Intellectual Property Policy (“IP Policy”)

UNIVERSITI TEKNOLOGI MALAYSIA

POLICY

Policy Name: UTM Intellectual Property and Exploitation Policy

Approved by Board of Directors UTM

Effective Date:

Last Amendment:

SECTION 1 – INTRODUCTION 1.1 Scope 1.2 Definition 1.3 Related Legislation and Policies SECTION 2 - POLICY 2.1 Statement of Policy 2.1.1 Ownership of Intellectual Property Principles 2.1.1.1 Staff Member(s) of the University 2.1.1.2 Student(s) 2.1.1.3 Agreements with Third Party 2.1.1.4 Intellectual Property Change of Ownership 2.2 Moral Rights 2.3 Exploitation of Intellectual Property 2.4 Policy Implementation 2.4.1 Commitment 2.4.2 Policing and Infringement 2.4.3 Dispute Resolution SECTION 3 – PROCEDURE 3.1 Administration 3. 2 Commercialisation Process 3.2.1 Licensing of Intellectual Property by UTM 3.2.2 Assignment or outright sales of Intellectual Property by UTM 3.2.3 Establishing a Spin-off Company 3.3 Type of Income Derived From Commercialisation 3.4 Formation of a Spin-Off Company 3.4.1 Equity in a University Spin-Off Company 3.4.2 Exit Strategy 3.4.3 Involvement of Staff Member(s) /Student(s) in a Spin-Off Company 3.4.4 Full Time Secondment for Cuti Keusahawanan 3.4.4.1 Time commitment: 3.4.4.2 Monitoring 3.4.4.3 Form of Remuneration or Payment (Allowance): 3.4.4.4 Commitment of Spin-off Company 3.5 Duration of Benefits to Creator 3.6 Conflict of Interest and Commitment in Exploitation SECTION 4 – GOVERNANCE

SECTION 1 – INTRODUCTION

This policy seeks to establish a sound framework for the encouragement of high quality research, creative work and technology transfer. The policy sets out how Universiti Teknologi Malaysia (UTM), in line with the University’s aspirations, process to manage intellectual property rights and exploit its intellectual property to be benefited by the society and as a mean to generate more income. 1.1 Scope This policy sets forth the university’s policies in relation to UTM’s Intellectual Property, its exploitation and distribution of income derived therefrom. This policy is applicable to all university’s employees, students and others (by agreement). UTM reserves the right to modify or add this policy at any time provided that any such change will only apply to works, inventions and other subject matter, in which intellectual property rights subsist,that come into the effective date of the change. UTM’s objectives with regard to intellectual property and exploitation are:

x To create the climate for innovation and invention; x To provide a framework whereby staff and students are stimulated to

identify, protect and exploit potentially valuable research and other creative work and successfully to engage in technology transfer;

x To create a better understanding of the various right witch the law provides for the protection of creative effort and thereby stimulate the proper protection of the UTM’s economic investment in that effort;

x To allow for various forms of exploitation of intellectual property created within UTM;

x To provide financial incentives for individuals, groups, faculties and organisational units to encourage research and to develop and pursue commercial projects;

x To recognise partial right of students to intellectual property emanating from original research at postgraduate level which will be assigned or licensed to UTM in exchange for being included in research programmes.

1.2 Definition

Term Definition

Commercialise or Commercialisation

To use, apply, publish, manufacture, assign, licence, sub-licence, franchise, sell, exploit, market, or otherwise use or dispose of the IP for the purpose of generating financial or other commercial returns.

Commercialisation Costs

All necessary and/or reasonable costs incurred during of Intellectual Property, including but not limited to: (a) Intellectual Property registration and prosecution; (b) legal; (c) other professionals giving rise to Commercialisation revenue; (d) related travel and accommodation by UTM Employee(s) and/or others involved; (e) incurred taxes and (f) UTM overhead charges or management fee.

