PROMEDICA HEALTH SYSTEM, INC.
Policy Title: Intellectual Property Policy No.: SP 14.18
Effective Date: August 1, 2012
Revised: December 18, 2012
1. To encourage creativity, innovation and invention within ProMedica.
2. To facilitate the transformation of Intellectual Property (“IP”) made through the utilization of ProMedica Resources into commercial products and services that directly benefit the health care community.
3. To ensure that revenue generated by commercializing inventions is distributed to support ProMedica and the advancement of health, innovation and research at ProMedica.
4. To attract and retain high caliber creative and inventive people to ProMedica.
PHS System Policy regarding IP. ProMedica seeks to clarify the ownership and handling of IP generated by ProMedica employees and affiliated inventors.
This policy and its associated procedures applies to all IP produced, developed or generated by ProMedica and Affiliated Inventors as disclosed on or after the effective date of this policy. At its sole discretion, ProMedica may collaborate with non-ProMedica organizations and individuals for the purpose of commercialization of IP that originated outside of ProMedica facilities or was created by such non- ProMedica entities. Such non-ProMedica organizations and individuals who have signed a separate PHS IP Disclosure Agreement and are engaged in this manner will be subject to this policy and its associated procedures.
“Affiliated Inventor” means an Inventor who is not an employee of ProMedica, whether or not under contract, who, individually or as part of a group, provides services to ProMedica and/or utilizes ProMedica resources or facilities in any manner.
“Copyrightable Work” means works created as institutional rather than personal works. In other words, works created for ProMedica purposes in the course of the Inventor’s employment or within the scope of the contractual engagement are considered Work for Hire and are owned by ProMedica.
“Employee” means any employee of ProMedica who works on a full-time or part- time basis, whether or not a written contract exists.
“IP” means any scientific, technical, or business-oriented invention, discovery, business plan, know-how or Copyrightable work whether or not protectable by law including but not limited to, any new and useful improvement thereof.
ProMedica Health System, Inc. Intellectual Property
“Inventor” refers to an individual who is responsible for the creating of the IP.
“Net Revenue” means Gross Revenue less any fees and other costs which are directly incurred in commercializing the Inventions, including but not limited to legal, marketing and research and development costs.
“ProMedica” includes ProMedica Health System Inc. and each of its subsidiary and affiliated entities.
“Resources” include, but are not limited to, tangible and intangible property, employees, facilities, patient data, and funding.
Terms: 1. IP covered by this Policy. IP covered by this Policy shall include, but not be limited to, all scientific, technological, or business-oriented IP that (i) is conceived, developed, and/or otherwise reduced to practice by ProMedica Employees and Affiliated Inventors; (ii) relates directly or indirectly to the business of ProMedica or its actual or demonstrably anticipated research or development activities; (iii) is conceived, developed, and/or otherwise reduced to practice during participation in any ProMedica-associated activities; (iv) is conceived, developed, and/or otherwise reduced to practice using ProMedica Resources of any kind; (v) is conceived, developed, and/or otherwise reduced to practice in ProMedica-owned or-operated facilities; or (vi) is an improvement, addition, or modification to existing ProMedica-owned IP.
2. Ownership. All rights, title, and interest in Inventions developed by ProMedica Employees and Affiliated Inventors acting within their scope of employment or using ProMedica Resources shall be owned by ProMedica. ProMedica Employees and Affiliated Inventors must assign to ProMedica all rights, title, and interest that they may have in the IP. All rights, title, and interest in IP created by non-ProMedica organizations and individuals who are subject to this policy also shall be assigned to ProMedica. In order to receive commercialization support from ProMedica the invention must be owned by ProMedica.
Ownership of inventions developed prior to employment or affiliation remains with the Inventor provided that the Inventor completes and submits a PHS IP Disclosure Form prior to employment or affiliation with ProMedica. Retained ownership is limited to the state of development of the invention that exists prior to employment or affiliation.
This Policy is not meant to prevent ProMedica Employees or Affiliated Inventors from developing ideas on an individual basis that are related to personal hobbies, vocational skills, or interests, that is, ideas that are (i) wholly
ProMedica Health System, Inc. Intellectual Property unrelated to the business of ProMedica or its actual or demonstrably anticipated research or development activities and (ii) were not conceived, developed, and/or otherwise reduced to practice using ProMedica Resources of any kind.
3. Revenue Distribution. To reward creativity, ProMedica shall distribute to the Inventor(s) of IP, a percentage share of the Net Revenue that it receives from the commercialization of such IP. See PHS Commercialization Income Distribution Policy attached as Exhibit A. If the creation or invention is not mutually agreed upon, then ProMedica will convene a committee composed of the chair(s) of the department(s) involved and chaired by ProMedica’s Medical Director for Innovations for the purpose of determining the appropriate rights.
