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Opportunities: Intellectual Property, Part 2

See part 1 of this series.

So you think your invention belongs to you? Guess again.

On your first day of grad school, your postdoc, or your job, you were probably so giddy and disoriented (dental insurance!) that you didn't notice among the many forms you were supposed to sign--heath insurance, employment verification, contact information, registration, and so on--the form that assigned all your intellectual property (IP) rights to your employer. Did you save a copy? Probably not--but you can bet your pipette that your employer has a copy, with your proud signature at the bottom.

You may be forgiven for not saving a copy of the invention-assignment form--you probably can find a copy on your institution's Web site if you'd like to read it again--but you will be remiss if you don't take the time now to understand how your institution manages and rewards IP.

If you are working in a basic-research environment, you may not have even considered the possibility that you might come up with an invention with commercial value. And if you are not looking for practical applications for your work, you are certain not to find any. But I don't think I have ever met a scientist or an engineer who hopes her work has NO IMPACT on the world around her. One of the fun things about science is the opportunity to shape the future. Intellectual property helps you do that; it gives you all sorts of opportunities: opportunities for funding, opportunities to expand your career through outside collaborations or consulting, and--of course--the opportunity to make a lot of money. Or change the world.

Listen to Peter Fiske discuss intellectual property and entrepreneurship in an exclusive Science podcast .

There are good reasons why your employer got you (and probably every other paid employee) to assign your IP rights to them. They provide the environment that enables you to be intellectually productive. Without lab space, libraries, computers, and so on, you wouldn't begin to be able to do the work needed to invent something new. In any case, they are well within their rights to expect that if they pay you to produce IP, the IP you produce belongs to them. Furthermore, if your institution receives government grants, it may be obligated by the terms of the contracts to report and defend the IP generated by the research those grants fund.

Not all IP assignment agreements are equal

The specific language contained in the standard IP assignment agreement varies with the organization, so read it carefully. Some agreements transfer all IP you invent during your employment, whether work-related or not, to the employer. At other institutions, the agreement may specify particular areas of technology. Whatever the language, almost all Ph.D. students have to sign such an agreement. Master's students may or may not, depending on whether they are paid by the university (such as for a research assistantship). My experience has been that every person paid by the institution has to sign such a form.

So what do these forms say? The language and the underlying ideas can vary widely. The first issue, usually, is precisely what IP your employer claims. Second is the issue of incentives: What kind of rewards does your employing institution provide to motivate you to work hard to have new, potentially profitable ideas?

Here's the language from the Patent Acknowledgement form from one major research university:

"I acknowledge my obligation to assign inventions and patents that I conceive or develop while employed by University or during the course of my utilization of any University research facilities or any connection with my use of gift, grant, or contract research funds received through the University. I further acknowledge my obligation to promptly report and fully disclose the conception and/or reduction to practice of potentially patentable inventions to the Office of Technology Transfer or authorized licensing office."

How would you interpret the language of this agreement? If you are paid by your employer to work on, say, protein transcription, but you have a weekend hobby at home modifying ski equipment and you come up with a cool new ski binding, does that invention belong to you or your employer? You didn't use university facilities or resources, and they don't pay you to invent ski bindings. I think it's easy to conclude that such an invention would be yours to claim.

But what if you come up with a brilliant idea one day at work that is only marginally related--or, for that matter, completely unrelated--to what your current employer is paying you to do? A lot of people might run down to the lab, full of excitement, and try to make the thing work. STOP RIGHT THERE! If you work at an institution with an IP agreement similar to the one above, as soon as you begin using your employer's resources to flesh out the invention, you may have crossed the line that is defined in your IP assignment agreement. What was yours--maybe--becomes theirs.

What you need to do then is get familiar with your obligations and responsibilities to your employer (and vice versa) BEFORE your "eureka!" moment hits. So find that agreement your employer made you sign, and read it very carefully.

Don't I have to sign those forms?

The short answer: Yes--but you may be able to get your employer to agree to narrow the scope of the IP they claim. If you find yourself in a situation where you are working in one area but may be developing (or already own) IP in another area, you may be able to narrow the field of assignment considerably. If you think you might do some consulting outside your place of employment, you may want to set some boundaries (or at least add some clarifying language) to your IP agreement. But in practical terms, does it make sense to seek such concessions? That depends on you and your situation. If you can't picture yourself in the role of inventor/entrepreneur, you may not want to risk acting at the outset like a high-maintenance employee. Then again, people change, and you can never know what opportunities the future holds. It's your call.

