University of Delaware
Policies and Procedures Manual

Section: Research
Policy Number: 6-6
Policy Name: Intellectual Property Protection, Ownership, and Commercialization
Date: October 1, 1981
Revisions: June 5, 1989; March 1, 1996; March 6, 2002; March 3, 2005; September 6, 2005; May 22, 2007; January 18, 2008; February 28, 2008; August 11, 2008

PURPOSE

The purposes of this policy are:

to provide a mechanism for placing in the public realm the fruits of research, while safeguarding the interests of the University, the inventor(s), and the sponsor;
to provide procedures to evaluate the significance of inventions, discoveries, research materials, and works, and the opportunities by which such creative advances may be brought to the point of commercial viability;
to provide adequate legal protection for intellectual property including patent, trademark, and copyright protection for inventions and works falling within the scope of this policy, through the collaboration of University faculty, staff, and students with the assigned attorney(s) and Research Office staff;
to establish principles for determining the rights of the University, the inventor(s), or developer(s) or author(s), and the sponsor;
to provide greater incentives for pursuing and commercializing intellectual property by University personnel;
to assist the inventor(s) or developer(s) or author(s) in realizing tangible benefits from the intellectual property;
to satisfy requirements of certain research grants and contracts; and
to provide a basis for establishment of institutional patent, copyright, and trademark agreements with the federal government and other agencies.

POLICY
1. General policy statement
  
  The University of Delaware strives to support its faculty, staff, and students by pursuing the commercial development of intellectual and tangible research property resulting from University research. The early transfer of such knowledge and rights is consistent with the University's mission of creating new knowledge and facilitating its application to the benefit of the public. The University has established policies and guidelines that provide incentives for faculty, staff, and students while protecting the integrity of research (also see Policy 6-11 related to avoidance of conflicts of interest). The University provides a number of administrative and legal services to inventors and authors to effectively and efficiently pursue intellectual property rights and technology transfer.
  It is policy of the University that all inventions and discoveries, together with any tangible research materials, know-how and the scientific data and other records of research including any related government protections (collectively "Intellectual Property"), which are conceived or reduced to practice or developed by University faculty, staff, or students in the course of employment at the University, or result from work directly related to professional or employment responsibilities at the University, or from work carried out on University time, or at University expense, or with the substantial use of University resources, shall be the property of the University. An invention shall constitute any discovery, machine, new and useful process, article of manufacture, composition of matter, life form, design, algorithm, software program, or concept that may have commercial value. University faculty, staff, or students employed by the University who discover or invent or develop a device, product, plant variety, method, or work while associated with the University must cooperate with the University in defining and establishing the rights to such inventions, works, materials, and data. This obligation extends to any Intellectual Property, whether or not made on University time with or without use of University facilities.
  When an invention is made, the inventor shall promptly provide, via the appropriate Department Chair and Dean, and the University Senior Vice Provost for Research, or his/her designee, an invention disclosure statement describing the circumstances under which the invention was conceived and reduced to practice, with particular attention to:
  1. describing the invention, including how the invention is made and used (i.e., its utility or applications), and including the results of a patent search establishing the novelty of the invention;
  2. indicating whether the invention was made under terms of a consulting or other personal agreement between the inventor(s) and client;
  3. indentifying in a business plan the anticipated business/societal value of the invention, and indicating those countries in which patent protection may be desirable;
  4. identifying the sponsor, if any, of the project or program;
  5. stating whether the invention is within the inventor's normal activities and responsibilities with respect to his/her University employment; and
  6. indicating the extent to which equipment or physical facilities provided by the University were used in the work which led to the invention.
  To implement University Policy 6-7 on Copyright Processing and Funding, an author or developer who may wish to pursue copyright or trademark protection for a work or development would file a memorandum with the Research Office requesting review of the material and opportunities for intellectual property protection.
2. Administrative Responsibility
  
  The administration of the principles and policies set forth in succeeding sections of this document is the responsibility of the Provost of the University. The Provost, however, has delegated routine administration to the Senior Vice Provost for Research, with the understanding that no departures from the stated principles and policies will be made without his/her prior concurrence.
  
