This page presents background for the C-Res discussion on intelletcual property and conflicts of interest in distance learning ventures.

The Committee's objective in this discussion is to understand issues around the ownership of intellectual property, and institutional and personal conflicts of interest, stemming from equity and other financial interests in distance learning ventures. Our goal is to present a reasoned position to the Senate for their consideration as they seek to develop policy in these areas.

This discussion takes place in the context of ongoing activities at Stanford and elsewhere in which faculty are developing course materials to be provided online. In this context, the Committee is asked to consider the following questions:

1. Who "owns" a Stanford class?
   
   
2. Who "owns" course materials produced at Stanford? Is the answer different if the materials are intended for electronic distibution outside of the University's campus? by Stanford? by a for-profit outside entity?
   
   
3. How do the answers to these questions inform our consideration of policy related to conflict of interest and commitment for:
   • the individual faculty member involved with distance education?
   • Stanford University as an institution?

The following information is provided to assist in considering these questions:

• Related Stanford University policies
  
  
• Definitions of intellectual property
  
  
• Stanford technology licensing operations
  
  
• Stanford organizations and examples of distance learning arrangements
  
  
• Readings and resources from Stanford and other institutions
  
  

This topic was the subject of the Committee's annual public meeting, held on May 14, 2001. (See Stanford Report article.)

• Inventions, Patents and Licensing
  
  
• Copyright Policy
  
  
• Faculty Policy on Conflict of Commitment and Interest
  
  
• University Investments in Start-Up Companies Involving Stanford Faculty
  
  
• Equity Acquisition in Technology Licensing and Distance Learning Agreements
  
  

A patent is a grant issued by the U.S. Government giving an inventor the right to exclude all others from making, using, or selling the invention within the United States, its territories and possessions for a period of 20 years. When a patent application is filed, the U.S. Patent Office reviews it to ascertain if the invention is new, useful, and nonobvious and, if appropriate, grants a patent - usually two to five years later. A patent is enforceable for twenty years from the date of issuance. After that, the invention becomes part of the "public domain."

See the Stanford OTL web site for a description of the patenting process.

A copyright is defined as the right to own one's creations. It protects "original works of authorship" which have been fixed in a tangible medium of expression from which they can be perceived, reproduced, or otherwise communicated. For example, copyrights protect against the copying of literary works (books, journal articles, poems, manuals, memoranda, tests, instructional material, bibliographies); musical or dramatic works; pantomimes and choreographic works; pictorial, graphic and sculptural works, including photographs, diagrams, sketches and integrated circuit masks; motion pictures and other audiovisual works such as videotapes; sound recordings. A copyright protects against the copying of such works for the lifetime of the author, plus seventy years. After that, the work belongs to the public.

"Work for hire" is a legal term defined in the Copyright Act as "a work prepared by an employee within the scope of his or her employment." This definition includes works prepared by employees in satisfaction of sponsored agreements between the University and outside agencies. Certain commissioned works also are works for hire if the parties so agree in writing. The employer (i.e., the University) by law is the "author," and hence the owner, of works for hire for copyright purposes.

STANFORD POLICY

PATENT POLICY
All potentially patentable inventions conceived or first reduced to practice in whole or in part by Stanford researchers (faculty, staff, students, visiting researchers) in the course of their University responsibilities or with more than incidental use of University resources, shall be disclosed on a timely basis to the University. Title to such inventions shall be assigned to the University, regardless of the source of funding, if any.

COPYRIGHT POLICY
All rights in copyright shall remain with the creator unless the work is a work-for-hire (and copyright vests in the University under copyright law), is supported by a direct allocation of funds through the University for the pursuit of a specific project, is commissioned by the University, makes significant use of University resources or personnel, or is otherwise subject to contractual obligations.

[Emphasis added]

Most of OTL's work involves patentable inventions. However, they also handle Stanford-owned copyrights and trademark licensing.

