The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.

Minnesota State Colleges and Universities

Intellectual Property Considerations in Contracts

Sarah A. McGee Assistant General Counsel

Webinar Goals Refresher on the different types of

intellectual property and how they come up in common agreements

Recognize when the template intellectual property clauses aren’t serving the interests of the parties

Understand our board policies and limitations before beginning negotiations with parties

Identify when there might be a problem and who to call

What is Intellectual Property? “IP” is the product of human creativity

and intellect.

Intellectual Property rights are “the legally recognized exclusive rights to creations of the mind.”

Intellectual Property Licensing: Forms and Analysis, by Richard Raysman, Edward A. Pisacreta and Kenneth A. Adler. Law Journal Press, 1998–2008

Owners of IP are protected by law, against unauthorized use by another party.

Why do we care about IP? Free dissemination and sharing of information and technology

is a core value of colleges and universities

Legal and regulatory obligations

May provide revenue to investigators/faculty and the colleges/universities.

Quick Refresher

Trademarks (distinct names, logos, symbols, non-functional packaging)

Copyrights (novels, paintings, photographs, movies, songs, presentations, etc.)

Patents (inventions, discoveries, plants)

Trade Secrets (non-public formulas, processes, etc.)

Four types of “IP”

Trademarks & Trade Secrets Trademarks are a creature of both

Federal and State law

Lanham Act

Minn. Stat § 333.18

Trademark Registration

MN Secretary of State

USPTO (generally preferred)

Trade Secrets are a creation of state law

Minn. Stat. Ch. 325C

Minnesota Uniform Trade Secrets Act

Patents & Copyrights Both originate in the Constitution,

Article I, Section 8

“Congress hall have the power … to promote the progress of science and the useful arts, by securing for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries.”

U.S. Copyright Office

copyright.gov

U.S. Patent & Trademark Office

uspto.gov

Copyrights Copyrights exist automatically upon creation of work

The law protects fixed expression of original ideas

Registration, not necessary, but desirable (and easy)

But without registration, you cannot sue in federal court

Most agreements we see that touch on “IP” will be concerned with copyrights Curriculum (online or otherwise) Software

Copyrights You can mark work with a © even if not registered

What’s included? A bundle of rights:

Reproduction

Derivative works

First distribution

Public performance

Public display

Action for infringement

Patents Unlike Copyrights and Trademarks,

Patent rights do not exist unless granted by the Federal Government

To be patentable an invention must be: Disclosed

New

Non-obvious

Useful

Within statutory class of patentable subject

matter

Patents cont’d What’s included in the Patent “bundle

of rights”?

The right to exclude others from making the invention, using the invention, selling the invention, offering the invention for sale, and importing the invention.

For a limited time in exchange for public disclosure of the invention when the patent is granted

Types of contracts that may touch on patents: Sponsored research agreements Royalty-sharing agreements

Trademarks Any name, word, symbol or device

that indicates the source of origin of a good/service

and is capable of distinguishing those goods/services from those of other suppliers.

Purpose: Avoid consumer confusion

Common law trademarks exist in the geographic area where the mark has been used

Registered marks (with the USPTO) offer comprehensive protection

Trademarks cont’d To register a service mark or trademark

Must be used in interstate commerce

Must be distinctive (fanciful, arbitrary)

Or have acquired secondary meaning

Can be a single letter, word, group of words, slogan, numbers, acronym, or drawing (logo)

Can also be a sound, color, or the shape of a package

Once federally registered: use ® symbol

You may use ™ for unregistered marks

Trademarks cont’d Registration with the state ($50)

Very limited protection

Registration with the USPTO ($275-425/class of goods) and may take a year or more

Trademark licensing deals are very valuable

You may see clauses like:

College shall not use the name of VENDOR nor any trademark, service mark, trade name, or symbol of the VENDOR, in any promotional statement, product, advertising, or news release, unless College has received VENDOR’s prior written consent.

UNIVERSITY acknowledges that SPONSOR exclusively owns all right, title and interest in and to or is licensed to use the SPONSOR Marks and that SPONSOR shall exclusively own all right, title and interest in and to any logos, designs, trademarks, service marks, characters, personas, copyrights, patents, trade secrets or other forms of intellectual property created by SPONSOR(and/or its agents) in connection with this Agreement.

Who Owns IP? Ownership may be divided or modified by agreement

Board Policy 3.26 operates and Collective Bargaining Agreements operate as written agreement for system employees

If no agreement exists, ownership is determined by law, using a variety of factors

This result may be surprising / unsatisfactory.

The “creator” is usually the owner

EXCEPT:

When something is made in the course & scope of employment it may be a “work for hire” and owned by the employer

Ownership may be very difficult to determine after the fact

MnSCU Board Policy on IP Ownership Board Policy approaches ownership differently from

traditional “work for hire.” Policy 3.26, Part 4 sets forth basic ownership categories and default expectations:

Institutional works (owned by the College/University)

Works Made for Hire (e.g., work of administrative staff)

Sponsored or commissioned work may be owned, in whole or in part, by the institution

If substantial college or university resources were used in creation of the work, and there is no written agreement

Scholarly works (owned by faculty)

Personal works (own time, no system resources, owned by individual)

Students works (usually owned by a student)

Changing the Standard Outcome A written agreement is the desired way to modify policy-

driven result (Board Policy 3.26, Part 4, Subpart B). These may include:

Joint Creation & Ownership Agreements

Specially Commissioned Work Agreement

Sponsored Research agreements

IP Assignments

License Agreements

Always best to do before the work is started

Why Include IP in Agreements? Agreements reduce risk

Agreements eliminate uncertainty

All parties’ rights are clarified

Facilitates planning

Tool for dispute avoidance

Correct misunderstandings

Reality check on expectations

IP protection and use

Why Include IP in Agreements cont’d Preservation of rights

Payment of costs

Legal protections

Commercialization

Sharing of income

Serving the public interest

Template Contracts with IP Provisions Guest Lecturer

“Presenter assigns to MnSCU all rights, title, and interest in any … materials created by the Presenter that arise out of the performance of this Agreement, including any materials disseminated as part of the presentation.”

