9.1 Inventions, Patents, and Licensing
Establishes policy and procedures for disclosure and assignment of ownership of potentially patentable inventions created in the course of work at Stanford or with more than incidental use of Stanford resources. Extends this requirement to faculty, staff, graduate students, undergraduate students, post doctoral scholars and visitors.
1. Patent Policy
A. Board Policy
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All potentially patentable inventions conceived or first reduced to practice in whole or in part by members of the faculty or staff (including student employees) of the University in the course of their University responsibilities or with more than incidental use of University resources, shall be disclosed on a timely basis to the University. Title to such inventions shall be assigned to the University, regardless of the source of funding, if any.
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The University shall share royalties from inventions assigned to the University with the inventor.
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The inventors, acting collectively where there is more than one, are free to place their inventions in the public domain if they believe that would be in the best interest of technology transfer and if doing so is not in violation of the terms of any agreements that supported or related to the work.
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If the University cannot, or decides not to, proceed in a timely manner to patent and/or license an invention, it may reassign ownership to the inventors upon request to the extent possible under the terms of any agreements that supported or related to the work.
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Waivers of the provisions of this policy may be granted by the President or the President's designate on a case-by-case basis, giving consideration among other things to University obligations to sponsors, whether the waiver would be in the best interest of technology transfer, whether the waiver would be in the best interest of the University and whether the waiver would result in a conflict of interest. In addition, the President may expand upon these provisions and shall adopt rules, based on the same factors as well as appropriateness to the University's relationship with inventors, for the ownership of potentially patentable inventions created or discovered with more than incidental use of University resources by students when not working as employees of the University, by visiting scholars and by others not in the University's employ.
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This policy shall apply to all inventions conceived or first reduced to practice on or after September 1, 1994.
B. Additional Provisions
(promulgated by the University President, reference section 5 of the Board Policy, above)
- In addition to faculty and staff (including student employees), the provisions of the University's patent policy will extend to:
- all graduate students and postdoctoral fellows
- non-employees who participate or intend to participate in research projects at Stanford (including visiting faculty, industrial personnel, fellows, etc.)
The Board policy will apply as stated for graduate students and postdoctoral fellows. In the case of non-employees, all potentially patentable inventions conceived or first reduced to practice in whole or in part in the course of their participation in research projects at Stanford, or with more than incidental use of University resources, shall be disclosed on a timely basis to the University, and title shall be assigned to the University, unless a waiver has been approved.
2. The President's authority to grant waivers of provisions of this policy is delegated to the Vice Provost and Dean of Research.
2. Administrative Procedures
A. Office of Sponsored Research
Office of Sponsored Research (OSR) is responsible for reviewing terms and conditions of the University's grants and contracts for compliance with University policies on intellectual property rights and openness in research.
B. Office of Technology Licensing
The mission of the Office of Technology Licensing (OTL) is to promote the transfer of Stanford technology for society's use and benefit while generating unrestricted income to support research and education. OTL is responsible for the administration of the University's invention reporting and licensing program, the commercial evaluation of inventions, patent filing decisions, petitions to agencies for greater rights in inventions, and negotiation of licensing agreements with industry.
C. Patent and Copyright Agreements
All faculty, staff, student employees, graduate students and postdoctoral fellows must sign the Stanford University Patent and Copyright Agreement (referred to as "SU-18"). In addition, non-employees who participate or intend to participate in research projects at Stanford must also sign a Patent and Copyright Agreement. A variation of this agreement has been created for individuals with prior obligations regarding the disclosure and assignment of intellectual property. See Patent and Copyright Agreement for Personnel at Stanford who have a Prior Existing and Conflicting Intellectual Property Agreement with Another Employer (SU-18A).
Each department is responsible for getting the Patent and Copyright Agreement signed, normally at the time of the individual's initial association with Stanford.
D. Invention Disclosures
An invention disclosure is a document which provides information about inventor(s), what was invented, circumstances leading to the invention, and facts concerning subsequent activities. It provides the basis for a determination of patentability and the technical information for drafting a patent application. An invention disclosure is also used to report technology that may not be patented but is protected by other means such as copyrights.
Inventors must prepare and submit on a timely basis an invention disclosure for each potentially patentable invention conceived or first actually reduced to practice in whole or in part in the course of their University responsibilities or with more than incidental use of University resources.
A disclosure form describing the invention and including other related facts should be prepared by the inventor and forwarded to OTL, or to the SLAC Inventions Administrator, as appropriate. Forms may be requested from these offices.
The following practical considerations relate to invention disclosures:
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Individuals covered by this policy are expected to apply reasonable judgment as to whether an invention has potential for commercial marketing. If such commercial potential exists, the invention should be considered "potentially patentable," and disclosed to Stanford.
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Individuals may not use University resources, including facilities, personnel, equipment, or confidential information, except in a purely incidental way, for any non-University purposes, including outside consulting activities or other activities in pursuit of personal gain.
"More than incidental use of University resources" would include:
- The use of specialized, research-related facilities, equipment or supplies, provided by Stanford for academic purposes
- Significant use of "on-the-job" time
The occasional and infrequent use of the following would typically not constitute "more than incidental use of University resources":
- Routinely available, office-type equipment, including desktop computers and commercially-available software
- Reference materials or other resources collected on the Stanford campus, and which are generally available in non-Stanford locations.
