INVENTIONS, PATENTS AND LICENSING POLICY

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1 Objective: INVENTIONS, PATENTS AND LICENSING POLICY Establishes policy and procedures for disclosure and assignment of ownership of potentially patentable inventions created in the course of work at Lankenau Institute for Medical Research ( LIMR ) or with more than incidental use of LIMR resources. Extends this requirement to faculty, staff, graduate students, student employees, postdoctoral trainees, medical resident/fellows and visitors involved in research ( Scientific Staff ). 1. PATENT POLICY A. Board Policy 1. All potentially patentable inventions conceived or first reduced to practice in whole or in part by members of the Scientific Staff of LIMR in the course of their LIMR responsibilities or with more than incidental use of LIMR resources, shall be disclosed on a timely basis to LIMR. Title to such inventions shall be assigned to LIMR, regardless of the source of funding, if any. 2. LIMR shall share royalties from inventions assigned to LIMR with the inventor. 3. If LIMR cannot, or decides not to, proceed within 60 days from the time of written disclosure to patent and/or license an invention, it will reassign ownership to the inventors upon request. 4. Waivers of the provisions of this policy may be granted, by the President or by an ad hoc patent committee with the President s final approval, on a case-by-case basis, giving consideration among other things to LIMR obligations to sponsors, whether the waiver would be in the best interest of technology transfer, whether the waiver would be in the best interest of LIMR and whether the waiver would result in a conflict of interest. In addition, the President individually, or upon recommendation by an ad hoc patent committee, may expand upon these provisions and shall adopt rules, based on the same factors as well as appropriateness to LIMR's relationship with inventors, for the ownership of potentially patentable inventions created or discovered with more than incidental use of LIMR resources and by students when not working as employees of LIMR, by visiting scholars and by others not in LIMR's employ. 5. This policy shall apply to all inventions conceived or first reduced to practice on or after September 1, 1999.

2 B. Additional Provisions (promulgated by LIMR President, reference section A.5. of the Board Policy, above) 1. In addition to Scientific Staff, the provisions of LIMR's patent policy will extend to non-employees who participate or intend to participate in research projects at LIMR (including visiting faculty, industrial personnel, fellows, etc.). In the case of non-employees, all potentially patentable inventions conceived or first reduced to practice in whole or in part in the course of their participation in research projects at LIMR, or with more than incidental use of LIMR resources, shall be disclosed on a timely basis to LIMR, and title shall be assigned to LIMR, unless a waiver has been approved. 2. The President or an ad hoc patent committee with the President s approval has the authority to grant waivers of provisions of this policy. 2. ADMINISTRATIVE PROCEDURES A. Office of Director, Scientific Administration (SA) SA is responsible for reviewing terms and conditions of LIMR's grants and contracts for compliance with LIMR policies on intellectual property rights and secrecy in research. B. Patent and Copyright Agreements All Scientific Staff must sign and acknowledge that they have read, understand and agree to this patent policy. In addition, non- employees who participate or intend to participate in research projects at LIMR must also sign such an acknowledgment. A variation of this agreement can be worked out for individuals with prior obligations regarding the disclosure and assignment of intellectual property. Each department is responsible for getting the acknowledgment signed, at periodic intervals or at the time of an individual's initial orientation with LIMR. C. Invention Disclosures An invention disclosure is a document that provides information about inventor(s), what was invented, circumstances leading to the invention, and facts concerning subsequent activities. It provides the basis for a determination of patentability and the technical information for drafting a patent application. An invention disclosure is also used to report technology that may not be patented but is protected by other means such as copyrights. Inventors must prepare and submit an invention disclosure for each potentially patentable invention conceived or first actually reduced to practice in whole or in part in the course of their LIMR responsibilities or with more than incidental use of LIMR resources.

3 The invention disclosure should describe the invention and pertinent information in support of the invention. The submission should be prepared by the inventor and forwarded to the SA. The following practical considerations relate to invention disclosures: 1. Individuals covered by this policy are expected to apply reasonable judgment as to whether an invention has potential for commercial marketing. If such commercial potential exists, the invention should be considered "potentially patentable," and disclosed to LIMR. 2. Individuals may not use LIMR resources, including facilities, personnel, equipment, or confidential information, except in a purely incidental way, for any non-limr purposes, including outside consulting activities or other activities in pursuit of personal gain. "More than incidental use of LIMR resources" would include: - the use of specialized, research-related facilities, equipment or supplies, provided by LIMR for academic purposes - significant use of "on-the-job" time. The occasional and infrequent use of the following would typically not constitute "more than incidental use of LIMR resources:" - routinely available, office-type equipment, including desktop computers and commercially-available software - reference materials or other resources collected on the LIMR campus, and which are generally available in non-limr locations. 3. The attached format is recommended for invention disclosure use. See the Disclosure Form attached as Exhibit A. D. Alternative disposition of rights If LIMR cannot, or decides not to, proceed within 60 days from the time of disclosure to patent and/or license an invention, LIMR will reassign ownership to the inventor or inventors upon request to the extent possible under the terms of any agreements that supported or related to the work. In the case of an invention resulting from a governmentsponsored project, where LIMR cannot or chooses not to retain ownership, the government would then typically retain rights. In such cases, the inventor may request and be granted rights by the sponsoring agency to an invention made under such an award, provided that a well-conceived and detailed plan for commercial development accompanies the request.

