Policies on Intellectual Property: Ownership and Commercial Development

Part 1. Introduction

The Icahn School of Medicine (ISMMS) engages in scholarly research for the purpose of advancing the understanding of the basic mechanisms of human disease as well as the diagnosis, prevention, and treatment of disease. To discharge its obligation to the public and its patients, it encourages its faculty and students to discuss research results at public forums and publish them in books and other scholarly publications. Inventions often must be developed into commercial products in order for the public to enjoy the full benefit of discoveries or inventions. In that context, ISMMS fully supports all efforts to commercialize inventions made by its faculty, students, and staff. The Mount Sinai Hospital is a not-for-profit teaching hospital closely associated with ISMMS. This policy applies to the Hospital's staff, employees, visitors, etc. (As used herein, "ISMMS" refers to both the Hospital and the Medical School.) The Bayh-Dole Act of 1980 provides academic institutions with the ability to elect to retain title to inventions developed using federal funds and thus encourages the commercial development of such inventions by the academic institutions.

1.0 Intellectual Property And Related Rights


The material set forth in this document covers the ownership, distribution, and commercial development of technology developed by ISMMS faculty, staff, and students and others. The term "Technology" is broadly defined in this document and includes but is not limited to technical innovations, inventions, discoveries, and tangible research property as well as writings and other information in various forms, including computer software. The principal rights governing the ownership and disposition of Technology are known as "intellectual property" rights, which are derived primarily from statutes granting patent, copyright, and trademark. In some instances, distribution and commercialization of technology may be accomplished by the transfer (as used herein, "transfer" includes the licensing, assignment, sale or other distribution) of the intellectual property rights, such as patents and copyrights. In other instances, distribution and commercialization of technology may be aided by or depend upon access to the physical or tangible embodiment of the technology, as in the case of biological organisms. All policies of ISMMS regarding intellectual property or conflict of interest shall be subject to applicable federal, state, and municipal laws, rules and regulations including, without limitation rules and regulations of the National Institutes of Health for research supported by those agencies. To the extent that there are or will be inconsistencies between ISMMS policies and applicable laws, rules, and regulations, the latter will prevail over those of ISMMS.

Part 2. ISMMS Policy Statements

2.0. General Policy Statement

The prompt and open dissemination of the results of ISMMS research and the free exchange of information among scholars are essential to the fulfillment of ISMMS’s obligations as an institution committed to excellence in education, research, and patient care. Matters of ownership, distribution, and commercial development, nonetheless, arise in the context of technology transfer, which is an important aspect of ISMMS's commitment to the improvement of patient care and public health. Technology transfer is, however, subordinate to education, research and patient care; and the dissemination of information must, therefore, not be delayed beyond the minimal period necessary to define and protect the rights of the parties.

2.1. Technology Ownership Policy Statement

ISMMS will own Technology made or created by ISMMS faculty, students, staff, visitors, employees, volunteers and others (referred to herein collectively as "ISMMS faculty") participating in ISMMS programs except for Technology that is owned by the Inventors/Authors. Inventors/Authors will own Technology that is:

a. Developed outside the area of research of the Inventor/Author conducted under a sponsored Research Project

b. Not created as a "work-for-hire" by operation of copyright law or not created pursuant to a written agreement between the Author/Inventor and ISMMS providing for a transfer of copyright, patent or other intellectual property right ownership to ISMMS or a third party; and

c. Not developed with the use of funds or facilities administered by ISMMS. Technology will not be considered to have been developed using ISMMS funds or facilities only if:

1. No more than a minimal amount of unrestricted funds have been used; and

2. No more than insignificant ISMMS facilities and equipment have been utilized. Use of individual office, library facilities, and of traditional desktop personal computers are examples of facilities and equipment that are not considered significant.

2.2. Certain Publications

a. ISMMS does not claim ownership of rights to books, articles and other scholarly publications, or to popular novels, poems, musical compositions, or other works of artistic imagination that are created by the personal effort of faculty, staff and students that do not make use of ISMMS funds.

b. The rights to textbooks developed in conjunction with class teaching, unless such textbooks were developed using ISMMS administered funds paid specifically to support textbook development, will be owned by the Author.

c. In general, theses are subject to this policy and the applicable policies of CUNY.

