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 assign intellectual property or grant an option for an exclusive license (subject to a pre-negotiated royalty or fee) as long as all project personnel are willing to do so. As an alternative, Penn State may provide industry sponsors with non-exclusive rights to utilize IP along with an option to negotiate an exclusive license on a commercially reasonable basis. Note: the former options (assignment and/or pre-negotiated exclusive licenses) are not appropriate for projects where one or more project personnel have a significant financial interest in the sponsor (as defined in RP06). Such options are also not appropriate for IP developed in the field of human health. Projects involving the College of Medicine, the Applied Research Lab, and the College of Ag Science may be subject to additional requirements. 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. Under these terms, Penn State retains title to all inventions conceived or reduced to practice in the performance of the project (Exhibit A, Article 11(C)). The state government, however, reserves the right to identify copyrightable works (including data, reports, and computer programs) as works made for hire (Exhibit A, Article 11(B)). This determination should be made in each individual purchase order.


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.