Inventions and Patents

   
   

Code of Practice

1. Terms

The following Code of Practice pertains mainly to inventions and patents.

Under the Copyright, Designs and Patents Act of 1988 the University as the employer is the owner of intellectual property (IP) created or produced by employees in the course of their employment, or as a result of duties specifically assigned to them. This includes all forms of IP, including copyright, and the revenue sharing arrangements on royalties arising from successful commercialisation apply to all such IP.

However, in certain instances, the operation of law is moderated by a long-standing and widely accepted academic practice in the Higher Education sector, whereby the employer waives assertion of copyright ownership of scholarly texts in favour of the academic author, this includes research papers and textbooks.

Further information on other forms of Intellectual Property, protection and routes to commercial exploitation may be found on the web pages of the IP Commercialisation office.

Inventions are divided into two categories as follows:

A. Inventions by members of staff not involving an outside body

When members of staff make an invention which, in their opinion, it is desirable to protect by a patent, they shall first contact the IP Commercialisation Office, provide a disclosure and discuss the nature of the invention and possibility of securing patent protection.

Staff shall provide sufficient information for the IP Commercialisation Office:

  1. To evaluate and determine the validity of a possible patent application and the potential for commercial exploitation
  2. To refer the matter for more detailed legal and commercial due diligence, which might include taking advice Patent Agents, professional advisers or any other organisation, to enable it to decide, as expeditiously as possible, whether an application for a patent should be filed in order to:
    1. invite a third party organisation to consider the possible prosecution and exploitation of the patent; o
    2. set up a spin-out company for the exploitation of industrial property rights; or
    3. waive the University’s interest, if any, in the invention, thereby leaving the individuals, as free agents, to take any action they may wish in respect of patenting.

In reaching its decision, the IP Commercialisation Office shall consider any evidence submitted in writing or, in person by the individuals. If the IP Office’s recommendations differ from the expressed wishes of the individuals, any difference may be brought to the attention of the Director of IP Commercialisation.

Whenever appropriate, the fullest opportunity will be given to the inventors to participate in the exploitation of their patented invention. The inventors will be required to provide technical assistance with the patent prosecution and review of examination reports.

Patent prosecution fees are shared 2/3rds:1/3rd between the IP Commercialisation Office and the inventor(s) schools or divisions. Any costs incurred by the University in supporting the application, including patent fees, development costs and the purchase of technical advice, shall be the first charge of any income arising from successful commercial exploitation.

The division of the remaining revenue shall be determined by reference to the scale approved by Council. In the case of an invention made in special circumstances, the Council of the University, by resolution and with the agreement of the inventors, may vary the terms of the division of revenue between the University and the inventors.

B. Inventions involving the University, members of staff and any outside body

The terms of contract governing the support given by an outside body must be approved by the University and shall include provisions relating to:

  1. The patenting, protection and exploitation of inventions arising therefrom; and
  2. The use and exploitation of existing Patents and Intellectual Property Rights whenever appropriate.

 

Various Government Agencies require the exploitation of any inventions to be the subject of an agreement, usually in a standard form between the University, the members of staff and the sponsoring body. The conditions, which apply to industrially supported work, are normally the subject of discussion and contractual agreement between University and the sponsor. In the case of Research Council support, the University is authorised to undertake the exploitation of inventions arising from research funded by the Research Councils on the understanding that the University will look to identify, protect and seek a commercial return from intellectual property that shows commercial promise and to share the net revenue with the inventors. The University IP Commercialisation Office has to provide such undertaking on grant applications to Research Councils and charities.

When members of staff make an invention, which, in their opinion or that of the sponsoring body, it is desirable to protect by a patent, they shall, inform the IP Commercialisation Office which shall undertake as appropriate evaluation, protection and subsequent commercial exploitation as outlined above.

The division of any revenue which results shall be determined by reference to the scale approved by Council but any costs borne by the University shall be a prior claim on any proceeds. In the case of an invention made in special circumstances, the Council of the University by resolution and with the agreement of the inventors may vary the terms of the division of revenue between the University and the inventors.

Where the invention has been made in collaboration with members of other research institutions the IP Commercialisation Office will negotiate with collaborating institutions and if a collaboration agreement has not already been executed will determine which institution leads on IP protection and commercialisation.