2.3. Responsibility To Comply With Policy

All faculty, students, staff, visitors and others participating in research at ISMMS are deemed to be aware of their obligation to assign rights to ISMMS and sign Invention and Copyright Agreements as provided under Part 5. All ISMMS personnel and visitors are responsible for complying with the terms of any agreement sponsoring their research. They should contact the Grants and Contracts Office (GCO) for information or assistance regarding interpretation of research contract terms. The terms of such sponsored research agreements apply to Technology made by faculty, students, staff, visitors, and others who participate in performing research supported by such agreements.

2.4. Trade And Service Marks

Trade and service marks relating to goods and services developed at ISMMS will be owned by ISMMS.

2.5. Software Acquisition And Use

Whether the software and databases used at ISMMS are owned by users or third parties and are protected by copyright and/or other laws, or subject to license or other contractual arrangement, it is the policy of ISMMS that users abide by any legal restrictions imposed by the owner of the software or database. It is the responsibility of the owner of the protected software or database to make the nature of the restrictions known to the user.

Part 3. Technology Evaluation and Protection

3.0. Office of Technology and Business Development

Mount Sinai Innovation Partners (MSIP) is responsible for facilitating the transfer of ISMMS Technology to the public use and benefit. MSIP evaluates, obtains proprietary protection for, and assists in the distribution of Technology for research purposes. MSIP assists in the commercial development of selected Technology by identifying potential markets and negotiating license agreements as described in Part 4.

3.1. Invention Disclosure

The initial step in establishing contact with MSIP is usually the submission of an ISMMS Technology Disclosure Form. The disclosure form can be obtained from MSIP. When submitted, the Technology Disclosure Form will initiate action by MSIP to investigate the patenting (or other methods of protection) and marketing of the Technology unless accompanied by a letter requesting other action by ISMMS, such as a waiver of ISMMS's ownership rights in the technology. A case number is given to the technology reported.

a. Evaluation
All faculty are required to promptly submit a Technology Disclosure Form to MSIP when they think they may have developed ISMMS-owned Technology. (There is no obligation to submit a Technology Disclosure Form for Inventor/Author owned Technology. See paragraph below, which provides for an optional certification process.) Once a Technology Disclosure Form disclosing an invention is submitted to MSIP, a representative of MSIP will typically meet with the Inventor/Author as a first step in evaluation. In certain cases, contact with industry will be made as a part of the evaluation process.
When necessary, MSIP will contact other members of the faculty, representatives of industry, and/or other outside experts to determine whether ISMMS should seek patent protection. MSIP makes the final decision as to whether patent protection will be sought, and it informs the Inventor/Author of the decision. The terms of sponsored research and other agreements normally create obligations for ISMMS with respect to the reporting of Technology to the sponsoring entity. As a result, inventions and copyrightable works developed through sponsored research should be promptly reported to MSIP by submitting a Technology Disclosure Form. Technology developed under ISMMS administered programs, either as work-for-hire or with the use of ISMMS funds or facilities, should also be submitted to MSIP using a Technology Disclosure Form.

b. Inventor/Author Owned Certification Process

Inventor/Author owned Technology need not be disclosed to MSIP unless the owner of the Technology desires MSIP to commercialize the Technology or unless the Author/Inventor wishes to have MSIP certify independent ownership by the Inventor/Author. The certification process is available to assist inventors in assessing whether technology they have developed belongs to ISMMS or is Inventor/Author owned.
At the Inventor/Author's option, the issue of whether or not Technology is Inventor/Author owned may be submitted for a review by ISMMS. The review will be by the Inventor/Author's laboratory director or department head, and a recommendation forwarded to MSIP, which is charged with the responsibility of making the final determination. If the Inventor/Author is a department head, the Dean will make the review and forward the final recommendation to MSIP. Absent such a review, ISMMS does not waive any right it may have to Technology that is not Inventor/Author owned as defined in this Policy.

3.2. Patents

Protection ISMMS will normally seek patent protection for inventions in order to pursue commercial licensing or to comply with the terms of sponsored research agreements. Although patent protection is, on rare occasion, sought for various noncommercial reasons, such as professional status, ISMMS will not seek protection for inventions that are not commercially attractive, even if the invention is intellectually meritorious. The procedures for obtaining patents on inventions are described in Part 4 - Commercial Development.

