Code of Practice on Intellectual Property, Commercial Exploitation and Financial Benefits

Transcription

1 G 46 Code of Practice on Intellectual Property, Commercial Exploitation and Financial Benefits 1 Objectives and Principles 1.1 The purpose of this policy document is to set out the principles governing the management and commercial exploitation of the University s intellectual property and to affirm the University s rights of ownership. The University s rights of ownership and interest in intellectual property created by its staff in the normal course of their employment are governed by law. In addition certain student intellectual property may be assigned to the University. Net proceeds from commercialisation of intellectual property will be distributed between the inventor(s), the relevant School(s) and the University. 1.2 The goals of the University concerning intellectual property are: To increase the commercial exploitation of its intellectual property, thereby increasing regional and national economic growth; To contribute to the professional development of and give appropriate financial reward to individual inventor(s) at the University; To enhance the reputation and resources of the University and provide new educational opportunities; To exploit intellectual property commercially by the most appropriate means whilst safeguarding academic dissemination. with a view to encouraging innovation by academics and other members of staff through working in collaboration with the University, and, as described below, the University s commercialisation strategic partner, ANGLE plc. 1.3 This document should be read in conjunction with the Guide to the Commercial Exploitation of Intellectual Property, which explains the processes and procedures to be followed when potentially commercialisable intellectual property is identified. 1.4 The University, as owner of the intellectual property of its employees, reserves at all times the right to modify this Code of Practice and the accompanying Guide at its discretion. 1.5 This version of the Code of Practice shall take effect from 23 March 2007 (the Effective Date) in place of and shall supersede all previous versions of the Code. This Code applies with effect from the Effective Date to the management and commercial exploitation of all University IP, whether created before, on or after the Effective Date. 2 Definitions 2.1 Intellectual Property (IP) can be defined as a category of intangible rights protecting commercially valuable products of the human intellect; like other forms of property, IP has an owner, can be bought, sold and rented,

2 Code of Practice on Intellectual Property / G 47 and must be sufficiently protected. This Code of Practice applies to all forms of legally recognised IP that are created or devised in the course of employment of University staff or in the course of contractual relationships or study by students registered at the University, including but not limited to the following: Patentable inventions, each embodying a new idea capable of being made or used by industry and involving a non-obvious inventive step, e.g. devices, DNA sequences, new chemical entities, some computer programs. These are protected by Patent New varieties of plants or seeds, protected by Plant Breeders Rights Literary and artistic works, films, videos, records, broadcasts and typographical arrangements, including computer software, electronic materials and web pages, protected by Copyright Designs and design drawings, mainly of aesthetic objects, protected by Registered Design Rights Engineering components, architectural drawings, etc., protected by Unregistered Design Rights Product brand names, company logos, etc., protected by Trade Marks Collections of independent works, data or other material in electronic or paper form, protected by Database Rights Trade secrets and background techniques, protected by Know-how. 2.3 Inventor(s) means any person or persons who create an item of intellectual property. 2.4 Research & Enterprise Services (RES) means the department of the University containing the Technology Transfer Office, which is responsible for managing and commercialising the University s IP. 2.5 School means the School, Directorate, Self Financing Centre or unit to which an individual is assigned in accordance with his/her contract of employment or student registration. 2.6 Staff means individuals who are employed by the University under a contract of employment whether fixed term or permanent, including but not limited to academic and non-academic staff, research associates, and technicians. 2.7 Student means any person registered as a full or part-time undergraduate or postgraduate student of the University or following any course as if such a student. 2.8 Supervisor means a member of academic staff responsible for supervising, assisting, guiding, or in any other way monitoring a specified piece of academic work, including assessments, by a student. 2.9 University means The University of Reading University IP means IP created by, or licensed to or by the University which it wishes to commercialise in collaboration with the Inventor(s). The definition of University IP includes, without limitation, all IP retained by the