2. Composition of Patents Committee

  • A Pro-Vice-Chancellor (Chairman)
  • Chairman of Finance Committee
  • A lay member of Council nominated by the President of Council
  • The Dean or Deans of the Faculty or Faculties concerned
  • A Professor of Law nominated by the Vice-Chancellor

3. Application

This Code of Practice (1987) shall apply to all members of staff appointed after 1st July 1987. Members of staff appointed before that date but after 28th March, 1979, shall be invited to accept its provisions in respect of any inventions they may make in the future. Otherwise the Code of Practice dated 4th May 1979 shall prevail. Members of staff appointed before 28th March 1979 shall be invited to accept the provisions of the Code of Practice (1987) in respect of any invention they may make in the future.

Any future modification of this Code agreed by Council shall similarly apply to members of staff appointed after an appropriate date approved by Council, and those appointed before that date may be invited to accept the modified provisions in respect of any inventions they may make subsequently.

In this Code of Practice where the context so admits, words importing the plural shall include the singular and vice versa. Nothing in this Code reduces the rights conferred upon the employee by the Patents Act 1977.

Note: The normal route for patenting is as described under 1(A)(i). The Patents Committee is virtually never used.

 

Royalties

The distribution of royalties arising from exploitation of intellectual property rights is as follows: 

The first £25,000 of the aggregate net revenue shall be apportioned:

  • 50% to the Inventor(s)
  • 30% to the Inventor(s) Department/School(s)
  • 20% to the central funds

Thereafter, the aggregate net revenue shall be apportioned:

    • 40% to the Inventor(s)
    • 20% to the Inventor(s) Department/School(s)
    • 40% to the central funds.  

Equity in Spin-out companies

In the event a spin-out company is formed to commercially exploit intellectual property the initial equity distribution shall be:

      • 40% to the Inventor(s)
      • 60% to the University

This distribution is based upon the University licensing the relevant intellectual property to the company. The University may also elect to license the relevant intellectual property for either a mix of equity and royalties, in which case the University’s equity stake may reduce, or may license entirely for royalties.

Inventors may receive equity in the spin-out company in exchange for renouncing any further call on the University’s revenue arising from exploitation of the intellectual property. Inventors may receive options to additional equity for participation in the on-going growth and development of the company – further information on spin-out companies is available on the IP Commercialisation Office web pages.

At the University’s discretion, the net revenue arising from realisation of the University’s equity stake in intellectual property based businesses may be divided:

  • 40% to the Inventor’s Department/School(s)/Faculty
  • 60% to the central funds.
  • The amount of revenue divided from any one exit shall be capped at £1 million.

Academic members of staff may wish to from spin-out companies around the provision of specialist services, knowledge and expertise rather than protected intellectual property. Permission to form such a vehicle and to be a Director must be sought from the University through the IP Commercialisation Office.

In the event that permission is granted the University may require an equity stake in the vehicle depending on the background, business proposition and links with the University. The amount of equity will be dependent upon the nature of the vehicle. In cases where there is any reliance on the use of University facilities a commercial agreement between the Company and the University will need to be put in place.

All work done for spin-out, service and consultancy companies by University staff is subject to the terms of the University’s External Work Policy unless there is a specific commercial agreement with the University that covers the activity.

Further information is available on the IP Commercialisation web pages.

Enquiries

IP Commercialisation Office: tel ext: 32180, http://www.nottingham.ac.uk/beis.

This Code of Practice (1987) shall apply to all members of staff appointed after 1st July 1987.

Members of staff appointed before that date but after 28th March, 1979, shall be invited to accept its provisions in respect of any inventions they may make in the future. Otherwise the Code of Practice dated 4th May 1979 shall prevail. Members of staff appointed before 28th March 1979 shall be invited to accept the provisions of the Code of Practice (1987) in respect of any invention they may make in the future.

Any future modification of this Code agreed by Council shall similarly apply to members of staff appointed after an appropriate date approved by Council, and those appointed before that date may be invited to accept the modified provisions in respect of any inventions they may make subsequently.

In this Code of Practice where the context so admits, words importing the plural shall include the singular and vice versa. Nothing in this Code reduces the rights conferred upon the employee by the Patents Act 1977.

 

Last edited Jun 11, 2017