It is important, to understand that any publication (including an oral presentation) that describes an invention even in minimal detail prior to filing for a patent may preclude patenting in foreign countries and may also preclude protection in the United States unless a patent is filed within one year of such written or oral publication. The implications of publication on patent rights should be discussed with MSIP and the decision on patent filing reached promptly so that publication will not be delayed.

3.3. Copyrights

Asserting And Registering Copyright protection of books, articles, and publications is sought in order to recognize authorship and protect the integrity of the work. Obtaining copyright protection may be essential for ISMMS to license copyrightable materials to commercial book publishers, software vendors and others and to comply with the terms of sponsored research agreements.

A copyright is established at the time expression is fixed in a tangible medium. In order to maintain the copyright for the period prescribed under the copyright statute, notice of copyright must be affixed to the copyrightable material. Failure to affix the proper notice will cause the copyright to be lost after a certain period of time has elapsed after the first publication of the work.

The following notice is to be applied on ISMMS owned works to protect the copyright:

"Copyright © 19XX MOUNT SINAI SCHOOL OF MEDICINE. All rights reserved."

The date in the notice should be the year in which the work is first published. No notice other than the foregoing is to be used for ISMMS owned works.

Further, for added copyright protection, certain works should be registered with the United States Copyright Office using its official forms.

Questions concerning copyright notices and registration should be brought to MSIP.

3.4. Trade And Service Marks

Asserting And Registering: A trade or service mark may be used to protect those names and symbols associated with certain ISMMS activities and events and with certain technology developments such as computer programs. Prior to registration for trademark protection, the designation "TM" after a trademark or "SM" after a service mark will give adequate notice of a claim of ownership. The designation "®" for a trademark may only be used after federal registration.

Request for use and registration of trade and service marks to protect ISMMS owned technology or to designate ISMMS as the origin of a product, event, activity, service, or the like, may be instituted only at the direction of MSIP. It is important to note that trademark protection carries with it certain obligations on the part of the holder of the mark. Therefore, requests for use and registration of trade or service marks on behalf of ISMMS must be referred to MSIP.

3.5. Tangible Research Property (TRP)

Tangible research property (TRP) such as biological materials and computer software is frequently patented or copyrighted as appropriate and then licensed for commercial purposes. The procedures described above apply to TRP as well.

Part 4. Commercial Development and Technology Transfer

4.0. Introduction

The primary functions of a medical school are education, research, improvement of patient care and public health, and public service. It is in the context of improved health care that ISMMS supports efforts directed toward bringing the fruits of ISMMS research to public use and benefit. Federal legislation, in particular the Bayh-Dole Act, actively encourages academic institutions which are recipients of federal research funds to commercialize inventions made as a result of those funds.

In many cases, mere publication of research results will be sufficient to transfer ISMMS research to the public. In other cases, it is desirable to encourage industry, by the granting of license rights, to invest its resources to develop products and processes for use by the public.

4.1. Commercialization - General

MSIP will pursue the licensing, or other transfer, of Technology by researching the potential market for the Technology, identifying third parties to commercialize it, entering into discussions with potential transferees, developing a business plan as appropriate, negotiating appropriate licenses or other agreements, monitoring progress, and distributing royalties or equity to the inventors/authors in accordance with ISMMS royalty policy.

4.2. Inventor/Author Assistance

With few exceptions, the support and cooperation of the Inventor/Author is essential to licensing success.

4.3. Inventor/Author Owned Technology - Transfer To ISMMS

ISMMS faculty who wish to pursue the development of their Inventor/Author owned technology through MSIP may offer such technology for evaluation by submitting a Technology Disclosure Form. MSIP will evaluate the commercial potential and determine whether or not the Technology will be accepted for licensing by MSIP.

Faculty, staff and students are free to choose some other mechanism for commercializing their independently owned technology, but prior to such commercialization may request certification of Inventor/Author ownership by MSIP. (See Section 3.1.)

