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Joint Report of the Council and the General Board on the ownership of intellectual property rights

The COUNCIL and the GENERAL BOARD beg leave to report to the University as follows:

1. In this Report the Council and General Board recommend that the University extends its existing policy and asserts ownership of all intellectual property generated by its employees in the normal course of their duties, from 1 January 2003, as described in the Annex. The aim is to maintain and encourage a culture of entrepreneurship, whilst providing support for all inventors, including those less able or inclined to participate actively in the application of their knowledge. There is no intention of attempting to commercialize inventions without the willing support and co-operation of inventors - even if that were possible. In the University, knowledge transfer through commercialization should remain secondary to the primary objectives of teaching and research, but the University needs a supportive infrastructure to ensure that where opportunities for application of new knowledge arise, the benefits to society are not lost. The procedures for dealing with knowledge transfer must be efficient and open to scrutiny. Freedom to publish academic work must be guaranteed and there will be no central vetting of draft publications. If individual cases of disagreement arise, there must be a fair and transparent mechanism for dispute resolution. The proposed policy has been devised by the General Board's Research Policy Committee (RPC) with these aims in mind. The policy has also been considered by the Personnel Committee and informal discussion (e.g. with the relevant Councils of the Schools) has taken place. This Report takes account of the comments received as a result of these discussions.

2. The recommendations in the General Board's Report, dated 17 January 2001, on the ownership of intellectual property rights generated by externally funded research (Reporter, 2000-01, p. 429) were approved by Grace 6 of 21 March 2001. The policy set out in this earlier Report both strengthened and clarified the University's policy and described enhanced revenue sharing arrangements. The resources available in the Research Services Division to assist staff and students with technology transfer have also been very considerably increased. These changes were made to ensure effective transfer of technology, rather than to increase short-term revenues for the University, although the expectation is that such revenues will increase in the long term. In addition, the University has won funds to promote technology transfer from the Government's Science Enterprise Challenge and University Challenge initiatives which have been used to set up the Cambridge Entrepreneurship Centre and the University Challenge Fund.

3. In the response to the remarks made at the Discussion of the Report of 17 January 2001 (ibid, p. 551) the General Board noted their intention to continue discussions on intellectual property matters further through the RPC, to consult the Regent House about substantive matters of policy, and to take notice of practices elsewhere. The General Board also stated their intention to consolidate the recommendations of their Report, if approved, with any future Reports on intellectual property policy for inclusion as a statement of policy in Statutes and Ordinances.

4. The report of the Joint Working Party on Copyright was published on 17 October 2001 (Reporter, 2001-02, p. 80) and described in detail the issues affecting academic copyright. This Second Report on University-funded intellectual property ownership makes no proposals to change University policy on copyright, which will be the subject of a future Report that will take into account both the recommendations of the Joint Working Party on Copyright and other recent developments (for example, those relating to electronic 'courseware').

5. The RPC have considered further matters relating to the University's policy on intellectual property generated by its staff and students from work carried out using University facilities but with the assistance of funding from the HEFCE and other University funds but not funded by external research funds. The University's policy differs from other leading UK research universities in that it does not make claim to all the intellectual property generated by its employees in the normal course of their duties, as described in the 1977 Patents Act, but only that generated with external grant funding. There is an inconsistency in that the outputs from separate streams of government money are treated differently and, by extension, different classes of employees employed on these separate streams have enjoyed different rights. The complexities created by this mixed ownership cause confusion internally for employees and externally for sponsors and potential investors in University-derived technologies.