  Inventions, developments, and works in which the University and the inventor(s)/developer(s) are the sole parties in interest shall be promptly evaluated for filing by the Chair(s) of the Department(s) involved and the Dean(s) of the College(s) involved, and a recommendation regarding how to proceed with patent filing (simple provisional patent application, fully developed provisional patent application, no provisional patent application) shall then be forwarded for review and appropriate action by Office of the Senior Vice Provost for Research and patent counsel for patentability or novelty for registration. Should the Dean(s) of the College(s) involved decide not to proceed with the patent filing, that decision may be appealed to the University Research Council. Following this review and evaluation, the inventions, developments, or works will then:
  1. be referred to counsel, who shall work with the full cooperation of the University inventor(s), to draft, file, and prosecute a patent application or to file a trademark or copyright application, or;
  2. be considered by the University (or the UD Technology Corporation if the Intellectual Property has been assigned to the University's commercialization affiliate, see Section C-5, below), in collaboration with the inventor(s), for opportunities to commercialize the invention;
  3. be offered to the Federal funding agency when the University initially elected to retain title under the Bayh-Dole statue but the invention and associated patent application(s) are no longer of interest to the University;
  4. be released to the inventor if found not to be of interest to the University or any Federal agency which may have funded the research leading to the invention; or
  5. in certain cases referred to brokers or outside entities with whom the University has contracts to assess commercial potential and interest in their filing and attempting commercial development.
3. Rights and Obligations of the University, Faculty, Staff, and Students
  
  The respective rights and obligations of the University, faculty, staff, and students in various situations are as follows:
  1. University-funded research
    
    Intellectual Property resulting from efforts conducted by faculty, staff, or students, that have been financed wholly by the University or have involved the use of University facilities, equipment, or materials, are covered by section B, above.
  2. Government-funded research
    
    Inventions or discoveries that result from efforts financed wholly or in part by Federal funds will be treated in accordance with the provisions of Public Law 96-517, "The Patent and Trademark Amendments of 1980" known as the Bayh-Dole Act. This act provides that the contractor (University of Delaware) may retain full title, right, and interest in inventions made under contract with the government, with certain exceptions for unusual circumstances. Except as specifically superseded by provisions of a specific funding agreement, inventions and discoveries covered by this section will be treated as outlined in section B, above.
  3. Research funded by grants or other contracts
    
    Intellectual Property resulting from research conducted by faculty, staff, or students, which research has been financed wholly or partially by industrial, philanthropic or other organizations, or by individuals, under contracts or written agreements are governed by the terms of such contracts or agreements, and the principal investigator is responsible for informing co- workers of their rights under such contracts or agreements before initiation of the research. Intellectual Property not required to be assigned by contractual terms may be processed or disposed of by the University as provided in section B, above.
  4. Intellectual Property resulting from research conducted wholly at the expense of the individual, without use of University facilities, equipment, or materials, and are outside the individual's normal field of activities and employment responsibilities are the property of the individual, and the University undertakes no responsibility with respect to such Intellectual Property. In all such cases the Provost will confirm the individual's ownership rights to the Intellectual Property to the inventor(s) or developer(s) to dispose of as the inventor(s) or developers see(s) fit. At the sole option of the inventor(s) or developer(s) and with the University's prior assent, such Intellectual Property may be conveyed by assignment to the University.
  5. It is the policy of the University, with reference to all creative work of faculty, staff, and students, to recognize the interests of all parties involved, to provide a mechanism for the identification of commercial opportunities, to provide guidelines for making a proper and equitable distribution of benefits, and to assist the inventor(s) or developer(s) in benefiting from his or her creative efforts. It is important to realize, however, that under U.S. law the parties identified as possible joint inventors are those who have contributed to the conception of an invention and sign a declaration attesting to their role. The decision on inventorship is a legal decision and different from the guidelines used to establish co-authorship. In situations where the University pursues commercialization through the licensing or transfer of rights in the Intellectual Property to another entity, the University normally elects to do so by assigning its rights to the UD Technology Corporation, a University affiliate established to facilitate such commercialization.
4. Roles and Responsibilities in Patent Procurement
  
