2. Patent Policy

a. Basic Objectives

Patents are created by the Constitution and the Laws of the United States "to promote the progress of science and useful arts by securing for limited times to...inventors the exclusive right to their...discoveries." The basic objectives of Princeton University's policy include the following:

1) To maintain the University's policy of encouraging research and scholarship without regard to potential gain from royalties or other such income.

2) To make inventions developed in the course of University research available under conditions that will promote their effective development and utilization in the public interest.

3) To provide adequate recognition to inventors through a share in any proceeds from their inventions since University salaries are not based on the expectation of income from inventions.

4) To advance and encourage research and scholarly endeavors within the University with any funds accruing to the University from patents.

5) To recognize the equity of outside sponsors in the endeavors of the University by granting appropriate limited rights to the sponsors, consistent with the University's basic objectives outlined above.

b. The University Research Board, the Dean for Research, and the Office of Technology Transfer

The University Research Board is responsible for general oversight and administration of the University's Patent Policy as regards the University, its Faculty, employees, students, and outside sponsors.

The Dean for Research is responsible for the implementation of the Patent Policy under general oversight of the University Research Board. The Office of Technology Licensing, reporting to the Dean for Research, is responsible for the University's Technology Transfer Program, providing management of inventions and patenting and licensing services for inventions developed by members of the Princeton University community.

c. Relationship Between the University and Faculty, Employees, and Students

All Faculty members, employees, and students, in consideration of their membership in the academic community and upon the approval of this policy by the Trustees and the Faculty of Princeton University, agree to handle inventions and patents resulting therefrom as follows:

1) The University shall own all rights in any discovery or invention resulting from research carried on by any Faculty member, employee, or student

a) in which all or part of the cost thereof is paid from University funds or from funds administered by the University, or

b) which is made as a direct result of University duties, or

c) which has been developed in whole or in part through the utilization of University resources.

2) All such discoveries or inventions must be disclosed to the Office of Technology Licensing as soon as practicable.

3) The Office of Technology Licensing shall determine that such discovery or invention be either:

a) assigned outright to the discoverer or inventor in the event the discovery or invention does not meet any of the criteria set forth in paragraph 1) above;

b) assigned outright to the discoverer or inventor if determination is made that University technology transfer is not warranted

c) transferred to one or more patent management organizations with which the University has contracted;

d) forwarded to the outside sponsor if such action is required under the terms of a sponsored project agreement or by law.

4) No Faculty member, employee, or student may assign or license or agree to assign or license an invention developed under the criteria listed in c.1. above without prior written consent of the Office of Technology Licensing.

5) When the University and an outside sponsor enter into an agreement for research or other scholarly endeavor to be conducted with funds or facilities provided by said sponsor, Faculty members, employees or students who utilize such funds or facilities shall comply with the conditions pertaining to inventions and patents contained in said agreement and may be required to agree in writing that they will so comply.

6) If a dispute should arise between an inventor and the University with respect to the provisions of this Section c., questions shall be referred for decision to the University Research Board.

d. Distribution of Income

Any income realized by the University from its equity in an invention will be used for the purpose of research or scholarly activity, with the preferential consideration being given to the field of activity in which the invention was made.

1) For an invention in which the University owns all rights in accordance with Section c. above, the inventor will be distributed the following percentages of the net income realized by the University: fifty percent (50%) of the first $100,000; forty percent (40%) of the next $400,000; and thirty percent (30%) of the amount in excess of $500,000. "Net income" for distribution purposes means the income received by the University minus unreimbersed out-of-pocket costs, without subtraction of the general expenses incurred by the University in supporting research and licensing technology.

2) For all licenses signed after July 1, 1998, the Department or Program of the inventor shall receive a portion of net income realized by the University as follows: zero percent (0%) of the first $100,000; ten percent (10%) of the next $400,000; and twenty percent (20%) of the amount in excess of $500,000 up to a maximum of one million dollars ($1,000,000).

3) For inventions which the University releases outright to the discoverer or inventor under the provision of Section c. above, the University may also release all claims to any subsequent income received by the discoverer or inventor.

e. Relations with Outside Sponsors

Research supported by outside funds is governed by the Policies for Sponsored Research which are set forth in the Rules and Procedures of the Faculty of Princeton University and also in the Rules and Procedures of the Professional Researchers and Professional Specialists of Princeton University.

When a sponsor of research at Princeton University desires a formal agreement that includes conditions applicable to inventions and patents, the provisions of such agreements will be negotiated giving full consideration to this Patent Policy and to the objectives cited in Section a. hereof.