Intellectual Property Policies

IP04 Royalty Payments for Course Materials (Formerly AD17)

Policy Status: 

Active

Policy Steward: 

Vice President for Research

Contents:

PURPOSE:

To establish that faculty may properly and appropriately receive reasonable royalty payments for certain original instructional materials that they develop for use in Penn State courses, and to establish advisory guidelines to facilitate the proper and appropriate receipt of those royalty payments through a transparent and consistent review process.

For the purposes of this policy the term “faculty” is defined as any Penn State student or employee acting in an instructional capacity in the conduct of a course.

POLICY:

The overarching goal of this policy is to offer incentives for faculty to produce better quality instructional materials as intellectual products for the use and benefit of Penn State students and students elsewhere by allowing faculty to recover some of the costs of their work, and at the same time, to protect Penn State students from potential financial exploitation. This policy covers original instructional materials developed by faculty as intellectual products and printed and sold by Document Services, as well as by other publishing companies and copying services, and regardless of the tangible medium of expression on which they are fixed, printed, recorded, posted, displayed or distributed.

Faculty members may receive reasonable royalty payments on certain kinds of original instructional materials used in Penn State courses including, but not limited to, noncommissioned courseware modules. Faculty members seeking royalty payments on materials sold to Penn State students must obtain written approval prior to receiving payment of such royalties in order to ensure that the payment of royalties is reasonable and justified in accordance with the guidelines set forth below, and that students are not financially exploited.

A written request for receipt of royalty payments describing the original instructional materials in question, the course(s) in which the materials are to be used, and the estimated overall cost to students must be submitted either to the department/division head or a peer committee in accordance with unit practice. A written decision must be rendered within one month of the initial request. If the requested royalty payments are denied, or a reduction from the initial request by the faculty member is recommended, the written decision must include an explanation of the reasoning, together with a recommendation of what a reasonable royalty payment would be if any payment is allowed.

If the College or department /division or peer committee denies the faculty member’s receipt of royalty payments, the faculty member should determine what happens to the royalty payment, subject to the review of the department/division head or a peer committee in accordance with unit practice.  Examples of acceptable disposal of the royalties could be (a) to Penn State, (b) to a reputable charity, or (c) to a reduction of the students’ cost of the materials associated with the specific course.

Faculty members who dispute the department/division head or peer committee decision regarding reasonable royalties may seek a review by the Faculty Rights and Responsibilities Committee of the University Faculty Senate in cooperation with the Vice Provost for Academic Affairs.

In accordance with the general standards of professional ethics embodied in AD47, faculty members also have an ethical obligation when they collect any royalty payments for any instructional materials to reveal those payments to all those affected, including but not limited to, the Penn State students in those courses.

ADVISORY GUIDELINES REGARDING PEER AFFIRMATION AND ROYALTY PAYMENTS:

