Policy No: 2043 Responsible Office: Commercialization and Industry Collaboration Last Review Date: 12/15/2020 Next Required Review: 12/15/2025
Patent and Invention Policy
The purpose of this policy is to expand the research enterprise of the institution, encourage the practical application of inventions made through research, establish guidelines for the management of those inventions, provide equitable distribution to inventors of rights, revenues, and other benefits arising from the commercialization of inventions, increase opportunities for economic development and return to the public the fruits of university-based research.
“ . . . To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
US Constitution, Article I, Section 8
Protection of intellectual property in the US through patents and copyrights arises from this single line in the Constitution. It declares the social and economic value of sharing new ideas and writings and, to encourage such sharing, reserves special rights for inventors and authors. The University of South Alabama recognizes the value of this system in furthering its mission of teaching, research and service.
The University advances its mission in part by generating knowledge through research. The development of inventions is not a necessary and final product or even a purpose of research but may be an important outcome with significant public benefit. The transfer of inventions to the private sector, and the securing of patents when appropriate, provides the means for disseminating these new discoveries to the general public through the free enterprise system.
This policy applies to the Academic Affairs, Research & Economic Development and Medical Affair Divisions, as well as all University Affiliated Individuals, as defined herein, of the University of South Alabama.
This policy shall become a part of the conditions of employment or affiliation of every University Affiliated Individual and of the conditions of enrollment and attendance of every student, whether such person was employed, affiliated or enrolled, as the case may be, before or after adoption of this policy. An Invention Agreement for University Personnel (IAUP) will be signed at the time of employment or affiliation with the University, or if already employed or affiliated, prior to the use of any University facilities which might result in an invention or discovery. University Affiliated Individual shall be bound by this policy whether or not they have signed such agreement.
This patent and invention policy supersedes all previous patent and invention policies unless otherwise agreed specifically in writing by an appropriate University official.
Course of Employment or Affiliation: Means any work or any activity consistent with the expectations, functions, field of expertise or duties and obligations of employment or affiliation with University, regardless of location or timing.
Department: Is defined to mean the unit of primary academic appointment or research activity and includes multidisciplinary centers or institutes within the University.
Inventions: Means all developments, discoveries, technological advances, tangible research materials, trademarks or know-how, whether patentable or not, which are made in the Course of Employment or Affiliation with the University. Computer software and related documentation, integrated circuits, maskworks, databases or other similar works which are not Regular Academic Works under the USA Copyright Policy and which may be subject to protection under both copyright and patent laws shall be considered Inventions according to this policy.
Inventor: means as defined by United Stated of America patent law, United States Code Title 35 including notes and subsection with respect to pre-Leahy-Smith America Invents Act ("AIA") and post-AIA, and my represent two or more individuals.
Gross Income: Means total revenues (including, without limitation, licensing royalties, minimum payments, and other measurable consideration which can be reduced to monetary value) earned and received by or from the commercialization, including but not limited to licensing, of Inventions.
Licensing Costs: Means all direct expenses incurred by the University to (i) prepare, file, prosecute, maintain and defend patents; and, (ii) to market and/or license Inventions.
Net Income: Means any revenues actually received by the University from the sale, assignment, license or other commercial development of Inventions (including royalties, licensing fees, milestone payments, equity shares in a company or other similar consideration but excluding any external research funding designated for support of research on Inventions or for support of other University research programs) less the deduction for Licensing Costs.
University: Is defined to mean all units of the University of South Alabama, including schools, colleges, hospitals, clinics, institutes, programs, centers and any other components not otherwise listed.
University Affiliated Individual means:
- All persons receiving employment compensation from the University, including but not limited to faculty, staff, administrators, medical residents, and students, whether undergraduate or graduate; and
- All persons affiliated with the University as students, post-doctoral fellows, medical residents or visiting scholars; and
- All persons participating in sponsored research projects; and
- All other persons using University time, facilities, staff, materials, funds, confidential information or other University resources in the conduct of research.
