Intellectual Property
Workshop
Linda Kawano – UCTech
Denise Butler – URA
Mary Ellen Sheridan – URA
October 20, 2003
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The University of Chicago
Governance of IP
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Statute 18
http://trustees.uchicago.edu/articles/statutes.pdf
New Information Technologies and Intellectual
Property at the University
www.uchicago.edu/docs/policies/intell_prop.html
Personnel Policy Guidelines, Section: U1004
http://uhrm.uchicago.edu/policy/p1004.html
What is Intellectual Property?
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Tangible Property – a set of rights defined by law that relate to a
physical object
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Intangible Property – a set of rights defined by law that are not
related to a physical object
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Intellectual Property “IP” –
Intangible property resulting from the process of intellectual creativity.
IP includes the rights provided by the laws of patents, copyrights,
trademarks, trade secrets and rights of publicity.
STATUTE 18. Patent Policy.
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18.1. The basic policies of The University of
Chicago include complete freedom of research
and the unrestricted dissemination of
information.
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The normal method of dissemination of the
results of academic work is through publication
in scholarly or other public media.
STATUTE 18. Patent Policy.
(Continued)
18.1 (Cont.) Where research or other activities carried
out at the University, or with substantial aid of its
facilities or funds administered by it result in
inventions, discoveries, or device-like software, such
products shall be disclosed to the University, shall be
the property of the University and shall be assigned
to the University, or an organization designated by
the University.
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New Information Technologies and
Intellectual Property
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Neither new information technologies nor rules
and procedures designed to accommodate
them should interfere in any way with the ability
of faculty members to pursue their research
and freely present their ideas to their
colleagues, their students, and the world at
large.
New Information Technologies and
Intellectual Property (Continued)
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Faculty currently enjoy royalties on their texts,
whether disseminated in print or electronically.
This should not change. As a general matter,
however, the University should own the
intellectual property created under its auspices
or with its resources.
New Information Technologies and
Intellectual Property (Continued)
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The University should not assert this interest in
the case of a faculty member's noncommercial
use of new information technologies or in the
case of the commercial use of such
technologies until the revenues generated are
substantial.
New Information Technologies and
Intellectual Property (Continued)
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The University has an interest in how its name
is used. Individual faculty cannot alone decide
whether a program should be sponsored by the
University. Hence, they must be vigilant when
using new information technology as
elsewhere to ensure that they do not engage in
activities that give the appearance of being
sponsored by the University.
New Information Technologies and
Intellectual Property (Continued)
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Because information technology can change
rapidly, the most important obligation of faculty
who exploit such technologies is early
disclosure of what they are doing to their chairs
or deans.
Personnel Policy Guidelines
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Section: U1004
Any invention, discovery, or device-like software which
results from activities carried out at the University or
with substantial aid of its facilities or funds shall be
disclosed to the University, shall be the property of the
University and shall be assigned to the University or a
University-designated organization.
Guidelines for Grant & Contract
Management
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212 -- Policy on Patents and Software
(October 2003)
213 -- Committee on Patents and Software
(October 1992)
University Reporting Lines
President
Vice President for Research
Provost
UCTech
Deputy Provost for Research
URA
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Material Transfer Agreement:
Intellectual Property Issues
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Desirable Definitions of Terms in
Material Transfer Agreements
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Material – the physical substance being transferred,
but in a proposed contract the term may be
definitionally enlarged to include other items, including
confidential information about the material, and the
forms of the material which may arise from replication
and maintenance in the recipient laboratory
Occasionally, the proposed definition of “Material” in
agreement drafts may even include new intellectual
property arising through the use of the transfer
material.
Desirable Definitions Cont.
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Progeny – usually means the descendant copies of the material
that are produced in the recipient laboratory as a result of
replication (e.g. cell division, DNA copying). The implication is
that progeny material is an essentially unchanged copy of the
originally provided material, and thus is provider-owned.
Unmodified Derivatives – usually means products of the original
transferred material (e.g. monoclonal antibodies secretd by a
hybridoma cell line) and these are also considered to be providerowned. When the term “derivatives” is used in a contract, it
should be clarified whether or not this term includes more than
unmodified derivatives.
Desirable Definitions Cont.
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Modifications – usually means modified derivatives (cf.
Unmodified Derivatives) of the original material (e.g.
the original provider-owned DNA molecule or a
fragment thereof newly embedded in a recipient-owned
expression vector and using a recipient-owned
promoter). Modifications with new utility that include
material from both the provider and the recipient may
be inventions with ownership vesiing in both the
provider and the recipient, but each individual case
must be well understood for such conclusions to be
reached.
