Learning Tuesdays: Program Transcript
Understanding SUNY’s New Patent and Inventions Policy
General Overview of the Program:
Participants will:
-Learn about the new SUNY Patents and Inventions Policy;
-Be walked through the technology transfer lifecycle;
-Be prepared for typical activities and challenges you may face when you begin the commercialization process;
and,
-Have the opportunity to ask questions of the presenters.
Carolyn Mattiske:
Welcome to Learning Tuesday. I’m Carolyn Mattiske, Learning and Development
Manager for the Research Foundation, and I’m pleased to introduce today’s
program, Understanding SUNY’s New Patent and Invention Policy. I want to
welcome our research foundation leader who has joined us today as our
moderator, Ms. Heather Hage. She is our Senior Director of Innovation and
Partnerships. And later in today’s program we’ll be joined by Ms. Elise Puzio,
Assistant Counsel and Secretary of Patent and Invention Policy Board for SUNY
System Administration, as well as Mr. Matthew Mroz, Assistant Director of
Innovation and Partnerships.
Heather will address as many of your questions as she can today during the live
program. To have your questions addressed, you may email the studio or use
the chat feature through live stream. Email should be directed to
[email protected] and we’ve already gotten a couple of questions in, which is
great. And alternatively, you can also use the chat feature through live stream
to submit your questions and interact with the full audience. This information
will appear at the bottom of the screen throughout today’s program so please
send your questions along.
With that, I will turn it over to Heather to get us started today. Thank you,
Heather.
Heather Hage:
Thank you, Carolyn. Good morning, everybody. I’m Heather Hage, Senior
Director for Innovation and Partnerships at the Research Foundation and this
morning I’m going to give an overview of SUNY’s new patented inventions policy
with an eye toward a brief historical perspective on the rationale for why SUNY
is implementing a new policy. Talk through the tech transfer life cycle a bit to
show how the new policy will operate in the new environment, give you an
opportunity to ask questions. And at the end we’ll transition to a video where
you’ll get to see our very professional acting skills displayed as we try to take
you through sort of a simple scenario to explain how the new policy will actually
apply in practice.
So to get started, I’m going to take us through a little bit of the history. So in
2011, Chancellor Zimpher, after her immersive learning experience and getting
to know our campuses and what our challenges are, issued a charge for the
system to work on modernizing its intellectual property and innovation
environment. After hearing from the front lines across campuses some of the
challenges we experience in trying to work with industry partners in
transitioning intellectual property from inside the university out to partners that
can turn our technology into products and services that can ultimately have an
impact on human health and welfare, the Chancellor took very seriously the
need for us to take a look at our policy environment and see what we needed to
change to be more enabling to the academic environment.
So to do that, the Chancellor charged a SUNY patented inventions policy board,
it’s a ten member body you see reflected here on the slide. It’s a rather diverse
group of people. The group represents various levels of leadership and
participation all across our campuses, different types of campuses, researchintensive locations, academic medical centers, comprehensive schools,
agriculture and technology schools, faculty and staff, attorneys and also two
members of business and industry who lent their perspective to what SUNY
could be doing to be more modern and to bring in partnerships from industry
who can afford both applied learning and experiential learning, opportunities
for our students and applied research opportunities for our faculty and staff.
This is the group that exists today. Just for clarity, the membership has changed
over time as individuals have come in and out of our environment. But the
diversity you see reflected here is generally representative of the composition
of the board over time.
Interestingly, the Patents and Inventions Policy Board existed prior to the
Chancellor’s charge. Uniquely, SUNY’s Patented Inventions Policy is not just a
policy but a regulation. And included in that regulation was a requirement that
SUNY maintained this board. So it was an existing body that was reinvigorated
by the Chancellor’s attention to the issues that needed some focus in our
current environment.
So this group for a period of about 18 months heard from faculty and staff alike
from all across our research enterprise to – testimony would be too formal a
word, but individuals appeared and told their stories of research and innovation
across the SUNY research enterprise, and in doing that tried to focus in on the
things that were really challenging, identifying the barriers to effective transfers
of technology and effective collaboration in industry that were really due to our
policies, as distinct from external market forces and things like that.
So hearing all these issues from all across the enterprise, this board then took
those issues, turned them into recommendations to amend our policy and
presented them to the Chancellor.
