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ECU Intellectual Property & Related Policies

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REG10.40.02 Current Version

Authority: Chancellor

History: First Issued: August 6, 2002. Last Revised: August 2, 2013

Related Policies: UNC Policy 500.2 - Patent and Copyright PoliciesUNC Policy 500.2.1[R] - Regulations for Establishing a Copyright Use and Ownership Policy POL10.40.01 - East Carolina University Patent PolicyRUL 08.05.04 - University Student and Employee Computer Use Policy

Additional Resources: U. S. Copyright Laws, Title 17 of the United States CodeN.C.G.S. \A7116-34 - Duties of Chancellor of InstitutionECU Disclosure Form for Copyright Ownership DeterminationIndependent Contractor Copyright ClauseVolunteer Agreement on CopyrightECU Copyright ResourcesECU IT Policies, Regulations and Guidelines - Academic Computer Use PolicyECU Graphics and Licensing StandardsECU Policy Regarding Commercial Exploitation of Classroom Materials

Contact Information: Vice Chancellor for Research and Graduate Studies (252-328-9471)

 

1.  INTRODUCTION

This regulation implements and affects the provisions of the Patent and Copyright Policies and the Regulations for Establishing a Copyright Use and Ownership Policy of the University of North Carolina (“UNC Polices”). This regulation should be read in conjunction with the UNC Policies.  By delegation of the Chancellor, the Vice Chancellor for Research and Graduate Studies (“Vice Chancellor”) shall administer ECU’s Copyright Regulation and develop and implement the procedures necessary for its administration.

This regulation seeks to balance the legitimate rights and responsibilities of ECU, its faculty, staff, and students in order to encourage a scholarly atmosphere that enhances ECU’s ability to meet its missions of teaching, research, and service.

2. DEFINITIONS

2.1 “Commercialization” means selling, licensing, or otherwise transferring some or all of the intellectual property rights in a work including grants of permission or a license to use the work. Commercialization does not include the transmission of technical reports to the sponsor or submission of scholarly journal articles for publication, nor the provision of course materials (e.g., course packs) to the ECU Bookstore or similar vendor developed for use by students in conjunction with a specific ECU course.

2.2 “Creator” means the author of original expression in a work.

2.3. “Direct Costs” mean documented costs of production, financial support for creation of the work, sales, advertising, distribution, licensing, costs of obtaining patents, copyrights, stipends, and release time.

2.4. “Directed Work(s)” means a work(s) that is specifically funded or created at the direction of ECU. A Directed Work includes a work created as a specific requirement of employment or arising out of employment responsibilities at the University. In addition, a Directed Work shall include any Work produced as a collaborative effort initiated by a college or department, or a work that is created and then developed and improved over time by a series of individuals, where authorship cannot be attributed to any one individual or group of individuals. Computer software created by non-faculty University programmers for use by the University constitutes Directed Work. A Directed Work also includes a work created by faculty, staff, or students in a University institute, center, or other unit that, with approval of the Vice Chancellor, has adopted rules providing that copyright in materials authored by such faculty, staff, or students in the course of their professional work or course study with that unit vests in the University and not in its author. Absent Exceptional Use of University Resources (Subsection 2.6) or use of Sponsored Resources (Subsection 2.7), instructional materials or courseware created by faculty members or instructors required to teach face-to-face, Distance Education, or correspondence courses as part of their employment responsibilities shall not be deemed Directed Works.

2.5. “Distance Education” or “Distance Learning” means a course in which more than fifty percent (50%) of instruction (interaction between students and instructors and among students) in a course occurs when students and instructors are not co-located. Instruction may be synchronous or asynchronous. The course may use internet, closed circuit, cable, fiber optics, DVDs, CD-ROM or other electronic means to facilitate learning.

2.6. “Exceptional Use of University Resources” means the University has provided support for the creation of the work with resources of a degree or nature not routinely made available to faculty, other EPA employees, SPA or CSS staff, or students. Except as is otherwise permitted by the University’s policies on Conflicts of Interest and Commitment, University resources are to be used solely for University purposes and not personal gain or personal commercial advantage, nor for any other non-University purposes. Exceptional Use of University Resources may include, but is not limited to: waiver of fees normally required to use specialized facilities such as equipment, production facilities, service laboratories, specialized computing resources, and studios; University funding or gifts in support of the work’s creation; or reduction in levels of teaching, service, or other typical University activities (e.g., course, load, student advising, division/department meetings, office hours, administrative responsibilities) specifically to facilitate creation of the work. In addition, use of the University’s name in connection with a personal work, other than by way of identification of the Creator as a faculty member, researcher or other employee or student at ECU, is itself Exceptional Use of University Resources. However, ordinary use of computers, laboratory space, libraries, office space or equipment, Distance Learning resources, limited secretarial or administrative services, or professional development activities shall not be considered Exceptional Use of University Resources. For students enrolled in a course of study, use of course laboratory, computing and library facilities, software, supplies and materials at a level ordinarily provided to students in the course are not considered to be Exceptional Use of University Resources.

2.7. “Sponsored or Externally Contracted Work” means any copyrightable work developed using funds supplied under a contract, grant, or other arrangement between the University and third parties, including a sponsored research agreement.

2.8. “Student” means any person from the time s/he accepts admission to ECU through the date of her/his graduation. This includes new students at Orientation, persons not currently enrolled but who are still seeking a degree from ECU, any person enrolled in a credit earning course offered by ECU, and teaching, graduate, and research assistants.

2.9. “Student Work” means a paper, computer program, thesis, dissertation, artistic and musical work, and other creative work made by University students that are produced outside any University employment, and are not Sponsored or Externally Contracted Work. Notes of classroom and laboratory lectures and exercises taken by Students shall not be deemed Student Works.

2.10 “Supervisor” means the individual to whom a covered individual reports (faculty, instructor, EPA employees, post-doctoral scholars, SPA, CSS staff, and student employees). They are typically the individuals who conduct the covered individual’s annual performance evaluation. In the case of faculty or instructor, the supervisor is typically a department chair. Other supervisors include office directors.

2.11. “Traditional or Non-Directed Work” means a pedagogical, scholarly, literary, or aesthetic (artistic) work originated by a faculty or other EPA employee or Post Doctoral Scholar resulting from non-directed effort. Examples of these works may include a textbook, manuscript, scholarly work, fixed lecture notes, Distance Learning materials not falling into one of the categories of this Regulation, a work of art or design, musical score, poem, film, video, audio recording, or other work of the kind that have historically been deemed in academic communities to be property of their Creator. A Traditional or Non-Directed Work also means any work created in the course of outside activities resulting from a contract between the individual directly and a third-party.

