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Report of the RPC Working Group on Ownership of Intellectual Property Rights (IPRs)

In response to the concerns expressed at the Discussion, held on 15 and 22 October 2002, of the Joint Report of the Council and the General Board on the ownership of intellectual property rights, the Research Policy Committee set up a Working Group on the ownership of intellectual property rights to consult widely about the proposals in the Report and then to report back to the Committee and the General Board (Notice, Reporter, p. 722). The Working Group's report has been received by these bodies and by the Council and is published below. The report has been scheduled for Discussion on 21 October 2003.

1. Introduction

1.1 The Working Group

1.2 The Cambridge Position

1.3 Joint Report of July 2002, the Discussion and the Working Group

1.4 Government attitudes to IPR ownership of academic research results

1.5 The various types of IPR

2. The Discussion and Survey of Opinion

2.1 Responses

2.2 The case for the proposed change of policy

2.3 Critical reactions to the proposed Policy of July 2002

3. Structure for an IP Ownership Policy

3.1 Necessary steps

3.1.1 Form and content of the IPR Policy

3.1.2 Legal status of the IPR Policy

3.1.3 Disclosure of information in the interests of science and technology

3.1.4 Disclosure of inventive ideas for commercialisation

3.1.5 Rights to be owned by the University under contracts of employment

3.1.5.1 Invention in course of employment

3.1.5.2 Patents and other rights subject to grant

3.1.5.3 Joint ownership of Patents

3.1.5.4 Securing patent grants

3.1.5.5 Software

3.1.5.6 The obligation of staff to disclose

3.1.5.7 Confidential information: entitlement

3.1.5.8 Ownership and control

3.1.5.9 Consultancy

3.1.5.10 Persons other than academic staff

3.1.6 Freedom of academic expression: copyright and database rights

3.1.7 On-line materials

3.1.8 Teaching materials within the University

3.1.9 Databases and the public domain

3.1.10 Specific undertakings about IPRs

3.1.11 Technology Transfer Referee

3.1.12 Block forward-selling of IP

3.1.13 Revenue sharing arrangements

3.2 Further Issues

3.2.1 Research contracts and industrial sponsors

3.2.2 Research Services: the future

4. Timetable

5. Summary of Recommendations

Appendices

Appendix 1 Reporter: References

Appendix 2 List of respondents

(i) Discussion

(ii) Written submissions

Appendix 3 Types of IPR

Appendix 4 Sources of Information

Appendix 5 UCL - Student Handbook extract - IPR

1. Introduction

1.1 The Working Group

The Research Policy Committee (RPC) set up a Working Group to consult widely about the proposals made in the Joint Report of the Council and General Board on the ownership of intellectual property rights of 24 July 2002. The Working Group was asked to report to the Committee and the General Board by the end of the Easter Term 2003 whether, with modifications and safeguards, the proposed policy would be acceptable to the University. The Working Group was chaired by Professor W. R. Cornish and the other members of the Group were Professor Sir Richard Friend, Professor I. M. Leslie, and Professor A. C. Minson, with Ms C. C. Hewetson as Secretary. The Group met on four occasions between February and June 2003 during which period as part of the process of consultation a consultative document was circulated to Chairs of Faculty Boards, Heads of Departments, Chairs of Councils of the Schools, and published for members of the Regent House in the Reporter.

1.2 The Cambridge Position

Who initially owns patents and other IPRs which may arise from the results of research conducted by academic staff in pursuance of their contracts of employment by their university? Cambridge has given a different answer from most other British universities. The uniqueness of the Cambridge situation arose from our deliberate decision, in the wake of the Patents Act 1977, that the University would not assert patent rights in inventions following from such research.1 At that time, by contrast, most universities introduced an express term into contracts of employment that gave patent rights initially to the university. The potential effects of the liberal Cambridge approach to IPR ownership are of great interest to the country as a whole, given the success of the Cambridge Phenomenon. The drive towards innovative development around Cambridge was partly fuelled by forefront research in the University. The effects are already striking enough to allow comparison with similar developments in California and Massachussetts. Whatever Cambridge decides to do about IPR ownership for the future is likely to be watched by other UK universities and beyond.

1.3 Joint Report of July 2002, the Discussion, and the Working Group

Since the abandonment of the National Research Development Corporation/British Technology Group monopoly over the exploitation of Government-funded research, Research Councils have tended to attach to their grants to universities a condition that those institutions must own any IP which results from the specific research.2 Research charities and other foundations have started to follow the same route. In Cambridge, the Notice of 1987 drew attention to the necessary change in the University's practice where these grants required it. For the rest, the Notice only encouraged academic staff to make use of the University's industrial liaison services for innovative development - but it did not require them to do so. Those services were provided by the Wolfson Industrial Liaison Unit until the decision to merge and expand it within the Research Services Division, established in 2000.

Two changes to Cambridge practice were later introduced:

(i) In October 1998, the contract of new employees bound them to conditions concerning intellectual property rights as prescribed by the University from time to time in policies;
(ii) In order to achieve parity of treatment in respect of specifically funded research, the University, by Grace 6 of 21 March, 2001, adopted a standard rule. In the main, IPR resulting from all such grants would belong from the start to the University. So far as Research Council grants were concerned, this was largely a matter of recognising a fait accompli imposed by the granting bodies.3 Major research charities had also been moving towards the same requirement.4 So far as concerns grants from industry, this policy links in with the policy of the University designed to ensure that it, and not the industrial funder, becomes owner of IPR generated by the research.

At this stage of the Cambridge dispositions, therefore, two divisions existed: 'horizontally' IPR ownership differed, depending on whether the research funding was specific or non-specific; 'vertically' IPR ownership would depend on whether the staff member entered a current employment contract on or after October 1998.5

The policy of 2001 was followed by the proposed policy of 24 July 2002 published as a Joint Report of the General Board and the Council, which became the subject of the heated Discussion of 15 and 22 October 2002. In a sense this 2002 proposal followed from the 2001 policy. It claimed as its justification the need to treat academic staff equally: University ownership of IPR should be the rule for those whose research was not specifically funded by grant as much as for those in receipt of a grant.6

However, there remains a difference between the situation dealt with in the 2001 policy and that intended to be covered for the first time under the 2002 proposal: University ownership of IP is accepted as a term of a specific grant. It is therefore part of the academic's decision to take up that opportunity. Under the 2002 proposal University ownership would apply to all IPR within the policy that an academic produces during his or her career with Cambridge regardless of the source of funding. Some see this as a difference in kind, rather than in degree, as is apparent from the objections raised in the 2002 Discussion and continued in the submissions to this Group. Proposing the change in 2002 contributed to a diminution in trust between much of the academic community, on the one hand, and the University's central bodies and administration on the other.

The terms of this Group's appointment require it to assess how serious and lasting the damage is. It is accepted that the new policy must be effected by Grace. The Working Group has been asked to divine whether there is any modified version of the policy that would be likely to be accepted in a ballot. We consider that it was right to refer this issue for investigation. In its original form, the proposed policy would, in all likelihood, have been rejected.

1.4 Government attitudes to IPR ownership of academic research results

The Government is rightly concerned to ensure that exploitable outcomes from university research should lead to actual innovation for the benefit of the British economy. Evidently this means that Funding Councils and other official bodies will require quantitative statements concerning technology transfer, including such measures as the number of patents applied for and the revenue generated. There are indications that there will be financial incentives to improve performance (through so-called Third Stream Funding). Some believe that there may in future be a legal requirement that all IPR arising in the course of academic employment must be owned by the relevant university; or, if not that, then pressure to adopt best practice models to the same effect. In Cambridge such thinking appears to underlie the view of those who have insisted upon the need for change 'because the status quo is not an option'.

Richard Lambert, former Editor of The Financial Times, is currently conducting a Review for the Treasury of Business and University Collaboration, which also embraces aspects of University governance. The Working Group met Mr Lambert on 20 May for an exchange of views which included some discussion of the possible impact of Third Stream Funding. Mr Lambert showed himself aware of the delicate balance needed in order to engage inventive academics in the exploitation of their ideas and of the crucial importance of their involvement in developing commercial prospects.

1.5 The various types of IPR

For those unfamiliar with the ramifications of intellectual property we attach Appendix 3, outlining its various forms, the policy objectives underlying the rights and the differing structures that result. The three main branches of IP are:

(i) patents for inventions,
(ii) copyright in expressed works and other material, and
(iii) trade mark rights over signs used to differentiate the sources of products and services in competitive markets.7

Somewhere in between also come rights in industrially produced designs; and as an outreach there is a quasi-property in confidential information (protecting what is often referred to as know-how or trade secrets).

