Appendix G

Patent Policy

Board Rule 509 Regarding the Patent Policy States:

1. Purpose.

In view of the far reaching research in the various campuses of The Board of Trustees of The University of Alabama, a corporation, (hereinafter referred to as University), it is inevitable that new discoveries and inventions will be made. The members of the Board of Trustees (hereinafter referred to as the Board) recognize the importance of obtaining the greatest public benefit and usefulness from the products of the University's scientific research and inventiveness, and that the protection and control provided under patent laws or other legal means for the protection of property rights may be necessary to obtain this goal. It is further recognized that employees of the University need assistance in determining and evaluating patentability and in prosecuting patent applications for or otherwise protecting inventions made by them. Furthermore, many such inventions involve equities beyond those of the inventor since the use of University facilities, the assignment of duties as a condition of employment, and the use of research funds with contractual obligations regarding patent rights give rise to questions concerning the rights and equities of all concerned. The purpose of this patent policy is to establish a mechanism to serve the public benefit and interest, to determine and apprise all concerned parties of relative rights and equities, to facilitate patent applications, the licensing of inventions, the equitable distribution of any royalties or other financial returns, to provide necessary uniformity in patent matters, and to provide for adequate reporting of patent activities.

2. Policy and Procedure.

a. It shall be the policy of the Board to encourage the concept that patentable inventions produced at the University shall be used for the greatest possible public benefit and to provide every reasonable incentive to the faculty and staff for the disclosure, evaluation and dissemination of such inventions. When University support makes the research effort possible or when it provides support of the development of a patentable invention, it is reasonable for the University to participate in the fruits of such development, including reimbursement for its costs. To that end, the University encourages the prosecution of patents for such inventions and the licensing thereof in the interest of the public, the inventor, and the University.

b. The President of each campus shall appoint a Patent Committee which shall be responsible to the President or his designee. Each committee shall have the responsibility for recommending to the President interpretations of the University policy hereinafter stated, recommending changes in this rule as experience suggests the desirability of such changes, and recommending regulations pursuant to this rule as it deems necessary. The President shall promulgate regulations and may designate a patent administrator to administer the patent program.

c. All faculty members and University employees, as a condition of employment, both while employed by the University and thereafter, and all graduate students performing research, shall report to the Patent Administrator of their respective campus any invention or discovery which they have conceived or developed or which has been conceived or developed under their direction during their University employment or enrollment.

d. Any such invention or discovery (1) which is the result of research carried on by or under the direction of any employee of the University and/or having the costs thereof paid from University funds or from funds under the control of or administered by the University, or (2) which is made by an employee of the University and which relates to the inventor's field of work at the University, or (3) which has been developed in whole or in part by the utilization of resources or facilities belonging to the University, shall be assigned to the University for the appropriate University campus. The applicability of the above stated conditions in any given case will be determined by the President of the respective campus or his designee. With the approval of the Board of Trustees or its Executive Committee, the President of the campus is authorized to assign any patent to a University designated nonprofit organization established for campus benefit, which said assignment shall be conditioned on full compliance with this policy, regulations promulgated thereunder, and appropriate state and federal law.

e. Each invention or discovery reported shall first be investigated in order to determine whether it must be assigned to the University under the standards set forth in section 2.d. herein above. If the invention or discovery is one that must be assigned, it shall be further investigated to determine whether the University desires to apply for a patent on it in the name of the inventor. In making this determination, the benefits that might accrue to both the University and the inventor shall be considered. The patent administrator shall act promptly in carrying out these duties so that the property rights of the inventor and the University may be protected. Upon expert advice, however, the patent administrator may request further development of the invention before final action. If it is determined that the invention or discovery is not assignable or, if assignable, is one in which the University has no interest, a release shall be executed by the campus patent administrator in favor of the inventor. In event of assignment, the University shall undertake to develop and protect the invention as it deems appropriate.

f. As further consideration for the assignment rights set forth herein, the Presidents or their designees on the inventors' campuses are authorized to enter into an agreement with the inventor to pay to the inventors, their heirs or assigns, a percentage of the royalties, fees or other financial returns received by the University from such invention after a deduction of fifteen (15%) thereof for overhead costs, plus a deduction for costs of patenting and protection of patent rights. Each campus President shall be responsible for the development of a policy governing the percentage of royalties, fees, and other financial returns on an invention paid to the inventor. Recoupment of any unusual expenses paid by the campus or the inventor may be included in the agreement. The agreement may also be subject to specific conditions contained in institutional contracts such as that with Research Corporation or the DHHS (formerly DHEW) Institutional Agreement. Any patent assignment to a University related foundation shall be made subject to the conditions of this policy. Each campus President shall be responsible for the development of a policy on internal distribution of the University's share of the royalties and distribution shall be reflected in the budget. in the event of intercampus participation leading to a patent, the Chancellor will appoint appropriate committees with representatives from each participating campus to make recommendation and will then determine any appropriate equities arising from said intercampus participation.