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I’ll try to quickly go over exactly what the board heard to be the current
challenges in our environment, what the new policy proposes to do to address
some of those challenges. But if this is a topic in which you’re particularly
interested and you want a deep dive on any of these subjects, you can go back
to Learning Tuesday that we did just about a year ago on September 29, 2015.
It’s in the Learning Tuesday archive where Elise Puzio from SUNY Council’s
offices, also the secretary to the Patents and Inventions Policy Board, who really
led the charge on that initiative. She and I really took a deep dive on each of the
topics that I’ll cover just briefly today. So if you’re interested in understanding
more, look for that September 29, 2015 Learning Tuesday episode in the archive
and you can get a lot more information there, in addition to asking questions
today. When we conclude, I’ll be happy to address any questions that you have.
Okay. So here’s what the board heard. Here you see a rather typical scenario.
This is a real mainstream and innovation type scenario where we have two
members of our professional staff, faculty researchers working together in the
lab. They’re using SUNY facilities. They’re working as part of their employment;
they’re working within the scope of their employment for the University and
doing a sponsor project. That’s really the mainstream situation and that will not
be disrupted by anything you’ll find in the new policy.
But here are some of the variations of the facts that the board heard that led us
to look deeper into resolving some ambiguities that existed in the current
environment. So what if this work is being done not in a university facility
perhaps by those same individuals, but what if they’re doing it at home in their
basement or their garage? Are those circumstances different than if they’re
performing the work in the university lab? And how are they different? What
does that mean? Who owns intellectual property that is created under the
various sets of circumstances? So this is an issue that the Board took a lot of
time to understand in the practical environment, how are people creating these
things and what are the best practices for University policy making and
ownership of intellectual property created by its people or with the use of its
facilities.
So the two part test that SUNY is adopting in its new policy is one that looks first
at the scope of employment, of the individual who is employed by SUNY. And in
that sense when I say SUNY or the University, we mean it in the global sense. If
you are part of the SUNY family. Whether your payroll happens to be SUNY or
the research foundation, a campus foundation, wherever your payroll might be,
if you’re part of the SUNY family and you owe an employment obligation to the
University, if the work is done within the scope of that employment, then the
University will assert ownership in the intellectual property you create.
By the way, we’re talking here about patents and inventions. So copyrightable
works, textbooks, curriculum, things that, that’s all far beyond the scope of
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what this policy is focused on. This is about patents and inventions.
The second part of that test. Number one is scope of employment. Number two
is a question of whether you’re making substantial or insubstantial use of
University facilities. These definitions are very well fleshed out in the policy
itself, but the essential question is whether your use of the facility was really
necessary for the creation of the invention. Some type of insubstantial use or
use of a piece of equipment that was not essential to the creation of the
invention will not give rise to an ownership trigger by the University. So if you’re
using your University laptop to send an email, that’s quite different than using a
piece of highly technical equipment that’s fitted out in the lab. So that’s the
second part of the test, scope of employment and substantial use of University
facilities will give rise to the University’s ownership of an invention.
If there remains any ambiguity or a question as to ownership under the new
policy in one of those circumstances, then there is a process for the patents and
inventions policy boards, a sub-committee of that group actually, to take a look
at the facts and circumstances and give a definitive answer to the individuals
who are affected by it. So we recognize, I think, in putting together this policy
that there’s no perfect answer. There is a best practice and we are adopting the
best practice to the extent that complications or complex circumstances leave
ambiguity, there is a process to seek relief and to get a clear answer above and
beyond the players at the campus. It goes up to a board committee that will
pass on the circumstances.
One other thing maybe to just bring up here. One of the key pieces of the
current policy that created a lot of confusion on the part of our faculty
researchers is the concept of own time. That’s something that was prominent in
our current policies, soon to be old policy. That’s where a lot of the confusion
came in because you see the individuals working here. It might be 2:00 in the
morning when they’re doing that experiment. So is that on somebody’s own
time? Are our researchers expected to be on a 9:00 to 5:00 schedule? The
concept of what is done on someone’s own time really added a level of
complexity and created a lot of confusion among the faculty we hope will be
addressed by the present changes. So that’s something also we spent a lot of
time on, and that own time loophole or gap is no longer in the new policy.
