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Intellectual Property Policy

The purpose of this policy is to protect the respective interests of all concerned by ensuring that the benefits of inventions, research, discoveries, and other Intellectual Property created at The University of Texas MD Anderson Cancer Center (MD Anderson) accrue to the public, the inventor(s), MD Anderson, and to the sponsors of the specific research.

Policy Statement

It is the policy of MD Anderson to abide by the Intellectual Property Rules contained in Series 90000 of the Regents’ Rules and Regulations. Subject to the then applicable Regents’ Rules and Regulations and unless and until changed by MD Anderson, this Policy will govern the ownership, development, and commercialization of the Intellectual Property of MD Anderson, the negotiation of equity in conjunction with an Intellectual Property licensing transaction, and the handling and disposition of equity received by MD Anderson as part of an Intellectual Property licensing transaction.

Intellectual Property either created by an individual within the course of his/her employment responsibility to MD Anderson, The University of Texas (UT) System, or any of its member institutions, or resulting from activities performed on MD Anderson time, or with the support of State funds, or from using the resources and facilities owned by MD Anderson is owned by Board. All Intellectual Property must be disclosed to MD Anderson’s Office of Technology Commercialization (OTC) as soon as conceived and/or reduced to practice and in all events prior to a Public Disclosure. No Public Disclosure of Intellectual Property should be made unless and until authorized by MD Anderson.

The decision whether to develop and commercialize Intellectual Property is in the sole discretion of the President of MD Anderson. If, however, Intellectual Property is commercialized by MD Anderson, the Creators are entitled to share a portion of the license income received by MD Anderson. Before sharing the license income with the Creators, however, the costs and expenses of licensing (including, but not limited to, the costs of obtaining a patent and other protection for the Intellectual Property) must first be recaptured from any royalties or other license payments. After repayment of such costs and expenses, the remainder of the license income (including, but not limited to, license fees, prepaid royalties, minimum royalties, running royalties, and sublicense payments) will be shared with the Creators as set forth below.

Under the Regents’ Rules and Regulations, MD Anderson is not obligated to share equity with the Creators. However, MD Anderson has chosen to share the proceeds of a certain type of equity with the Creators as set forth below.

If MD Anderson decides not to commercialize any Intellectual Property, then, in accordance with the Regents’ Rules and Regulations, MD Anderson (in its discretion) will either release or license the Intellectual Property to the Creators. In such cases, MD Anderson retains the right to make and use the Intellectual Property. The Creators must promptly notify OTC if the Intellectual Property is commercialized. If the Intellectual Property is commercialized, MD Anderson will be entitled to 25% of such proceeds after the first $50,000 of income. In certain cases as MD Anderson may deem appropriate, MD Anderson may impose additional conditions, limitations, obligations, or income rights as conditions to the release or license of the Intellectual Property to the Creator.

Scope

This policy applies to: all individuals employed by MD Anderson (including full and part-time faculty and staff and visiting faculty members and researchers); anyone using MD Anderson's facilities; undergraduate students; candidates for master’s and doctoral degrees; and postdoctoral and predoctoral fellows.

Compliance with this policy is the responsibility of all faculty, trainees/students, and other members of MD Anderson’s workforce.

Target Audience

The target audience for this policy includes, but is not limited to, all individuals employed by MD Anderson (including full and part-time faculty and staff and visiting faculty members and researchers); anyone using MD Anderson's facilities; undergraduate students; candidates for master’s and doctoral degrees; and postdoctoral and predoctoral fellows.

Definitions

Board: The Board of Regents of The UT System.

Creator: Any person who, under Series 90000 of the Regents’ Rules and Regulations, is entitled to share in income from Intellectual Property due to his or her contribution to the creation of the Intellectual Property.

Intellectual Property: Any invention, discovery, creation, know-how, trade secret, technology, scientific or technological development, research data, works of authorship, computer software or other intellectual property that is owned by the Board under Series 90000 of the Regents’ Rules and Regulations, regardless of whether subject to protection under patent, trademark, copyright, or other laws.

Investment Equity: Any equity received by MD Anderson as part of an investment made by MD Anderson in a licensee, including, but not limited to (a) direct cash investments into a company by MD Anderson and/or its affiliates (e.g., MD Anderson Services Corp.); (b) indirect cash investments (e.g., equity received in exchange for patent costs or other licensing expenses) into a company by MD Anderson and/or its affiliates; and (c) founder’s equity received by MD Anderson or its affiliates for putting the company together.

License Equity: Any equity accepted by MD Anderson as part of the consideration for a license grant, including, but not limited to equity received under a license as payment of royalties, upfront fees, maintenance fees, milestone payments, etc. License Equity does not include Investment Equity.

Public Disclosure: Any non-confidential disclosure that is made to any person who either is not an employee of MD Anderson or is not subject to obligations of confidentiality to MD Anderson.

Regents’ Rules and Regulations: The Rules and Regulations of the Board of Regents of The UT System.

Procedure

1.0 Disclosure and Assignment

Upon creation of any Intellectual Property, any person subject to this policy must disclose the Intellectual Property to MD Anderson by submitting an invention disclosure report to the OTC. Such disclosures should occur prior to any Public Disclosure or submission for publication. All persons subject to this policy must assign and do hereby assign their rights in Intellectual Property to the Board.

2.0 Documentation

MD Anderson employees should keep detailed and accurate laboratory notebooks to document important dates in the conception and development of their ideas. Lab notebooks should include descriptions, drawings, photographs, and any other documentation that may be applicable to an invention. Employees should sign and date each lab notebook entry and have at least one witness, but preferably two witnesses, sign and date the entries at the time such entry is created.

3.0 Contracts

3.1 Licenses to commercialize Intellectual Property will be under agreements approved as to form and substance by MD Anderson and, if necessary, The UT System, and shall be negotiated by the OTC.

