C.16 February 1, COMPUTER SOFTWARE I SOFTWARE CREATION POLICY 1. PREAMBLE

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1 C.16 February 1, COMPUTER SOFTWARE I SOFTWARE CREATION POLICY 1. PREAMBLE 1.1 Computers are becoming an increasingly important tool in the academic programs of the University. If the University is to remain in the forefront of developments employing this technology, it is important that the University maintain an environment which encourages the development of innovative computer software by its faculty, staff and students, and provides appropriate recognition for the creator. 1.2 In accordance with the basic purpose of the University, significant new software should be made available to society. One way to accomplish this, which may be appropriate under certain circumstances, is through commercial exploitation in a manner consistent with the role and image of the University. The benefits from commercial exploitation should be shared between the creator, who supplied the ingenuity, and the University, which provided the facilities for the software development. The University's share of any income generated can help to strengthen its academic programs. 2. DEFINITIONS 2.1 Software - as used in this policy the term `computer software' shall mean any sequence of coded instructions or data for a computer including firmware and any hardware modifications required for a sequence of instructions to be executed by, or made available to, the computer. 2.2 University Personnel - this term shall include all members of the University's faculty, professional librarians, professional staff, technical, administrative, support or other staff, students registered in the University's academic programs and any other personnel employed in the University's teaching or investigative programs. 2.3 Creator - this shall describe members of University personnel as defined above who made a significant intellectual contribution to the development of an item of software. 2.4 Net Revenues - this term shall mean the gross income received from the sale or licensing of an item of software less all expenses paid or incurred directly or indirectly in connection with the creation, development, marketing, licensing and maintenance of that software. 2.5 Development Costs - development costs shall be those resources specifically allocated to an individual, department or college to create and/or develop an item of software. 3. SCOPE 3.1 The Software Creation Policy shall apply to all software created by University personnel with the use of any University facilities or resources. 4. POLICY

2 4.1 Ownership of Software a) The general policy is that, except for the special circumstances described below in Sections 4.1(b) and (c), the ownership of software developed by University personnel in the course of carrying out their normal University responsibilities utilizing resources normally available to them, shall belong fully to the creators. Normally available resources include, but are not limited to, research grants and contracts, regular budget allocations and facilities and other resources available to students as part of a course. b) Ownership of software shall belong fully to the University in the following four situations: i) the software was created by a faculty member, or any other member of University personnel whose regular job responsibilities do not include software development, with the direct assistance of significant, specially allocated, University resources over and above those normally provided by the University. ii) the software was produced with significant resources provided by an external sponsor via a grant, or contract without a specific ownership provision, predominantly for the development of that software. iii) the software was created by a member of staff whose regular job responsibilities include software creation and development. iv) creation of the software was specifically commissioned by the University of a faculty member, or of any other member of University personnel whose regular job responsibilities do not include software creation or development, under a written agreement which clearly describes all the arrangements including the resources to be allocated for the software creation and development and any provisions for sharing of net revenue. c) When the software was created under a written contract with an outside sponsor the ownership of software shall vest in accordance with the conditions of the contract. 4.2 Disclosure of Software a) When a member of University personnel believes he/she has created an item of software which might have commercial potential he/she, after consultation with his/her academic department chair or administrative department head as appropriate, shall disclose it to the Vice-President Research who shall, together with the creator, department chair or head and college dean or administrative director, determine the identity of all creators and whether the software is owned by the creator, the University, or an outside sponsor. 4.3 Commercial Development, Revenue Sharing and Use of Revenue a) Software Owned Wholly by the Creator. i) the creator is free to choose the method for commercial development and the University will if requested by the