6. The present policy is believed by some to have made a major contribution to the success of 'The Cambridge Phenomenon', to the encouragement of entrepreneurial activity and to the University's ability to attract and retain academic staff. It allows academic staff to act independently of the University and has thereby removed from the University the overall responsibility of managing its intellectual property. This rationalization may be superficially attractive but is unprovable and a policy based on assertion and belief is hard to justify. While the current policy may provide motivation to some individuals, they have both the benefit and the burden of exploiting their technology. Without specialist advice they may, however, prove vulnerable to predatory external parties, and any commercial deals done may be of variable quality. There is little support for less entrepreneurial individuals to enable them to realize the value of their inventions. Furthermore, given the inconsistency in the current policy, it is hard to justify its continuation without a mechanism for eliciting disclosure of all inventions made using significant University (including HEFCE-funded) resources, and proper procedures for charging for the personal use of facilities by individual inventors. Implementing such changes to support an idiosyncratic policy is not an attractive option.

7. The RPC considered a number of options including the maintenance of the status quo, and an earlier proposal for joint ownership by inventors and the University, as suggested by the Management Committee of the Wolfson Industrial Liaison Office in 1999. The RPC took into account the practices of other universities in the UK and the US, and noted particularly the recent revision of policy by the University of Oxford. The relative merits of various options were considered and external legal advice was obtained on a number of issues.

8. As a result, the RPC have recommended that, subject to the 1977 Patents Act, the University should assert ownership over all intellectual property generated by its employees in the normal course of their duties, with the exception of copyright in normal academic forms of publication including books, articles, and lectures or other similar works generated by staff, unless those works have been commissioned by a sponsor or by the University. This option is consistent with practice elsewhere in the UK.

9. The RPC considered three possible ways by which the University could assert ownership

(i)	of all intellectual property generated past, present, and future by all employees where it has not been licensed, assigned, or is in any other way subject to third party obligations;
(ii)	of all intellectual property created after an agreed date by all employees;
(iii)	of all intellectual property created by new employees who join after an agreed date.

The University of Oxford initially chose the third option in 1995, when they made a similar change in policy, but have, in the light of experience, more recently switched to the first option as their policy, after receiving advice from Counsel that changes in individual employment contracts were not required. Advice from the same Counsel who advised Oxford, on the contractual implications for Cambridge of the above policy options, supports the current proposals.

10. Employees' contracts are subject to the Statutes and Ordinances of the University, and those issued since November 1998 state that an employee is 'required to observe the University's policy on Intellectual Property Rights as may be decided by the Regent House from time to time'. The question was therefore whether such a change in policy might have an adverse effect on individual contracts of employment. Counsel's opinion was that 'The University can change its current practice by introducing a new policy. This policy should be incorporated into the University's Statutes and Ordinances.' He further stated that 'There are, however, potential problems in the University attempting to change policy in order to assert rights in relation to past copyright and inventions. An attempt to do so may well amount to a breach of the implied term of trust and confidence between employer and employee.'

11. MIT and Stanford in the US, and UMIST in the UK, have intellectual property policies that leave the ownership of intellectual property not generated from research funded by external bodies with individuals, unless substantial or significant use of the university's own resources were made in its creation. Disclosure of such intellectual property is required at Stanford and UMIST whilst MIT requires a disclosure of all intellectual property generated by its faculty so that a formal assessment can be made of whether or not such use of its resources has been made. Substantial or significant use is deemed to include use of university (mainframe) computers, software and associated documentation, involvement of other staff and students in exploitation activities, and granting external agencies privileged access to facilities, research results, and confidential information. Routine use of PCs, offices, libraries, etc., is generally excluded.

12. As a result of the above considerations and on the advice of the RPC, the Council and General Board recommend that the University adopts the second option (ii) in 9 above and approves the policy set out in the Annex to this Report. The policy will only apply to inventions made by employees in the normal course of their duties. Inventors will be expected to disclose all such inventions using the existing procedures within the Research Services Division. Inventions made in the course of consultancy will be excluded and due care must be exercised that any such intellectual property is clearly differentiated from that made in the normal course of duties and that no conflicts of interest with those duties are created when undertaking consultancy work. The time and location of the making of inventions are not relevant to the interpretation of the 1977 Act, or to the present policy.

