Office of Research Administration
Button Spacer
News and Announcements
Button Spacer
Proposal ToolKit
Button Spacer
Policies and Regulations
Button Spacer
NIH and Other Federal Links
Button Spacer
Technology Transfer and Intellectual Property
Button Spacer
Community of Science
Button Spacer
Research Admin Staff
Button Spacer
Useful Links 		Office of Research Administration

Intellectual Property Policy

TECHNOLOGY LICENSING INVOLVING EQUITY AND ASSOCIATED SPONSORED RESEARCH

I. Preamble

Inventions, discoveries and new technologies made by faculty of the School of Hygiene and Public Health using University resources represent valuable intellectual property owned by the University. In certain instances, it may be desirable to license this technology to start-up ventures or other commercial ventures in exchange for equity. It may also be desirable to have the inventor(s) continue to work on development of the inventions with financial support by the licensee. This policy permits such equity participation and sets forth rules intended to minimize actual or perceived conflicts of interest and to safeguard against stock price manipulation or speculation and to avoid any adverse effect on the reputation of the University. This policy shall be interpreted in a manner consistent with the applicable federal and state statutes and implementing regulations. Oversight will be the responsibility of the School of Hygiene and Public Health's Committee on Professional Conduct and will be conducted on a case by case basis.

This policy recognizes that a start-up venture or other commercial venture may also desire to fund additional research at the University by the inventor(s) or others. This policy permits such sponsored research, but requires disclosure and formal review and approval by the Committee on Professional Conduct.

Finally, the ultimate value of the equity in such ventures is subject to wide variation. To avoid discontent and retrospective criticism, it is essential that all terms and conditions of the agreements between the inventors, the University and the licensee be set forth explicitly in advance.

II. Scope

This policy statement shall only cover those circumstances in which equity is received by the University and School of Hygiene and Public Health Faculty Inventors as part of a technology licensing arrangement.

III. Definitions

  1.  "Equity" or "Equity Shares" shall mean shares of common or preferred stock, warrants, options, convertible instruments, units of a limited partnership, or any other instrument conveying ownership interest in a Commercial Venture.

  2.  "Commercial Venture" shall mean a start-up company, limited partnership, joint venture or any other entity that has obtained a license to School of Hygiene and Public Health Technology that involves Equity. Ownership of a company's stock by the University in the endowment investment pool (EIP) will not alone define the company as a Commercial Venture.

  3.  "Closing Date" shall mean the date the University has entered into a fully executed License Agreement with a Commercial Venture under which the University and School of Hygiene and Public Health Faculty Inventor(s) receive an equity share in the Commercial Venture.

  4.  "Stock Restriction and Escrow Agreement". All equity held by School of Hygiene and Public Health Faculty Inventors with Commercial Ventures shall be subject to a "Stock Restriction and Escrow Agreement", as further detailed in this policy statement.

  5.  "Trigger Date" shall mean the date the Equity held by the University and by School of Hygiene and Public Health Faculty Inventors is no longer subject to restrictions imposed by the University and may be traded subject to any remaining restrictions imposed by law, the underwriters or the Commercial Venture. On this date, Equity held by the School of Hygiene and Public Health Faculty is no longer subject to the Stock Restriction and Escrow Agreement.

  6.  "School of Hygiene and Public Health Inventors" shall mean faculty holding full-time primary appointments in the School of Hygiene and Public Health who are inventors of technology licensed to a Commercial Venture. Non-faculty inventors (e.g. other employees or predoctoral and postdoctoral students) who assign their rights to the University will be treated as School of Hygiene and Public Health Faculty Inventors under this policy.

  7.  "License Agreement" shall mean an agreement conveying rights in School of Hygiene and Public Health technology to a Commercial Venture, and under which Equity is received as partial or full consideration.

  8.  "Research Agreement" shall mean a separate agreement to conduct research related to licensed technology.