4. Compliance with Law and Contractual Obligations. Both Inventor and ProMedica will comply with all applicable laws and regulation as well as contractual obligations to third parties.
5. Dispute Resolution. The parties shall resolve controversy, dispute, or disagreement arising under this Policy or agreements resulting from actions taken pursuant to this Policy informally to the maximum extent possible. The parties shall negotiate all matters of joint concern in good faith, with the intention of resolving issues between them in a mutually satisfactory manner. In the event of a dispute between the parties that cannot be resolved through informal discussions, the matter shall be settled initially by ProMedica’s Medical Director for Innovations. Should the issue still remain unresolved, or the Inventor wish to appeal a decision, any controversy, dispute or disagreement arising out of or relating to this Policy, shall be settled exclusively by binding arbitration, which shall be conducted in Toledo, Ohio in accordance with the American Health Lawyers Association Alternative Dispute Resolution Service Rules of Procedure for Arbitration, and which, to the extent of the subject matter of the arbitration, shall be binding not only on all parties to the Agreement, but on any other entity controlled by, in control of or under common control with either party to the extent that such affiliate joins in the arbitration, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Expenses for Alternative Dispute Resolution shall be split between the parties and each party will be responsible for their own costs, including, but not limited to attorney fees.
ProMedica Employees and Affiliated Inventors who, alone or with others, create, develop, and/or otherwise reduce to practice IP must disclose to ProMedica in a timely manner. Disclosure is the act of giving notice of invention by the Inventor to ProMedica and shall be made on PHS Invention Disclosure Form. An online disclosure form is available on ProMedica's Intranet and at www.promedica.org/innovations
. Disclosure the invention is encouraged at the earliest possible time, in order to appropriately
ProMedica Health System, Inc. Intellectual Property protect the Invention. Disclosure must take place before any presentation to the public or description or conversation outside of the Inventor(s)’ immediate working group. Although not necessary for disclosure, specific milestones that should trigger Disclosure include: (a) intent to publish; (b) when the idea is mature enough for an internet or patent search; (b) when the IP is ready for prototyping or other development; and (c) when the IP is reduced to practice in any manner.
The failure to have a signed agreement shall not be deemed or construed as a limitation of ProMedica's ability to enforce any and all rights it may have in and to any IP. Inventors shall disclose any and all pending public disclosures, third party interests in the IP and any information that may affect the commercialization of the IP.
Non-ProMedica organizations and individuals who wish to collaborate with ProMedica for the purpose of commercialization of IP that originated outside of ProMedica facilities or was created by such non-ProMedica entities will sign a PHS Nondisclosure Form prior to disclosure of IP to ProMedica. If both parties agree to pursue joint commercialization of IP, non-ProMedica organizations and/or individuals will complete a PHS IP Disclosure Form and be subject to this policy and its associated procedures.
ProMedica will determine, in its sole discretion, whether ProMedica shall legally protect and/or commercialize any disclosed IP.
2. Legal protection of IP. ProMedica commercialization process begins with the Inventor’s completion and submission of the PHS Invention Disclosure Form. Upon receiving the form, ProMedica officials will review the invention with the Inventor. The Inventor will share any relevant contracts with entities that he or she may have with ProMedica and provide input into the commercialization strategy for the invention. ProMedica may take one of two actions: (a) request additional information from the associate or affiliated Inventor; or (b) proceed with legal protection and/or commercialization.
All ProMedica Employees, Affiliated Inventors and non-ProMedica organizations and individuals who are subject to this Policy will cooperate with ProMedica in seeking and obtaining legal protection for IP in order to comply with federal and state laws on innovations derived from government- sponsored research, to abide by contractual obligations in commercially sponsored research agreements, and to protect ProMedica's interests in such IP. All ProMedica Employees, Affiliated Inventors and non-ProMedica organizations and individuals who are subject to this Policy will provide the information related to the invention as requested by ProMedica. As needed, the inventors maybe asked to develop the IP further or provide more technical information on the IP.
ProMedica Health System, Inc. Intellectual Property ProMedica does not require that magazine and journal articles or book chapters be preapproved in writing; however, if pre-approval is not sought, the author assumes full responsibility for ensuring that no valuable ProMedica-associated IP is lost due to publication. Authors are also reminded to abide by any contractual obligations in commercially sponsored research agreements related to pre-publication responsibilities to avoid potentially losing protection of IP that may be owned by the commercial sponsor.