g. It is understood that many research contracts, grants, and consulting agreements from or with the United States Government or its agencies, from or with corporations, or from or with individuals contain patent clauses that must be complied with. Such documents that are at variance with this policy may be referred to the appropriate Patent Committee for recommendations prior to approval. To the extent the provisions of these contracts, grants, and agreements require, the campuses shall administer such patents to provide nonexclusive licensing or on a royalty-free or on a reasonable royalty basis.

h. Annual reports of patent matters will be made to the Chancellor for this information and that of the Board of Trustees within thirty days following the end of each fiscal year, to include as a minimum identification of each patent and patent applied for, the distribution of patent revenue including the share going to the inventor, and the expenses of obtaining and managing patents. The Chancellor may prescribe appropriate format for such reporting.

(Adopted February 23, 1980; Amended September 16, 1981; February 27, 1986)

The Patent Policy of the Board of Trustees of The University of Alabama, as stated in Board Rule 509, mandates that certain decisions be made and actions taken by institutional officials regarding inventions and discoveries made by campus personnel. The following are guidelines for a standard decision-action path intended to assist these officials carry out their responsibilities under the Board policy.

1. The Patent Administrator (PA) shall be the Chair of the University's Patents and Copyrights Committee.

2. All University persons covered by Board Rule 509 1.c. (herein, the "inventor") shall, pursuant to the requirements of this Board provision, file an approved disclosure form with the PA with respect to any invention or discovery conceived or developed during their University employment or enrollment, as the case may be. Such disclosure shall be provided in sufficient detail to facilitate the review described below.

3. Upon receipt of such written disclosure, the PA shall promptly inquire into the circumstances out of which the invention or discovery arose. Based on such investigation, the PA shall determine whether the conditions set forth in Board Rule 509 2.d. exist so as to require assignment of the invention/discovery to the University.

4. If the PA determines that the foregoing conditions do not exist, and upon obtaining the concurrence of the Associate Provost and Vice President for Research, a release shall be prepared by which the University releases, waives, and disavows any interest in the invention/discovery in favor of the inventor.

5. If the invention/discovery is one which must be assigned to the University, the PA shall then refer the disclosure statement to those members of the University's Patents and Copyrights Committee possessing expertise in the scientific or technical field related to the invention/discovery or, in the discretion of the PA, impanel an ad hoc subcommittee under the supervision of a committee member composed of University personnel possessing expertise in such scientific or technical field. After review of the disclosure statement and such other investigation as is appropriate in the circumstances by the Committee members, or by the ad hoc subcommittee, a report shall be given to the PA for the purpose of enabling him or her to form a judgment as to the patentability of and marketing/commercialization potential for the invention/discovery.

6. Based on such report and other Committee comments, the PA may determine that the University has no interest in pursuing patent rights with respect to the invention/discovery. In such case, the PA shall consult with the Associate Provost and Vice President for Research, and, upon the latter's concurrence in such determination, the inventor shall be given a release (see paragraph 3 above).

7. On the other hand, the PA may determine after such report and other Committee comments that the University has an interest in pursuing patent rights with respect to the invention/discovery. In such case, the PA shall consult further with the Associate Provost and Vice President for Research (or his designee) and other appropriate University personnel to assess the options available to the institution. These options might include referral of the invention/discovery to the Research Corporation for the prosecution of the patent and the development of the means for exploitation of the invention/discovery, prosecution of the patent by the University directly through its patent counsel and the licensing by the University of its right therein to interested third parties, etc. In making such assessment, considerations of cost to the University of pursuing a patent at its own expense, its ability to market the patent rights, the potential financial return which may be produced by exploitation of the invention/discovery, and other relevant concerns as identified by the PA, the Associate Provost and Vice Present for Research, and/or other appropriate University personnel shall be reviewed.

8. The PA shall, with support and assistance from the Office of Counsel, follow through with the options) selected (see paragraph 6 above) unless and until that responsibility is assigned to some other University official.

9. As to any invention/discovery that is assignable to the University under Board policy and in which the University has an interest, the PA shall negotiate an appropriate agreement to pay the inventor a percentage of the royalties and other return that may be received by the University from the exploitation of the invention/discovery. The provisions of Board Rule 509 and the attached policy statement, "Patent Policy-Distribution of Royalty Income," shall be used by the PA in such negotiations.

10. The inventor shall have the right to appeal any determination of the PA to the Associate Provost and Vice President for Research and, thereafter, to the President.

11. All documents referred to above requiring execution on behalf of the University shall be signed by the Associate Provost and Vice President for Research.

12. The Office of Counsel shall prepare the disclosure instruments, releases, assignments, royalty sharing agreements, licensing agreements, and other documents required to carry into effect the actions taken hereunder. The Office of Counsel shall also be available to assist the PA and other involved institutional officials with any legal matter arising out of the University's patent program.