IV-3.00(A)

UMB Policy on Patents

Research   |   Approved May 31, 1990

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Responsible VP/AVP

James L. Hughes, MBA

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Policy Statement

The State of Maryland encourages commercializing university developed technologies. The University of Maryland Patent Policy seeks to provide financial compensation as well as professional recognition to inventors and to protect and serve the public interest. The Patent Policy establishes the rights and responsibilities for patenting and licensing innovations and inventions at the University of Maryland. This policy applies to all university personnel and covers all inventions or innovations resulting from: a university administered program; activities within the scope of the inventor's employment by the university; or activities involving the use of university time, facilities, or materials. As a condition of employment, the university has an interest and a right to ownership of all inventions and innovations conceived within these activities.

UNIVERSITY RESPONSIBILITIES

Under the Patent and Faculty Conflict of Interest Policies, the university is responsible for expediting the decision regarding patent ownership and commercialization. If the university declines ownership, the interest may be transferred to the inventor. Additionally, the university ensures that faculty are protected from possible conflict of interest situations arising from research activities. In all cases, the university shall:

• notify the inventor promptly whenever it decides not to pursue or to abandon the pursuit of patenting or commercialization of an invention;
• execute, upon request, all contracts, assignments, waivers, or other legal documents necessary to transfer to the inventor the university's interest in any invention it declines to pursue;
• act with reasonable promptness and in good faith on all inventions disclosed to it;
• remit to the inventors their share of revenue as defined in Part E of the Patent Policy; and
• review for possible conflict of interest and obtain any necessary approvals.

PERSONNEL RESPONSIBILITIES

While federal laws govern patent criteria, inventors must follow university procedures for disclosure and licensing. University personnel have several responsibilities specified by the Patent Policy. Areas of personnel responsibility include:

• prompt notification and cooperation with the university;
• careful consideration on how publishing might affect the right to patent; and
• disclosure of any potential conflict of interest.

The Office of Technology Development will attempt to identify patentable research, but it is the responsibility of university personnel to disclose inventions, or potential conflicts of interest, in a timely manner. The inventor shall, upon request, execute all contracts, assignments, waivers, disclosures or other legal documents necessary to vest in the university the rights to any invention in which it retains an interest. University personnel may not enter into any patent agreements for university research activities, as defined in the Patent Policy, with outside organizations without prior authorization; the university retains this right exclusively.

PUBLICATIONS

Although the Patent Policy does not limit the right to publish, inventors should consider how the timing of a publication may affect the right to patent. Publication in a scientific or other journal places the invention in the public domain and may vitiate any ability to obtain a patent.

Articles in newspapers, newsletters, bulletins, textbooks, journals, theses and reports all qualify as publications. Oral presentations may constitute publication in some countries, as would distribution of a paper at a public meeting. The key test is that the publication must be enabling; it must describe the invention in sufficient detail so that it could be duplicated or put into use.

In the United States, a patent owner has a grace period of one year to file an application after disclosure through publication. If the U.S. patent application is filed prior to any publication, worldwide patent rights are preserved for one year from the U.S. filing date. If, however, an invention or innovation is published before filing a U.S. patent application, most foreign patent rights are lost. To protect foreign patent rights it is essential to file a foreign patent application prior to publication.

The United States is a member of a convention that provides that a patent application can be filed in other countries within a year of the U.S. filing and will be accorded the same priority date as the U.S. filing. Some 60 countries have signed this treaty which guarantees similar rights to citizens of foreign countries that are granted to their own citizens.

INVENTION DISCLOSURE PROCEDURES

OTD is responsible for directing all patent activity at UMB and UMBC. Investigators are requested to discuss patent ideas with OTD. Based on a favorable review, an investigator may be asked to file an "Invention Disclosure Form."

The Invention Disclosure is evaluated by OTD to determine the university's interest and plan of action. There are several possible outcomes.

OTD may submit the disclosure to Research Corporation Technologies (RCT). OTD is the liaison between RCT and the University. RCT has been retained by UMB and UMBC to provide all patent services and liaison to industries which may be interested in licensing university inventions and exploring commercial development.

In this case, within 30 days, RCT must indicate its interest in the disclosure and notify OTD of the individual or group charged with the evaluation. RCT then has 60 days in which to notify the university of its acceptance or rejection of the disclosure.

