Colleges should effectively manage and utilise college IP to optimise VET outcomes in Western Australia and to otherwise benefit the people and economy of Western Australia.
This section captures concepts of use by the college, non-commercial sharing and commercialisation (sharing or transfer on a commercial basis). These Guidelines do not place an emphasis on either commercial or non-commercial sharing. Colleges should identify the importance of their IP as a resource which can be utilised to benefit the WA VET sector and the State generally and adopt an approach to maximise those benefits.
4.1 SHARING OF IP WITHIN TAFE
TAFE colleges are encouraged to share IP such as training materials, curriculum and administration systems, with other TAFE colleges.
TAFE colleges should charge each other no more than the amount provided under the MinisterialPricing Guidelinesprovided in Appendix A.
TAFE colleges are encouraged to let other colleges know what IP they have that is available for sharing.
4.2 SHARING OF IP ACROSS THE AUSTRALIAN VET SECTOR
The AEShareNetsystem is a web-based system that operates to streamline the licensing of intellectual property, in particular VET IP, so that learning materials are developed, shared and adapted efficiently.
AEShareNet Limited is a non-profit company, established by the Australian Ministers for Education and Training, which operates the AEShareNet system. The State and Commonwealth Ministers for Education and Training in Australia comprise the shareholders ofAEShareNetLimited.
WestOne Services is the only West Australian member of the AEShareNet system. As the WA member WestOne acts on behalf of the state education and training sector to facilitate the licensing of learning materials. Licenses can be either to use and/or adapt intellectual property owned by third parties or to allow use and/or adaptation of intellectual property owned by TAFE colleges, the Department of Training and Workforce Development or WestOne. Licenses can be free or for a fee depending on the wishes of the IP owner and the circumstances of the use requested.
4.3 COMMERCIAL SHARING OF IP
4.3.1 TAFE Powers and Obligations in IP Commercialisation
Commercialisation of IP is the promotion, advertisement, publication, distribution, supplying, hiring, marketing, offering to sell or hire, and franchising to the market place for a commercial return.
TAFE colleges obtain their power to engage in commercial activities relating to IP under Section 37(1)(da) of the VET Act.
Under those powers colleges can engage in commercial activities relating to the commercialisation of their IP if those activities are capable of being carried out under a contract and involve the sale or assignment of the IP or the licensing of the IP i.e.granting rights to third parties to use or reproduce the IP.
Business arrangements are defined as including “a company, a partnership, a trust, a joint venture, or an arrangement for sharing profits”. Any exercise of a business arrangements power can only be undertaken with the consent of both the Minister for Training and the State Treasurer, and only in relation to the provision of training for purposes specified in the VET Act. Business arrangements are therefore rarely used.
Colleges should try to commercialise IP assets for the benefit of the college and the WA VET sector, yet in doing so avoid any significant interference with the college’s operational activities or service delivery. The exercise of these powers carries the responsibility of ensuring that practices are in place to protect and manage the interests of the VET sector and the college. Colleges should not expend a significant amount of resource in developing an IP asset for the sole purpose of commercialisation of that asset. Commercialisation of IP should be only an ancillary part of a college’s operational activities and not become part of a college’s core business.
If a TAFE college wishes to enter into any commercial activities relating to IP which is not routine/covered by thePricing Guidelinesthey should:
1. Refer to the Government Intellectual Property Policy and Best Practice Guidelines(DOIR, 2003).
2. Seek appropriate advice: colleges are encouraged to consult with WestOne Services ([email protected]) for guidance and advice on commercialisation of college IP.
3. Ensure that the Council of the college is informed and supports the commercialisation initiative.
4. Ensure that any commercialisation related decisions are made under delegation from the Council or CEO of the college; and
5. Ensure that the Minister for (Education and) Training is informed of the commercialisation activity.
The Governing Council is ultimately responsible for the assets and financial operations of a college including the commercialisation of IP. Nevertheless, a governing council may delegate authority to an individual at the appropriate level to deal with issues concerning contracts, joint ventures, assignment, ownership and licensing associated with commercialisation of IP.
4.3.2 Assessment and Evaluation of IP Commercial Potential
Colleges must obtain commercial and legal advice on the commercial potential and viability of any IP before commercialisation is undertaken. This assessment must be professionally done at a very early stage.
In evaluating the commercial potential of IP, issues to be considered include: development costs, cost recovery, cost of commercialisation, the market potential of the IP, public benefit or public interest, royalties, licensing fees, sale amounts, the operational costs of the commercialisation, as well as the rights and obligation of colleges upon the commercialisation. When colleges choose a commercial partner or licensee or distributor to commercialise an IP asset, every effort should be made to choose a West Australian or Australian enterprise as a partner or licensee.