How does loss of control of intellectual
property limit future research paths?
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If preemptive MTAs cloud ownership rights,
investigators may be restricted in their ability to interact
with a future sponsor.
Intellectual property terms in MTAs may prevent the
institution from conferring rights on a future developer,
just as a lien on real property may prevent subsequent
transfer of title. No sponsor wants to pay for research
benefits that it cannot have.
In addition, the terms of an MTA may make it difficult to
collaborate with other scientists.
Why is there concern about
ownership rights?
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While it is obvious that the physical materials are the
property of the provider, providers may also assert
ownership not only to the physical material being
provided, but also to new materials created by the
recipient or inventions made through the use of the
provided materials.
While an agreement may not claim actual ownership, it
may award the provider an automatic license to
resulting intellectual property for little or no
compensation.
Why is there concern about
ownership rights? Cont.
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When a company makes what it regards as available
materials for use in university research, it generally
expects some access to resulting intellectual property.
Since the provider of the material is (usually) not
funding the research, the institution needs to ensure
that its intellectual property obligations to those
sponsors who are funding the work do not conflict with
the proposed obligations to the provider of the material.
Why is there concern about
ownership rights? Cont.
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Because so much academic research is federally funded, it may
be important to clearly acknowledge in the MTA the rights of the
federal government regarding inventions that may be made with
the material.
Terms which give the provider licensing rights to resulting
intellectual property must be carefully crafter to ensure that (a) the
rights of research sponsors are protected, (b) the licensee
company will diligently develop the intellectual property for public
use, and © the university receives fair compensation for its
contribution.
Why is there concern about
ownership rights? Cont.
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The bottom line is that getting the material may
open new avenues of research, but careless
acceptance of terms that surrender intellectual
property rights may close them down.
Is there an option for an institution to
forego ownership rights?
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Investigators may be willing to forego inventor’s rights because
they believe it would expedite MTA processing, and intellectual
property rights and commercialization are not that important to
them personally.
Investigators who have federal funding should be aware that
although the federal government does not demand active
participation in commercialization by anyone, it does require that
its grantees avoid impeding commercialization.
The institution cannot “give away” rights which it has previously
agreed either to claim itself or waive to the federal government.
Sponsored Research Agreement
Intellectual Property
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Intellectual Property
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University is to grant commercial sponsors of
research an option to negotiate to obtain a
license for intellectual property that may be
created in the research they sponsor
Patents and Licensing
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The University will not agree to assign
inventions to commercial sponsors, nor will it
agree (usually) to specific financial terms for a
license before an invention is made.
Policy on Patents and Software
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This policy refers to Statute 18. In keeping with its longstanding policies, the University does not pursue
research in anticipation of profits. The principal goals of
research remain the discovery of new knowledge and
its dissemination. Since some of the by-products of
research may be of commercial value if they are
properly protected, developed and marketed, the
University realizes that it needs an appropriate
mechanism to recognize developments, protect them,
and bring them to the marketplace.
Policy on Patents and Software Cont.
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In order to recognize changing circumstances, the scope of Statute
18 has been broadened to cover certain software in addition to
patents. The policy follows the University's traditional distinction in
the treatment of inventions and publications. Under University
policy inventions have been the property of the University with the
inventor receiving a share of any proceeds from their
commercialization. Traditionally, published works written by
members of the faculty have been published under agreements
made by the faculty members and without the participation of the
University. There is no purpose to change the customary
arrangements on published material.
Policy on Patents and Software Cont.
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One type of materials that is not normally patented but
has become potentially valuable property is computer
software. Such software often is protected by
copyrights. In some cases it may be patented and in
other cases it is either licensed under secrecy
arrangements or made readily available to the public.
After some study, it is being recommended that
"device-like" software be treated as a by-product of
research activities like inventions.
Policy on Patents and Software
Cont.
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Software may conceptually be divided into two
principal categories. "Textual" software is software
which is primarily intended and likely to result in
informing or educating the user or in improving his or
her general capabilities. For instance, such software
may be an interactive package intended to train the
user in a skill as part of the user's education, or may
teach the user elements of software design or
engineering. This type of software is akin to a textbook,
and ordinarily will be treated as published materials
rather than as an invention subject to Statute 18.
Policy on Patents and Software
Cont.
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"Device-like" software is software which is primarily
intended and likely to result in the accomplishment of a
task or in allowing the user to produce, manage,
analyze, or manipulate a product, such as data, text, a
physical object, or more software. Such software acts
as a tool or building block in the accomplishment of
such a task or in the creation or management of such a
product or result.
Policy on Patents and Software
Cont.