3 G 48 / Code of Practice on Intellectual Property University as a result of third party collaboration, but excludes all IP which the University, in its discretion, does not wish to commercialise. 3 Ownership Staff 3.1 Under the Patents Act 1977 and the Copyright, Designs and Patents Act 1988, employers own IP created by their employees in the normal course of their employment. 3.2 IP created outside the normal course of employment may be the property of the individual. 3.3 The University asserts its rights to ownership of all IP created as defined in 3.1 notwithstanding clause 3.5, and including but not limited to the following: Films, typographical arrangements, video tapes, records, drawings, broadcasts, multi media productions, photographs or other works made with the aid of University facilities Courseware, databases, computer software and firmware Patentable and non-patentable inventions, plant varieties and related information Any University commissioned works Works generated by computer hardware or software owned or operated by the University Registered and unregistered designs and semi-conductor chip topographies. 3.4 Where the University has specifically commissioned books, textbooks, reports, articles, lectures, plays, teaching aides or similar works in all formats, it asserts its rights to ownership. The University agrees to acknowledge the right of the Inventor(s) to be identified as author of any copyrightable works mentioned within this clause. The University grants the Inventor(s) of the material a free, non-assignable right to use and copy such material for their own academic purposes (but not in any way for commercial exploitation) whether or not the Inventor(s) is still at or employed by the University. In the case of usage after employment by the University has ceased, the form of the material covered by the licence will be that in place at the date the Inventor s employment by the University ceased. Where copyright belongs to the University, staff and students should confirm the fact by inserting the following copyright notice on all material: The University of Reading 200[ ]. 3.5 Taking into account clause 3.18, the University will generally not assert its rights to ownership under law of copyright in books, textbooks, articles, lectures, plays and teaching aides in all formats not specifically commissioned by the University, and generally assigns copyright to the Inventor(s). The Inventor(s) grants the University a free, unconditional and perpetual, non-exclusive licence to use and copy such material for academic and administrative purposes. In the event that the Inventor leaves the University this licence will remain in effect. Where the copyright belongs to the

4 Code of Practice on Intellectual Property / G 49 Inventor(s), they are encouraged to insert a personal copyright notice on the material: [Author s Name] 200[ ]. 3.6 Any author submitting material for publication whose subject is known to be of commercial value, or where there is any doubt as to the possible commercial value, should first consult RES. 3.7 Any author submitting material to be published must inform the publisher of the licence between themselves and the University defined in clause 3.5. When copyright is transferred to a publisher the University must retain a licence to archive the material and make it freely available online. Students 3.8 As referred to in clause 3.1, legislation states that employers own IP created by their employees in the normal course of their employment. As students are not employees, the University does not automatically own student IP. 3.9 However, there are circumstances where the University will require a student to assign their IP to the University before, during or after the course of studies. These can include the following: A project funded by a third party under a grant or contract. The terms of the grant or contract between the University and the funding body will determine ownership of the IP and in some cases the student will be required to provide an undertaking to assign their IP to the University or funding body A student working in collaboration with University staff where the IP generated by the student is needed to enable the use of the entire technology A student who wishes to work with the University to exploit their IP and the University agrees to do so It is essential that a supervisor informs the student of any contractual issues concerning IP ownership at the start of the project and a confidentiality agreement is signed where appropriate. If an assignment of IP is necessary, the supervisor will inform RES immediately When the University requires a student to assign their IP to the University, the student will be required to complete an Assignment Agreement and abide by the procedures and accept the obligations in this Code of Practice In consideration of a student who has assigned their IP to the University they will be treated for ownership and reward purposes pursuant to clause 5 of this Code of Practice as though they were staff of the University and will benefit from input of RES professionals in IP management If a student is not willing to assign their future IP to the University then the University shall be free to re-assign the student to a less commercially orientated project The copyright in a thesis written by a student shall belong to the inventor. The inventor grants the University a free, unconditional and perpetual, non-exclusive licence to use and copy such material for academic and

5 G 50 / Code of Practice on Intellectual Property administrative purposes; the licence will remain in effect in the event that the inventor leaves the University. The University requires a copy of the thesis to be deposited in the University and the British libraries. For further information a student should contact the Examinations Office A student who remains uncertain of their rights and obligations in the protection of IP is encouraged to consult RES in the first instance and seek independent advice if necessary. Non-Employees of the University 3.16 A consultant engaged by the University will be bound by the terms of the Consultancy Agreement which must be signed by both parties before any work at the University commences Heads of School shall require academic visitors to sign an agreement in respect of ownership of IP invented or discovered by the visitor in the course of the visit. The agreement will be one of: If the academic visitor has no contract of employment, IP will belong to the University; If the academic visitor has a contract of employment with another institution, the ownership and exploitation of the IP will be subject to an interinstitutional agreement to be put in place by RES before work commences. Agreements with Funding Bodies 3.18 If IP arises from research which is supported or commissioned by a third party (e.g. Research Council, Government, Industry, Charity) under a grant or contract, then the terms of the contractual agreement between the University and the third party will determine ownership, use, commercial exploitation and the rights, if any, of the University to any revenue from commercial exploitation. All staff and students involved in a research project supported or commissioned by a third party must be informed of the contractual issues by the principal investigator before the research starts. 4 Exploitation of University IP 4.1 The early identification of IP is vital if commercial exploitation is to be feasible. Members of staff and students should always be alert to the prospective value of their research and develop a self-auditing approach. Staff are expected to notify RES immediately of any IP that they believe may have commercial value arising from their University work or that of their students. 4.2 RES must be contacted before publishing or making any other public disclosure of the work, since it may be appropriate to protect the IP first with an application for a patent or other registered rights. The invention and associated information must remain confidential until this has been done. 4.3 RES will review the ownership and likely commercial potential of the IP. A decision will be made either to maintain the University s interest or to waive any interest in the IP.