4.3.3 FORMS OF IP COMMERCIALISATION
Exploitation of IP is utilization of IP for profit. Exploitation of IP can be carried out in a number of ways like sale, license, royalty or assignment on fee.
Colleges must enter into legally enforceable agreements with third parties before exploitation of IP commences. Agreements must address issues concerning fees, payments and royalties relating to the exploitation of IP. It is important that colleges maintain and protect confidentiality while trying to negotiate or discuss the exploitation of the IP. Wherever the disclosure of IP is involved, colleges must use confidential disclosure agreements. Advice and assistance on confidential disclosure agreements can be obtained from WestOne Services.
Licensing of IP is the common way of exploiting IP. When colleges license IP themselves, there are several issues which must be considered. Advice on licensing agreements is available from WestOne Services upon request. All such licensing agreements must be legally vetted. To assist the colleges with the various aspects of licensing transactions, a list of issues for consideration are included inAppendix E.
When colleges license IP assets, agreements should normally be non- exclusive, non-transferable and must include the following:
rights assigned under the license, licensed territory, performance obligations, royalties, duration of license, uses of the asset, reproduction
identification and attribution of the college as the owner of the IP in the materials produces and marketed by the licensee;
rights over enhancements to the original product, including the extent and nature of enhancements to be made, and the rights the college will have to access and use of the enhancements;
issuance of authorised versions of the materials to third parties and retention of any subsequent commercial benefit; and
responsibilities for maintaining the IP.
Certain rights like reproduction, copying and using or marketing associated with IP assets can be sold or assigned by colleges to third parties. In the event colleges decide to sell or assign an IP asset, colleges must consider factors such as the colleges’ and the Crown’s liability, if any, from sale of the IP asset, as well as any requirements to access and use the IP in the future. A college should operate in as open, accountable and competitive manner to obtain the best deal for itself and the VET sector.
Colleges must obtain legal and commercial advice from legal or patent attorneys before entering into licensing or sale arrangements. License and sale agreements must be legally vetted.
4.3.4 Risk Management
Whenever colleges commercialise or commercially exploit IP assets, a number of risks and liabilities occur. The colleges must minimize or prevent the occurrence of such liabilities. The colleges must have procedures and measures to identify and evaluate the risks involved, and initiate take steps to minimise exposure to such risks and liabilities.
Wherever feasible commercialisation agreements should include indemnities from liability. Colleges must take insurance cover against loss or liabilities arising from the commercialisation of IP asset. Colleges must try to avoid commercialisation or exploitation of IP assets that attract large or excessive risks. Much of the risk and liability should be passed on to the commercial partner or licensee.
In assigning risk, colleges must refer to Treasurer’s Instruction 109 under the Financial Administration and Audit Act (FAAA) 1985.
4.3.5 Revenue Generation from Commercialisation Activities
Colleges should consider the economic benefits of the Crown before deciding to commercialise IP. In exploiting IP, colleges should aim for no less than full cost recovery. Commercialisation of IP by the college for revenue generation may involve significant monetary expenditure and colleges must obtain necessary advice before venturing into commercialisation.
When commercialising IP, colleges may earn a great deal of revenue through royalties and licensing fees. Under the terms of Section 48 of the VET Act, monies received by colleges from commercial activities form part of the funds of the college. The revenue received from the IP commercialisation is part of these funds. Consequently, colleges may use such funds in accordance with the provisions of the VET Act and the FAAA.
Before granting permission to use college IP, it is necessary to ensure that the request is genuine and that the request has come from an appropriate source. In granting a request, the college’s clearance letter must specify the purpose and person or organisation to whom the permission is granted. A sample clearance form is included as Appendix F.
4.4 NON-COMMERCIAL SHARING OF IP
It is entirely acceptable in appropriate circumstances for TAFE colleges to share IP on non-commercial terms. This may include providing IP for free or for the costs of administration only. If a college wishes to share IP in a non- commercial manner they should still ensure that they consider what terms it should attach to the non-commercial sharing.
These conditions should include:
What the recipient of the IP should be able to do with the IP and what restrictions if any should be imposed, such as:
- rights to use the IP unaltered;
- rights to make a limited number of copies of the IP; or - rights to use for non-commercial purposes only; and
If the recipient is entitled to modify the IP what are the conditions relating to ownership of and sharing of that modified IP.
4.5 PUBLICATION THROUGH WESTONE SERVICES
A key function of WestOne Services is to facilitate the development and distribution of IP created by TAFE colleges to benefit the whole of the WA