Each type of IPR has a different function and the duration of the right therefore varies. Each has its derivatives. In the present context, the database right introduced by EU law in 1996 (in effect as an adjunct of copyright) is particularly germane to the exploitation of modern science and technology. Some technology is protected by more than one type of IPR. Notably, computer software is protected in its detailed programming by copyright; but inventive algorithms and other structural concepts are increasingly awarded patents (especially in the US).

As the generic name indicates, an IPR gives a property right to an owner. This property is negative in character: the right is to prevent others - pirates, counterfeiters, sometimes innocent devisers of the same idea - from commercialising products and services which deploy the protected subject-matter. IPR owners may enforce their rights themselves as part of engaging in their own production. Alternatively, they may assign IPR ownership to another. Equally, they may license others to make use of the subject-matter in ways which would otherwise infringe the IPR. Licences may be exclusive (giving the licensee the entire right of exploitation and a right to sue infringers); or they may be non-exclusive. They may be for money or other benefit, or they may be free. The rights can be charged as security for a loan.

The law is remarkably flexible. It provides a range of transactional forms by which two parties can contract about IPRs in ways that they decide are of mutual benefit to them. A balance can therefore be set which may accommodate beliefs about the magic of ownership with the commercial realities of exploitation. A simple illustration is the common practice in British book publishing, where the author does not assign ownership, but rather grants an exclusive licence to publish on the detailed terms which relate to the various streams of income which might be tapped (book, serialisation, film, e-book; home market, foreign rights, etc.). The same is true of any technology transfer agreement. Whatever choice is made about ownership and licensing of the IPRs and other property, that is only one step in working out the terms for a complex relationship over time in which the marketable goods and services may develop in many ways, some of them unforeseeable.

The law defines the person who will be initial owner of an IPR with some subtlety. With patents, copyright, and the like, this will be the inventor or creator, with one major exception. Where the subject-matter is discovered or created 'in the course of employment', the employer, not the employee, is the first proprietor. But that in turn is a default rule. Employer and employee may contract to the contrary, and such a contract could result from established practice, or particular circumstances, as well as from an express agreement. On a different tack, some derivative types of IPR are given initially, not to a creator or deviser, but to the financier who sets up the project. This is the case with the special database right already mentioned.8 There are some types of IPR, therefore, in which the University has the initial claim in any case - a matter to which we return later.

2. The Discussion and Survey of Opinion

2.1 Responses

At the discussion held on 15 October 2002, in response to the Joint Report of the Council and the General Board, the Council made a statement and forty-two members of the Regent House spoke.

Of these statements the main issues arising were concerned with the drafting of the Report and the lack of clarity about terminology, the motives of the Council and the General Board in publishing the Report, the perceived role of the current IPR arrangements in encouraging entrepreneurship linked to the 'Cambridge Phenomenon', the existing arrangements for externally funded research, and the lack of trust in the ability of the existing administration to deal with IPR matters. There were further comments about areas which seemed linked to the Report but were omitted from it, e.g. open source software, consultancy, and a number of contractual matters.

Of the 42 contributions to the Discussion of October 2002, only five discussants spoke broadly in favour of the Report. Following the consultation by the Working Group a further 38 written responses were submitted. Of these, four were received from people who had already contributed to the Discussion, three of whom made different remarks or amplified their contributions to the discussion.

In the written submissions, the Schools of Biological Sciences, Clinical Medicine, and Technology made an overall School response, the School of Physical Sciences reflected their discussion, and the Schools of Arts and Humanities, and of Humanities and Social Sciences encouraged responses from Faculties. Thirteen submissions were made by Faculties and Departments. Nineteen responses were made by individuals. One response, by the Campaign for Cambridge Freedoms, referred the Group to its website in addition to its written submissions.

The written submissions once more covered the problem of the drafting of the Report and the definitions used, particularly in relation to copyright. However, more concern was expressed over contractual arrangements than in the Discussion. Many respondents spoke of personal experience either with the Wolfson Industrial Liaison Office, or the Technology Transfer Office, and a number of respondents suggested different ways of approaching the ownership of IPR. Respondents also highlighted the omissions in the Report or at least referred to matters that required clarification. All responses were acknowledged and considered by the Working Group.

2.2 The case for the proposed change of policy

As already indicated, the proposed policy of 2002 took, as its main premise, the need to procure equal treatment of those researching under specifically funded contracts and those not. The Report stated at the same time that there could be no technology transfer without the willing co-operation of the academic inventor (the use of the term inventor here indicates that the main focus of the Proposal was the technology transfer activities of the Research Services Division (RSD)). In most situations, therefore, the academic is willing to assign or license the relevant IPR and there is no edge to the question of initial ownership. What then are the practical difficulties of leaving the question of ownership until the transaction stage of finding outside partners and settling the terms as a whole? They appear to be:

(i) that individual negotiation about assignment or licensing of the rights by the academic can sometimes be long-drawn-out and therefore costly;
(ii) that this can be so particularly when several inventors are involved;
(iii) that speed is often of the essence in securing venture capital and industrial involvement;
(iv) that an officer in the Research Services Division may experience difficulty in helping the academic to choose among different distributions of rights, because that choice turns on an unpredictable future. The officer often has at the same time to handle doubts about the prospects being expressed by the potential outside partners. They may be frightened off by statements that the academics involved have yet to assign or license rights to the University.

There are substantial practical difficulties here which deserve to be frankly addressed. They have been rather submerged in the course of discussion so far. How serious they are cannot easily be assessed by those who are not engaged in trying to bring technology transfer about in an academic environment. We have endeavoured to give them due weight.

2.3 Critical reactions to the proposed Policy of July 2002

The majority of contributions to the Discussion and the Group's Inquiry have been critical in tone, or have reflected concerns about the policy as it was proposed in 2002. Naturally, Schools, Faculties, Departments, and other groups have addressed difficulties which relate to their own types of research and teaching. In broad terms, the humanities and social sciences have been concerned with questions to do with copyright, the sciences with patents and adjunct rights. As already pointed out, computer science straddles both and the impact of database right deserves to be appreciated across the whole spectrum.

One element in the criticisms must be stressed at the outset. The proposed Policy, as it is directed to technical inventions and software, offers a scale for sharing the benefits of the IPR to which it applies which gives the individual academic the major proportion of first earnings, and only after £100,000 reduces the proportion to one-third. Very few critics are of the opinion that they should be exempt from contributing to the University's revenue (including that of their Department) from the financial benefits that may flow from IPRs deriving from their work. There were some concerns about the proportional shares adopted and about distribution of the non-personal portions but not about the basic principle.9 The major thrust of objections has concerned the right of the inventor or inventors to participate in decisions over whether and how to exploit and the apportionment of responsibilities in that process. Academics are primarily concerned to ensure that their work is of public interest and benefit, through publication and contributions to discussion in their disciplines. This includes commercial development of their ideas. Nonetheless, for most people financial return from such activities is a secondary matter.

3. Structure for an IP Ownership Policy

Our analysis of the varied suggestions and proposals has been divided into (i) Necessary Steps which should form part of any revised version of the Policy; and (ii) Further Issues which the RPC might advise Council to follow in order to strengthen the case for the Policy. The list is inevitably long, since the situations are diverse and many suggestions have been made about what to do. The Working Group is clear that, unless all necessary time is taken to consider the list in detail, the chances of a negative vote in a ballot on the policy remain considerable. Given the responses, the Group did not examine the arrangements for revenue sharing in detail, but noted that the lack of guidelines in the case of spin-out companies needs to be addressed.

3.1 Necessary steps

3.1.1 Form and content of the IPR Policy

The responses to the Group indicate that the form adopted for the policy in the July 2002 Report was a first cause of anxieties. In the Report the actual policy to be graced was laid down in an Annex, preceded by a whole series of statements about the desirability of the change, what was and was not being included, what relevant practices (or lower level policies) were in operation and what could be expected in future. This has led to suspicion among academics that they are being fenced in stage by stage. As they see it, certain activities which they have until now been left free to develop are being curtailed, or are perhaps about to be. And if one current inequality is to be removed by extending the strait-jacket, that will only lead to elimination of the next anomaly down the line. Given such concerns, we think it desirable for the University to work towards a policy on IPR ownership which balances the interests of the University with adequate guarantees for the individual researcher. It should provide for freedom to promulgate research results and it should ensure participation in decisions on commercialisation on fair terms. The policy, as stated in the Annex itself (not merely the accompanying Report), needs to spell out in some detail the elements which will contribute to this balance. No new version of the policy should be proposed until those elements are in place. In the time available to the members of the Working Group, we have not been able to pursue all relevant matters to a conclusion. We have striven to arrive at a structure for furthering debate on the matter. We have written our report in the hope that, as soon as it has been seen by the University's bodies, it will be published and so will form a basis for further discussion in the University.

