The Office of Innovation Commercialization

Troublesome Language

There are several U.S. laws which may delay or impede your material transfer.

Confidentiality

Due to Public Record Law, agreements to confidentiality must be made in a way that is consistent with NC Public Records Act G.S. 132. The marketing requirements are necessary so employees know what information to treat as confidential. It would be too burdensome to keep track of random information that is not easily recognizable as confidential.

Perpetual confidentiality agreements: The expiration of confidentiality restrictions must be limited due to the University setting. The University cannot keep track of students once they have matriculated or left the University.

Export Control Regulations

Due to Export Control Regulations, the University cannot agree to withhold publication. However, the University can agree to delay publication for 60-90 days in order for intellectual property issues to be addressed.

Assignment

An assignment is a transfer of rights to a third party. Assignments are dangerous for the University because they may interfere with the exclusive emoluments clause of the NC constitution by privileging a party to public funds without consideration. Furthermore, assignments may interfere with the duties owed to the University.

Intellectual Property Ownership

The Tax Reform Act of 1986 requires that the University owns patents developed by University personnel using University resources or results from use of facilities built or renovated with tax- exempt bond proceeds. The tax exempt status of the bonds is lost if the facilities are used for private rather than public research. While the patents are owned by the University, the University can license those patents out. The Bayh-Dole Act prohibits the University from assigning its rights to any third party without the approval of the federal agency funding the research.

Liability/ Limitation of Damages/ Indemnification

Under North Carolina Tort Claims Act, (NC Gen. Stat. 143-291), a public University cannot waive the State’s governmental immunity and assume liability for actions not covered under the act. Only the General Assembly has the authority to go beyond the scope of the NC Torts Claims Act. The University is not allowed to purchase liability insurance to cover an indemnity promise. An indemnity clause would be against public policy conveyed by the NC constitution.

Forum Selection Provisions

Forum Selection Provisions are not allowed under NC Stat 22-B-3. The statue holds that such contracts are void and unenforceable.

Sovereign Immunity

The University, as a state agency, cannot agree to “choice of law” clause requiring the University to consent to litigation in a jurisdiction other than North Carolina. Choice of law clauses are prohibited under NC Gen Stat 22B-3. These clauses interfere with the Attorney General’s exclusive duty to defend the University and they also go beyond the scope of the waiver of sovereign immunity.