National Council of University Research Administrators
KEYS TO SUCCESS
NCURA Region IV
Spring Meeting
April 27 – 30, 2014
© 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
Dawn Underwood, Director, Office of Sponsored Programs
Indiana State University
Melony A. Sacopulos, General Counsel and Secretary of
the University,
Indiana State University
@ 2014 National Council of University Research Administrators
Terminology
Grant, Contract or Cooperative Agreement?
Participation differences..
Differences in deliverables…
A contract is a “purchase” of good or services.
Payment depends upon completion of
milestones.
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Research Administrators
Contracts with Industry
• Company wants all intellectual property rights
• Company wants university to agree to strict
confidentiality clauses
• Company might expect insurance levels that
universities don’t have
• Semester timeline and industry timeline issues
• Faculty are not hourly employees
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Research Administrators
Contracts with States
• States often have contract boilerplate
language
• Signatures may be delayed several months
due to admin processes
• We cannot agree to jurisdiction in another
state or to abide by the laws of another state
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Research Administrators
Federal Contracts
Some are cost reimbursement contracts, some
are fixed-price contracts.
The type of work to be performed is an
important point to consider. Is it research? Is it a
service?
Definitions
• FAR= Federal Acquisitions Regulations
• DFARS= Defense Federal Acquisitions
Regulations Supplement
• Simplified Acquisition Threshold (SAT)= usually
$150,000. For contracts and purchases less
than the SAT, certain clauses do not have to be
incorporated into the agreement.
FAR Clauses in Federal Contracts
Contracting officers must follow prescribed rules
for inserting or not inserting certain clauses into
agreements. Go to
http://www.acquisition.gov/far/
FAR matrix is 32 pages long. But are they
applying it correctly to the project?
DFARS
Contracts from the Department of Defense
incorporate clauses from the FAR as well as the
DFARS. In many cases, the clauses are nearly
identical. However, sometimes they vary.
Contract Received, Now What?
As with any contract, you will need to review the
terms and conditions of the award. You will
either accept the terms of the contract or
negotiate more favorable terms. FAR and DFARS
clauses are usually NOT written out in the
contract document, but are incorporated by
reference and listed by clause number.
Your Approach to Review
You don’t want the government treating you like
a vendor or a provider of a commercial service.
If you do, you will potentially be subject to all
sorts of things like export controls, excessive
insurance requirements, intrusive inspections,
etc. Universities don’t guarantee the outcomes
of R&D efforts.
Sample Clauses
Patent Rights 52.227-11, implements
the Bayh-Dole Act
Rights in Data- General 52.227-14,
ask for Alternate IV, this alternate
allows university ownership of
copyrights for R&D.
Patent Indemnity 52.227-3, you don’t
want to agree to this! Instead, you
want clause 52.227-1, Alt I.
Sample Clauses, cont.
• 52.215-2, Audit and Records, ask for Alt 2 to
incorporate OMB A-133.
• 52.223-6 Drug-Free Workplace, generally
acceptable.
• 252.223-7004 Drug-Free Workforce, generally NOT
acceptable to universities. Requires random drug
screens, etc.
Sample Clauses, more…
• 52.246-9 Inspection, this clause gives
inspection rights to govt. DO NOT agree to
52.246-7 or 52.246-8, unless you have
inspection systems, provide warranties of your
work, etc.
Our experience
• ISU received a contract for services from a
company, a subcontract of Department of
Defense funds
– 127 FAR and DFARS clauses incorporated by
reference!
– Contract document included indemnity clauses,
professional liability insurance requirements,
export controls, additional terms in the work
order.
Negotiation Outcomes
•
•
•
•
Indemnity Clauses modified
Insurance requirements modified
Export controls clause deleted
FAR and DFAR incorporation reference edited
to incorporate clauses “as applicable”.
• Collaborative discussion about concerns, with
a follow up email
• Discussions with other institutions
TOOL FOR REVIEW
http://www.ucop.edu/raohome/clauses/guidance.html
Research Administration Office of the California System
offers this database to assist in the review of FAR/DFARS
clauses.
Still, reading the clauses is often necessary.