Commercialisation Revenue

(a) royalty upon sale by a licensee; (b) royalty from sub-license fees received from a licensee; (c) lump sum license fee; (d) proceeds of sale of the Intellectual Property; (e) signing fee; (f) milestone payments; (g) minimum annual payments; (h) reimbursement of Intellectual Property registration and prosecution; (i) dividends upon shares owned by UTM in a spin-off company to which it grants a license where researchers do not own any equity in the spin-off company; (j) proceeds of sale of shares owned by UTM in a spin-off company to which it grants a license where researchers do not own any equity in the spin-off company; and (k) damages from any infringement proceeding. The above list is not exhaustive, and does not include the overhead component of research funds paid pursuant to a research agreement.

Commissioned Work

means generic tasks performed under an employment contract or appropriate position description, and which may be performed by any staff member with similar qualifications and position description.

Term Definition

Computer Software is defined as a set of statements or instructions to be used directly or indirectly in a computer to bring about certain result.

Contributor Any person who makes a material contribution to the creation or demonstration of the Intellectual Property.

Employee

Any person employed by UTM part-time or full time, contractual or permanent and includes both academic and non-academic staff.

EULA End User License Agreement (EULA) is a legal contract between a software application author or publisher and the user of that application.

Faculty

Any division or department within UTM comprising one subject area or a number of related subject areas.

Green Lane Green Lane is a filing process of intellectual property based on payment by the inventor through ICC without prior approval by the Innovation and Commercialisation Committee.

HICoE Higher Institution Centre of Excellence

ICC Innovation and Commercialisation Centre.

Innovation And Commercialisation Committee

A group of expert academics based at the faculty. The Innovation & Commercialisation Committee have the following membership:

(a) Deputy Dean of Research & Innovation (b) members of the faculty appointed by the Dean of the

faculty (c) Additional experts that may be invited as when

necessary to assist the screening evaluation and grading.

Term Definition

INNOCOMMS Innovation & Commercialisation System (INNOCOMMS) is a online system developed to assist in registration of intellectual property by UTM’s Staff (inventor), besides to monitoring and reporting purposes.

Intellectual Property (IP)

All forms of intellectual property protected under the laws of Malaysia or other legislations on Intellectual Property including copyright, patents, industrial design, trademarks, geographical indication, Integrated Circuit layout designs, new plant varieties, know-how and confidential information.

Invention Idea which permits in practice a technical solution to a specific problem in technology and may relate to, a product or process.

KPI Key Performance Indicator

Net Commercialisation Revenue

Gross Commercialisation Revenue less Commercialisation

Costs.

MyRA © Malaysia Research Assessment (MyRA©)

Originator Inventor, creator or author of the Intellectual Property.

RC Research Centre is a recognised centre by Senate and University Board of Director (LPU), operation as school and ones of the entity under the (Centre of Excellence), called institute.

RG Research Group is a group of academic staffs conducted research in the same fields of research.

Research Alliance A formal association established that consists of centres of excellence, laboratories, formal and informal groups of

Term Definition

individual professors, established research groups within UTM (possibly involving outside parties).

Student An enrolled student, as defined by Universities and University Colleges Act (Amendment 1996) / Act A946 as amended or replaced from time to time, who creates a work in which there is intellectual property, in the course of studies or research at the University.

Spin-off Company A company formed by a staff member and/or student that exploits a university Intellectual Property.

UTM Technology and Innovation Management Sdn. Bhd. (UTIM)

A wholly-owned subsidiary company of UTM that is managed by ICC for exploitation of university intellectual property.

UTM Universiti Teknologi Malaysia.

