IP Policies and Guidelines: Patents
For the following, we define an invention as any innovation that the employee or the institution thinks might be patentable. See the IP Primer for a brief description of what might be patentable.
The IMD and OAR relate primarily to inventions or technological improvements. IMD 6.210 further defines these as new and useful processes, machines, devices, manufacture, composition of matter, or improvements to any of them.
Our guidelines are:
- PSU requires that all employee work related inventions be assigned to PSU.
- PSU employees have a responsibility to disclose to IIP any inventions they make.
- PSU will provide a proactive waiver of ownership for non-work related inventions, but these must first be disclosed to IIP and go through the waiver process.
- PSU may waive work related inventions, but these must first be disclosed to IIP and go through the waiver process.
- PSU will, in consultation with inventors, make PSU-owned inventions available to industry and the public in an effective and non-discriminatory manner, obtain reasonable royalties for use in furthering institutional education and research objectives, and reward inventors through participation in net royalty income received.
The IMD states that the State Board of Higher Education reserves ownership rights to all work related inventions and inventions made with institutional resources (IMD 6.215), and the OAR states that as a condition of employment employees shall agree to assign rights in those items to the Board (OAR 580-43-0011). Inventions made with the use of grant, gift, or sponsored research funds count as having been made with institutional resources (IMD 6.215). The IMD goes on to say that as part of accepting a Notice of Appointment each employee is obligated to agree to assign rights to inventions conceived while employed by the institution (IMD 6.230).
PSU complies with the above by requiring all employees to assign their rights to all work related inventions to PSU. PSU can waive this ownership back to the inventors or funding agencies in certain circumstances as outlined below.
The OAR states that as a condition of employment all employees are responsible for disclosing to the Board (through IIP) all inventions and technological improvements made during the conduct of normal activities (OAR 580-43-0011). The IMD states that employees and other persons who conceive or develop inventions while engaged in activities utilizing institutional resources shall report such findings to the institutional official (IMD 6.225).
IIP understands that employees may not always know or recognize when an innovation may or may not be patentable, and we encourage faculty and staff to contact us to explore this possibility with regard to their projects. Also, although these rules only require disclosure of inventions made “during the conduct of normal activities” or conceived or developed with institutional resources, PSU requires the disclosure of ALL inventions so that we can fulfill our responsibility to proactively determine if the university has any interest and provide a waiver if applicable - see Waiver section below.
The IMD states that the university’s rights in an invention can be waived if it is determined that the invention is not related to work or an assigned project and that the development of the invention used no or minimal use of institutional funds or facilities (IMD 6.215). In order for the preceding to apply, no external or internal funding through the university can have been used. If this is the case, a statement can be issued which waives any institution or Board claim on the invention.
In order for this statement to be issued, however, the institution must first know about the invention and go through a waiver process to document the determination. Therefore, even if an employee has an invention that was made outside of work responsibilities and with no or minimal use of institution resources (and NO university funding, internal or external), PSU requires that the employee disclose that invention to IIP so the waiver of the board’s rights can be determined and documented. Despite the hassle, this is actually a benefit to the employee inventor, as it can proactively clear up the questions of ownership of an invention. See the Patent Waiver page for details on the process.
If PSU determines that a disclosed invention is incidental to the employee inventor’s work assignment, or that PSU has no interest in an invention, and decides to forego patenting of an invention, then PSU may at its discretion complete a waiver process to waive its rights to such an invention (IMD 6.215, 6.235). In this case, if the invention was funded by a federal funding agency, PSU would waive the rights back to the funding agency and the employee inventor would need to petition the agency to have the rights returned to them. See the Patent Waiver page for details on the process.
PSU will, in consultation with inventors, make PSU-owned inventions available to industry and the public in an effective and non-discriminatory manner, obtain reasonable royalties for use in furthering institutional education and research objectives, and reward inventors through participation in net royalty income received.
The above guideline is nearly word-for-word from IMD 6.245.
Although IIP focuses on using patents to promote use and impact, the directive above must also be taken into consideration as we license patents and patent applications to both established companies and faculty start-ups. In the majority of cases, we do not give free licenses. We engage in an arms-length transaction to establish monetary compensation terms that are fair and appropriate. IIP strives to build the compensation structure of our licensing deals in a way that best fits the needs of the innovation and the needs of the company.
IMD 6.245 also states that we prefer non-exclusive licenses over exclusive licenses, except where an exclusive license best serves the development of the innovation. The term of such exclusive licenses should be limited to a time necessary to achieve and benefit from commercial development. The IMD calls for five years from the date of first commercialization of the invention or issuance of the patent, however, IIP recognizes that in order to best pursue development and deployment of our innovations we must adhere to industry standards for the terms of exclusive licenses, and for some innovations they are often longer than five years.
IMD 6.245 also enumerates items which we need to include in any patent license. They are provisions:
- prohibiting the use of the name of the researcher, institution, and Board, either directly or implied, in any advertising relating to the commercialization of the product or process or in supporting evidence provided in prospectus literature, and the use of any statements which imply approval of the licensee's or sponsoring agency's marketing techniques, business objectives, or relationships with wholesalers, retailers, or consumer. Exceptions to this policy require Board approval;
- indemnifying the institution against any and all claims, demands, damages, costs, and other related items arising from the manufacture, use, or sale of the licensed invention or process, and, whenever possible, from any liability for damages resulting from a final judicial determination that such commercial utilization of the invention constitute an infringement of any third party patent;
- allowing the institution to produce and use the invention or process for its own educational or research purposes;
- allowing the institution and inventor to publish the findings of research and to continue with research related to the process or invention including publication of future findings;
- for receiving or examining accounting records maintained by the licensee and any sub-licensees; and
- for removing licensing rights and terminating the agreement should the licensee fail to develop and market the product within a reasonable time.