4.4. ISMMS Owned Technology - Transfer To Inventor/Author

MSIP may in its discretion and consistent with the public interest and any preexisting contractual commitments, license ISMMS owned Technology to the Inventor/Author exclusively or nonexclusively with the provision of payment or royalties to ISMMS by the Inventor/Author. The Inventor(s)/Author(s) must demonstrate technical and financial capability to commercialize the intellectual property, and MSIP will have the right to terminate such license if the Inventor/Author has not achieved effective dissemination within 3 years. The license is also subject to the Inventor/Author waiving his/her rights to royalty sharing under this policy guide. Where such a license is issued, the Inventor/Author may be required to assume the costs of filing, prosecuting and maintaining any patent rights.

4.5. Waiver Of ISMMS Rights

When it has the right to do so, ISMMS may, if requested by the inventor, and at ISMMS's discretion consistent with ISMMS's obligations to third parties, "stand aside" in those situations where ISMMS has notified the Invent or/Author that it believes that the commercial value of the Technology is of insufficient interest to ISMMS. By "standing aside", ISMMS agrees not to exercise its contractual rights to the Technology, clearing the way for the ISMMS Inventor/Author to seek ownership. Inventors/Authors may request the ISMMS "stand aside" by submitting a letter of request to MSIP. When ISMMS agrees to "stand aside", the Inventor/Author assumes the obligation of meeting the obligations contractually imposed on the Technology by the funding agency or industrial sponsor.

4.6. Conflict Of Interest Or Commitment In Licensing Of ISMMS Rights To Inventors

Any of the following factors may signify a conflict of interest that will be taken into account prior to waiving or licensing ISMMS's rights to Inventors/Authors:

a. an adverse impact on ISMMS's education responsibility to its students;

b. an undue influence on the employment commitment of the Inventor/Author to ISMMS in terms of time or direction of effort;

c. a detrimental effect on ISMMS's obligations to serve the needs of the general public; and

d. potential conflict of interest as defined in ISMMS's Faculty Handbook.

4.7. Commitment Of Future Inventions

In general, ISMMS does not commit to license, assign or otherwise commercialize Technology to be developed in the future. This includes commitments to future Technology developed by the same Inventor/Author to the original licensees even where improvements of the technology are anticipated. Some very narrowly drawn exceptions may occasionally be appropriate to handle subordinate patents and well defined derivative works or inventions. In general, such exceptions require the assent of the Inventor/Author.

4.8. Certain Provisions In Technology Transfer Agreements

An agreement for the transfer of Technology is often complex and must be fashioned to meet the needs of a particular transaction. Nonetheless, ISMMS has certain provisions which are to be included in any agreement. These are designed to ensure that the missions of ISMMS are furthered by the transfer. These provisions are:

a. Confidentiality provision: ISMMS will not agree to restrict the publication of research results. Reasonable delay in publication for the purpose of evaluating the information described in the publication may be permitted. Every individual involved in research subject to a publication delay must be informed of any agreement to delay publication;

b. Compensation: Mount Sinai will expect appropriate consideration for any Technology transferred. Such compensation may be in the form of royalty payments, or other monetary amounts or equity;(see footnote)

c. Sponsored research: The transfers must be consistent with any requirements imposed by sponsors of the research. For example, research contracts sponsored by the Federal Government are subject to statutes and regulations under which ISMMS acquires title in inventions conceived or first reduced to practice in the performance of the research. ISMMS's ownership is subject to a nonexclusive license to the government and the requirement that ISMMS retain title and take effective steps to develop the practical applications of the invention by licensing and other means; and

d. Insurance and Indemnity: There must be adequate insurance and indemnity provisions as determined by MSIP.

4.9. Consulting Contracts

The ISMMS will not negotiate consulting contracts for individual faculty or the Inventors/Authors even as part of a Technology transfer arrangement. However, the ISMMS recognizes that from time to time Inventors/Authors may have consulting agreements which have a Technology transfer component. The following conditions must be met by each consulting contract:

a. The consulting agreement must be consistent with the ISMMS policy on Intellectual Property and all other institutional policies, including those regarding Conflicts of Interest.

b. Technology may be transferred in the course of the consulting agreement only if it is Inventor/Author owned Technology.

c. If there is a Technology Transfer component in the consulting agreement, no sponsored research may be conducted in the consultant's ISMMS laboratory on substantially the same project.

d. Each consulting contract must include the statement: "In the event the terms and conditions of this Agreement are in conflict with the terms and conditions of (individuals name)'s employment by ISMMS including the terms of any grants or contracts administered by ISMMS for which he/she performs service, the latter shall prevail".