3.2 No contract for Intellectual Property shall be effective until all appropriate signatures have been obtained and a fully executed copy is provided to MD Anderson.

4.0 Income Sharing

4.1 All license income, not including Investment Equity or any dividends or proceeds from Investment Equity, received by MD Anderson from the commercialization of Intellectual Property shall first be applied to all reimbursable costs and expenses of MD Anderson. Subject to exceptions in appropriate circumstances, the remaining income will be distributed as follows:

A. 50% to the Creator(s); and

B. 50% to MD Anderson.

4.2 Of the 50% retained by MD Anderson, that income, subject to exceptions in appropriate circumstances, will be applied internally as follows:

A. 15% to an institutional account(s) under the Creator(s)’ signature authority to support his/her research activities;

B. 10% to the Creator(s)’ department chair(s) to support the research activities of those department(s) as determined by the department chair(s); and

C. 25% to MD Anderson.

4.3 If any Creator retires or leaves his/her employment with MD Anderson, the 15% of income directed to that Creator’s institutional account shall be re-directed to that Creator’s department chair.

4.4 If any Creator in Section 4.3 returns to MD Anderson employment on a full or part-time basis, the Provost and Executive Vice President shall, in consultation with the Creator’s department chair, determine whether and to what extent (in amount and time) to support the reemployed Creator’s ongoing research from the portion of income directed to the Creator’s department chair in Section 4.3.

4.5 If a Creator is a research assistant, post-doc, or student, his/her share of the 15% that goes to an institutional account under the Creator’s signature authority shall be distributed to an institutional account with signature authority of the faculty member (assistant professor, associate professor, or professor) who supervised the Creator during the course of the discovery, unless the faculty member is no longer with the institution, in which case the Creator’s share shall be distributed to department chairman. If the research assistant, post-doc, or student becomes a faculty member (at the assistant professor level or above), such portions shall be distributed to an institutional account under the Creator’s signature authority immediately upon the Creator’s promotion to such position.

4.6 All license income and any equity received by MD Anderson prior to the effective date of this policy shall be distributed according to then existing policies and practices, subject to the Regents’ Rules and Regulations.

5.0 Equity

5.1 Absent exceptional circumstances, MD Anderson will not agree to take equity as the only consideration for a license grant.

5.2 MD Anderson will hold all License Equity until liquidation, and the Creators will not hold any such equity in their own name. Accordingly, the Creators will have no interest in the License Equity unless and until it is liquidated. Upon liquidation, however, the proceeds of the License Equity will be treated the same as cash consideration. Thus, following liquidation and recoupment of MD Anderson’s costs, the proceeds of the License Equity will be shared with the Creators and their departments in accordance with Sections 4.1 - 4.6 of this Policy.

5.3 Liquidation of License Equity will be at the sole discretion of MD Anderson, but will generally occur at the first possible liquidation opportunity.

5.4 In order to be entitled to receive proceeds from the liquidation of License Equity pursuant to this Policy, a Creator who is a current employee of MD Anderson (and who does not already have a Plan in place pursuant to Section 5.7, below) must submit a Conflict of Interest Management Plan within thirty (30) days after execution of the related license agreement. Any Creator who fails to submit a Plan prior to the end of this thirty (30) day period will have no right to share in any proceeds from the liquidation of License Equity (including any portions that would have gone to the Creator’s department or laboratory).

5.5 Investment Equity will not be considered part of the consideration for a license grant. Therefore, the Creators and their departments will not have any interest in or share in any portion of the Investment Equity or the proceeds from the sale of such equity. Any costs that are reimbursed as Investment Equity (e.g., including, but not limited to, patent costs) shall not be deducted from the license consideration prior to distribution in accordance with Sections 4.1 – 4.6 of this Policy.

5.6 Liquidation of Investment Equity will be at the sole discretion of MD Anderson.

5.7 If a Creator holds equity in a business entity that is a potential licensee of Intellectual Property conceived, created, discovered, invented or developed, in whole or in part, by the Creator, and if the Creator is a current employee of MD Anderson, then a Conflict of Interest Management Plan must be in place prior to execution of the license agreement by MD Anderson and the Board in accordance with Regents’ Rule 90103, Sec. 2.

6.0 Reversion of Rights

6.1 OTC, for and on behalf of the President of MD Anderson, will evaluate Intellectual Property disclosed to it and will decide whether MD Anderson will develop and/or commercialize the Intellectual Property. Any Intellectual Property that OTC decides not to develop and/or commercialize will be made available to the Creators if they desire to attempt commercialization of the Intellectual Property on their own behalf.

6.2 If Intellectual Property is released to the Creators, neither the facilities nor the resources of MD Anderson may be used to develop or commercialize the released Intellectual Property, except as MD Anderson’s President may approve where MD Anderson retains an interest under the terms of the release.

7.0 Creator’s Role

7.1 Creators of Intellectual Property shall be consulted and kept apprised of all commercialization efforts in relation to their Intellectual Property. However, all decisions regarding the commercialization of such Intellectual Property shall be made by OTC, MD Anderson, and the Board.

7.2 Creators shall provide timely and reasonable assistance in the commercialization of their Intellectual Property, including but not limited to, working with OTC on the filing of any patent application and providing necessary information related to the Intellectual Property, and meeting with prospective licensees and representatives of OTC when OTC is marketing the Intellectual Property.

8.0 Creators’ Representative

If any Intellectual Property has more than one Creator, then the Creators shall appoint a Creators’ Representative who will serve as the primary contact for all of the Creators for MD Anderson and OTC on all matters related to their Intellectual Property. See Agreement Confirming Rights and Interests of MD Anderson Creators in a Discovery.