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Rutgers Council of AAUP Chapters v. Rutgers

October 20, 2005


On appeal from the Public Employment Relations Commission, SN-2003-0056.

The opinion of the court was delivered by: Wefing, P.J.A.D.



Argued September 14, 2005

Before Judges Wefing, Wecker and Graves.


In April 1996, the Board of Governors of Rutgers, The State University of New Jersey ("Rutgers") approved an amendment to the University's Patent Policy. In April 2003, Rutgers Council of AAUP Chapters ("AAUP") filed a petition with the Public Employment Relations Commission ("PERC") seeking a determination that certain aspects of that Patent Policy were subject to mandatory negotiation and could not be unilaterally adopted by the University. Rutgers appeals from PERC's Final Decision upholding certain portions of AAUP's position. AAUP has not cross-appealed. After reviewing the record in light of the contentions advanced on appeal, we affirm in part and reverse in part.

Rutgers is included among the premier research universities in the nation. Ashley Packard, Copyright or Copy Wrong: An Analysis of University Claims to Faculty Work, 7 Comm. L. & Pol'y 275 n.98 (2002). As such, research has for many years been a critical aspect of Rutgers fulfilling its responsibilities as New Jersey's state university. Every full-time member of the faculty at Rutgers is expected not only to teach, but also to engage in research and other scholarly activities. Such activities on the part of the faculty have resulted not just in the general advancement of knowledge but in discoveries which have yielded patents and economic benefits. Universities across the nation are attuned to the economic significance of the research activities in which their faculties are engaged. "In 1999 the top 100 research universities earned more than $862 million in royalties from faculty inventions, compared to $725 million in 1998." Packard, supra, 7 Comm. L. & Pol'y at 276.

Congress has also recognized that such research is vital to the continued strength and expansion of our national economy. In 1980, Congress passed the Patent and Trademark Act Amendments, commonly referred to as the Bayh-Dole Act, 35 U.S.C.A. §§ 200 to 212, to provide federal funding for academic research. The statute was "enacted to foster commercial development of government funded research." Platzer v. Sloan-Kettering Inst. for Cancer Research, 787 F. Supp. 360. 365 (S.D.N.Y.), aff'd o.b., 983 F.2d 1086 (1992), cert. denied, 507 U.S. 1006 (1993).

One commentator summed up the statute's approach in the following manner:

[A] government agency sponsors research conducted by faculty, with the university acting as the contractor. If faculty develop an invention arising from the research, they follow disclosure procedures outlined under the law. The university can then elect title to the invention and work with the faculty members to apply for a patent and to market the invention. The government receives a nonexclusive, nontransferable, irrevocable, paid-up license (shop right) to the invention, and the faculty member receives a percentage of the royalties. [Pat K. Chew, Faculty-Generated Inventions: Who Owns the Golden Egg? 1992 Wis. L. Rev. 259, 293-94 (1992).]

PERC acknowledged in its decision the importance to Rutgers of the research efforts of its faculty, particularly after the passage of the Bayh-Dole Act.

Sixty percent of Rutgers' research is now federally-funded and is subject to the Bayh-Dole Act's provisions concerning, e.g., disclosure of inventions, distribution and use of royalty income, and the university's ability to retain title to inventions or discoveries emanating from federal funding.

The Bayh-Dole Act does not pertain to inventions and discoveries resulting from non-federally funded research.

Prior to the passage of Bayh-Dole, universities nationwide received fewer than 250 patents per year, compared to 3100 in 2001. In 2000, Rutgers received $10 million in annual royalty income and had 252 patents under license. [Rutgers, The State Univ. v. Rutgers Council of AAUP Chapters, 30 NJPER 44 (2004).]

In recognition of the critical role that research holds in the university-wide community, the Board of Governors first adopted a Patent Policy in 1962. The 1996 Patent Policy that is before us on this appeal is the fourth such Policy adopted by the University. The ...

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