C.16
                              February 1, 1989
 
                            16. COMPUTER SOFTWARE
 
                         I  SOFTWARE CREATION POLICY
 
                                 1. PREAMBLE
 
1.1   Computers are becoming an increasingly important tool in the academic
      programs of the University. If the University is to remain in the
      forefront of developments employing this technology, it is important
      that the University maintain an environment which encourages the devel-
      opment of innovative computer software by its faculty, staff and
      students, and provides appropriate recognition for the creator.
 
1.2   In accordance with the basic purpose of the University, significant new
      software should be made available to society. One way to accomplish
      this, which may be appropriate under certain circumstances, is through
      commercial exploitation in a manner consistent with the role and image
      of the University. The benefits from commercial exploitation should be
      shared between the creator, who supplied the ingenuity, and the Univers-
      ity, which provided the facilities for the software development. The
      University's share of any income generated can help to strengthen its
      academic programs.
 
                               2. DEFINITIONS
 
2.1   Software - as used in this policy the term `computer software' shall
      mean any sequence of coded instructions or data for a computer including
      firmware and any hardware modifications required for a sequence of
      instructions to be executed by, or made available to, the computer.
 
2.2   University Personnel - this term shall include all members of the
      University's faculty, professional librarians, professional staff,
      technical, administrative, support or other staff, students registered
      in the University's academic programs and any other personnel employed
      in the University's teaching or investigative programs.
 
2.3   Creator - this shall describe members of University personnel as defined
      above who made a significant intellectual contribution to the develop-
      ment of an item of software.
 
2.4   Net Revenues - this term shall mean the gross income received from the
      sale or licensing of an item of software less all expenses paid or
      incurred directly or indirectly in connection with the creation,
      development, marketing, licensing and maintenance of that software.
 
2.5   Development Costs - development costs shall be those resources specifi-
      cally allocated to an individual, department or college to create and/or
      develop an item of software.
 
                                  3. SCOPE
 
3.1   The Software Creation Policy shall apply to all software created by
      University personnel with the use of any University facilities or
      resources.
 
                                  4. POLICY
 
4.1   Ownership of Software
 
      a)    The general policy is that, except for the special circumstances
            described below in Sections 4.1(b) and (c), the ownership of
            software developed by University personnel in the course of
            carrying out their normal University responsibilities utilizing
            resources normally available to them, shall belong fully to the
            creators. Normally available resources include, but are not
            limited to, research grants and contracts, regular budget alloca-
            tions and facilities and other resources available to students as
            part of a course.
      b)    Ownership of software shall belong fully to the University in the
            following four situations:
 
            i)   the software was created by a faculty member, or any other
                 member of University personnel whose regular job responsi-
                 bilities do not include software development, with the
                 direct assistance of significant, specially allocated,
                 University resources over and above those normally provided
                 by the University.
 
            ii)  the software was produced with significant resources pro-
                 vided by an external sponsor via a grant, or contract with-
                 out a specific ownership provision, predominantly for the
                 development of that software.
 
            iii) the software was created by a member of staff whose regular
                 job responsibilities include software creation and develop-
                 ment.
 
            iv)  creation of the software was specifically commissioned by
                 the University of a faculty member, or of any other member
                 of University personnel whose regular job responsibilities
                 do not include software creation or development, under a
                 written agreement which clearly describes all the arrange-
                 ments including the resources to be allocated for the soft-
                 ware creation and development and any provisions for sharing
                 of net revenue.
 
      c)    When the software was created under a written contract with an
            outside sponsor the ownership of software shall vest in accordance
            with the conditions of the contract.  
 
4.2   Disclosure of Software
 
      a)    When a member of University personnel believes he/she has created
            an item of software which might have commercial potential he/she,
            after consultation with his/her academic department chair or
            administrative department head as appropriate, shall disclose it
            to the Vice-President Research who shall, together with the
            creator, department chair or head and college dean or administra-
            tive director, determine the identity of all creators and whether
            the software is owned by the creator, the University, or an
            outside sponsor.
 
4.3   Commercial Development, Revenue Sharing and Use of Revenue
 
      a)    Software Owned Wholly by the Creator.
 
            i)   the creator is free to choose the method for commercial
                 development and the University will if requested by the
                 creator provide suggestions on where to seek advice on pro-
                 cedures for commercial development.
 
            ii)  the creator may, at his/her option, offer the software to
                 the University for commercial development in which case the
                 following steps shall be followed:
 
                 a)    the creator shall assign all rights to the software to
                       the University;
 
                 b)    the Vice-President Research shall be responsible for
                       determining, after consultation with the creator, and,
                       if necessary, with additional technical and legal
                       experts and within 90 days of the date of disclosure
                       of the software, whether or not the University wishes
                       to commercially develop the software;
 
                 c)    if the University decides that it does not wish to
                       commercially develop the software, it will return all
                       rights to the software to the creator;
 
                 d)    agreement on the appropriate avenue to follow for the
                       commercial development of the software will be reached
                       in discussions between the creator, and the Vice-
                       President Research assisted by, if necessary, addi-
                       tional technical and legal experts;
 
                 e)    when the software is commercially developed through
                       the University, mutually agreeable arrangements will
                       be made with the creator for the maintenance and
                       service of the software.
 
