CEO 89-1 -- January 18, 1989
CONFLICT OF INTEREST
COUNTY SOLID WASTE DIRECTOR
APPLYING FOR PATENT
To: (Name withheld at the person's request.)
Under the specific circumstances addressed by this opinion, no conflict of interest would be created if a Solid Waste Director of a County were to apply for a patent on a process he developed for managing waste. The Code of Ethics should not be applied to deprive a public employee of any legal rights he may have as long as the exercise of those rights does not impede, conflict, or otherwise interfere with the full and faithful discharge of his public duties. Here, the idea for the process was a result and application of knowledge and experience the Director acquired before he was employed by the County. Applicable patent law seems to recognize a potential right of the Director, the County does not appear to be asserting any right to the patent, and the Director intends to recognize a "shop right" or license for the County to use the process should it be patented. Therefore, it does not appear that the Code of Ethics would be violated by a patent application.
A provision in a contract to sell the patent to a private entity which requires the Director to disclose any future invention he may devise could violate Section 112.313(8) and 112.313(7)(a), Florida Statutes. If, however, this provision is modified and interpreted only to require the Director to disclose improvements in the specific waste management process addressed in this opinion and is only effective for one year, it would appear that the potential conflict would be avoided. In addition, the private entity would not be regulated by and does not intend to do business with the County. CEO's 82-75, 82-86, 81-54, 87-70, and 83-10 are referenced.
Would a prohibited conflict of interest be created were you, a County Solid Waste Director, to apply for a patent on a method of solid waste processing you developed while working for the Board of County Commissioners and then to contract to sell that patent to a private entity?
Your question is answered in the negative, limited to the specific circumstances addressed and to the conditions described in this opinion.
In your letter of inquiry, you advise that you are the Solid Waste Director for Collier County. The job description for your position which was in effect at the time relevant to this opinion states that you were
[r]esponsible for the study, research and recommendation of solid waste recovery, recycling and other productive and cost efficient methods of handling wastes.
It also states:
Employee is responsible for planning, developing, and evaluating diverse complex programs and activities. Available guides may be of little of no use necessitating the development of novel or innovative solutions.
A later job description (dated September 15, 1988) does not contain these provisions.
You state that you do not have an employment contract but that you have been employed in that position since October 1, 1979, at the pleasure of the Board of County Commissioners. You further advise that you report directly to the Public Works Administrator/ County Engineer, who reports directly to the County Manager.
You advise that you developed a method of solid waste recovery and recycling. Your method uses a modified standard quarry screening plant to separate previously landfilled wastes. This process retrieves or "mines" waste from a landfill and separates the waste to provide material which can be recycled as landfill cover or fuel for a waste energy facility from material which can be remanufactured into new products.
You draw a distinction between the process described above and the machinery used to implement the process. The development of the process, which you refer to as the "BCMR Process" (Bury, Compost, Mine, Reclaim), was your idea and creation. You advise that you spent much time, both during your work and free hours, considering alternatives to current methods of solid waste management. You state that the idea was a result of your lifetime of accumulated education and experience, including experience you acquired when working in a rock quarry. The idea actually occurred to you during a weekend when you were not working for the County.
The machinery used to implement the "BCMR Process" is a modified standard quarry screening plant. The funds to modify this machinery were provided in part by Collier County and in part by a $20,000 grant from the Governor's Energy Office. The actual modifications were performed by a private business with the assistance of employees of the County's Solid Waste Department.
All of the information you used in development of the process and in determining how to modify the machinery is a public record or was obtained from documents and materials available to the public, you advise. The actual specifics on how to perform the modification and implement the process are within your personal knowledge and are not contained in any public documents.
According to the information you have given us, you intend to apply for a patent on the "BCMR Process" but not on the modified machinery. You have been advised by your patent attorney, and apparently intend, to recognize a "shop right" or license on behalf of the County to allow it to continue to use the Process, should it be patented. You also have signed a contract to assign your patent rights to a private corporation.
You have stated that the company to which you have assigned patent rights does not intend to contract or do business with the County but intends to recognize a license on behalf of the County to use the new process for as much and as long as it chooses. The company is not regulated by the County. You will consult temporarily with the company, apparently in order for it to fully understand and implement the production or marketing of the new process.
In CEO 81-54, we determined that a Program Analyst in the Manpower Development Section of the Department of Health and Rehabilitative Services' Mental Health Program office could not form a consulting corporation to provide training to county psychiatric receiving facilities. The training proposed to be provided consisted of aggression control techniques developed by the Program Analyst as part of his employment with HRS. Although the entities to which he proposed to provide training were not regulated by his agency, and he would not have been selling services to his own agency, we determined that Section 112.313(8), Florida Statutes, would be violated. Section 112.313(8) states:
DISCLOSURE OR USE OF CERTAIN INFORMATION.--No public officer or employee of an agency shall disclose or use information not available to members of the general public and gained by reason of his official position for his personal gain or benefit or for the personal gain or benefit of any other person or business entity.
In that opinion we stated:
In a previous opinion, CEO 80-21, . . . we advised that this provision would prohibit a State employee from offering his services as a consultant relating to dispute resolution alternatives, where he had been employed by the State to direct a project on dispute resolution alternatives. Similarly, here, you intend to offer as a consultant to public and private organizations a program developed for use by D.H.R.S. Although the techniques taught in the program are modifications from existing self-defense styles, in part readily available to the public, it appears that some of the information you would impart as a consultant has not been made available to members of the general public. As the statute prohibits the use of such information for your personal gain or benefit or for the personal gain or benefit of any other person or business entity, we are of the opinion that you would be prohibited also from disclosing the information contained in the program to a business entity with which you would not be involved, for the benefit of that business.