UTM Holdings Sdn. Bhd. (UTSB)

A wholly-owned subsidiary company of UTM that manages consultancy projects led by staff member

Garis Panduan

Penubuhan dan

Pemantauan

Syarikat Hiliran 2018

Cuti Keusahawanan

1.3 Related Legislation and Policies The policy is developed based on related legislation and policies.

Name Section covered

Trade Marks Act 1976 Copyright Act 1987 Patents Act 1983 Protection of New Plant Varieties Act 2004 Geographical Indication Act 2000 Industrial Design Act 1996 IC Layout Design Act 2000

● Akta Badan-Badan Berkanun (Tatatertib dan Surcaj) 2000 (Akta 605)

● Agensi Inovasi Act 2010 ● University and College Act (AUKU) 1971 ● Government of Malaysia General Order and related

Circulars from JPA: Pekeliling Perkhidmatan Bil 2 Tahun 1993: Bayaran (Fees), Elaun-elaun dan pampasan yang boleh disimpan oleh pegawai-pegawai kerajaan yang dilantik menjadi Pengerusi / Ahli-ahli Lembaga Pengarah Badan-Badan Berkanun / Kuasa-kuasa Tempatan/ Badan-badan Perniagaan yang kerajaan mempunyai kepentingan) Intellectual Property Commercialisation Policy For Research & Development (R&D) Projects Funded By The Government of Malaysia (June 2009)

● National Intellectual Property Policy (2007)

● Universiti Teknologi Malaysia Constitution

All

SECTION 2 - POLICY

2.1 Statement of Policy 2.1.1 Ownership of Intellectual Property Principles 2.1.1.1 Staff Member(s) of the University Except as otherwise agreed in writing or provided for in this Policy, the University shall assert and claim worldwide rights, title and interest to or in all Intellectual Property Rights in all works, inventions, designs and other subject matter whether vested, contingent or future including without limitation any improvements, modifications and/or enhancement to the Intellectual Property which:

a. created by Staff Member(s) of the University in the course of and as a result of

their employment with the University or at the expressed request or direction of the University or subject to Clause 2.1.1.3, pursuant to any agreement with a third party to which the University is a party;

b. created, developed, generated or otherwise brought into existence by Staff

Member(s) of the University with the use or the support of any facilities, grants, materials, funds or other resources provided or obtained by or through the University; or

c. commissioned by or on behalf of the University for any purpose whatsoever.

The University will not assert any right or claim ownership of any Intellectual Property scholarly books, articles, audio-visuals, lectures, conference papers, creative works, text, artistic works, musical, dramatic, proceedings or other such scholarly work or subjected-matter generated or composed or created by researchers or academic Staff Member(s), other than that specifically commissioned by the University. The University reserves a non-exclusive, royalty free, perpetual licence right to use, develop or reproduce in whatever manner it deems fit in such works or subject matter for the teaching purposes which licence shall continue even after the Staff Member(s) of the University has left the University.

The University will assert and claims all worldwide right, title and interest to and/or in all Intellectual Property Rights in any commissioned lecture notes, courses, radio broadcasts, audio-visual material and the like which have been

developed to further its teaching function pursuant to specific commissions in favour of one or more researchers.

The University will not assert any right or claim of ownership of the Intellectual Property in any works, inventions, designs or other subject matter created by Staff Member(s) of the University outside the scope of their employment and which was created, developed, generated or otherwise brought into existence without the use or support of any facilities, materials, funds or other resources including pre-existing Intellectual Property owned by the University, provided or obtained by the University. The Staff Member(s) may assigns or transfer all rights or claim of ownership of the Intellectual Property to the University, subject to mutually agreed upon terms and conditions. 2.1.1.2 Student(s)

Except as otherwise agreed in writing or provided for in this Policy, the University does not assert or claim any right, title or interest to or in any Intellectual Property created by Student(s) in the course of their studies or research at the University. However, Student(s) may be required to enter into an agreement which permits the University to obtain the rights to certain Intellectual Property that may be generated by them in the course of their studies or research. Such an agreement shall:

a) be made prior to the Student(s) commencing the study or research; b) be explained to the Student(s); and c) treat the Student(s) no less favourably than originators who are employed by

the University. Notwithstanding Clause 2.1.1.2 the University asserts and claims any worldwide right, title, interest to or in any Intellectual Property generated or created by Student(s) where : a) the generation of the Intellectual Property has required use or support of Staff

Member(s)s of the University, facilities, materials, funds or other resources provided or obtained by or through the University or as a condition of the Student(s)’ continued participation in any such project;

b) the Intellectual Property belongs to a set of Intellectual Property generated by a sponsored University team of which the Student(s) is a member. The supervisor or Department of the team should inform Student(s) as early as possible in the admissions process and in any case prior to start of their research;

c) the Intellectual Property is generated in the course of and as a result of collaboration research and/or employment with the University; or

d) the generation of the Intellectual Property has resulted from the use of pre-existing Intellectual Property owned by the University.