4.10. Leave Of Absence

A ISMMS faculty member with the permission of the Dean and the Department Chairman may take up to one year unpaid leave to work at the company and not lose his/her standing at ISMMS subject to ISMMS's policy on appointments and promotions as specified in the Faculty Handbook. During any leave of absence, the ISMMS faculty member may work full time for the company. Only Inventor/Author owned Technology may be transferred to the company.

4.11. Conflict Of Interest

Remuneration received by any Inventor/Author, in any form, including equity, is subject to the Conflict of Interest rules and regulations of ISMMS and those rules as may be imposed from time to time by relevant Federal , State, or City agencies or other research funding organizations.

Pending implementation of a comprehensive Conflict of Interest in Research Policy by the ISMMS, all faculty are advised that in transactions involving the transfer of technology or a potential transfer of technology, they must comply with the Interim Policy Concerning Conflict of Interest in Equity Ownership and Technology Transfer appended to this policy.

Receipt of any compensation by the faculty, whether for consultation, or other activities, including founder shares, may not be payment for the licensing of, or access to, ISMMS Technology. Faculty must disclose to the Dean any compensation, including equity, received from any licensee or assignee of ISMMS owned Technology.

4.12. Legal Issues Arising From Equity Holdings

When an Inventor/Author has an equity position in a company that is a licensee of intellectual property developed by the Inventor/Author, sale of any or all of the equity may potentially involve insider trading as defined in the federal securities law. Therefore, the Inventor/Author is required to notify the President of The Mount Sinai Health System of the intention to sell any or all of such equity holdings and to obtain the President's permission, which shall not, however, relieve the seller of individual responsibility.

4.13. Distribution Of TRP

In keeping with the traditions of academic science and its basic objectives, it is the policy of ISMMS that results of scientific research are to be promptly and openly made available to others. Since the traditional modes of dissemination through scholarly exchange and publication are not fully effective for most TRP, it is ISMMS policy that those research results which have tangible form should also be promptly and openly made available to other scientists for their scientific research, unless such distribution is inappropriate due to factors such as safety, the need to more fully characterize or develop the TRP prior to distribution, or unless such distribution is incompatible with other obligations.

Where TRP is developed in the course of research which is subject to the terms of a sponsored research or other agreement, control over its development, storage, distribution, and use is the responsibility of the principal investigator, who will consult with the Grants and Contracts Office (GCO). In other cases, use of ISMMS resources will be presumed and control over TRP will rest jointly with the laboratory director or department head and with MSIP. The responsibility for control, which includes determining if and when distribution of the TRP is to be made beyond the laboratory for scientific use by others, resides with the principle investigator in accordance with the terms of this policy.

4.14. TRP Identification

Each item of TRP should have an unambiguous identification code and name sufficient to distinguish it from other similar items developed at ISMMS or elsewhere. MSIP should be consulted for assistance in developing appropriate identification systems.

4.15. TRP With Potential Commercial Value

Scientific exchanges should not be inhibited due to potential commercial considerations. However, TRP may have potential commercial value as well as scientific value. Principal investigator(s) who may wish to make TRP available for scientific use in a manner that does not diminish its value or inhibit its commercial development should seek guidance from MSIP. The typical mechanism for commercialization of TRP is through licensing agreements.

4.16. Distribution Of Biological TRP To Research Colleagues

Biological materials are in many cases patentable and licensed for commercial purposes under various types of patent licenses. They are also a form of TRP which can be distributed for commercial and/or research purposes with or without patent protection. Biological TRP owned by ISMMS may usually be distributed for research purposes only, with minimal conditions attached. Any such distribution is subject to an agreement by the recipient that commercial development or commercial use or further transfer of the biomaterial is not to be undertaken. (These agreements are typically referred to as Material Transfer Agreements and are available through MSIP.) In addition, the principal investigator may wish to control subsequent use, for example, by requiring recipients to follow a specific research protocol in the use of the biological materials.

