Intellectual Property Policy

North Shore-LIJ Health System, Inc. Hofstra North Shore-LIJ School of Medicine
Office of Legal Affairs 500 Hofstra University
150 Community Drive Hempstead, New York 11549
Great Neck, New York   11021

The Feinstein Institute for Medical Research

OFFICIAL POLICY ON INTELLECTUAL PROPERTY

1. General Policy
   The North Shore-Long Island Jewish Health System, Inc. (the “Health System”) acting by and through The Feinstein Institute for Medical Research (the “Institute”) recognizes that inventions may be made by employees within the Health System in the course of their duties and activities.  It is the desire of the Institute that such inventions be administered in such a manner that they are brought into public use for public benefit at the earliest possible time.  In furtherance of such purpose, the Health System hereby establishes the Policy on Intellectual Property (the “IP Policy”) set forth herein, which policy may be amended from time to time as deemed necessary or desirable, and which policy supersedes any and all prior statements of intellectual property policy promulgated within the Health System.
   
   All inventions or improvements, whether patentable or not, which are conceived or first reduced to practice or as to which research or development work is done by employees of the Health System or by others who use research or development facilities owned by or otherwise made available by the Health System, excepting such facilities as are under lease to any organization not subject to the supervision of the Board of Trustees of the Health System (such employees and such others being hereinafter referred to as “Inventors” or an “Inventor” ), and which inventions or improvements arise from or are otherwise related to any research or development work supported by the Institute or are otherwise related to any operations or activities of the Health System (such inventions and improvements being hereinafter referred to as “Inventions” or an “Invention”), shall be administered in accordance with the following provisions of this IP Policy.  For purposes of this IP Policy, employees of the Health System will mean individuals employed by the Institute or any hospital or institution within the Health System that has the Health System or North Shore-Long Island Jewish Healthcare, Inc. as its sole corporate member and shares a common board of directors and management with the Health System.
2. Office of Technology Transfer (OTT)
   The primary function of the Office of Technology Transfer (the “OTT”) is the evaluation, protection, development and commercialization of Inventions and other intellectual property on behalf of the Institute and for the benefit of the Health System.   The OTT will be headed by a Director of Technology Transfer.  The OTT is a part of the Institute and is responsible for facilitating the transfer of Health System technology to the public use and benefit.  Subject to the provisions of this IP Policy, the OTT will obtain proprietary protection for Inventions.  Inventors shall assist the OTT in the commercial development of Inventions, for instance by identifying potential corporate sponsors and markets.
3. The Feinstein Institute for Medical Research
   The Institute was established primarily to conduct and facilitate the conduct of medical research, including, but not limited to, investigations, experiments and studies to discover, develop or verify knowledge relating to the causes, diagnosis, treatment, prevention, or control of physical and mental diseases and other human health impairments.  The conduct of all research as well as the functions of the OTT shall be subject to the oversight of the Institute.  All formal relationships with third parties with respect to research, clinical trials, grants, grant applications, contracts, Inventions or other intellectual property shall be effected through the Institute.  The Chief Executive Officer (the “CEO”) of the Institute will be the only person authorized to enter into contracts that legally obligate the Institute.  Except as designated by the Board of Directors of the Institute, no other employee is permitted to sign any contract that binds the Institute.  All contracts concerning intellectual property matters or the conduct of research shall initially be submitted to the Director of the OTT and reviewed and approved by the Office of Legal Affairs.
4. Disclosure of Inventions
   All employees are to disclose their Inventions to the OTT, as soon as reasonably possible after conception or first reduction to practice, in accordance with the procedures established by the OTT.  Following the initial disclosure, Inventors will fully cooperate with the OTT in defining the rights to such Inventions and in the preparation and prosecution of any patent application that may result.
5. Ownership of Intellectual Property
   All Inventions shall be the sole property of the Institute, except where ownership of such an Invention is subject to or is disposed of in accordance with any other provision of this IP Policy.  All Inventions shall be assigned by the respective Inventor to the Institute or its designee, as directed by the OTT, except in cases where such an Invention is released to the Inventor thereof by the Institute.  With respect to collaborations with other institutions or commercial entities, it is the policy of the Institute that ownership of intellectual property derived from such relationships shall follow the rules for inventorship under U.S. Patent Law.
   
