ITEM 123-111-R0504


TO: Board of Regents

FROM:  LeRoy H. Schramm, Chief Legal Counsel

RE:  Cooperative Agreements with Employees to Develop Intellectual Property

DATE:  May 20-21, 2004

In 2001 the Montana Legislature, at the urging of the University System, enacted an exception to the state conflict of interest statute that gave University System employees the right to enter into cooperative arrangements with the University to commercially develop the fruits of the employees research (now codified at 20-25-109 MCA). In 2002 the Regents adopted Policy 407 (entitled University System/Employee Joint Ventures), which created a procedure for Regents approval of these cooperative arrangements (copy attached). The Regents have since that time approved 4 or 5 such arrangements. In January of this year the Board expressed a desire to formalize or regularize the submission of information that must accompany a request to approve a joint employee/university arrangement to develop intellectual property. Following that meeting I circulated a form that laid out how the information already required by Policy 407 should be submitted to the Board. That form is also attached.

There remains some concern about the information requested, especially on the MSU campus. The main sticking point is #5 on the form. That requests that the campus submit a copy of the written agreement for which approval is sought. However, it also provides that if public disclosure of any parts of the contract would compromise legally protected property rights these parts can be deleted (or redacted as lawyers are wont to say). Some on campus think that this provision is too weak and that public disclosure of the contract will generally have a chilling effect on partners who might otherwise be willing to participate with the University and its employees in a venture to commercialize the intellectual property in question. Discussions between this Office and MSU have failed to come up with mutually acceptable language. Therefore, the matter is being passed on to the full Board for its discussion and resolution.