4.17. Distribution Of Computer Software For Research Purposes

The distribution of ISMMS owned computer software to colleagues for research purposes must be coordinated with MSIP if the software has potential commercial value, if the principal investigator wishes to control subsequent use, or if it is subject to the terms of a sponsored research agreement. MSIP will provide wording for the distribution agreement necessary to preserve commercial value and will arrange for trademark and copyright registration as appropriate.

4.18. Other TRP

Distribution of TRP, other than biological TRP, should follow the procedures outlined in this policy for computer software.

4.19. Royalty Distribution - General

Royalty income received during the preceding ISMMS fiscal year for a technology license shall be distributed sixty (60) days after receipt as follows:

1. Deduct 15% from Gross Royalty which deduction is capped at $100,000 per year. This deduction, which may be adjusted from time to time, is directed toward partially covering from Royalty Income the non-specific transactional expenses of MSIP.

2. Then, deduct out of pocket costs directly assignable and, in some cases, a reserve for expenses in a specific case such as patent filing, prosecution and maintenance costs and specific marketing costs to arrive at "Adjusted Royalty Income". When in any distribution period such out of pocket costs and reserves exceed 50% of the Gross Royalty less the deduction specified in the paragraph above, the Adjusted Royalty Income will be defined to be 50% of the Gross Royalty less the deduction specified in the paragraph above and the remaining deductions and reserves will be carried forward to the next distribution period.

3. Of the first $1,000,000 in aggregate "Adjusted Royalty Income", distribute 50% to the inventor(s)/author(s), 45% to ISMMS and 5% to the inventor’s (inventors’) research program(s).

4. For aggregate "Adjusted Royalty Income" in excess of $1,000,000, distribute 33.3% of the "Adjusted Royalty Income" to the inventor(s)/author(s), 61.7% to ISMMS and 5% to the inventor’s(inventors’) research program(s).

5. If an inventor/author waives participation in royalties, those waived royalties will be distributed to ISMMS.

4.20. Equity Distribution

Equity distribution (see footnote) will be made as follows:

1. Deduct 20% of the equity. This deduction which may be adjusted from time to time is directed toward partially covering the non-specific and specific transactional expenses of MSIP and out of pocket expenses for unmarketable patents.

2. Of the remaining 80%: 40% is distributed to the inventor(s)/author(s); 30% is distributed to ISMMS; and
30% is distributed to the inventor's Department.
Ownership of Founder's shares or equity ownership of more than 5% of a company, as defined in the Conflict of Interest policy, issued to the Inventor/Author within two years of the licensing of the Technology are deemed by ISMMS as compensation for ISMMS Technology. Therefore, the Inventor/Author must choose between retaining the equity in the Company and receiving his/her share of the Inventor/Author distribution or compensation that ISMMS receives for the invention or turning over his equity in the Company to ISMMS for ISMMS to distribute under the royalty formula.
 The Inventor Author must inform in writing MSIP before the closing of the licensing agreement which option has been elected. The election is irrevocable and may only be changed at a later date under extraordinary circumstances with the approval of the Dean and the President of The Mount Sinai Health System.

4.21. Royalties - Special Cases

In cases where a license involves a patent with multiple Inventors/Author and/or involves multiple patents, MSIP will request the inventors to achieve from their perspective a fair and equitable distribution of the Inventors' income. If the Inventors can achieve an agreement, they will submit a letter signed by each one of them to the Director of MSIP stating their agreement and providing the specific income distribution scheme. In the event that such agreement cannot be achieved, any one or more of the Inventors can so notify the Director of MSIP, who will then request the Dean to form a committee of the faculty to make an appropriate recommendation with input from MSIP which with the Dean's approval will be binding on the inventors. Should this committee be unable to reach an agreement, the funds to be distributed to the inventors will be disbursed as if all inventors have made an equal contribution and all inventions that are part of the license have equal economic importance.

Part 5. Faculty, Student, Staff and Visitor Obligations

5.0. General Policy

It is the policy of ISMMS, The Mount Sinai Hospital and The Mount Sinai Health System that individuals through their activities by ISMMS, Mount Sinai Hospital, and The Mount Sinai Health System or by participation in a sponsored research project, using ISMMS, Mount Sinai Hospital, and The Mount Sinai Health System administered funds or facilities, thereby accept the principles of ownership of technology as stated under this policy. In furtherance of such undertaking, all participants will be required to sign Invention and Copyright Agreements in accordance with the following policy.

