Intellectual Property Policy: FAQ

The University of Arizona Intellectual Property Policy explains, supplements, and implements the Arizona Board of Regents (ABOR) Intellectual Property Policy for the University of Arizona. The ABOR IP Policy establishes the basic rights and obligations relating to intellectual property created by employees, students, and others connected to the University, provides an explanation of some of the key aspects of the ABOR IP Policy, and also provides additional detail regarding intellectual property creation, ownership, disposition, and transfer at the University.

 

The ABOR Intellectual Property Policy establishes the basic rights and obligations relating to intellectual property created by employees, students, and others connected to the University. The University of Arizona Intellectual Property Policy supplements the ABOR IP Policy primarily with respect to course materials.  

Although not technically part of either policy, income generated through the commercialization of intellectual property is shared with the contributors to the intellectual property as set forth in the Royalty Distribution Schedule (see "How are royalties distributed?" below). In general, the contributors share in the largest single portion of the royalties. In specific circumstances, a department may take the role of the contributors, garnering both the contributor share and the contributor lab share, along with the department’s share. This occurs when the intellectual property is determined to be a departmental work.

The UA royalty distribution schedule (see "How are royalties distributed?" below) is based on net income. Net income consists of the cumulative gross revenues generated through the transfer or other commercialization of ABOR-owned IP through Tech Launch Arizona, including royalties, up-front and license fees, milestone payments, settlement amounts, and any other compensation, less: (a) a 15% University administrative fee to fund Tech Launch Arizona operations; (b) unreimbursed legal costs and direct costs, including any amounts required to be remitted to the State of Arizona or any other costs incurred by Tech Launch Arizona, associated with the ABOR-owned IP; and (c) amounts owed under any agreement related to the ABOR-owned IP, including those with a sponsor, federal or state agency, co-owner, or other university or nonprofit entity. No University personnel, overhead, or other costs not directly related to legal protection or other contractual obligations will be deducted as part of the net income calculation.

Net income (see definition above) is distributed according to the following schedule:

NET INCOME

DISTRIBUTED TO

%

$0–$100,000

Contributor

Contributor Discretionary Account

Fund for Promotion of Research

50%

30%

20%

$100,001–$500,000

Contributor

Contributor Discretionary Account

Fund for Promotion of Research

Department Account

Dean’s Account

40%

25%

25%

5%

5%

Above $500,000

Contributor

Contributor Discretionary Account

Fund for Promotion of Research

Department Account

Dean’s Account

30%

15%

30%

15%

10%

 

This is a University account administered by the IP Official to promote research, develop intellectual property, and directly enable technology transfer. It is funded by a portion of the University share of net income received from the licensing or sale of ABOR-owned IP that flows through Tech Launch Arizona.

Contributors, Inventors, and Authors are used interchangeably when discussing inventions at UA and are determined in accordance with U.S. intellectual property laws. For patentable inventions, the laws regarding who is considered an inventor will apply, and for copyrights, the laws regarding who is considered an author will apply. Anyone who qualifies as an inventor or author has an equal and undivided interest in the Intellectual Property as a Contributor, unless a different allocation is agreed upon in writing among the joint inventors or authors. If there are contributors who are not Covered Individuals at the University, such as sponsors or federal agencies or other universities, these non-University contributors will not be included as Contributors for the purposes of revenue distribution but note that those non-University individuals/entities may be entitled to a portion of the revenues before they are distributed (see definition of Net Income under Royalty Distribution Schedule). For Departmental Works, notwithstanding the above, the department that commissioned the work will be deemed the “Contributor” for the purposes of revenue distribution under this Policy. Contributors receive their Contributor share regardless of their employment status and upon death, their heirs receive that income until the termination of the agreement(s) that produce the revenue. 

An inventor is someone who contributes to the conception of the invention (see “How is inventorship determined?” below.) Demonstrating, or carrying out tests to reduce an invention to practice, do not generally add inventive contribution. Authorship, on the other hand, relates to copyrights, and indicate contribution to a copyrighted work. So, an individual may be included as an author on a research paper resulting from the work, along with all the other people who may have contributed in a similar manner to the work, while still not being an inventor. U.S. Patent law defines an inventor as an individual who contributes to at least one patent claim. 

Generally, intellectual property (IP) is a work or invention that is the result of creativity, such as a compound, process, software, literary or artistic works, manuscript or design, to which one has rights and for which one may protect by law by applying for a patent, copyright, trademark, etc. In the case of UA, IP might be patentable items (processes, compounds, machine, etc.) or copyrightable items like software (which may or may not be patentable), books, music, art and more. 

Simply put, and for the purposes of invention disclosures to Tech Launch Arizona, an “invention” is any new technical contribution, discovery, process, device, program (including software and mobile apps), method, use, product improvement, design improvement, or other intellectual property that an individual or group creates during the course of research or other work at the University. Although inventions have to meet specific legal criteria to be patentable, all inventions should be disclosed to Tech Launch Arizona for evaluation of potential patentability and/or commercialization opportunities. Often, you will hear “intellectual property,” “IP” and “invention” used interchangeably.