The University will not normally consider assisting a Student(s) to protect an invention or otherwise exploit the intellectual property originated by the Student(s) unless the Student(s) is prepared to assign the patent rights or other Intellectual Property rights to the University in accordance with this policy. Where the University owns Intellectual Property created by Student(s), the University will ensure that such ownership does not interfere with the assessment of the Student(s)’s academic performance of the grant or an award.

2.1.1.3 Agreements with Third Party It is envisaged that the University may be involved in projects with third parties and/or that the third parties may sponsor research within the University by providing funds, grants or award. The University may enter an agreement with the third parties, and the ownership and exploitation of the Intellectual Property created pursuant thereto shall be governed by the terms and conditions of the agreement. Where the Intellectual Property does not rest with the University, the consent of the originators shall be obtained before any such negotiation is entered into.

In negotiating such an agreement with third parties, the University shall ensure:

a) that the originators are consulted at all stages; and b) that the terms of the agreement are consistent with the principles set out in the

other provisions of this policy. Where inconsistencies on ownership and exploitation of Intellectual Property arise between the terms of the agreement and Clause 2.1.1 of this Policy, the provisions of the agreement will prevail. Where such an agreement requires the originators to assign Intellectual Property to the University, or to some other party, the University shall, as far as practicable, ensure that the terms of the agreement are brought to the attention of those originators before they commence the work to which the agreement refers.

2.1.1.4 Intellectual Property Change of Ownership Intellectual Property which filing or maintenance costs are borne by any other party shall be jointly owned with the University and subject to Joint Ownership Agreement. Intellectual property with annual maintenance cost is subject to annual audit and renewal approval by the University. In the event that the University does not wish to maintain the Intellectual Property, the University shall assign its partial right of the Intellectual Property ownership to the originators either Staff Member(s) or Student(s). Upon assignment, the Staff Member(s) or Student(s) will be free to protect and exploit the Intellectual Property at his/her discretion and cost, subject to the interests of any third parties. The University reserves the right to retain a non-exclusive right to use the Intellectual Property for academic and research purposes.

2.2 Moral Rights

The University recognizes the moral rights of the originators of Intellectual Property in accordance with the Copyright Act 1987 and the University shall take reasonable steps to respect the right of an originator to be acknowledged as the creator of Intellectual Property and to endeavour to ensure that others respect that right.

Where the University uses Intellectual Property created by an originator, it shall take reasonable steps that does not harm the reputation or honour of the originator by consulting the originator before modifying or adapting that Intellectual Property, except in the case of external teaching materials in which it is the owner of the copyright. In such case the University may modify or adapt the materials at its sole discretion for the purpose of producing modified or adapt the materials at its sole discretion for the purpose of producing modified or adapted external teaching materials.

Where an originator wishes not to be acknowledge as the creator of Intellectual Property which has been modified or adapted, the University shall take reasonable steps to respect that wish, and to endeavour to ensure that others respect it.