   Subject to any external sponsor or  governmental consents, rights, restrictions or requirements that apply, the Institute may endeavor to release an Invention and rights therein to an Inventor thereof, in cases where the Institute (a) makes a final and conclusive determination not to file a patent application after receiving an invention disclosure thereupon, (b) files a Provisional patent application but makes a final and conclusive determination not to file a non-Provisional application claiming priority thereof, or (c) makes a final and conclusive determination to abandon patent prosecution or maintenance at any time after the filing of a non-Provisional patent application.  The Inventor to whom the Invention is to be released shall have petitioned, pursuant to Section 12 hereof, for a waiver of the standard provisions of this IP Policy in relation to the Invention and any rights therein for which release is sought, and such waiver shall have been granted by the Institute, in its sole discretion, pursuant to a written agreement comprising at a minimum, the conditions specified in Section 6(b)(iv) below.
6. Licenses and Distribution of Royalty Income
   Licenses for commercial development of Inventions shall be sought to ensure that useful Inventions shall be made available in products or services beneficial to the public.  In cases involving substantial development expenditures by the licensee, or for other special reason, an exclusive license may be given, subject to the terms of an applicable grant or contract.  All such licensing agreements shall be negotiated by the OTT and executed by an appropriate officer of the Institute.
   1. Royalty Income
      In the event that an Invention is licensed for use other than by the Institute, the Inventor thereof shall share in any income derived by the Institute from such Invention in accordance with the formula set forth below.  “Royalty Income” upon which the Inventor’s share is calculated, shall include all sums payable as consideration for the transfer of Institute technology regardless of how it is designated (e.g., whether as a royalty, license signing fee, milestone payment, minimum royalty payment or otherwise), less (i) any amounts due and payable to other entities which may have an ownership interest in the Invention and  (ii)  any transaction costs payable to third parties in connection with earning such Royalty Income.  Royalty Income shall not include any sum paid to the Institute under arrangements which designate the sum paid to be for particular use, such as laboratory support, sponsored research, patent costs or as reimbursement of other costs.
   2. Distribution of Royalty Income
      All Royalty Income received by the Institute will be distributed by the Director of the OTT as follows:
      1. Until such time as all legal and out-of-pocket expenses incurred by the Institute for the preparation and negotiation of the license, and all legal and out-of-pocket expenses incurred by the Institute (or paid by the Institute to or on behalf of third parties) for the filing, prosecution and maintenance of patents (collectively, “Expenses”) are one hundred percent (100%) recovered, Royalty Income received by the Institute shall be distributed as a twenty percent (20%) share to the Inventor and an eighty percent  (80%) share to the Institute.
      2. Once all Expenses have been so recovered, Royalty Income thereafter shall be divided between the Institute and the Inventor as follows:  The Inventor shall be paid a share equal to forty percent (40%) of the remaining Royalty Income realized, subject to any limitation prescribed by other parties having rights in such Inventions, such as NIH, and the remaining Royalty Income shall be retained by the Institute.
      3. In cases where there is more than one Inventor (“Co-Inventors”), the Co-Inventors shall be required to establish in writing, at the time of disclosure of the Invention to OTT, the percentage distribution to each Co-Inventor with respect to any Royalty Income that might be realized on the Invention being disclosed.  The aggregate amount payable to all Co-Inventors shall be limited, nevertheless, to the twenty percent (20%) Inventor’s share and the forty percent (40%) Inventor’s share as calculated above, which aggregate amount shall be divided in accordance with the percentages agreed to in advance by the Co-Inventors or, in the absence of such agreement, equally distributed among the Co-Inventors.
      4. In cases where the Institute has agreed to release an Invention, and rights associated therewith, to an Inventor, all such releases shall be subject to the following conditions:  (x) the Inventor shall become responsible for all past and future Expenses (as defined in Section 6(b)(i)) relating to such Invention and such rights; (y) responsibility for patent prosecution and maintenance and for commercialization of such Invention and such rights shall thereafter rest with such Inventor; and (z) the distribution of any compensation, in any form, that thereafter results from commercialization of such Invention and such rights shall be amended from the standard provisions of this Section 6 such that the Inventor (A) shall retain ninety percent (90%) of such compensation, net of the recovery by the Inventor of the amount of Expenses repaid to Institute and any additional out-of-pocket patent prosecution and maintenance costs (but not licensing costs) paid by the Inventor pursuant to the immediately preceding clause (x) hereof, in respect of such Invention and such rights, and (B) shall pay to the Institute an amount equal to ten percent (10%) of such net compensation amount, wherein such ten percent (10%) amount paid to the Institute shall not be deemed to be Royalty Income subject to distribution to such Inventor pursuant to this Section 6.
      5. The following exception to the Royalty Income distribution formula described in this Section 6(b) shall apply in the case of an EOE (as defined below)  or other entity in which an Inventor has a “significant financial interest” that exceeds the “PHS de minimis amount”, as such terms are defined in the Policy on Conflicts of Interest in Research.   No distribution of Royalty  Income shall be made to such an Inventor until such time as all Expenses (as defined above) incurred by the Institute are one hundred percent (100%) recovered by the Institute.
      6. In the event of the death of an Inventor, that Inventor’s share thereafter shall be made payable to the Inventor’s estate.
   3. Equity Participation
      Technology transfer arrangements sometimes involve proposals for the issuance of equity securities to the Institute, either in addition to, or in lieu of, other forms of Royalty Income.  The Institute is open to such arrangements in appropriate circumstances that will be considered on a case-by-case basis.  Where such equity arrangements are made by the Institute, the royalty income sharing formula noted above shall apply to the liquidation value realized by the Institute at such time as the equity is liquidated by the Institute, except in the following circumstances:
      1. The equity is received by the Institute pursuant to or in connection with sponsored research at the Institute; or
      2. The equity is received by the Institute as direct consideration for, as examples, (x) cash paid by the Institute for the securities, (y) provision by the Institute of research space or services, or (z) reimbursement to the Institute of Expenses (as defined above).
      The Institute’s equity position in any entity shall be overseen and managed by the Investment or Commercialization Committees of the Institute’s Board of Directors.

