January 9, 2006
Frequently Asked Questions Patent and Invention Policy
Why does Brown need a Patent and Invention Policy?
Brown University and indeed all peer institutions have a Patent and Invention Policy (PIP) and for historical reasons they have treated patentable inventions differently from copyright. The new policy is aimed at improving our existing policy and re-aligning it with our peers.
Will faculty have the choice of being "grandfathered" into the old policy and of thus remaining untouched by the new policy?
It is important for Brown and all other institutions of higher education and research to keep their policies up to date, competitive and reflective of changes in law, regulation, and peer practice. The new policy brings a much needed re-alignment of Brown's PIP with that of peer institutions. It is important for our policies to be open, fair and commonly applied. The new PIP replaces the old policy and became effective on May 27, 2005. A number of faculty have existing written agreements with associated and often individualized royalty/benefit distribution packages. Faculty having such existing written agreements will have the opportunity to remain with their existing royalty/benefit distribution formula (i.e., they may elect to be grandfathered in). Election to switch to the new royalty/benefit distribution formula for existing agreement holders must be made within three months of the acceptance by the corporation of the new policy.
What happens to the net royalties to the inventors if they leave the institution?
The net royalties will follow the inventor. They will be paid if an inventor moves to a new institution or retires.
What happens to the net royalties assigned to the inventors' Laboratory if they leave the institution?
The net royalties assigned to an inventors' Laboratory will be given to that inventors' Department at Brown.
Does the proposed policy apply to intellectual property created during leaves of absence and sabbaticals? If so why? What about intellectual property created during vacations? What is the definition of University Duties?
This policy1 applies to "faculty, postdoctoral associates, graduate students, employees, visitors and consultants, whether paid or not, who create or make any discovery or invention relating to, conceived during or developed from, research conducted as a part of their University Duties, or in which all or part of the cost is paid from University funds or funds administered by the University, or which has been developed in whole or in part through the use of University resources." This policy also applies to undergraduate students who are receiving sponsored research funding and/or working collaboratively with faculty who are Covered Individuals under the policy. "University Duties" include teaching, mentoring of students, the conduct of scholarly research and service on university committees consistent with the furtherance of knowledge and its dissemination. A faculty member's University Duties are those that are customarily performed by those holding the position held by the faculty member as well as those that are assigned by the University. It is understood that research and intellectual endeavors of University faculty are not static, but rather are dynamic and subject to change and evolution, and therefore it is not possible to specifically demarcate when an invention or discovery might be covered by this policy without, in some cases, an examination of the facts and circumstances surrounding the development of the invention or discovery. The policy will apply to sabbaticals and vacations because these are benefits of appointment at Brown. Application of the policy will not be affected by an inventor's change in status after an invention is made. Ownership of intellectual property arising while a faculty member is on a leave of absence will depend upon the specific conditions of the leave of absence and a review of those conditions. In most cases it is expected that intellectual property arising while a faculty member is on a leave of absence is not covered by this policy. This is because the intellectual property did not arise from (i) research conducted as a part of their University Duties, (ii) research in which all or part of the cost is paid from University funds of funds administered by the University, or (iii) research developed in whole or in part through the use of University resources.
Does the proposed Patent and Invention Policy abridge the faculty's ability to consult for companies?
No. The intent of the proposed Policy is not to hinder academic-industry collaborations. Indeed, the University believes such relations have considerable merit for all parties and should be fostered as a form of knowledge creation, dissemination and application that ultimately benefits society and contributes to the public welfare. The University 1 The new policy will apply to those covered by the existing policy – see FAQ2. specifically permits and encourages its faculty to engage in appropriate consulting relationships.
Does the proposed Patent and Invention Policy impose new restrictions on faculty consulting?
No. The proposed policy does not impose new restrictions on faculty consulting. Provision 1.1.1(i) is devised to state in a precise manner those terms, conditions and obligations already existing under University policies and procedures that govern faculty responsibilities and consulting. The general principles that guide research, teaching, and service by faculty members, and principles relating to faculty consulting can be found in various statements/policies of the University, such as the Statement on Faculty Responsibilities, University policies of Conflict of Interest and Conflict of Commitment, information as set forth in the Handbook on Academic Administration, and the Standards and Criteria of individual academic units. None of these rules have changed and will still apply with equal force and effect under the new patent policy.
Does Section 1.1.1 create unrestricted University ownership to all faculty inventions?
No. Section 1.1.1 is devised so that the University has ownership to those inventions that fall within the terms of the activities described in Section 1.1.0 -- thus the University will not assert ownership to those inventions that do not fall within that ambit. This is in addition to the exception that is specified for outside third party consulting found in Section 1.1.1(i).
How does Brown University's consulting policy compare to those of other universities?
Our consulting policy and its application in practice comports with and is comparable to those of our peers. It is common practice for faculty to be permitted to perform consulting duties upon conditions that (1) acknowledge that a faculty member's primary employer is, and their primary obligation is to, their institution; (2) performance of consulting duties does not interfere with a faculty member's performance of their teaching, research, or other university duties; (3) outside consulting does not compromise the intellectual property of their institution; and (4) conflicts of interest and commitment are to be avoided, and/or disclosed, and/or managed, in accordance with institutional policies.
