University IP: The University as Coordinator of the Team Production Process

24 Pages Posted: 21 Sep 2014 Last revised: 19 Apr 2016

Date Written: April 8, 2016

Abstract

This paper focuses on intellectual property (“IP”) issues in the university setting. Often, universities require faculty who have been hired in whole or in part to invent to assign inventions created within the scope of their employment to the university. In addition, the most effective way to secure compliance with the Bayh-Dole Act, which deals with ownership of inventions involving federally funded research, is for the university to take title to such inventions. Failure to specify who has title can result in title passing to the government. The university then decides whether to process a patent application, and if it does, whether to pursue options for commercialization, frequently including licensing the invention to industry.

A number of academics and other commentators have contended that it would be more efficient and fair to allow faculty to own the rights to their own inventions, even if they have been hired in part to invent and the inventions are created within the scope of employment. The debate, it should be noted, is only over the appropriate default rule. Not even critics of the current institutional default rule would object to faculty assignment of ownership rights to the university. Since faculty are not generally in a good position to pursue commercialization on their own, the question for public policy is what are the benefits and costs of allowing faculty, in the first instance, to decide whether the university or some other entity should manage the commercialization process.

This paper evaluates the case for changing the ownership default rule. First, we provide background on patent rights in the employment setting and how patent rights are applied in a university environment. Second, we explain how most universities handle faculty inventions and technology transfer. Third, we lay out and challenge some of the key arguments critics have offered in support of faculty control of patent rights. Finally, we suggest that faculty inventions which use other university resources, including personnel such as graduate and post-doctoral students, are best viewed as a product of a team production process rather than solely the invention of the faculty member; and the university generally is the more efficient manager of the commercialization effort.

Keywords: employment, intellectual property, patent, work for hire, inventor, innovation, technology transfer, ownership, default rule

JEL Classification: D21, H41, O31, O34

Suggested Citation

Estreicher, Samuel and Yost, Kristina, University IP: The University as Coordinator of the Team Production Process (April 8, 2016). Indiana Law Journal, Vol. 91 (2016); NYU School of Law, Public Law Research Paper No. 14-55; NYU Law and Economics Research Paper No. 14-29. Available at SSRN: https://ssrn.com/abstract=2498083

Samuel Estreicher (Contact Author)

New York University Law School ( email )

40 Washington Square South
New York, NY 10012-1099
United States
(212) 998-6226 (Phone)
(212) 995-4341 (Fax)

Kristina Yost

Jones Day ( email )

222 E. 41 St.
New York, NY 10017
United States

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