13. While the Council and General Board recommend that primary ownership of intellectual property should be with the University, and that initial disclosures should be made to the Research Services Division, they wish to see that all inventions continue to be exploited successfully for the mutual benefit of the inventors, the University, and society. They would not wish to change current practices whereby the inventors are actively involved in the exploitation process and, in many cases, are the appropriate persons to take the lead in that process. As is also current practice, the University may disclaim and assign its rights in inventions to the inventors in cases where the inventor is keen to commercialize intellectual property but the Research Services Division is unable to support such commercial development.

14. There is considerable case law and experience available to help resolve questions of ownership of intellectual property rights but, in the event that the Technology Transfer Office is unable to resolve satisfactorily any questions of ownership, the following dispute resolution procedure is proposed. The complainant should inform their Head of Department or, if the complainant is a Head of Department, the Chairman of the relevant Council of the School, and then submit their case to the Intellectual Property Sub-Committee of the Research Policy Committee. If this Committee is unable to resolve any such dispute, it will be referred to the Centre for Dispute Resolution for mediation, following the procedure described in the University's current Model Collaborative Agreement.

15. The policy will allow the University for the first time to maintain a comprehensive record of the commercialization of its intellectual property, which is likely to have a positive effect on the allocation of any future 'HEFCE Third Stream Funding' and in its dealings with the Government, sponsors, and other third parties.

16. The Council and General Board recommend that approval be given for the implementation of the policy on the ownership of intellectual property rights as set out in the Annex to this Report, with effect from 1 January 2003.

22 July 2002	ALEC N. BROERS, Vice-Chancellor	S. LEATON GRAY	G. A. REID
	TONY BADGER	IAN LESLIE	JEREMY SANDERS
	JOHN BOYD	PAUL LEWIS	M. SCHOFIELD
	PETER GODDARD	A. M. LONSDALE	LIBA TAUB
	D. A. GOOD	JAMES MATHESON	R. E. THORNTON
	GORDON JOHNSON

10 July 2002	ALEC N. BROERS, Vice-Chancellor	KATIE CHILDS	A. C. MINSON
	TONY BADGER	ANDREW CLIFF	KATE PRETTY
	P. J. BAYLEY	S. LEATON GRAY	M. SCHOFIELD
	N. O. A. BULLOCK	PETER LIPTON	S. J. YOUNG
	H. A. CHASE

ANNEX

University policy on the ownership of intellectual property rights

Definitions

For the purposes of this policy:

'IPR' means all rights arising from intellectual property devised, created, or made by staff in the course of their employment by the University whether those rights are capable of registration or not, the most common forms arising from academic research being patents, know-how, confidential information, and copyright in the form of designs, software, and associated documentation.

'University' means the University of Cambridge, or its designated nominee company, currently Cambridge University Technical Services Limited.

Statement of policy

1. Subject to Clause 2 below, and the provisions of the Patents Act 1977, except where the University has agreed otherwise, IPR arising from intellectual property devised, created, or made on after 1 January 2003 will be owned by the University;

2. The University will not claim ownership of copyright in normal academic forms of publication including books, articles, and lectures, or other similar works generated by staff, unless those works have been commissioned by a sponsor or by the University;

3. Where revenue is generated by the exploitation of IPR, any net benefit received by the University, after deduction of agreed costs, will be shared between the inventor, his or her Faculty or Department, and the University on the following terms, which shall be revised from time to time.

For the avoidance of doubt these figures do not address situations where equity in companies is allocated to inventors.

4. This policy supersedes the policy on the ownership of intellectual property rights generated by externally funded research approved by the Regent House on 30 March 2001, with respect to all IPR devised, created, or made on or after 1 January 2003.

5. Assistance with the implementation of the new policy may be obtained from the Research Services Division.

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Cambridge University Reporter, 24 July 2002
Copyright © 2002 The Chancellor, Masters and Scholars of the University of Cambridge.