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INTELLECTUAL PROPERTY IN ACADEMIA

© Nadya Reingand. All rights reserved.

UNIVERSITY Types of IP in academia Bayh-Dole act Who needs patenting? you do Passways to IP development

Technology transfer office: how to deal efficiently Striking on your own: start-ups

INDUSTRY: TECHNICAL COMPETITIVE INTELLIGENCE How to create a company patent portfolio? Umbrella patent structure

INTELLECTUAL PROPERTY IN ACADEMIA INTELLECTUAL PROPERTY IN ACADEMIA

© Nadya Reingand. All rights reserved.

Types of intellectual property relevant to university researchPatents

Utility patents: protect processes, devices and materials Design patents: protect ornamental appearance

Copyright Copyright identified by the symbol © does not cover ideas and information themselves,

only the form or manner in which they are expressed

Trademark A trademark and servicemark identified by the symbols ™ and SM (not yet registered) and

® (registered) is a distinctive sign used to discern the products and/or services to consumers

Most of IP discussions are focused on utility patent analysis due to the importance of the technological aspects associated with utility patents

Bayh-Dole Act (1980) gave a right to universities to retain title to inventions

Universities retain title to inventions made under federally-funded research programs

Encouraged to collaborate with commercial enterprises

Expected to give licensing preference to small businesses

Government retains a non-exclusive license to practice the patent throughout the world; march-in rights

Amazon.com

University invention: from idea to business success

patent licensing

acquisition

Company revenue

Role of patenting

patenting

Two options:Licensing IP via Office of Technology TransferCreating a start-up and starting business yourself

In both cases patenting is a key element of achieving revenue

“Up to 75% of the company value is in its intellectual

property”

Influence of Bahl-Dole act

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A rapid growth of the University and National Lab’s IP after

Bahl-Dole Act of 1980.

From:History of University IP Policies:

Changing Objectives?, Yale AIDS Network, April 19, 2003

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Domestic U.S. Patents (Left Scale)

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Domestic U.S. Patents (Left Scale)

www.yale.edu/aidsnetwork/Spring%202003%20Univ%20IP%20History.ppt

University patenting has grown much faster than other patenting activity in

the U.S

University patenting:Pro and contras

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The advantages of the university IP patenting include (1)monetary revenue through licensing to existing companies; (2)the rise of entrepreneurial activities at the university through start-up formation; and (3) intangible values such as worldwide recognition. The disadvantages of the university IP patenting include (1) negative effects on progress of research, especially in fields where advances are cumulative; (2) tension between patenting and open science norms; (3) potential to bias academic inquiry away from basic research.

The specifics of university patents 1) greater generality and importance than industrial patents, 2) cover early-stage research that is far from ready for commercial use, 3) a company that purchases university patent license takes more risk compared to industrial licensing.

Types of University –Industry agreements

Research Agreements This is a project of mutual interest of the company-sponsor and university,

which is in the frame of the university research program. It may be based on company or university IP and may include development of new IP.

“Fundamental” Research Agreements This type of projects does not include any IP involvement, the research

results in open publications and conference presentations. Fee for Service Agreements

University can provide data or other information (without its processing or interpretation) for which university has unique capability to provide for the cost that cannot underbid for-profit providers of similar service, because of its tax exempt status. This agreement does not involve IP.

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IP ownership in industry sponsored research

IP ownership

1. the university owns the intellectual property; Most of the contracts

2. the sponsor owns the intellectual property; If the research is based on the sponsor’s IP or development If the sponsor likely to be the only user

3. the university and sponsor jointly own the intellectual property joint ownership means that each owner has independent right to exploit the

intellectual property

University researchers must be able to publish the results The sponsor may have a right to review (commonly 45 days) The sponsor may have a right to patent innovations (another 30 to 75 days)

If IP is owned by both (Industry & Uni), can one of them sell IP without asking permission of the other side?

Yes, both own 100%

IP ownership

Before formal transfer of your rights to the University or elsewhere: it is under employment legislationInventing as a part of “work-for-hire”Inventing, which is independent from

employer

After formal rights transfer – you cannot sign any docs. Your invention do not belong to you.