4. Policy Guidelines
4.1 Allocation of Rights
4.1.1 Inventions Owned by University
Inventions which are conceived or first actually reduced to practice in the Course of Employment or Affiliation with the University, or through participation in sponsored research made available by the University, or with the use of the funds, resources or facilities administered by the University, shall be the property of the University. Such Inventions shall be assigned by the Inventor to the University, to an organization sponsoring the research or to an independent entity capable of and responsible for the management of patents and inventions, as determined by the University, in consideration for a share of Net Income generated by such Invention, in accord with Section “Distribution of Net Income” below.
4.1.2 Inventions Owned by Inventor
Inventions developed outside of the Course of Employment or Affiliation with the University and made without use of University funds, resources or facilities shall be the sole property of the Inventor. The University shall have no claim to any rights in such Inventions. The Inventor of such Inventions may choose to offer such Inventions to the University; if accepted by the University, said Inventions shall be treated in the same way and be subject to the same procedures outlined herein as any Invention owned by the University, unless otherwise agreed in advance by the Inventor of such Inventions and the University.
4.1.3 Inventions Owned by Research Sponsors
It is not the usual practice of the University to grant automatic ownership of Inventions made in the course of research to the sponsors of such research. When an Invention is developed through an externally sponsored grant or contract, any special provisions regarding Inventions contained in said grant or contract shall prevail. In the absence of such special provisions, this University policy applies.
4.2 Responsibility to Disclose & Assign
Inventions conceived or first reduced to practice by University Affiliated Individual in the Course of Employment or Affiliation shall be promptly disclosed in writing to the University Office of Technology Development. Inventor may not assign or license rights to such Inventions to third parties without the express written consent of the University. Inventor agrees to assist and cooperate with the University in executing and delivering all assignments and other documents necessary to obtain and enforce patents within the United States or any other country.
4.3 Designated Management Organizations
In the event that an Invention may be deemed of actual or potential commercial value, the University reserves its rights to designate or assign all its rights, title and interest in such Invention to the University’s Foundation for Research and Commercialization (USAFRC), to further such interest, including the facilitation of efficient transfer and utilization of such Invention in order to maximize public benefit.
Upon such designation and/or assignment by the University of South Alabama, USAFRC shall own all rights, title and interest in such Invention. USAFRC will have the responsibility to administer and manage all patents assigned to them and to receive, account for, and properly distribute all monies received from any commercialization activity, according to this policy.
Any income generated by an Invention designated or assigned to USAFRC is considered Gross Income, and shall be allocated by USAFRC as outlined below:
- 90% University of South Alabama;
- 10% USAFRC.
4.4 Publication & Public Disclosure
The University upholds the academic imperative to publish research, thereby advancing the scientific body of knowledge and fulfilling the University’s public mission. The University also, however, encourages University Affiliated Individual to coordinate publication or presentation of Inventions with the Office of Commercialization and Industry Collaboration in order to preserve all available intellectual property rights since certain rights in Inventions may be lost through any public disclosure which occurs in advance of the filing of patent applications.
4.5 Distribution of Net Income
Any Net Income generated by an Invention shall be distributed as outlined below. The distribution of Net Income is based upon the total cumulative funds generated by an Invention without regard to the time in which the funds are accumulated. In such instances where an Invention has more than one Inventor, the Net Income allocated as “Inventor Share” shall be divided and distributed among all Inventor in accordance with a revenue sharing agreement specifying the exact distribution of Net Income for Inventions to each Inventor, which shall be executed between the University or its designated management organization and the Inventor at or around the time of the first Invention disclosure. The revenue sharing agreement must be executed prior to the first distribution of any Net Income to the Inventor.
The Inventor’s Share of such Net Income is personal income separate from regular University compensation. The Inventor shall be responsible for the payment of any taxes due on that income.
In the event that an Inventor ceases to be a University Affiliated Individual, the Inventor’s Share of Net Income shall remain the same as set forth herein, and shall be payable to him/her or to his/her heirs, successors, designees or estate for as long as such Net Income is received by the University or its designee.
The Department receiving the “Inventor’s Department” share of Net Income under this distribution formula must reflect the primary Department in which the research that produced the Invention was performed. If more than one Department is involved, a reasonable division of Net Income for each Department must be agreed upon in writing before funds are dispersed. The Department share shall be used for research, scholarly, and educational purposes. Departments are encouraged to allocate a significant portion of the Departmental share of Net Income, at the discretion of the Department’s Chair, for the continued support of research by the Inventor or other scholarly activities.