Once a technology is disclosed, the inventor meets with the OTL staff member to evaluate manufacturing feasibility, novelty, potential applications, and possible markets. From these discussions, a preliminary licensing strategy will be developed.

Stanford makes the determination whether or not to apply for a patent, and arranges for the filing and prosecution of patent applications through an outside patent attorney. If Stanford decides not to seek a patent, the invention is turned over to the inventor, who may seek a patent independently of Stanford.

Stanford markets the technology and seeks a company to invest in its commercial development. Once a licensing agreement is reached, OTL collects all royalties. 15% is deducted to support OTL's operation; any direct expenses, such as patent costs that are not reimbursed by the licensees, are also deducted.

Net Royalties are then divided three ways:

• One third to the inventor(s);
• One third to the inventor's Department; and
• One third to the inventor's School.

OTL may at times accept equity in lieu of cash as part of the license issue fees. After dedutcion of OTL's administration fee, inventors receive their proportional share and the remainder, managed by the Stanford Management Company, is earmarked for the OTL Graduate Fellowship Fund and administered by the Dean of Research and Graduate Policy.

This list is incomplete. At the Committee's meeting on January 29, Kathy Ku and Sam Steinhardt discussed some of these arrangements. On April 16, Andy DiPaolo presented background on the Stanford Center for Professional Development (SCPRD).

SCPD (Stanford Center for Professional Development, part of the School of Engineering)

Formerly the Stanford Instructional Television Network, SCPD now offers hundreds of Stanford classes to a network of corporate sites around the world. Classes are offered on a matriculated, for-credit basis. In addition, professional development courses are offered on a non-credit or certificate basis. Lectures and course materials are now being digitized for online transmission through Stanford Online. Faculty participation in televised or online classes is voluntary. Licensing revenues are shared in accordance with the OTL royalty-sharing policy (see above).

SCPD web site - http://scpd.stanford.edu/

LTEE (Stanford organization, Learning Technologies and Extended Education)

In January, 2001, GSB and Political Science Professor David Brady, a senior fellow at the Hoover Institution, was named Acting Vice Provost for Learning Technologies and Extended Education (LTEE) until August, replacing Geoffrey Cox, who left Stanford last year to become Vice President of U-Next.com. The Chief Financial and Operations Officer for LTEE is Sam Steinhardt.

Stanford Learning Lab web site - http://sll.stanford.edu/

OTL (Stanford organization, Office of Technology Licensing)

OTL is the Stanford organization responsible for the management of the University's intellectual property assets. OTL reports to the Vice Provost and Dean of Research. OTL receives invention disclosures from Stanford faculty, staff and students, evaluates them for commercial viability, and when possible licenses them to industry. If successfully licensed, cash royalties collected by OTL provide funding to the inventors' departments and schools, as well as personal shares for the inventors themselves. Kathy Ku is the Director, OTL.

OTL web site - http://otl.stanford.edu/

U-Next.com (University-wide)

SU entered into an agreement with Unext.com, a company formed for the purpose of delivering business and management education throughout the world. The agreement gives Unext.com a nonexclusive right to use SU trademarks. Financial terms provide for yearly payments and royalty obligations that can be converted into equity. University obligated to develop and deliver modules. U-Next owns the content; University may license. University agrees not to enter into any agreement with any distance learning business that directly competes with Unext.com for delivered modules or "relating to the specific subject matter, scope and intended student audience of each Initial Module." This is an ongoing relationship.

U-Next web site - http://www.UNext.com/

e-Skolar (School of Medicine)

E-Skolar is "the university's first Stanford-branded Internet startup. E-Skolar will allow physicians to perform rapid searches cross multiple medical references" and earn CME credits through the use of the system. "The School of Medicine will actively support e-Skolar through technology transfer, content collaboration and oversight." E-Skolar works closely with SOM, SUMMIT, and students/faculty etc. and has it origins in SHINE, a Stanford supported project under the auspices of Dr. Ken Melmon. The exclusive license through OTL provided for cash payments and earned royalties. Licensee is allowed to use marks for Stanford, Stanford University School of Medicine, SOM Shield and the Stanford Seal. Stanford owns approximately 60% of e-Skolar. The Board was originally only Stanford personnel who did not receive compensation for serving on the Board. This is an ongoing relationship.

e-Skolar web site - http://www.skolar.com/

Alliance (campus-wide, primarily H&S content)

Stanford provided $3 of the $12 million needed to launch this distance learning venture with Oxford, Princeton and Yale universities. Alliance will provide online courses in the arts and sciences to the 500,000 alumni of the four schools.