All Staff Member(s) shall ensure that in the creation, development and generation of any Intellectual Property, the Staff Member(s) must take all reasonable care in ensuring that there is no breach of any ethics or guidelines or policy established by the University and/or the law of Malaysia in relation to the moral rights of the originators of the Intellectual Property, data storage and confidentiality, ethical and safe conduct of research, particularly with humans and other animals, plagiarism and falsification of data. 2.3 Exploitation of Intellectual Property Where a Staff Member(s) creates University Intellectual Property, which the University claim ownership (excluding Intellectual Property referred to Clause 2.1.1.1 (i) , 2.1.1.1 (iv) and 2.1.1.2 (i) ), which in his/her opinion capable of exploitation, he/she shall report its existence to the Director of ICC. The Staff Member(s) should be conscious of the need to avoid premature disclosure of research results to third parties prior to a consideration of the need to obtain Intellectual Property protection. Student(s) will follow procedures outlined in any applicable assignment or licensing agreement that they have entered into with the University. The University reserves the rights to exploit the Intellectual Property, and shall undertake the appropriate action to be taken. This may include, but not limited to, one or more of the following: a) undertake the appropriate measures to protect the Intellectual Property; b) the identification of potential licenses; c) the assignment of the rights to a third party; d) the formation of a limited liability company to exploit the technology start-up

company (subject to separate negotiation); and e) some other vehicle to exploit the Intellectual Property Where the University decides to be involved in the exploitation of University Intellectual Property, the Staff Member(s) and Student(s) shall provide all reasonable assistance in the exploitation process by, for example, providing information promptly on request, attending meetings with potential licensees, advising on further development and execute appropriate documents, as required.

2.4 Policy Implementation The Innovation and Commercialisation Centre is committed to implement this policy in a transparent manner and all decisions made with regard to the implementation and review of the policy will be disseminated to the relevant stakeholders. 2.4.1 Commitment Upon adoption of this policy, the University shall take all reasonable steps to ensure that it is communicated and explained to staff and Student(s). The University shall establish, on an annual basis, an Intellectual Property education programme with the following objectives: a) To alert new staff and Student(s) to their rights, responsibilities and

opportunities in relation to Intellectual Property; b) To alert staff and Student(s) as to any changes to this policy; c) To generate a better understanding of Intellectual Property issues in general,

and so contribute to the creation within the University of a more cooperative and productive environment for teaching, learning and research.

2.4.2 Policing and Infringement This policy may be implemented or supplemented in any way consistent with its terms and those of other University policies. This policy shall not apply to existing written agreement between the University and/or creator(s) and any internal organisation or individual, concerning the development, legal protection, or exploitation of specific Intellectual Property, and entered into prior to the date or which this policy is adopted by the University’s Senate.

University staff member will not engage in any activity in conflict with the University interests, including:

a) signing of Intellectual Property agreements with outside persons or

organisations which may abrogate the right of the University, as stated in this policy or which otherwise conflict with the policy, and

b) using the name of University or any of its faculties, institute or centre, without prior authorisation, in connection with any invention.

University units and personnel are responsible for knowing applicable regulations, monitoring their continuing evaluation, and conducting their activities in full compliance with the applicable laws and regulations related to patent and copyright infringements. The responsibility to avoid penalties for non-compliance or infringements extends to all personnel who carry out activities which involve transmission, communication or duplication of materials protected by copyright. 2.4.3 Dispute Resolution

If a dispute arises as to the operation of this policy, or as to matter on which the operation of this policy relies, the Director of ICC shall appoint a mediator to assist the parties in resolving their dispute.

If such a dispute cannot be resolved through the assistance of a mediator, the Director of ICC shall appoint an arbitrator to investigate and decide the matters in dispute. The arbitration shall be held in Kuala Lumpur at the Kuala Lumpur Regional Centre for Arbitration and shall be conducted in accordance with Arbitration Act 2005. The arbitrator may adopt whatever procedure he or she deems appropriate, provided each party is given a fair hearing.

In selecting a mediator or arbitrator, the Director of ICC shall, as far as is reasonably practicable, choose a person who is acceptable to all parties, failing which the appointing authority for the arbitrator is to be the Director of the Regional Centre for Arbitration, Kuala Lumpur. The arbitration shall be final and binding on the Parties.

The decision of the arbitrator shall be reported to the Director of ICC without undue delay and the Director of ICC shall as soon as is practicable convey the decision to the parties to the dispute.