6 Code of Practice on Intellectual Property / G If the University decides to maintain interest in the IP, the Inventor(s) must give RES all reasonable assistance in formalising the ownership, registering the IP and exploiting it commercially. 4.5 All protected IP will be regularly reviewed by RES and if it is no longer considered commercially exploitable then RES may recommend that protection be allowed to lapse and any other work on it cease. If the University accepts such a recommendation but the Inventor(s) nevertheless wish to continue such protection at their own risk and cost, the University may, at its own discretion, reassign the IP to the Inventor(s) on mutually acceptable terms. In the event of such a reversion of rights to the Inventor(s), the Inventor(s) shall grant to the University a perpetual irrevocable licence to use such reverted IP for its own purposes. 5 Models for commercial exploitation of University IP 5.1 The appropriate and most effective model for commercial exploitation of University IP will be reviewed on a case by case basis. 5.2 Typically, exploitation will be by any of the following (or combination of the following) models: IP licence or assignment, in return for revenue payments eg annual royalties IP licence or assignment, in return for a one-off lump sum payment or up-front fee or, occasionally (but this is not actively encouraged by the University), shares in the buying entity The formation of a company, generally referred to as a spin-out company, by the University in which it will hold shares and to which the IP is licensed and/or assigned. 5.3 The accompanying Guide to this policy document provides further guidance on the spin-out process which typically would be implemented where commercial exploitation is to be carried out by the formation of a spin-out company. 5.4 As a general policy, unless a spin-out model is to be used, the University does not encourage IP licence or assignment in return for shares in the buying entity but, in such cases, actively seeks to negotiate a revenue share. Where, notwithstanding this general policy, the University receives shares for IP licence or assignment the provisions of clause 8 will not apply. The net sale proceeds of any subsequent sale of the shares and any dividend receipts before sale will be treated as revenue to be shared in accordance with the provisions of clause 7. 6 ANGLE plc 6.1 In July 2006 the University entered into a 20 year strategic partnership with ANGLE plc for the commercialisation of its IP (the ANGLE Framework Agreement). 6.2 Under the terms of the ANGLE Framework Agreement, ANGLE plc has the exclusive right of first refusal to invest in all University IP that is commercialised through a spin-out company model. Where ANGLE plc exer-

7 G 52 / Code of Practice on Intellectual Property cises this right, it will invest under a set formula obtaining an equity stake of 60% in each spin-out company. 6.3 Additionally, ANGLE plc will receive a 15% share in all commercial returns from University IP, both licensing, IP assignment and spin-out, in which ANGLE plc does not invest. 6.4 In exchange, ANGLE plc will provide consultancy support to the University on IP commercialisation. 7 Distribution of cash payments (revenue sharing) 7.1 This clause 7 sets out the standard arrangements for the distribution of income and other cash receipts arising from commercialisation of University IP. 7.2 The provisions of this clause 7 shall also apply to cash receipts from the sale of shares and any dividend receipts from such shares before sale where shares have been allocated to the University in an entity to which University IP is licensed or assigned which is not a spin-out company. 7.3 Where University IP is commercialised using a spin-out company to which the University IP is licensed or assigned in return for shares, the Inventor(s) will receive their share of the benefits as equity rather than cash. To that end the provisions of clause 8 shall apply and the provisions of this clause 7 shall not apply, notwithstanding any income or other cash receipts to which the University may in addition be entitled arising from the IP commercialisation. 7.4 The University acknowledges that special circumstances may arise in any particular commercialisation opportunity which make modification of these arrangements necessary or desirable. In such a case, these arrangements would be subject to review and, where agreed with the University, the Inventor(s) and, where relevant, ANGLE plc, subject to modification. 7.5 This clause 7 calculates entitlements on the basis of net payments (ie gross revenue less deductible costs). This means that the University s direct costs and other liabilities incurred in the commercialisation or sales process will be a first claim on the gross payments (gross revenue) received. These costs will typically include payments to third parties and expenses incurred from the IP management and/or sales process, such as patent fees and fees for legal and commercial advice. The costs may also include: any grant or award repayments which become due as part of the commercialisation process, eg awards made under the CommercialiSE programme or awards or grants from other funding sources; payments due to co-owners of IP, where the IP concerned is jointly owned with a third party, or payments due to third parties who are otherwise involved in the invention. Appendix 1 to this policy document sets out in further detail the categories of cost deductible from gross revenue for these purposes. (References in the Appendix to the commercialisation of IP shall include the sale of any shares allocated to the University in an entity which is not a spin-out company to which IP is licensed or assigned.) As a general rule, but subject to review on a case by case basis and within

