As a condition of employment, each employee will be required to execute a patent agreement that reflects the provisions of AUI contractual agreements with its funding agencies, as well as, with the AUI Patent Policy adopted on March 12, 1987. The refusal of any employee to execute a patent agreement shall not reduce the employee’s responsibility under this Policy. Copies of the Policy will be made available upon request to employees at the time they are requested to sign a Patent Agreement. The provisions of AUI’s Patent Policy apply to all inventions which were conceived or first actually reduced to practice in the course of research at an AUI Research Center after November 8, 1984.
Any invention made in the course of activities to which this policy applies, must be disclosed promptly by the inventor to the office at the respective Research Center designated by the Director to receive such disclosures. AUI must disclose each invention to the sponsoring agency within two months after disclosure to AUI by the inventor. This disclosure shall be in the form of a written report using the approved Record of Invention Form.
Ownership of Inventions
Under the provisions of P.L. 96-517 as amended by P.L. 98-620, AUI has the right to take title to all inventions conceived or first actually reduced to practice by AUI employees in the conduct of their research. This right is reflected in the Patent Rights Clauses implementing these statutes included in AUI’s contractual agreements. AUI will determine whether to take title of any invention reported, and, if it decides to take title, AUI will provide resources to attempt to obtain patent coverage and to license the invention. If AUI takes title, the inventor(s) will cooperate and assist AUI in preparing and prosecuting a patent application for protection of the invention.
If AUI does not take title to an invention to which it is entitled under the terms of a contract with the U.S. Government, title normally remains with the U.S. Government. If the Government has title, the inventor(s) will cooperate and assist AUI and the Government in preparing and prosecuting a patent application or other application for protection of the invention.
If AUI does not take title and the sponsoring agency does not choose to obtain patent or other protection, AUI will notify the inventor(s) who may, at their discretion, petition the agency for a waiver of Government rights. Before the agency will consider a waiver request from an AUI employee, AUI must consent to this waiver.
Inventions made by employees on their own time and without the use of AUI or sponsoring agency resources shall not be subject to claims by AUI.
If the contractual provision under which work is being conducted requires a different time frame in which AUI must disclose the invention to a funding sponsor or in which to retain title to the invention, the provisions of the contract shall prevail.
Income Derived From Inventions
It is the policy of AUI to distribute income received from its patent licensing activities in accordance with the provisions of sponsoring agency contractual agreements and in a manner that recognizes the best interests of the Research Center that developed the technology. After payment of applicable expenses and the inventor’s share of royalties, AUI will distribute the remaining licensing income (known as “Net Income”) with special consideration being given to applying these funds in one or more of the following areas at the Research Center where the invention originated:
- To support research and development and educational activities in the Center’s broad areas of science or technical effort and, where applicable, in the department where the invention was made;
- As “seed money” for the support of new projects funded by a Director’s Exploratory Fund; and
- For the support of the technology transfer/patent licensing program, Allocation of Net Income will be directed by the President after consultation with the Director of the Research Center that is the source of the royalty income. The President will seek the advice and consent of the AUI Board of Trustees on the allocation of monetary income.
All income from inventions covered by the AUI Patent Policy will be payable to AUI and a formal accounting of all activities will be maintained in an AUI Patent Account for the appropriate Research Center on a fiscal year basis of October 1 through September 30. Permanent, continuous accounting records will also be maintained for each invention.
Disbursements from the AUI Patent Account will be made in accordance with the following provisions and priorities:
(1) Any income from an invention will first be applied on an invention-by-invention basis, to offset all cumulative administrative and legal costs associated to date, with the patenting, licensing and protection of that invention.
(2) After all outstanding costs (past and current) associated with a given invention have been recorded from income from that invention, a portion of any remaining Net Income will be awarded to the inventor(s) on a cumulative basis within sixty (60) days of the end of each fiscal year in accordance with the following schedule:
- First One Hundred Thousand Dollars ($100,000) of Cumulative Net Income – fifty percent (50%) awarded to the inventor(s);
- The next Four Hundred Thousand Dollars ($400,000) of Cumulative Net Income – twenty-five percent (25%) awarded to the inventor(s);
- Of the next Two Million Dollars ($2,000,000) of Cumulative Net Income – fifteen percent (15%) awarded to the inventor(s); and
- Of Cumulative Net Income in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) – ten percent (10%) awarded to the inventor(s).
Joint inventors shall receive equal portions of the percentage of Cumulative Net Income set aside as the inventor’s share.
(3) After disbursements described in (1) and (2) above, any remaining income received in a given fiscal year from all inventions derived through work done at a specific AUI Research Center will be applied to offset all other costs associated with patent activities at that Center for that year.
(4) After all transactions described in (1), (2), and (3) above, any remaining income from patents associated with a particular Research Center in a given year will be partitioned as follows:
- Publicly Funded Inventions — One hundred percent (100%) of any remaining income will be put into an AUI Research Center-specific account for future disbursement at the Research Center in accordance with the policy provisions cited above.
- Privately Funded Inventions —
- Fifty-one percent (51%) will be placed into an AUI Research Center- specific account for future disbursement at the Research Center in accordance with the policy provisions cited above;
- Forty-nine percent (49%) will remain in the Research Center’s Patent Account to defray any accumulated losses and for other appropriate uses in accord with the policy provisions cited above.
Distribution of the inventor’s share of Cumulative Net Income will continue to be made regardless of changes in, or termination of, an inventor’s employment status with AUI. In the event of an inventor’s death, the share of distributed royalty income will be made available to the inventor’s estate.
Conflict of Interest
AUI’s policy with regard to Conflict of Interest is addressed in the Personnel Policies section of this policy manual. While the basic principles set forth therein apply here, it is recognized that there is an enhanced potential for actual conflicts of interest (or the appearance thereof) to arise in the conduct of work on an AUI-owned invention or one for which AUI has made a determination to retain title. Research Centers, Directors are responsible for assuring that work on such inventions does not interfere with, or adversely affect, AUI’s user facilities, its government-sponsored mission programs or its work-for-others activities. It is important for management and all employees to take positive steps to eliminate any real conflicts of interest and also to allay concerns about the appearance of a conflict of interest in such situations. Increased sensitivity arises when personal monetary gain from inventions is involved. This is especially true if there are additional considerations related to outside consulting. In order to protect itself and its employees against any allegations of potential or real conflicts of interest, Research Center Directors carefully review the facts and circumstances under which an employee receives any AUI invention award or annual royalty payments in excess of ten percent (10%) of his/her annual base salary.