Dear Bill:  here's a snippet from an argument I made with a CA state
agency that wanted my university to give up copyright and ownership of
intellectual property.  I made my case and they let us retain ownership
and copyright.

"We retain copyright and ownership for a number of reasons:  1)
retention
of copyright and ownership makes it easier for our faculty to utilize
results and
deliverables of present research for any future research and teaching;
and 2) the retention of ownership and copyright is a means of proving to
the Internal Revenue Service that Cal Poly and the Cal Poly Foundation
do not perform "works for hire" and thus provide research services
consistent with their educational mission.  The IRS has deemed that
research performed by an educational or non-profit institution that is
not consistent with its educational mission (as defined by the IRS)
could endanger the non-profit status of the institution and lead to
unrelated business income taxes (UBIT). The educational/research mission
is defined by the IRS as "being in the public interest". Research is
regarded as in the public interest if all patents or other resulting
rights are made "available to the public". The IRS has indicated that
giving up ownership of intellectual property and limiting a faculty
member's right to publish may point to the fact that the non-profit or
educational institution is no longer adhering to its educational mission
since the products of its research may not be made public (i.e. -- not
in the public interest).  Presumably, if Cal Poly agreed to give up
ownership of its intellectual property by agreeing to a "works for hire"
agreement, we could not ensure that the products of our research would
be made available to the public.  This would endanger our non-profit
status and could lead to UBIT.  Therefore, in order to avoid the
potential loss of its non-profit status (and to avoid UBIT), Cal Poly
has a policy of retaining copyright and ownership of its intellectual
property.

Another consideration that may or may not impact the ownership issue
revolves around whether the original source of funds for this agreement
is federal. If so, the funding may be subject to the provisions of the
Bayh-Dole Act (Public Law 96-517, codified at 37 CFR 401).  As you may
be aware, Bayh-Dole provides universities and other non-profits with the
right to retain ownership of intellectual property developed under
research agreements funded by federal dollars."

I hope this helps.

Rochelle Athey
Director, Sponsored Programs
Cal Poly State University Foundation
805-756-1123/805-756-5588 fax
http://www.cpfoundation.org/SP/

-----Original Message-----
From: bc18 [mailto:xxxxxx@SWT.EDU]
Sent: Monday, February 21, 2000 6:04 AM
To: RESADM-L
Cc: bc18
Subject: Work for Hire Contracts

I would appreciate hearing from anyone who has experience in handling
contracts that are essentially "work-for-hire". As a state institution,
we
are instructed that we do not contract for work-for-hire. I would like
to
hear how other institutions manage this issue. Also, if you could share
with
me the reasons you give for not signing work-for-hire contracts, it
would be
helpful.
Thanks in advance for the info.
Bill Covington
Associate VP for Research
Southwest Texas State University
San Marcos, Texas 78666
xxxxxx@swt.edu
512 245-2314

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