3.1.2 Legal status of the IPR Policy

In our opinion, it should be stated in the Policy itself that the ownership of intellectual property is a matter which can be altered only by a Grace (and not, for instance, by a Notice); that any change which diminishes the rights of academics will not operate retrospectively; and that any alterations of policy will not take effect until incorporated in the Statutes and Ordinances and then in respect of inventions and other research results arising in the future.10

It should be noted that incorporation is the procedure that has been followed in instituting the substantially defined policy now operating in Oxford University. It is also the procedure which Michael Beloff QC and Gemma White recommended for adopting a new Policy here, so far as the Policy is intended to affect Cambridge academics employed on their present contracts before October 1998. Their Opinion, which was based upon only limited evidence about Cambridge practice under the Notice of 1987, concluded that, in relation to that group of staff, the University had not placed itself in a position where it was obliged to abide by the contents of that Notice.11 But they advised proceeding by formal change and only in respect of future inventions and works, because it might well be argued that any retrospective policy would constitute a breach of the good faith which an employer owes to its employees. The same approach should be applied to any aspect of the University's IPR Policy.

3.1.3 Disclosure of information in the interests of science and technology

The ability to place research results in the public domain embodies a basic academic value. The disclosure can take the form of a publication for the unreserved use by others, and especially the particular research community. Likewise information may be provided to others under licence terms allowing liberal use by licensees. The first case has been dramatically exemplified by the competition to complete the Human Genome Map. The second case is typified by the free software movement in computing, which achieves its objectives of shared development through open source copyright licences, such as the General Public Licence, promulgated by the Free Software Foundation.12

There appears to be no real controversy over leaving academics free to take the decision to follow either of these paths. RSD sees its role as being the channel for exploitation to the extent that the academic wishes to see commercialisation take place. This was reflected in the Joint Report of 2002 in the statements that the question of exploitation could not arise except with the collaboration of the researcher. However, if the University were to be designated as the owner of IPR overall, it could at any time seek to introduce a contrary policy and, presumably, make it a breach of contract for the academic to 'go public'. This fear is undoubtedly felt and is epitomised in Sir John Sulston's pithy intervention in the Discussion (which might be Orwellised as 'Revenue-share, yes; ownership, no!'). It is reflected in the arguments of the Royal Society's recent report, Keeping Science Open: the Effects of Intellectual Property Policy on the Conduct of Science (April, 2003).

We consider it essential that the University should declare in its terms of employment that all those covered by the policy are free to place research results in the public domain or to release them by open-source arrangements. This should of course be coupled with the necessary warning that all chance of a patent or royalty income will be compromised if public disclosures are made (see further para. 3.1.5.4). The only exception to the academic's freedom to go public would be a specific agreement requiring information about particular research to be kept confidential. Such a term could be appropriate for team research and could be specified as part of particular research grants. We draw attention to the common ground which exists between these fundamental academic values and those attaching to the freedom to promulgate ideas more generally, which arise in relation to copyright, database rights, and other IP affecting the expression of information (see further, para. 3.1.6ff).

3.1.4 Disclosure of inventive ideas for commercialisation

We accept that the University must be placed in a position to benefit from the commercialisation of research results once the researchers have decided that that is what they want. It is the researchers' decision which should trigger a responsibility to notify the RSD of their discovery and a statement about this should be part of the policy. The information thus disclosed will provide the basis for the University's returns to governmental and other inquiries about IPR. To become acceptable, however, more will need to be specified in order to safeguard the interests of the researchers in decisions over the whole mechanism for exploitation that will be embodied in any ensuing Technology Transfer Agreement. We consider that, at the least, the following elements must be present in a future policy:

(i) The Policy must specify the types of right which the University should own ab initio. Attention should be focussed on the right to apply for a patent.
(ii) The Policy must also specify the procedure for resolving differences of opinion about the way forward, once disclosure to the RSD occurs.

We discuss these elements in the next paragraphs.

3.1.5 Rights to be owned by the University under contracts of employment

The following sub-paragraphs contain our essential recommendations in relation to technological research and its exploitation.

3.1.5.1 Invention in course of employment.13 The legal position is that, subject to any contract to the contrary, an employer is entitled from the outset to patent rights in an invention made by an employee in the course of the employment. It is for the employer to establish that the invention arose in this way, since otherwise the employee, as actual inventor, is entitled. Moreover, an employer cannot, by contract made in advance of the actual invention, alter the position so as to diminish that right of the employee.14 It is often difficult to determine precisely what is made in the course of a particular employment. The starting point will be the job description and tasks specifically assigned or agreed to. Other universities, both in the US and the UK, have sought to given clearer guidance on the course of academic employment by asserting patent rights only in inventions made with substantial use of university equipment and facilities.15

As noted, all academic staff are under a contractual obligation to conduct research, though they are not contractually obliged (and in our view should not be obliged) to seek commercial outcomes for their research results. A 'culture of entrepreneurship', encouraged in the Joint Report, will only come about through a growing acceptance of its value and relevance. If there has been such use of University equipment and facilities that must be strong evidence that the research arises in the course of employment.16 If the invention has been made in other circumstances, it is for the University to establish, on the balance of probabilities, that it was directly connected with the research which the staff member conducts in fulfilment of the research obligation in his contract of employment. There will always be borderline disputes, and they could be suitable cases for reference to a Technology Transfer Referee (as proposed in para. 3.1.11).

3.1.5.2 Patents and other rights subject to grant. Our first proposal is that the University should have the right to apply for a patent and thus to become proprietor of any patent granted on an invention made in the course of research conducted in fulfilment of the obligation in the employment contract to conduct research and in other circumstances covered by the Patents Act 1977, s. 39(1).17 However, as we stress at once, this proposal is a pragmatic solution directed at finding a workable system that preserves a balance between the interest of researcher and that of the University. The proposal concerning ownership is accordingly subject to a number of conditions which are laid out in the succeeding sub-paragraphs. These conditions relate to:

(i) definition of the obligation to disclose potentially exploitable results (see para. 3.1.5.6);
(ii) recognition that it is for the academic to choose what material is placed in the public domain or dealt with under royalty free licences (see para. 3.1.3);
(iii) recognition that confidential information continues to be the researcher's (see para. 3.1.5.7); and
(iv) acceptance that the researcher has a preferential position in determining the mode of exploitation of her/his results (see para. 3.1.5.8).

3.1.5.3 Joint ownership of Patents. One way in which the staff member could be guaranteed a place in the commercialisation of her or his research is by providing that the initial ownership of patents and software should be joint, the rights belonging equally to the inventor/creator and the University. This suggestion was made by several of those who responded to us. It is an interesting idea and we think it embodies objectives that are desirable. They are however difficult to achieve by this mechanism. It would for instance be necessary to decide at what point, if any, either side would have an option to secure an assignment of the rights of the other. It would also be necessary to determine how the joint rights would operate in different legal systems, if no assignment took place. On balance, we prefer the proposal put to us that gives the University the rights in patents and perhaps other registered IPR, but in that form of right alone.

3.1.5.4 Securing patent grants. One principal justification for treating patents in the way proposed is that, at the moment of invention, the right is inchoate. To obtain a patent is a complex and expensive process, which is dependent on keeping the information confidential until all the necessary applications have been filed through the British patent office18 and the international position has been assessed with a view to securing patent coverage elsewhere in the world. There is a clear need for expert management of the whole procedure, which involves both an official search and examination by patent office experts. To provide it RSD needs to know from the outset that the rights belong to the University. The same can be said for other rights which depend upon grant by government agencies: registered design rights and plant variety rights.19 In consequence of its patent ownership, the University assumes the obligation to discover who all the inventors are. Inventors are entitled to be named in the patent. They are likewise entitled to an appropriate share (which may have to be settled between the inventors) of the revenue as provided in the policy.20 The University must therefore expect to be responsible for seeing that all inventors are treated fairly. It will then have a duty to safeguard the interests of those who cannot readily press their own case.