  The patent procurement system involves technical and legal efforts over a number of years to obtain meaningful, enforeceable patents to protect valuable intellectual property developed through research programs at the University. After a Univesity inventor files an Invention Disclosure to initiate the patenting process with the Research Office, there are four stages of patent prosecution over a 3-5 year period. The most critical decisions in this process, however, occur within the first 30 months and carry with them significant costs. This policy defines the critical elements and procedures of the process and allocates technical, legal, and financial responsibilities attendant with each element.
  1. Invention Disclosures, prepared by University research personnel, are submitted to the Research Office via the Department Chair(s) and the Dean(s) of the College(s) involved for review, approval, and action as described in Section B above. If approved, the Research Office will arrange for an appropriate U.S. provisional patent application to be prepared and filed with the USPTO through outside counsel. In the case of industry-supported research agreements, the costs associated with the preparation and filing of the provisional application will be borne by the industrial collaborator.
  2. Costs incurred for patenting inventions from research not supported by an industrial partner will be shared as follows.
    1. for the simple form of the provisional patent application, costs will be paid by the Research Office; or
    2. if the fully developed form of the provisional patent application is selected as appropriate and filed, the costs will be shared one-third by the Research Office; one-third by the department(s) of the inventor(s); and one-third by college(s) of the inventor(s).
    If the University determines it will not file, the inventor(s) shall have the right to appeal such a decision to the University Research Council.
  3. If agreed by the inventor(s), the Department Chair(s), and the Dean(s) of the College(s), the provisional patent application will be converted to a non-provisional, utility application and a global foreign application under the Patent Cooperation Treaty ("PCT") will be filed within one year of the original filing of the provisional application. Costs associated with this industry-supported research agreements, or as follows for all others:
    1. one-third of the costs by the Research Office;
    2. one-third of the costs by the Department(s) of the inventor(s);
    3. one-third of the costs by the College(s) of the inventor(s).
      If the University determines it does not wish to continue, the inventor(s) shall have the right to appeal such a decision to the University Research Council. If the Dean(s) of the College(s) elect(s) not to proceed and the University does not wish to continue, the invention and associated patent application(s) shall be offered to the inventor(s) as per Paragraph II.B.4 above. If accepted by the inventor(s), they shall be fully responsible for all future costs, governmental notifications, and other obligations. No conversion to a utility application, or filing of a PCT application, will be made until the inventor(s) have developed a detailed plan and/or identified an industrial partner to further develop the invention. The University Intellectual Property Committee will be asked to assist in evaluating the intellectual property for future marketing and utilization and to identify potential industrial partners to further develop the invention.
  4. At 30 months after the original filing of the provisional application, a decision regarding in which foreign countries to pursue a patent (enter the PCT National Phase) by the inventor(s), the Department Chair(s), and the Dean(s) must be made. Costs associated with this selection of countries in which to pursue foreign patents will be borne by the industrial collaborator for industry-supported research agreements, or as follows for all others:
    1. one-third of the costs by the Research Office;
    2. one-third of the costs by the Department(s) of the inventor(s);
    3. one-third of the costs by the College(s) of the inventor(s).
      If the University determines it does not wish to continue, the inventor(s) shall have the right to appeal such a decision to the University Research Council. If the Dean of the College elects not to proceed and the University does not wish to continue, the invention and associated patent application(s) shall be offered to the inventor(s) per Paragraph II.B.4 above. If accepted by the inventor(s), they shall be fully responsible for all future costs, governmental notifications, and other obligations.
  5. The decision to continue prosecution of the U.S. utility patent application and any associated foreign patent applications shall be reviewed periodically among the inventor(s), the Department Chair(s) of the appropriate Department(s), the Dean(s) of the appropriate College(s), and the University. Costs associated with continued patent prosecution will be borne by the industrial collaborator for industry-supported research agreements, or as follows for all others:
    1. one-third of the costs by the Research Office;
    2. one-third of the costs by the Department(s) of the inventor(s);
    3. one-third of the costs by the College(s) of the inventor(s).
    If the University determines it does not wish to continue, the inventor(s) shall have the right to appeal such a decision to the University Research Council. If the Dean of the College elects not to proceed and the University does not wish to continue, the invention and associated patent application(s) shall be offered to the inventor(s) as per Paragraph II.B.4 above. If accepted by the inventor(s), they shall be fully responsible for all future costs, governmental notifications, and other obligations. NOTE: In the event the patent application has been licensed or is subject to other legal obligations, prosecution of such applications shall continue until expiration or release of such obligation(s).
  6. The Research Office will operate to manage the patent prosecution effort and oversee the activities of outside counsel. The Research Office shall communicate information and coordinate decisions with the inventor(s), Department Chair(s), and the Dean(s) of the appropriate College(s) involved to ensure the implementation of academic directives.
  7. If the patent(s) are successfully licensed, for the purpose of recovering patent prosecution costs, Net Revenues from the licenses will be allocated in accord with the allocation formulas of Section F, below.
  8. Appeals of any decision not to file an application or to discontinue patent prosecution of a pending patent application shall be taken to the University Research Council.
5. Arbitration of Disputes
  
