All reviewed policies give a brief statement of the importance of the research and graduate studies parts of the university mission, and the intent of the IP policy to support those aspects of the mission. This is usually accompanied by a statement that the policy is not meant to promote commercialization for its own sake, but that commercial income can help drive the research enterprise in a climate of shrinking government support. Accordingly, it is well accepted that the exploitation of IP should include financial benefits to the creator personally and to the university's internal research fund. Also recognized is the fact that commercialization of IP is a form of dissemination and of direct utilitarian benefit to society at large, both of which are well established goals of the university. The Queens document includes a good treatment of underlying principles.

In varying degrees, IP policies address the legal aspect of ownership as it relates to employee/employer relationship. In the industrial model, any IP created by an employee is, by law, automatically owned by the employer. The employee is named as the creator of the work but has no right of ownership, unless granted by the employer. The same law applies to the university as an employer, and therefore IP policy must state that the university waives this automatic right to full ownership. Other clauses in the policy may reclaim part or all university ownership based on the particular circumstances of the creation of the IP.

2.3 Applicability

Most IP policies apply to all members of the university, including students, staff and faculty. Although some rights of students may differ due to student/faculty relationships (normally accounted for in graduate studies policies) and the differences between student and employee roles, students are given the same opportunity to share in the benefits of IP. For example, Ottawa states: "... all members of the university community are treated in the same way, regardless of their status as faculty members, students or support staff and all are entitled to the same consideration."

In some cases IP policies are supplemented by other related documents such as publication policy and graduate studies policy. To get a complete picture of student rights within SRC activity one would have to consult such related policies; this was beyond the scope of the present review. Another complication is the fact that some universities (Guelph, Windsor, York) include part or all patent and copyright policy within the collective agreement between faculty and the university, thus excluding students and staff (from those documents).

2.4 Repayment of Resources Used

All policies require that any university resources used in the process of creating the IP, protecting it, developing it to the commercial threshold and licensing it, be paid for out of the income that it generates. Such resources can include university funds, staff time, and any other resource used directly in the creation of the IP, but does not include the regular salary of the creator. Repayment is normally covered by a fraction of the university share of the proceeds and the total amount is paid down over time.

2.5 Ownership Conditions

The following is a partial list of ownership criteria, common to all universities reviewed.

1. If a staff or faculty member is directed by the university to create an entity which has IP value, for the express purpose of supporting the normal operation of the university, the IP is owned fully by the university; eg, software program written by computing centre staff on university time.
2. If IP is created in the process of pursuing research which is funded by a grant or contract, where the sponsor does not claim full ownership, where the university administers the grant or contract, and where university facilities are used in the research, the university has claim to at least partial ownership.
3. All policies recognize ownership of IP by an external sponsor as stipulated by the terms and conditions of the grant or contract involved.

There is an understood distinction between ownership and the sharing of the net proceeds of IP, although not generally articulated. Ownership gives the owner the right to make decisions on whether to exploit and how to exploit IP. Ownership also carries all financial and other responsibilities (eg, patenting and development) associated with exploitation. If ownership is jointly held, the parties must consult and come to agreement on all decisions and financial contributions, presumably with weight of input proportional to percentage ownership.

The proportion of sharing of the net proceeds is often different from the share of ownership. For example, if the university has full ownership, the creator of the IP may receive a royalty depending on his/her contribution to the work and the circumstances under which it was created. If a faculty member has full ownership, the university will usually receive a royalty, a part of which is used to repay any resources used directly in the initiative.

2.7 Creation vs Development of IP

Also understood but not always clearly articulated is the distinction between the first step of creating IP and then the often arduous task of developing it to a level where it has appeal in the marketplace. To illustrate, consider a patentable idea arising directly from a research program. The creation of this idea may have taken years of dedicated research effort and therefore this phase carries a substantive portion of the total value of the inventiveness. Obtaining a patent for protection, although a critical step in the ultimate success, usually represents a relatively minor contribution in terms of effort and associated cost. The final phase involves the development of a product to the level of a manufacturable prototype, or the development of a process capable of conclusive demonstration, before any company will consider a licence agreement to manufacture and distribute. This is often the most problematic phase since it tends to be costly and does not necessarily fit within normal university activity.

The reviewed policies use the term 'development" in the list of steps that may represent university costs, or fees paid to an external development agency, or a great deal of personal effort by the IP creator. In any case, the IP must be carried through the development phase by the appropriate champion before licencing or sale can be contemplated. The Guelph policy is most explicit in this regard.

2.8 Other Common Elements

Other common areas among the policies reviewed include:

1. the university always retains the right to use the IP internally for research or teaching purposes;
2. the university maintains the prerogative to decide whether or not to take on part or all of the responsibility for the protection, development, and licensing of IP owned exclusively by a member of the university (there is no automatic commitment);
3. when IP belongs to an individual it is his/hers to protect, develop and commercialize;
4. the creation of IP is always attributed to the creator regardless of ownership.

There are many complex aspects to forging an IP policy that will need to be addressed by Ryerson. This section deals with only a few of the more fundamental considerations, and provides suggestions to facilitate the process of drafting policy.