2.12. “University” means ECU and all of its undergraduate, graduate, and professional schools, colleges, centers, institutes, and administrative units.

2.13. “Work” means an original work of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device (See, e.g., 17 USC §102(a)). Examples of these Works include: literary Works such as books, journal articles, poems, manuals, memoranda, tests, computer programs, instructional materials, Distance Education materials, databases, and bibliographies; musical Works including accompanying words; dramatic Works including accompanying music; pantomimes and choreographic works; pictorial, graphic and sculptural Works, including photographs, diagrams, sketches, and integrated circuit masks; motion pictures and other audiovisual Works such as videotapes; sound recordings; and architectural Works.

2.14. “Work Made for Hire” means (a) a Work prepared by an SPA or CSS employee within the course and scope of his or her employment, or (b) a work specially ordered or commissioned for use as a contribution to a collective Work, as part of a motion picture or audiovisual Work, as a translation, as a supplementary Work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the Work shall be considered a Work made for hire. A Work created in the course of a student’s employment by the University shall be considered Work Made for Hire.

3. SCOPE AND COVERAGE

This regulation applies to all faculty, EPA employees (including postdoctoral scholars), SPA and CSS staff, and students of the University. Compliance with the terms of this regulation is a condition of employment for University faculty, EPA employees, and SPA and CSS staff, and of enrollment for University students. This regulation is subject to any applicable laws and regulations or to specific provisions in grants or contracts that govern rights in works subject to copyright created in connection with sponsored research.

4. FACULTY, STAFF, AND STUDENT USE OF WORKS SUBJECT TO COPYRIGHT

4.1. Appropriate Use of Works Subject to Copyright

The University is committed to complying with all applicable copyright laws. As an institution devoted to the creation, preservation, and dissemination of knowledge through teaching, research, and public service, the University supports the responsible, good faith exercise of full fair use and face-to-face instruction rights as codified in 17 U.S.C. §§ 107 and 110(1), by faculty, staff, and students in teaching, research, and service activities. Except as allowed by law, it is a violation of this regulation and law for University faculty, staff, or students to reproduce, distribute, display publicly, perform, digitally transmit, or prepare derivative works based upon a work subject to copyright without permission of the copyright owner.

4.2. Information and Education on Copyright Use

The Vice Chancellor shall be responsible for administering and implementing this Regulation. The Vice Chancellor or her/his designee shall:

(a) provide the University community with information about copyright law, with a particular emphasis on the application of fair use in academic settings;(b) hold workshops to educate the University community about copyright and fair use; and(c) provide resources on copyright laws in general and on the application of fair use.

5. OWNERSHIP

5.1. Ownership by Faculty and EPA Employees

Consistent with academic freedom and tradition, Faculty, Non-Faculty EPA (Exempt from the State Personnel Act) Non-Faculty Employees, and Postdoctoral Scholars (collectively, “EPA Employees” herein) own Traditional or Non-Directed Work, including Distance Education material, unless the work is a Directed Work, created with the Exceptional Use of University Resources, a Sponsored or Externally Contracted Work, or a Work Made for Hire.

5.2. Ownership by SPA and CSS Employees

Work by any SPA (Employees Subject to the State Personnel Act) and CSS (Clinical Support Services Employees) employee is considered to be a Work Made for Hire and is owned by ECU. However, SPA and CSS employees own works created at their own initiative, outside the scope of their employment, and without Exceptional Use of University Resources. In addition, SPA and CSS employees may own a Work when the University formally waives ownership of the Work in writing or where there is a written agreement providing ownership to the employee in accordance with Subsection 7.2.4.

5.3. Ownership by Students

5.3.1. Subject to the provisions below, students (see Section 2.8) shall own the copyright in Student Works except where the Work:

 (a) is a Sponsored or Externally Contracted Work;(b) involves Exceptional Use of University Resources; or (c) is a Work Made for Hire.

5.3.2. Students are frequently involved in the creation of Works in consultation with, or under the supervision of, University faculty and staff. Such Work may be related to coursework, research, extracurricular activities, or other University projects. In some circumstances, it is difficult to determine whether and to what extent the Students are acting as agents or employees of the University. When ownership of a Work is unclear, a written agreement with Student(s) regarding ownership of the Work should be considered, consistent with this regulation and after consideration of the parties’ rights and interests. The Copyright Officer shall have resources available to faculty and students regarding such agreements.

5.4. University Ownership

The University owns any of the following Works:

 (a) Directed Work;(b) Work involving Exceptional Use of University Resources;(c) Sponsored or Externally Contracted Work, unless the contract specifically states otherwise; and(d) Work Made for Hire.

5.5. Works by Independent Contractors

Any Work produced for the University by an independent contractor shall be considered a Work Made for Hire and shall be owned by the University. No University unit or department shall enter into any agreement or arrangement for Work to be produced by an independent contractor without a written contract, signed by the authorized University designee, stating University ownership of the intellectual property in the Work. The approved Independent Contractor Copyright Clause should be incorporated into such agreements.

5.6. Volunteers

Volunteers shall retain the copyright to Works they create unless the University unit or department that has initiated or benefits from the Work obtains the copyright or license to use the work. If the volunteer service involves the creation of a Work that will be used by the University, the unit or department responsible for overseeing the Volunteer shall have the Volunteer execute a Volunteer Agreement to Grant Copyright License or Volunteer Agreement to Assign Copyright for the Work.

5.7. University’s License in Works

5.7.1. As a condition of employment, EPA Employees shall be deemed to have granted the University a perpetual, non-exclusive, non-transferrable, royalty-free license to use Traditional or Non-Directed Works and Sponsored or Externally Contracted Works owned by them for the University’s own education or research use, unless such license will impede scholarly publication or similar activities, or violate provision of a contract between the EPA employee and a third-party.

5.7.2. As a condition of enrollment, University students shall be deemed to have granted the University a perpetual non-exclusive, non-transferrable, royalty-free license to use any Student Work created as part of an academic endeavor at the University, subject to the student’s privacy rights under federal law.     

5.8. Creator’s License in Works

Where practicable, and subject to any additional terms or limitations made necessary by the University’s licensing agreements with third parties, the University shall grant a non-exclusive, non-transferrable, royalty-free license to a University-owned Work for the Creator’s own educational or research use.

5.9. Works Subject to Both Copyright and Patent Protection

Where an Invention or Creation is subject to protection under both patent law and copyright law, if the University decides to retain title to its patent rights, the Inventor/Creator shall assign all copyrights to the University.