The parties to the dispute shall have the right of appeal against the decision of the arbitrator on the grounds of unfair hearing or a denial of natural justice, only. Any appeal shall be made to the Vice-Chancellor in writing within 30 days of receipt of the decision of the arbitrator.

The Vice-Chancellor shall consult with the parties to the dispute, the arbitrator and such other persons as the Vice-Chancellor shall decide, and shall make a determination on the outcome of the appeal without undue delay.

SECTION 3 – PROCEDURE

3.1 Administration Innovation & Commercialisation Centre (ICC) is responsible in the management of innovation and commercialisation activities in UTM. ICC has the function which include but not limited to the following:

a) To take appropriate measures to identify, assess and protect the Intellectual Property;

b) To assess the business plan if available or if it is need to an appropriate business plan to suite the IP in the journey of commercialisation.

c) To identify potential assignees/licensees;

d) To propose any assignments/licensing rights to a third party(s);

e) To determine an appropriate route to exploit the Intellectual Property; and

f) Any other related herein.

Innovation and Commercialisation Committee serves to evaluate UTM research products/services/technologies before the product goes through the process of innovation and exploitation.

3. 2 Commercialisation Process

Commercialisation may follow one of the following commercialisation modes. The Intellectual Property may be:

a) Exploited by the University to the market place, by way of licensing or assignment to its wholly owned company;

b) Licensed by the University to a commercial partner, where the commercial partner exploits the Intellectual Property to the marketplace;

c) Assigned/ outright sales by the University, where the University sells the Intellectual Property to a person or a company that will take it to the marketplace;

d) Exploited through the establishment of a Joint Venture/ Spin-off Company by the University together with a third party where the University and the third party are shareholders of the company.

The Innovation & Commercialisation Committee will decide which commercialisation pathway or pathways will be explored, bearing all these factors in mind and working where possible in close consultation with the Inventors.

This decision to exploit and commercialise technology will be made by the Innovation & Commercialisation Committee having considered:

a) the risks to exploit the intellectual property to the University;

b) any impact upon the University's reputation and standing;

c) the extent to which the activity will or may depart from the University's core business;

d) any legal liabilities and exposures to which the University may be subject;

e) the University's insurance cover; and

f) all other matters which to the University are relevant.

If the Innovation & Commercialisation Committee makes a recommendation that the Intellectual Property is feasible for exploitation, a full proposal within the policy stipulated herein must be tabled to the University Management Committee for approval.

3.2.1 Licensing of Intellectual Property by UTM

In the case of licensing, ICC will act as Licensor on behalf of UTM and licensing of UTM’s Intellectual Property will be effective through a Licensing Agreement.

3.2.2 Assignment or outright sales of Intellectual Property by UTM

The assignment or outright sales of Intellectual Property from UTM to other parties will be effective through an Assignment/Outright sale of Intellectual Property Agreement.

3.2.3 Establishing a Spin-off Company

In the case of a spin-off company exploiting UTM’s Intellectual Property, UTM may or may not own equity in the said company. However, any exploitation of UTM’s Intellectual Property by the spin-off company will only be effective through a Licensing Agreement.

In the event the University decides not to file or not to prosecute an Intellectual Property, the University may assign the Intellectual Property back to the Originator(s).

3.3 Type of Income Derived From Commercialisation

Income derived from commercialisation by the University will be categorised as follows:

a) Net Commercialisation Revenue (including all Royalties, fees and other benefit: from Joint Venture companies and licensing). Commercialisation Revenue less Commercialisation Costs as defined in Section 1.0.

b) Distribution of Profits from a Spin-off and Joint Venture Company

i. Profit from business operation of a spin-off or joint venture company may be distributed to shareholders in the form of dividends according to the Resolutions of the Board of Directors of the company.

c) Assignment or Outright sales of Intellectual Property and/or its derivatives

Distribution of income derived from Commercialisation shall be paid to the University in accordance to Garis Panduan Penubuhan dan Pemantauan Syarikat Hiliran 2018.