  1. In applying and interpreting the advisory guidelines established here, the academic administrator or peer committee should apply them in light of the overarching goal of this policy set forth above.
  2. In every course there is some essential core of information that the instructor has been paid to organize and deliver and that students have paid to receive. Normally this essential core goes beyond course material prepared by others to include the faculty member's own intellectual contributions, which may include printed or posted materials. Therefore, a royalty payment is not automatically reasonable and justified for printed or posted material of the faculty member's own creation.
  3. In light of Guideline No. 2, a royalty payment is not reasonable or justified for printed or posted materials that are customary to a faculty member's core contribution to the conduct of a course, including but not limited to a course syllabus, reading schedules, versions of lecture notes, packets of what would otherwise be "handouts" of illustrative material used in class, and collections of copied readings or other printed material authored or prepared by others that are merely assembled and organized by the faculty member for the convenience of students.
  4. A reasonable royalty payment to the faculty member may be justified for printed or posted course materials if they represent a substantial intellectual product contribution by the faculty member and if they bring added value to a course as a supplement to the faculty member's core contribution. For instance, if the course could be taught using a commercially available text or manual in lieu of the printed materials prepared by the faculty member, or if the faculty member's printed materials could plausibly be used as supporting material in a similar course at another institution, then those materials may be considered a substantial intellectual product contribution. In addition, a royalty payment normally is justified only if the academic quality of the material has been verified by an independent academic review, using reviewers that were not selected by the faculty member receiving the royalty payment.
  5. Faculty members are ethically obligated not to financially exploit students (see AD47, Part II, "General Standards of Professional Ethics"). Procedures currently exist under AC76 ("Faculty Rights and Responsibilities") and RA10 ("Handling Inquiries/Investigations into Questions of Ethics in Research and in Other Scholarly Activities") to deal with alleged violations of this ethical standard. Faculty members should avoid conflicts of interest in making academic and/or financial decisions regarding students (see HR91, "Conflict of Interest").
  6. Royalty payments for textbooks and other books authored, co-authored, or edited by a faculty member are typically reasonable, and are excluded from this policy provided that: (a) their use is reasonably related to the purpose of the course for which they are assigned; (b) they have been published by an academic or commercial press in which the faculty member does not hold an ownership or vested interest; (c) they have been subject to a peer review process in their publication by an independent authority with reviewers that were not selected by the faculty member, and; (d) they have been produced for use beyond Penn State courses. Nevertheless, faculty members who author, co-author, or edit such publications and assign them to the courses they teach are required to submit them for approval to the academic administrator or peer committee described above to avoid either a conflict of interest or the appearance of a conflict of interest.
  7. Faculty members may want to assign course materials that are to be purchased by the students from a company from which the faculty member has received payment for consulting or other services.  Such payments should be disclosed to the academic administrator or peer committee for consideration regardless of whether the payments are royalties.
  8. The appropriate academic administrator or peer committee, according to unit practice, is responsible for determining the reasonableness of the royalty amount. In making this determination, the administrator or committee may, among other things, take into account factors such as standard royalty payments in academic publishing, royalties typically paid for reproduction permissions, and the percentage of the royalty payment in relation to the price for which the work is sold to students. These factors are merely suggestions and are not intended to be exhaustive of other considerations determined to be relevant by the appropriate academic administrator or peer committee.
  9. All decisions about royalty payments must be consistent with the policies laid out in IP03 concerning the appropriate assignment of royalties.

FURTHER INFORMATION:

For questions, additional detail, or to request changes to this policy, please contact the Office of the Vice President for Research.

CROSS REFERENCES:

Related policies include:

AD47 - General Standards of Professional Ethics

FN14 - Use of University Tangible Assets, Equipment, Supplies and Services

AC76 - Faculty Rights and Responsibilities

HR90 - Extra Compensation for Exempt Staff Employees

HR91 - Conflict of Interest

IP01 - Patents and Copyrights (Intellectual Property; formerly RA11)

IP03 - Courseware

IP05 - Policy Governing Copyright Clearance (formerly AD46)

Effective Date: January 7, 2013
Date Approved: September 14, 2012
Date Published: January 7, 2013 (Editorial changes- November 19, 2015)

Most Recent Changes:

  • November 19, 2015 - Editorial changes. Title changes FROM "Vice President for Research and Dean of the Graduate School" TO "Vice President for Research."

Revision History (and effective dates):

  • December 20, 2013 - Editorial change in CROSS REFERENCES section. RA10, Addressing Allegations of Research Misconduct, has been removed. Revisions to RA10 make it no longer applicable to this particular IP policy as a cross reference.
  • October 25, 2013 - Editorial changes. Addition of policy steward information, in the event that there are questions or requests for changes to the policy.
  • January 7, 2013- Policy moved from the Administration section, formerly named AD17 - Royalty Payments for Course Materials. Revised and renamed Policy IP04 - Royalty Payments for Course Materials.
  • May 10, 2002 - New policy.