3.1.5.5 Software. In our view, computer software should be treated in the same way as other technical research results. To the extent that rights in programming are realistically capable of protection by patents, the University should have the right to apply for them from the outset.21 Patents over computer programming are typically available for a novel and inventive algorithm that can be said to have a technical effect (the European test) or a useful outcome (the US test).

As explained in Appendix 3, copyright attaches to the expression of a computer program, and its accompanying literature. There is thus a certain overlap in the patent and copyright protection available. The question therefore arises whether, by way of exception to the general retention by academics of copyright (which we advocate below, in para. 3.1.6), software copyright should also be treated as being initially owned by the University. Some assert that, in order to realise the commercial value of developmental programming, ownership of the two types of right in software should be dealt with in the same way in the policy. We are not ourselves convinced that this special treatment of software is warranted. We are advised that, in the situations it handles today, programs are typically part of larger technological 'bundles'. From that it seems to follow that, as regards initial ownership of IPR, program designers ought to be treated in the same way as those contributing other technology22 to the bundle. Our general approach is to treat formal IPRs (notably patents) as belonging to the University and informal rights (in know-how and copyright) to the individual. We have concluded that this approach should apply in relation to computing research as much as to other technical fields. Likewise, so far as concerns patent rights, the individual researcher's freedom to place ideas in the public domain, including through liberal licensing regimes, will apply here as elsewhere.

3.1.5.6 The obligation of staff to disclose. There is an important consequence of providing that the University's ownership of rights should not override the academic's decision that an invention should be placed in the public domain. Academic researchers and students must be given a clear understanding of the consequences of releasing potentially valuable information to the world. If they are ignorant of this, any provisions at all about ownership and patenting are whistling in the wind. They must be made aware that if they do decide on public release, the patent system cannot be brought into play thereafter. Equally, once they decide to explore the prospects of commercialisation, they must disclose it to the Technology Transfer Office, while continuing to keep the information confidential until patent applications are under way.23 It is at this point that the University, must be in a position to ensure that all inventors have been identified and its ability to do so will be reinforced through its ownership of the potential patent or patents.

3.1.5.7 Confidential information: entitlement. We do not recommend that the University should have ownership of whatever parts of an academic's knowledge may be characterised as confidential information. In industry, the law on what technical and commercial secrets must be held by an employee for her or his employer is difficult enough to apply, both during the employment and after it has ceased. Explicit employment terms are subject to the principle that they must not embody undue restraints of trade. If they do, the employee will not be bound by them. There is little case law which defines how these principles should be adapted to the circumstances of university research.24 To try to impose such obligations through rules about 'ownership' of the confidential information would be unwise. It would be an inherent threat to the independence of judgement about consultation and exchange of ideas which are as much part of academic existence as is the freedom to develop a subject as a researcher sees fit.

In our view, the arrangements about what information is to be treated as confidential in a particular technology transfer contract can only be worked out once the decision to commercialise has been taken. As some of the statements to us have shown, there will from time to time be serious issues about the continued involvement of the researchers in the process and therefore obligations that need to be defined and agreed. This should not be determined under the constraint that the University already 'owns' all the know-how of the researchers. It will be in a strong enough position if it is already entitled to make the applications for grant of specific IPRs.

Given this recommendation, there will be cases in which the terms of a specific research grant require a different disposition of IPRs and confidential information. To that extent alone, the researcher who accepts the terms of the grant will be under a greater obligation than others in the University. This is a relatively minor difference, compared with the present situation, where Grace 6 of 21 March 2002 gives patent rights to the University in respect of all specific grants, while the academic keeps patent rights for non-specifically financed research. We therefore consider that our proposed Policy on IPR ownership should be varied only to the extent that the specific terms of each grant require there to be a variation.

3.1.5.8 Ownership and control. Several of the responses to us have stressed the association which will necessarily exist between ownership of rights and control over decision-making, both at the stage of organising a technology transfer agreement and afterwards during its operation. It is a particular concern for some in science and engineering Departments that, where they themselves have workable plans for outside co-operation, it is those arrangements which should be pursued. At present in many cases there are no differences of opinion about the best way forward, the academic being content for the project to be delegated to RSD. Typically in such cases the patented technology will be licensed to an outside developer with little involvement of the academic. But in some there will be continuous participation, and then the role of RSD may give rise to conflict. This can occur if there is to be a spin-out company in which the involvement of the academic is a crux of success.

We believe it to be essential that, where such differences cannot be rapidly settled by negotiation, it should be possible to put the issue to one of the proposed Technology Transfer Referees for resolution and that the arrangements for doing so should form part of the Policy. Where the academic's proposal for development has a reasonable chance of success, there should be a presumption in favour of adopting it, subject to reference to a Technology Transfer Referee. There is a separate question whether specific time-limits should be laid down within which the University should decide upon its response to the disclosure of research results to it. As a general rule we are in favour of doing so. Upon the University deciding not to pursue the opportunity there should be arrangements for releasing the University's rights back to the researcher.

3.1.5.9 Consultancy. The Joint Report of July 2002 excludes inventions made in the course of consultancy from University ownership under the proposed Policy. Undertaking consultancy is of course a highly efficient way of using the expertise of universities for the benefit of industry and Government, while at the same time honing the skills of the academic concerned. Accordingly the RSD is able to offer help in setting consultancies up. The Joint Report noted, however, that resulting inventions must be clearly differentiated from those made in the ordinary course of duties and that no conflicts of interest must arise with those duties when undertaking consultancy work. A statement on consultancy needs to be carefully worked out and included in the Policy. It should contain a procedure for signalling potential conflicts of interest in advance.

3.1.5.10 Persons other than academic staff. The obligations and freedoms so far discussed have been considered primarily in relation to academic staff. There are situations where academic-related and assistant staff can generate novel technical information. To the extent that this can be regarded as falling within their 'course of employment', we consider that resultant IPRs should be owned by the University to the same extent as for academic staff. It would be highly desirable that College Research Fellows should be subject to an equivalent contract term (an important matter when they are part of a team within the University). The arrangements for this will need to be worked out with the Colleges. If discussions about what the arrangements should be are unduly prolonged, the matter should not be allowed to hold up the presentation of a revised policy to the University.

As regards students, both undergraduate and postgraduate, the present position in Cambridge is that, since they are not employees, they are entitled to all intellectual property arising from their inventions and creations. Having regard to team research and to the requirements of funders, it is our view that there will be circumstances in which students should be required by specific agreement to assign IPRs to the University to the same extent as is required of academic staff by their employment contracts.25 Our proposals aim to strike a practical balance and we think it important that, so far as possible, the same balance should apply to all who are concerned to see the commercialisation of their technology.

3.1.6 Freedom of academic expression: copyright and database rights

The Joint Report and associated policy26 drew a distinction between different types of IP at one point which has caused widespread concern. This is the proposal to include copyright as part of University ownership along with all other types of IP, 'with the exception of copyright in normal academic forms of publication including books, articles, and lectures, or other similar works, unless those works have been commissioned by a sponsor or by the University.' The Working Party on Copyright, whose Report was published on 17 October 2001, as several participants in the Discussion pointed out, was of the firm opinion that copyright - being a right to prevent reproduction or other exploitation of literary and artistic work - must in general remain owned by an academic creator as a guarantee of his or her freedom of expression. Although that Report was accepted by the General Board and Council and later published, it has been inferred from the proposed policy of 2002 that there are now second thoughts in play. Paragraph 4 in the Joint Report of 2002 did not endorse the Working Party position but instead announced a future report which would take account both of that position and of 'other recent developments (for example, those relating to electronic 'courseware')'. Likewise the qualification for work commissioned by the University went undefined, so not unnaturally this led to speculation (some of it entertaining).27

We believe that there should be a clear statement endorsing the view of the Copyright Working Party that the University does not claim copyright in the works of academic staff. An exception for work specifically commissioned by the University will be necessary but it should be in strictly limited terms. We see no reason why work commissioned by a sponsor should as of course belong to the University.28 An arrangement should be worked out to fit each sponsorship.

