Follow-up on UC’s changes to patent language

The DFA Board wanted to follow-up on the message sent last month regarding changes that UC is making to the way faculty assign patents to UC.

Patents are not relevant to a large number of campus disciplines, and so the changes to the patent language that UC is implementing should not be a financial concern for most faculty members. For the small number of faculty who were depending on the old patent language, here is what a DFA member who has valuable patents says, based on his conversation with a lawyer:

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As a part of our ongoing exchange of information regarding the amendment to the patent agreement requested by the University, I am sharing my current understanding.

After contacting legal counsel, my understanding is that the Stanford case does not obligate employees to amend their patent agreement. The requested amendment might help protect the University from ending up in a situation similar to the result in the Stanford case. That does not necessarily mean that an employee is obligated to give the University a preinvention present assignment rather than an assignment after creation and disclosure, if the Patent Agreement that was signed does not require it. Principles of tenure and wrongful termination may protect employees from having the University condition future employment on signing the requested amendment. The University may have the discretion to make other changes that could adversely impact an uncooperative employee.

The language change, although consistent with the intent of the earlier language, is not a mere clarification; it is a material change in the rights of the parties to the Patent Agreement according to the Stanford case. Because the University cannot change the Patent Agreement unilaterally, it is asking employees to agree to the change. Although the employees may be obligated to assign certain inventions to the University once the invention is created, this change would make the present assignment in the amendment effective by operation of law (automatically) without further assignment once the invention exists, under the Stanford case. There may be reasons in particular situations, such as where the nature or timing of the invention is disputed, why one might not want to agree to an automatic assignment.

There are also questions as to whether the signed amendment might be used by the University to argue interpretation, waiver or estoppel as to other issues, so as to expand the impact of the amendment.

In the absence of a third party agreement involving a present assignment, such as the one in the Stanford case, or a refusal to sign an assignment on disclosure, an employee’s refusal to sign this amendment is probably inconsequential to the University’s rights under the Patent Agreement.

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Other information:

The clause in the old agreements that UCOP may be using to enforce this change is probably:

“I will do all things necessary to enable the University to perform its obligations to grantors of funds for research or contracting agencies as said obligations have been undertaken by the University.”

One of the most useful sources of information on this issue provided by UCOP is the signing form FAQ, available at:

http://www.vres.us/html/uofc/UCPatent_FAQ.pdf