            iii) notwithstanding Sections 4.3(a)(i) and 4.3(a)(ii)(c), where
                 software owned by the creator has been developed in whole or
                 in part with the support, facilities and/or equipment of the
                 University, the University shall normally retain a non-ex-
                 clusive, royalty-free, non-assignable, irrevocable license
                 to use the software for the University's own purposes. The
                 University will not, however, modify the software without
                 the consent of the creator.
 
            iv)  When the software is owned by the creator and has been
                 assigned to the University for commercial development, the
                 University shall pay to the creator:
 
                 a)    75% of the first $100,000 of net revenue;
                 b)    25% of net revenue exceeding $100,000.
 
            v)   The University's share of net revenue, up to a maximum per
                 item of software of $500,000 per year, shall normally be
                 distributed as follows:
 
                 a)    25% to the academic or administrative department of
                       the creator;
                 b)    15% to the college or directorate of the creator;
                 c)    60% towards recovering the accumulated prior costs, if
                       any, of the software marketing and licensing program
                       of the University, otherwise to the University's
                       endowment fund.
 
            vi)  If the University's share of net revenues from a single item
                 of software exceeds $500,000 in any one fiscal year, the
                 Research Board shall make recommendations to the President
                 for the disposition of the additional revenues.
 
            vii) The $100,000 and $500,000 levels shall be reviewed periodi-
                 cally by the Research Board which may recommend adjustments.
 
      b)    Software Owned by the University According to the Provisions of
            Section 4.1(b) (i) or (ii).
 
            The provisions of Section 4.3(a) shall apply except that the
            creator does not have the initial option to commercially exploit
            the software privately. The University will make the initial
            decision on whether commercial exploitation should be attempted. 
                                      
      c)    Software Owned by the University According to the Provisions of
            Section 4.1(b) (iii).
 
            i)   The chair of the academic department or head of the adminis-
                 trative department and dean of the college or head of the
                 administrative directorate in which the software creation
                 occurred shall be responsible for determining whether or not
                 commercial development of the software should be attempted
                 and, if so, what strategy should be followed. The Industrial
                 and Innovation Services group in the Office of Research will
                 assist if necessary.
 
            ii)  Except for the provisions described below in (iii) and (iv)
                 the net revenues shall be returned to the academic depart-
                 ment or administrative directorate which created and devel-
                 oped the software. If net revenues from any one item of
                 software exceed $100,000 in any one year the use and dis-
                 tribution of the amount over and above $100,000 shall be
                 determined by a committee comprising the Vice-President
                 Academic, the Vice-President Administration, the Vice-Presi-
                 dent Research, the department chair and college dean or
                 administrative director involved.
 
            iii) One (1) per cent of net revenue shall be set aside in a fund
                 which shall be administered by the academic department chair
                 or administrative director and shall be available, for
                 professional development only, to all members of University
                 personnel in that department or directorate with priority to
                 those persons who contributed to the creation and develop-
                 ment of the software.
 
            iv)  When one or more members of the staff in Computing Services
                 and/or Communications Services made significant contribu-
                 tions to the creation and development of the software, one
                 (1) per cent of net revenue shall be set aside in a fund
                 which shall be administered by the Directors of Computing
                 Services and Communications Services and shall be available
                 for professional development only to all members of these
                 two directorates.
 
            v)   Special Recognition
 
                 a)    Chair or academic departments or heads of adminis-
                       trative departments should ensure that contributions
                       of members of University personnel to the creation and
                       development of software are considered in the applica-
                       tion of the University personnel policies on promotion
                       and merit increase.
 
                 b)    University personnel who have made an exceptional
                       contribution to the creation and development of soft-
                       ware which, in the opinion of the department chair or
                       head warrants special recognition, may receive on the
                       recommendation of the department chair or head and the
                       approval of the appropriate dean or director and vice-
                       president, a one-time cash or non-monetary payment in
                       recognition of the special contribution of those
                       persons.
 
4.4   Recognition of Creator
 
      a)    When software is commercially developed by the University, the
            University shall use its best efforts to ensure that the creator
            of the software is acknowledged.
 
4.5   Policy Administration
 
      a)    The Vice-President Research shall be responsible for the admin-
            istration of the Software Creation Policy.
 
4.6   Resolution of Disputes
 
      a)    Section b) below shall apply only in those situations where the
            software creation and development was not covered by a specific
            written agreement (section 4.1(b) (iv)).
 
      b)    If all other attempts fail, in an effort to resolve a dispute
            between another party and the University with respect to the
            decision on ownership of software, the identity of creators of
            software, or the revenue sharing arrangement, the dispute shall be
            referred to a Board of Arbitration composed of one representative
            nominated by the University, one by the other party, and a third
            member selected by the two representatives thus chosen. Either the
            University or the other party may require that a Board of Arbitra-
            tion be selected by giving to the other written notice of such
            requirement. If either the University or the other party does not
            nominate a member of the Board of Arbitration within ten (10) days
            after the other has given such written notice, then the member of
            the Board of Arbitration nominated by the party giving the orig-
            inal notice shall constitute the entire Board of Arbitration. If
            both parties nominate members for the Board of Arbitration and the
            two members so nominated are unable to agree on a third member for
            the Board, this shall be resolved under the Arbitrations Act of
            Ontario. The decision of the Board of Arbitration shall be final.