3.1.7 On-line materials

The Working Group looked at the question of e-learning and distinguished a number of issues. The University has an interest to share in commercial exploitation of learning via the Internet. In arrangements in which it is a participant (perhaps with other universities or outside organisations) it may well own copyright in recordings and films. In any event it (or the organising group) needs to make specific contracts with academics who provide material for an e-learning programme so as to secure the assignment or licence of the copyright in that material to the University or other exploiter. At the same time, the continuing rights and responsibilities of all parties, including the academics involved, need to be specified in detail. In some Departments, arrangements exist for collaborative production of teaching materials which may have uses outside the University, as well as within it. These arrangements likewise should be covered by express agreements organised through the Copyright Officer of RSD.

Where academics contract purely with outside organisations, copyright in the material they provide should remain theirs, unless some other arrangement is agreed. We see no distinction here from the publication of books and other materials. There may be occasions when a Department or Faculty is considering the commercial prospects of material which is being generated as a joint resource within the Department. In such a case it should seek the assistance of RSD's Copyright Officer or the Technology Transfer Office.

3.1.8 Teaching materials within the University

Separate again are questions concerning the provision of lecture notes, handouts, and other such teaching material in the University. We consider it clear that, when teaching materials are placed on the Web, this does not constitute any form of commission by the University and that therefore copyright in the materials remains the academic's. Where there are local agreements in a Department that the materials are institutional rather than personal, there will be an express or implied licence from the creators of the material that others may make use of the material in their teaching. In future, it will be desirable for such circumstances to be identified by Faculties or Departments and the understanding about the entitlement of others to be specified.

3.1.9 Databases and the public domain

It is also highly important that academics are declared in the Policy to enjoy the freedom to place databases in the public domain. A separate declaration to this effect is needed because the legal protection of databases is now complicated and at crucial points legally uncertain. The person who designs the database may well create a copyright in it that will endure for his or her lifetime plus seventy years. At the same time the financial organiser will have a shorter right (often termed a sui generis database right) to prevent extraction and re-utilisation from the database. Within higher education, therefore, this second right may well inure to the university. The academic must be free to make the database publicly available, whatever the University's IPR in the matter,29 and the Policy ought to say so. That freedom should apply in circumstances equivalent to those for IPR more generally which are outlined above.

3.1.10 Specific undertakings about IPRs

The Opinion of Council to the University on the position of 'pre-1998' academic staff concludes that cases where individuals were told on the University's behalf that they would be able to retain ownership in any IPR created by them, could require separate treatment. As the Opinion states, it could well be that the staff members could then establish that this was either an express term of their employment or that there was a collateral contract to that effect. Any new policy must provide for this situation. The issues arising in particular cases could be subject, if necessary, to a decision of the Technology Transfer Referee.

3.1.11 Technology Transfer Referee

As already foreshadowed, we regard it as highly desirable that issues about IP ownership and exploitation should be capable of resolution by the decision of a Referee who is perceived to be independent and whose experience creates confidence in her or his judgement. The person (or persons) should, however, be appointed to this University office through a defined selection procedure and should consider cases in a way that is as simple and speedy as possible. The arrangement suggested in the Joint Report for dispute resolution procedure is rather elaborate and ultimately involves mediation by the Centre for Dispute Resolution (CEDR). We consider this to be too cumbersome a mechanism. At this stage we do not think it profitable to elaborate the structure and operation of this office. It may well be desirable to have a panel of referees with different specialisms. It will also be necessary to consider whether there should be any special form of appeal from a decision by a Referee. These issues should be investigated after the principle is accepted.

3.1.12 Block forward-selling of IP

In one quarter of the University, there has recently been exploration of the prospect of selling future IPRs en bloc to a financial institution in order to raise immediately needed capital. The Oxford Chemistry Department set a precedent for a deal of this kind. The RPC has recently decided that such transactions are undesirable. To that point of view we would add that, given the recommendation that we are making, the consent of each Department member would be necessary, particularly because the University would not own all the relevant rights from the outset. There could also be difficulties in recruiting new members of the Department, for whom acceding to the agreement might prove a disincentive.

3.1.13 Revenue sharing arrangements

As already stated, the principle of revenue sharing from the commercialisation of IPRs is widely accepted (see para 2.3). The Policy should however clarify that the academic's share remains payable after leaving the University to work elsewhere or to retire; and on death payment continues to the estate. There should also be a statement in the Policy about normal arrangements between institutions when an academic moves from Cambridge to another university, institution, or company, particularly where the same line of research will continue.

Objection has been raised to the discretion that currently lies with the Head of Department as to the uses to which the Department's share of revenue is put. When the University's new Resource Allocation Model is in place such matters are likely to need resolution at local level.

3.2 Further Issues

3.2.1 Research contracts and industrial sponsors

A number of comments have concerned the relationship of a policy on IPRs as between the University and individual researchers and the policy on IPR ownership as between the University and industrial and other sponsors. The latter is often an issue at the research contract stage and the RPC is currently examining how far a requirement that any IPRs generated in the research which currently belong to the University should become open to variation in appropriate cases. Our main recommendations may have some impact on the issue. More generally, we believe that acceptance of our proposals is likely to be enhanced if it is known that a more flexible treatment of IPRs vis-à-vis industry is possible.

3.2.2 Research Services: the future

The Faculty of Clinical Medicine, while supporting the Policy proposed in July 2002, has raised the need to monitor and evaluate the central process and service for managing IPR:

'It would seem appropriate to have formal criteria for a review of the size, cost, function, and effectiveness of the section within the RSD, at some specified point, say five years from now, so that there is a defined point at which to consider performance and potentially reconsider the arrangements'.

Further, the School of Technology is concerned that the current structure of RSD, which contains both research contracting and technology transfer in a single unit, may give rise to conflicts of interest in negotiating with external sponsors.30

We think that there must be a strong case for a University Review of the Research Services Division at the latest within five years. The structural conflict of interest also deserves consideration. Knowledge that the review process has been put in place would have a reassuring effect in the academic community generally.

4. Timetable

The deadline for responses to the Working Group's Consultative paper was 19 May 2003. The Working Group suggests that in the light of the importance of the subject and the length of the report that the Research Policy Committee may wish to consider the report again before onward transmission to the General Board. The Group respectfully suggests that the General Board could consider the report on 9 July and that the Council could consider the report on 21 July. It would then be possible, should the General Board and Council wish, to publish the Working Group's report in the last Reporter of the year. A Discussion could take place in the first or second week of the Michaelmas Term, 2003, before the possible formulation of a formal Report.

5. Summary of recommendations

Introduction

1. We were asked to consider whether there was any modified version of the University's proposed policy on IPR which would be likely to be accepted in a ballot. We have given full consideration to the legal character of IPR, to the history of its ownership at Cambridge and the current rules, to Government interest in the issue, to practice elsewhere, and to the arguments voiced in the debate around the University's draft proposals.

2. We recommend certain changes in relation to the initial ownership of IPRs by academic and other staff, and we believe that our proposals provide a workable approach that will best encourage staff to develop the commercial potential of their inventions and other research results.

3. We propose a balance in which disclosure of results with commercial potential and associated rules about ownership is set against certain guarantees that should provide staff with assurance of fair treatment.

Underlying principles

4. The ability to place research results in the public domain embodies a basic academic value. The University's ownership of IPR is subordinate to the fundamental freedoms of academics to pursue intellectual inquiry, and to publish the results (para 3.1.3).

5. So far as possible, all employees of the University should be treated alike (para. 3.1.5.10).

6. There is a need for clarity in the rules as to ownership of IPR in the University. The policy concerning the matter should therefore be as complete as can be achieved (para. 3.1.1).

7. The ownership of intellectual property in the University is a matter which should be altered only by Grace (para 3.1.2).

8. Any change that diminishes the rights of academics should not operate retrospectively (para. 3.1.2).

9. Any alterations of policy should not take effect until incorporated in the Statutes and Ordinances and then only in respect of inventions and other research results arising in the future (para. 3.1.2).

10. Where, through the ownership of IPR or contractual arrangements, the University is involved in commercial exploitation of research, it should be entitled to a share in the returns of the kind adopted in Grace 6 of 21 March 2002. Certain consequential matters should be addressed in any future policy (paras. 2.3 and 3.1.13).

Patents and similar rights

11. We propose a different approach to patents (and other rights that are granted by a State) from that which we propose for copyright and other informal rights.