Copyrightable contributions to commercially distributed computer software programs or video productions will be treated in the same fashion as inventive contributions to patentable subject matter. Provided, however, that commercial revenue received therefrom may be distributed only when such revenue exceeds the amount necessary to cover the net internal costs associated with the creation of the computer software program or video.
All IP must be fully disclosed to ProMedica by its Inventor before its Inventor's employment or association with ProMedica. Any IP not disclosed will be presumed to be owned by ProMedica after its Inventor's employment or association with ProMedica and will be subject to this policy. A statement by its Inventor that a specific IP predated its Inventor's employment or association with ProMedica must be supported by clear and convincing evidence, e.g., properly authenticated laboratory notebook entries or previously filed patent application(s), that such IP was actually conceived and reduced to practice prior to its Inventor's employment or association with ProMedica. If so supported, then such IP shall not be subject to this Policy.
Finally, if IP is either (i) conceived prior to employment or association with ProMedica, but then developed and/or otherwise reduced to practice after employment or association with ProMedica or (ii) conceived and reduced to practice prior to employment or association with ProMedica, but then improved, added to, or modified, after employment or association with ProMedica, then ProMedica shall be assigned all rights, title, and interest in and to such IP or such improved, added to, or modified IP, respectively, by its Inventor (or Inventors), unless its Inventor or Inventors is/are legally unable to do so or if such IP is otherwise exempt from this Policy.
3. Commercialization of IP. ProMedica will determine, in its sole discretion, whether ProMedica shall commercialize any disclosed IP. ProMedica's rights to IP may not be transferred to any other person or entity without the consultation and written permission of ProMedica (via ProMedica).
In support of its mission of education, research, and patient care, ProMedica may sponsor, directly or with the help of affiliates or other entities, the commercialization of IP by establishing or expanding corporations, ProMedica Health System, Inc. Intellectual Property partner>ships, or other commercial enterprises. In such cases, ProMedica may receive and hold equity shares in companies as consideration for authorizing the use of IP or for investments (including cash and in-kind investments) made by ProMedica in spin-off companies. ProMedica shall solely hold such shares until such shares are liquidated, at which time the proceeds related to the IP will be distributed according to the Commercialization Income Distribution Policy then in effect.
ProMedica, from time-to-time, may (i) decline to commercialize IP, (ii) determine, in its sole discretion, that the market potential for a specific IP does not warrant the expense of legal protection (if available) and/or commercialization, or (iii) decide, in its sole discretion, to cease either patent prosecution or maintenance or ongoing commercialization efforts regarding a specific IP. IP declined due to a lack of market potential remains the property of ProMedica, but the Inventor(s) may choose to pursue commercialization of the IP on the Inventor(s)' own accord. The Inventor(s) are encouraged to then re-involve ProMedica if commercial interest in the IP is generated. Regardless, ProMedica retains rights to any income derived from the commercialization IP, which shall be distributed according the PHS Commercialization Income Distribution Policy attached as Exhibit A.
If ProMedica has declined to commercialize the IP, the Inventor(s) of the IP can request that such IP be re-assigned to the Inventor(s) to commercialize or subsequently abandon as the Inventor(s) desire. If ProMedica, in its sole discretion, agrees to such re-assignment, then the Inventor(s), in exchange for such re-assignment, must agree that ProMedica shall (a) first be fully reimbursed for any and all costs incurred by ProMedica relating to the protection and/or commercialization of the IP, e.g., personnel or marketing costs and out-of-pocket patent-related expenses, and (b) then be paid a mutually agreed upon royalty, fee, or other consideration consistent with the PHS Commercialization Income Distribution Policy then in effect. Any ensuing IP developed by such Inventor(s) will remain subject to this Policy.
4. Commercialization Endpoints. There are two common outcomes of a successful commercialization endeavor; licensing or new business creation. ProMedica has the authority to determine and execute a commercialization strategy.
President and Chief Executive Officer:
Chief Medical Officer:
Lee Hammerling, M.D.
Chief Financial Officer:
Medical Director of Innovations:
John P. Pigott, M.D.
PHS Commercialization Income Distribution Policy
Prior to Net Revenue distribution, direct expenses of IP commercialization born by ProMedica will be deducted from gross revenue and reimbursed to ProMedica. After all direct costs are covered; the distribution shall be as follows:
40% to the Inventor(s)
60% to the ProMedica
In the case where there are multiple inventors who are ProMedica employees or ProMedica affiliate inventors, the inventor share will be distributed equally among co-inventors unless otherwise set forth in the PHS Disclosure Form or similar PHS document.