Professional/Technical (“PT”) Contract

“MnSCU shall own all rights, title, and interest in all of the materials conceived of or created by the Contractor.”

“The Contractor hereby assigns to MnSCU all rights, title and interest to the materials.”

“The Contractor warrants that the materials produced or used … do not and will not infringe on the intellectual property rights of another.”

P/T and Guest Lecturer Contract

The contractor/lecturer won’t actually be creating anything new under the contract

Contractor/Lecturer (rightly) objects to MnSCU owning everything

But, we need to make sure our use is legal

And what are the limits on our use / re-use of the material

The contractor will use a combination of existing materials and create new materials under the contract

Must carefully define what “materials” are new and what existed before

Will we need a license for the pre-existing IP?

Issues that May Arise

Template Contracts with IP Provisions cont’d Services Contract

“The Contractor represents and warrants that any materials, plans, specifications, documents, software or IP of any kind do not and will not infringe up on the rights of another.”

Customized Training

“The __________ shall own all rights, including all IP rights, in all original materials including any curriculum materials, inventions, reports, studies, designs, drawings, … developed by the College/University and its employees individually or jointly with others under this contract.”

This provision shall not apply to the following materials…

Template Contracts with IP Provisions cont’d Inter-Agency Agreement

“The Requesting agency shall own all rights, title, and interest in all of the materials conceived or created by the providing agency.”

“The Providing Agency hereby assigns to the Requesting Agency all rights, title, and interest to the materials.”

Joint Powers

“The State shall own all rights, including all IP rights, in all original materials created by the Contractor.”

This provision shall not apply to the following materials…

Grant Contract

The State shall own all rights, title, and interest in the materials created by the Grantee.

Questions to Consider Before Entering Partnerships Who will own the work?

Who has the right to make use of it in the future?

What uses can they make?

What resources in the college/university/system allocating?

Who has the right/responsibility to update the work?

E.g., Courseware

Is the work entirely new? Or is it building on “background” IP

What were the funding sources? Any restrictions?

Is sponsored research taking place in a building funded in part by GO bonds? [Contact Counsel]

Negotiation Process Someone has a program, task, idea or contract that will result

in original work

Goal: find answers to the previous questions before entering into an agreement

Identify the work or product that may have value

Separate out any pre-existing “background” IP

Identify the parties who may contribute resources: time, money, creativity, services, equipment, facilities, etc.

Negotiation Process cont’d Get the parties in a room

Ask them to articulate their needs, desires, outcomes, and possible contributions

Brainstorm options

Seek ways to achieve as many goals as possible for each party

Look for out of the box solutions

Reduce agreements to writing and seek legal counsel

IP Ownership vs. Use

“Ownership” may not be the most important issue

The right to use the work may be the most important

An “assignment” is a transfer of the ownership right

A “license” is a contract right – a legal agreement that permits one party to use IP belonging to another under mutually agreed terms.

Remember, Copyrights, Patents, Trademarks are all “bundles” of rights

Copyrights: Reproduce, Modify, Distribute, Publicly Perform

Patents: Making, using, selling, and offering for sale

aka Licensing

IP Licensing The IP owner may grant any right or combination of the

“bundle” of rights, with or without payment, and subject to further limitations or conditions

“Scope” Terms Restrictions on use (e.g. internal or not-for profit) Exclusivity Territory Duration Revocability Payment Scope (Royalties) Transferability

IP Commercialization IP licenses are also the vehicle used to commercialize IP in

exchange for royalties

Royalties are the consideration ($$) paid to the licensor in exchange for certain rights in the IP that the licensor is providing to the licensee.

Royalty-free (no additional $$)

With commercialization, must protect the IP from competitors (registration and other legal actions)

Who is paying for the patent prosecution ($5,000-$20,000+)

Who will pay to bring or defend an infringement lawsuit?

Marketing, non-competes, confidentiality clauses

How to handle revenue streams

What’s it worth to you? Not for amateurs

Resources Most IP agreements are fact specific, not a one-size-fits-all

template. You first must know what you are trying to accomplish, and agreement can be tailored to match.

Contact OGC or the AG’s Office with questions.

MnSCU Copyright Website:

http://copyright.mnscu.edu

MnSCU Intellectual Property Website:

http://intellectualproperty.mnscu.edu

QUESTIONS & ANSWERS

Please Chat in your questions to the host or the panelists. You may also “Raise Your Hand.”

You will be called upon to ask you question & your microphone unmuted at that time.

How to Access Today’s Materials

Within a few business days, the recording link and PDF PowerPoint link will be posted on the OGC website: www.ogc.mnscu.edu.

Click: “Webinars” in the left hand column.

The links can be accessed in the Second Thursday schedule.

Contact Information Minnesota State Colleges & Universities

System Office

Sarah McGee Assistant General Counsel

sarah.mcgee@so.mnscu.edu 651-201-1410

Office of General Counsel

www.ogc.mnscu.edu

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