NCURA Region IV Spring Meeting
April 27 – 30, 2014
Some fundamental concepts in patents as
they relate to university research:
1. Patent law stems from Constitutional
authority, Article I, Section 8. The laws are
codified in Title 35 of the U.S. Code.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
2. A patent does not grant rights to the
patent holder to produce or manufacture
the product; it only imbues the patent
holder with the right to exclude others
from doing so.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
3. Three requirements to be patentable:
a. New: This means novel in relation to the
prior art in the field. Prior art refers to
information publically available prior to the
alleged discovery by the inventor.
b. Useful: This is a relative term, and even
things that are amusing can be useful. This is
not a difficult hurdle to jump.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
c. Non-obvious: This means that the item
must be non-obvious to a person of
ordinary skill in the field. This
requirement is treated virtually identically
to the “new” requirement in that prior art
is used to determine what might be
obvious to a person skilled in the art.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
4. There is no “work made for hire” doctrine
in patent law.
a. Employee who creates an invention within
the scope of his employment is the inventor.
b. Have to make specific, written assignment to
employer.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
5. Two types of application:
a. Provisional: Place holder; contains no claims
and a moderate filing fee. Establishes early
effective filing date and have to file nonprovisional application w/I 12 months.
b. Non-provisional: This is a standard
application and involves examination by the
patent office. Patents are issued from nonprovisional applications. 20 year life.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
6. All joint inventors must sign the patent
application, no more and no less.
a. Even after issuance, patent can be deemed
invalid if it does not properly identify the
inventors, or does not list the joint inventors.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
7. An inventor must expressly grant his
rights in an invention to his employer if the
employer is to obtain those rights.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
8. In certain situations, Congress has
divested inventors of their rights.
a.
b.
c.
d.
Nuclear material and atomic energy
NASA contracts
Dept. of Energy contracts
Executive Order 10096 – federal employees
conducting research
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
9. Bayh-Dole Act (1980)
a. Promote utilization of inventions arising from
federally supported research
b. Promote collaboration between commercial
concerns and nonprofit organizations
c. Ensure Government obtains sufficient rights
in federally supported inventions
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
The Bayh-Dole Act allocates rights in
federally supported inventions between
the government and the federal
contractor.
It applies to any invention of the contractor
conceived or first actually reduced to
practice in the performance of work under
a funding agreement.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
The government receives from the contractor a
nonexclusive, nontransferable, irrevocable,
paid-up license to practice the subject
invention.
The government also possesses “march-in
rights,” which permit the agency to grant a
license to a responsible third party under
certain circumstances, such as when the
contractor fails to take effective steps to
achieve practical application of the invention.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
When the contractor does not elect to retain
title to a subject invention, the
government may consider, and after
consultation with the contractor, grant
requests for retention of rights by the
inventor.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
To elect to retain title to a subject invention:
•
Contractor must disclose each subject
invention to the agency within a
reasonable time.
•
Contractor must make a written
election w/i 2 years after disclosure.
•
Contractor must file a patent
application before any statutory bar date.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
It is very important to understand that an
invention of the contractor in the context
of Bayh-Dole does not automatically
include inventions made by the
contractor’s employees.
The U.S. Supreme Court has held that the
Bayh-Dole Act does not automatically void
ab initio the inventors’ rights in
government-funded inventions.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
Further, The Bayh-Dole Act does not confer
title to federally funded inventions on
contractors or authorize contractors to
unilaterally take title to those inventions; it
simply assures contractors that they may
keep title to whatever it is they already
have.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
University rights in patents usually stem
from university policies that require
employees to assign inventions made in
their capacity of employees to the
university.
Or, employees sign contracts promising to
make such assignments.
@ 2014 National Council of University Research Administrators
NCURA Region IV Spring Meeting
April 27 – 30, 2014
But beware: a promise to assign is not the
same as an actual assignment.
“I agree to assign my right, title and interest
in inventions resulting from my
employment” doesn’t actually make the
assignment.
“I will assign and do hereby assign my right,
title, and interest in . . . .” is an assignment.
@ 2014 National Council of University Research Administrators