Well, as I suspected I might, I received volumes of requests for our
policy/position paper on this issue.  We are constantly battling
industry requirements to retain title to inventions under MTAs.
As tech transfer administrator for the NYS Department of Health we had to
go to an internal committee (IPRC) at the Department of Health and then to the
Commissioner of Health to accept such MTAs.  The following was
written to present the issue to this committee and to the Commissioner
and to request that they delegate the authority to accept such agreements
to HRI under certain defined conditions.  (The final policy ended up
dealing only with the title issue per se, but the precursor draft of the
policy is presented below --as I think it deals with more of the issues
and we use it here internally as our "guidance" in dealing with restrictive
MTAs.  It would be nice to think the NIH guidance says it all, but
unfortunately, there are companies out there that could care less what the
NIH has to say on the issue.  Also, we do deal with situations where we
are negotiating MTAs when there are no federal funds involved in the research.
BTW - we realize the part about no patentable inventions are expected is a
a real hoot ;-)

HRI is requesting IPRC approval to authorize acceptance of  Material Transfer
Agreements which include restrictive terms that are in conflict with current
DOH/HRI Patent Policy.  An overview of the circumstances warranting this
delegation of authority to HRI and the conditions under which it would be this
applied is presented below:

Background

Technology transfer staff  negotiate the terms of Material Transfer Agreements
(MTAs) which govern receipt by DOH scientists of research  materials (clones,
cell lines, new compounds, etc.) from researchers at other institutions and in
private industry.  These agreements set out the terms and conditions under
which we agree to accept and use the research materials.  Such materials are
generally unique and not commercially available.

Due to the growth of the biotechnology industry, "cutting edge" research once
performed exclusively in academic settings is now routinely a part of corporate
R&D.  The results of this corporate research frequently open up new avenues of
inquiry for academic researchers that often cannot be explored without access
to the unique materials developed in the course of corporate research.

The Problem:

In the academic setting,  the motivation to share research materials stems
mainly from the need to allow duplication--and thereby validation-- of
research results.  Concerns in the corporate sector tend to revolve around the
need to control rights to materials and any technology that might be derived
therefrom in order to establish a competitive market position.   Holding title
to an invention gives an organization the ability to patent that invention and
to subsequently license the invention and collect royalty income.   More
importantly, owning a patent allows the owner to prevent others from selling
products based on that patent.

Federal policies in the 1980s allowed university and non-profit organizations
to retain title to inventions developed with federal support.  As a result,
such organizations have developed policies and procedures to retain proprietary
rights in new technologies and to commercialize those technologies through
licensing.  The DOH Patent Policy is an example of such a policy.  Conflict
often results from attempts to share materials between industry and academia --
with both the commercial entity and the non-profit wanting to retain rights to
inventions developed through use of the industry provided materials.

Regardless of attempts at the federal level to develop a Uniform Biological
Materials Agreement for use by both academic and industrial organizations,
MTA's with restrictive terms designed to protect the proprietary interests of
the industrial owner are becoming more common,  Restrictive conditions that
conflict with the established patent policy of the Department include
requirements that the company retain title to or receive an exclusive
royalty-free license to all inventions arising from or related to work with the
material.  Restrictive confidentiality or publication clauses that can
potentially interfere with the Department's freedom to disseminate research
results are also common.

Because the materials are often not available from any other source,  and
failure to obtain the materials can  rule out an entire line of research, HRI
is frequently in a poor negotiating position.  More often than not, the
technology transfer office is successful in negotiating terms reconcilable to
the DOH patent policy;  however,  we often (5  times in the past year)
encounter companies unwilling to negotiate less restrictive terms.  Under
current DOH/HRI policy, when companies insist on holding title to inventions,
HRI must obtain IPRC and Commissioner approval in order to sign such Material
Transfer Agreements.

HRI has general conditions under which it recommends approval of such MTAs:

 The company refuses attempts to negotiate less restrictive terms.

 The material is not available elsewhere and the research cannot be
conducted without the material.

 Research is NOT funded in whole or in part by federal funds or any
other funding source that requires retention of title.  (Federal law
prohibits grant recipients from  giving away title to inventions
developed in whole or in part with federal funds).

 The research is not considered likely to produce any patentable
inventions.

 Management responsible for oversight of the particular research agrees

that the terms are acceptable under the circumstances.

 There is no prior approval authority over scientific publications
granted to the        provider of the material.  (Prior review for a defined
time period is acceptable).

The incidence of restrictive MTAs appears to be on the rise.  Processing such
MTAs for IPRC/Commissioner approval is time consuming for both HRI staff as
well as for members of the IPRC and the Commissioner, and often the need for
expedited approval results from the protracted negotiations involved in trying
to reconcile the agreement to DOH/HRI policies.  Because the circumstances
under which such MTAs can be approved can be clearly defined, HRI requests
authority to approve MTAs when all of the above conditions are met.

* Elizabeth (Liz) Mazzella            xxxxxx@HEALTH.STATE.NY.US*
* Director, Technology Transfer & Contract Programs           *
* Health Research, Inc. (A Non-Profit Corp.) Albany NY 12209  *
* Voice: (518) 431-1200                    Fax: (518)431-1234 *