12. In relation to the exploitation of technical ideas, we recommend that patent rights in inventions made in the course of employment, which includes activity conducted under an employment obligation to carry out research, should belong from the outset to the University (paras. 3.1.5.1 and 3.1.5.2). This should apply to staff whatever their date of employment, but subject to the following limitations:

(1) The University's rights should not extend to ownership of 'know how' or confidential information relating to the idea: this should remain with the inventor(s), who, if they wish to be involved in the exploitation of their ideas, will therefore bring this added element of value to the table when arrangements are being settled for exploitation (para. 3.1.5.7);
(2) when the invention is potentially commercially exploitable, it is for the inventor to determine when or whether he or she will:

(i) place them in the public domain, which will include releasing them through a public licence arrangement; or
(ii) disclose them to the University's Technology Transfer Office (TTO) in order that arrangements for exploitation may be discussed and specifically agreed (para. 3.1.5.6).

13. We propose that within the University there should be a panel of people qualified to act as Technology Transfer Referees, able to resolve differences arising under these arrangements when they cannot be settled swiftly by negotiation (paras. 3.1.5.8; 3.1.10; 3.1.11).

14. So far as practicable, specific time limits should be laid down within which the University should decide to commit itself to proceeding with exploitation. Once it decides not to do so, the researcher(s) should be entitled to a release of its rights to them (para. 3.1.5.8).

15. During the period of discussion with the TTO there will be an obligation on both sides to keep the information from any form of non-confidential disclosure or use, because that will jeopardise the chance of obtaining patents (para. 3.1.5.4).

16. The University is responsible for discovering who all the inventors are for seeing that they are all treated fairly. In this connection it needs to give consideration to the position of non-University staff and students (para. 3.1.5.10).

Further considerations

17. To the extent that the proposal above represents a change in policy, it should only affect future inventions (see 9 above).

18. We recognise that to some degree the principles proposed above will have to be subject to the conditions of specific research contracts where the funder requires different conditions. However, in comparison with the present situation, the scope for differences of obligation between different members of research teams will be very substantially reduced (para. 3.1.5.7).

19. Similarly, both the University's and the individual's rights may be subject to the terms of a consultancy arrangement: see 24 below.

Copyright and databases

20. Copyright should continue to belong to individual creators, except where:

(i) the University is involved in commercial arrangements for e-learning and other distance learning projects and the work was generated or adapted for that purpose;
(ii) the work was specifically commissioned by the University (i.e. was not the product of ordinary teaching or research).

21. Where teaching materials have been prepared on a clear understanding in the Faculty or Department concerned that they should be available for other members to use in the University's teaching, those persons shall have the freedom so to use them.

Software

22. To the extent that developments in computer programming are realistically capable of protection by patents, the University should own the right to apply for them following the researcher's decision to commercialise. However, the copyright in the expression of software should, like other copyright, belong initially to the researcher.

23. Even where rights to databases are conferred upon the University, this should not compromise the ability of academics to place the data in the public domain (para. 3.1.9).

Consultancy arrangements

24. Consultancy arrangements form a useful method of exploiting university research. The terms on which a consultancy is undertaken should determine who is entitled to any resultant IPRs, not the general policy above (para 3.1.5.9).

Other matters

25. The Research Policy Committee of the General Board has rejected the idea of block forward-selling of IPRs by the University (e.g. on behalf of a Department to raising building project capital) and we believe this to be right. There would otherwise be considerable difficulties over ownership and other aspects of the eventual rights and over arrangements for exploitation (para. 3.1.12).

26. For persons currently employed in the University before November 1998 on terms that ownership of IPRs in their work should be theirs, that undertaking could require separate treatment (para. 3.1.10).

27. The University should announce and pursue a more flexible policy in its negotiations with industrial partners in relation to ownership of IPR. Such a change could do much to enhance acceptance of what is being here proposed as could the announcement of arrangements for a review of the RSD (para. 3.2.1 and 3.2.2).

2 July 2003

APPENDICES

 

Appendix 1

The Ownership of Intellectual Property Rights Reporter: References

(i) The Joint Report of the Council and the General Board on the ownership of intellectual property rights (Reporter, 24 July 2002)
(ii) Report of the General Board on the ownership of intellectual property rights generated by externally funded research (Reporter, 31 January 2001) and Notice (Reporter, 21 March 2001)
(iii) Report of Discussion, Tuesday 15 October 2002
 Joint Report of the Council and the General Board, dated 22 July and 10 July 2002, on the ownership of intellectual property rights (Reporter, 30 October 2002)
(iv) Report of the Joint Working Party on Copyright,
 Section 4: 'Exploitation of copyright material created by staff and students' (Reporter, 17 October 2001, pp. 89-91]

 

Appendix 2(i)

Consultation: Ownership of Intellectual Property Rights
Contributors: Discussion on Intellectual Property Rights (15 October 2002)

NameInstitution
Statement by the COUNCIL (read by Dr D. R. J. LAMING)Council
**Professor A. MINSONPathology
Dr R. ANDERSONComputer Laboratory
Professor D. NEWBERY (read by Dr R. ANDERSON)Applied Economics
Professor S. DEAKIN (read by Dr R. ANDERSON)Judge Institute of Management Studies
Professor R. FRIENDPhysics
Sir John SULSTON (read by Professor M. ASHBURNER)Sanger Centre
Professor M. ASHBURNERGenetics
**Professor Sir Keith PETERSSchool of Clinical Medicine
Professor R. J. EVANSHistory
Mr R. J. DOWLINGComputing Service
Professor A. B. HOLMES Melville Laboratory,Dept of Chemistry
**Professor A. J. BADGERCouncil
Dr S. MAHAJANPhysics
Dr D. MACKAY (read by Dr S. MAHAJAN)Physics
Professor J. P. ALLAINHaematology
Mr M. LUCAS-SMITH Geography
**Professor M. J. KELLYEngineering
Mr S. ALLOTTComputer Laboratory
Dr A. MYCROFT (read by Mr S. ALLOTT)Computer Laboratory
Dr J. P. DOUGHERTYApplied Maths and Theoretical Physics
Dr T. W. KöRNERPure Maths and Mathematical Statistics
Professor M. E. MCINTYREApplied Maths and Theoretical Physics
Mr D. B. WELBOURN formerlyEngineering
Dr H. LEE (read by Dr M. CLARK)Haematology
Dr N. J. HOLMES (read by Dr M. CLARK)Pathology
Dr M. R. CLARKPathology
Dr P. HAZELComputing Service
Dr G. R. EVANSHistory
Mr N. M. MACLARENComputing Service
Dr M. SAYERS (read by Dr R. ANDERSON)Computing Service
Professor J. CROWCROFT (read by Dr R. ANDERSON)Computer Laboratory
Professor I. G. ROBERTS (read by Dr R. ANDERSON)Linguistics
Mr R. SANSOMCambridge Angels
Mr R. J. STIBBSComputing Service
**Dr M. MACLEOD (read by Dr D. SECHER)Engineering
Dr D. SECHER Director,Research Services Division
Dr S. J. COWLEYApplied Maths and Theoretical Physics
Dr N. DODGSON (read by Dr F. KING)Computer Laboratory
Mr P. GOSLINGEngineering
Professor Dame Marilyn STRATHERN (read by Mrs S. BOWRING)Social Anthropology
Dr D. R. DE LACEYSchool of Arts and Humanities

 

Appendix 2(ii)

Consultation: Ownership of Intellectual Property Rights
Contributors: Written Responses

(deadline 19 May 2003)