IP in student inventions

Student inventions are NOT a part of “work-for-hire”

Student pay for their education their own money or grants

_________________________Examples:

University of MissouriStanford University

_________________________Conclusion:It depends on the university

involvement in the inventionStudent developer Tony Brown displays the applications he helped develop, NearBuy and Newsy, on an Apple iPad and iPhone 4

Difference between USA and EU in IP rights in industry sponsored contracts

In Europe: industry may own all rights, provided they pay on a model that considers 100% of the costs including personel, equipment amortization and overheads*

In USA: University always retains rights, at least a license to continue research in the same field.

*European Commission Recommendation , April 2008, ISSN 1018-5593,EC on the management of intellectual property in knowledge transfer activities and Code of Practice for universities and other public research organisations

Funding which does not allow IP

Since university has a tax exempt status, this provides certain restrictions on university-industry collaboration

To be considered qualified 501(c)(3) bonds, no more than 5% of the bond proceeds may be used for any private business use

Legal restrictions on University business

Service:Universities cannot provide services (such as analytical services) at rates that undercut for-profit providers of such services, since universities are taxed on Unrelated Business Taxable Interest (UBIT), which primary purpose is to eliminate a source of unfair competition with for-profit businesses

Government contracts: DARPA, DOE, etc. Government regulations: The Federal Acquisition Regulations (FAR) and

Defense Federal Acquisition Regulations (DFAR) Rights in technical data

http://www.acq.osd.mil/dpap//dfars/html/current/252227.htm#252.227-7013 Rights in Noncommercial Computer Software

http://www.acq.osd.mil/dpap//dfars/html/current/252227.htm#252.227-7014

Independent R&D (IR&D) funds can be a valuable source of funding for the development of inventions and filing patent applications

Government will acquire no rights in inventions developed with IR&D funding

Contract studies IR&D

Funding

The Best Entrepreneurship Courses in America Spine Sweat Experience, Indiana University Bloomington Inventor’s Studio, Rensselaer Polytechnic Institute

The goal is for each student to finish the class with a patented invention

iPhone Application Programming, Stanford University Introduction to Community Entrepreneurship, University of Vermont Business, the Economy, and World Affairs, Baylor University The Ultimate Entrepreneurial Experience, Babson College Restaurant Entrepreneurship, Cornell University New Business Venture Development, Washington State University Nuts and Bolts of a Business Plan, Massachusetts Institute of Technology

Most of the easy-to-follow course materials are available for free online

Government contracts: IP rights

Unlimited rights: the rights to use, or change, or disclose technical data or computer software in whole or in part, in any manner, and for any purpose whatsoever;

Limited rights: the rights to use, modify or disclose technical data, in whole or in part, within the Government;

Restricted rights: the rights to use a computer program with one computer at one time, to transfer to another Government agency without the further permission of the Contractor destroying the copy at the previous location;

Government purpose rights: the rights to use, modify or disclose technical data or computer software within the Government for Government purposes 

University departments associated with intellectual property

In USA: The Office of Technology Transfer of the university

receives the disclosures of inventions, assists in the registration of copyrights and trademarks, helps with the filing of patent applications (typically done by appointed law firm), determines who owns intellectual property, handles the commercialization/licensing of intellectual property and the allocation of net royalties received.

The Copyright Clearance Office assesses fair use and obtains permissions (where necessary) from copyright holders for persons creating

course packets for their classes.

In other countries, it is different For example, in Germany: 2001 Reform: intellectual property rights now belong to the university and not the individual inventor any

longer, German government supports financially Patent Valorization Agencies (Patentverwertungsagenturen/PVA), Each PVA commercializes research potential and results on behalf of a number of universities, university

colleges and research institutes, Nearly all German Universities have bonds to one of the 20 PVAs.

