research inventions (and therefore do not negotiate with faculty inventors or face competition from independent intellectual property management agencies and professionals), they have a powerful incentive to pursue more restrictive licensing arrangements, which they believe are more profitable. In actual practice, such behaviors tend to rely on a very few licensing deals generating a disproportionate amount of licensing income, while the vast majority of inventions claimed by a university languish: the extra licensing income serves to file patents—that is, to claim formal institutional ownership of inventions—but is not used to transfer these inventions to the public. In fact, the institutionally created patents become barriers to access and serve to undermine the value of the research that led to the discoveries and inventions in the first place.
In its written comments, AUTM argued that in order to foster successful technology transfer, it was necessary to give universities the power to patent government-funded inventions and license them exclusively to private companies. Otherwise, it stated, those companies would be unwilling to invest the capital required to bring embryonic academic inventions into commercial development. This more aggressive university focus on patents and exclusive licensing may aid in the development of some inventions, but—as recent cases involving stem cells, breast cancer genes, disease patents, and software demonstrate—it by no means helps with all university discoveries, and it is often not in the public interest.
It thus seems particularly shortsighted for AUTM and university administrations to insist on the compulsory assignment of faculty research inventions to the university—a process that necessarily distances faculty members from the management and marketing of their own inventions. Given that faculty inventors have the deepest knowledge of their own inventions and some¬times are sole sources of the expertise that surrounds their scholarly work (which is often experiential and cannot be patented), it is simply sound policy for faculty members to control the dissemination of their own scholarship and research.
In seeking to strengthen these rights, faculty members will likely face considerable opposition from university technology-licensing officers and universities' legal counsel, who have grown accustomed to asserting monopoly positions on faculty scholar¬ship and have a powerful interest in maintaining the status quo that funds their salaries. Propelled by Bayh-Dole and other legislative reforms, universities have invested heavily in their technology ownership and licensing operations over the last three decades, expending large sums on licensing staff, legal experts, patenting and licensing fees, and intellectual property– related litigation.
The figures are intended to look impressive. But they are not. Contrary to widespread assumptions, most universities have not actually generated substantial income from their patenting and licensing activities, nor has their licensing activity resulted in a significant number of new products coming into commercial use. Only roughly two dozen US universities with “blockbuster” inventions generate sizable revenue from their licensing activities.25 A 2006 econometric analysis found that, after subtracting the costs of patent management, universities netted “on average, quite modest” revenues from 1998 until 2002, two decades after Bayh-Dole took effect. The study concluded: “[U]niversities should form a more realistic perspective of the possible economic returns from patenting and licensing activities.”26 Lita Nelsen, director of the technology-licensing office at MIT, made similar observations: “[T]he direct economic impact of technology licensing on the universities themselves has been relatively small (a surprise to many who believed that royalties could compensate for declining federal support of research) . . . [M]ost university licensing offices barely break even.”27 Licensing offices less than twenty years old and institutions with annual research budgets of less than $100 million have particular difficulty breaking even. Those universities, especially, should adopt policies that restore faculty control of their inventive scholarship, for financial reasons and to protect academic freedom and support innovation. The blockbuster invention that a faculty member might make is more likely to benefit the institution when the relationship between the faculty inventor and the university is one of voluntary collaboration than when it is governed by a compulsory ownership policy.
The academic freedom principles undergirding principle 11 (below) have been guiding the AAUP since its founding. To our knowledge, this principle has not been endorsed previously by other professional academic groups; however, it builds on several recent policy statements issued by the AAUP relating to faculty-generated intellectual property. It is also consistent with long-standing principles of academic freedom and with US patent and copyright laws pertaining to the ownership rights of inventors.
Principle 11 was additionally informed by recent evidence of university technology-transfer offices abrogating the academic freedom rights of faculty in intellectual property decisions pertaining to their research (some of these cases are discussed above or in Recommended Principles to Guide Academy-Industry Relations) and by a 2010 faculty advisory board ruling in an academic freedom case involving a dispute between Stanford University and a Stanford professor (also discussed in Recommended Principles).
In light of the changing legislative environment, and in view of the evolution of contracts and policies in the intellectual property area, AAUP believes that the establishment of an on-going Intellectual Property Committee representing both faculty and administration would serve a useful purpose in both collective bargaining and non-collective bargaining environments. Such a committee could serve a variety of purposes, including keeping faculty and administration apprised of technological changes that will affect the legislative, contract, and policy contexts. Such a committee would play a role in policy development, as well as perform a dispute resolution function. In the absence of such an overall policy committee, a dispute resolution committee with both administrative and faculty representation is essential.
