Frequently Asked Questions Regarding Current IP Policy

1. Why have the policies been revised?

 

Dartmouth’s Patent Policy had not undergone a substantive review since 1978 and Dartmouth’s Copyright Policy had not undergone a substantive review since 1994.  In the meantime, the technology and business landscapes have changed significantly, necessitating a fresh look at our policies and how they incentivize intellectual property creation and commercialization. 

 

The new Policy on Rights and Responsibilities with respect to Copyrights, Patents and other Intellectual Property Rights (the New IP Policy):

  • Consolidates the previously in effect patent and copyright policies into one comprehensive policy addressing all intellectual property (IP);

  • Clarifies who owns IP generated by members of the Dartmouth community;

  • Encourages entrepreneurship at Dartmouth by creating “Option 2,” which allows Dartmouth Inventors/Authors/Creators (see §B of the New IP Policy for definitions of these capitalized terms) to require the College to transfer College-owned IP to his, her or their start-up company (Inventor Company);

  • Codifies past operating practices with a spirit of support for entrepreneurship; and

  • Harmonizes inconsistent past practices.

 

2. Who is covered by the New IP Policy?

 

Covered Persons include (i) individuals holding a College academic appointment, including without limitation Faculty Members, Distinguished Fellows and Postdoctoral Scholars, (ii) Staff Members, (iii) Research Visitors, and (iv) Students (see §B of the New IP Policy, which includes definitions of all the foregoing capitalized terms).

 

3. What are the biggest changes from the old policies?

 

The three biggest changes are:

  • The consolidation of the previously in effect College patent and copyright policies into one policy and inclusion of specific provisions covering all other forms of intellectual property such as trademarks and tangible research materials;

  • The inclusion of “Option 2” (see §D.6 of the New IP Policy); and

  • Clarification of the circumstances giving rise to ownership of IP by the College, i.e.:

  1. where IP is developed with funding that comes from or through the College (such as sponsored research funds, federal funds, faculty start-up funds, or the Provost’s seed fund) that is specifically devoted to a particular research project;

  2. where IP is developed with Significant Use of Dartmouth Resources;

  3.  where IP is developed pursuant to an agreement between the College and an Inventor/Author/Creator providing the IP will be owned by the College;

  4. where IP constitutes “Related Intellectual Property;”

  5. where a work of authorship protected by copyright is developed by a non-faculty employee within the scope of his or her employment; OR

  6. where a work of authorship was specially commissioned by the College or resulted from an assigned institutional effort.

 

(See §§D.1 & E.2 of the New IP Policy.)  Note that there is no material difference between the existing patent and copyright policies and the new IP Policy regarding the circumstances under which the College asserts ownership in IP.  However, the existing policies do not provide as much detailed guidance about how the general concepts embodied in them translate into practice.

 

The New IP Policy also deals with several areas not covered by the previous policies and provides more concrete and objective criteria to make the policies and practices around IP ownership more transparent, egalitarian and efficient.

 

4. What constitutes a “Significant Use of College Resources”?

 

Under the New IP Policy, the use of College facilities, equipment, databases, supplies or other resources in excess of the typical use of any such resources in the College community OR more than incidental use of the services of College employees while such employees are working within the scope of their employment will result in College ownership of the IP developed with such resources (see definition in §B of the New IP Policy).  However, if an Inventor/Author/Creator makes arrangements in advance, to pay the College fair market consideration for excess use of these resources, such use shall not be a Significant Use of College Resources. 

 

 (Office space, College email, desktop computers, laptops, networks, storage servers, the libraries, machine shop facilities, wood shop facilities and DEN facilities are not among the resources covered by the preceding sentence, i.e., Inventors, Authors and Creators may utilize, without charge, such resources to any extent they desire in developing IP without such use giving rise to a claim of ownership by the College.)

5. What is “Related Intellectual Property”?

 

“Related Intellectual Property” is any IP that is necessary for the practice of an invention that an Inventor has not disclosed as being part of such invention.  It includes trademarks associated with a good or service related to such invention and non-commercial computer software on which such invention operates.  It does not include scholarly works (see definition in §B of the New IP Policy).

6. What are some examples of what is, or is not, a specially commissioned work of authorship or an assigned institutional effort?

 

An essay written by a faculty member at the request of the College for inclusion in a College publication celebrating a College event, case studies or curricular materials to be used by members of a department other than or in addition to the Authors and works created in the course of an administrative assignment, such as committee reports and College catalog course descriptions are examples of specially commissioned works of authorship.  The College would own the copyright in these works unless otherwise agreed with the Author.

 

The creation by a faculty member of computer software to be used in the operation of a shared College resource is any example of an assigned institutional effort.  Again, the College would own the copyright in this work unless otherwise agreed with the Author.

