Editor’s Note: José Cortina is a member of the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A.

RESEARCH TRIANGLE PARK, N.C. – As universities struggle with finances, exploitation of intellectual property developed by faculty and other employees has taken on greater importance.

While many universities, particularly research universities, already have policies in place, many are struggling to decide how to best exploit the fruits of their employees’ efforts. However, prior to discussing the various aspects which are essential features of a university intellectual property policy, it is important to understand what is meant by term “intellectual property” in the context of technology developments in a university environment.

While there are many different forms of intellectual property, for purposes of formulating a university policy, the forms of “intellectual property” of greatest concern are copyrights and patents.

The Copyright Issue

Copyright generally applies to the specific expression of ideas as reflected in works of authorships fixed in any tangible medium. Patents on the other hand apply to inventions or discoveries, and generally provide broader protection than copyright since they protect the implementation of ideas as reflected in the definition of an invention in a portion of a patent which is known as the “claims.”

In implementing a university policy on intellectual property, the question of ownership of the intellectual property must be addressed. The American Association of University Professors has noted that it has been the prevailing academic practice to treat faculty members as the copyright owners of works that are created independently and at the faculty member’s own initiative for traditional academic purposes. However, this is not universal and some individual universities have actually required that work subject to copyright protection have the copyright therein transferred to and owned by the university.

The area of software development presents a particularly complicated issue because software is protectable by copyright and sometimes patent, but does not have the characteristics of a traditional work of authorship such as a textbook or an article for an academic journal. In this area, universities are increasingly taking the position that copyright in works of authorship embodied in software should be owned by the university. This in turn means that the university is entitled to any license fees received with respect to the software and determine to what extent it shares such fees with the faculty-member author.

The Patent Issue

Patents present a more challenging issue, somewhat similar to the issue related to copyrights as they apply to software. More specifically, patents are often the result of sponsored research funded by the federal government, nonprofit institutions and private industry, among others. In the case of universities that receive federal research funds, federal statutes require in many cases that the university own patents resulting from any research conducted by faculty members at the university, but a complication arises in that many private companies as a condition of providing research and development funds, wish to obtain ownership rights of any inventions resulting from the funded research and development.

While appearing to present an insurmountable problem, the issue of ownership of inventions by a sponsoring private company can be addressed by the university simply by providing a grant of an exclusive license which transfers all of the rights in the patent so that it is effective as an assignment, short of actual transfer of title. Of course, such a license will have an effect on the license fees required, and the university needs to be careful that such grant of a license is done for appropriate compensation, and not effectively without charge.

In order to incent faculty members to pursue patents, and to allow the technology transfer offices of the universities to monetize the results of the research, it is important that universities provide some type of monetary sharing arrangement with the faculty members who are the inventors of developments that result in patents. As a result, a university implementing an intellectual property policy should be required to set a firm policy concerning distribution of any funds generated from the exploitation of any intellectual property developed.

On the other hand, such a policy cannot be static because of the continuing change in the legislative environment, technology and in the means of exploiting intellectual property. As a result, the American Association of University Professors also suggests that universities establish an ongoing intellectual property committee representing both faculty and administration.

Such a committee can play a prominent role in evolving policy development, and as also suggested by the American Association of University Professors, can also play a role in dispute resolution in a currently changing technology and economic environment. It is essential that universities develop policies concerning intellectual property designed to maximize return on research and development while fairly compensating those that contributed to such research and development. In addition, the policies must be flexible and adaptable to rapidly changing times.

A. José Cortina is a registered patent attorney with the law firm of Daniels, Daniels & Verdonik, P.A. He focuses his practice on the intellectual property needs of small to large technology companies, including providing patent, trademark, copyright, counseling, licensing, conflict resolution and transactional services. He is experienced in a broad range of technologies, including electronics, communications, computer hardware and software, biomedical, materials, and selected chemical and chemical engineering technologies.