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Researcher push-back at Pitt prompts changes

Faculty ire over IP assignment illustrates continuing struggle in wake of Stanford v. Roche

This article appeared in the November 2014 issue of Technology Transfer Tactics. Click here for a free sample issue or click here to subscribe.

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When the University of Pittsburgh attempted this summer to update its intellectual property assignment processes — with an eye directly on the Supreme Court’s ruling in Stanford v. Roche — the pushback from faculty was so strong the school withdrew its proposal and retooled it. In a just-announced move, the university now offers innovators three options for assigning IP rights to Pitt; officials are assembling researchers’ signatures this month.

All three options, of course, lead to the same place: Pitt ownership of the IP. And that’s the way it absolutely must be, experts agree.

In an October 24 letter to faculty, staff and students obtained by Technology Transfer Tactics, Patricia E. Beeson, provost and senior vice chancellor at the school, notes that the drama began in August when her office requested that faculty sign a new agreement “explicitly assigning IP rights to the university, consistent with university policy.” There were, the letter concedes, “concerns raised by faculty about the language of the agreement.” Local news media reports at the time characterized the “concerns” as resistance to a blanket IP assignment policy. Some researchers asked, in fact, for the right to negotiate IP assignment on an invention-by-invention basis.

In response, Pitt formed an ad hoc faculty committee to advise on more revisions to the assignment form. In the late October letter, Beeson reveals that innovators at Pitt now have three possible courses of action. Those who signed the August agreement need do nothing more; others can sign the new form or a new “Intellectual Property Rights Acknowledgement Form.” Beeson is clear in the letter: “Starting November 21, faculty members submitting federal grants or contracts through the Office of Research or receiving funding from an active federal grant or contract will be required to execute one of the three agreements.”

In the letter, Beeson makes two important points. For one, she says, “as a condition of receiving federal support, funding agencies require the university to have agreements in place with individual faculty that protect the government’s interest in IP developed as a result of research supported by federal grants and contracts.” She adds: “Corporate and foundation contracts and material transfer agreements increasingly require [such] agreements.”

The second point cuts to the proverbial chase. “The university has obtained written agreements from new faculty and staff for many years,” the letter notes, “but [they] have not been consistently obtained and the university has determined, as a matter of contract administration, that we need to confirm by a certain date that we have the necessary agreements in place.” And, she emphasizes, “regardless of which agreement [an inventor] chooses to sign, University Policy 11-02-01, established in 1985 and revised in 2005, requires prompt disclosure of inventions and asserts the university’s ownership of the worldwide patent and IP rights.”

Of course, as the letter also points out, that policy specifies that an inventor is “entitled to share in the proceeds from the licensing or other transfer of patent rights or other IP rights.” That’s normally 30% of the net financial return; if university policy changes to more favorable terms in the future, and an inventor has opted to sign the old or the new IP assignment document, he or she “will be entitled to the more favorable economic terms.”

The agreement offered in August is Option 1 under the new IP assignment regime. It “meets the university’s obligations to federal funding agencies and assigns patent rights to the university” consistent with existing policy. Option 3 is a basic requirement for receiving federal funding. The Acknowledgement Form “fulfills the university’s obligations to federal agencies,” the letter says, adding: “By signing [the] agreement, you will agree to abide by university policy regarding patent rights and technology transfer, including your responsibilities to disclose inventions and take steps necessary to protect sponsors’ rights in the IP.”

The form also “confirms that you have not entered into other agreements that would limit your ability to meet [that] obligation.” Signing it replaces the August form, but it “does not supersede or replace any other assignment agreements you have executed prior to August 2014.”

Option 2 reflects the university’s efforts to acknowledge faculty pushback to the August attempt — and to take Stanford v Roche by the horns. It “incorporates suggestions made by the ad hoc committee to clarify and improve the original assignment agreement,” Beeson’s letter says, and it “protects your own interest should you inadvertently assign rights to a third party, as was the case in Stanford v Roche.” As well, the letter says, signing Option 2 “will facilitate processing of third-party agreements that require the university to demonstrate ownership of IP developed under the contract, as is often the case with MTAs and corporate contracts.”

“I hereby assign…”

Other universities have directly addressed the Stanford v. Roche ruling, and Baltimore’s Johns Hopkins University is one of them. “We made a few small changes to the IP policy to include the ‘hereby assigns’ language suggested by Stanford v Roche,” reports Wesley D. Blakeslee, who recently retired as executive director at Johns Hopkins Technology Transfer. Indeed, he emphasizes, the TTO made its own decisions about what to change — in consultation with an attorney and former member of the general counsel’s office, as well as the general counsel’s office itself. “The JHTT head drafted it,” he says, “and the general counsel reviewed it.”

The University of Notre Dame (IN) also tweaked its assignment processes after the ruling. “Just prior to Stanford v Roche, Notre Dame had modified the standard invention disclosure form to change from a promise to assign to an actual assignment upon submission of the invention disclosure,” says Richard Cox, director of the Office of Technology Transfer there. But the case “hastened our adoption of the new invention disclosure form and encouraged us to make sure that copies of the old form that were floating around were quickly substituted with the new form.” He adds: “We’ve also added a couple of leading questions to the research proposal form to try to identify projects that may generate new IP so that we can begin to interact with the PIs at an early stage and throughout their research projects.”