8 Code of Practice on Intellectual Property / G 53 the University s discretion, costs which are recouped from gross revenue will be credited to the originating budget. Any dispute relating to the treatment of any expenditure shall be referred for resolution in accordance with clause The standard arrangements for distribution of net payments are as follows: ANGLE plc will be entitled to receive 15% of the net payments in accordance with the ANGLE Framework Agreement The balance of the net payments after deduction of all the University s costs and other deductible liabilities (net revenues) will be shared between University central funds, the Inventor(s) and the Inventor s School To determine an Inventor s share: (a) revenue generated from the commercialisation of all University IP created by an Inventor will be aggregated, subject as provided in paragraph (b) below. The scale referred to below shall apply to aggregate revenue generated from commercialisation of all the University IP created by the Inventor and not by reference to each separate commercialisation activity; (b) however, the following will be excluded for this purpose: revenue arising before the Effective Date from commercialisation of IP created by an Inventor before the Effective Date; and revenue arising after the Effective Date from licences and/ or assignments or other contracts entered into before the Effective Date in respect of University IP created by an Inventor before the Effective Date, and any arrangements in place prior to the Effective Date for the sharing of such revenue shall continue to apply after the Effective Date; (c) where more than one Inventor is entitled to share in the revenue generated from a particular University IP commercialisation: the Inventors, in consultation with, and with the assistance where required of, their respective Heads of School will be responsible for determining and agreeing in writing as early as possible the split as between them of such share and shall notify the University s Technology Transfer Office of such split; the revenue allocation to each Inventor will then be shared as between the University central funds, the Inventor and the Inventor s School in accordance with the scale referred to below The net revenues will be shared between the Inventor(s), the School and the University in accordance with the following scale (with the intent that the School s share is capped at 1,000,000):

9 G 54 / Code of Practice on Intellectual Property Net revenue Inventor School University (after ANGLE plc share and allocation in accordance with clause 7.6.3) first 5, % 0% 0% 5, ,000 60% 20% 20% 100,000 3,043,000 ⅓ ⅓ ⅓ over 3,043,000 ⅓ ⅔ 7.7 The accompanying Guide to this Code contains illustrations of the application of this clause Inventor(s) entitled to receive a share of the net revenues from commercialised IP in accordance with the above scale will continue to receive their share if they leave the University until the net revenues cease. In the event that the Inventor dies, the estate of the deceased will continue to receive his/her share. 7.9 The Finance Directorate will be responsible for distributing any net revenues in a timely manner. 8 Distribution of shares (equity) 8.1 This clause 8 sets out the standard arrangements for the distribution of shares arising from University IP commercialisation in a spin-out company. 8.2 The University acknowledges that special circumstances may arise in any particular commercialisation opportunity which make modification of these arrangements necessary or desirable. In such a case, these arrangements would be subject to review and, where agreed with the University, the Inventor(s) and, where relevant, ANGLE plc, subject to modification. 8.3 The standard arrangement is as follows: the Inventor (or, if more than one, the Inventors together) and the University shall share in the equity in equal proportions; where more than one Inventor has created the IP, the Inventors, in consultation with, and with the assistance where required of, their respective Heads of School and, where relevant, the other investors in the spin-out company, will be responsible for determining and agreeing in writing as early as possible the split as between them of such equity share and shall notify the University s Technology Transfer Office of such split; where the shares arise in a company which is a spin-out company in which, under the terms of the ANGLE Framework Agreement, ANGLE plc exercises its right to invest, the shares shall be distributed as follows: ANGLE plc Inventor(s) University 60% 20% 20%