Principle 14 flows logically from the recommendations contained in principle 11, which were drawn from earlier AAUP statements relating to the rights of faculty members to own and control their intellectual property. The purpose of principle 14 is to extend these faculty rights to both traditional and larger-scale corporate sponsored research agreements.
These principles are reproduced (with the original numbering retained) from Recommended Principles to Guide Academy-Industry Relations.
HANDBOOK PRINCIPLE 11: Faculty Inventor Rights and Intellectual Property (IP) Management: Faculty members’ fundamental rights to direct and control their own research do not terminate when they make a new invention or other research discovery; these rights extend to decisions about their intellectual property—involving invention management, IP licensing, commercialization, dissemination, and public use. Faculty assignment of an invention to a management agent, including the university that hosted the underlying research, will be voluntary and negotiated, rather than mandatory, unless federal statutes or previous sponsored research agreements dictate otherwise. Faculty inventors retain a vital interest in the disposition of their research inventions and discoveries and will, therefore, retain rights to negotiate the terms of their disposition. Neither the university nor its management agents will undertake IP decisions or legal actions directly or indirectly affecting a faculty member’s research, inventions, instruction, or public service without the faculty member’s and the inventor's express consent. Of course, faculty members, like other campus researchers, may voluntarily undertake specific projects as “work-for-hire” contracts. When such work-for-hire agreements are truly voluntary and uncoerced, their contracted terms may legitimately narrow faculty IP rights.
HANDBOOK PRINCIPLE 12: Shared Governance and the Management of University Inventions: The faculty senate or an equivalent body will play a primary role in defining the policies and public-interest commitments that will guide university-wide management of inventions and other knowledge assets stemming from campus-based research. University protocols that set the norms, standards, and expectations under which faculty discoveries and inventions will be controlled, distributed, licensed, and commercialized are subject to approval by the faculty senate or an equivalent governance body, as are the policies and public-interest commitments that will guide university-wide management of inventions and other knowledge assets stemming from campus-based research. A standing faculty committee will regularly review the university’s invention-management practices, ensure compliance with these principles, represent the interests of faculty investigators and inventors to the campus, and make recommendations for reform when necessary.
HANDBOOK PRINCIPLE 13: Adjudicating Disputes Involving Inventor Rights: Just as the right to control research and instruction is integral to academic freedom, so too are faculty members’ rights to control the disposition of their research inventions. Inventions made in the context of university work are the results of scholarship. Invention-management agents are directed to represent and protect the expressed interests of faculty inventors, along with the interests of the institution and the broader public, to the maximum extent possible. Where the interests diverge insurmountably, the faculty senate or an equivalent body will adjudicate the dispute with the aim of recommending a course of action to promote the greatest benefit for the research in question, the broader academic community, and the public good. Student and other academic professional inventors have access to grievance procedures if they believe their inventor or other IP rights have been violated. Students will not be urged or required to surrender their IP rights to the university as a condition of participating in a degree program.
HANDBOOK PRINCIPLE 14: IP Management and Sponsored Research Agreements: In negotiating outside sponsored research agreements, university administrators will make every effort to inform potentially affected faculty researchers and to involve them meaningfully in early-stage negotiations concerning invention management and IP. In the case of large-scale corporate sponsored research agreements like strategic corporate alliances (SCAs), which can have an impact on large numbers of faculty members, not all of whom may be identifiable in advance, a special faculty committee will be convened to participate in early-stage negotiations, represent collective faculty interests, and ensure compliance with relevant university protocols. Faculty participation in all institutionally negotiated sponsored research agreements will always be voluntary.
HANDBOOK PRINCIPLE 15: Humanitarian Licensing, Access to Medicines: When lifesaving drugs and other critical public-health technologies are developed in academic laboratories with public funding support, the university will make a strong effort to license such inventions in a manner that will ensure broad public access in both the developing and the industrialized world. When issuing an exclusive license to a company for the development of a promising new drug—or any other critical agricultural, health, or environmental safety invention—the university will always seek to include provisions to facilitate distribution of these inventions in developing countries at affordable prices.