A strict reading of CEO 81-54 might prohibit you from using the information on modification of the machinery and implementation of the process for your private gain and the private gain of the corporation to which you have assigned your patent rights. In your case, however, the development of the process was largely the result of expertise you acquired before you began working for the County. Therefore, we believe your situation is more analogous to that addressed in CEO 83-10 and 87-70, in that much of the information and expertise used in developing this procedure was acquired through sources which are not connected with your position with the County.
In CEO 83-10, we determined that the Director of the Department of Education's Division of Public Schools could participate in the formation of a corporation which would develop, copyright, and sell materials on public education without creating a prohibited conflict of interest. Part of the basis for this decision was that the information used by the Director in this activity, and which was gained through his position, would be limited to official public records. We noted in the opinion that most of the information used would be obtained from sources not directly connected with the Director's employment or position. We also reached our decision on the basis that the situation would not involve the sale of materials developed by the Department.
Similarly, in CEO 87-70, we concluded that no conflict of interest would be created if a city director of engineering were to privately copyright and sell an engineering construction manual which was similar to one he had developed for the city. In that opinion, although the original manual was developed on city premises, the actual writing, typing, and editing were done on the employee's personal time. A great deal of the writing was done prior to the individual's employment with the city. A second manual was developed by the individual on his own time, and it was this second manual the individual proposed to copyright and sell. The city still would be allowed to produce, update, and sell the first manual. We based our decision that Section 112.313(8) was not violated by this activity on the fact that neither manual was written as part of the director's duties with the city. In addition, the manuals were developed based upon the individual's 26 years of experience in the civil engineering field.
Like the situation addressed in CEO 83-10, the information used in arriving at the "BCMR Process" either was a public record or was derived from sources not directly connected with the County and therefore presumably not directly connected with your employment or position. In addition, the development of the "BCMR Process" was the result of years of experience which you had obtained through sources not connected with the County. As in CEO 87-70, although the implementation of your idea for the new waste management process was done on County time and using County resources through modification of the screening plant, it does not appear that the actual idea was formulated during your working hours with the County. Even though the development of the idea would fall within the scope of your described duties, apparently you did not develop it solely as part of your work with the County. Therefore, we believe that your attempt to patent this idea would not involve the disclosure of information gained by reason of your public employment and would not constitute a violation of Section 112.313(8).
In addition, although it is clearly beyond our authority or jurisdiction to express any opinion as to who is entitled to the patent, it appears that applicable patent law may provide a reasonable legal argument that the patent could belong to you. See generally 60 Am. Jur. 2d Patents, Section 1, et seq. (1987), and 53 Am. Jur. 2d Master and Servant, Section 111, et seq. (1970). You have stated that you have not received any indication that the County intends to assert a right to the patent.
The Code of Ethics should not be interpreted to deprive you of legal rights you may have, as long as the exercise of those rights will not impede the full and faithful discharge of your public duties. Section 112.316, Florida Statutes, states:
Construction.--It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator or legislative employee of his duties to the state of the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes.]
We are therefore of the opinion that applying for the patent under the described circumstances would not create a prohibited conflict of interest under the Code of Ethics for Public Officers and Employees.
You also have stated that you have assigned your patent rights to a private corporation. This assignment constitutes a contractual relationship which must be analyzed separately under the Code to determine if any conflict of interest exists.
This contract contains a provision which requires you to disclose to the company any improvement or further techniques you may discover or acquire in connection with landfill management. The provision has the potential of requiring you to disclose information which could violate Section 112.313(8), Florida Statutes. In a telephone conversation you have stated, however, that this provision has been utilized, and its apparent intent is, to allow the company to become aware of any improvements you devise in the "BCMR Process," not to allow it to gain access to other, unrelated inventions. You also stated that this contract is only effective for one year. If the company will agree that this is only to be interpreted to require you to disclose any improvements in the Process as you perfect the newly developed method, and that you are not required to disclose new methods of waste management unrelated to the "BCMR Process" which may come into your and possibly the County's possession, we would find that this contract does not violate Section 112.313(8), Florida Statutes.
Since your duties to the County involve improving waste management techniques, this contractual provision might create a continuing or frequently recurring conflict between your public duty to work to improve waste management on behalf of the County and your private responsibility for disclosing such methods to a private entity, in violation of Section 112.313(7)(a). See CEO's 82-75 and 82-86. Section 112.313(7)(a), Florida Statutes states:
CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.--No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties.
Again, however, if the contract is modified and can be interpreted to require you to disclose only improvements in the "BCMR Process," under the narrow circumstances described, we would find that no conflict of interest is created. This is assuming that the County is always free to use the process and that your contract with the company is only for one year (thereby ensuring that your primary responsibility for developing new waste management methods remains with the County). We note also that the company will not be regulated by and does not intend to do business with the County.
Based upon the facts presented by you, the "BCMR Process" is a result of expertise and experience you have acquired through education and work experience outside your employment with the County. The fact that you have used your education and experience to develop a method of waste management which benefits the County should not prohibit you from acquiring a patent on the process if the law says you are rightfully entitled to do so, provided that your sale or other use of the patent will not conflict with your public duties and responsibilities with the County.
Accordingly, we find that under the narrow situation addressed in this opinion, no prohibited conflict of interest would be created were you to apply for the patent and to contract to sell your patent rights to the company.