Repository: UIHistories Project: Board of Trustees Minutes - 1982 [PAGE 415]

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BOARD OF T R U S T E E S

[October 15

On motion of Dr. Donoghue, this recommendation was approved by the following vote: Aye, Mrs. Day, Dr. Donoghue, Mr. Forsyth, Mr. Hahn, Mr. Howard, Mr. Madden, Mr. Neal, Mrs. Shepherd, Mr. Stone; no, none; absent, Governor Thompson. (The student advisory vote was: Aye, Mr. Bandala, Mr. Bettenhausen, Mr. Persons; no, none.)

Agreement with University Patents, Inc.

(15) Historically, commercial development of University inventions has been handled by transferring them to the University of Illinois Foundation. A recent amendment to the State Finance Act allows the University to retain in its own treasury the funds received from patent development. It is now advantageous for the University to make arrangements directly for commercial development of inventions. University Patents, Inc., has performed, under contract with the foundation, a number of duties related to the foundation's patent development effort. It now is proposed that the Board of Trustees enter into a substantially similar contract with University Patents, Inc. ( U P I ) . Under its terms, U P I would receive a right of first refusal to act as the University's licensing agent with respect to certain inventions and, if that right is exercised, the exclusive authority to license that invention. Title to patents would remain in the University. Excluded from the proposed contract are inventions made under existing research agreements with preferential treatment terms in place, unless the University chooses to have U P I obtain the patent for the invention and service the license. Also excluded are inventions that the University may decide not to develop. U P I will assist the University in pre-grant negotiations, evaluate invention disclosures for patentability and commercial utility and advise the University concerning the same, submit and prosecute U.S. and foreign patent applications as the University's agent, seek prospective licensees for inventions, and service executed license agreements. U P I will pay the costs of obtaining U.S. patents. The costs associated with obtaining foreign patents will be chargeable to the income from the invention. Of the royalties received, U P I would retain 40 percent and remit 60 percent to the University. University employees who are inventors would receive a single $150 payment from U P I when the patent applications on their inventions are filed. U P I would be required to obtain approval prior to granting an exclusive license. T h e University's prompt response to such a request is required. T h e University can recapture the rights to an invention if it determines that U P I has not obtained the maximum reasonable return. In the event of recapture, U P I would continue to receive its 40 percent share of royalties until reimbursed for its direct out-of-pocket expenses and 10 percent thereafter. T h e proposed contract would become effective on the date it is signed and terminate on October 4, 1985, which is also the termination date of the foundation's service contract. T h e executive vice president has recommended that the Board of Trustees: ( I ) approve an agreement with University Patents, Inc., on the terms outlined above, and (2) authorize the executive vice president to review and approve exclusive license agreements presented by U P I for approval. I concur.

On motion of Dr. Donoghue, this recommendation was approved by the following vote: Aye, Mrs. Day, Dr. Donoghue, Mr. Forsyth, Mr. Hahn, Mr. Howard, Mr. Madden, Mr. Neal, Mrs. Shepherd, Mr. Stone; no, none; absent, Governor Thompson.