3.1 Structure of Policy

Existing Ryerson policies that cover ownership and patents are not only confusing and incomplete, but are unnecessarily complicated by their separation into three independent documents. It is recommended that the new draft be a single document on all aspects of intellectual property, including subsections on patents and copyright. It may be useful to subdivide applicability issues into the three main constituent groups on campus, students, staff and faculty, especially since graduate studies policies are not in place yet to cover students. However, it may not be practical to incorporate issues related to publication policy, which although related, would be more effective as a subsection of general SRC policy (which also needs review and revision).

3.2 Existing Models

It is unlikely that the Ryerson policy will require any major elements that do not exist presently in the university system. The policies reviewed herein contain appropriate models from which the Ryerson policy can be drafted selectively. Adjustments can be made to accommodate any special circumstances associated with SRC activity at Ryerson.

3.2 Guiding Principles

In the drafting of statements of intent and of reaffirmation of mission and goals, an excellent reference would be the Report of the Senate Ad Hoc Committee on Intellectual Property at Queens. This report encompasses a complete review of IP issues at Queens while articulating a balance between academic principles and commercial considerations. It also gives a historical perspective on certain policy changes and contains recommendations which have since been approved as current IP policy. Despite the differences in positioning between Queens and Ryerson, the report could serve as a guide in the early stages of drafting policy.

3.3 Ownership, Royalties and Disclosure

Ownership and royalty shares should reflect both the importance of the creator and the extent to which he or she has been involved in the development phase. In this regard, three axiomatic realities should be kept in mind.

1. Creating IP which has appeal in a highly competitive commercial world, while carrying a heavy teaching load and conducting SRC activity under the combined pressure of securing and supervising graduate students, maintaining external funding, and publishing results, requires a high degree of personal commitment and dedication.
2. Developing IP to a level where it can be sold or licenced is also an undertaking of major proportions.
3. The creator of the IP is normally the most effective person to champion the initiative through to success.

In accordance with the foregoing points, it is recommended that the policy allow the creator the option of full ownership of the IP. Of course, this will require certain stipulations that will give the university the right to an appropriate royalty.

In the author's experience, each IP initiative is unique. This suggests that the policy should provide guidelines but should maintain flexibility; hence the above recommendation to allow the creator the option of ownership. Similarly, it is suggested that the share of net proceeds between the creator and the university be negotiable within reasonable guidelines.

Should policy include an obligation to disclose all IP to the university? Experience shows that individuals in the university setting respond better to well placed incentives than to hard and fast obligations. If policy gives the IP creator the option of full ownership, disclosure of potential IP by all members of the university will likely be maximized. Conversely, undue possessiveness on the part of the university will, in many cases, cause faculty to ignore any stated obligation to disclose. This has the ultimate effect of forcing inventiveness underground, with attendant deterioration of trust and satisfaction, and with no reputational or financial benefit to the university.

3.4 Administration of IP Policy

The value of a policy to the university and its members lies in its content and how effectively it is administered. The administrative dimension includes a myriad of items ranging from detailed procedures and forms to the overall institutional structure required to process IP initiatives. This section deals only with the latter.

Since Ryerson is an active member of the IP Consortium with Mc Master, Toronto, Windsor and York (funded by NSERC), it makes sense to take full advantage of the resources and services available from that partnership. As a member of the Consortium, Ryerson has, access to the services of the Innovations Foundation, originally established by U of T for its own initiatives. Presently, the Innovations Foundation is a not-for-profit corporation whose objectives are to promote, broker and negotiate licencing arrangements for inventions arising from the five universities and other research organizations such as the teaching hospitals. Staff of the Foundation are highly qualified for these functions and are well beyond the in house capacity of the universities.

It is recommended that Ryerson establish an internal 'front end" mechanism for processing disclosures and early deliberations on all IP initiatives. After passing through such a process, initiatives may be referred to external agencies for commercialization, at the discretion of the university if the university has any ownership and/or royalty rights. Technological inventions would be referred to the Innovations Foundation where decisions on patenting would be made in an informed commercial context, and where appropriate marketing skills and industrial connections are available. Other creative works (literary works, films, videotapes, etc.) would require alternate paths. The early Ryerson phase would be coordinated by ORS in cooperation with the IP Committee. The Committee would be responsible for first level approvals on behalf of the university, would inform the creator of his/her rights under the policy, and would provide advice on the options available for commercialization.

3.5 Final Note

As academics we are dedicated to our students and our discipline. Our professional instincts are to teach, publish and serve society. Consequently, as a community, we tend to shy away from the notion of commercial exploitation of SRC results. It is suggested that this tendency needs to be complemented by an entrepreneurial view in order to create the appropriate balance needed to write an effective IP policy. This does not mean importing policy writers with an entrepreneurial bent. Rather, it suggests that we put aside our collective conservatism and create a policy which rewards those individuals who are effective inventors/creators as well as good academics, with appropriate generosity. The creator of intellectual property is the essential ingredient in any potential commercial success and therefore must be given central priority in university policy.

Disclaimer:

This document scanned, OCR'd, and converted to HTML by W. Brimley, October 9, 1997.