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Faculty Property Stolen in “Contract of Adhesion”

Dr. Renee Kaswan, the inventor of the blockbuster dry eye treatment Restasis®, signed only two contracts with the University of Georgia that pertained to her intellectual property rights. But when a dispute over the rights to her invention went to court, a host of other documents found their way into the record including an obscure 1979 (revised in 1995) agreement between the UGA Research Foundation (UGARF) and the Georgia State Board of Regents. This document is not generally provided or accessible to faculty researchers.


Under federal patent law, there is no difference between patent rights and real property rights. The law states that, "Subject to the provisions of this title, patents shall have the attributes of personal property."


In 1983, when she was hired by UGA, Kaswan signed an employment contract and the UGA Patent Agreement in which she agreed to be bound by the patent policy of the University of Georgia as it is revised from "time to time".


With that, UGA wrongly accused Kaswan of consenting to other contracts that she had neither seen nor signed. These contracts of adhesion, undisclosed to UGA faculty were held by a Georgia court to dominate faculty rights and even canceled the unspoken obligation of every employer to act in "good faith and fair dealing," towards their employees.


The contract UGARF relied on to seize Dr. Kaswan’s intellectual property was an obscure charter document: the 1979 Intellectual Property Administration Agreement between the Georgia Board of Regents and UGARF. UGARF alleged the 1979 agreement, and a 1995 revision of it, included text granting UGARF "sole discretion and total authority" to administer intellectual property at UGA.


Kaswan, like all faculty members, had no idea that the charter document existed. Such administration agreements between state higher education governing boards and state universities are rare, and private institutions are, by definition, not subject to the rules of state boards.


In Virginia, for example, the State Council of Higher Education takes no role in setting intellectual property rights at its many respected research institutions. Under Virginia state law, that power is vested in independent Boards of Visitors for each school.


These Virginia boards are appointed by the governor with input from the institutions and their alumni associations. Some Boards of Visitors even reserve one seat for student representation.


In other states, boards of regents or other governing bodies create intellectual property agreements that must be signed by employees of public institutions. That’s a far cry from the administration agreement between UGA and the Georgia Board of Regents which is undisclosed to employees.


Even the judge in the Kaswan case acknowledged that UGARF was basing its claims on a "contract of adhesion," one that is fair only to one party.


Black’s Law dictionary defines a contract of adhesion as a "contract prepared by one party, to be signed by the party in a weaker position, usually a consumer, who has little choice about the terms. Also termed take-it-or-leave-it contract."


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Comments : 3 - Last Post : Mar 20, 2009 7:02 AM by: Scott
re: Faculty Property Stolen in “Contract of Adhesion”
Posted by tregan: Feb 21, 2009 12:52 PM

I just don't understand how a court could let UGA get away with this. It is absolutely ridiculous that documents that she had never seen had some sort of power over her. I hope the media blows this wide open!

re: Faculty Property Stolen in “Contract of Adhesion”
Posted by acook: Feb 27, 2009 8:48 AM

Why would any institution of higher learning like UGA allow these sort of contracts to exist?  Am I wrong in assuming that this would be considered when a talented researcher decides where they want to become a faculty member?  Why would a researcher want to join UGA if they know that a school in Virginia does not restrict them in such a way? 

re: Faculty Property Stolen in “Contract of Adhesion”
Posted by Scott: Mar 20, 2009 7:02 AM

Cash-strapped universities are getting more and more litigious as they seek to capitalize on faculty inventions. Acook is absolutely right, bad deals like this can hurt a university's reputation and cause the best talent to go elsewhere. Any researcher considering joining a university faculty would be wise to thoroughly investigate its patent policy and its history in dealing with its researchers.

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