¾ÅÐãÖ±²¥

Approved by Senate May 27, 1993

Approved by the Board October 1, 1993

Table of Contents

1. Background
2. Ownership of Intellectual Property
3. Technology Transfer: The New Environment
4. Revised Policy

Background

A position paper on Technology Transfer Policy was published as a supplement to the ¾ÅÐãÖ±²¥ Gazette of February 3, 1987. This paper reviewed development of the technology and intellectual property transfer processes at ¾ÅÐãÖ±²¥ and at other universities and discussed the relationship between these activities and the fundamental mission of the University, namely education and research.

The paper, describing the process by which technology was then transferred from the University to the private sector, was based on the expectation that intellectual property having commercial potential, developed at ¾ÅÐãÖ±²¥, should be disclosed to the University. Further, there was the presumption that the University owned such intellectual property and had the right of first refusal to pursue its commercial exploitation.

The position paper recognized that collaborative relationships with business and industry offer ¾ÅÐãÖ±²¥ the opportunity to secure substantial benefits for our mission of education and research. To best assist in achieving these benefits, it was recommended that technology transfer activities should be separated from the academic and research activities of the University by the creation of a separate, non-profit, self-sustaining corporation.

The Canadian Enterprise/Innovation Centre (CE/IC) had previously been established to develop the University's intellectual property management and technology transfer capability in 1985, with the assistance of funding from the Province of Ontario. This organization then evolved into PARTEQ Research and Development Innovations, a non-profit corporation, in 1988 (PARTEQ being short form for Partners in Technology at ¾ÅÐãÖ±²¥).

With the creation of CE/IC, there was a need for a University body to act as an interface between the academic researchers and the technology transfer organization, to consider and recommend technology transfer policy and to transfer intellectual property to CE/IC and later to PARTEQ. A Technology Transfer Board (TTB) was established for this purpose.

During the period 1985-91, an operational process was accepted whereby researchers who created intellectual property with commercial potential were encouraged to discuss it informally with PARTEQ. Upon the advice of PARTEQ, the creator(s) made a formal disclosure to the University. This disclosure was then reviewed by a Technology Review Subcommittee. This Subcommittee, chaired by the Director of Research Services, included a member of the TTB, a representative of PARTEQ and two ¾ÅÐãÖ±²¥ faculty who could provide expert advice upon the particular intellectual property. If the Subcommittee considered that the invention was novel, protectable and had significant commercial potential, the TTB was so advised and PARTEQ was given the opportunity to accept the property for protection and commercialization. If PARTEQ elected not to accept the property, it was returned to the creator who could then transfer the property in whatever manner he/she wished.

Ownership of Intellectual Property

During the period 1985-91, first CE/IC and then PARTEQ effectively had exclusive access to commercially useful intellectual property created at ¾ÅÐãÖ±²¥ - the presumption being that all such property was owned by the University. However, during this period, the question of ownership of intellectual property became an issue which was considered first by a Principal's Advisory Committee, then by the Advisory Research Committee, and finally by the Senate Ad-Hoc Committee on Intellectual Property.

The Senate Ad-Hoc Committee took the position that it is in the best interest of the University and of members of the University community for intellectual property to be owned by the creator. Certain exceptions to this position were recognized, namely when the terms of a contract specify otherwise and when persons are employed by the University to create specific types of intellectual property.

The report and recommendations of the Ad-Hoc Committee on Intellectual Property were brought to and accepted by Senate in June 1991. An appendix dealing with the sharing of revenues from the commercialization of intellectual property was subsequently added in April 1992. The new policy on the ownership of intellectual property was ratified by the Board of Trustees in May 1992, with a provision that the impact of the policy should be reviewed within five years.

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Technology Transfer: The New Environment

The report of the Senate Ad-Hoc Committee on Intellectual Property recognized the utility and effectiveness of PARTEQ in protecting and transferring technology to the private sector. The Committee endorsed the continuation of PARTEQ and even recommended an expansion of the services that it offers as an interface between industry and the University.

Prior to 1991-92, ¾ÅÐãÖ±²¥ technology transfer activities had been operated under the presumed ownership of intellectual property by the University and the expectation that commercially useful intellectual property would be disclosed by researchers and staff. Under these circumstances, PARTEQ effectively had a captive clientele and was not very active in promoting its services. The new policy vesting ownership of intellectual property with the creator, significantly changed the environment in which PARTEQ operates.

PARTEQ recognized that by promoting itself as a user-friendly organization with a proven track record of effective technology transfer and by winning the trust of the University community, the number of disclosures of intellectual property with commercial potential would be unlikely to decline. PARTEQ based this conclusion on an analysis of the options available to creators:

1. An inventor could attempt to commercialize her/his intellectual property by independent action. This would likely require the services of a patent agent for protection, personal time for marketing and a lawyer for licensing or sale. This would involve a substantial investment in time and money. Alternatively, an organization similar to PARTEQ (such as the Canadian Industrial Innovation Centre at Waterloo) could be approached.

2. The inventor could disclose the property to the University and work with PARTEQ. PARTEQ would assess the invention, pay the costs of protection, undertake a marketing program, and attempt to license the property. The net revenue from commercialization would then be shared between the creator and PARTEQ.

PARTEQ believes that it provides the most convenient and competent intellectual property management service available to the ¾ÅÐãÖ±²¥ community. PARTEQ has therefore begun to market its services by the preparation of a pamphlet which was mailed to all researchers with a covering letter from Mr. John Molloy, Executive Director, in September 1992.