Inventorship is a legal determination, U.S. Patent law defines an inventor as an individual who contributes to at least one patent claim. It is vital to note that if inventors are intentionally named to a patent erroneously, or are omitted, the patent can be invalidated. Authorship differs from inventorship, only those persons who made an inventive contribution to the claimed invention may be listed as inventors. During prosecution of the patent, claims may need to be revised by the patent attorney. Thus, it is possible that the original inventors listed on an invention disclosure may change depending upon which claims are allowed by the Patent Office and who actually contributed to those allowed claims. Final inventorship is determined when the patent issues. Only those persons who made an inventive contribution to the claimed invention may be listed as inventors. If inventorship is contested by any party, TLA may engage the services of an independent attorney to assess the issue.

The University claims ownership of all inventions created by employees in their capacity as an employee. The IP Policy describes such employees as covered individuals (see Section F of the ABOR IP Policy "Definitions"). The primary exceptions to this are: (a) when IP is created by covered individuals under consulting or sponsorship agreements with outside entities, and unrelated to their research at the University, or (b) created outside the scope of their duties and with no use of University resources. Covered individuals have usually already assigned their intellectual property to the University through their employment agreement but need to provide additional written documentation evidencing the assignment, if requested by Tech Launch Arizona.

In practice, the contributors of any intellectual property are required to come to agreement related to distribution of royalties related to commercialization of intellectual property. If the contributors cannot agree on contribution percentages, the IP Policy allows for equal distribution of the contributor share among the contributors. In addition, any individual contributor can request that the IP Official review the case, and if disputes continue, the IP Committee is delegated the authority to review such cases. 

Yes, covered individuals have an obligation to report new inventions to Tech Launch Arizona. This obligation is also conveyed in federally sponsored research. The invention disclosure process serves as the basis for communication with Tech Launch Arizona about the invention. If you have any questions about the invention or the disclosure process, please contact Tech Launch Arizona. Often, you will be asked to complete this process even when requesting confirmation of individual ownership of IP. 

Software falls under the same rules as any intellectual property produced at the University. The creator of the software should disclose it to Tech Launch Arizona. This would then be reviewed by Tech Launch Arizona for determination of ownership. If the software, including mobile applications, was created as a result or component of employment at the University, the University claims ownership. There are certain circumstances where the University would not claim ownership, such as when the software is completely outside the scope of one’s employment. If there is uncertainty related to ownership of software, contact Tech Launch Arizona to discuss your unique situation. If appropriate, Tech Launch Arizona will provide a letter stating the University does not claim ownership based on the circumstances. (See ABOR IP Policy Section A, Ownership.)

If the University owns the copyrighted material, contact Tech Launch Arizona to discuss the best way to license or distribute the material. TLA will help you through the process, handling, for example, the licensing/sale/distribution of:

  • Mobile apps
  • Computer software intended to be revenue generating
  • Databases created through research and intended to be revenue generating
  • Product designs
  • Copyrighted works funded by internal or external sponsors

When it comes to research, you should disclose any invention to Tech Launch Arizona. In order to fully protect it, such disclosure should be made as soon as possible after creation, and ideally before publication (or as soon as possible afterwards), using the Invention Disclosure Form. Contact your embedded Technology Licensing Manager or anyone at TLA to discuss.

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The University does not claim ownership of intellectual [roperty created by students who are not employed by the University (e.g., not graduate assistants or otherwise student-employees). (See part A.3, the Student-Created Works section of the ABOR IP Policy.)

However, a student acting in his or her capacity as an employee of the University (e.g., a graduate assistant) or working under a sponsored project will be subject to the standard rules applicable to all other employees under the IP Policy. In addition, under certain limited circumstances, the University may ask students to agree to assign intellectual property to the University in exchange for access to University resources in a laboratory or classroom setting as part of a particular project. This is most often seen when University faculty introduce University IP into classroom projects. In these circumstances, students should have the option of taking part in another project in that class where an assignment of student intellectual property is not required.

The UA offers students free legal advice via ASUA. Information is available here on the ASUA Student Legal Services website.

The UA James E. Rogers College of Law also offers an intellectual property clinic to help student entrepreneurs get their businesses off the ground.

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Tech Launch Arizona involves inventors in all aspects of the protection and licensing process. During the patenting process, the inventors work directly with Tech Launch and the patent attorney explaining and refining detailed elements of the invention. This interaction is crucial in developing the prosecution strategy for the patent application.

As TLA markets and licenses inventions, inventors typically participate in multiple ways, but only to the extent they are interested and able. Inventors might assist in the identification of companies as potential target licensees, deep-level technology discussions with potential licensees, and other ways as needed.

