Financial Administration

Patent Policy (G34)

Revised: December 10, 1985


  1. Purpose

    Each University of the UW System, as appropriate to its institutional mission, has a role in discovering and transmitting knowledge and providing public service. This creates an environment which is highly conducive to the conception and development of many forms of intellectual property. There is always the possibility that these developments may have commercial value, which possibly may be enhanced through the use of patents. The University of Wisconsin System has traditionally recognized and continues to foster and support development of inventions for public use. However, the contractual rights of extramural sponsors and the System's commitment to the principles of academic freedom and the tradition of free and open discussion of research must also be maintained.

    It is the purpose, here, to state for faculty and staff and students the relevant System policies, as well as the nature of faculty, staff and students' responsibilities, privileges and options when they have made an invention or discovery.


  2. Background

    Historically, most universities of the UW System have not claimed proprietary rights in any invention generated by the faculty, staff, or students. However, patent agreements between individual faculty, staff, or students and the institution may be entered into at universities in the UW System. In the absence of contractual provisions obligating transfer of all or some proprietary rights in an invention, the inventor traditionally is free to dispose of those rights in the manner of his or her own choosing.

    Much of the research is funded by outside parties through formal grants and contracts, with various Federal agencies constituting the major research funding source. The University of Wisconsin System Board of Regents is the legal recipient of all grants and contracts which are accepted on behalf of faculty, staff and students and, as such, has the legal responsibility for complying with all contractual obligations. Consequently, when an invention is generated, it is necessary that the designated authorities at each university review and make determinations with regard to patent rights as set forth by those funding sources which contributed to the making of that invention.

    To insure that all obligations attaching to contracts and grants will be met, faculty, staff and students who participate in programs having extramural support are required to complete a patent agreement which recognizes those obligations.


  3. Policies

    1. Federal Agreements

      In order to expand public use of inventions and in recognition of the need for establishing government-wide policies for the allocation of rights to Federally supported inventions, Section 6 of Public Law 96-517 dealing with the disposition of rights to inventions made with Federal assistance was adopted and became effective on July 1, 1981. That section of the law provides, in general, that universities have the first right to take title to inventions resulting from research supported by Federal funding. The policies and regulations emanating from PL 96-517 are contained in OMB Circular A-124. The February 19, 1982 Federal Register states "Since one of the primary purposes of PL 96-517 is to foster cooperative research arrangements among government, universities and industry in order to more effectively utilize the productive resources of the nation in the creation and commercialization of new technology, it is important to remove any doubt as to the propriety of such cooperative arrangements and the proper application of the Circular to them". This patent law has been amended by PL 98-620, but the main thrust and purpose are unchanged. In particular, the Department of Commerce, which has been given patent authority under the new law, has proposed implementing regulations which closely follow Circular A-124.

      The most significant aspect of these laws is that a university can use a single policy document and essentially uniform policies for all Federal agencies. Because these laws require that the staff member and university initiate appropriate patent action for each invention, it is essential that faculty, staff and students become familiar with the reporting requirements. The most relevant of these policies and requirements are summarized here.

      1. These Acts give non-profit organizations, including universities or their designated patent management organization, a first right to title in inventions made in performance of Federal grants and contracts.

      2. The regulations are applicable to all Federal funding agreements, contracts as well as grants, with domestic nonprofit organizations (including universities), executed on or after March 1, 1982. They take precedence over numerous previous conflicting statutory and administrative policies of individual agencies.

      3. The patent policy does not apply to funding agreements made for educational purposes. Specifically, no scholarship, fellowship, or training grant will contain any provision giving the awarding Federal agency any rights to inventions made by the recipient. Thus research support rather than financial aid will determine the status of inventions by these fellows and trainees.

      4. The term "invention" means any invention or discovery which is or may be patentable or otherwise protectable under Title 35 of the United States Code, or any novel variety of plant protectable under the Plant Variety Protection Act; the term "subject invention" means any invention conceived or first actually reduced to practice in the performance of work under a funding agreement, provided that, in the case of a plant variety, the "date of determination" must also occur during the period of the grant or contract; and, the term "practical application" means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system.

      5. The Federal Government shall have a non-exclusive, non- transferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject invention throughout the world.

      6. The university must disclose each subject invention to the appropriate Federal agency within two months after the inventor discloses it in writing to university personnel responsible for patent matters.

      7. The university must elect in writing whether or not to retain title to any such invention by notifying the Federal agency within two years of its disclosure to the agency. However, publication or public use creates a one year statutory limit for filing for US patents. An agency may shorten its deadline for modification to 60 days prior to the expiration of this one-year period. Publication or public use prior to filing results in the loss of overseas patents which are the major source of income for biomedical patents.

