Legislature(2003 - 2004)
01/22/2004 03:03 PM House HES
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
January 22, 2004
3:03 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Carl Gatto, Vice Chair
Representative Paul Seaton
Representative Mary Kapsner
Representative Sharon Cissna
MEMBERS ABSENT
Representative John Coghill
Representative Kelly Wolf
COMMITTEE CALENDAR
HOUSE BILL NO. 282
"An Act relating to contracts between the University of Alaska
and its employees involving research or other development of
intellectual property and to the authority of the president of
the University of Alaska regarding employee contracts for
development of intellectual property."
- MOVED HB 282 OUT OF COMMITTEE
PRESENTATION BY THE GOVERNOR'S COUNCIL ON DISABILITIES AND
SPECIAL EDUCATION
- HEARD [See 3:26 p.m. minutes for this date]
PREVIOUS COMMITTEE ACTION
BILL: HB 282
SHORT TITLE: UNIVERSITY EMPLOYEE RESEARCH CONTRACTS
REPRESENTATIVE(s): FATE, Guttenberg, Holm, Anderson, McGuire
04/23/03 (H) READ THE FIRST TIME - REFERRALS
04/23/03 (H) HES, L&C
05/15/03 (H) HES AT 3:00 PM CAPITOL 106
05/15/03 (H) Scheduled But Not Heard
01/22/04 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
JIM POUND, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 282 on behalf of
Representative Fate.
WENDY REDMAN, Vice President for University Relations
University of Alaska
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 282 and answered
questions from the members.
ACTION NARRATIVE
TAPE 03-04, SIDE A
Number 0001
CHAIR PEGGY WILSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:03 p.m.
Present at the call to order was Representatives Wilson, Gatto,
Kapsner, and Seaton. Representative Cissna arrived as the
meeting was in progress. Chair Wilson announced for the record
that Representatives Wolf and Coghill have been excused from the
meeting, since they have been called back to their districts.
HB 282-UNIVERSITY EMPLOYEE RESEARCH CONTRACTS
Number 0050
CHAIR WILSON announced that the first order of business would be
HOUSE BILL NO. 282, "An Act relating to contracts between the
University of Alaska and its employees involving research or
other development of intellectual property and to the authority
of the president of the University of Alaska regarding employee
contracts for development of intellectual property."
Number 0101
JIM POUND, Staff to Representative Hugh Fate, Alaska State
Legislature, presented HB 282 on behalf of Representative Fate,
sponsor. He explained that HB 282 will allow the University of
Alaska to compete in the research and development arena. Across
the nation universities have moved towards a research role as a
means of supplementing the high cost of education. This
research has resulted in inventions and innovations that have
moved into the private sector and sometimes created a profit, he
said.
MR. POUND told the members that the University of Alaska system
has been involved in research, but seldom development because of
the lack of financial incentives based on the Alaska Executive
Branch Ethics Act. He said AS 39.52.10, which is a declaration
of policy, discourages those officers from acting upon personal
or financial interests in the performance of public
responsibilities. In AS 39.52.170 outside employment is
restricted. A public employee may not render services to
benefit a personal or financial interest, or engage in or accept
employment outside of the agency the employee serves, he
explained.
MR. POUND said this legislation will give the president of the
university a recruitment tool whereby he/she will be able to
negotiate an intellectual property agreement with a researcher
who could then develop a product that is commercially viable.
Based on that negotiation, the researcher and the university
could both benefit financially from commercial enterprises
through sales, entrepreneurial activities, or development of an
industry here in Alaska. This agreement would allow researchers
to continue advancing their work, which helps to maintain staff
stability at the university. Mr. Pound summarized his comments
by saying that this legislation will bring quality staff who
will be working on projects that could bring new ideas,
industry, and new non-general fund money to the University of
Alaska. He asked the members to support HB 282.
Number 0259
CHAIR WILSON stated for the record that Representative Cissna
has joined the meeting.
Number 0269
REPRESENTATIVE GATTO asked what would prevent an employee from
taking his/her product home or to some other organization. What
in this agreement encourages the employee to remain at the
university and share in the profits?
Number 0306
MR. POUND responded that there would be initial negotiations and
a contract between the university and the researcher/faculty
member. He explained that the advantages for researchers are
the use of university facilities, equipment, and graduate
student staff to assist him/her, which would not be available
outside of the university system. Once the research produces
results there would already be a contract in place for a joint
venture between the university and the researcher, he
reiterated.
Number 0352
REPRESENTATIVE GATTO posed a hypothetical example of a
[researcher] who saw the election problems in Florida, and then
went on to develop an optical scanner in his garage. Even
though this person works at the university, does the university
have any claim on his/her [invention], he asked. Representative
Gatto pointed out that the university could make the argument
that during this individual's years of employment he/she had
plenty of ideas on developing an optical scanner. He asked what
rights the university would have in a case like this.
Number 0392
MR. POUND responded that in a case such as the one posed by
Representative Gatto, there would be a lawsuit involved. It
would be necessary to determine how much of the university's
resources were involved in the development of the optical
scanner and how much of the development was done in his/her
garage.
REPRESENTATIVE GATTO asked for clarification that the university
would initiate a lawsuit in a case like this.
MR. POUND responded that is correct.
Number 0431
WENDY REDMAN, Vice President for University Relations,
University of Alaska, testified in support of HB 282 and
answered questions from the members. The issue that
Representative Gatto brought up addresses how the university
plans to make money, which is through joint patents and
copyrights, she said. The university does have a right to claim
a portion [of the profits as a result of research developed at
the university]. She explained that it varies from campus to
campus and project to project as to the portion of patent or
copyright produced by faculty members during a time he/she is
employed. This would really have to go to the courts, Ms.