IV. Specific Rules

  1. The Assistant Dean for Research Administration, the Director of the Office of Technology Transfer or their designee will be responsible for representing the University in all negotiations between the School of Hygiene and Public Health and Commercial Ventures under this policy. The School of Hygiene and Public Health Inventors may actively participate in all negotiations. The terms of Research Agreements and License Agreements, subject to this policy, and the number of Equity shares (including warrants, options, convertible instruments) and restrictions on those shares and vesting schedules will be negotiated by the Sr. Associate Dean for Finance and Administration or his designee and will be subject to approval by the Dean of the School of Hygiene and Public Health or the Dean's designee.
  2. Equity may be received as: consideration for licensed technology (category A); consideration for future participation by School of Hygiene and Public Health Faculty Inventors in the Commercial Venture, as described in Paragraph 5, or for providing future consulting services to the Commercial Venture (category B). Each of these categories is discussed below:

    Category A - Equity as consideration for licensed technology

    Equity shares received from licensing of the technology will be divided as follows:

    SHPH Faculty Inventor
    Department Share
    School Share
    University Share
    Personal Share
    Research Share
    		      
    35%
    15%
    10%
    30%
    10%

    Equity allocated to the School of Hygiene and Public Health Faculty Inventors' "Personal Share" shall be offered to them and, if accepted, owned subject to the Stock Restriction and Escrow Agreement, as further detailed below. The "Personal Share" will be divided equally between the relevant School of Hygiene and Public Health Faculty Inventors. Where multiple inventions are involved, and where an agreement cannot be reached between the School of Hygiene and Public Health Faculty Inventors, the Dean of the School of Hygiene and Public Health or the Dean's designee will, at his/her sole discretion, define the relative contribution of each invention and the relative portion of the "Personal Share" offered to each School of Hygiene and Public Health Faculty Inventor. Equity will not be allocated in the "Personal Share" for future inventions. All other Equity will be owned by the University, managed by the Treasurer, and sold after the Trigger Date at a time, and in a manner, selected solely at the discretion of the Treasurer.

    When Equity owned by the University is sold, the cash will be allocated to the "Research Share"; "Department(s) Share", "School Share" and "University Share". The "University Share" shall be distributed to the President's Discretionary Fund, the "Department(s) Share" to the Department of the School of Hygiene and Public Health in which the invention was made and the "Research Share" to support the work of the School of Hygiene and Public Health Faculty Inventor(s) while full-time faculty at the School of Hygiene and Public Health. Upon termination of his/her affiliation with the School of Hygiene and Public Health the unspent portion of the "Research Share" will be divided equally between the "School Share" and "Department(s) Share".

    (If Equity is not accepted by Faculty Inventors, then all equity will be owned by the University and may be sold at a time after the Trigger Date, at the discretion of the Treasurer. The appropriate portion of the cash received from such sale will be allocated to the "Personal Share" according to the above distribution table, and distributed to School of Hygiene and Public Health Faculty Inventors as ordinary income.)

    If requested by the School of Hygiene and Public Health Inventor, the Treasurer will sell a portion of the shares allocated to fund the "Research Share", provided such request is after the Trigger Date and that the sale of the stock is not otherwise prohibited by restrictions imposed by law, by the underwriters or by the Commercial Venture. Cash received from the sale of shares allocated to the "Research Share" will be apportioned in equal amounts annually to the appropriate research activities over the remaining life of the relevant U.S. patent or the remaining years under the relevant license agreement, whichever is shorter, unless the dean of the school of the inventor(s) and the inventor(s) agree to another method of distribution.

    Category B - Equity as consideration for future consulting and/or participating in the Commercial Venture

    If equity as a result of consulting is associated with a technology transfer arrangement, then equity so derived is pooled with the equity generated during the initial licensing agreement and shall be distributed according to the equity distribution schedule in section IV.2. If faculty consulting is unrelated to a technology transfer agreement, then faculty may own his/her equity. However, this must be disclosed in the same manner as any other consulting arrangement.