Attorneys who work with tech transfer offices have seen the same thing. “Our university clients had policies in place for the ownership of inventions made by their faculty and students before the decision in Stanford v Roche,” says Janet M. MacLeod, PhD, a partner at Fox Rothschild LLP, New York, “but the decision certainly prompted them to review those policies.” Before Stanford, she adds, “it was widely assumed in the university technology transfer community that the Bayh-Dole Act automatically granted federal contractors, including universities, full title to inventions developed at their institutions in whole or in part with federal funds.” The Supreme Court found to the contrary, though, “so effective assignment agreements from the university’s inventors to the university are necessary for the university to take title to the inventions.”

Christopher F. Wright, a partner at Radnor, PA’s McCausland Keen & Buckman, agrees. “Following the case, many institutions updated their policies to make sure that the grant of rights was contemporaneous — i.e., ‘I hereby assign’ instead of ‘I agree to assign,’” he says. “More importantly, hopefully all institutions have now faced the reality that they must implement a process to collect signed assignments from all of their employees.”

Indeed, all the experts caution against placing too much emphasis on the Stanford case. It was “an anomaly based on specific facts and specific law applicable to those facts,” Blakeslee comments, “so it’s hard to generalize that result nationwide.” In fact, he emphasizes, “many states’ laws would have found that the prior agreement of the faculty member to assign inventions to the university was primary, and all that he was then able to do was make that promise to the Roche predecessor subject to his existing obligation to the university. Instead the court ignored the prior agreement, finding on the ‘hereby assigns’ versus ‘agrees to assign’ distinction.”

Wright puts it like this: “From my perspective, the Stanford case confirmed, rather than changed, the best practices advice that I had been giving my clients for more than a decade: To ensure the enforceability of IP policies, institutions need to require advance contemporaneous written assignments of future IP rights from all of their faculty and research employees.”

Tips for locking down assignment

Making that happen is, of course, the hard part. It’s “easy in principle but can be cumbersome to administer,” Wright says. Here’s what the experts advise:

  • Start at the beginning of the invention process. “Hopkins includes the written assignment to the university on the invention disclosure form,” Blakeslee says. “I recommend that. When the TTO receives the disclosure, the invention is assigned to the university, and thus it is reasonable for the university to engage in the activities necessary to evaluate the invention.”
  • Gain assignment upon employment if at all possible. “Require each new faculty member and research employee to sign contemporaneous assignments as part of the intake process at the commencement of employment,” Wright suggests. “Most commercial entities already tackle the analogous issue by requiring new employees to sign confidentiality/IP agreements on their first day of employment.” Don’t forget to “preserve the signed agreements in case of a dispute,” he adds. He advises then requiring “a signed supplementary specific assignment of IP following each invention disclosure of patentable or copyrightable IP from all inventors and authors, which can then be used for recording purposes at the USPTO or the Copyright Office.”
  • Stay on top of every opportunity to snag an assignment agreement. After commencement of employment and submission of an invention disclosure form, another opportunity is when the patent application is filed, notes Daniel W. Young, an associate in the biotechnology group at Boston’s Wolf Greenfield & Sacks PC. “Most universities review written invention disclosure forms for purposes of deciding which they’re willing to support a filing on,” he says. Because those disclosures contain detailed technical information, including assignment language in such forms can be an effective way to obtain a present assignment that is specific about what’s covered.
  • Don’t give in to faculty demands for case-by-case assignment of IP rights. “That’s not feasible in my opinion,” Blakeslee comments. “Tech transfer is a huge cost to a university, and some of that cost is offset by the fact that some, not all, inventions have some value. That value needs to be obtained to enable the operation of a TTO, and that would not work if faculty could choose not to assign all technologies.” MacLoed agrees. “What would be the criteria for determining whether rights would be assigned?” she asks. “Also, for inventions made with federal funding, ownership of IP by the university is necessary to achieve the purposes of the Bayh-Dole Act.”
  • Give researchers the tools they need. “Education of researchers on university policy and best practices, as well as the requirements of the Bayh-Dole Act, is critical,” MacLoed asserts. “One point that should be emphasized in this discussion is that although the university owns the IP, the Bayh-Dole Act and many university policies provide that that the university share with the inventors a portion of the net licensing revenue generated by the invention.”
  • And make sure you know what else your researchers are up to. Blakeslee advises “carefully managing outside consulting by faculty,” and notes that JHU requires clauses that must be in faculty consulting agreements that protect the university’s IP rights.

“At the end of the day, the law is the law,” Young notes. “If the university wants rights in an invention, it needs to get assignment in writing. One way or another, you need to find a way to balance an environment of scientific freedom with contractual needs.”

Contact Beeson via Ken Service, vice chancellor for communications, at 412-624-2795 or kservice@pitt.edu; Blakeslee at 410-516-8300 or wes@wesblakeslee.com; Cox at 574-631-5158 or rcox4@nd.edu; MacLoed at 212-905-2301 or JMacLeod@foxrothschild.com; Wright at 610-341-1026 or cwright@mkbattorneys.com; and Young at 617-646-8245 or daniel.young@wolfgreenfield.com.


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