Redman commented, because even if a person developed a product
in the garage, if he/she were employed by the university at the
time, it is likely the university would be entitled to a portion
of the patent or copyright.
Number 0501
REPRESENTATIVE GATTO asked if staff members occasionally enter
into an agreement with the university at the beginning of their
employment. He asked if staff come to the university with an
idea and ask for the use of their facilities to develop
something.
MS. REDMAN responded that it has not been a normal occurrence in
the past, but it is becoming much more common now. This is
particularly true of high-technology fields where students come
out of college with good ideas, but not the laboratory
facilities at their disposal. She noted that it is becoming
more common to recruit those kinds of faculty.
Number 0578
CHAIR WILSON asked if the university hires non-teaching faculty
to do research or is it mandatory that researchers also teach.
MS. REDMAN responded that faculty can be hired for research
[purposes]; however, the research cannot be paid for with state
funds. If a faculty member has a research grant which covers
his/her salary 100 percent, plus the overhead to run the
laboratory, then this faculty member would not have to teach.
She added that the University of Alaska has many productive
research faculty.
CHAIR WILSON asked what advantage there is for individuals to
work with the university if it is necessary for them to provide
the grants to pay all the expenses.
MS. REDMAN responded that the advantage is that the researchers
will be working with peers, graduate students, and have access
to laboratory space that they could not [otherwise provide for]
themselves. The university also assists in getting inventions
patented. An added benefit of being associated with the
university occurs when working with research institutes that are
affiliated with [other] colleges and universities, she said.
Number 0689
REPRESENTATIVE KAPSNER prefaced her question by saying that she
is uncertain if this relates to [HB 282]. She explained that
the Native community is concerned about [the theft of]
intellectual property in terms of cultural stories and myths.
For example, if someone documents [stories and myths] and then
capitalizes on them, there is concern that these stories or
myths either would not be correct or would be taken and used for
capital gain. Representative Kapsner asked how that would fit
in [HB 282].
Number 0729
MR. POUND responded that unless the individual [who took the
stories] was a university employee, it would have no effect
whatsoever.
REPRESENTATIVE KAPSNER asked: What if [the individual who took
the stories or myths] was a university employee?
MR. POUND said intellectual property does cover copyrights on
written material. He pointed out that under this bill a two-
party agreement exists between the researcher and the
university. In this instance, there are three parties involved.
CHAIR WILSON asked Ms. Redman what would happen if a Native
professor at the university used [family stories and myths].
MS. REDMAN commented that she understands the dilemma
Representative Kapsner is addressing. This bill does not deal
with intellectual property and inappropriate use of intellectual
property by someone at the university. There are other
mechanisms at the university to deal with that situation, she
added. Ms. Redman offered to talk in detail about what is in
place to address this kind of situation, and emphasized that
this bill would not have any impact on that dilemma.
Number 0804
REPRESENTATIVE CISSNA told the members that her office requested
a legal opinion on [the subject of] immunity for the university
[with respect to a] business, since it would be jointly involved
in a business and possible litigation. She asked if the
university has looked into this issue and what the ramifications
could be.
Number 0844
MS. REDMAN told the members that [immunity] is one aspect that
would be covered under this bill; however, it really covers
broader kinds of consultations. The specific issue of owning a
business is something the [university] has been looking into for
a great deal of time. Dean Case, who is the dean of the College
of Business and Management at the University of Alaska
Anchorage, is very interested in this [issue] and has been
researching what other colleges and universities around the
country are doing, she said. There are a great number of
colleges and universities that have gotten into the process of
owning their own businesses. This is particularly true with the
school of business, where students take over businesses and then
turn it over once it is up and running. Ms. Redman explained
that some of these [universities] have formed 501(3)(c)
[nonprofit corporations]. Other states provide liability
protection, she added. She said that it is a very interesting
issue and offered to provide more information on the research
the university has done.
Number 0929
CHAIR WILSON asked Ms. Redman for clarification in the case
where an individual who is not an employee is given a grant by
the university.
MS. REDMAN responded that the university does not normally award
grants to individuals outside of the university [system];
however, the university's attorney makes it clear that anything
that is produced, thought of, dreamed up, or developed under the
aegis of the university is owned by the university.
Number 0988
REPRESENTATIVE GATTO asked, for example, if the university is
working to design a "nano-engine" to operate the "Spirit [Mars]
Rover" and someone else gets the contract, whether the
university absorbs the loss or the researcher bears some of the
financial responsibility.
MS. REDMAN responded that the university is not anticipating
involvement in that level of high-risk endeavors. Normally,
those research projects are accomplished through separate
501(c)(3)[nonprofit corporations]. Theoretically, the
university would absorb the risk; however, she reiterated that
the university is not looking at that high-level risk. Ms.
Redman said generally the federal government or the private
sector is involved in this kind of risk.
Number 1102
MR. POUND summarized his comments by saying that this is the
kind of program that is growing in the country. For example,
Duke University is involved with huge numbers of medical
research and development [projects] where there are intellectual
property agreements between those researchers and the
university. He told the members when he was researching this
issue he used [an Internet] search engine that provided
approximately 15,000 hits and almost all of them were
universities that are using this program as an incentive to keep
highly qualified professors and researchers.
Number 1145
REPRESENTATIVE SEATON moved to report HB 282 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 282 was reported from the
House Health, Education and Social Services Standing Committee.
The House Health, Education and Social Services Standing
Committee took an at-ease at 3:20 p.m. in order to prepare for
the overview. [For the overview of the Governor's Council on
Disabilities and Special Education, see the 3:26 p.m. minutes
for this date.]
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