UPPS 01.04.26 - Intellectual Property: Inventions, Discoveries and Patents (IDP)
Intellectual Property: Inventions, Discoveries and Patents (IDP)
UPPS No. 01.04.26
Issue No. 3
Effective Date: 8/06/2018
Next Review Date: 7/01/2021 (E3Y)
Sr. Reviewer: Associate Vice President for Research and Federal Relations
Texas State University recognizes that research and scholarship by its faculty, staff, and students will result in inventions, discoveries, and other intellectual creations with potential societal benefit and market value. These include biological and other proprietary materials, plants, computer software, trade secrets, medical treatments, devices, pharmaceuticals, phrases, graphic designs, manuscripts, and musical, artistic and literary works. This policy seeks to protect the interests of individual inventors, researchers, creators, and the university, while also ensuring that the Texas State community and society benefit from fair and full dissemination of knowledge and innovation. In all cases, affected individuals answer to individual or university obligations under grants, contracts, and research agreements with governmental agencies or sponsors.
This policy applies prospectively to all persons employed by Texas State, to all students of Texas State, and to anyone using Texas State facilities or under the supervision of Texas State personnel. Texas State expects its employees, faculty, staff, and students to be aware of and abide by the university’s policies related to intellectual property. The prior established policy shall govern all intellectual property disclosures made prior to this policy’s date.
This policy intends to foster the traditional freedoms of Texas State faculty, staff, and students in matters of publication and invention, through a fair and reasonable balance of equities and interests among creators, sponsors, and Texas State. This policy strives to outline the rights and interests of faculty, staff, and students in intellectual materials created while they are affiliated with Texas State. This policy focuses primarily on inventions, discoveries, patents, (collectively referred to as IDP), and intellectual property that may prove patentable. Except where otherwise specified herein, the ownership and usage rights related to copyrighted works, trademarks, and trade secrets are more fully addressed in Chapter III, Section 11, of The Texas State University System (TSUS) Rules and Regulations and in university policies with a focus on those particular forms of intellectual property.
Texas State’s IDP policies are derived primarily from the TSUS Patent Policy, more specifically Chapter III, Section 12, of The TSUS Rules and Regulations. The TSUS Patent Policy is incorporated into this policy by reference and shall govern if any provisions of this policy are found to be in conflict. Key provisions of the TSUS Patent Policy are outlined in Section 03.
Creator – an individual subject to this policy, who invents, discovers, authors, or otherwise develops intellectual property as defined below.
Invention – a process, method, discovery, device, plant, composition of matter, or other invention that reasonably appears to qualify for protection under United States patent law, Chip Design Protection law or plant protection schemes, whether or not actually patentable. A single inventor or a group of collaborating inventors can produce an invention.
Copyrighted Work – an original work of authorship fixed in a tangible medium of expression from which others can perceive, reproduce, or otherwise communicate it, either directly or with a machine or device, including books, journals, software, computer programs, musical works, dramatic works, videos, multimedia products, sound recordings, and pictorial and graphical works. A single author or a group of collaborating individuals may produce a tangible research item.
Trademark (including Service Mark) – a distinctive word, design, or graphic symbol, or combination word and design that distinguishes and identifies the goods and services of one party from those of another, such as the university’s logo and tagline (see also UPPS No. 01.04.11, Guidelines for Use of Texas State Logos and System Statement Graphic).
Tangible Research Property – tangible items produced in the course of research including such items as biological materials, engineering drawings, integrated circuit chips, computer databases, prototype devices, circuit diagrams, and equipment. Individual items of tangible research property may connect with one or more intangible inventions or discoveries. A single creator or a group of collaborating inventors can produce an item of tangible research property.
Intellectual Property – a term referring to a number of distinct forms of property that result from intellectual thought or activity, and for which a set of exclusive rights are recognized. Under intellectual property law, owners receive certain exclusive rights to the intellectual property they own, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs.
Intellectual Property (IP) Committee – a standing committee appointed as directed in Chapter III, Section 12.8, TSUS Rules and Regulations. The committee provides a forum for discussion of Texas State policies and procedures related to commercialization of IDP. The committee reviews inventions and discoveries made by university faculty, staff and students and makes recommendations to the university president regarding the university’s ownership interest. At the president’s request, the committee provides advice and recommendations regarding the handling of IDP commercialization opportunities and technology transfer disputes.
Office of Research and Sponsored Programs (ORSP) – the Texas State organizational unit charged with promoting the transfer of Texas State technologies for society’s use and benefit while generating unrestricted income to support research and education. Technology Transfer and Contracts (TTC), within the ORSP, is responsible for administration and implementation of Texas State’s IDP program, and for assisting and advising Texas State faculty, staff and students regarding commercialization issues.