 

By contrast, books, journal articles, syllabi, lecture notes and other instructional materials, or other works of authorship produced by faculty on their own initiative, are not considered to be specially commissioned works of authorship, nor is their creation considered to be an assigned institutional effort.  Thus, absent an agreement to the contrary with the College, the Author would own the copyright in these materials.  

 

(See clause iv of §E.2.b of the New IP Policy.)

 

7. How is Net Revenue distributed where IP is owned by the College?

 

Net Revenue from the commercialization of an Invention/Work of Authorship owned by the College is split 50/50 between the College and the Inventor(s)/Author(s)/ Creator(s) (See §D.5 of the New IP Policy), except in the case of a Material Transfer Agreement, in which case the distribution of Net Revenues shall be determined by the OETT.  This has not changed from our current practice.

Where multiple Inventions, Works of Authorship or other IP are licensed under a single license agreement, the allocation of Net Revenues among such IP will be determined in accordance with guidelines established by the Office of Entrepreneurship and Technology Transfer. 

 

Unless otherwise agreed among Inventor(s)/Author(s)/Creator(s), the share of Net Revenues which is due to such individuals pursuant to the license of IP by the College will be split equally among the Inventor(s)/Author(s)/Creator(s) of such IP. 

 

8. How is the College’s share of Net Revenues from non-Option 2 Transactions distributed?

 

The College’s portion of the distribution will be allocated as follows:

  1. 20% to the Office of the Provost ( the "Provost's Portion");

  2. 40% to the Office of the Dean of the school at which the Inventor, Author or Creator is employed, appointed or enrolled, as applicable (the "Dean's Portion");

  3. 25% to the department, institute or center at which the Inventor, Author or Creator is employed, or appointed or enrolled, as applicable (the" Department's Portion"); and

  4. 15% to the laboratory (if any) of the Inventor, Author or Creator or for the benefit of the research group (if any) of the Inventor, Author or Creator (the "Laboratory's/Research Group’s Portion").  If the Inventor, Author or Creator does not have a laboratory or is not a member of a research group, this portion shall be allocated as determined by the Provost or his or her designee;

 

provided, that if the Provost determines, after consultation with the Dean or other persons affiliated with any affected school or administrative unit and such other persons as he or she deems appropriate, that it is in the best interest of the College to reallocate all or any part of the College’s portion of any distribution, either among the portions described above or for other institutional needs, such portion shall be distributed as determined by the Provost.  (See §D.5 of the New IP Policy.)

Where there are multiple Inventors, Authors and Creators, the Dean's Portion, the Department's Portion and the Laboratory's/Research Group’s Portion shall be divided among the respective Dean's offices, departments/institutes/centers, and laboratories or research groups of such individuals in the proportions attributable to each Inventor, Author or Creator pursuant to the preceding paragraph, subject to further adjustment as provided in the following sentence.  In the case of any Inventor, Author of Creator with joint appointments in two or more schools or departments, institutes or centers, the Dean’s Portion, the Department’s Portion and the Laboratory’s/Research Group’s Portion shall be allocated among the schools, the department, the institute and center and their corresponding subunits as determined by the Provost or his or her delegee.  (See §K.3 of the New IP Policy.)

 

9. Do Students own the IP in Inventions/Works of Authorship they develop or create pursuant to their academic

         work?

 

Inventions developed by Students pursuant to their academic work are treated like any other Inventions under the New IP Policy – they are owned by the Student unless they were developed with funding from or through the College which is specifically devoted to a particular research project, with Significant Use of College Resources, constitute Related Intellectual Property, or as otherwise agreed between the Student and the College. Works of authorship created by Students in the course of their non-employee academic work are likewise owned by the Student except in the circumstances listed above in this item 6 (see §§D.1 & E.2.c of the New IP Policy).

 

This has not changed from our current practice.

 

10. What is “Option 2”?

 

Option 2 is the process by which, under very specific conditions, an Inventor/Author/Creator may at his or her option direct the College to transfer ownership of an Invention (or in the case of non-patentable computer software, the copyright) to his or her start-up company (see §D.6 of the New IP Policy).

 

There are several conditions that must be met to trigger Option 2, the most important of these being:

  1. ALL Inventors/Creators/Authors must agree to transfer ownership of the Invention (see §D.6.a.i of the New IP Policy);

  2. The Inventor Company must provide evidence that it has at least $250,000 in cash financing or an SBIR/STTR award (or equivalent) for Invention development  (see §D.6.a.ii of the New IP Policy);

  3. If the invention was federally funded, the sponsoring federal agency must approve the transfer(see §D.6.a.iii of the New IP Policy); and

  4. The College receives a 4% founders equity stake in the Inventor Company (see §D.6.a.vi of the New IP Policy).

 

11. What is the rationale behind “Option 2”?

 

The College is committed to incorporating experiential learning and innovation into the “Dartmouth Experience,” and a key part of this initiative is increasing the entrepreneurial activity of Faculty Members and Student researchers.  The focus of the new Option 2 is to reduce transactional costs for the College, the Inventor/Author/Creator, and the Inventor Company, accelerate translation of the IP, and establish a financial interest for Dartmouth which is aligned with the inventor entrepreneur in the spirit of partnership and support. 