      8. The university must secure written agreement from all employees, other than clerical and nontechnical employees, to disclose promptly in writing to personnel identified as responsible for the administration of patent matters and in a format suggested by the university, each subject invention in order that the university can comply with the disclosure provisions of paragraph 6 above and execute all papers necessary to file patent applications on subject inventions and to establish the Government's rights in the subject inventions. (See Appendix I)

      9. The university must agree to submit periodic reports no more frequently than annually on the utilization of a subject invention or on efforts at obtaining such utilization by its licensees or assignees. Such reports shall include information regarding the status of development, date of first commercial sale or use, and gross royalties received by the university.

        As noted earlier, the laws permit a university itself to accept assignment of these inventions or to designate a nonprofit patent management organization to act for it, Each university of the UW System is required to establish procedures which it will use in the event a Federally supported invention or discovery is made. These procedures must either designate an institutional administrative office which will accept assignment of the invention and take responsibility for its development, or designate an external organization to carry out that function. In either case, the procedure used and the offices and/or external agencies involved must be reviewed and approved by the Vice President for Business and Finance. A university of the UW System may establish a suitable outside organization specifically for this purpose, but such organizations must meet stringent operating criteria. Alternatively, organizations such as the Research Corporation may be designated. (For the UW- Madison, the Wisconsin Alumni Research Foundation [WARF] has been designated as the organization responsible for processing patent applications. Certain services in patent evaluation are available from WARF to other universities in the UW System. If it is determined that a patent is to be sought, WARF services will be available on a cost reimbursable basis. Interested parties should contact the Managing Director of WARF for current information on patent related services available to System universities other than UW-Madison).

    2. Non-federal Extramural Support

      The patent expectations of the many non-Federal funding sources of university research vary. That fact plus the frequent practice of using funds from more than one source in support of a given research project can place an inventor in an ambiguous and even conflicting position with several sponsors.

      In discussions with any extramural research sponsor, principal investigators must take into consideration existing contractual obligations involving any personnel or resources to be involved in the proposed research. This is especially important where the proposed support is for research whose purpose is the same or similar to research conducted by the principal investigator with some Federal funding, however minimal. Obligations which exist because of Federal or other extramural sponsors must be recognized in the negotiated agreement. Written agreements between the employee and the sponsor may be used to designate assignment of inventions as long as the agreement does not conflict with other existing agreements or with university policies on the conduct of research.

      The disposition of all inventions generated at a UWS institution, regardless of funding sources, is subject to review by the Chancellor or Chancellor's designee. The purpose of the review is to determine if any contractual obligation exists in connection with and as a result of, the funding leading to the invention.

    3. Institution/Staff Contractual Agreements

      Special circumstances may arise where faculty/staff work assignments have been made with an expectation that patentable materials will be produced. In such cases, a written agreement between the employee and the institution may be executed, specifying the disposition of any patents developed in the course of the work. The normal presumption of faculty/staff ownership and control of patents developed on non-federally funded projects prevails unless agreements to the contrary have been executed.

    4. Procedures for Reporting an Invention

      When any member of the staff or student on appointment makes a discovery or invention in pursuing his/her university duties, or on university premises, or with university supplies or equipment, a report of this fact must be made to the Chancellor or his/her designee. The required "Invention Record and Report" form is provided in Appendix II.

      The Chancellor (or designee) will judge the relation of the reported discovery or invention to the purpose of any grant or contract that may be involved.

      The Chancellor (or designee) has the ultimate responsibility for determining if an obligation to a grantor does exist and, if so, to insure that such obligations are fully met.

      In the interest of protecting the inventor's patent rights by the prompt filing of appropriate patent applications, the inventor is urged to pursue patent filing at the same time that the invention report is in process. As noted earlier, the opportunity to obtain foreign patent protection on an invention is generally lost if a publication disclosing that invention is issued prior to filing.

    5. Restricted Inventions (Federal)

      All personnel who, having complied with the established reporting procedure, are advised by the Chancellor's office that their research was funded in whole or in part by a Federal grant, may choose either of two options:

      Option 1: Submit the invention to the designated administrative office or extramural organization which will examine thoroughly the invention and will, when it considers such action is warranted in the public interest, accept assignment of the invention, prepare and file patent applications, and thereafter exercise its best effort to bring the invention quickly and effectively into public use.

      Option 2: Propose to the Chancellor or his or her designee that the university assign the invention to the Federal Government to dispose of as it sees fit. Although the inventor and the Chancellor may recommend whether the invention ought or ought not be patented, the final decision under this option will be made by the Government.

    6. Restricted Inventions (Institutional/Staff Contractual Agreements)

      When the Chancellor's Office determines that an invention or discovery has been made under an institutional or contractual agreement (other than a Federal agreement) the inventor will be advised of the options available. It will be the responsibility of the Chancellor's Office to assure that the obligations of the contract are carried out.