Software – in recent years, the United States Patent and Trademark Office has granted patents to software meeting certain technical and legal criteria. When Texas State has an ownership interest in copyrighted software with patentable subject matter, and it chooses to seek patent protection for the software, it will manage this software as an invention under this policy.
KEY PROVISIONS OF THE TSUS PATENT POLICY AND MORE
Ownership – IDP and tangible research property made with the use of Texas State facilities or during the course of regularly assigned duties of the faculty, staff and students shall become the property of Texas State. Individuals subject to this policy shall, upon request, assign all applicable IDP and tangible research property to Texas State, except that owned by third-parties pursuant to sponsored research agreements and that result from independent work or approved consulting activities not utilizing Texas State facilities.
Personal Time and Resources – Faculty, staff, or students generally own the IDP and tangible research property developed in their personal time and without use of university resources or work force support, except in the case of conflict with any applicable agreement. In this context, the university defines “resources use” to mean any facility, including equipment and material, available to the inventor as a direct result of the inventor’s affiliation with the university.
Persons who claim that IDP and tangible research property made on personal time and without the use of Texas State’s resources have the responsibility to disclose all such IDPs to the university. It shall be the responsibility of the inventor to demonstrate and document the basis of the inventor’s claim that only personal time and resources were used in creation of the IDP or tangible research property.
Government-Sponsored Research – The terms of the grants or contracts specified by the government sponsor or by applicable law may control patents arising from government-sponsored research. In the absence of such terms or when patent rights are waived by the sponsor, patent rights arising from government-sponsored research are controlled by the TSUS Patent Policy.
Non-Government-Sponsored Research – Texas State must ensure the public interest is best served by the manner in which it applies its facilities and workforce. Likewise, it must also consider the legitimate interests of private sponsors. The university normally reserves the right to ownership of IDP arising out of research funded, in whole or in part, by grants or contracts with private sponsors. However, upon request, the university may negotiate special provisions that grant patent ownership to the private sponsor. In such cases, the university should:
retain the right to use the IDP for its own research, educational, and service purposes without the payment of royalty fees;
require the sponsor to use due diligence in the commercial use of the IDP; and
retain the right to freely publish the results of its research after a reasonable period necessary to protect the rights of the parties and to allow for the filing of a patent application.
IDP Disclosure – Creators of IDP have a duty to promptly disclose their IDP to TTC in writing. Certainty about patentability is not a requirement for disclosure. The duty to disclose arises as soon as the creator has reason to believe, based on the creator’s own knowledge or upon information supplied by others, that the invention or discovery may be patentable.
Creators must use the disclosure form prescribed by and available from TTC to make disclosures. Creators shall cooperate with Texas State and TTC in protecting intellectual property rights in the IDP. Creators shall execute such declarations, assignments, or other documents as necessary in the course of invention evaluation, patent prosecution, or protection of patent rights to ensure that Texas State holds title to these inventions.
IDP Protections – The IP Committee will review all disclosures and offer recommendations to the president regarding Texas State’s ownership interest in the IDP, if any, and how the university might exploit that ownership interest. The following are the possible avenues of IDP protections or commercialization:
File a Patent – This may be in the form of a Provisional Patent, International Patent Cooperation Treaty (PCT) Patent, or a US Patent. The goal of filing the patent is to pursue commercialization of the disclosed invention. A paid license to one or more outside entities is the desired outcome.
Hold the Disclosure – The IP committee may recommend that the disclosure not be released or filed. This decision is based on many factors including, but not limited to, maturity of the technology, potential of successful commercialization, the existence of third-party rights or continued research in the disclosed subject area.
Inventor Initiated Filing – If, after reviewing the disclosure, the IP Committee’s recommendation is to hold the disclosure, the inventor determines that filing a patent is in the best interest of Texas State or for public benefit, the inventor may request that Texas State file the patent, in Texas State’s name and at the inventor’s expense. Such requests must be approved by the associate vice president for Research (AVPR). If inventor-initiated filing is approved, an agreement detailing both the inventor’s and Texas State’s financial obligations and other details shall be executed. Filing may not be initiated until the agreement is executed and the agreed-upon payment is received by TTC.
Release to Inventor – After review, the IP committee may recommend that the IDP be released to the inventor. The recommendation is then sent to the president for approval. If the president decides that Texas State should not assert and exploit its ownership interest in the disclosed IDP, the IP Committee shall promptly notify the creator of that decision. The inventor is then free to file a patent and exploit its rights privately. No invention made with federal funds shall be released to the inventor without the prior written approval of the funding agency.
Prior to any waiver of interest, the TTC shall evaluate the third-party rights to the IDP and take appropriate steps to ensure compliance with contractual obligations and state and federal law.