6. DETERMINATION OF COPYRIGHT OWNERSHIP

6.1. Disclosure 

6.1.1. When to Disclose

6.1.1.1. Subject to the provisions of Subsection 6.1.3 below, the following Works must be disclosed within three (3) business days after the Work is created:

(a) Sponsored or Externally Contracted Works;(b) Works involving the creation of software that may have commercial application; (c) Works owned by the University where the work will be sold, licensed, displayed, performed, reproduced, or distributed for use outside the University; and (d) Works intended to be commercialized, subject to the provisions of subsection 6.1.3 below.

6.1.2. Whether to Disclose.

6.1.2.1. Except as delineated in section 6.1.1.1 above, generally there is no mandatory disclosure requirement for Works created by University employees or students when there is no intent to commercialize the Work. 

6.1.2.2. If a Creator does not make use of any University resources in the course of creating the Work and complies with other applicable University policies, including those on Conflict of Interest and Commitment, the Creator is not required to disclose Work intended to be commercialized that result from such activities.

6.1.2.3. If a question exists regarding whether disclosure is required, the Creator should contact the ECU Copyright Officer (hereinafter “Copyright Officer”).

6.1.3. How to Disclose

Disclosures must be made in writing to the Creator’s Supervisor in the case of ECU employees and volunteers or the Copyright Officer in the case of Student Works developed pursuant to Subsection 5.3.1 herein. The Supervisor shall forward the disclosure to the Copyright Officer, with a copy to the dean of his or her respective college and to the Director of the Office of Technology Transfer (“OTT”). The disclosure will not be considered complete until all required information has been provided.

6.2. Determination of Ownership

6.2.1. Upon receipt of the disclosure, the Copyright Officer shall review the disclosure, confer with the Creator, and investigate all questions regarding the issue of ownership. Upon making a determination of ownership, the Copyright Officer shall report in writing to the Creator, with a copy to the dean of her or his respective college, to her or his Supervisor, and to OTT, his or her determination of the Work’s owner.

6.2.2. If the Creator, dean, or OTT disagrees with the Copyright Officer’s decision, the decision may be appealed as outlined in Subsection 8.3.

7. COMMERCIALIZATION OF A WORK

7.1. Employee or Student-Owned Works

7.1.1. A Creator who owns the copyright in her or his Work under this regulation may commercialize such Work, without the authority or permission of the University, so long as the University’s name is not used in connection with the Work, other than to identify the Creator as an employee or student at the University. Any use of the University’s name in connection with a Work created by an employee or student must be approved in writing in advance by the Vice Chancellor. The Vice Chancellor may consult with the Director of the Office of Technology Transfer (OTT), the Director of Trademark Licensing, the Director of University Marketing, the University Counsel and Vice Chancellor for Legal Affairs, and others as appropriate concerning such proposed use.

7.1.2. A University employee or student who owns a Work pursuant to this regulation may seek assistance from the University in commercializing the work. In that instance, the Creator shall report the work to OTT using such forms or procedures as OTT shall establish. If, in its discretion, OTT decides to assist in commercialization of the Work, OTT and the Creator shall negotiate an agreement governing the commercialization of the Work. Any revenue from the commercialization shall be allocated according to Subsection 7.2.2 below.  

7.1.3. Notes of classroom and laboratory lectures, syllabi, exercises and other course materials taken by Students shall not be deemed Student Works, may only be used for personal educational purposes, and shall not be used for commercialization by the Student generating such notes or by any third party without the express written permission of the author of such Works. Violation of University Policy may be grounds for disciplinary action pursuant with the ECU Student Conduct Process.

7.2. University-Owned Works

7.2.1. The University may, in its sole discretion, use and/or commercialize Works that it owns pursuant to this regulation.

7.2.2. When a Work owned by the University pursuant to this regulation is commercialized by OTT (in accordance with its guidelines and procedures), income from such commercialization shall be apportioned according to the East Carolina University Patent Policy.

7.2.3. If a University-owned Work is to be published and distributed solely for use by students and faculty at the University, such publication and distribution may be conducted by the University department that employs the Creator(s) or that proposes to use the Work. In such instance, the department may self-publish the Work, or may contract with an outside publisher, subject to the review and approval by the Director of the Office of Technology Transfer. The department shall retain all net revenues related to the Work in this circumstance.

7.2.4. OTT may decline commercialization of a University-owned Work due to lack of resources, lack of commercial interest, or other reasons OTT deems appropriate. In such case, OTT may assign the Work to the Creator(s), subject to any rights retained by any sponsor or third party. In addition, the Creator shall agree (i) that the University reserves a royalty-free, non-exclusive, irrevocable right to use the Work for research and educational purposes; (ii) to allow other academic and non-profit institutions similar use on similar terms; and (iii) to indemnify the University against any liability arising from commercialization. Exceptions may be allowed in accordance with Section 9 below. 

7.3. Works Subject to Both Copyright and Patent Protection

In cases where an Invention or Creation is subject to protection under both patent law and copyright law, if the University elects to retain title to its patent rights, the University shall be compensated in accordance with the revenue provision of its Patent Policy.

8. COPYRIGHT COMMITTEE

8.1. Appointment

The Copyright Committee shall consist of eleven (11) voting members, appointed by the Vice Chancellor, which shall serve as an advisory body to him or her and the Copyright Officer. The voting members of the Copyright Committee shall consist of five (5) faculty members, three (3) staff members, one postdoctoral scholar, one graduate student, and one representative of the Vice Chancellor, chosen for their familiarity with or involvement in copyright or other intellectual property matters. The Faculty Senate shall nominate to the Vice Chancellor five (5) faculty members to serve on the Copyright Committee. The faculty representative nominees shall include at least the Chair of the Faculty or his or her delegate, one Faculty Senator, one member of the Distance Education and Learning Technology Committee, one member of the Research/Creative Activity Grants Committee, and one at-large member elected by the Faculty Senate. The Staff Senate shall nominate to the Vice Chancellor three Staff Senate Members to serve on the committee. The Graduate School shall nominate to the Vice Chancellor one graduate student to serve on the Committee. The Office of Postdoctoral Affairs shall nominate one postdoctoral scholar to serve on the Committee. The Vice Chancellor may also appoint ex officio non-voting members of the Committee from offices such as Technology Transfer, Libraries, ITCS, University Counsel, and the Divisions of Academic Affairs, Health Sciences, Research and Graduate Studies, and Student Affairs. The Copyright Officer shall serve as a non-voting ex officio member of the Copyright Committee.

8.2. Duties 

8.2.1. The Copyright Committee may be asked to:

(a) review, recommend, and advise the University on matters relating to this Regulation;(b) identify areas in which policy development is needed and recommend to the Chancellor new or revised University policies and guidelines;(c) review the operation of this Regulation and make recommendations for change when needed;(d) assist in identifying educational needs of faculty and others related to compliance with copyright policies and guidelines and advising on appropriate ways to address those needs;(e) serve as a committee to which a Creator may appeal the Copyright Officer’s decisions;(f)  meet at least once each Fall and Spring Academic Semester; and(g) advise the Vice Chancellor regarding exceptions to this Regulation.