Document
No.
NameInstitutionType of response
1Miss M. P. Chalk Council of the School of Arts and Humanities School
2Miss K. Douglas Council of the School of the Biological Sciences School
3Miss S. Pinnock School of Clinical Medicine School
4Dr A. T. Winter Council of the School of the Physical Sciences School
5Dr S. T. Lam Council of the School of Technology School
6Mrs S. Round Faculty Board of Music Faculty
7Mrs J. Fisher-Hunt Faculty Board of Oriental Studies Faculty
8Professor R. Hunter Faculty Board of Classics Faculty
9Professor M. McKendrick Faculty Board of Modern and Medieval Languages Faculty
10Mrs C. Daunton Faculty Board of English Faculty
11Mr P. N. Richens Faculty Board of Architecture and History of Art Faculty
12Ms K. Stacey Faculty Board of Social and Political Sciences Faculty
13Professor J. Crawford Faculty Board of Law Faculty
14Dr M. Ingham Faculty Board of Mathematics Faculty
15Mrs S. Collins-Taylor Faculty Board of Engineering Faculty
16Professor I. Leslie Computer Laboratory Institution
17Professor S. Deakin Cambridge Campaign for Freedoms Institution
18Professor A. HolmesMelville Laboratory, Department of Chemistry Institution
19Dr D. Livesey Secretary General of the Faculties -
20Dr R. Zimmern Cambridge Genetics Knowledge Park Personal/Institution
21Mr N. M. Maclaren Computing Service Personal
22Dr M. J. Rutter Cavendish Laboratory Personal
23Mr R. Hadden 16 Rollestone Crescent, Exeter, Devon, EX4 5EB
alumnus of Queens' College
Personal
24Dr N. Holmes Dept of Pathology,Immunology Division Personal
25Dr M. R. ClarkDept of Pathology,Immunology Division Personal
26Dr M. R. ClarkSecond submission - Department of Pathology, Immunology DivisionPersonal
27Dr S. J. Cowley Centre for Mathematical Sciences, Department of Applied Mathematics and Theoretical PhysicsPersonal
28Dr P. M. E. Altham Statistical Laboratory, Centre for Mathematical Sciences Personal
29Dr K. Sparck Jones Computer Laboratory Personal
30Mr M. Lucas-Smith Department of Geography Personal
31Professor A. W. F. Edwards Professor of Biometry Personal
32Mr B. Harris Computing Service Personal
33Dr P. Duffett-Smith Department of Physics Personal
34Dr Sanjoy Mahajan Corpus Christi College Personal
35Dr O. Rackham Corpus Christi College Personal
36Dr A. Smith Corpus Christi College Personal
37Fellow of Corpus Christi College
(who wishes to remain anonymous)
Personal
38Professor M. Mackley Department of Chemical Engineering Personal

June 2003

 

Appendix 3

The types of IPR

This appendix outlines the types of IPR that may apply to the results of University research, teaching, and related material. Intellectual property exists to the extent that the law attaches rights for its protection. We avoid the confusing current usage which treats the information as itself 'intellectual property' and only then asks how far it is protected through an 'intellectual property right'.

As stated in the report, the IPRs that are of significance in connection with University research are patents for inventions, copyright in creative works and related subject matter, database rights, and to some degree industrial design rights.1 While not technically a property right, legal protection is also given to 'confidential information', a broad term embracing technical and commercial trade secrets and know-how, as well as governmental and personal information. Each of these will be briefly outlined.

Patents for inventions - much the most important IP in technology transfer by universities - are granted by or for states as incentives to R&D, and inducements to release information about the protected material for the benefit of the industry concerned. They last for a maximum of 20 years from application to a Patent Office for protection and are good against unconnected persons, including those who may have made the invention independently. They are restricted therefore to inventions which are novel and not obvious, and these matters are investigated before any grant by a Patent Office search and examination. Because of the novelty requirement, an inventor who makes his invention public thereby ends the chance of obtaining a patent on it.

Applications for a patent need to be made using a patent agent, because the skills involved are specialised. Since patents (and other IP) exist country by country, it is necessary to decide which countries will be covered in addition to the UK and to set applications in motion for them as well. The granting process will take three or more years in most cases.

The right to be granted a patent (and accordingly the right to apply for one) is given to the inventor or joint inventors, save in one case. The right belongs instead to an employer where the invention is made in the course of employment by a employee within the definition of the Patents Act 1977, s.39(1) - in brief, a person employed, or specifically detailed, to do research which may produce invention or a person in a senior managerial position who owes special obligations of fidelity to the employer.2 This, however, may be varied in the employee's favour by a contract term to the contrary (though not in the employer's favour in advance of the invention: s. 42(2)). An employed inventor can in some circumstances become entitled to compensation from the employer from its earnings on the patent: s. 40-43.

Alternatives to Patents. Most current EU states, but not the UK, also have a Petty Patent or Utility Model, which give shorter term protection to technological improvements without a technical examination before grant.3 The UK makes up for this, in limited measure, by giving an informal right in technical designs, to the extent that they result in products having a particular shape. This is through the UK Unregistered Design Right, one special variety of which is the Semiconductor Topography Right in the layout of multi-layer chips. Such protection is, however, restricted to the particular shape or layout designed by the right owner. These rights, in the UK or abroad, may have only occasional relevance for university inventors.

Copyright. Copyright is given for an author's creation of a literary, dramatic, musical, or artistic work, or for directing a film. Again the main economic objective has been to shore up the costs of creation, production, and marketing against imitations by pirates whose costs would be noticeably smaller. Copyright comes into being without any formal granting procedure. It endures for the author's life plus seventy years. It is a right to prevent copying of the work in hard form, electronic form (especially by making available on the Internet), and in the course of performances (broadcasting, etc.). Copyright initially belongs to the author, except where the work is produced in the course of employment, a rule that again can be varied by a contract to the contrary. The general acceptance in universities that academics retain copyright in their works amounts at least to an implied term of their employment. There are of course differences of view over what forms of exploitation this implied term covers.

Extensions of Copyright. Copyright has been deployed by analogy to give rights to persons other than creators: performers and their exclusive producers, sound recording producers, film producers, publishers for the format of their publications, broadcasting, and cable-casting organisations. These 'related rights' are almost all directly in favour of the investors who set up production arrangements. Accordingly, recordings, films, etc. made using University facilities and equipment give rise to IPRs which in all likelihood belong to the University.

Industrial designs. Almost uniquely, as explained above, the UK has introduced an unregistered design right which protects of the shape or configuration of products, whether the design element is decorative or functional. Alongside this there is a registered design right which depends upon grant by a Designs Registry, country by country.4 Here, however, the design right relates to the appearance of products, and cannot apply to designs which are dictated solely by function. Accordingly, its importance in the academic sphere is peripheral.

Confidential information. Although it avoids the label property, the law gives rights to protect any information acquired in confidence from being disclosed or used in ways that breach the confidence. Employees in industrial research, management, marketing, and sales are given (or they themselves generate) much information which they are obliged to keep secret for their employers. They are, however, entitled to keep for themselves all the general know-how which is a generic part of the skills of their job. The application of these principles to a sphere, such as academia, in which the main purpose is not the commercialisation of research is far from clear, as is pointed out in para. 3.1.5.5. Much depends on particular circumstances and the whole issue deserves to be approached with circumspection.

Two types of subject-matter deserve separate comment in the university context.

Software (computer programs and explanatory material): when computers and their programs became mass-marketed products there was a rush to procure IPRs against pirated imitations. Programs were protected as literary works under copyright (bearing, for what it is worth, the full term of authorial protection). But there was also a drive to give broader protection to programming principles and types through patents, where the claimed invention could be said to be novel and non-obvious. Against this, in many countries - and in particular in West Europe - patents were not allowed for computer programs 'as such'. Led by developments in the US, there has been considerable movement towards allowing patents in principle for programs, whether they procure a 'technical effect' or are merely useful in business terms. Thus novel applications programs, as well as operating systems, are likely to be patentable in the US and other industrially important countries.

Databases: as explained in para. 3.1.9, there is, both, a copyright in the creative construction of a database, and, importantly, a shorter term (15-year) right sui generis in the database, which operates against extraction and re-utilisation of substantial parts of the content of the database. As substantial new material is added, the 15-year period begins to run afresh. This 'database right' is accorded to the person who finances and organises the construction of the database. As with the rights related to copyright, is an 'entrepreneurial right' which will belong to the University when the database is established using its equipment.

Right to employees' inventions: Patents Act, 1977, S.39(1) and (2)

[Ref. Footnote 2 ]

39 - (1)Notwithstanding anything in any rule of law, an invention made by an employee shall, as between him and his employer, be taken to belong to his employer for the purposes of this Act and all other purposes if:

(a) it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties; or
(b) the invention was made in the course of the duties of the employee and, at the time of making the invention, because of the nature of his duties and the particular responsibilities arising from the nature of his duties he had a special obligation to further the interests of the employer's undertaking.

(2) Any other invention made by an employee shall, as between him and his employer, be taken for those purposes to belong to the employee.

1 Trade-marks protect the signs which one competitor in a market uses to distinguish his goods or services from those of rivals. Hugely important in trade today, they are not of direct significance to academic inventors and creators, who commercialise through others. The Working Party on Copyright alerted the University to the need to draw together its holdings of trade marks so that they can be managed coherently. It is unclear what has been the outcome of that recommendation.