The other set of circumstances that the board spent a lot of time looking at is
what happens when students are involved in either one of these scenarios.
Today, as most of you know, on campuses we have things like robotics clubs and
entrepreneurship clubs, innovation clubs, all sorts of activities in which students
are really empowered and engaged in entrepreneurial ventures and in highly
innovative activity. The old policy treated our faculty and students exactly the
same. Our old policy said anything that you do using a University facility is going
to be owned by SUNY. So in a certain way, our old policy was supra-maximalist.
It wanted to own everything that’s done under the auspices of the University.
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And in the case of students, the board really felt that that wasn’t an appropriate
treatment. Our economic relationship with our faculty and staff and with our
students are inverted. It was cause to really take a fresh look at how University
Innovation Policies treat students, what the implications are for students, and
the new policy takes a fresh approach to that.
So there are significant exceptions for student created IP. The presumption now
instead of that the University will own, the presumption is that the student will
own intellectual property that he or she creates, but subject to a lot of
exceptions. So again, going to the typical scenario where a student is working in
the laboratory above there with the two faculty members, they’re working on a
sponsored project, they’re employed as a research project assistant or in some
way really working under the direct mentorship and guidance of a faculty
member on a project in our of our laboratories making substantial use of our
facilities, then that’s a different situation not subject to the exception, and the
University will own that IP consistent with the ownership of the faculty member
who would be advising them.
So you’ll see in the new policy a fresh treatment for students, a lot more leeway
for students to be innovative and creative, but also affording students the
opportunity to work with the University if they so choose. So in every case, if a
student has even an invention that he or she owns outright, they are
encouraged and welcome to come and talk with one of our technology transfer
offices and get some help on patenting, on licensing, on commercialization
planning. Our doors are always open to the student population to come in and
get some help and we’ll figure out how to make that happen. So that’s one of
the key pieces of the new policies, a fresh look at student innovation.
So changing gears a little bit, one of the other major things we heard come
through in some of the challenges at campus level is the strict application of our
patents and inventions policy to non-patentable IP. So you see in the slide here
various compositions of the types of things that normally come up in this
context. Antibodies in some cases, cell lines, skid mice, even software to a
certain extent can have commercial value, can be desired by the private sector
to be transferred from the University. You see agreements of this certain type,
material transfer agreements or license agreements to software and user
license agreements. There are all sorts of variations of the types of transactions
that we use to transfer materials from the University to the private sector.
Speaking specifically of industries, not transfer between academic institutions
but to for-profit partners, the old policy didn’t consider that often if you’re
working and producing material in the context of a federally sponsored award,
there are program income requirements. There are other requirements that
flow down from that government funding to which we have to comply, and in
some cases that created a conflict with our current policy.
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Also, some campuses really wanted to create an incentive structure for faculty
to share in the revenue generated when we transfer those types of materials,
and under the old policy that became very complicated. So to enable that type
of incentive for campuses who want to reward their faculty for engaging in that
type of activity, the new policy is empowering to that.
Computer software represents a really interesting and quickly developing area
of policy making for universities. But again, remember the differences and what
the test is. It’s not that we’re saying all computer software is owned by the
University. No. It’s inventions that are created meeting that two part test that
we talked about with the substantial use of University facilities and within the
scope of your employment that would be owned by the University. So that’s
another key area the board looked at and offered some recommendations to
change.
Then the final point is on the finances. This is a piece that took quite a long time
for everybody to really understand the different dynamics that are at play. The
essential issue comes down to our current policy distributing royalties to
inventors based on the gross royalty received from licensing and inventing
where the overwhelming majority of public and private institutions in the
United States distribute loyalties on net.
There are several reasons for that. One is the alignment of incentives between
the faculty and the administration. It’s becoming more and more common,
particularly in drug development and discover, that if we develop let’s say a
compound and license that out to a pharmaceutical company and the
pharmaceutical company enters the market to see that drug, it’s very likely
they’re going to face litigation from generics manufacturers and others who
would seek to destroy or invalidate that patents.