  3. The Stock Restriction and Escrow Agreement will require Equity owned by the School of Hygiene and Public Health Faculty Inventor to be held in escrow by the Treasurer of the University and released to School of Hygiene and Public Health Faculty Inventor (or his/her estate or legal representative) on a Trigger Date. The Trigger Date will be a date defined prior to the execution of the License Agreement and will be determined on a case-by-case basis by the Dean (or Dean's designee) of the School of Hygiene and Public Health, with advice from the Assistant Dean of Research Administration, the Associate Dean for Graduate Education and Research and the School of Hygiene and Public Health's Committee on Professional Conduct. The Trigger Date will be selected to minimize even the perception of a conflict of interest. Examples of Trigger Dates selected by the Dean (or Dean's designee) of the School of Hygiene and Public Health may be: 1) two (2) years from the first commercial sale of the principal licensed product (where first commercial sale is the sale of an FDA approved product as part of a nationwide sales effort); 2) upon an arms length acquisition of all the stock or assets of the Commercial Venture; or 3) after the stock is publicly traded and all restrictions on sale imposed bylaw or by the underwriter or the Commercial Venture have expired.

  4. The University may enter into Research Agreement(s) with Commercial Ventures covered by this policy. The scope and type of research to be performed under such Research Agreement(s) will be reviewed by the School of Hygiene and Public Health's Committee on Professional Conduct prior to the University entering into such a Research Agreement according to the principles and procedures published by the Committee on Professional Conduct. When the results of research, performed under such Research Agreement(s) are published, the School of Hygiene and Public Health Faculty Inventor(s) must disclose, in the publications, their equity ownership in the Commercial Venture.

  5. A School of Hygiene and Public Health Faculty Inventor who receives Equity may, with prior approval of the Dean of the School of Hygiene and Public Health, or the Dean's designee, direct research at the facilities of the Commercial Venture. A School of Hygiene and Public Health Faculty Inventor may provide services to the Commercial Venture at the University under a contract between the University and the Commercial Venture, provided the work has been approved by the Committee on Professional Conduct pursuant to Paragraph IV 4. Graduate students mentored by the School of Hygiene and Public Health Faculty Inventor(s) are not permitted to work at or for the Commercial Venture nor may University resources be used by the Commercial Venture without approval from the Dean (or Dean's designee) of the School of Hygiene and Public Health. The School of Hygiene and Public Health Faculty Inventor must disclose, in writing, his/her intended involvement with the Commercial Venture. On a yearly basis these School of Hygiene and Public Health Faculty Inventor(s) must describe the distinction between his/her research at the University and his/her responsibility to and participation in the Commercial Venture. The School of Hygiene and Public Health's Committee on Professional Conduct will review for approval, the yearly reports submitted by the School of Hygiene and Public Health Faculty Inventor. The following responsibilities are permissible for a School of Hygiene and Public Health Faculty Inventor in a Commercial Venture:

    1. Member of the Board of Directors (only after obtaining approval from the Dean, or Dean's designee, of the School of Hygiene and Public Health)
    2. Member of the science advisory board
    3. Consultant

    In any event, School of Hygiene and Public Health Faculty Inventor's time involvement at the company will be governed by the School's Policy on Conflict of Interest and Commitment (PPM Faculty 4). A School of Hygiene and Public Health Faculty Inventor may, with permission of the Dean (or Dean's designee) of the School of Hygiene and Public Health, may take up to one (1) year unpaid leave to work at the company and not lose his/her standing at the University. Such leave is subject to the School of Hygiene and Public Health's Policies and Guidelines Governing Appointments, Promotions and Professional Activities and the School's Policy on Conflict of Commitment and Conflict of Interest. During any leave of absence, the School of Hygiene and Public Health Faculty Inventor may work full-time for the Commercial Venture.

  6. The School of Hygiene and Public Health has an affirmative obligation to prevent "pipelining" of future inventions to a specific Commercial Venture. Future inventions unrelated to the original licensed technology, must be offered by the Associate Dean for Research to other companies in the field before they can be licensed exclusively to a Commercial Venture in which the School of Hygiene and Public Health Faculty Inventor and/or University hold Equity.

  7. Transactions involving Equity have complex tax and security law considerations. To assist the School of Hygiene and Public Health Faculty Inventor in understanding these obligations and the risks of Commercial Ventures, the School of Hygiene and Public Health strongly recommends that the School of Hygiene and Public Health Faculty Inventor seek separate counsel from an attorney or accountant familiar with tax and business law issues.

Home | Contact Us
Johns Hopkins Bloomberg School of Public Health © 2002
615 North Wolfe Street
Baltimore, MD 21205-2179