8.2.2. The Copyright Committee shall elect annually a Chair from its membership who is responsible for ensuring that the Committee executes its duties in a timely manner as requested pursuant to Section 8.2.1.

8.3. Appeals 

When the Creator, dean, or OTT disputes a decision taken in application of this Regulation by the Copyright Officer, he or she may file a written appeal to the Vice Chancellor or her or his designee within ten (10) University business days of receiving the Copyright Officer’s decision. The Creator, dean, or OTT shall be entitled to appear before the Copyright Committee and present evidence with respect to any matter specifically involving the application of this Regulation to her or his Work. The Copyright Committee will review the matter and make a recommendation to the Vice Chancellor. The Vice Chancellor will conduct any further investigation deemed necessary and will issue the final University written decision to the employee or Student and the Copyright Committee.

8.4. Appeals Procedure

8.4.1. Jurisdiction. Review of all matters related to appeal of the Copyright Officer’s decision under Section 8.4 of this Regulation shall fall under the exclusive jurisdiction of the Copyright Committee, subject to the final decision of the Vice Chancellor. 

8.4.2. Appointment of the Appeal Panel. Upon notification from the Vice Chancellor that s/he or has received a timely filed written appeal pursuant to Section 8.3 above, the Chair of the Copyright Committee shall appoint a five (5) member Appeal Panel (“the Panel”) to hear appeals with at least three (3) Panel members being selected from the general membership of the Copyright Committee and provided further that if a party with an interest in the appeal is an ECU faculty member then at least three (3) members of the Appeal Panel will be faculty members without administrative appointment. The University shall provide appropriate support to the Panel including, but not limited to, legal assistance from University Counsel and Vice Chancellor for Legal Affairs.

8.4.3. Conflicts of Interest. In the event that the appeal involves the Chair of the Copyright Committee, the Vice Chancellor shall appoint the Panel in accordance with the provision of Subsection 8.4.2. Prior to hearing the appeal, all Panel members shall disclose any personal, professional, or financial conflicts of interest, and shall recuse themselves from the Panel as appropriate. The Chair or Vice Chancellor, respectively, shall appoint a substitute member(s) as necessary. The Panel shall elect a chair from its membership to facilitate hearing of the appeal. 

8.4.4. Conduct of the Hearing. All parties to the dispute will be given an opportunity to present evidence and arguments in support of their respective positions. The hearing shall be conducted in accordance with procedures adopted by the Chair of the Panel. A party may be accompanied to the hearing by a non-participating advisor, provided that, if the advisor is an attorney, then an attorney from the Office of University Counsel shall also be present at the hearing. The Copyright Officer may present testimony and evidence during the appeal, but may not serve as chair of the Panel hearing the appeal. 

8.4.5. Disposition. Pursuant to Section 8.3 of this Regulation, the Panel shall report its written findings of fact and its recommendation(s) for disposition of the appeal to the Vice Chancellor.  Copies of this report shall be provided to the parties to the appeal.

9. EXCEPTIONS 

Exceptions to this Regulation may be approved by the Vice Chancellor if consistent with UNC Policies and federal and state law. The Vice Chancellor will request that the Copyright Committee consider a request for an exception to this Regulation and make a recommendation to her or him concerning the same.  The decision of the Vice Chancellor is final.

10. ECU OFFICE OF COPYRIGHT

There shall be an ECU Office of Copyright under the direction of the ECU Copyright Officer. The Provost shall appoint the Copyright Officer. In addition to the Copyright Officer’s other duties as described herein, he or she shall assist the Vice Chancellor in fulfilling information and education obligations established under Subsection 4.2 of this Regulation. The ECU Office of Copyright shall serve as the University’s primary resource on Copyright, and the Copyright Officer shall be available to assist faculty, staff, postdoctoral scholars, and Students with copyright issues. The Office shall develop training and education materials for use by the campus community, and coordinate workshops, conferences, seminars, and other similar activities on copyright.


Click to View on the Policies, Rules & Regulations Website

POL10.40.01 Current Version

Authority: Board of Trustees

History: First issued: March 1984 Revised: August 27, 2012; December 5, 2012 Interim posted: April 16, 2013 BOT final approved: July 18, 2013

Related Policies: UNC Policy 500.2-Patent and Copyright Policieshttp://www.northcarolina.edu/policy/index.php?pg=dl&id=283&format=pdf&inline=1">UNC Policy 300.2.2-Conflicts of Interest and Commitment Affecting Faculty and Nonfaculty EPA EmployeesUNC Code: Appendix Ihttp://www.northcarolina.edu/research_spunc/index.php?pg=vs&id=s178&return_url=%2Fresearch_spunc%2Findex.php%3Fpg%3Dvs%26id%3Ds178">UNC Policy 500.6 University Equity Acquisition Policy REG10.40.02 East Carolina University Copyright Regulation http://www.ecu.edu/cs-acad/fsonline/customcf/currentfacultymanual/part8section2.pdf">ECU Faculty Manual Part VIII, (II) Policy on Conflicts of Interest and Commitment and External Activities of Faculty and Other Professional Staff 

Additional Resources: U.S. Patent Laws 35 U.S.C. \A7\A7 1-376ECU Patent Assignment Agreement

Contact Information: Director, Office of Technology Transfer 2200 South Charles Boulevard (Greenville Center Room 2500) Mailstop 163, East Carolina University Greenville, NC 27858-4353 (252) 328-9549 (Office) (252) 328-0799 (Fax) www.ecu.edu/ott



1. Introduction

1.1. East Carolina University (the “University”) is dedicated to the pursuit of instruction, research, scholarship, engagement, innovation development and the extension of knowledge for the benefit of the public good in an environment that is open to collaboration and publication. Inventions, discoveries, and other intellectual assets may arise as a result of the conduct of these activities by University personnel, including faculty and other EPA employees, employees subject to the State Personnel Act (SPA), clinical support services (CSS) employees, emeritus faculty, adjunct faculty, visiting faculty or other visitors or volunteers using research facilities, post-doctoral employees, graduate students, and undergraduate students participating in research as employees or otherwise, and may qualify as intellectual property in the form of patents or copyrights. The Board of Governors of the University of North Carolina has determined that patenting and licensing of these intellectual property assets are consistent with the purposes and mission of the University of North Carolina. This Patent Policy is subject to and supplements the patent and copyright policies of the University of North Carolina.

