Penn State's Position on Intellectual Property

Penn State's basic position regarding Intellectual Property (IP) is determined by the source of funding.


Almost all federal grants and contracts are subject to the terms and conditions of the Bayh-Dole Act (37 CFR 401). Under these terms, Penn State retains title to all inventions conceived or reduced to practice in the performance of the project (37 CFR 401.14(B)). The Federal government receives a non-exclusive license to use the invention for government purposes. Penn State reserves the right to negotiate additional licenses to commercial partners.

Federal Flow-through

The Bayh-Dole Act applies to all federal funds, even when such funds are flowed through a third party.  If a company or state agency is flowing federal funds to Penn State, the company or state agency "will not, as part of the consideration for awarding the subcontract, obtain rights in the subcontractor's subject inventions" (37 CFR 401.14(G)(1)).

Internal Industry Funds

Penn State may grant a non-exclusive royalty-free commercial license (with an option to negotiate an exclusive license) or an exclusive commercial license (subject to a pre-negotiated royalty or fee) as long as all project personnel are willing to grant such rights. Such licenses are not appropriate for projects where one or more project personnel have a significant financial interest in the sponsor (as defined in RP06). Additional restrictions apply to projects involving human health and/or projects involving faculty members in the College of Medicine, the Applied Research Lab, and/or the College of Agricultural Science. Additional guidance can be found here. Please consult the Industry Agreement Decision Tree for identifying the appropriate industrial terms and conditions.

Commonwealth of Pennsylvania

Most state contracts are issued in accordance with the Commonwealth Master Agreement. The following terms and conditions apply:

  • Penn State retains title to all inventions conceived or reduced to practice in the performance of the project but grants the Commonwealth a license. (See Exhibit A, Article IX.C. for further details.)
  • Ownership of copyrightable works (including data, reports, and computer programs) is determined by the source of funding identified in Master Agreement Attachment 1 (Agency Request – Work Plan):

    • If the project is Federal flow-through, copyright ownership vests with Penn State, but the Commonwealth is granted a license. (See Exhibit A, Article IX.B.2 for further details.)
    • If the project is funded entirely with state funds, then the Commonwealth retains ownership of all copyrightable works. Penn State retains a license. (See Exhibit A, Article IX.B.1 for further details.)


Penn State receives awards from many other sponsors, including foundations, foreign governments, local governments, etc. Please work with the Office of Sponsored Programs for guidance regarding the appropriate IP clauses for your particular agreement.

For more information on Penn State's policies regarding Intellectual Property (IP), see IP01 and IP06.

If you have additional questions, please contact the Office of Technology Management.