E. Alternative Disposition of Rights
The inventor, or inventors acting collectively when there are more than one, is free to place inventions in the public domain if that would be in the best interest of technology transfer and if doing so is not in violation of the terms of any agreements that supported or governed the work. The University will not assert intellectual property rights when inventors have placed their inventions in the public domain.
If OTL cannot, or decides not to, proceed in a timely manner to patent and/or license an invention, OTL may reassign ownership to the inventor or inventors upon request to the extent possible under the terms of any agreements that supported or related to the work. In the case of an invention resulting from a government-sponsored project, where OTL cannot or chooses not to retain ownership, rights would then typically be retained by the government. In such cases, the inventor may request and be granted rights by the sponsoring agency to an invention made under such an award, provided that a well-conceived and detailed plan for commercial development accompanies the request.
3. Licensing
The University encourages the development by industry for public use and benefit of inventions and technology resulting from University research. It recognizes that protection of proprietary rights in the form of a patent or copyright are often necessary - particularly with inventions derived from basic research - to encourage a company to risk the investment of its personnel and financial resources to develop the invention. In some cases an exclusive license may be necessary to provide an incentive for a company to undertake commercial development and production. Nonexclusive licenses allow several companies to exploit an invention.
The research and teaching missions of the University always take precedence over patent considerations. While the University recognizes the benefits of patent development, it is most important that the direction of University research not be established or unduly influenced by patent considerations or personal financial interests.
OTL handles the evaluation, marketing, negotiations and licensing of University-owned inventions with commercial potential. Royalty distribution is as follows:
1. Cash Royalties
A deduction of 15% to cover the administrative overhead of OTL is taken from gross royalty income, followed by a deduction for any directly assignable expenses, typically patent filing fees. After deductions, royalty income is divided one third to the inventor, one third to the inventor's department (as designated by the inventor), and one third to the inventor's school. In the case of Independent Laboratories and Independent Research Centers or Institutes, which report directly to the Vice Provost and Dean of Research (who is the cognizant Dean for these research units), the inventor may assign to his or her Independent Laboratory, Center or Institute the department's third of the royalty income or a part thereof, based on support of the work. In these cases, the School's portion goes to the Dean of Research. Similarly, when more than one department is involved, the inventor shall designate the distribution of the department and school thirds based on support of the work. Disagreements involving royalty distribution will be reviewed and resolved by OTL; involved parties may appeal the OTL resolution to the Dean of Research.
2. Equity
Stanford may at times accept equity as part of the license issue fee. Net equity, i.e., the value of the equity after the deduction of 15% to cover OTL administrative costs, will be shared between the Inventor(s) and the University, with the University share going to the OTL Research and Fellowship Fund. The University's share of equity will be managed by the Stanford Management Company, and the OTL Research and Fellowship Fund is administered by the Vice Provost and Dean of Research. (All other cash payments, including royalties based on sales, will be distributed in accordance with the provisions of (1) above.)
See Research Policy Handbook document, Equity Acquisition in Technology Licensing Agreements.
4. Background
A. What is a Patent?
A U.S. patent is a grant issued by the U.S. Government giving an inventor the right to exclude all others from making, using, or selling the invention within the United States, its territories and possessions for a period of 20 years. When a patent application is filed, the U.S. Patent Office reviews it to ascertain if the invention is new, useful, and nonobvious and, if appropriate, grants a patent - usually two to five years later. Other countries also grant similar patents. Not all patents are necessarily valuable or impervious to challenge.
B. What is an Invention?
An invention is a novel and useful idea relating to processes, machines, manufactures, and compositions of matter. It may cover such things as new or improved devices, systems, circuits, chemical compounds, mixtures, etc. It is probable that an invention has been made when something new and useful has been conceived or developed, or when unusual, unexpected, or nonobvious results have been obtained and can be exploited.
An invention can be made solely or jointly with others as coinventors. To be recognized legally, a coinventor must have conceived of an essential element of an invention or contributed substantially to the general concept. (See section 2.D. for information and procedure regarding the formal disclosure of an invention.)
C. Patentability
Not all inventions are patentable. Questions relating to patentability are often complex and usually require professional assistance.
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General criteria for patentability
An important criterion of patentability is that an invention must not be obvious to a worker with ordinary skill in that particular field. It must also be novel, in the sense that it not have been previously publicly known or used by others in this country or patented or described in a printed publication anywhere.
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Loss of patentability
Inventions that are patentable initially may become unpatentable for a variety of reasons. An invention becomes unpatentable in the United States unless a formal application is filed with the U.S. Patent Office within 12 months of disclosure in a publication or of any other action which results in the details of the invention becoming generally available.
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Circumstantial impairment of patentability
Many other circumstances may impair patentability, such as lack of "diligence." For example, unless there is a record of continuous activity in attempting to complete and perfect an invention, it may be determined that the invention has been abandoned by the initial inventor, and priority given to a later inventor who showed "due diligence."
3. International variation of patentability regulations
Regulation covering the patentability of inventions and application filing procedures vary from country to country and are subject to change. It is important to note that an invention is unpatentable in most foreign countries unless a patent application is filed before publication.
D. Value of Unpatented Inventions
An invention, although unpatentable for various reasons, may still be valuable and important - for example, trade secrets and technical "know-how" encompassing proprietary information of a valuable and confidential nature.
Agencies sponsoring research at Stanford usually require reports of all inventions, whether or not they are considered patentable.