2. Coverage

2.1. This Patent Policy applies to all University employees, students, and volunteers, including, but not limited to, faculty and other EPA employees, employees subject to the State Personnel Act (SPA), clinical support services (CSS) employees, emeritus faculty, adjunct faculty, visiting faculty or other visitors or volunteers using research facilities, post-doctoral employees, graduate students, and undergraduate students participating in research as employees or otherwise. The individuals subject to this Patent Policy are collectively referred to herein as “University Personnel.” This Patent Policy is a condition of employment of every employee of the University and attendance of every student at the University.

2.2. Upon prior written agreement between non-University persons or entities and the University, this policy may be applied to persons not associated with the University who make their inventions available to the University under circumstances where the further development and refinement of such inventions are compatible with the research program of the University.

3. Ownership

3.1. Patent Assignment Agreement: All University Personnel engaged in or who propose to engage in research or other activities that may result in an Invention subject to this Policy as part of their affiliation with East Carolina University shall agree to, and execute, the East Carolina University Patent Assignment Agreement.

3.2. University Personnel shall not:

3.2.1. Enter into agreements with third parties (including but not limited to outside organizations) which would abrogate the University’s intellectual property rights and interests, and/or which would require use of University research resources;

3.2.2. Violate the terms and conditions of any grant or contract to which the University is a party; or

3.2.3. Without prior authorization, use or associate the name marks and other indicia of the University or its administrative units or academic departments in connection with any Invention subject to this Patent Policy.

3.3. University Ownership of Inventions: Invention means an invention or discovery of any new and useful process, machine, manufacture, or composition of matter; or any new and useful improvement thereof, including, but not limited to, compounds, prototypes, biological materials, software, complex multimedia works and tangible research results, that is:

 3.3.1. Patentable under the laws of the United States or any foreign country;

 3.3.2. Commercializable (through licensing or otherwise);

 3.3.3. Obligated under a sponsored research agreement or any other agreement to which East Carolina University is a party; or

 3.3.4. Created to support the administrative operations of the University.

3.4. Except as otherwise specified herein, the University owns all right, title and interest in and to any Invention or discovery or part thereof that (each a “University-Owned Invention”):

 3.4.1. Results from research or other activities carried out at or under the auspices of East Carolina University; and/or

 3.4.2. Is developed:

  3.4.2.1. With the aid of the University’s resources or facilities, University Personnel; and/or

  3.4.2.2. Through funds administered by the University.

3.5. With respect to any Invention owned by the University, upon request, the Inventor(s) shall execute promptly all contracts, assignments, waivers or other legal documents necessary to vest in the University or its assignees any or all rights to such Invention, including complete assignment of any patents or patent applications relating to the Invention.

 University Personnel hereby irrevocably assign to the University, all right, title and interest in and to Inventions and related patent applications and patents, and shall cooperate fully with the University in the preparation and prosecution of patent applications and patents.

3.6. Inventor(s) Ownership of Inventions: “Inventor(s)” means an individual or individuals who contribute to an Invention that is subject to this policy. An Inventor who is a University Personnel may own all right, title and interest in certain Inventions (each an “Inventor-Owned Invention”) under either of the two following circumstances:

3.6.1. If the subject matter of the Invention is outside the scope of the Inventor’s/Inventors’ University activities (such activities included, but not limited to, the Inventor’s/Inventors’ research, teaching, administrative, service or permitted entrepreneurial activities) at the University, an Invention may be an Inventor-Owned Invention if it was made:

 3.6.1.1. without the material use of University’s facilities, equipment, materials or resources;

 3.6.1.2. without funds administered by the University; and

 3.6.1.3. without interfering with the Inventor’s/Inventors’ obligation to carry out all of his/her University responsibilities in a timely and effective manner.

3.6.2. If the subject matter of an Invention is within the scope of the Inventor’s/Inventors’ University activities (such activities including, but not limited to, the Inventor’s/Inventors’ research, teaching, administrative, service activities or permitted entrepreneurial activities) at the University, the Invention may be an Inventor-Owned Invention if it qualifies as an “external professional activity invention.” An “external professional activity invention” means an Invention that:

3.6.2.1. meets the conditions set forth in section 3.6.1. (3.6.1.1 through 3.6.1.3.) above;

3.6.2.2.  is made in the course of Inventor’s/Inventors’ external professional activities in compliance with the University’s Policy on External Professional Activities of Faculty and Other Professional Staff (or any substitute or complementary policy);

3.6.2.3.  is not based on or, if to be practiced, does not require the use of intellectual property owned by the University; 3.6.2.4.  arises out of a specific scope of work defined in a written agreement between the Inventor(s) and a third party; and 3.6.2.5.  if such Invention is within the specific subject area of the Inventor’s/Inventors’ current and ongoing University research activities, such Inventor(s) has/have received prior approval from his/her departmental chair, school dean, unit director or similar administrative officer to engage in such external research activity, and notice of such approval has been provided to the University’s Office of Technology Transfer.

3.6.3. The University does not claim any rights in Inventor-Owned Inventions.

4. Revenue Sharing

4.1. The University shall share revenue earned from technology transfer activities with the Inventor(s) as specified in this section. Specific provisions of grants or contracts may govern rights and revenue distribution regarding inventions made in connection with sponsored research; consequently, revenues the University receives from such inventions may be exclusive of payments of royalty shares to sponsors or contractors. Moreover, the University may contract with outside persons or organizations for the obtaining, managing, and defending of patents. Any expenses incurred for the services of such persons or organizations, as well as any and all incremental expenses incurred by the University in obtaining and maintaining patents and/or in marketing, developing, and licensing and defending patents or licensable inventions, shall be deducted before the University distributes revenues as provided in Section 4.2 below.

4.2. The revenues that the University receives from a patent or invention shall be distributed as follows:

First $1,000 gross receipts received: 100% to Inventor(s);

Next $100,000 net receipts received: 50% to Inventor(s), 15% to Department(s), 5% to School / College(s), 25% to Invention Management Fund, 5% to Division of Research & Graduate Studies;

Greater than $101,000 net receipts received: 40% to Inventor(s), 15% to Department(s), 5% to School / College(s), 30% to Invention Management Fund, 10% to Division of Research & Graduate Studies

4.3. Applicable laws, regulations or provisions of grants or contracts may, however, require that a lesser share be paid to the Inventor(s). In the case of co-Inventors, each percentage share described in Section 4 as due a sole inventor shall be subdivided equally among the co-Inventors unless all the co-Inventors provide the University a written instrument signed by each of them allocating ownership among them other than in equal shares. In no event shall the share payable to the Inventor(s) in the aggregate by the University, pursuant to Section 4.2, be less than 15% of gross royalties received by the University.

4.4. To the extent practicable and consistent with State and University budget policies, amounts allocated to the University pursuant to the above chart will be dedicated to support University scientific research, development, commercialization and education activities.