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Since device-like software serves the same purposes
as other inventions, the new statute identifies devicelike software, like inventions, as a type of property that
will be owned by the University. Protection in the form
of copyright, patents and/or licensing will be utilized as
appropriate. In no case will the policy be used to
interfere with the free publication of research results.
Income from patents and device-like software shall be
distributed among the inventors, Division and research
units involved, and the University.
Policy on Patents and Software
Cont.
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The statute recognizes that procedures to implement
the policy will be administered under the direction of
the President. It is also recognized that in particular
situations questions may arise as to the proper
ownership of patents or device-like software under the
policy (including whether a particular piece of software
is textual or device-like). As with all other business or
professional activities, a faculty member should obtain
the consent of the appropriate Chairman or Director
and Dean before engaging in activities that might be
inconsistent with this University policy.
Policy on Patents and Software
Cont.
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In order to advise on this and other questions
of implementation, the President will appoint a
Faculty Committee on Patents, Software, and
Intellectual Property. A Chairman, Director,
Dean or Faculty member may seek the advice
of this committee in any case if he or she
desires [See Guideline 213, "Committee on
Patents, Software, and Intellectual Property", p.
213.1].
Policy on Patents and Software
Cont.
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This policy is grounded in sound principles. Often,
inventions made during the course of commercially
sponsored research are the result of years of activity
using University facilities and resources that have not
been supported by the sponsor.
While commercial sponsorship may defray a portion of
the actual cost of carrying out a sponsored research
program, it does not and is not intended to compensate
the University for the commercial use of inventions that
may be made during the research.
Policy on Patents and Software
Cont.
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Applicable laws and regulations provide an additional
basis for the University’s position on sponsor rights.
One such law that bears on the University’s handling of
intellectual property created during commercially
sponsored research relates to use of facilities that have
been built or enhanced with tax exempt bonds. The
general rule is that the tax-exempt status of bonds
issued for the construction of research facilities may be
lost if the facilities are used for private, rather than
public purposes. Such a loss of tax-exempt status
would have serious consequences for the University.
Background Technology
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Often in sponsored research proposals,
sponsors may need or want to utilize existing
technology owned or controlled by the
University. This scenario creates significant
problems. For example, how can a sponsor be
given rights in technology that it did not fund
and/or was funded by other industrial sponsors
or government.
Technology Transfer
The transfer of research results from universities to the commercial sector
Origin of Technology Transfer
Vannevar Bush Report of 1945
Importance of University research to national defense
Initiated substantial Federal funding to university research
Stimulated formation of NIH, NSF, ONR
Bayh-Dole Act of 1980 (Public Law 96-517)
Encouraged utilization of Federally-funded inventions
Promoted participation of universities in commercialization process
Established a uniform Federal patent policy
Provided the basis for US university tech transfer practices
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Bayh-Dole Act
Important Provisions
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Universities may elect title to inventions
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Universities are expected to protect IP
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Government retains non-exclusive license
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Government retains march-in-rights
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Uniform guidelines for granting licenses
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Universities must report on activities
UCTech
Office of Technology and Intellectual Property
Who we are…
UCTech Home Page
http://uctech.uchicago.edu/contact/index.shtml
What we do…
We work to disseminate discoveries with commercial potential to the
public
We work with faculty, students and staff in this effort
We protect the IP rights of inventors and the University
We seek out and work with industrial partners to develop and
commercialize discoveries
We strive to generate revenues of research and education
We ensure that the revenues are shared with inventors, their labs,
departments and academic divisions
Revenue Share Policy: http://uctech.uchicago.edu/crsp060603.pdf
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When do IP issues arise within the University?
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As a by-product of sponsored research grants
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As a result of a sponsored research agreement
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In the creation of course materials
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In the transfer of tangible properties out of and into the
University
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Through collaborations with other institutions
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Through the use of third party proprietary research materials
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During clinical trials (not common but possible)
When does UCTech become involved in the
research process?
New Invention Disclosures
Inter-institutional Agreements
License Agreements
Option Agreements
Material Transfer Agreements (MTAs) – IP clauses
Sponsored Research Agreements – IP clauses
General advising of faculty, students, staff – IP issues, licensing,
working with industry
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Invention Disclosure and Management
Invention Disclosure
New Invention Pending List
Invention Assessment
Potential for patent protection - public disclosure?
Commercial potential
Sponsor rights/other rights
Stage of development/ future research planned
Inventor’s interests and expectations
Invention Management Strategy
Allocate resources – yes? no?