5.1. Personnel Invention And Copyright Agreements

5.1.1. Who Must Sign

Invention and Copyright Agreements must be signed by all individuals at ISMMS who:

a. receive support from sponsored research or ISMMS, The Mount Sinai Hospital, and The Mount Sinai Health System funded projects; or

b. otherwise may be in a position to make, conceive or reduce to practice Inventions or otherwise develop Technology under sponsored research or ISMMS, Mount Sinai Hospital, and The Mount Sinai Health System funded projects, whether or not salary or other support is received from such projects, or through the use of ISMMS, Mount Sinai Hospital, and The Mount Sinai Health System administered funds or facilities, must sign the ISMMS Invention and Copyright Agreement. Note that this requirement specifically extends not only to ISMMS personnel but also to visiting scientists and fellows or others. Voluntary Faculty as a rule are required to sign the policy only if directly involved in ISMMS, Mount Sinai Hospital, or Mount Sinai Health System funded research.

Note: Whether or not a person covered by this policy has signed such an agreement he or she will be bound by the policy, including all terms of the agreement. A copy of the Invention and Copyright Agreement is attached hereto.

5.1.2. Administration

Each ISMMS laboratory and department through its Administrative Officer is responsible for ensuring that Invention and Copyright Agreements are signed by all faculty, students, staff and visitors, who may be or are involved with sponsored projects or who may have opportunities to use ISMMS funds or facilities administered by that laboratory or department. MSIP will monitor laboratory and department compliance with this requirement. All Invention and Copyright Agreements should be signed in triplicate with one copy retained by the signatory, one copy retained in the laboratory/department files and one copy sent to MSIP. Invention and Copyright Agreement forms may be obtained from MSIP which will assist with any questions which arise in connection with such Agreements.

5.1.3. Consultants And Independent Contractors

Under the Copyright Act, copyright of commissioned works of non-employees is owned by the author and not by the commissioning party unless there is a written agreement to the contrary. All ISMMS personnel are cautioned to ensure that independent contractors agree in writing that ownership of the commissioned work is assigned to ISMMS, except where special circumstances apply and it is mutually agreed that the author will retain ownership.

Part 6. Administration

6.1. Interpretation Of Policy

In disputed issues related to the interpretation of this policy, the Dean has the final authority. The Dean will seek a resolution within the guidelines defined herein cognizant of various transcending factors such as open scientific discourse, protection of the reputation and financial integrity of ISMMS, and professional growth of ISMMS's faculty, staff and students. Any such disputed issues that cannot be resolved with the assistance of MSIP should be referred to the Dean. In unusual circumstances, the Dean with the approval of the President of Mount Sinai Health System and of the Technology Transfer Sub-Committee of the Research and Education Policy Committee of the Board of Trustees of ISMMS which oversees MSIP may authorize exceptions to the procedures and policies stated in this document.

6.2. MSIP

MSIP has two principal goals. The first is to facilitate the transfer to public use and benefit of technology developed at ISMMS. The second, where consistent with the first, is to provide an additional source of unrestricted income to support research and education at ISMMS. MSIP will work with the ISMMS developers of technology and with industry. However, it will do so in a manner which does not interfere with the normal flow of technical and academic information through publications, conferences and consulting.

6.3. Effective Date And Policy Review

The effective date of this policy statement on intellectual property is October 24, 1995. The Icahn School of Medicine Board of Trustees has mandated MSIP to prepare by January 1, 1998 a review of the implementation of this policy statement. The Board of Trustees itself will review the effectiveness of these policies by July 1, 1999. In the event that the economic terms of this policy statement are altered as a result of the Board of Trustees review, the Inventor(s)/Author(s), who had been receiving distributions of royalty or equity income and expect to continue to do so after the Board of Trustees review, may elect to continue to be compensated as specified in this policy or to be compensated in the future as specified in the revised policy statement which may result from the Board of Trustees review as of the effective date of the new policy.

6.4. ISMMS Board Of Trustees Oversight

The Technology Transfer Sub-Committee of the Research and Education Policy Committee of the Board of Trustees of ISMMS will oversee the operations of MSIP.