4.5. In the event that the Inventor(s) leaves the University, either voluntarily or involuntarily, and the Inventor(s) is entitled to receive compensation in accordance with this Policy, then the Inventor(s) shall continue to be entitled to receive payments during the remaining term of the applicable license agreement. In the event of death of an Inventor(s) who is entitled to receive compensation in accordance with this policy, then such payments will be paid to the Inventor’s/Inventors’ estate or as directed in accordance with a court approved action.

5. Sponsored Research

5.1. Government Sponsored Research:  Patents on any invention conceived or first actually reduced to practice in the performance of work under the Federal funding agreement arising from research supported by the United States Government (“Subject Invention”) may be controlled by the terms of the grants and contracts specified by the government agency pursuant to Federal law. Consistent with Federal law, the University may, within a reasonable time after disclosure to the U.S. government, elect to retain title to any Subject Invention. Also, the Federal government may receive title to any Subject Invention in which the University does not elect to retain rights or fails to elect rights within a reasonable time. In the event that the University elects to retain title to Subject Inventions then it shall provide the Federal government with a non-exclusive, non-transferable, irrevocable, paid-up license. In the event that the Federal Government retains title to Subject Inventions then the University shall be free to use such invention(s) so covered for its own scientific and educational purposes without payment of royalty or other charge, consistent with Federal Law. Except as provided by Federal law, the terms of government-supported grants or contracts, or when patent rights are waived by the government, patents arising from government sponsored research are controlled by this policy. 5.2.  University Research Sponsored by Non-Governmental Entities:

The University must ensure that its facilities and the results of the work of University Personnel are applied in a manner which best serves the interests of the public. Likewise, the legitimate interests of a private sponsor who provides financial or other support to research carried out by the University must be considered. The University should normally reserve the right to ownership of patents on inventions arising out of research supported in whole or in part under grants or contracts with nongovernmental organizations or firms. Contracts or agreements which are entered into between the University and such organizations or agencies should contain clauses setting forth such a reservation unless deviations therefrom are requested by the sponsor and approved by the University consistent with the public interest. In the interest of fair treatment to the sponsor in consideration for the sponsor's investment and in the interest of discharging the University's obligation to the public in the application of the time and talent of University Personnel and University facilities, special provisions may be negotiated by the University in such non-government sponsored contracts, upon request, provided:

5.2.1. That the University retains the right to use the invention for its own research, educational, and service purposes without payments of royalty fees;

5.2.2. That the University requires the sponsor to use due diligence in the commercial use of the invention; and

5.2.3. That the University retains the right to freely publish the results of its research after a reasonable period necessary to protect the rights of the parties and to allow for the filing of a patent application (Section 6 herein).

6. Duty to Disclose and Public Use and Publication Restrictions

6.1. Duty to Disclose:

All individuals whose discoveries and inventions are covered by this Policy (including University-Owned Inventions and Inventor-Owned Inventions) have a duty to disclose their discoveries and inventions promptly to the Office of Technology Transfer. The duty to disclose arises as soon as the individual has reason to believe, based upon his or her own knowledge or upon information supplied by others, that the discovery or invention may be patentable. Certainty about patentability is not required before a disclosure is to be made. Failure to timely disclose an Invention may prevent the Invention from being patented, may subject the University to noncompliance with federal laws and/or contractual obligations, and may result in other University sanctions.

6.2. Duty to Notify Prior to Public Disclosure:

6.2.1. The results of faculty and student research should be published in scholarly form. Though this Patent Policy does not limit the right to publish, except for short periods of time necessary to protect patent rights, publication, public use, or sale of an invention or otherwise making an invention available to the public may constitute a statutory bar to the granting of a United States patent for the invention unless a patent application is filed within one year of the date of a disclosure. Publication or public use also will generally be an immediate bar to patentability in most foreign countries.

6.2.2. It is the duty of the Inventor(s) to report or, if the Inventor(s) is not available to make such report, the duty of his/her supervisor to report to the Office of Technology Transfer any inventions subject to this policy prior to any publication, submission of manuscript for publication, sale, public use, or plans for sale or public use of an Invention (hereinafter a “Public Disclosure Event”). This duty to report applies immediately upon the Inventor(s) or his/her supervisor becoming aware of any such Public Disclosure Event, and shall remain an affirmative duty until a patent application or a provisional patent application is filed, or until the one-year anniversary of the first Public Disclosure Event, whichever event occurs first. If an Invention is disclosed to any person who is not employed by the University or working in cooperation with the University upon that Invention, a record shall be kept of the date and extent of the disclosure, the name and address of the person to whom the disclosure was made, and the purpose of the disclosure.

6.3. Publication Restrictions:

If a sponsor proposes to support a research effort that will involve a limited exclusive use license of resulting patents, the agreement with respect to publication shall include the following:

6.3.1. The sponsor must agree that the results of the research may be published if desired by the investigators or research workers;

6.3.2. To ensure that patent applications are not jeopardized, the University, investigators, and research workers may agree that any proposed publication will be submitted to the sponsor with a notice of intent to submit for publication. If within a period of no more than 90 days from the date of such notice the sponsor fails to request a delay, the investigators, research workers and University shall be free to proceed immediately with the publication. However, if the sponsor notifies the University that a delay is desired, the submission of the manuscript to the publisher shall be withheld for the period requested, but in no event shall the total period of delay be longer than one year from the date of the notice of intent to submit for publication mentioned above. Such a period will permit the sponsor to have the necessary patent applications prepared and filed but will not unduly restrict the dissemination of scientific knowledge.

7. Avoidance of Conflicts

7.1. Conflicts involving patentable inventions and discoveries may arise when University personnel or students enter into personal consulting agreements with outside firms and organizations. The agreements that outside firms and organizations wish to have executed by those who are to serve as their consultants frequently contain provisions as to the licensing or assignment of the consultant's inventions and patents. Unless such provisions are narrowly worded, they usually will apply to areas in which the individual's University work lies and thus come into conflict with the obligations owed by the individual to the University under these policies, either with respect to the rights of the University itself in an invention or with respect to the rights of a sponsor of research in the same field or subject matter.

7.2. Prior to signing any consulting agreement including, but not limited to, agreements involving patent rights and trade secrets, where any University time, facilities, materials or other resources are involved, University Personnel must bring the proposed agreement to the attention of the Office of Technology Transfer and either obtain a waiver of University rights or otherwise ensure the consulting agreement conforms with this and all other University policies. Consulting agreements may not in any way limit the right of any University Personnel to engage in teaching, research, or service at the University.

7.3. The foregoing requirements are in addition to, and do not eliminate the necessity for compliance with the ECU Policy on Conflicts of Interest and Commitment, the ECU Policy Statement on External Professional Activities of Faculty, and the ECU Policy on Secondary Employment for SPA and CSS employees.