4 If after LIMR or its designee has filed a patent application, it decides to abandon patent prosecution, the inventor will be notified and will be free to apply for or continue the prosecution of a patent in the inventor s own name and own expense. Under these circumstances, the inventor will grant to LIMR a royalty-free, irrevocable, perpetual nonexclusive license to make or use the invention for its own purposes. 3. LICENSING LIMR encourages the development by industry for public use and benefit of inventions and technology resulting from LIMR research. It recognizes that protection of proprietary rights in the form of a patent or copyright are often necessary - particularly with inventions derived from basic research - to encourage a company to risk the investment of its personnel and financial resources to develop the invention. In some cases an exclusive license may be necessary to provide an incentive for a company to undertake commercial development and production. Nonexclusive licenses allow several companies to exploit an invention. The research and teaching missions of LIMR always take precedence over patent considerations. While LIMR recognizes the benefits of patent development, it is most important that the direction of LIMR research not be established or unduly influenced by patent considerations or personal financial interests. LIMR handles the evaluation, marketing, negotiations and licensing of LIMR-owned inventions with commercial potential. 4. DISTRIBUTION OF NET INCOME A. The inventor or inventors of a particular patented invention that is acquired and retained by LIMR under this policy shall participate in the Net Revenues actually realized by LIMR from the sale, licensing and/or enforcement of that patented invention, such participation to be at a total level, in the aggregate for all inventors of a particular patented invention, to be divided and paid according to the following schedule: Annual Income Inventor(s) Share LIMR s Share Portion of LIMR s Share to Subsidize Research Program(s) of Inventor(s) First $100,000 50% 50% 10% Second $100,000 40% 60% 15% Third $100,000 30% 70% 20% Over $300,000 20% 80% 25% Net Revenues attributable to a particular patented invention are defined as gross revenues, including royalties from the licensing, proceeds from the sale or assignment, and/or recoveries from the enforcement, of the invention by LIMR, less in every case, and prior to any distribution, all related costs and expenses incurred by LIMR including, but not limited to, costs and expenses associated with the procurement, maintenance,

5 defense and/or enforcement of that patented invention, any related attorneys fees, and all marketing fees and costs attributable to commercialization and exploitation of the patented invention, whether incurred directly by LIMR or through a patent management firm or marketing agency. B. Distributions of Net Revenues pursuant to paragraph 4.A above may be subject to modification in accordance with the terms of a particular and related grant or contract between LIMR and a Sponsor or Sponsors. C. Distributions of Net Revenues to multiple inventors with respect to a particular patented invention shall be made by LIMR in accordance with any written agreement between those inventors that is on file with LIMR, otherwise, a per capita distribution shall be made. D. The share of Net Revenues remaining after each distribution to the inventor or inventors with respect to a particular patented invention with the exception of and not including the portion of LIMR s share to subsidize the research program(s) of the inventor or inventors will be retained by LIMR and will be utilized to further research and scholarship at LIMR in the discretion of the President. E. Distributions of the portion of LIMR s share of Net Revenues to subsidize multiple research programs with respect to a particular patented invention shall be made at the discretion of the President. F. The share of Net Revenues remaining after each distribution to the inventor or inventors with respect to a particular patented invention including the portion of LIMR s share to subsidize the research program(s) of the inventor or inventors will be retained by LIMR and will be utilized to further research and scholarship at LIMR at the discretion of the President should the inventor or inventors no longer be employed by LIMR. G. The inventor(s) shall continue to receive the specified share of royalties after he (she) is no longer affiliated with LIMR. In the event of the inventor s death, royalties due and payable under this Policy will be paid to the inventor s estate for the remainder of the royalty period. 5. BACKGROUND A. What Is A Patent? A patent is a grant issued by the U.S. Government giving an inventor the right to exclude all others from making, using, or selling the invention within the United States, its territories and possessions for a period of 20 years. When a patent application is filed, the U.S. Patent Office reviews it to ascertain if the invention is new, useful, and nonobvious and, if appropriate, grants a patent - usually two to five years later. Not all patents are necessarily valuable or impervious to challenge.