  In the event the University and the inventor(s) or developer(s) cannot agree with respect to any of their respective rights or obligations hereunder regarding a non-patent procurement matter, such dispute shall be submitted for determination to an arbitration panel of three members chosen from the University community and having a member named by the inventor(s), or developer(s), a member named for the University by the Provost, and a chair selected by mutual agreement of these two nominees. The decision of a majority of such panel shall be final and binding upon both the inventor(s) and the University.
6. Division of Income
  1. Income received by the University or the UD Technology Corporation from the commercialization of Intellectual Property, including but not limited to upfront technology access fees, royalties, approvals to assign rights, equity interests, compensatory damages for infringement and other direct damages awards ("Revenue") shall be used first to reimburse the parties (the University, UD Technology Corporation and other University units as appropriate) that shared in the costs for direct assignable or foreseeable future expenses arising in connection with obtaining or litigating the Intellectual Property ("Expenses"). An additional 15 percent of the net Revenue remaining after recovery of expenses shall be retained by the University or UD Technology Corporation for management expenses to cover overhead.
  2. For the case where income is coming from all sources except litigation, the remaining balance, "Net Revenue" shall be distributed quarterly and divided one-third to the inventor(s), one-sixth to the department(s) of the inventor, one-sixth to the College(s) of the inventor(s), and one-third to the University or UD Technology Corporation.
  3. For the case where income is coming from litigation, "Net Revenue" up to $3 million dollars shall be distributed quarterly and divided one-third to the inventor, one-third to the College(s) of the inventor(s), and one-third to the University or UD Technology Corporation. Above $3 million dollars, "Net Revenue" shall be distributed quarterly and divided one-fifth to the inventor, two-fifths to the College, and two-fifths to the University or UD Technology Corporation. Punitive damages and/or treble damage awards obtained in litigation of IP matters shall be retained solely by the University.
  4. If two or more inventors or developers are entitled to share in the portion of "Net Revenue" earned by them under Section II.F(i), the inventors and developers must sign, have notarized, and present to the University an agreement stipulating how such income will be shared among themselves before the University will distribute any "Net Revenue" to such inventors and/or developers. In the absence of an agreement among the inventors providing specific guidance regarding the distribution of their shares of "Net Revenue", the University (or UD Technology Corporation) shall distribute the inventors' share of "Net Revenue" in equal shares to each University inventor.
  5. In the event that compensation from the Intellectual Property is in the form of restricted or unrestricted common or preferred stock, such stock will be distributed in accordnace with Section II.F(i) as soon as practical after receipt by the University, or the appropriate portion of shares may be registered directly with the inventor(s) or developer(s). It shall be the sole responsibility of the inventor(s) or developer(s) to satisfy any personal tax obligations related to stock distributed to them under Section II.F(i).
  6. When Intellectual Property is created under contract with an outside agency as provided in Sections II.C-2 and II.C-3, the division of income shall be in accordance with the terms of the contract. In the event that any contract with an outside agency provides for the University to receive unrestricted funds from the Intellectual Property, such funds shall be divided as provided in Section II.F(i).
  7. In the event that Revenue is received under an agreement granting licenses for two or more patents or works, the prorating of income amoung the patents or works shall be determined by the University Patent Committee(see Section II.F(i), above) using the procedure of Section B as a guide. This Committee shall utilize legal, accounting, and scientific consultants as it deems necessary in making its decisions. If one or more of the inventors named in the patents or works involved disagrees with the decision of the committee, the matter shall be resolved by arbitration as provided in Section II.E.
  8. Revenues less than $100.00 received by the University or UD Technology Corporation shall be retained by the University or UD Technology Corporation and not distributed.
Submitted by: Research Office

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University of DelawarePolicies and Procedures Manual

University of Delaware
Policies and Procedures Manual