After you sign the agreement: IP practices while you are on the job

Ironically, although nearly all technical organizations have some assignment-of-invention form for you to sign when you join, many do not follow up with training about how to generate, codify, and protect IP you create for them.

To be legally recognized, an invention needs to be written down and witnessed by someone. You may have noticed that some lab notebooks have a place to date every page and lines at the bottom of each page for signatures; well, now you know why. Many (especially corporate) laboratories have a formal process by which each day's lab notebook pages are signed and witnessed. At other institutions, the process is much less formal; you may be called on to sign the notebook each day--or you might not--and you may or may not have it witnessed on a regular basis. But even at institutions with more lax--or less formal--procedures, it makes sense to be careful on those days or weeks when you think there may be some marketable IP lurking there.

Not sure if there's valuable IP there? If you are uncertain whether your idea or discovery represents an invention worth disclosing, talk to colleagues. Better, contact the licensing office at your institution. In a few minutes, they can help clarify the commercial potential for your discovery. They can also get you started with the next step: filling out an invention-disclosure form.

Keeping an orderly, well-documented notebook and disclosing inventions promptly after you make them are key ways that technical employees fulfill their side of the IP deal.

So how do employers keep their part of the bargain? Technology companies usually have the best and most thorough IP policies for scientists and engineers. Some of the more enlightened ones recognize that innovation is critical to their future, so they foster innovation and reward invention. For example, Hewlett-Packard pays a staff member a cash bonus just for filing an invention disclosure. A second, larger bonus is paid out if the company decides to file a patent based on that disclosure. When the patent is issued, the inventor can expect another cash bonus, and perhaps a nice plaque and public recognition. Even small companies usually have some incentive or reward policy in place for inventors.

In contrast, most universities and national laboratories have no financial reward system for the filing of invention disclosures or patents. Most of them DO, however, have some sort of royalty-sharing arrangement that grants an inventor whose patent is licensed a portion of the royalties paid by the licensee. This can be as high as 30% of the total royalty--which, for a blockbuster patent, could really put you in beer and skittles.

Sharing--IP's final frontier

Because so much of today's science is collaborative, inventions are rarely made by one person. Collaborations between researchers within an organization, or between researchers in different organizations, present additional IP challenges. Sharing credit can be challenging enough when it comes to writing publications, but when money gets involved it can be much worse. Divvying up royalties for a licensed patent, for example, can cause things to get nasty in a hurry.

The best way to minimize such conflicts is to spell out the IP expectations at the outset. In cooperative research and development agreements (CRADAs) between private industry and public research institutions, IP rights are usually determined before any work begins. This is one of the roles that the technology licensing office usually plays: hammering out a specific IP agreement before the work begins.

In academia, however, such an approach will seem heavy-handed. For collaborations between teams at different research institutions, the team leaders from each organization should have, at the very least, a discussion of the roles and expected contributions from each side, and how the fruits of any invention will be split. This is just good, basic communication; setting expectations at the outset is a lot easier than clarifying and revising expectations down the road. This won't completely prevent future conflicts if an invention--or even a paper--is produced by the collaboration. But the foundation it lays will help things go smoothly--scientifically and otherwise--and it won't get in the way of the science.

Six steps to better IP practices for scientists and engineers

IP is a complex area of law and policy, and I will forgive you if it does not remain foremost on your mind as you move through your career. So let me close out the discussion with a list of six valuable steps you can take to manage the IP you create during your career.

  • Never sign any invention disclosure without reviewing it thoroughly. Sleep on it, ask questions, and make sure that you know exactly what is expected of you before you put pen to paper.
  • Be diligent about documenting your IP. Keep a good notebook, and file invention disclosures promptly.
  • Thoroughly understand the reward structures at your organization (if there are any) to promote the creation of IP.
  • If you are working in an organization that has no reward mechanism for the filing of invention disclosures, politely suggest that they set one up. If it's good enough for Hewlett-Packard and IBM, it's good enough for your organization, too!
  • In any collaboration you are involved in, insist on a clear understanding of the rights and responsibilities with respect to IP that is generated. The best way to do this is to have an IP agreement written and signed by all before the work begins.
  • Use the rich record of patents and patent applications as a research tool for your work. The U.S. Patent and Trademark Office database is accessible on the Web and is easily searchable.

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