HANDBOOK PRINCIPLE 16: Securing Broad Research Use and Distribution Rights: All contracts and agreements relating to university-generated inventions will include an express reservation of rights—often known as a “research exemption”—to allow for academic, nonprofit, and governmental use of academic inventions and associated intellec¬tual property for noncommercial research purposes. Research exemptions will be reserved and well publicized prior to assignment or licensing so that faculty members and other academic researchers can share protected inventions and research results (including related data, reagents, and research tools) with colleagues located at this university or at any other nonprofit or governmental institution. The freedom to share and practice academic discoveries, for educational and research purposes, whether legally protected or not, is vitally important for the advancement of research and scientific inquiry. It also enables investigators to replicate and verify published results, a practice essential to scientific integrity.
HANDBOOK PRINCIPLE 17: Exclusive and Nonexclusive Licensing: The university, its contracted management agents, and faculty will always work to avoid exclusive licensing of patentable inventions, unless such licenses are absolutely necessary to foster follow-on use or to develop an invention that would otherwise languish. Exclusive and other restrictive licensing arrangements will be used sparingly, rather than as a presumptive default. When exclusive licenses are granted, they will have limited terms (preferably less than eight years); include requirements that the inventions be developed; and prohibit “assert licensing,” sometimes referred to as “trolling” (aggressively enforcing patents against an alleged infringer, often with no intention of manufacturing or marketing the product yourself). Exclusive licenses made with the intention of permitting broad access through reasonable and nondiscriminatory sublicensing, cross-licensing, and dedication of patents to an open standard should meet public-access expectations. However, the preferred methods for disseminating university research are nonexclusive licensing and open dissemination, to protect the university’s public-interest mission, open-research culture, and commitment to advancing research and inquiry through broad knowledge sharing. To enhance compliance and public accountability, the university requires all invention-management agents to report publicly and promptly any exclusive licenses issued together with written statements detailing why an exclusive license was necessary and why a nonexclusive one would not suffice. The faculty senate, or another designated governance body, has the authority to review periodically any exclusive licenses and corresponding statements for consistency with the principle.
HANDBOOK PRINCIPLE 18: Upfront Exclusive Licensing Rights for Research Sponsors: The university will refrain from signing sponsored research agreements, especially multiyear, large-scale SCA agreements, granting sponsors broad title, or exclusive commercial rights, to future sponsored research inventions and discoveries unless such arrangements are narrowly defined and agreed to by all faculty members participating in, or foreseeably affected by, the alliance. If this arrangement is not feasible, as in the case of larger SCAs, the faculty senate (or another designated governance body) will review and approve the agreement and confirm its consistency with principles of academic freedom and faculty independence and with the university’s public-interest missions. Special consideration will be given to the impact exclusive licenses could have on future, as-yet-unimagined uses of technologies. When granted, exclusive rights will be defined as narrowly as possible and restricted to targeted fields of use only, and every effort will be made to safeguard against abuse of the exclusive position.
HANDBOOK PRINCIPLE 19: Research Tools and Upstream Platform Research: The university and its contracted management agents will undertake every effort to make available and broadly disseminate research tools and other upstream platform inventions in which they have acquired an ownership interest. They will avoid assessing fees, beyond those necessary to cover the costs of maintaining the tools and disseminating them, and avoid imposing other constraints that could hamper downstream research and development. No sponsored research agreement will include any contractual obligations that prevent outside investigators from accessing data, tools, inventions, and reports relating to scholarly review of published research, matters of public health and safety, environ¬mental safety, and urgent public policy decisions.
HANDBOOK PRINCIPLE 20: Diverse Licensing Models for Diverse University Inventions: Faculty investigators and inventors and their management agents will work cooperatively to identify effective licensing or distribution models for each invention with the goal of enhancing public availability and use.
HANDBOOK PRINCIPLE 21: Rights to “Background Intellectual Property” (BIP): University administrators and their agents will not act unilaterally when granting sponsors rights to university-managed background intellectual property related to a sponsor’s proposed research area but developed without the sponsor’s funding support. The university will be mindful of how BIP rights will affect faculty inventors and other investigators who are not party to the sponsored research agreement. University administrators and managers will not obligate the BIP of one set of investigators to another’s sponsored research project, unless that BIP is already being made available under nonexclusive licensing terms or the affected faculty inventors and investigators have consented.

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