    7. Unrestricted Inventions

      When, after review by the Chancellor or his or her designee, it has been determined that no third party is contractually entitled to exercise control over the proprietary rights in an invention, or that no contractual agreement exists with the institution, the inventor will be so advised and will be free to dispose of the invention. Practically speaking, any one of three options is available to the inventor.

      Option 1: Submit the invention to designated office or organization as in Option 1 under Restricted Inventions (Federal)

      Option 2: Under his/her own initiative and resources, seek patents on the invention and thereafter administer, dispose of, or license such patents in whatever manner seems appropriate.

      Option 3: Dedicate the invention to the public by publishing findings and taking no legal action.

      It is suggested that the inventor thoroughly weigh the relative advantages and consequences of these options in terms of which will most likely result in early public use and greater public benefit.

    8. Publication

      Regardless of the option elected, the inventor is free, indeed urged, to establish scientific priorities through publication of research results. It is recognized, of course, that short delays may be required to establish patent rights.


  4. Institutional Reporting Requirements

    All inventions, whether supported by Federal or non-federal funds are to be reported on an Invention Record and Report Form (See Appendix II). Patent protection and notification of sponsors are to be processed as soon as adequate information is in hand.

    Institutions, in addition to being responsible for insuring compliance with the above policies and procedures, will prepare an annual report for submission to System Administration. The report should be submitted by December 1 of each year and include the following information: a listing of patent applications by invention title, the inventor(s) name and title, identification of funding sources and a brief description of the invention(s).




APPENDIX I

UNIVERSITY OF WISCONSIN-________________
Invention and Patent Agreement*

    ______________________________________________________________________
    Name (Last)     (First)     (Middle Initial)    SOCIAL SECURITY NUMBER

As a condition of and in consideration of my participation in any extramurally sponsored research or other extramurally supported activity at the UW-__________________, I hereby agree to disclose promptly to the Chancellor (or designee) any invention conceived and/or reduced to practice by me, whether solely or jointly with others, resulting in whole or in part from such extra-murally supported activity. I further agree that I will comply with the provisions of any agreement between the University and any sponsor pertinent to the particular activity supported by that sponsor in which I am involved, and will cooperate in assuring that the sponsor's rights, including rights in inventions and patents, are fully protected.

If I am the Principal Investigator of any extramurally sponsored project, I shall require that each participant in such project sign this Agreement and become familiar with the provisions in the agreement between that extramural sponsor and the UW-_______________________ pertinent to participation in the project, including invention and patent provisions, and with the UW - _______________________'s policies concerning inventions and patents.

   __________________________
           Signature

   _______________________________
           Date

*The Office of _____________________________ will assure that this agreement is on file for each Principal Investigator. The Principal Investigator is responsible for filing the agreements of the project staff with the ____________________.






APPENDIX II

UNIVERSITY OF WISCONSIN

INVENTION RECORD AND REPORT

(Submit to the Chancellor or Designee)




________________________________________________________________________ 
         (person filing report)                              (date)

  1. Brief descriptive title of invention:



  2. Full name of inventor(s), home address(es), and appointment title(s):



  3. Recommendation of inventor(s) whether patent should be sought:

        _____ Yes        ____ No



  4. Results to be achieved by the practice of this invention:



  5. Outline of means discovered for achieving above results in terms of (a) the steps in a process, or (b) the components in a composition or groups in a chemical compound (include description of process of making) or (c) elements in a machine, article or device. Point out means which are essential, others which are important or useful and any critical limitations on any of these.

  6. Chronology of principal events in conception and developments:

    (a) Earliest conception date (reference to substantiating evidence desirable):


    (b) Date of disclosure (orally or in writing) to other persons and names of such persons: ___________________________________________________


    (c) First written record pertinent to invention: _________________


    (d) Date and result of first test of the invention. If invention is a process, its first test is the first successful trial; if a composition of matter or a compound or a machine, article or device, its first test is its first creation and evaluation with respect to new or improved properties or behavior.


  7. Source(s) and amount(s) of all grant, contract or gift funds used by inventor(s) regardless of purpose or use during the period starting with the date noted in item 6(a) and continuing to the present.



  8. Identify those sources indicated in item 7 which contributed to the invention.



  9. Date and place (e.g. particular periodical) or any publication regarding invention (whether publication has occurred or is projected): ________________________________________________



  10. Background of published information and practice in the field of the invention (known practices, periodical citations, patents, etc. Attach documents if pertinent.)



  11. Features embodied in this invention which would not have been obvious to or readily foreseeable by the typical skilled worker in the field:

                                    __________________________
                                    Signature of person filing report


    _______________________       _______    ______________________________
    Signature of Inventor(s)      Date       Witness to Inventor's Signature



    Certification by Inventor's Supervisor

    (Dept. Chairman, Program Director or Coordinator)



    I have reviewed the information provided above with particular reference to item 8, source of funds contributing to the invention. To the best of my knowledge, I believe the above statements to be accurate.

                                               _________________________
                                                Signature of Supervisor