University departments associated with intellectual property(continuation)Great Britain: OTT is

a separate company wholly owned by the university Separation of non-profit anf for-profit organizations

Israel: the same as GBJapan

A separate corporation owned by university professors

Office of Technology Transfer

Disclosing Inventions

OTT: Host innovation seminars;

presentations at departmental

meetings; individual

meetings with researchers

Invention Disclosure Assessment

Invention disclosure

assessment:

• Patentability• Commercial feasibility

Marketing and Commercialization

Technology brief is published on OTT

web site

OTT and inventor(s) develop

commercialization strategy

Potential commercial

partners identified

Commercialization decisions:

• University elects to take title

or• Wait for further improvement

or• Invention is released to inventor(s)

or• Invention is released to funding agency

IP Prosecution and Maintenance

Patent application drafting and filing

Patenting strategy development

Researcher:Submit invention disclosure to OTT

Patent attorney or agent selection

Technology presented to

interested parties

Licensing terms negotiated

License agreement executed

Post-licensing Activities

Continue patent prosecution

Participate in product

development

Optional: new sponsored research

programs

Inve

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is a k

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Top Patent revenue-generating Universities in 2006

University

Research Expenditures (Million $)

Research-Related Income (Million $)

Yield

1 New York University 210 157 75%

2 Wake Forest University 146.3 60.5 41%

3 Stevens Institute of

Technology

28 4.56 16%

4 Ohio University 24 3.26 13%

5 Brigham Young University 26 3.07 11.7%

6 University of Rochester 355 38 11%

7 University of Minnesota 594 56 9.4%

Successful stories of university patent licensing

In many the cases the bulk of the university patent revenue is generated by one successful biotech patent. NYU's serious return is in great part to medicine called Remicade, a rheumatoid arthritis drug

developed along with Centacor and Johnson & Johnson. Ohio University came in fourth thanks to research on Somavert, a drug marketed by Pfizer to

counteract the effect of the body's overproduction of growth hormones.

Largest patent revenue: 406 firms licensed the right to use Cohen-Boyer patent jointly held by Stanford and the University

of California. Over the life of the patent 1980-1997 licensing revenues were $255 M from $35 B in worldwide product sales [1]

[1]M. Jelinek, S. Markham “Industry-University IP relations: Integrating Perspectives and policy solutions”, IEEE Transactions on Engineering Management, v.54, No,2, p.257-267.

On average, the income from patent licensing corresponds to about 2% of the university expenditures.

Academic IP licensingThe economic impact of U.S. academia licensing results in

• the investments in $20 billion per year range, thus creating •over 150,000 jobs per year .

1. Licensing to existing companies

2. Start-up formationThe proportion is different for each university and depends of the specialization

MIT (Massachusetts Institute of Technology) shows that although only 35% of the licenses were granted to start-ups, they accounted

for 77% of the investment and 70% of the jobs

Licensing (continuation)

Exclusive license gives the licensee sole and entire rights to operate excluding all others, including the right to sublicense

Licensing does not constitute a change in ownership of the patent

Non-exclusive rights give the licensee rights to make, use, import, offer to sell and/or sell the licensed technology

Licensing agreement for federally funded research may require U.S. manufacturing and retained Government rights

University receives hundreds of invention disclosure

forms (IDFs), chooses to pursue about 1/3 of those and

licenses 1/2 of these, 10% break even, 5% make some money and 0.01% generates a million dollars of revenue

Typical license includes reimbursement and ongoing payment of patent prosecution costs milestone payments minimum annual royalties a percentage royalty on sales

The revenue is split between the inventor(s), university and inventor’s lab Example: 34% +33%+33%; inventor share varies from 25% to 70% In case of many inventors: typically share equally unless inventors agree otherwise in writing In some Universities (e.g. Iowa) first $100,000.00 of net revenue is given to the inventor(s)

Revenue from the patent licensing

Worldwide protection

US patent provide IP protection only on territory of US If the market or main competitors are abroad, one may seek

international protection Globalization does not really affect IP legislation; it is still national There are differences in IP laws in different countries, which must

be taken into account Some countries do not have long history of patent rights

enforcement (e.g. China, Russia, etc.); so patenting in those countries may serve as preventive means, but it does not guarantee absence of infringement

Patent protection is territorial If you file patent application in one country, It is NOT protected in other countries Nobody in other country can get a patent for the invention which copies your

patented in your country invention

BUT Anyone can produce and sell your invention in other country, for example, for US

patented product it is legal to manufacture it in China, sell in Germany

IF THE INVENTION NEEDS TO BE PROTECTED WORLDWIDE, IT HAS TO BE FILED IN ALL COUNTRIES OF INTEREST

Patents of different countries

International patent application

serves to coordinate efforts on filing, searching and the examination of patent applications

does not grant international patents.

