Introduction to Intellectual Property in Academia 1.6 – 1.7

1.6 IP in various types of university–industry agreements

  • Research Agreements

Research agreement usually formalizes a project of mutual interest to the company-sponsor and university, in the framework of the university research program. It may be based on company or university IP and may include development of new IP. In Chapter 8 patent ownership in the academic environment is discusses in details.

  • “Fundamental” Research Agreements

This type of project does not include any IP involvement, the research results in open publications and conference presentations.

  • Fee for Service Agreements

A university can provide data or other information (without its processing or interpretation) for which it has the unique capability to provide a cost that cannot be underbid by for-profit providers of a similar service, because of its tax exempt status. This agreement does not involve IP.

1.7 University departments associated with intellectual property

In the US, the Office of Technology Transfer of the university receives the disclosures of inventions, assists with filing of patent applications which is typically done by appointed law firm, and determines the ownership of the intellectual property. Furthermore, it handles the commercialization/licensing of intellectual property and the allocation of net royalties received. In a large university, the Office of Technology Transfer receives on average hundreds of invention disclosure forms (IDFs). It typically chooses to pursue no more than 1/3 of those and licenses about 1/2 of these. The culling goes on as out of all licensed patents just about 10% would break even, 5% would make some money, and it is only the tiny fraction of 0.01% that would result in a revenue stream measured in  millions of dollars. It is difficult to imagine a setting where the maxim “High Risk High Payoff” could be more relevant than in university IP development.

Usual license fees taken care of by OTT include: reimbursement and ongoing payment of patent prosecution costs, milestone payments, minimum annual royalties, and a percentage royalty on sales. If and when it comes to revenue sharing, the revenue is typically split between the inventors, university and inventor’s lab. For example, it could be split as follows: 34% +33%+33%; but inventor share varies within wide range from 25% to 70%. In some Universities (e.g. Iowa) the first $100,000.00 of net revenue is given to the inventors. In case of multiple inventors, the revenue is typically shared equally unless inventors agree otherwise in writing.

Copyright issues can also be handled by the Copyright Clearance Office at the university. This office assesses fair use and obtains permissions (where necessary) from copyright holders for persons creating course packets for their classes.

In some other countries the structure of Technology Transfer system is similar, but not identical to that of the US [7]. British TTOs are generally separate companies that are wholly owned by the universities, rather than a department within the university. In Japan, TTO is also a separate corporation; however it is owned by the university professors rather than by the university.

 The structure of the Offices of Technology Transfer in Germany is yet another variation. According to German 2001 Reform of Employee Law, intellectual property rights no longer belong to the individual inventor but are the property of the university. As a consequence, the German government supports financially the system of Patent Valorization Agencies (Patentverwertungsagenturen/PVA). Each PVA commercializes research potential and results on behalf of a number of universities, university colleges and research institutes. Nearly all German Universities have bonds to one of the 20 PVAs [8].

Despite of variety of organizational structures of TTOs, the common feature is that in majority of countries a scientist has a predetermined path which he or she needs to follow to proceed with the invention made at the university. An efficient way to communicate with the Offices of Technology Transfer is one of the keys to the commercial success of the invention. The TTO issues are the subject of Chapter 5.