Invention Marketing – seeking potential licensees
Licensing
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Licensing
Conduct basic research – business area and market
Target specific companies – more research
Make contacts
Begin initial discussions – fit/capabilities/interests
Negotiate license terms
Prepare license agreement
(Licensor = University; Licensee = Company)
Continue negotiations
Come to agreement on all terms
Execute license agreement
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License Terms of Major Importance to the
University
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No restrictions on research and teaching activities
Patent reimbursement
Management of patent prosecution and maintenance
Indemnification
No warranties or representations
Reservation of rights of Government sponsors
No use of names without written permission
No assignment of patent rights
Inclusion of diligence / performance terms
Reasonable financial terms
Priorities and Concerns of Industry
PROFIT
Efficiency
Costs vs Benefits
Time to market – stage of development
Regulatory issues / hurdles
Budgetary concerns
Standardization of manufacturing processes
Market acceptance
Outcomes
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University and Industry Negotiations
Best Practices
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Strive for excellent communications – professional, clear and
effective
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Fully understand the goals, interests, priorities and constraints
of the university
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Understanding the goals, interests, priorities and constraints of
the other party
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Discuss the above at the outset of negotiations
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Establish clear understandings and manage expectations
within your own organization
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Respond in a timely manner
IP at Chicago: Points to Consider
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Colleagues, Objectivity and the IRS
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Data Sharing
FOIA & Data Access
IRS and Tax-exempt Bonds
Financial Conflicts of Interest
Who OWNS the Data?
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University Policy says the University owns the
IP
No University data “ownership” policy per se
PHS policy states the institutions owns the
data
Obligations for Data Sharing
(“access”)
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Sharing research resources, including data,
already a condition of award for PHS, NSF
Specific data sharing plan required by NIH in
certain proposals
Why is sharing important? Confirmation of
scientific progress is replication of claims
Retention of Data?
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A-110 requires institution to retain data for
three years after the end of the project period
What happens when students or postdocs
leave the University?
Take a copy of data for future research, leaving
original notebooks
No rights to underlying IP
What happens to data when PI
leaves?
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It all depends – are there collaborators?
Usually data are under “custodial” care of PI,
but obligation to produce data would still be
University’s (e.g. in an allegation of scientific
misconduct)
HIPPA, IRB clinical data concerns. Medical
records cannot leave the University
What’s FOIA got to do with data?
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Access to applications – NO
Access to funded proposals – YES
PI contacted by Agency prior to release
Ability to protect certain information in funded
application
Including “proprietary” data in
proposal?
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Mark every page of application
Weigh the consequences about how reviewers
might regard this
Does meet the “business information”
protection
FOIA and Shelby Amendment
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Shelby proposed access to research data
developed with Federal funds
OMB refined: Must be related to agency action
or position that has the force and effect of law
Agency must have publicly cited the findings in
developing agency action
Exemptions from Shelby
Amendment
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Preliminary analyses
Communications with colleagues
Data that would violate personal privacy
information
Shelby applies to all awards issued
after November, 1999
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PIs are urged to discuss any FOIA requests for
data with URA, Legal before approving release
of funded proposal or data
All FOIA requests go through agency – NO
direct requestor-PI contact
Why does the IRS care about IP
rights?
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Tax exempt status granted to organizations
with public service mission
University’s education and research must
benefit the public, not private interests
Tax-exempt Bonds and IP
complications
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Institutions borrow money for construction of
research buildings with tax-exempt bonds
If private sector has “exclusive” committed
rights to research outcomes, perhaps through
sponsored research agreement
Tax-exempt status may be jeopardized
Avoiding Tax-exempt pitfalls
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Watch which space is used for corporate
sponsored research
Use “option” for exclusive license for
commercialization not assignment or outright
exclusive license
Financial Conflicts of Interest
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Individual
Institutional
Maintain objectivity in research
Outside commercial relationships
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Compensation (consulting, gifts,honoraria)
Equity – stock or stock options in company
Special concerns if clinical research
Relationships that may distort
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Design
Conduct
Reporting
University policy: Individual
Financial COI
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Incorporates PHS and NSF regulations and
policy
Requires Assurance of Compliance by all
faculty and key personnel
Not restricted to sponsored research
Policy – no outright prohibitions
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Emphasis on on Disclosure
Protection of human subjects
Concerns for students, junior faculty, staff
Recognizes complexity of relationship with
commercialization of University IP
Processing of COI Disclosures
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Review through departmental/divisional
channels
Management Plan established by Deputy
Provost
Oversight of Compliance - Dean’s office or
other as delegated
Institutional COI
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Situations where outside interests or
advantages influence or appear to influence
institutional decision making
Interfere with integrity of University’s research
and education mission
University beginning to develop policy