So more often, universities find themselves being joined as a party in that type
of litigation. And of course to defend those cases is quite expensive. So if you’re
in that situation where a product is successful, it has some market success, but
the University has legal expenses to be offset by the royalties, that’s a situation
where those legal expenses should be charged off against the royalty before
_____ to the benefit of individuals. That’s one of the types of scenarios the
board looked at.
We had several instances, real life key studies, from SUNY to talk through as we
tried to figure out what the right approach is for the treatment of royalties. In
the vast majority of other cases, though, though the calculation will be moving
from a gross distribution to a net distribution, in many cases we think that won’t
have as significant an impact as it may seem on the surface.
It’s a very common tactic for our technology transfer professionals at least here
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at SUNY to seek reimbursement of our expenses from a partner at the point of
licensing. So if we have royalties coming in, that means we have a partner. And
if we have a partner, it’s very likely we’ll work with them to absorb patent
expenses going forward and to reimburse us for expenses to date.
So while on its face that may seem like a big change and in some cases it
certainly will have an impact, in the vast majority of cases I would expect the
finances to sort of continue uninterrupted but for we’re actually increasing the
percentage the faculty members will be able to share in from the overall royalty
revenue. So whereas our former policy distributed royalties on gross, 40 percent
of the gross would be distributed to the inventor. Under SUNY’s new policy, for
the first $100,000 of revenue, the inventor will receive 45 percent rather than
40 percent of the revenue coming in, and then 40 percent thereafter. So there is
a silver lining to that, too.
Okay, so that’s another issue that the board spent quite a bit of time on. And I
think you’ll see, further to the comments about how it works in practice, when
we go forward we’ll play our video clip for you, I think it will become a little
more clear how that will apply with the mechanics of that when we work
through the technology transfer life cycle.
So the final point that the board spent quite a bit of time on was just focusing
on this era of collaboration. And what it really means for academia and industry
to collaborate together in a way that is effective and that ultimately results in
the work of our research enterprise making its way into the hands or the lives of
the broader public.
So for that to happen for the outputs of our research enterprise to really be
translated into cures and products that can have an impact on people’s lives and
improve human health and welfare, we have to ensure that our policy
environment is fostering that type of collaboration and not putting up artificial
barriers. So that was a big piece of what the board looked at.
So from that perspective, one of the major changes is we no longer will
prescribe who owns what in the context of an academic industry collaboration.
The sole requirement when putting together an academic industry collaboration
from the point forward of our new policy is that it would be reduced to writing.
Not that any one person, not that the University owns everything, not that the
partner owns everything, but that the parties will work together in good faith to
create a written agreement that makes that determination. So a collaborative
process to lead to more collaboration. That was really a key piece that the Board
felt was really important to fostering collaboration at SUNY.
The second thing is a key tenant that you’ll see woven through all the elements
of the new policy and how you’ll find our tech transfer professionals and others
in our learning environment conducting ourselves in the new policy is that
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consultation with the faculty member is key. So any decision that will be made
in the context of the ownership of inventions of the licensing of inventions will
be done in consultation with the faculty member.
So as I describe here, in an academic industry collaboration, the voice of a
faculty member should weigh heavy in the minds of our administration as we
make decisions about how to structure this type of collaboration.
So taking it from there, that’s the high level overview of changes that will be
made. If you want a deep dive on any one of those topics as a referenced
previously, please go back to the Learning Tuesday archive from September 29th
of 2015 and you’ll find a Learning Tuesday there when Elise and I went much
deeper into the subject matter around each of the areas of change from the old
policy to the new policy.
But looking forward, what we tried to do in filming this skit in advance that we’ll
play in just a minute was to really walk you through the technology transfer
process using a rather mainstream example. So there are a lot of different ways
this process can be run depending on the type of technology, the type of
partner we’re trying to work with. There are a lot of variants, but we tried to
pick a rather mainstream scenario to walk you through the one, two, three,
four, five, six, seven, eight, the eight stages of the tech transfer process as the
Research Foundation facilitates it for SUNY.
So in the graphic on the slide, this is how we boil down the essential process.
Beginning at the top with discovery, that’s where one of our faculty members or
a researcher is working in a University lab within the scope of their employment
making substantial use of University facilities and they create something he or
she believes is novel and is a substantial invention. They will then move through
a disclosure process where the individual creating the invention will submit a
form – it will be explained in our clip – submit a form to disclose the invention to
the Tech Transfer office and then the Tech Transfer office will go through an
evaluation process looking at the patentability and the marketability of that
invention to decide whether to move it forward to IP protection. That’s
generally filing patent applications and securing the patents to protect the
invention.