Harvard Business School(HBS)/Stanford GSB and School of Engineering

HBS and Stanford University (GSB and School of Engineering) are exploring a joint venture to develop and deliver online executive and management education.

SemiZone (School of Engineering)

SemiZone and the Stanford Center for Professional Development (SCPD, School of Engineering) will co-develop short courses in engineering and SemiZone will distribute them over the web. The 2-3 year exclusive license for webcasting involves equity and a share of the profit. This is an ongoing relationship.

SemiZone web site - http://www.semizone.com/

Resources below will open in a separate browser window.

• "Class Dismissed?"
  Review of Stanford ventures with online learning, published in the May/June issue of Stanford Magazine
  
  
• Intellectual Property in the Information Age
  Available as a free online publication of the National Academy Press, a report approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
  
  
• "Online Education: The Rise of a New Education Industry"
  Keynote presentations delivered by Andy DiPaolo (SCPD).
  
  
• May the Course Be With You
  Feature article in Lingua Franca, Vol. 11, No. 2, March 2001
  An extended discussion of the question of who owns a course, focusing on application of copyright laws. The article refers to the following reports:
  
  
  • the Tanner Report, a report of the University of California Task Force on Copyright, published in 1999
    
    
  • the CETUS Report, Fair Use of Copyrighted Work, 1995. CETUS is the Consortium for Educational Technology for University Systems, comprised of California State University, State University of New York, and the City University of New York.
    
    
• Indiana University
  Draft agreement for production of distance learning materials
  This not an "official" instrument for the allocation of ownership rights at Indiana University. It is a draft that may be a useful start for reaching agreement between the appropriate university officer and the individual instructor who is preparing materials.
  
  
• American Federation of Teachers
  Summary of "Distance Education: Guidelines for Good Practices"
  Published in 2000, this report presents the results of a survey of college and university practitioners of distance education.
  
  
• MIT
  Disturbing the Educational Universe: Universities in the Digital Age Ñ Dinosaurs or Prometheans?, President Charles M. Vest's report for the Academic Year 2000-01, examining the impact of technology on higher education and assessing the future role of the research-intensive residential university.
  
  Draft report of the Ad Hoc Faculty Committee on Intellectual Property and Conflict of Commitment
  MIT's goal is to craft a set of principles to help faculty make optimal use of emerging technology for education, while maintaining the collegiality of the campus, the open dissemination of information, and faculty commitment to the mission of the institution. This site presents the draft report of the committee, and solicits inputs from the MIT community. It also includes a summary of policies from other Universities, including Stanford.
  
  
• The Pew Learning and Technology Program
  Who Owns Online Courses and Course Materials? Intellectual Property Policies for a New Learning Environment
  Discussion from February, 2000, symposium, includes discussion of four cases:
  1. the Arthus Miller case (Harvard)
  2. U-Next.com (several universities, including Stanford)
  3. CaseNET (University of Virginia)
  4. Math Emporium (Virginia Tech)
  
  
  
• University of Illinois
  Report on Courseware Development and Distribution, May, 1999
  
  
• Duke University
  Policy on Intellectual Property Rights
  This is a pdf file. Note especially Section III, Particular Provisions Applicable to Courses of Instruction Approved for Duke Credit
  
  
• Harvard University
  Statement on Outside Activities of Holders of Academic Appointments
  
  
• University of Chicago
  New Information Technologies and Intellectual Property at the University