Frequently asked questions address the distribution formula and often suggest changes such as removing caps, increasing inventor's Lab shares, reducing or capping BTP fees and increasing departmental shares etc.
The proposed policy is consistent with peer institutions and is designed to foster invention while benefiting the individual, the university at large and the departments in particular. It is proposed that The Research Advisory Board (RAB) for the Office of the Vice President for Research or its appointed working party or sub-committee will periodically review and update the PIP. Considered in this review will be the policies of peer institutions and changes in law and regulation. The RAB, working party or subcommittee may also make recommendations to the Vice President for Research, the Provost and the President to modify the levels at which distributions are made and capped to take into account the impact of inflation as well as changes in law and regulation.
What additional incentives could be included to help motivate individuals to actively participate in the process?
The purpose of revising the policy was to make the rewards to inventors, labs and departments more consistent with that of our peers. We believe we have accomplished this. The concept of incentives has been discussed and continues to be under review. Opinion is divided between the two extremes of (i) no incentives and (ii) incentives to the inventors on the filing of a patent application and the conclusion of a license agreement. Please submit your thoughts and opinions on this matter to the RAB.
How exactly will the proposed policy apply to hospital-based faculty who are not paid by the University and other institutions? How are intellectual property (IP) rights linked to grant awards?
We are trying to create a new policy which combines clarity of understanding with a much fairer share of the potential rewards returning to the inventor, the inventor's laboratory and the relevant department. The new policy will apply in essence to those covered by the existing policy and under that policy the current guidelines are: Ownership of Intellectual Property is usually defined through an analysis of:
i. employment-related policies, i.e. who is the employer and what are their conditions regarding IP relating to the employee,
ii. location of grant (see below), i.e. who is the grantee organization and
iii. any additional agreements between two or more partner organizations.
Thus if one is employed by Brown and an invention arises through a federal grant administered by Brown, the IP belongs to Brown. Similarly if one is employed by a hospital and the federal grant is administered by the hospital, the IP belongs to the hospital. If a Brown employee has a grant which is administered by a hospital (or the reverse) then the ownership of resulting IP will be determined in consultation between the hospital and Brown. In instances including a third party such as a foundation, IP ownership will involve a multiparty resolution of rights, such as among Brown, the hospital and the foundation. In essence IP rights follow the grantee organization. That is, wherever the grant is awarded, the Bayh-Dole Act says that the grantee institution owns the IP. In the case of subcontracts, the IP rights flow down to the subcontractor organization, and in the case of joint inventions, the IP rights are shared by the inventors' organizations. Note that discussions are underway with several institutions regarding meaningful coordination of IP. In particular, Brown Technology Partnerships (BTP) has an agreement with the Marine Biological Laboratory (MBL) in Woods Hole to process their patents and inventions. From a MBL faculty viewpoint, disclosures are made in the normal way to the appropriate officer at MBL and these are referred to BTP for processing and action. Ownership of the IP is not modified in any way by this process.
Are there tax implications of equity distribution?
There may be tax ramifications to the Covered Individuals and authors under these Policies. It is recommended that the persons concerned should consult with their independent financial advisers.
Who receives the royalties on books and textbooks?
With regard to books and textbooks, the copyright will customarily be owned by the authors and any royalties earned will be paid to the authors. The University will receive no royalty under this circumstance. In those rare instances in which the University owns the copyright, the royalties will be distributed according to the formula set forth in section 1.3 of the PIP.
Why is Brown entitled to ownership of Intellectual Property developed by the individual faculty?
Because Brown provides the faculty member with facilities and a financial support environment in which to create, invent and discover. Consequently Brown, like virtually all academic institutions, takes ownership of inventions but shares any financial rewards with the faculty member/inventor. Were the faculty member an employee in industry she/he would be obligated to assign ownership rights to the employer typically without receiving any share in the royalties.
What are the University's obligations under Bayh-Dole?
The emphasis on technology transfer from universities to the private sector can be dated to the 1980 enactment of The Patent and Trademark Law Amendments Act (PL96-517), more commonly known as the Bayh-Dole Act, and amendments included in P.L. 98-620, enacted into law in 1984. Bayh-Dole covers an invention or discovery that is or may be patentable and was conceived or first reduced to practice in the performance of work under a federal funding agreement. The Act generally specifies:
1. Universities must file patent applications on inventions they elect to own and comply with Federal notification and reporting requirements;
2. Universities may out-license, but they may not assign, rights to inventions;
3. The Government will retain a nonexclusive license to practice the invention on behalf of the U.S.;
4. The Government will have (theoretical) march-in rights to inventions;
5. The invention must be developed and commercialized in a diligent, expedited and efficient manner, including milestones and performance assessments; and
6. In order to be sold in the U.S., any products made using the technology must be substantially made in the U.S. and preferably by small businesses. 1.9.2006