7. Publication
   The Institute supports the traditional principles and practices of academic freedom concerning scholarly publications and, in general, the Institute will not bar or prohibit publication of disclosures and inventions on which patent applications have been filed.  At the same time, the Institute recognizes that governmental authorities, industrial concerns, the Institute’s own interests or those of other organizations that sponsor Institute research may require temporary restriction on publication in order to protect the sponsor’s or the Institute’s interest in patentable or copyrightable intellectual property, or because of other reasons considered sufficient by the sponsor or the Institute to determine whether publication would compromise these rights and interests.
   
   With respect to any Invention, the Inventor must file an invention disclosure with the OTT as soon as it is possible to do so, but in any case prior to the submission of an abstract or manuscript or other public disclosure of the invention.  In order to obtain protection for foreign patent rights, which are lost upon publication or public disclosure prior to filing a patent application in the United States, the Inventor shall disclose the Invention to the OTT a minimum of sixty (60) days in advance of printed or oral disclosure, so that an application for a patent may be filed prior to public disclosure.

8. Committee on Intellectual Property (IP Committee)
   The Director of the OTT, in consultation with the CEO of the Institute, shall appoint a Standing Committee on Intellectual Property (the “IP Committee”) and such other ad hoc committees as are deemed appropriate to implement this IP Policy.  At a minimum, members of any committee constituted pursuant to this Section shall include either the CEO, a representative from the Office of Legal Affairs, a representative from the Office of Grants and Contracts, the Director of the OTT, and at least one member of the research staff of the Institute. Members of the IP Committee will serve at the pleasure of the CEO and in accordance with any rules which may be prescribed by the Institute.  Minutes shall be taken at each IP Committee meeting and archived with the OTT.  The minutes of every IP Committee meeting shall be communicated to the CEO of the Institute and the Senior Vice President and General Counsel of the Health System.