Once we get through that, and often at the same time, we’ll move through a
customer discovery process where we’re looking out at existing market players
to figure out where this might fit, what sector is it a part of, who is interested in
it, how could it be made into a product, what are the potential applications and
who do we know, who is in our network, who might be able to give us some
insight into the most likely path for this type of technology. That’s what we do in
customer discovery.
And then in partnering, in that customer discovery process, we’ll cross paths
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and talk with a lot of different industry partners who might be interested in
sponsoring research around the technology, who might be interested in
licensing it, in somehow collaborating on it. that’s what we find in the
partnering process is figuring out who are the right partners that the University
needs to be working with to advance the innovation such that it can make its
way all the way around and get into the hands of the public.
Once we’ve got it partnered, we expect the private partner to turn it into a
product. That’s something that we can contribute to as a university but we don’t
make and sell products. That’s for the private sector. So the private sector will
engage in that product development effort.
If they’re successful and make a tremendous investment to turn our usually
early stage technology into a product, then that’s when it eventually makes its
way into the hands of the public, at some point will be paid a royalty, and those
royalties come back and our fed into the discovery process. The University’s
portion of any revenue that derives from the royalties that come in has to be
rededicated to academic research and innovation. And that brings us right back
to the discovery process.
So that’s a high level overview of the tech transfer process. I just took us
through at a very high level the upcoming changes to SUNY’s Patents and
Inventions Policy. And next we’re going to queue up a video that we made, a
little skit of our staff and other colleagues just sort of acting out in a sort of
quick and high level enactment of the typical tech transfer process and the life
cycle that I just described, and how we work with faculty members and how we
work with industry partners to start from the discovery phase and bring us all
the way around to public use, financial returns, so we can continue to support
research and discovery at SUNY. So we’re making light of very complex subject
matter, so I hope you will forgive us for our poor acting skills and understand
this is us trying to oversimplify complex subject matter in a way that may even
be a little bit funny. So please enjoy, and then we’ll come back and answer
questions.
[Play video]
Okay, welcome back. I hope you enjoyed our skit and I hope it helps you to
understand, at least at a high level, how we make our way through the
technology transfer process here at SUNY.
While the video was running we got a couple of questions so I will read them
and do my best to answer each of them.
The first is what is the legal framework that regulates the relationship between
the RF and the inventor? Is it New York State Partnership Law?
Okay. No, it is not New York State Partnership Law. The Research Foundation’s
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relationship with SUNY is governed by what we refer to casually as the 1977
agreement. It was an agreement executing in 1977 between the Research
Foundation and SUNY, and that’s the fundamental document that governs the
relationship between the Research Foundation and SUNY.
The RF’s relationship with an individual inventor, it’s highly variable dependent
upon who the inventor is. If it’s someone who comes from another company
versus someone who is an employee with SUNY. It can be variable. I’m not sure
directly the context of the question. So the answer is it depends. But in the
context of the process that we’re talking about today if you’re a faculty member
working through this technology transfer process, when you submit your
invention disclosure to SUNY and assign the invention to the RF, that’s the
document that embodies that essential relationship as the assigner, the
inventor of a patent and the assigner and assignee relationship.
I would encourage maybe the asker to submit a follow up if I didn’t answer your
question. I’m not sure I understand the origin. But it is not New York State
Partnership Law that governs the relationship between the RF and inventors.
Second question. Let me read it. the proposed policy changes the deadline for
RF to decide on whether to file a patent on a disclosed invention from six
months to 12 months. With the current patent law, that gives the patent rights
to the first to file rather than the first to invent. This deadline extension
increases the likelihood that RF will lose the patent rights to a non-RF party
somewhere in the world that happens to file before RF. This change is thus
highly undesirable. Please clarify.
Okay. So a couple of points there. The intent with adjusting the time line and I
should have talked through that in my introductory remarks in the overview;
forgive me for that. but again, if you go back to the September 29th issue,
there’s more on that topic.