146 countries are in PCT

After the PCT examination:• inventors can see the examination report, and • make a conscious decision on filing or not filing patents in a number of countries • the patent rights are granted by national offices

Entering national stage

PCT (Patent Cooperation Treaty) is an agreement for international cooperation in the field of patents

World intellectual property organization

• is a specialized agency of the United Nations• dedicated to developing a balanced international intellectual property (IP) system

Remember that WO patent

documents are patent applications

Patents: WIPO PCT Publications

start with letters WO

Software protection by patents

Programming of cyclic running machines  

Software patents are valid on the territory of that country where the patent was granted

CopyrightsWhat is copyrightable?

Works ineligible for copyright protection in the United States: (1) Federal Government works, or (2) works without the requisite level of originality to qualify for copyright protection

Publications Illustrations Software Mask works

© Nadya Reingand

Copyright in industry-sponsored research

Copyrights protect the original expression of ideas in a tangible form, while patents protect original ideas (inventions)information and data

a resulting report or manuscript, may be copyrightable University keeps a right to continue using

articles, dissertations, theses, and books typically sponsors does not have copyright on those

software both object code and source code are copyrightable typically University assign the object code to the sponsor if it is not

useful to other potential licensees University keeps the source code to use it for other research

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Software protection

Protects specific expression of the idea, i.e. the exact sequence of codes

Formalities-free, does not require registration

Harmonized in most of the countries

Protects a new way of doing something

The patent is granted after examination

Different in different countries

Copyright law Patent law

Copyrights

No “international copyright law”Contract rules

in case of international collaboration

COPYRIGHTUSE OF

COPYRIGHTED MATERIAL

Fair use

-copy-distribute-create derivative works

- teaching- commentary

- read a book or an article- use somebody’s experimental results- borrow from a library

Berne Convention for the Protection of Literary and

Artistic Works

an international agreement governing copyright, which was first accepted in Berne, Switzerland in 1886

164 countries -members

Equal treatment:the copyright of works of authors from other countries are treated in the same way

as the copyright of its own nationals

Decision: to determine whether a claimant actually held the copyright on a work, the

laws of the country of origin had to be applied to decide whether a copyright infringement had occurred and for possible

remedies, the laws of the country where the infringement was claimed applied

defines rules: which the copyright laws of the country of origin or those of the U.S. are applicable in international

disputes over copyright

Itar-Tass Russian News Agency v. Russian Kurier, Inc.

Dispute resolution

Electronic publishing

Advantages:keyword browsingconvenient editing, publication and reviewinglow costwider dissemination

Examples:Scientific journalsE-booksWebsitesOnline newspapersCD-ROM

No common approach to copyrights for electronic material

-Sometimes the laws of the country of the Internet Service Provider applied- In other cases the country of the desired audience prevail

University trademarks

University traditionally owns trademarks associated with the university name, for example, HARVARD SCHOOL OF ENGINEERING AND APPLIED SCIENCES®.

However the whole trademark portfolio, which can be as large as Harvard’s 103 trademarks, may include some specific types terms irrelevant to the name, see, for example, ASK WHAT YOU CAN DOTM.

The role of trademark is to promote education at this particular university, to protect university high standards from unauthorized use and to collect royalties through trademark licensing.

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Free access to trademark database:http://tess2.uspto.gov/bin/gate.exe?f=searchss&state=4004:79t2vm.1.1

Trademark

™ an unregistered trade mark, the mark to promote goods

℠ an unregistered service mark, the mark to promote services

®

a registered trademark

National application

Madrid system

Country #1

Country #2

Country #3

Word Mark OMISTRAIN

Goods and Services

IC 009. US 021 023 026 036 038. G & S: Optical metrology apparatus and instrumentation, namely metrology tools for 2D and 3D visualization and measurement of the deformation motion and strain field in advanced electronic packages, system-on-chip and MIEMS/MOEMS (micro-electro-mechanical systems I micro-opto-electromechanical systems) product engineering; computer software used for image acquisition, stressing control, image processing.

ConclusionsSpecifics of university inventions:

Early stage in developmentUniversity ownershipSpecial department , OTT, dealing with licensingGovernment rights in government-sponsored

researchTypically unfavorable agreements for industrial

partner

Thank you for your attention