OSR Brownbag

1. NIH-Funded Research, the Bayh-Dole Act, Agreements with Commercial Entities, and Academic Freedom OSR Brownbag Bruce ElliottExecutive Director, OSR–Chicago September 12, 2011

2. Highlights from Previous Brownbag on Sharing NIH Resources • Reinforces open scientific inquiry, promotes new research, facilitates education of new researchers, allows review by other scientists giving them the opportunity to verify results and extend them (creation of new knowledge) • NIH policy that PIs and universities are expected to make the results and accomplishments of their activities available to the research community and to the public at large

3. What Kinds of Data are Candidates for Sharing? • Data • Unique research resources • Model organisms • Genome-wide association studies • Publications • Intellectual Property (inventions and patents)

4. What is the Bayh-Dole Act? • Pre-1980: Tough for the federal government to transfer technologies for which it had assumed ownership. Many patents were not being used because the government lacked the resources to develop • 1980 B-D Act created a uniform patent policy among federal agencies in which universities – rather than the government - retain ownership to inventions made under federally funded research • In return, universities are expected to file for patent protection and licensing and commercialization • B-D created Technology Transfer and sped up commercialization of federally funded research

5. Bayh-Dole Act Expectations • Universities can retain the title in a federally funded inventions. In exchange, the university is required to: • Report each disclosed invention to the funding agency • Elect to retain title in writing within a statutorily prescribed timeframe • File for patent protection • Grant the federal government a non-exclusive royalty-free license to practice on its behalf – permits further research by fed agencies • Actively promote and attempt to commercialize the invention, with preference to small business firms • Share royalties with the inventor. A portion is also used to support the University and department/college to further education and research, and INVO

6. Sharing Data with Commercial Entities • NU’s interactions with other universities is our standard way of doing business • NU also works with commercial partners in NIH-funded projects • Sharing resources and IP with commercial entities comes with strings attached • Why? Universities and commercial entities have many incompatible purposes, objectives, and philosophies.

7. Sharing Data with Commercial Entities • Universities are not-for-profit, tax-exempt educational and research institutions • Creation of generalizable knowledge • Dissemination of knowledge for public good through • Education of students who disperse and transmit it broadly • Publication and presentation without restriction • Technology transfer • Industry has many different interests: • Contributes to society by developing and providing cutting-edge products and services • Must be profitable to survive • Profit can be increased by restricting access to research: sharing with public not in their interest

8. Interactions with Industry Can Take Many Forms • NIH encourages universities to collaborate with commercial entities to promote the use of university research • University-Industry interaction, e.g., SBIR/STTR • Spinoffs – faculty startup companies • Material transfer agreements • Industry as consultants on NU NIH grants • Faculty serving as consultants for industry • What points need to be considered in developing sponsored agreements with commercial entities when the agreements are fully or partially funded by NIH?

9. Preservation of academic freedom is of importance to NIH • Universities committed to openness in research - freedom of access by all interested parties to underlying data, processes, and final results of research • Academic institutions have contributed to fundamental knowledge primarily through federal funding and free from interference in the conduct of the research • NU does not conduct secret / classified research or work-for-hire projects • NU does not allow the sponsor to control the project or select personnel • NU doesn’t accept publication restrictions • NU owns intellectual property developed with NU resources • Reasonable best efforts

10. NIH Sponsored Agreements with Commercial Entities Must Consider: • That agreements do not adversely impact NIH expectation of open access to technology • Academic freedom • Shifting control of scientific activities, management, and independence into hands of commercial entity • Prospective exclusive licensing rights to company • Access of company to university IP should be based on level of funding and type of funding, e.g., for specific research area, or for general operation

11. NIH Sponsored Agreements with Commercial Entities Must Consider: • Extramural invention reporting compliance responsibilities • Timeliness is the key! Recipients must ensure that invention, patent, and license requirements adhered to • Employee notification to University • Written disclosure to NIH in sufficient detail to describe invention (iEdison) • Notification as to election of title • Continues follow-up with NIH on status of licensing

12. Dissemination of Research Results • Grantees must ensure that timely dissemination of research findings is not hindered by the research agreement • Any licensing agreements must protect the mission of the University by ensuring that faculty inventors retain rights to continue research in the licensed field, publish freely, and disseminate research results to other academic researchers • Publication - industry sponsor’s consideration of commercial applicability of IP and confidentiality may justify delay of disclosure of research results 30-60 days • Deal breakers: Inability of NU to own results; publication restriction by industry

13. Utilization • NIH expects federally funded technology to be developed and commercialized efficiently • Universities need to consider whether commercial entity has experience, capability, commitment to bring invention to market • To avoid delays: • Avoid exclusive licensing rights before deciding whether company wishes to commercialize • Provide option limited to 6 months • If option expires, university technology can be licensed to others • Build in due diligence and benchmarks to actively monitor performance

14. NIH March-In Rights • What happens if the university in good faith licenses a patent to a company but the company doesn’t commercialize the invention? • NIH march-in rights: NIH has non-exclusive license • Genzyme and Fabry disease. • Genzyme had production problems in 2009 • Severely limited amount available • Petition filed by 3 patients

15. SBIR/STTR Template Language • Compare university principles and B-D expectations with language in NIH agreements having industry participation

16. Thank You! Bruce Elliott 3-1780 b-elliott@northwestern.edu