3 creator provide suggestions on where to seek advice on procedures for commercial development. ii) the creator may, at his/her option, offer the software to the University for commercial development in which case the following steps shall be followed: a) the creator shall assign all rights to the software to the University; b) the Vice-President Research shall be responsible for determining, after consultation with the creator, and, if necessary, with additional technical and legal experts and within 90 days of the date of disclosure of the software, whether or not the University wishes to commercially develop the software; c) if the University decides that it does not wish to commercially develop the software, it will return all rights to the software to the creator; d) agreement on the appropriate avenue to follow for the commercial development of the software will be reached in discussions between the creator, and the Vice- President Research assisted by, if necessary, additional technical and legal experts; e) when the software is commercially developed through the University, mutually agreeable arrangements will be made with the creator for the maintenance and service of the software. iii) notwithstanding Sections 4.3(a)(i) and 4.3(a)(ii)(c), where software owned by the creator has been developed in whole or in part with the support, facilities and/or equipment of the University, the University shall normally retain a non-exclusive, royalty-free, non-assignable, irrevocable license to use the software for the University's own purposes. The University will not, however, modify the software without the consent of the creator. iv) When the software is owned by the creator and has been assigned to the University for commercial development, the University shall pay to the creator: a) 75% of the first $100,000 of net revenue; b) 25% of net revenue exceeding $100,000. v) The University's share of net revenue, up to a maximum per item of software of $500,000 per year, shall normally be distributed as follows: a) 25% to the academic or administrative department of the creator; b) 15% to the college or directorate of the creator; c) 60% towards recovering the accumulated prior costs, if any, of the software marketing and licensing program of the University, otherwise to the University's endowment fund. vi) If the University's share of net revenues from a single item

4 of software exceeds $500,000 in any one fiscal year, the Research Board shall make recommendations to the President for the disposition of the additional revenues. vii) The $100,000 and $500,000 levels shall be reviewed periodically by the Research Board which may recommend adjustments. b) Software Owned by the University According to the Provisions of Section 4.1(b) (i) or (ii). The provisions of Section 4.3(a) shall apply except that the creator does not have the initial option to commercially exploit the software privately. The University will make the initial decision on whether commercial exploitation should be attempted. c) Software Owned by the University According to the Provisions of Section 4.1(b) (iii). i) The chair of the academic department or head of the administrative department and dean of the college or head of the administrative directorate in which the software creation occurred shall be responsible for determining whether or not commercial development of the software should be attempted and, if so, what strategy should be followed. The Industrial and Innovation Services group in the Office of Research will assist if necessary. ii) Except for the provisions described below in (iii) and (iv) the net revenues shall be returned to the academic department or administrative directorate which created and developed the software. If net revenues from any one item of software exceed $100,000 in any one year the use and distribution of the amount over and above $100,000 shall be determined by a committee comprising the Vice-President Academic, the Vice-President Administration, the Vice-President Research, the department chair and college dean or administrative director involved. iii) One (1) per cent of net revenue shall be set aside in a fund which shall be administered by the academic department chair or administrative director and shall be available, for professional development only, to all members of University personnel in that department or directorate with priority to those persons who contributed to the creation and development of the software. iv) When one or more members of the staff in Computing Services and/or Communications Services made significant contributions to the creation and development of the software, one (1) per cent of net revenue shall be set aside in a fund which shall be administered by the Directors of Computing Services and Communications Services and shall be available for professional development only to all members of these two directorates. v) Special Recognition a) Chair or academic departments or heads of administrative departments should ensure that contributions of members of University personnel to the creation and development of software are considered in the applica-

5 4.4 Recognition of Creator tion of the University personnel policies on promotion and merit increase. b) University personnel who have made an exceptional contribution to the creation and development of software which, in the opinion of the department chair or head warrants special recognition, may receive on the recommendation of the department chair or head and the approval of the appropriate dean or director and vicepresident, a one-time cash or non-monetary payment in recognition of the special contribution of those persons. a) When software is commercially developed by the University, the University shall use its best efforts to ensure that the creator of the software is acknowledged. 4.5 Policy Administration a) The Vice-President Research shall be responsible for the administration of the Software Creation Policy. 4.6 Resolution of Disputes a) Section b) below shall apply only in those situations where the software creation and development was not covered by a specific written agreement (section 4.1(b) (iv)). b) If all other attempts fail, in an effort to resolve a dispute between another party and the University with respect to the decision on ownership of software, the identity of creators of software, or the revenue sharing arrangement, the dispute shall be referred to a Board of Arbitration composed of one representative nominated by the University, one by the other party, and a third member selected by the two representatives thus chosen. Either the University or the other party may require that a Board of Arbitration be selected by giving to the other written notice of such requirement. If either the University or the other party does not nominate a member of the Board of Arbitration within ten (10) days after the other has given such written notice, then the member of the Board of Arbitration nominated by the party giving the original notice shall constitute the entire Board of Arbitration. If both parties nominate members for the Board of Arbitration and the two members so nominated are unable to agree on a third member for the Board, this shall be resolved under the Arbitrations Act of Ontario. The decision of the Board of Arbitration shall be final.