3.4 Formation of A Spin-Off Company

UTM Spin Off Company is a company established by Staff member(s) to commercialise the UTM intellectual property. The formation of a Spin-Off company is also to allow third parties investments into University IPs to enable the most effective commercialisation of that IP.

The staff member who intends to establish a spin-off company is responsible for the investigation, market survey, product validation, IP valuation and early stage development of the commercial prototype or the opportunity represented by the IP.

University Staff Member(s) shall seek prior approval from the University through ICC to establish a Spin-off Company. Establishment of any type company by Staff member(s) without prior consent from University shall face disciplinary action by University under Act 605.

Establishment of Spin-Off Company shall be limited to Sendirian Berhad (Sdn. Bhd.) or Perkongsian Liabiliti Terhad (PLT). Any other type of company establishment is subject to prior consent from University. All costs related to Spin-off Company establishment shall be borne by Staff member(s) or any individual(s) related to the company. No special provisions shall be provided by the University for the business establishment. Spin-off Company shall be obligated to submit its annual audited financial report, quarterly sales report and any other document required by the University. 3.4.1 Equity In A University Spin-Off Company The University may or may not opt to own equity in the newly formed spin-off company. In the event UTM opt to share the returns of the company through equity holding, the following will be considered in the equity structure:

a) The value of IP;

b) The length of service of inventor(s) at UTM;

c) Degree of business potential derived from the IP and his/her knowledge and innovations; and

d) The degree of University involvement in the spin-off.

UTM may appoint a University's representative as a member of BOD to be in the newly formed spin-off company.

Where the intellectual property is created by more than one inventor, the proportion of income distribution among the Inventors shall be agreed between the Inventors and such agreement will have to be endorsed by University.

Equity in a spin-off company will be considered on a case-by-case basis. Inventors will need to consider the taxation impact, if any, upon them of holding equity. The detailed terms and conditions of share equity are to be stipulated in the shareholders’ agreement.

The management of the spin-off company may be offered share options in a spin-off company, to be considered on a case-by-case basis.

3.4.2 Exit Strategy

The table below illustrates some of possible exit routes:

Exit Route Outcome and Expected Return

Trade Sale Sale of the assets and business of the company. All assets converted to cash when the company winds-up and capital gain or profit returned to shareholders. In the case of sale off all shares in the company to a single buyer, shareholders will receive proceeds of sales of the shares.

Merger Merging with another company. Shares in the company are exchanged for shares in the other company.

Redemption of Shares

Shares are redeemed by the company. Shares returned and cancelled and the company pays agreed purchase price.

Initial Public Offering

IPO results in raising capital from the public therefore listing with a stock exchange. Stock exchange listing provides a liquid and accessible market for a Venture Capital / Investor to sell its shares for profit.

Winding-up In the event of the company needs to be wound up, it shall be subjected to winding-up rules and procedures.

Table 2: Exit Strategy for a University Spin-off Company

3.4.3 Involvement of Staff Member(s) /Student(s) In a Spin-Off Company

To ensure success of the spin-off company, Staff member(s) who participates as a partner in a spin-off activity according to specific clauses in the constitutional document have to respect the following:

a) will not give-up the participation, for a minimum of three years;

b) will not carry out any activity in competition with the consulting and research that the University offers to public and private organizations;

c) will safeguard the reputation, good name and the interests of the University and offer adequate information for the University on the activity of the spin-off and the management of the company.

Staff member(s) who proposes the creation of a spin-off or is a partner shall be authorized and attained consent by the Vice Chancellor, to carry out activity for the spin-off while continuing his/her responsibilities and maintaining their University positions.

Students can carry out remunerated or not remunerated activity for the spin-off company if they meet the condition that it is not in opposition with the regular and diligent fulfilment of the research tasks, with the favourable opinion of the Dean of the Schools of Graduates Studies, Office of the Students Affairs and the University’s Senate.

Staff member(s) who is a partner of a spin-off company can carry out remunerated or non-remunerated activity for the spin-offs with the authorization of the Registrar’s office so as their responsibilities are not affected.

