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Re: IP Question Stephen Erickson 06 Dec 2001 22:44 EST

Just one point of clarification, if this is typical software and is copyrighted,
then Bayh-Dole would not apply since that only applies to patentable inventions.
The federal government retains it's royalty-free license to software through
"rights in data" clauses or provisions.


"James R. Brett" wrote:

> Ruth,
> So far you have gotten fairly conservative advice on the IP question.
> Here is a slightly different point of view.
> The sponsor does not have a right to free use of the intellectual
> property of its contractors, not even the federal government.  What is
> in the contractor's head they pay for as Time; what is already built,
> patented or copyrighted they pay for as Facilities, Supplies, and
> Services.  It is frequently the case that professionals have developed
> specialized tools, processes, survey instruments, etc., which are
> patented or copyrighted for which there is an established value and they
> have a right to receive that value.  And they do.
> If the IP is to be improved as a stated goal of the project, then the
> Bayh-Dole Act provisions will begin to apply, particularly if the
> project requires that the IP be improved to successfully meet the
> project goals.  If, however, the IP is to be improved incidentally to
> the stated goals of the project, and if it is perfectly good for use in
> the project "as is," i.e., as brought here from Sweden, then the PI can
> charge for its use.  Bayh-Dole Act considerations may accrue, but are
> post hoc considerations.
> A conflict of interest develops in a context in which the financial
> interest of the PI is seen to be greater than and/or interfering with the
> project interests.  If, for instance, there were a couple of other
> software products which met or exceeded the utility of the PI's
> software, then he/she might be deemed to have a financial conflict
> of interest.  But, if no other product is available, then the PI is
> perfectly
> justified in using his own product and charging fair market value for
> it.  After all, if the PI did not own this IP, then he/she would
> necessarily have to employ someone else's product and pay for it.  I
> think that common sense tells us that if the benefit of using the PI's
> software is demonstrably greater than using rival products, the project
> should use the software that works best ... and pay for it.  Mere preference
> is not enough; there must be a demonstrably greater benefit.
> Fair market value for unique products can be difficult to determine.  If
> this product has never been sold on the open market, I would advise you
> to do two things: first, get a reliable/expert third party to give you a
> estimate of the value of the product based on "a closest approach to
> function" of other regularly available products, if any, and two, to show
> this
> value only as cost-sharing on this project and perhaps the next one,
> too.  If the feds don't require cost-sharing, then put it in anyway.  If
> they object to the established value, listen to the reason for the
> objection.  If you got good advice from your expert, you will have some
> basis for continuing the conversation.  If the software has a substantial
> recent sales history, use that value as a direct cost.  If the sales are
> infrequent and not recent, put the value into cost-sharing.
> Your PI will, no doubt, complain about the lack of consideration in all of
> this.  My conservative colleagues are not wrong.  A good deal of the burden
> of removing a shadow of conflict of interest rests on the person who might
> benefit -- your PI.
> Jim
> Ruth Tallman wrote:
> > Good Morning,
> >
> > We have a "sticky" situation regarding intellectural property and I
> > would appreciate your counsel.  One of our faculty came to Lehigh with a
> > commercial software product which he will be using and improving through
> > his research activities at Lehigh.  The ownership of the product and
> > future enhancements has been reviewed, discussed and documented.  The
> > faculty member owns it and Lehigh doesn't want any rights now or in the
> > future.
> >
> > Here's the sticky part:  the faculty member wants to charge his grants a
> > license fee for two copies of the software each year.  I consider this
> > "sticky" because I'm not sure that there is a large market for the
> > software or if it is being marketed, at all.  Also, from the prior
> > discussions, it was clear that the software will continually be enhanced
> > and expanded through his work.  What should I do: make sure there are
> > other customers for/users of the software and that the grants are not
> > the only paying "customers"?  Confirm that the software is being
> > enhanced though the work, and then restrict the license to only the
> > first year for the initial "version" of the software?
> >
> > Your input would be appreciated.
> >
> > Ruth
> >
> > Ruth Tallman
> > Office of Research and Sponsored Programs
> > Lehigh University
> > 526 Brodhead Avenue
> > Bethlehem, PA  18015
> > Phone:   (610)758-3024
> > FAX:    (610)758-5994
> > E-mail:
> >
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> --
> James R. Brett, Ph.D., Director,
> Office of University Research
> California State University, Long Beach
> 562-985-5314  562-985-8665 fax
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Stephen Erickson, Director
Office of Research Administration
Boston College, McGuinn Hall 600
Chestnut Hill, MA 02467
Telephone: 617-552-3345 - On-Campus Fax:  2-0747
Fax to My Computer: 413-895-8328

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