Texas State shall reserve the right to share in any revenues derived from IDP that has been released to the creator. The release letter shall state the university share, but it may never exceed three percent of net revenue. Texas State shall reserve the right to use IDP previously released to the creator for educational and future research purposes.
IDP Administration – In asserting and exploiting Texas State’s IDP ownership interest, the TTC shall make determinations as to:
the potential value of the IDP to Texas State;
the rights and equities of the creator, Texas State, and any third-parties; and
the required actions to maximize the benefits of any IDP to the public, Texas State, and the creator.
TTC is authorized to negotiate management, licensing, and royalty agreements with reputable individuals, agencies or firms. Management services may include evaluation of IDP disclosures, filing of patent applications, and patent licensing and management.
Royalties and Other Proceeds – When Texas State elects to protect IDP in its name, it shall award to the creator a reasonable share (as defined below) of the net proceeds from royalties or other income or value after deduction of the directly assignable costs of patenting, marketing, licensing and protection of intellectual property rights.
Texas State shall deduct the administrative and patent management costs prior to royalty distribution. Such costs include those associated with the patenting, licensing, and protection of patent rights.
In most instances, Texas State will distribute the net royalties or other net income received under a formula of 50 percent to the creator and 50 percent to Texas State. Any distribution that grants the creator more than 50 percent shall require approval of the president and TSUS Board of Regents (as specified in Section 12. (14) 3 of the TSUS Rules and Regulations).
In the event of multiple creators, the creators will first determine the proper distribution of the 50 percent creator’s share. If they cannot agree, all creators will share the royalties evenly.
The associate vice president for Research and Federal Relations (AVPR) shall retain Texas State’s 50 percent for use in furthering research and commercialization activities.
In the event that a creator contributes a personal work to Texas State, the university must execute a written agreement. The terms of the agreement shall include a statement governing the division of royalties between Texas State and the creator.
In cases of extramural funding, the funding agreement’s terms shall govern the division of royalties resulting from commercialization of materials. In the event that the funding agreement vests royalty rights in Texas State and does not provide a royalty share for the creator, the creator will receive the same proportionate share due if the work received intramural funding. Such a royalty payment to the creator, however, may not violate the terms of the funding agreement. Such share shall receive a proportion of whatever share is Texas State- owned under the funding agreement’s term and this policy.
PROCEDURES REGARDING COMMERCIALIZATION AGREEMENTS WITH PRIVATE ENTITIES
The following guidelines shall apply to agreements with private entities including those formed primarily for developing or commercializing intellectual property created at Texas State, subject to the terms of sponsored research agreements that led to the intellectual property’s creation:
Exclusive agreements are permitted, especially when conditions would otherwise prevent the IDP from reaching the marketplace for the benefit of the public. If an entity receives the exclusive rights with respect to a particular invention, product, process or intellectual property item, the agreement should provide that such rights will revert to Texas State if the entity fails to diligently develop and commercialize the IDP within a specified time period that is appropriate to the circumstances. The president must approve an exclusive license.
An entity that receives exclusive rights to develop or commercialize patentable inventions and discoveries must reimburse Texas State for expenses the university incurred in obtaining a patent. If the university does not hold a patent, the entity must prosecute and bear the expense of obtaining patent protection for Texas State’s benefit and, in either event, the entity must take all actions necessary, including litigation, to protect and preserve such patented rights from infringement.
The agreement must protect and indemnify Texas State and its officers and employees from all liability arising from the development, marketing, or use of the IDP.
The agreement should minimize any restrictions on use for research and teaching purposes and the publication rights of researchers.
If the entity fails to develop and commercialize the IDP, the entity will return all rights in Texas State’s IDP so that the university may offer these rights to another entity.
The entity must comply with all applicable federal, state, and local laws and regulations, particularly those concerning use of animals, biological materials and necessary testing, human subject protection and approval by the Federal Drug Administration, or other relevant federal or state agency.
The entity must maintain the confidentiality of any unpatented inventions or know-how.
The entity must pay to Texas State a fair market portion of any royalties or fees received as a result of sublicensing Texas State’s IDP. Texas State’s share of such revenues shall be determined on a case-by-case basis.
License agreements should contain other provisions that the TTC and the TSUS general counsel determine are in Texas State’s best interest.
The director is authorized to negotiate license agreements.
PROCEDURES FOR APPROVAL OF EMPLOYEE PARTICIPATION IN BUSINESS ENTITIES
Any Texas State employee who wishes to participate as an employee, officer or member of the board of directors of a business entity that has agreements with Texas State relating to the research, development, licensing or exploitation of IDP in which Texas State has an ownership interest, must request authorization from TTC. TTC will forward the request and TTC’s recommendation to the AVPR for approval.
