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Universities and Professors Consider Possible Shifts in the IP Interest “Balance”

Posted: Tuesday, June 26, 2012 | Posted by Lizbeth Hasse, Esq. | Labels: , ,

Who controls intellectual property that is the product of grant-funded faculty research and work in a university environment? Are the "inventions" of professors essentially the result of their positions and participation in a research environment and, as such, like those of an employee produced in the course of employment with a private company? Should written works of authorship – articles, scholarship, books, and textbooks – be treated differently from medical, biotech, or software advances that professors create or contribute to? What about the input from students, especially specialized graduate students, in the process? Should the contributions of third-party industry funds to research and development in the university setting be acknowledged with intellectual property interests? Are the creative products of professors ever “works for hire” for their universities? The American Association of University Professors (AAUP) doesn’t think so.

Two weeks ago the AAUP released a draft version of its report, “Recommended Principles & Practices to Guide Academy-Industry Relationships,” with 21 new guidelines for governing the relationship between academia and industry. Much of the 300-page report recommends already familiar principles for maintaining the integrity of academic research, but it also contains new recommendations with the controversial (for some) aim of giving faculty members more ownership interests in the products of their research than many universities currently allow.

The section entitled, “General Principles to Guide Management of Intellectual Property (IP)”, contains 11 principles that would gird up a structure where the intellectual-property interests of faculty “extend to decisions involving the management, intellectual property (IP), licensing, commercialization, dissemination, and public use” of their inventions.  It also calls for faculty senates or equivalent faculty-governing bodies to play a key role in setting policies dealing with faculty inventions. And, it suggests a process for effecting the enhancement of faculty rights: universities “should not undertake intellectual property or legal actions directly or indirectly affecting a faculty member’s research, inventions, instruction, or public service without the faculty member’s and/or the inventor’s express consent.”

It’s not surprising that the AAUP decided to draft new guidelines governing IP at this time. Before this week, many of AAUP’s most-recent documents had been criticized as archaic in light of increasing commercial sponsorship of university research. Further, a U.S. Supreme Court decision about intellectual-property rights published a year ago focused attention on the issues. Board of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Systems, Inc., 131 S.Ct. 2188 (2011), held that neither universities that receive federal research grants nor the government itself has an automatic right to patents or inventions that may result from federally financed research. The ruling was initially praised by many as providing stronger support to the intellectual-property claims of individual university faculty members. Still, it didn’t offer a practical solution and, in some instances, may have back-fired on faculty stakeholders. As the AAUP reports, many “universities have responded by announcing, or weaving into faculty contracts, policies declaring they have the rights to faculty members' inventions.”

The AAUP and the report explain that because faculty have little bargaining power at the time of hiring, for instance when Ph.D. candidates are offered tenure-track jobs, they are susceptible to institutional pressures. New faculty typically sign away their invention rights without objection or much foresight about the issues, sometimes for their entire careers.

While the AAUP contends that the new changes are proposed to promote the long term interests of both universities and private industry, as well as to protect faculty interests, the report faces opposition from other important academic organizations that say they, too, are balancing the needs of universities, industry and other stakeholders which may have been overlooked.  The Association of American Universities (AAU), which represents leading public and private research universities, and the Association of University Technology Managers (AUTM) were extremely critical of the draft version of the AAUP report, especially its recommendations regarding intellectual property rights. AAU and AUTM argue that laws currently in place, like the Bayh-Dole Act of 1980 (which governs IP issues arising from federally sponsored research; permitting universities, instead of the government, to hold title to inventions), adequately address the IP issues that arise between researchers, universities and private industry.

AUTM’s vice president for advocacy opposes the recommendations because they "oversimplify the incredibly complex, nuanced process of academic technology transfer.” In addition, many believe that the recommendations overlook the fact that most university research is the product of more than one professor or department, usually involves a team of faculty and students and, sometimes, even more than one university.  AUTM also said that the report "assumes that faculty alone are the most qualified to make decisions about how and to whom technologies are licensed." AAU and AUTM believe that license negotiations should be handled by those trained and experienced in balancing all stakeholder interests, those of universities, faculty, funders, students and the larger society. Of course, bringing in experts to manage negotiations does not mean that enhanced interests or participation cannot be given to certain constituents.

The debate surrounding assignment and ownership of inventions by employees or employers is nothing new. There are state statutes and a large body of case law on the matter.[1] The AAUP draft report is part of the intense legal activity concerning IP ownership and scope of employment. It’s not surprising that there’s a lot of talk about this report and its IP issues, and it’s not surprising there are no easy or uniform answers. There will be intense discussions about any kind of rule proposed to structure academic relationships and faculty interests. And a lot of proposed exceptions are to be expected in a sometimes rarefied world where relationships are defined in contrast to the “standard” of employee-employer, and where “academic freedom” and the unfettered exchange of knowledge and ideas are paramount values.  

In addition to the new guidelines concerning IP management, the report has sections devoted to strategic corporate alliances and mechanisms for addressing potential conflicts of interest that can undermine research integrity. The report recommends a number of measures to encourage transparent public reporting of professors' industry ties and discourages certain kinds of relationships that may distort professors’ public-knowledge functions.[2]

[1]  As one of many examples, the California Labor Code § 2870 bars the assignment to an employer of inventions developed on an employee's own time, unless (1) the employee used the employer's materials or information; (2) the invention relates at the time of conception or practice to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (3) the invention results from work performed by the employee for the employer. See also Mattel, Inc. v. MGA Entertainment, Inc., C.A.9 (Cal.)2010, 616 F.3d 904, 96 U.S.P.Q.2d 1012 (where employment agreement did not unambiguously require assignment of employee's idea for a new line of fashion dolls; contract specified that “inventions” included all discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, but did not mention “ideas”).  
[2] The report cites the BP oil spill in 2010 where BP’s contract with academic scientists imposed a three year confidentiality restriction that later put scientists in a bind when the federal government sought them out as expert witnesses; BP imposed gag orders based on its contract. See “BP Buys Up Gulf Scientists for Legal Defense, Roiling Academic Community,” Mobile PressRegister, July 16, 2010; “BP Accused of ‘Buying Academic Silence,” BBC News, July 22, 2010; “BP Tries to Limit Release of Oil Spill Research,” Associated Press, July 23,2010. It also address concerns such as faculty or institutions promising or implying to deliver predetermined research results; masquerading "marketing projects” as scientifically driven clinical trial research;" and undertaking "seeding studies" from pharmaceutical companies mainly to introduce doctors and their patients to new drugs.


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