Government servants who become Directors are subject to the Government Policy in the Government Circular: Pekeliling Bil. 2 Tahun 1993: Bayaran (Fees), Elaun-elaun dan pampasan yang boleh disimpan oleh pegawai-pegawai kerajaan yang dilantik menjadi Pengerusi / Ahli-ahli Lembaga Pengarah Badan-badan Berkanun / Kuasa-kuasa Tempatan / Badan-badan Perniagaan yang kerajaan mempunyai kepentingan.

3.4.4 Full Time Secondment for Cuti Keusahawanan

3.4.4.1 Time commitment: Full time up to two (2) years with option to extend up to maximum of one (1) year. During this period the Inventor shall be committed full time to the success of the spin-off company and will not be engaged in teaching nor have any administrative duties from UTM. Inventor, however, is obligated to make himself available at UTM’s calling at any reasonable and adequate time of notice.

3.4.4.2 Monitoring

Performance of University Staff member seconded to Spin-off Company shall be monitored by ICC and its progress shall be subject for review every three (3) months. Upon approval by the University, related PTJ to University Staff member shall make any necessary allowance and arrangement to enable Staff member(s) to be involved in Spin-off Company. Beyond the two (2) years period, the University Staff member shall rejoin UTM.

3.4.4.3 Form of Remuneration or Payment (Allowance):

For the first two (2) years, the University Staff member will continue to receive full salary and allowance from UTM. Beyond the first two (2) years, University Staff member will only receive Basic Salary from UTM. 3.4.4 4 Commitment of Spin-off Company

The University shall at any time reserve the right to revoke the status of Spin-off Company should any of the following occurs:

i. UTM Intellectual Property Licence expires and no effort to renew or take

up any other UTM Intellectual Property Licence. ii. Breach of Malaysian Law and/or University Act and regulations

iii. Misuse of University’s name iv. Spin-off company does not make monetary contribution to the University

in accordance to Garis Panduan Penubuhan dan Pemantauan Syarikat Hiliran

v. Any related occurrence that will justify a revocation to be taken against the Spin-Off company.

3.5 Duration of Benefits to Creator

Creator will receive the benefit of the Creators’ share for as long as Commercialisation Revenue is received and upon decease, such benefits will be paid to the Creators’ beneficiaries.

3.6 Conflict of Interest and Commitment In Exploitation

UTM is committed to basic values of transparency, integrity and independence as it pursues its mission to create, preserve and disseminate knowledge through teaching, research, technology transfer, and public service. Accordingly, UTM allows and encourages faculty and staff to engage in outside activities and relationships that enhance the mission of UTM. All faculty and staff members are to act with honesty, integrity and in the best interest of UTM when performing their duties and to abide by the highest standards of research, educational, professional and fiscal conduct.

Given that UTM allows and encourages outside activities and relationships that enhance the mission of UTM, potential conflict of interest and commitment are inevitable. Outside activities which include sponsored or collaborative research and intellectual property exploitation, should not, however, interfere with an individual’s obligations to UTM. Creators and University Staff Member(s) must

not use their official UTM positions or influence to further gain or advancement for themselves, parents, siblings, spouse or partner, children, dependent relatives or other personal associates.

There are various conflicts of interest that can emerge in relation to Inventors receiving Commercialisation Revenue. These include potential conflict associated with:

a) the conduct and reporting of research;

b) the Inventor’s involvement in decision making on grants, sponsorship, recruitment, practices and resource allocation; and

c) the Inventor’s involvement in expert, advisory or regulatory capacities, both within and outside their course of employment at UTM or engagement in exploitation activities through ICC.

Any possible situation of conflict of interest has to be communicated to the related administrative office. The spin-off company will have to demonstrate the actions specifically adopted to avoid conflict of interest with a specific report sent to the Vice Chancellor and Registrar.

SECTION 4 – GOVERNANCE

Responsibilities

Policy Owner Deputy Vice Chancellor (Research and Innovation)

Policy Manager Innovation and Commercialisation Centre (ICC)