6.5. Interim Policy Concerning Conflict Of Interest In Equity Ownership And Technology Transfer

When an Inventor/Author Takes Equity: When the Inventor/Author is the transferee of technology, or a significant equity participant in the transfer of technology, certain policies apply to avoid conflicts of interest potentially damaging to the Inventor/Author or ISMMS. All such transactions involving the transfer of ISMMS Technology and equity ownership must receive explicit approval of the Dean, the President of The Mount Sinai Health System, and the Technology Transfer Sub-Committee of the Research and Education Policy Committee of the Board of Trustees of ISMMS, which is charged with the oversight of MSIP.

The Inventor/Author must sign a Conflict of Interest Statement, affirming that he/she will not:

a. use students at ISMMS for research and development projects for the company;

b. restrict or delay access to information from his/her ISMMS research;

c. take direct or indirect research support from the company in order to support his/her activities at ISMMS; or

d. employ students at the company.

The Inventor/Author must differentiate clearly between the intellectual directions of his/her ISMMS research and commitments to the company. To that end, he/she will expressly inform the Department head/Laboratory director annually of the general nature of his/her activities on behalf of the company. The Department Head/Laboratory director reviews and signs these reports.

6.6. When the Inventor/Author or ISMMS takes Equity

Once a decision is made to transfer Technology to an Inventor/Author's company or a company in which he/she is a significant equity owner, the transfer terms are negotiated. In most cases, the terms include a license issue fee, annual maintenance fees, and running royalties on product sales, all in the form of cash payments. Under some circumstances, however, ISMMS will take equity in a small, tightly-controlled company in partial lieu of royalties.

There is a greater risk of conflict of interest, or the appearance of such conflict, when Inventors/Authors and/or ISMMS hold equity, versus only royalty rights, which makes equity participating subject to special scrutiny. There is the possibility of substantial financial gain, even early in the invention's life cycle, through a public stock offering or acquisition by another company before the technology is proven or the first product sold. There is, of course, the possibility of substantial financial gain from a future royalty stream as well, but only in connection with the commercial success of a useful product.

If the Inventor/Author holds or will shortly acquire an equity position, ISMMS may accept equity only with the prior approval of the Dean. If ISMMS does not acquire equity, the company will be expected to grant the Inventor/Author holding or acquiring a significant equity position a total equity share reflective of the individual's contribution both to ISMMS intellectual property and to the company operations. MSIP will take this factor into account in its license negotiations with the company.

ISMMS will not accept research funding from a transferee of Technology in which ISMMS, through MSIP, or an ISMMS Inventor/Author of the transferred Technology, has a significant equity interest unless:

a. the funded research will not be conducted in the laboratory of the Inventor/Author who owns the equity, or in any research area related to any transferred Technology;

b. the students of the Inventor/Author who owns the equity will not participate in any project funded by the transferee. Rare exceptions may be made with appropriate assurances on conflict.

When an Inventor/Author desires to waive equity participation in order to obtain research funding from a small, tightly-controlled company, MSIP will require in its license agreements that the Inventor/Author not make any arrangements to obtain equity at a later date and avoid negotiating for equity until at least two years following the termination of the research agreement. In such circumstances, ISMMS will also refrain from taking equity.

ISMMS will not take a seat on the Board of Directors in connection with the equity acquired through license agreements.

ISMMS limits its equity involvement to a minority position (e.g., under 20% and typically under 10%).

Any equity obtained from a license agreement is transferred immediately from MSIP to the ISMMS Financial Division. Decisions on whether to invest university funds in future rounds of funding, or whether to hold or sell the stock when it becomes liquid, are made by professional portfolio managers involved in neither the original technology transfer nor the ongoing relationship.

Footnotes

23 Equity is defined as an ownership interest in a company, including but not limited to, shares of stocks, warrants, options, convertible instruments and participation as a partner in a partnership.

24 When the equity owned by ISMMS is sold, the net proceeds will be allocated to the Department(s) and ISMMS. If equity is not accepted by Faculty Inventors or cannot be transferred to them because of the licensing agreement or by reason of law, then all equity will be owned by ISMMS and may be sold at a time at the discretion of the Director of MSIP with the approval of the President of The Mount Sinai Health System.