In order to be successful as an intellectual property management service operating within the University environment, PARTEQ appreciates that it must:

• have the confidence of the academic community, and must be seen to provide a service with a real benefit to the user

• have skilled staff with experience and a record of success

• be able to add value throughout the commercialization process. Whether it be intangible benefit through networks, contacts, know-how, etc. or tangible benefits such as financing patent expenses, research funding or venture financing, PARTEQ has to be able to enhance the value of the intellectual property

• act as an interface or bridge between academe and industry. PARTEQ staff must be able to discuss, gain the confidence of and negotiate with both groups

• provide services at a fair cost, so that a fair return can be gained by the user

• be proactive and aggressive in its approach to commercialization

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Revised Policy

The University has an obligation to ensure that information and intellectual property is communicated such that it can be used for the benefit of society. It should be recognized that knowledge and intellectual property resulting from research and scholarly activities and, indeed, the inventiveness of all members of the ¾ÅÐãÖ±²¥ community is disseminated and transferred from the University in many ways:

• by publication in peer review journals and other publications
• by seminar and conference presentations
• by the movement of trained persons (undergraduate and graduate students, and staff) to industry, government and other institutions
• as a result of consulting activities, contract research and collaborative endeavours of researchers with companies and colleagues elsewhere
• by the protection and licensing of commercially useful intellectual property to external organizations

The revised technology transfer policy in no way inhibits the ability of the creator(s) to use or transfer their intellectual property in any manner that is consistent with University policy*. Creators have the freedom to use their intellectual property in any way that is consistent with University policy, unless constrained by the terms of an external or employment contract. Creators of inventions or software (intellectual property most likely to have commercial value) may elect to give, exchange, sell or license their technology to external organizations. However, creators do have an obligation to report, to the Vice-Principal (Research), prior to embarking upon any commercial activity related to intellectual property developed at ¾ÅÐãÖ±²¥. Creators should be aware of the potential costs, in terms of time and money, which could be incurred in selecting this route. Use of the University technology transfer services, available from PARTEQ, may be more effective. Creators should be aware that, whichever route is selected for intellectual property transfer, the University retains a non-exclusive, royalty-free, fully paid license to use and modify, for educational and research purposes, all intellectual property developed by members of the ¾ÅÐãÖ±²¥ community.

¾ÅÐãÖ±²¥ has established PARTEQ, and this non-profit corporation will remain in place as long as it is self-sustaining and its effectiveness can be demonstrated to the University community. However, the Technology Transfer Board (TTB) and Technology Review Subcommittee (TRS) which previously served the technology transfer process are no longer required and are disbanded as a consequence of the new policy on ownership of intellectual property.

In this new operational environment, PARTEQ will provide the following services:

• intellectual property management advice
• intellectual property management
• industrial liaison
• facilitator of private sector contract research

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PARTEQ will continue to offer intellectual property protection and commercialization services. However, after an initial consultation period, PARTEQ cannot be expected to work on an intellectual property case unless it is properly assigned to ¾ÅÐãÖ±²¥ and PARTEQ is assured of access to the rights. PARTEQ will use the following management approach:

• Initial consultation, which will be initiated by the creator, will be provided free of charge.

• If the creator wishes PARTEQ to finance and manage the intellectual property, he/she must provide an exclusive option to PARTEQ for a 3-month period of evaluation. During this 3-month period, PARTEQ will assess protectability and commercial potential.

• PARTEQ is under no obligation to accept the property. If PARTEQ elects to proceed with protection and commercialization, an assignment to ¾ÅÐãÖ±²¥ will have to be executed.

• Once the assignment to ¾ÅÐãÖ±²¥ is executed, PARTEQ will have the exclusive, worldwide, royalty-free rights to the intellectual property and to any background intellectual property necessary to exercise these rights.

• PARTEQ shall have access to any improvements to assigned intellectual property.

• As the norm, PARTEQ will maintain the longstanding distribution of net revenues on assigned intellectual property, as follows:

  Inventions (Patents & Know How)

  Inventor(s)	40%
  PARTEQ	60%

  Software

  Creator(s)	50%
  PARTEQ	50%

• The above allocations will be applied in most cases, but PARTEQ will retain the flexibility to negotiate individual creator compensation arrangements where special circumstances apply or where venture creation involves equity participation.

• The assignment to ¾ÅÐãÖ±²¥ may be subject to mutually agreeable performance requirements on the part of PARTEQ. In the event that these performance requirements are not met, the creator has the right to recover the intellectual property subject to the payment of costs according to a schedule set out in the original assignment agreement. If disagreement arises as to whether the performance requirements have been met, the issue will be referred to an independent arbitration committee established by the Vice-Principal (Research).

• If PARTEQ abandons its protection and commercialization efforts, the intellectual property will be returned to the creator(s) at no charge and PARTEQ will retain no interest in the intellectual property.

• PARTEQ will not offer other services on a fee-for-service basis.

Through promotional and educational activities, PARTEQ will continue to make members of the ¾ÅÐãÖ±²¥ community better aware of its services and resources.

PARTEQ, as a legally separate, non-profit corporation, has a Board of Directors. ¾ÅÐãÖ±²¥ has and will retain majority representation on the Board. For administrative purposes, the Executive Director of PARTEQ reports to the Vice-Principal (Research) and any concerns from members of the ¾ÅÐãÖ±²¥ community about the activities of PARTEQ or their interactions with PARTEQ may be communicated to the Vice-Principal (Research).

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