6 B. What Is An Invention? An invention is a novel and useful idea relating to processes, machines, manufactures, and compositions of matter. It may cover such things as new or improved devices, systems, circuits, chemical compounds, mixtures, etc. It is probable that an invention has been made when something new and useful has been conceived or developed, or when unusual, unexpected, or nonobvious results have been obtained and can be exploited. An invention can be made solely or jointly with others as coinventors. To be recognized legally, a coinventor must have conceived of an essential element of an invention or contributed substantially to the general concept. (See section 2.D. for information and procedure regarding the formal disclosure of an invention.) C. Patentability Not all inventions are patentable. Questions relating to patentability are often complex and usually require professional assistance. (1) General criteria for patentability An important criterion of patentability is that an invention must not be obvious to a worker with ordinary skill in that particular field. It must also be novel, in the sense that it not have been previously publicly known or used by others in this country or patented or described in a printed publication anywhere. (2) Loss of patentability Inventions that are patentable initially may become unpatentable for a variety of reasons. An invention becomes unpatentable in the United States unless a formal application is filed with the U.S. Patent Office within 12 months of disclosure in a publication or of any other action that results in the details of the invention becoming generally available. (3) Circumstantial impairment of patentability Many other circumstances may impair patentability, such as lack of "diligence." For example, unless there is a record of continuous activity in attempting to complete and perfect an invention, it may be determined that the invention has been abandoned by the initial inventor, and priority given to a later inventor who showed "due diligence." (4) International variation of patentability regulations Regulations covering the patentability of inventions and application filing procedures vary from country to country and are subject to change. It is important to note that an invention is unpatentable in most foreign countries unless a patent application is filed before publication.

7 D. Value Of Unpatented Inventions An invention, although unpatentable for various reasons, may still be valuable and important - for example, trade secrets and technical "know-how" encompassing proprietary information of a valuable and confidential nature. Agencies sponsoring research at LIMR usually require reports of all inventions, whether or not they are considered patentable.

8 Appendix A Invention Disclosure Procedure Form DATE: 1. Title of Invention: (A clear, plain language title describing what your idea is or does is essential). 2. Inventor Information. (Please provide the full names, home and work mailing addresses, telephone numbers and citizenship for each inventor.) a. (Name) (Home Address) (City, State, ZIP) (Telephone) (Work Address) (City, State, ZIP) (Telephone) (Citizenship) b. (Name) (Home Address) (City, State, ZIP) (Telephone) (Work Address) (City, State, ZIP) (Telephone) (Citizenship) (Use additional sheets as required.)

9 3. Brief description of the invention. Is the invention a new process, composition of matter, a device or one or more products? Is it a new use for, or an improvement to, an existing product or process? (A concise description, which explains what your idea is or how it works without the excessive use of jargon, is most helpful. This description is an "Abstract" of the invention. A more complete discussion of your idea can be attached to the Disclosure if you think it would be helpful in explaining your invention.) 4. From the above description, pick out and expand on novel and unusual features. How does the invention differ from present technology? What problem does it solve, or what advantages does it possess? 5. If not indicated previously, what are possible uses for the invention? In addition to immediate applications, please speculate on other uses that might be realized in the future. 6. Does the invention possess disadvantages or limitations? Can they be overcome? How? 7. Are there publications (including theses, reports, abstracts, news releases, oral presentations or internal publications) pertaining to the invention? If so, please list with publication or presentation dates, and attach copies. Please include manuscripts submitted for publication. 8. Are laboratory records and data available? If so, please provide dates and locations of supporting reports and lab records. 9. Are there any known related patents or inventions, either by any of the inventors or any other person? If so, please attach any available information or copies.

10 10. Please provide the date, place and circumstances of the first actual or anticipated public disclosure of this invention, e.g. poster session, abstract or manuscript submission or publication dates. 11. Was the work that led to the invention sponsored? If yes, please attach a copy of the contract or agreement. If possible, fill in the appropriate blanks below. a. Sponsor: b. Grant/Contract No.: c. Principal Investigator(s): d. Dates of Award: e. Amount of Award: 12. Has any commercial interest been expressed in the invention? Do you know of any companies that might be interested in supporting research in this field or which might be interested in commercialization of this technology? If so, please provide the name of the company and any specific contact person(s) that you may know. 13. Signature(s) of inventor(s) and date: Signature: Signature: Signature: Date: Date: Date: 14. Signatures of witnesses to whom this disclosure has been made and whose signature hereby indicates that they understand the invention that has been disclosed to them. The witnesses may not be co-inventors. Disclosed to and understood by me: Signature: Date: Signature: Date: Additional sheets may be attached to respond to questions and to provide any other helpful data, including sketches, drawings, photographs or other materials that help illustrate the description. Are additional pages attached? Yes No How Many?