9. Employee-Owned Entities (EOE)
   In appropriate circumstances, an Invention may be licensed to  a business entity owned, in whole or in part, by  one or more employees of the Health System (including particularly, one or more Inventors of such Invention), for development and commercialization by such employee-owned entity (“EOE ”).  The decision to license and any subsequent relationship with the EOE will be treated in an arms-length fashion and will be subject to the same standards of review and due diligence as would be accorded to a potential licensee that is not an EOE.  All EOE relationships shall be subject to the Institute’s statements of policy with respect to commercially sponsored research.  All EOE licensees shall be required to prepare and submit a Development Plan in connection with the issuance of any license and such Development Plan will be monitored by an Oversight Committee after the issuance of the license.
   1. Development Plan
      The EOE Development Plan shall consist of two parts.  The first part will, in form and substance, constitute a research and development plan for the Invention and a program of commercialization objectives.  The second part will consist of a budget and a statement with respect to anticipated sources of financing for the development of the Invention.
   2. Oversight Committee
      An Oversight Committee shall be constituted for each EOE that is the subject of a license agreement with the Institute.  Such Committee will be appointed by the Director of the OTT in consultation with the IP Committee.  The responsibilities of such Committee will be to:
      1. Review the validity of and ensure the continued validity of Institute research that is related to the licensed Invention.
      2. Review data being collected pursuant to such related research and ensure that such data is being properly collected, shared, interpreted and disseminated.
      3. Periodically review the relationships of the EOE, the employee/owner, and the Institute to ensure that the business interests of the Institute are being protected and that all conflicts or potential conflicts are being appropriately managed.
      4.  Periodically review the relationship of the EOE and the Institute to ensure that, among other things, all Institute facilities being used are paid for, as appropriate, by the EOE.
10. Copyright Policy
    Except where the Institute reserves its rights, it acknowledges that copyrightable material in print media for scholarly publication shall belong to the author and the distribution of royalties, if any, shall be a matter of private negotiation between the author and his or her publisher or licensee.
    
    However, when (a) the provisions of any sponsored research or other agreement govern the disposition of copyrightable material, or (b) the copyrightable material consists of material in non-print media (for example, computer software), which has been produced in the course of employment by the Health System or through the use of facilities or funds of the Health System, then in such instances, all rights are reserved to the Health System and this IP Policy shall apply.
    
    In the event that the Institute receives royalty income with respect to such material, the authors will be compensated by the Institute in a manner similar to that established in Section 6 of this IP Policy.

11. Materials Transfer
    1. Tangible Research Property
       The term “tangible research property” refers to those research materials and results which are in a tangible form, as distinct from intangible (or intellectual) property.  Examples of tangible property include computer software, biological organisms, clinical or laboratory samples, engineering prototypes, and other property which can be physically distributed.
    2. Materials Transfer Agreements
       Tangible research property may be distributed to third parties for research purposes only.  Any such distribution shall be subject to a Materials Transfer Agreement in a form supplied by the OTT, under which the recipient agrees, among other things, not to undertake any commercial development or further transfer.  The Institute endorses the use of the Uniform Biological Material Transfer Agreement forms in connection with all transfers of tangible research property.  Employees are not authorized to execute Materials Transfer Agreements and are not authorized to transfer tangible research property without the execution of a Materials Transfer Agreement.
    3. Commercialization
       Any agreement providing for or requesting the commercialization of tangible research property shall be submitted to the Director of the OTT for review and an approval decision, and shall be subject to this IP Policy.
12. Waiver Requests
    A waiver of any provision of this IP Policy will be granted only in extraordinary and compelling circumstances.
    
    A request for a waiver of any of the provisions of this IP Policy shall be submitted to the Director of the OTT for prompt review and an approval decision in consultation with the IP Committee.  Such request shall include an identification of the provision or provisions of the Policy requested to be waived, and a full explanation of the reasons why the waiver is consistent with the mission and purposes of the Institute and the public interest.