Ultimately, whether an invention receives an issued patent is up to the patent and trademark office of the country in which a patent is being sought. Although Tech Launch Arizona's intention is to patent as many inventions as possible, occasionally, after detailed discussions with the inventors, detailed assessments and market research, TLA may conclude that the cost of pursuing a patent is not justified. Such situations might include those where there are existing related patents, where enforcement of patent rights would be extremely difficult, or where the relevant target licensees are unlikely to be interested. In these cases, the intellectual property is handled according to the provisions of any applicable sponsored agreement (e.g., for government-sponsored inventions, rights are returned to the government). In rare circumstances, if the inventor is interested in developing and commercializing the technology despite TLA’s findings, the office will consider releasing the invention to the inventors.

Prepaid fees related to potential IP (IP that might be created under a research agreement – for examples of such agreements, see Arizona Choice) are distributed under the royalty distribution schedule (see above) when IP is created and disclosed to Tech Launch Arizona. Occasionally, no IP is developed under these agreements, and given that the IP Policy does not apply, these prepaid fees are distributed under an alternate distribution process related to such fees where no inventor can exist (as there is no invention).

Revenue from license agreements (see the royalty distribution schedule above) is shared with all inventors regardless of their participation in the licensee. In addition, the University considers all revenue received under a license agreement, including any revenue garnered from warrant or equity positions in a startup, as revenue to be distributed.

Tech Launch Arizona generally supports open source licensing, but there are many factors to consider in a determination on whether to subject software to an open source license, such as which open source license applies. Your rights and obligations as a user and developer of open source software varies widely among different open source licenses, so it is important to understand these differences and evaluate them carefully. Therefore, it is in the best interest of the individual and the University to discuss these options prior to general release. TLA can help you understand the differences between open source licenses, and can provide custom “open source”, “free use”, “source available” and other such licenses if needed. In addition, TLA can host and distribute University-owned software directly from the web, either for free or for a fee.

Before engaging in any kind of consulting arrangement, you should obtain your own legal advice to review agreements and make sure you understand all the related matters. Refer to the UA Consulting Agreement FAQs for help and details. 

The University allows faculty to spend certain portions of their time consulting with parties outside the University. Often, such consulting agreements require that intellectual property created under the consulting arrangement will belong to the outside entity. So long as that consulting activity complies with the University’s Conflict of Interest and Conflict of Commitment policies (and any other applicable policies), and so long as no University-owned IP (or other third party-owned intellectual property) is used or connected to the consulting activity, the University generally will not claim ownership of that intellectual property. Talk to a Technology Licensing Manager about your particular circumstances.

No employee (or anyone else) may use University-owned IP outside the University without proper notification to the University, and appropriate licenses to that intellectual property. In addition, there are Conflict of Interest and Conflict of Commitment policies and procedures that must be followed when employees wish to start companies outside of the University. Tech Launch Arizona can help navigating these requirements.

Inventorship in patents is a legal determination, based on contribution to patent claims, and can be difficult to determine in some cases. Contribution to copyright-related intellectual property, however, doesn’t have the same legal determination, and usually vests in the employer.

Any individual contributor/inventor can request that the IP Official review a specific case and determine ownership, inventorship or contribution. In such cases, the IP Official may elect to engage outside counsel to perform an inventorship analysis. The results of such an analysis will be considered the final position of TLA. If disputes continue, the IP Committee has the authority to review such cases and may be asked to do so.

The University claims ownership of all intellectual property created by covered Individuals in their capacity as employees. When other parties contribute to an invention, generally those party’s employers would also have a claim of co-ownership in the intellectual property. When more than one party has a claim of ownership in the same intellectual property, UA will typically enter into an agreement (if with another university, it is usually called an “Inter-Institutional Agreement”) that describes how the intellectual property will be managed.

A warrant is a type of security that entitles the University to buy the underlying stock of the issuing company at a fixed price called the “exercise price.” Warrants are a form of consideration the University often receives in a license with a startup, usually in lieu of an initial license fee. More often now, in lieu of warrants, stock in the company is provided as consideration in a license. This stock is held by the UA Foundation. Either form may be referred to as equity.

These forms of equity are held until some form of “liquidation event.” That is, typically until the startup is acquired by another company or “goes public” with an initial public offering (IPO) of stock in the company.

Once a liquidation event occurs TLA will generally sell the warrants, or the Foundation will sell the shares of stock, within a short time-frame, typically days, after legally able to sell (often, especially in the case of an IPO, there is a “hold period” during which equity cannot be sold.) However, on rare occasions, TLA, or the Foundation, may have reasonable belief based on special circumstances that holding the equity for a short time would result in a higher return. In these cases, discussions with all potential recipients of these royalty distributions may take place to decide to hold the equity for a limited time prior to selling. Once sold, the revenue is distributed according to the Royalty Distribution Policy.

The IP Committee is a University committee that hears appeals by covered individuals, reviews proposed changes to the IP Policy, and makes recommendations to the President through the IP Official, as outlined in Sections D(3) and D(5) and the ABOR IP Policy. It is composed of not fewer than five persons, including faculty and staff. The IP Official appoints the members, with at least half of the appointments based on discussions with the Chair of the Faculty Senate, and with the inclusion of at least one member of the Research Policy Committee.