If the invention is accepted by RCT, they will have responsibility for all patent filing, patenting costs, identification of licensee, patent maintenance and enforcement. Under the agreement with RCT, the university receives 60% of the royalty income and licensing fees while RCT retains 40%. If RCT declines to accept the invention, the university must decide whether or not to cover the costs of filing a patent application.

Occasionally, OTD will identify technologies to pursue internally, which, in some cases, may have been rejected by RCT. In this event, OTD will assume responsibility for the evaluation, patenting costs and licensing agreements. The university will retain an approved attorney should it decide to file for patent protection. OTD also notifies appropriate federal agencies of the invention if federal funds supported the research and it elects to retain title to the invention. In the event the university decides not to pursue the invention, it may transfer the title to the inventor.

Sometimes innovations and inventions result from privately supported research. In this instance, patent and licensing agreements are usually stated in the research agreement, whether it is a grant or contract. OTD, upon reviewing the invention disclosure, will act in accordance to any agreement.

THE PATENT APPLICATION

In the patent application, it is most important to make a full disclosure of the invention and to define it in such a way as to clearly create borders of protection for the limited, temporary monopoly granted by the patent. When received in the U.S. Patent Office, the application package is assigned to an examiner who specializes in the field relevant to the invention. The examiner searches to determine whether the application discloses new and patentable subject matter, and judges the allowability of each claim.

Although the makeup of a patent application varies considerably, here's what a typical application may include:

• a title;
• drawings of the invention, when feasible;
• name(s) of the inventor(s);
• a brief statement regarding the field to which the invention relates;
• an explanation of the problem;
• the object of the invention;
• how the invention solves the problem;
• descriptions of drawings, if any;
• detailed description of the invention;
• example of results;
• one or more claims defining the invention in legal terminology; and
• a list of references cited by the Patent Office during the pendency of the application.

While Research Corporation Technologies or an approved attorney will execute the patent filing, any information which can be supplied by the inventor facilitates the evaluation. OTD encourages inventors to participate in the disclosure process by providing any useful information.

AGREEMENTS

Federally Sponsored Research

In order to retain patent rights for federally sponsored research, the university must comply with the requirements under the law. First, the university must report all inventions made under federal sponsorship to the applicable federal agency within 60 days. Second, title must be elected generally within one year of the report. Third, a patent application must be filed in the U.S. within two years of title election. Finally, the university must seek out licensees to utilize the invention; U.S. small businesses are preferred.

In all cases, the government retains a non-exclusive right to use the invention or have it utilized for government purposes. The government also retains certain march-in-rights to inventions not brought to commercialization after several years.

Licensing Agreements

While patents are intended to promote progress and serve the public, patents may also benefit inventors through recognition and monetary returns through commercialization.

A patent owner, having the right to exclude others from using the invention, may also grant permission to others to infringe. This is usually accomplished through licensing agreements. A license is essentially an agreement by the patent owner not to sue for infringement, so long as the licensee's actions are within the terms of the agreement. A licensee typically addresses:

• the term of the license;
• the territory of the license;
• any limits to the license grant, usually a license is exclusive to one party;
• amount of license fee or other consideration to be paid by the licensee;
• amount and assignment of royalty rates, including a minimum payment;
• milestones the licensee must meet and provision for termination of the license in event of failure;
• provision for the inventor to continue to use the invention for research purposes; and
• provision for the licensee to indemnify the inventor or institution granting the license.

Confidentiality Agreement

In the course of evaluating an unpublished invention, it is often worthwhile to determine if the invention has merit by disclosing it to potential licensees. To protect the inventor's rights, as well as foreign patent rights, disclosure to third parties is made only after the third party has signed a confidentiality agreement. This can assist the licensing agent in assessing whether or not the expense of filing a patent application can be justified. In some cases, commercial organizations may underwrite patent expenses in return for the right to obtain a license.

Revenue Sharing

After an invention is licensed, the university will receive a revenue share which is based on sales of products or other similar criteria.

Section "E" of the University of Maryland Patent Policy states that "the university shall share revenue which it receives from patents or inventions with the inventors" and sets forth terms for revenue sharing after provision for expenses are made.

It is the duty of the Office of Technology Development, to assure that revenue received from an invention is properly distributed, through the standard university system, to inventors and their departments. Revenues include: up-front payments, technology purchases, option fee; minimum annual license fees; and royalties.