Texas State Participation in Business Entities – When requested and authorized by the TSUS Board of Regents, an employee may serve on behalf of the Board, as a member of the board of directors or other governing board of a business entity that has an agreement with Texas State relating to the research, development, licensing, or exploitation of Texas State IDP.
The following related policies apply:
ASSIGNMENT AND PROTECTION PROCEDURES
Creators shall execute appropriate assignment or other documents required to set forth effectively the ownership and rights to IDP and tangible research property. TTC prescribes and provides assignment agreements.
TTC, in collaboration with the IP Committee, will determine whether Texas State desires to commit funding to obtain protection for the inventions and discoveries, and shall so notify the creators of the decision. In many cases, before making a final decision, TTC will identify one or more licensees who will bear the cost of obtaining patent protection.
In those instances where the creator perceives that delay would jeopardize obtaining the appropriate protection for the inventions and discoveries, the creator may request that Texas State expedite its decision.
OBLIGATIONS TO SPONSORS
- TTC, in cooperation with Post-Award Support Services, shall coordinate reporting requirements and other obligations to research sponsors regarding IDP or economically significant tangible research property developed under a research contract or grant, including obligations to the United States Government Code, 37CFR, Section 401.
AVOIDANCE OF CONFLICTS
Per TSUS policy, Chapter III, Section 12. (16), any employee subject to this policy shall report in writing to TTC, or its designee, the name of any business entity as referred to therein in which the person has an interest or for which the person serves as a director, officer, or employee and shall be responsible for submitting a revised written report upon any change in the interest or position held by such person in such business entity. TTC (or designee) will collect these reports and forward them to the president via the AVPR and the provost and vice president for Academic Affairs.
Prior to signing any consulting agreement that deals with patent rights, trade secrets, or the like, where any Texas State time, facilities, materials, or other resources are involved, Texas State personnel and students must bring the proposed agreement to the attention of TTC and either obtain a waiver of Texas State rights or otherwise modify the consulting agreement to conform with this policy.
Owned by Texas State – In agreements with business entities relating to rights in IDP owned by Texas State, Texas State may receive equity interests as partial or total compensation for the rights conveyed. Texas State will exercise all due diligence to ascertain the fair market value of any equity offered by privately held companies prior to acceptance.
Owned by an Employee – In accordance with Texas Education Code §51.912, and subject to review and approval by the president, employees of Texas State who conceive, create, discover, invent, or develop IDP may hold an equity interest in a business entity that has an agreement with Texas State relating to the research, development, licensing or exploration of that IDP. Texas State may, but shall not be obligated to, negotiate an equity interest on behalf of any employee as a part of an agreement between Texas State and a business entity relating to IDP conceived, created, discovered, invented, or developed by the employee and owned by Texas State.
Dividend income and income from the sale or disposition of equity interests held by Texas State pursuant to agreements relating to IDP shall belong to Texas State and shall be distributed in accordance with the provisions of this policy. Dividend income and income from the sale or disposition of an equity interest held by a Texas State employee pursuant to an agreement between Texas State and a business entity relating to rights in IDP conceived, created, discovered, invented, or developed by such employee shall belong to the employee.
Faculty, Staff and Students Involvement in Startup Companies
Texas State encourages its faculty, staff and students to participate in the formation of startup companies with the intention of commercializing promising research. When such companies are formed, conflict of interest, conflict of commitment and outside employment and activities policies must be addressed (see section 05.03).
Use of Texas State Labs, Facilities, and Resources – The company may not use university resources, including but not limited to labs, equipment, and supplies, without an executed agreement with the university. The company will be expected to pay the university for use of its resources. The rates charged would be the same rates that would be charged to any other company.
No faculty, staff, or students should be engaged in company-related business without a properly-executed agreement. A faculty member with company interests may not directly supervise, act as a mentor or advisor to any student, other faculty member, or staff member engaging in any kind of work, research, or agreement related to the company in which the faculty member has an interest.
Student Entrepreneurship – Student entrepreneurship classes and business startup competitions may not include any IP under license to a faculty member-owned company. Nor can any IP released to the faculty member (meaning the university no longer has an ownership interest) be used for this purpose.
REVIEWERS OF THIS UPPS
Reviewers of this UPPS include the following:
Position Date Associate Vice President for Research and Federal Relations July 1 E3Y Director, Technology Transfer and Contracts and Chair of the Intellectual Property Committee July 1 E3Y
This UPPS has been approved by the following individuals in their official capacities and represents Texas State policy and procedure from the date of this document until superseded.
Associate Vice President for Research and Federal Relations; senior reviewer of this UPPS
Provost and Vice President for Academic Affairs