The University’s share of Net Income will be allocated to the University’s Innovation Investment Fund. This Fund has been established to further the University’s research, education and economic development missions through the provision of small grants which support and encourage further research, inventions, proof of principle or other activities relevant to the generation of intellectual property at the University. Such “gap” or “seed” funding is often the missing link in the chain of moving Inventions from concept to commerce, and the University has an interest in closing that gap whenever possible.
Grants from the University’s Innovation Investment Fund will be made available from time to time, upon application from University Affiliated Individual for specific projects, and will be awarded through a peer review evaluation process.
Net Income, other than equity shares in a company, generated by an Invention shall be distributed as follows:
- From $0- $10,000 -- 70% -- Inventor's Share:
- 20% Inventor’s Department;
- 10% USAFRC (or SAMSF if Invention originated from USA College of Medicine).
- From $0- $10,000 -- 70% -- Inventor's Share:
- From $10,001-$50,000 -- 50% -- Inventor Share:
- 20% Inventor’s Department;
- 30% USAFRC (or SAMSF if Invention originated from USA College of Medicine).
- From $10,001-$50,000 -- 50% -- Inventor Share:
- Over $50,000 -- 30% -- Inventor Share:
- 20% Inventor’s Department;
- 30% USAFRC (or SAMSF if Invention originated from USA College of Medicine);
- 20% USA Innovation Investment Fund.
- Over $50,000 -- 30% -- Inventor Share:
In the event net Income from an Invention is to be distributed to more than one Inventor's Department, i.e. multiple Inventor from different departments are named on the Invention, the Net Income will be distributed to each Inventor's Department proportionate to the Inventor contribution to the Invention.
In the event any Inventor Share has been waived by an Inventor, e.g. Inventor waives Inventor Share and elects to hold equity in a company licensing a USA technology on which said equity-electing Inventor is also a named Inventor on the licensed USA technology (see USA Policy on Founder Equity in Technology Licensing Agreements), then the waived Inventor Share of Net Income shall be proportionately redistributed according to the tier structure above, to the Inventor’s Department, USAFRC (or SAMSF if Invention originated from USA College of Medicine), and USA Innovation Investment Fund (if applicable).
4.6 Equity Policy
The University or USAFRC may accept a minority equity interest in a business entity in partial consideration for the licensing and commercialization of an Invention. Such acceptance of equity shall be based on principles of honesty, objectivity, and fairness and will be managed in accord with applicable statutes and the University policies on Conflict of Commitment/Financial Conflict of Interest. The University shall not exercise any management control of the business entity. For as long as the Inventor remains a University Affiliated Individual, the Inventor may not participate in the management of the business entity or serve on the Board of Directors. In the event the business entity is such that an Inventor of the Invention is in anyway affiliated, e.g. faculty startup companies, please refer to the USA policy titled USA Policy on Founder Equity in Technology Licensing Arrangements.
Net Income in the form of equity interest in a company shall be distributed immediately according to the last tier of the revenue sharing formula in section 4.5 above. When the University or USAFRC accepts equity in a business entity, the Inventor(s) shall receive 30% share of that equity and the University or USAFRC shall receive 70% of that equity. The Inventor’s 30% share of equity interests shall be issued by the company in the name of the Inventor and distributed directly to the inventor at the time of the issuance of shares. Thereafter such Inventor will be wholly responsible for any tax burden, benefit, and business judgment regarding the management of the shares as distributed. The University or USAFRC shall have no fiduciary responsibility to the Inventor for shares of equity interests.
The University’s 70% share of equity interests will be given separately, to be held and controlled by USAFRC. Such equity interest will be managed in accord with the University investment policies.
University Affiliated Individuals who generate Inventions that are licensed with equity as partial consideration may perform clinical trials or research & testing for the licensee ONLY upon the specific approval of the relevant University oversight committees (i.e. IRB, IACUC, etc.) after full disclosure of all pertinent interests and consideration of any real or perceived conflicts of interest in the pursuit of such activities.