8. Administration

8.1. Patent Committee:

The Patent Committee, appointed by the Chancellor and consisting of no less than three members, one of whom shall be designated by the Chancellor to serve as Chair, is charged with reviewing and recommending to the Chancellor or his delegate the procedures for the implementation of this policy; resolving questions of invention ownership that may arise between the institution and its faculty, staff, students, or volunteers, or among individuals; recommending to the Chancellor the expenditure of the patent royalty fund; and making such recommendations as are deemed appropriate to encourage disclosure and assure prompt and expeditious handling, evaluation, and prosecution of patent opportunities; and to protect the interests of both the University and the public. The University Committee on Intellectual Property/Patents serves as the Patent Committee for the University. The Director of the Office of Technology Transfer shall serve as an ex-officio voting member of the Committee. The Office of Technology Transfer shall administer and provide support for the Committee.

8.2. Patent and License Management:

 The Office of Technology Transfer is charged with administering the University’s patent management and licensing program, including, but not limited to filing, prosecution, and maintenance of the University’s patent portfolio and maintenance of the University’s license portfolio.

8.3. Implementation:

The Office of Technology Transfer is responsible for implementing this policy. Such implementation shall address various matters covered by this policy, including developing policies and procedures designed to supplement and interpret the ownership aspects of this policy, providing advice regarding ownership of specific works, releasing institutional rights, and accepting an assignment of rights to the Institution from an author or creator of a work.

8.4. Release of University Invention to Inventor(s):

In the event that the University chooses not to pursue patenting and/or commercialization of a University invention, the Inventor(s) may request release of the invention to them under the terms of the University Invention Release Agreement.

8.5. Dispute Resolution

8.5.1. Jurisdiction:

Review of all matters related to patents shall fall under the exclusive jurisdiction of the Patent Committee. Any individual subject to this policy may seek resolution of questions of invention ownership that have arisen between the University and its faculty, staff, students, volunteers, or among individuals by filing a written request with the Chair of the Patent Committee. The Chair shall appoint a 5-member Dispute Resolution Panel (“the Panel”) to address the dispute with at least 3 panel members being selected from the membership of the Patent Committee. In the event that the dispute involves the Chair of the Patent Committee, the Vice Chancellor for Research and Graduate Studies shall appoint the Panel. The Panel shall elect a chair from its membership. The University shall provide appropriate support to the Panel including, but not limited to, patent counsel or other patent expertise.

8.5.2. Conduct of the Hearing:

 In its sole discretion, the Panel may elect to conduct a hearing or may make a recommendation based upon the written record, provided that all parties to the dispute are given an opportunity to present evidence and arguments in support of their respective positions. The hearing shall be conducted in accordance with procedures adopted by the Chair of the Panel. A party may be accompanied at the hearing by a non-participating advisor.

8.5.3. Disposition:

 The Panel shall report its written findings, conclusions and recommendations for disposition of the matter to the Vice Chancellor for Research and Graduate Studies. Copies of such findings, conclusions and recommendations shall be provided to all parties, subject to confidentiality of third party interests, if any. Upon receipt of such findings, conclusions and recommendations, the Vice Chancellor for Research and Graduate Studies will conduct any further investigation deemed necessary and will issue the final University written decision.

9. Works Subject to Protection by Both Copyright & Patent Laws

9.1. In cases where an invention or creation is subject to protection under both patent law and copyright law, if the University elects to retain title to its patent rights, then the Inventor(s) shall assign such patent and copyright rights to the University.

10. Policy Exceptions

10.1. Exceptions to this Policy may be approved by the Vice Chancellor for Research and Graduate Studies if deemed to be in the University’s best interest and consistent with the UNC policies and federal and state law.


 Excerpt from East Carolina University Patent Policy

 POL10.40.01 Version 2

 4. Revenue Sharing 

 4.1. The University shall share revenue earned from technology transfer activities with the Inventor(s) as specified in this section. Specific provisions of grants or contracts may govern rights and revenue distribution regarding inventions made in connection with sponsored research; consequently, revenues the University receives from such inventions may be exclusive of payments of royalty shares to sponsors or contractors. Moreover, the University may contract with outside persons or organizations for the obtaining, managing, and defending of patents. Any expenses incurred for the services of such persons or organizations, as well as any and all incremental expenses incurred by the University in obtaining and maintaining patents and/or in marketing, developing, and licensing and defending patents or licensable inventions, shall be deducted before the University distributes revenues as provided in Section 4.2 below. 

 4.2. The revenues that the University receives from a patentor invention shall be distributed as follows:  

 

Income Distribution

4.3. Applicable laws, regulations or provisions of grants or contracts may, however, require that a lesser share be paid to the Inventor(s). In the case of co-Inventors, each percentage share described in Section 4 as due a sole inventor shall be subdivided equally among the co-Inventors unless all the co-Inventors provide the University a written instrument signed by each of them allocating ownership among them other than in equal shares. In no event shall the share payable to the Inventor(s) in the aggregate by the University, pursuant to Section 4.2, be less than 15% of gross royalties received by the University. 

4.4. To the extent practicable and consistent with State and University budget policies, amounts allocated to the University pursuant to the above chart will be dedicated to support University scientific research, development, commercialization and education activities.  

4.5. In the event that the Inventor(s) leaves the University, either voluntarily or involuntarily, and the Inventor(s) is entitled to receive compensation in accordance with this Policy, then the Inventor(s) shall continue to be entitled to receive payments during the remaining term of the applicable license agreement. In the event of death of an Inventor(s) who is entitled to receive compensation in accordance with this policy, then such payments will be paid to the Inventor's/Inventors' estate or as directed in accordance with a court approved action.

The Bayh-Dole Act, passed by Congress in 1980, created a uniform patent policy among the U.S. federal agencies that fund research in the non-profit and small business sectors. The Act provides recipients of federal research funds with the right to retain ownership of their patents with the underlying tenet that federally funded inventions should be licensed for commercial development in the public interest. This principle is reflected in virtually all university policies whether or not the invention is federally funded.

FolderClick to View the Council on Government Relations Brochure (pdf)

Interagency Edison (iEdison) allows government grantees and contractors to report government-funded subject inventions, patents, and utilization data via the web to the government agency that issued the funding award. Over 30 U.S. federal funding agency offices use iEdison, consistent with the Bayh-Dole Act, its implementing regulations, and agency policies (including plant variety protection (PVP) reporting).

Click to Visit iEdison

CHECK BEFORE YOU SIGN

Did you know that only certain ECU Officials are allowed to sign contracts, grants, cooperative agreements, confidentiality agreements (CDAs), licenses, options, material transfer agreements (MTAs) and other documents?

