Patent Rights
In knowledge-based economies, companies compete by "out-innovating" their competitors, and usually desire to keep their innovations close to home and away from competitors. That perspective carries over when companies sponsor research projects at universities.
Universities also compete in a knowledge-based environment. When they generate intellectual property, like patents, universities desire to retain ownership of that property, but seek to license it to companies that are in a better position to undertake commercial development and bring the innovations to market.
Industry-sponsored project agreements at a research university attempt to balance the interests of the corporate sponsor and the university research organization. Typical language, which has been found acceptable in most cases, provides something similar to the following:
- Nothing in the execution of this Agreement or the performance of the Project alters either party's rights to their respective intellectual property made prior to the Effective Date or after the Termination Date or otherwise outside the scope of the Project.
- Project Intellectual Property ("Project IP") means Project Inventions and Project Works.
- "Project Inventions" means inventions falling within the statutory subject matter for a U.S. or foreign patent and made in the performance of the Project.
- "Project Works" means computer software and other works of authorship falling within the statutory subject matter for a U.S. copyright and authored in the performance of the Project, excepting i) reports, interim reports, and summaries submitted to Sponsor to record progress in the Project and ii) traditional academic papers reporting scientific results of the Project and prepared for submission to scholarly journals.
- Project IP is initially owned by the inventors and authors who create it. University of Arizona personnel are required to assign their interest in employment related inventions to the University.
- Each party agrees to notify the other promptly of new Project IP.
- For Project Inventions, the list of inventors will be consistent with U.S. patent law. Initial ownership of Inventions will vest in the inventor(s). University personnel must assign their interest in Inventions to the University.
- Option to License
- Subject to University obligations, if any, to the Federal Government arising from use of Federally supplied funds or equipment in the Project, University hereby grants to Sponsor a limited-term exclusive option to exclusively license University's Project IP.
- The option will expire two (2) months after University first discloses Project IP to Sponsor.
- Licensing terms are negotiable after Project IP becomes known in sufficient detail to permit estimation of its commercial value, and will be typical of the type of Project IP and the licensed field of use. An exclusive license will include a one-time license issue fee, reimbursement of University's reasonable patent costs for the licensed Project IP, milestone payments, and royalty payments.
- License royalty rates will take into consideration factors such as robustness of the patent claims; the degree to which the licensed Project IP is an evolutionary or a disruptive advance on competitive technologies; and whether the licensed use is for a discrete technology or one component of a complex technology.
- Upon Sponsor's written request, University will grant Sponsor a commercial evaluation license for optioned Project IP. The license will be valid for the duration of the option period and will be at nominal cost to Sponsor.
Sponsored project agreements that call for outright assignment (transfer of ownership) of University-made inventions to the sponsor are accepted only in rare cases, only under special conditions specified by the Arizona Board of Regents, and only with the written approval of the Vice President for Research.
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Last modified: June 27, 2008.
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