4.7 Conflict of Commitment/Financial Conflict of Interest
License and assignment agreements between the University and its University Affiliated Individual or between the University and a company in which University Affiliated Individual hold a financial or management interest may create a conflict of interest. When such a license or assignment agreement is entered into by the University, any continuing development of the Invention with the use of University funds, facilities, or funds administered by the University presents potential conflicts of interest, and may only proceed if managed through appropriate disclosure, review and approval under the processes set out in the University's Conflict of Commitment/Financial Conflict of Interest Policy.
University Affiliated Individuals consulting or communicating with commercial enterprises can be of significant benefit to the University, the individual, the commercial entity, and the general public. However, in such instances where such consulting or communicating involves an Inventor named on an Invention and the commercial entity that has licensed or is negotiating a license to said Invention, there exists the potential for conflicts of interest, for the inhibition of the free exchange of information, and for interference with the employee's primary allegiance to the University. University employees should be guided in these arrangements by University's Conflict of Commitment/Financial Conflict of Interest Policy.
Questions concerning potential conflicts should be referred to the University's Office of Research and Economic Development.
4.8 Waiver of Rights
The University may, where it is free to do so and in its sole discretion, waive and release its ownership rights in an Invention to the Inventor if the University determines that said Invention is unlikely to be patentable or commercially viable The University shall, in such case, execute all documents necessary to enable the inventor to undertake protective measures and arrange for the commercial development and exploitation of the Invention. Any release of University ownership rights shall be made on the following terms:
- The Inventor agrees to develop the Invention for the public benefit;
- The Inventor agrees to comply with and fulfill any obligations that may exist to sponsors of the research leading to the Invention, particularly the federal government;
- The Inventor agrees to report to the University, upon request, the status of licensing and/or commercial development of the Invention;
- The Inventor agrees to reserving equity interest in any of the following company if University requests;
- The Inventor agrees that the first income received from the licensing and/or commercial development of the Invention will be used to reimburse the University all Licensing Costs and any other direct expenses related to that Invention incurred by the University prior to the date of release of ownership rights in the Invention to the Inventor.
4.9 Student Inventions
Inventions made by students, (a) in the Course of Employment or Affiliation with the University, or (b) in the conduct of research in University laboratories as part of a post-baccalaureate or postdoctoral degree or non-degree program, or (c) resulting from work directly related to the student's employment or research responsibilities at the University, or (d) from work performed under a grant or other sponsorship, or faculty-directed research or work shall be the property of the University and shall be subject to this policy. In such instances, students will make assignment of the Invention to the University and will share in the distribution of royalties as set forth in this policy. In the event an Invention is made by a student and such instances described hereinabove do not apply, then ownership of the Invention shall remain with the student.
The President has delegated the responsibility for administering this policy to the Office of Commercialization and Industry Collaboration (OCIC). The Director of OCIC will implement such procedures as are necessary to carry out the requirements of this policy. The Director will develop and maintain any standard written agreements required under this policy and will mediate the negotiation of any special agreements or circumstances which arise under this policy.
The University Intellectual Property Policy Committee is appointed by the President to serve as a University resource with respect to matters involving the general subject of intellectual property in patents, inventions and copyright. The Committee shall review individual exceptions to this policy, hear appeals regarding the University’s ownership of a particular Invention, as well as consider any other special circumstances which may arise as a result of this policy.
It is the general policy of the University to encourage the development and marketing of Inventions resulting from University research to advance the public good. It is recognized that furtherance of such a policy may require various forms of agreements including the granting of exclusive licenses. The Director will manage the licensing of all Inventions. It is in the sole discretion of the University as to whether or not to accept and develop any Invention disclosed to it. The University has no obligation to pursue or maintain patent protection, other than as required by federal law, for Inventions. The University has the final authority in all decisions regarding patent, licensing and commercial development of Inventions.
Any waiver of the provisions of this policy shall be granted only in extraordinary and compelling circumstances. A request for waiver shall be submitted in writing to the University Intellectual Property Policy Committee through the Director and shall explain the reasons justifying the request for waiver as well as a description of how a waiver would be consistent with the University’s academic mission and the public interest.