10 Code of Practice on Intellectual Property / G where the shares arise in a company which is a spin-out company in which, under the terms of the ANGLE Framework Agreement, ANGLE plc does not exercise its right to invest, the shares shall be distributed as follows: ANGLE plc Inventor(s) University 15% 42.5% 42.5% where ANGLE plc is not entitled to receive shares, the shares shall be distributed as follows (with the intent that the spin-out company does not fall to be treated as a subsidiary of the University): Inventor(s) University 50% 50% In certain circumstances, third parties may become entitled to equity participation in the company, eg. in repayment of awards made under the CommercialiSE programme or as a result of awards or grants made under other funding sources or where IP is jointly owned with a third party. In such circumstances, the percentages referred to above will be adjusted on a pro-rata basis: as between the University and the Inventor(s); or where agreed between the University and ANGLE plc, on a pro-rata basis as between ANGLE plc, the University and the Inventor(s); or on such other basis as may then be agreed between the University and, where relevant, ANGLE plc, but with the Inventor(s) proportion being no less than the University s proportion. 8.4 The University intends that the net sale proceeds (after recoupment of all University costs (including any applicable taxes)) from any future sale of the University s shares in any particular spin-out company and any dividends paid before sale would be divided equally between the University and the Inventor(s) School, but subject to an overall limit of 1,000,000 on the School s aggregate receipt (with any net sale proceeds (together with any dividends before sale) above such amount retained by University central funds). 9 Using IP Belonging to a Third Party 9.1 It is essential that the University does not infringe IP rights belonging to third parties. 9.2 Staff and students intending to use any material provided by or owned by third parties must ensure that they and the University are authorised by the IP owner to do so. Anyone in doubt should contact RES. 9.3 Particular care should be taken when downloading material from web sites, since using such material may amount to copyright infringement. Staff and

11 G 56 / Code of Practice on Intellectual Property students are referred to the Rules for the Use of University Computers and Data Networks for further guidance. 10 Dispute Resolution 10.1 Any dispute, controversy or claim relating to this Code of Practice should in the first instance be referred to the Director of RES If a decision is not mutually agreed within a reasonable amount of time then the dispute may be referred to the Pro-Vice-Chancellor (Enterprise) for a resolution. The Pro-Vice-Chancellor will appoint the appropriate Head of School, together with a member of staff from a School other than the inventor s and not in any way associated with the subject matter of the dispute, to assist the Pro-Vice-Chancellor in reaching a resolution. The parties in dispute will have a hearing, and will have the right to be accompanied to meetings by a friend (a fellow worker or Trade Union official) If the member of staff or student is still not satisfied, the dispute may be resolved by mediation. A mediator will be appointed by the Centre for Effective Dispute Resolution (CEDR). If the mediation is successful, the decision reached will be binding on all parties. Otherwise, CEDR will appoint an expert who will hear both sides and make a decision which will be binding on all parties Alternative means of dispute resolution to the use of CEDR may be introduced by legislation (for instance, recourse to the University Ombudsman for students or the ability to take legal action for staff) All proceedings and records will be kept confidential. This document contains information on Intellectual Property which is provided for general information only. It is not intended as a source of legal advice applying to specific circumstances. The University of Reading does not accept any liability for errors or omissions. Appendix 1 Costs and other liabilities for deduction from gross revenues (clause 7.5) 1. Subject as provided in paragraph 2 below, the following categories of cost shall be deducted from gross revenue for the purposes of clause 7.5: all reasonable expenses paid outside the University, including patent agent fees, for the filing, prosecution and maintenance of intellectual property rights which are not reimbursable otherwise; all reasonable external legal fees incurred in the commercialisation of the IP; all reasonable external legal fees expended on litigation; all reasonable expenditure on insurance relating to the maintenance and enforcement of intellectual property rights; all professional fees relating to the commercialisation of the IP; all reasonable expenses incurred in connection with the commercialisation of the IP, e.g. travel made expressly for the purpose of meetings, negotiations etc;

12 Code of Practice on Intellectual Property / G 57 salary and associated costs for staff employed specifically to provide ongoing support for a commercialisation activity; any payment due to third parties, for example through revenue sharing agreements with sponsors of the research leading to the IP; any sums payable under any then existing agreement (e.g. joint ventures, licences or assignments); any repayments of grants, loans or subsidies for the purpose of commercialising the IP; any applicable taxes; any other expenditure that is agreed with the University, the Inventor(s) and/or ANGLE plc as appropriate, 2. The following categories of cost shall not be deducted from gross revenue for the purposes of clause 7.5: any internal recharges for time spent by University staff unless a specific fee has been paid, or the time spent has been exceptional; any departmental costs or charges relating to any use or provision of any equipment or facilities.