The intent of the board in extending the time line was really to true up the
policy to reality. When we talk through what actually happens and how long it
takes to evaluate inventions and make decisions in the present context. The
other things the board heard as we were working through these issues is that
the timing of patent filings is really driven primarily first by whether or not the
inventor intends to make a public disclosure and what we have found in the
evaluation process as to the state of the prior are the other patents and
publications and other information in the public domain and its bearing on the
present invention.
Those two drivers have significantly more impact in how a decision is made
rather than the arbitrary time line that’s in one of our policies. But the intent in
making the change in our policy was to align it with federal standards. So there
was in the past on conflict between when you create an invention using federal
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funds and the time period you have to elect title in connection with that
agency’s funding is longer than the six month period that was allotted in SUNY’s
patents and inventions policy. So the board took the step to align those two
things.
So just going back to the question, there shouldn’t increase the likelihood that
RF will lose patent rights to a non-RF party because the issue about the timing of
our filings is really driven by whether or not the inventor intends to make a
public disclosure and the findings of our evaluation process.
Second question. Same asker, I think. The proposed policy changes the royalty
from a percentage of the gross to a percentage of the net, with the net income
being obtained by deducting the out-of-pocket expenses from the gross income,
thus SUNY may outsource all the work, even the evaluation of the invention
which is different from patent filing and prosecution so that all of its expenses
will be out-of-pocket. Please clarify.
Okay. So first in the policy itself, you’ll find the definitions for the various
categories of out-of-pocket expenses that can be charged. And then within the
Research Foundation’s own procedures that we use to implement the policy,
those categories are further narrowed. Those are not public yet because they’re
still in the development process working with all of our campuses, just for
clarity. But they will be posted to our website by the time the regulation is
formally enacted by SUNY’s board of trustees. I’m not sure the right way to do
that follow up. Maybe we’ll do another session like this. I think we have one
scheduled in December and April if I’m not mistaken; Carolyn can correct me on
that. So we can walk through those next time around, if that’s helpful.
But just know that the RF procedures do articulate exactly what type of invoices
and that type of thing can be charged against this. So I think you’ll find there
shouldn’t be a tremendous concern about the broadness of those expenses.
They’re very narrow.
Second of all, I guess is it possible that SUNY could outsource its entire tech
transfer process and try to charge that against royalties? Is that a thing that
could possibly happen? It’s possible. But that was not the intent in changing the
policy to work this way. It’s really just to deduce the rather routine expensing
that are attendant to these cases to ensure that we have built a program that is
sustainable. Which is in keeping with best practices across the country and
globally. So I don’t think it’s a likely outcome that SUNY is going to elect to
outsource its tech transfer process so that it can deduct all the expenses. That
was just not the intent in framing the rules this way.
I think there was one more. Since there is no legal entity or organization to
represent SUNY inventors, can RF provide a list of SUNY inventors with the goal
of allowing inventors to talk about their needs and goals?
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That’s an interesting question. That sounds a little to me like what the RF does
with our mentoring program where we pair mentors and protégés. That’s
actually a very interesting suggestion. To respond to it on the fly, I can’t
necessarily commit that we will do all of that. but I’m going to take that as a
suggestion to bring back to the Research Foundation leadership team as
something we could consider opening up our mentor protégé process to
inventors to work with each other, perhaps people that have been through the
process before being paired with people who are new to the process so they
can talk about their experiences and offer comfort perhaps when you’re
working through that commercialization process. So thank you for that
suggestion.
Carolyn, do I have any other questions? Are we good to go? Okay.
If we’re all done, then thank you for taking the time to attend today’s program.
The next Learning Tuesday program is scheduled for October 25th and we’ll
focus on open enrollment and a fringe benefit update. In addition to learning
about the new rates and health plans and benefits, participants will also learn to
relax, recharge and refocus during the work day. Our EAP partners will show us
breathing techniques, yoga, stretching and mediation, all of which can be done
from our desks. Learn more about this program and all upcoming programs on
the RF website. There are a variety of programs scheduled for the coming year
and into 2017 so you’ll want to take a look. Register in advance for any program
you’re interested in and you’ll be sent a convenient reminder and a link to the
live stream.
Keep spreading the work on your campus about the learning and development
programs that will benefit your colleagues as well.
Thanks again, and have a great day.
[End of Audio]
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