 

The College believes that availability of Option 2 will help to differentiate Dartmouth as a leader with a supportive environment for entrepreneurs and startup creation, and in turn will help to attract talent to Dartmouth.

 

12. How was the size of the equity stake that the College will take in Inventor Companies under Option 2    

          determined?

 

Based on a review of deal terms for analogous transactions at peer institutions and consideration of how to best promote economic viability for the Inventor Companies, and in light of the fact that most of Dartmouth’s technologies are at a very early stage of development and will require substantial time and investment to further develop, as well as the fact that the Inventor(s)/Author(s) and Creator(s) will not share in any inventor company equity issued to Dartmouth, it was determined that a 4% equity interest should be acceptable to the College.

 

13. Under Option 2, how are dividends/distributions from the College’s Equity stake in an Inventor Company

          distributed?

 

Distributions from the College’s 4% stake in an Inventor Company will be divided as follows: 44.75% to the Provost’s Office; 34% to Dean of relevant school; 21.25% to the Inventor(s)’/Author(s)’/Creator(s)’ department/institute/center.

 

Inventor(s)/Author(s)/Creator(s) will not receive any portion of Dartmouth’s 4% equity or distributions therefrom.

 

14.  For individuals who may be covered under both, how does the College’s New IP Policy interact with the

           Dartmouth-Hitchcock IP Policy?

 

The New IP Policy does not allocate ownership of IP based on the “paymaster” of a particular Inventor/Author/Creator of IP.  Rather, it clarifies that the College will assert ownership over IP which is developed in connection with certain funding sources, the use of certain resources, and (in the case of Works of Authorship) whether they were created as part of a specially commissioned work or within the scope of employment for a non-faculty-member employee.

 

Under its own IP policy, D-H asserts ownership over IP “resulting from research or investigation conducted in the course of an investigator’s work on behalf of Dartmouth-Hitchcock or in connection with the use of Dartmouth-Hitchcock resources”.

15. What are the material changes to the Dartmouth College Policy on Acceptance of Equity (which was revised in light of the New IP Policy revisions)?

 

There are two material changes to the Policy on Acceptance of Equity,  as follows: 

  1. (i) Provision for the acceptance of Equity by the College to be approved by a designee of the Provost and EVP (see §C.2 of the revised Policy on Acceptance of Equity); and

  2. (ii) Exemption of transactions effected under “Option 2” from the need for approval by one of the above officers of the College where all of the required conditions for triggering Option 2 as set forth in §D.6 of the New IP Policy have been met (see clause i. of §C.1 of the revised Policy on Acceptance of Equity).

 

Other revisions generally consist of language changes to make this policy conform to language used in the New IP Policy.

 

16.  When did the policies become effective and  how do they apply?

The policies became effective on March 5, 2016 (see §K.11 of the New IP Policy and §F of the revised College Policy on Acceptance of Equity).

 

The New IP Policy applies to intellectual property that is created, first conceived or reduced to practice by any Covered Person on or after March 5, 2016. However, in light of the interests intended to be promoted by Option 2, Inventors/Creators/Authors of intellectual property in existence prior to March 5, 2016 are entitled to exercise Option 2 on or prior to September 4, 2016 unless doing so would conflict with an outstanding contract applicable to such intellectual property (see §K.11 of the New IP Policy).

 

The revised Policy on Acceptance of Equity applies to all equity which any commercial venture proposes to issue to the College on or after March 5, 2016 unless doing so would conflict with an outstanding contract applicable to such equity issuance (see §F of the revised Policy on Acceptance of Equity).

 

17. What is the process for amendment of the policies?

 

Both policies are subject to amendment or revocation by the College, in whole or in part, from time to time (see §K.11 of the New IP Policy and §F of the revised Policy on Acceptance of Equity). In addition, the Board of Trustees, the President, and the Provost each acting alone shall have the power to make revocations or amendments. In addition, during fiscal year 2022 the College is required to review Option 2 for the purpose of assessing its impact on the encouragement of entrepreneurial activities on the part of Covered Persons, the recruitment of faculty, other personnel and students, and other relevant matters (see §K.11 of the New IP Policy).

 

18. How will questions of interpretation and disputes under the policies be resolved?

 

Questions or disputes regarding the application, interpretation or implementation of the policies shall be resolved by the Provost (or his or her designee) in consultation with the Senior Vice President for Research, OSP, OETT and OGC.  The Provost's decision on the matter shall be binding on the College and all Covered Persons (see §K.10 of the New IP Policy and §E of the revised Policy on Acceptance of Equity).

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