Folder Click here to learn more about the appropriate delegations for Signatory Authority

 

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UNC-System Intellectual Property & Related Policies

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University Equity Acquisitions Policy

 

The UNC Policy Manual

500.6

Adopted 01/14/05

 

University Equity Acquisition Policy

I.          Introduction

Constituent Institutions occasionally have the opportunity to acquire equity in companies in relation to inventions. Usually, equity agreements are structured to enhance technology transfer whenever cash reserves for new companies are not available for payment of intellectual property rights as the result of licensing or other transfer of technology.

Acceptance of equity for constituent institution intellectual property rights presents issues considerably different from fee-generating licensing transactions and therefore should be treated differently within the framework of the UNC Patent and Copyright Policies, in regard to distribution of equity and/or earnings on equity to inventors.

This policy has been designed to limit the issues of institutional conflicts of interest and conflicts of interest of inventors, departments, schools and technology transfer offices and officers. Decisions on when to convert equity into earnings should be made at “arms length” from the technology development and licensing offices to limit securities exchange violations.

II.        Policy

A.         Conditions for Receipt of Equity 

Equity in a company may only be received by a constituent institution in the UNC system as partial or full consideration for a technology license or transfer of technology, as negotiated by the technology transfer office or by the Chief Research Officer, Chief Academic Officer, or University Counsel. Constituent institutions should designate the unit responsible for effecting such negotiations and the unit responsible for receiving and managing such equity. Without the approval by a constituent institution’s Chancellor, no other unit of the constituent institution, including affiliated foundations, may acquire equity in a company from which the constituent institution has received or is negotiating to receive equity in conjunction with a licensing or transfer of technology transaction, except as provided in Section II(F) of this Policy. Acceptance of equity will be based upon similar principles of constituent institution fee-generating licensing where transactions occur in an atmosphere of openness, objectivity and fairness, placing education, research and public service before institutional or individual gain.  Equity transactions will be conducted in accordance with other University policies such as: the Policy on Conflicts of Interest and Commitment, the Policy on Ethics in Research, the Policy on External Professional Activities for Pay, and other related University policies and guidelines.

B.         Negotiations, Founder’s Shares, Voting Representation

1.          Negotiations. Except as expressly approved by the constituent institution’s Chief Research Officer, there shall be no negotiation on behalf of a constituent institution independent of the appropriate technology transfer office (or other responsible unit, as designated by constituent institution) by any constituent institution inventor regarding any constituent institution license with or on behalf of a licensee, including a licensee company founded in whole or in part by that inventor. Independent negotiations by an inventor regarding personal consulting contracts with the potential licensee are permissible, provided the inventor complies with the Policy on External Professional Activities for Pay, the Policy on Conflicts of Interest and Commitment, the Patent and Copyright Policies, and other applicable University policies.

2.         Founder’s Shares. Any constituent institution inventor who is a Founder of a company shall not be eligible to be a recipient of equity or the proceeds of equity accepted on behalf of the constituent institution. For the purposes of this Policy, a “Founder” shall be any person who has received, receives or is likely to receive a substantial economic benefit as a result of acting as a founder, originator, or promoter of a company.

3.         Voting Representation. No constituent institution or its assigns will seek or accept voting representation on the board of directors of a licensee company that provided equity as consideration for a license from the constituent institution, regardless of the level of its equity received as consideration for a license. Constituent institution employees may accept appointments to boards of directors and scientific advisory boards of licensees in their individual capacities and not as constituent institution representatives, but are still subject to all applicable university policies in doing so.

C.         Constituent institution Employee or Officer Equity Ownership

Other than a founder or inventor, no officer or employee of a constituent institution will be allowed to hold or acquire equity in a company with which the constituent institution has negotiated or is negotiating a license agreement if that license agreement includes the transfer of equity to the constituent institution as either partial or complete consideration for the license agreement and if the officer or employee is engaged in or has access to or knowledge of the negotiation between the company and the constituent institution.

D.        Equity Terms and Minority Ownership

1.          Equity Terms. The terms of any equity-based technology licensing transaction, with the exception of the form of consideration, shall be consistent with constituent institution licensing transactions for comparable technologies. 

2.         Minority Ownership. Neither constituent universities nor their assigns will accept more than a minority ownership share in a licensee as consideration for a license.

E.         Timing and Nature of Distribution

Where there is a proposal for equity in a company to be accepted by the constituent institution or its assign as consideration for a technology licensing transaction, the constituent institution technology transfer office or other designated responsible unit may elect either:

1.          Distribution at Licensing. Arrange for inventor(s) other than Founder(s) to receive in the aggregate a one time distribution of no less than 15% of the total shares due to the constituent institution or its assign directly from the licensee upon execution of the relevant agreement, including provisions relating to restrictions, if any, on transfer or disposition of inventor(s) equity, in which case the inventor will be responsible for retaining his/her own business advisors, legal counsel and tax counsel and will be responsible for all financial, tax and legal consequences related to the equity he/she receives; or

2.         Distribution After Licensing. Arrange for all equity, including shares attributable to the inventor(s) other than Founder(s), to be issued in the name of and held by the constituent institution or its assign. The inventor(s)’ sole right under these circumstances is the receipt of no less than 15% in the aggregate of the total shares, or the pro-rata total shares, or cash equivalent, of equity held by the constituent institution or its assign that become unrestricted and have market value. The inventor will be responsible for retaining his/her own business advisors, legal counsel and tax counsel and will be responsible for all financial, tax and legal consequences related to the equity or cash equivalent he/she receives. 

F.         Management of Equity

1.          Independent Management Decisions. The constituent institution or its assign shall make decisions regarding the management and disposition of equity it receives pursuant to this Policy based upon sound business judgment, which may include a decision that it is in the best interests of the constituent institution to establish a certain date of liquidation of equity, and publicly available information. Such decisions shall be made independent of any undue influence by the inventors, the technology transfer office, or any other campus licensing unit.

2.            Limited Additional Investment. Under no circumstances shall the constituent institution or its assign make any direct investment in any licensee in which equity has been accepted by the constituent institution or assign in consideration for license pursuant to this Policy unless and until the licensee company is publicly traded or until licensee’s equity is priced by unrelated and independent means.

III.       Institutional Policies

Each constituent institution may adopt internal polices, procedures, and guidelines consistent with this Policy. The internal polices, procedures, and guidelines may include a provision that recognizes the unique nature of equity acquisition and allows the constituent institution’s Chancellor to approve exceptions to certain provisions of this Policy, in extraordinary individual cases, where those exceptions comply with all University of North Carolina and constituent institution policies, relevant laws, regulations, and ethical requirements.