2 S.39(1) and (2) are set out in full at the end of this Appendix.

3 Japan has such a system, the US does not.

4 In the EU, there is now a registered Community Design.

 

Appendix 4

Consultation: Ownership of Intellectual Property Rights Sources of Information

HEFCE (March 2003/11): Higher Education - business interaction survey 2000-01

Beloff, White: Opinion: Cambridge University Staff Contract Terms relating to Intellectual Property Rights (April 2002)

HEFCE (February 2003/08): Intellectual Property Rights in e-learning programmes (Report of the Working Group)

DES: The Future of Higher Education (January 2003)

Universities UK: Universities UK's response to 'The Future of Higher Education'

HEFCE (March 2003/12): HEFCE Strategic Plan 2003-2008

Segal, Quince, Wicksteed: The Cambridge Phenomenon Revisited (Parts One and Two) (June 2000)

Auril, Universities UK, and the Patent Office: The Management of Intellectual Property

Royal Society: Keeping Science Open: The Effects of Intellectual Property Policy on the Conduct of Science (April, 2003)

Various University websites, e.g. Oxford, Imperial, UCL, etc.

 

Appendix 5

University College London - Student Handbook Extract - IPR

The Registry Online

http://www.ucl.ac.uk/Registry/Current/Rights/IPR/

Friday, 27 June 2003

Intellectual Property Rights

Intellectual Property Rights (IPR) are very complex. They address the status of previously generated material (background information) during the project, after the project ends and during commercialisation of the results.

Intellectual Property Generated by Students

Under UK statute law all intellectual property (e.g. copyright, patents, design rights) developed by employees in the course of their normal duties belongs to their employer. UCL, like most other universities, takes steps to protect the research findings of its academic staff. Considerable effort and resources are put into protecting inventions (e.g. patent protection) and sourcing companies that can successfully commercialise UCL inventions. UCL recognises the substantial contribution made by academic staff in generating new intellectual property and their involvement in the exploitation process. Accordingly, UCL's Financial Regulations provide for a substantial part of revenue received from commercialisation to be given to the inventor(s).

As a student at UCL, you are not a UCL employee and therefore the university does not automatically own intellectual property generated by you in the course of your degree course. However, there are occasions when UCL does seek such ownership. In such situations (which are described in more detail below), UCL requires you to assign (transfer ownership) of your intellectual property to UCL and you are required to complete such formal documentation as is required to give force to such an assignment. In exchange, UCL undertakes to treat you in the same way as a member of staff for the purposes of sharing any revenues arising from the commercial exploitation of that intellectual property.

Circumstances in which you may be asked to assign intellectual property to UCL

Projects form a part of many degree programmes at undergraduate and graduate level. Such projects are usually proposed by members of academic staff in your department and will often be connected in some way to that academic's on-going research interests. You may be joining a team to investigate one particular aspect of a much larger research programme. This is usually of great benefit to you, the student - rather than starting from a blank sheet, you can draw on the considerable expertise, reputation and infrastructure of the group and thereby get a valuable head-start in your research project.

There are, however, two serious intellectual property issues associated with inviting students to work closely with existing research teams:

the intellectual property developed by the student will sometimes be needed to enable use of the whole technology - in such cases UCL does not want to find itself in a position where a small gap in its IP portfolio precludes it from being able to license the technology;
the intellectual property will often be based on advice and ideas contributed by many others in the laboratory, and may be based on confidential, proprietary or otherwise valuable information that already belongs to UCL or a research sponsor.

Procedure for assignment of student generated IP

As a general rule, in cases where you are, in your supervisor's opinion, likely to generate IP that falls into one of these categories, UCL requires you, the student, to complete a confidentiality and intellectual property assignment. By signing this document: (Adobe PDF format)

you agree to keep confidential any information that is disclosed to you relating to the project;
you agree to assign ownership of the intellectual property to UCL if and when requested;
we agree to treat you as a member of staff for the purposes of royalty sharing (in accordance with the College's Financial Regulations).

If you are in any doubt about the meaning or effect of the form then you should seek independent legal advice before signing it.

If you decline to sign this form then you may be offered an alternative project on which to work. In any circumstances:

participation in the research should not interfere with the assessment of your academic performance;
your future career choices should not be closed by the choice of work in a confidential area of research.

1 Letter of Alan Cottrell, Vice-Chancellor to the CVCP, 1977; General Board Notice of 26 February 1987 (See Reporter, 1986-87, p. 440).

2 The terms, however, differ from Research Council to Research Council. The purpose of the Notice of 1987 was to adopt a University Policy requiring ownership of IPRs from Research Council grants to vest in the University (using Lynxvale Ltd as the appropriate vehicle). For the exploitation of other research, however, academic staff were merely encouraged to use the same University facility.

3 Notice, however, the differences in the statements about IPR ownership in the grant conditions of the various Research Councils, mentioned in Note 2.

4 The 2001 policy therefore followed the line already established in the Notice of 1987, extending it, however, to some cases where the grant did not explicitly require University ownership. Accordingly some submissions from academics have called for the 2001 policy to be cut back to grants where the requirement has been clearly demanded.

5 The 'vertical' difference would acquire substance only when there was an IPR policy in force, i.e. from March 2001.

6 For post-1998 appointees, the change is to follow from the IPR term in their contracts of employment expressed as a policy approved by Grace; for pre-1998 appointees, it is to be achieved by a Grace altering current terms of employment. In either case, the essential step is to be approval of the Grace. There is a further question whether the content needs to be incorporated into Ordinances, following the advice of Michael Beloff QC and Gemma White.

7 Of the three, trade marks have virtually no relevance to the present discussion.

8 This rule, designed for commercial contexts, would appear, nonetheless, often to give the database right to the University as a matter of law (in the absence of a contrary contract).

9 There were some concerns about the ways in which a Department might apportion its share.

10 The University should also acknowledge that any term which seeks to give it ownership of inchoate IPRs not arising 'in the course of employment' will be void in law: for patents, see Patents Act 1977, s. 42(2) and at common law, Electrolux v. Hudson [1977] Fleet Street Reports 312.

11 For explicit statements to individuals, see below, para. 3.1.10.

12 Where it is desirable that free source material is provided on the terms of a formal licence, the Department concerned should have a set of model licences available from which the staff member can choose. The Department ought to keep a record of such licences as are agreed in order to supply RSD with numbers for its statistics and hence for returns to Government.

13 See further, Appendix 3.

14 See above, para 3.1.2. On the other hand, the employer, as over-dog, can give rights to 'course of employment' inventions to the employee if it wishes. Hence the argument, made by some participants in the debate, that the University did so by such acts as the 1987 Notice.

15 The Joint Report gave examples of definitions used elsewhere (para.11) but it is not clear what conclusion was being drawn.

16 Where the Joint Report says (para. 12) that the time and location of making inventions is not relevant, it must be understood to mean not conclusive.

17 For which see Appendix 3.

18 Today, the applications are frequently for European patent grants, rather than for UK national patents alone.

19 For the limited relevance of these to academic research conducted in the University, see Appendix 3.

20 The policy will in effect operate to fulfil the statutory obligation upon an employer patentee to pay compensation to employee inventors in respect of outstanding benefits received from the patent. See Appendix 3.

21 Subject, however, to the researcher's overriding power to make the information publicly available instead: see para. 3.1.3. above.

22 The situation resembles the organisation of a commercial e-learning project (see below, para. 3.1.7). Where a number of creators have interests alongside those of the managers of exploitation, of necessity there has to be agreement on mutual rights and obligations in which initial ownership of IPR is only one element.

23 It would be desirable for Departments in which Open Source licences are granted to keep records of all formal licences of this kind and to inform RSD periodically for statistical purposes.

24 However, University of Nottingham v. Fishel [2000] Industrial Relations Law Reports 471 makes it clear that academic employees are not normally to be treated as fiduciaries who are under a general duty to hold all confidential information for their universities. In consequence that vital argument in the university's case against Dr Fishel failed.

25 The Group commends the current arrangements concerning students' inventions which are in place at University College London: see Appendix 5.

26 As did the policy graced in March 2002.

27 In the Copyright Report commissioning was related to narrow examples, such as the setting of examination papers and the writing of documents for administrative business, etc. Thus it was not intended by the Copyright Working Party to relate to work produced in the conduct of academic research.

28 In many cases, doubtless, the real issue for academics will be whether publication is to be subject to a veto.

29 This necessity is strongly emphasised in the Royal Society's Report already referred to.

30 By Notice of 11 June 2003, it was announced that the Technology Transfer Office is part of Cambridge Enterprise and so falls within the RSD structure.


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Cambridge University Reporter, 6 August 2003
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