IP Policies

Intellectual Property policies differ from Mission Statements with their heavy legalistic terminology. Some policies are established as part of an employment contract while others may be separate agreements the university requires its researchers to execute as a condition of employment. These policies vary widely depending on the university, with some giving broader latitude to its researchers in terms of conditions of ownership rights, commercialization, licensing and licensing royalty revenue sharing.

Intellectual Property policies of a research university may be established by either a university-wide Policy Office, by the office of a Research Provost or Chancellor, by the Regents’ System or another oversight body within or in addition to a particular university or system of universities. IP Advocate recognizes that in every aspect of Intellectual Property, certain universities are operating in a more socially responsible and equitable manner than others.

The following examples represent policies of universities whom IP Advocate considers to be operating under Best Practices:

• Columbia University - One of the best features of this policy is their concern for the inventors. In the event of controversy over ownership aspects or any matter of the sort, a panel will decide the issue at hand. Even more rare is that the inventor is allowed to participate in the selection of panel members. Consideration is also given to the inventor where they have concerns about a potential licensee of their innovation.
• University of Pennsylvania - This policy may seem complex at first glance, however, it very clearly defines all terms used and is quite fair to the inventor. In regard to licensing revenue distribution, there are no “discretionary funds”.  All of the funds are distributed directly to the inventor, their research, their department, and then the remainder for general research.

Cautionary Tales

Massachusetts Institute of Technology ("MIT")

Overall, MIT's policies are reasonable, but a portion of their policy is challenging. Having sole discretion vested in one person can make things difficult.

Policy in Question

Ownership, Distribution and Commercial Development of MIT Technology, Section 4.7 Royalty Distribution - General

Distribute one-third of the Adjusted Royalty Income to the inventors/authors. This distribution shall be contingent upon the inventors/authors adherence to the obligations of any applicable sponsored research agreement.1

If the Vice President for Research determines that an inventor or author has caused a material breach of a sponsored research agreement, he or she may after investigation, but in his or her sole discretion, deny the inventor or author all or a portion of the royalty income from any inventions arising from such sponsored research agreement.

Analysis

IP Advocate does not support vesting the authority to disenfranchise an inventor from all of the royalties from their invention in one person. More specifically, IP Advocate does not support denying an inventor their share of their invention for any reason. However, if MIT feels this section is required in their policy, a committee, including peers of the researcher, should be entrusted with this power, not a sole university administrator.

IP Advocate encourages MIT to:

• Strike this section in its entirety, or
• Modify it substantially to ensure there is no opportunity for abuse.

University of Michigan ("UM")

Policies in Question

The University of Michigan’s IP policy takes the position that research conducted on an employee's own time and with his or her own resources is subject to the Universities IP Policies. In contrast, the majority of universities specifically exclude employee's salaries from qualifying university resources.

Technology Transfer Policy, Section II, Ownership of Intellectual Property

Intellectual Property made (e.g., conceived or first reduced to practice) by any person, regardless of employment status, with the direct or indirect support of funds administered by the University (regardless of the source of such funds) shall be the property of the University, except as provided by this or other University policy. Funds administered by the University include University resources, and funds for employee compensation, materials, or facilities.

Technology Transfer Policy, Section V, Revenue Distribution

For agreements entered into after January 1, 2007, after recovery of University Expenses, aggregate revenues resulting from royalties and sale of equity interests shall be shared as follows. The division of revenues is subject to change through appropriate University procedures.

Technology Transfer Policy, Section VII, Appeal Process

The Vice President for Research (or designee) shall diligently consult the involved parties and other University administration officials as necessary, and shall communicate the decision, which shall be final, in writing, to the appellant.

Analysis

The policy from University of Michigan specifies use of “indirect” funds “administered by the University” as a qualifier for university ownership of an innovation. The policy then goes on to list “employee compensation” as “funds administered by the University”. IP Advocate's interpretation of this policy is that if a researcher uses any portion of their personal salary to finance research performed in their spare time off of University premises, using no University assets, the University would still own the results of that research.

Furthermore, their Appeals process is vested in one individual. Either the Vice President for Research, or someone else they have designated for the role - this person's decision is final. This portion of their policy is concerning as well, particularly in combination with the following issue.

University of Michigan sets aside 15-35% of the licensing revenue (depending on the profitability) for the University itself, with no qualifier dedicating it to further research. This implies that these funds are “discretionary”, which can encourage decision making to drive profit without regard for right and wrong. Furthermore, revenue distribution is based on net revenues “after University Expenses” yet these expenses are not further defined in the policy.

IP Advocate encourages the University of Michigan to:

• Exclude salaries from this policy
• Appoint a committee to address appeals
• Define, in detail, what constitutes “university expenses”
• Direct the university’s portion of licensing revenue into further research