O AK R IDGE N ATIONAL L ABORATORY U. S. D EPARTMENT OF E NERGY STCU Guidance and Procedures...

OAK RIDGE NATIONAL LABORATORYU. S. DEPARTMENT OF ENERGY

STCU Guidance and Procedures

September 27-28, 2005

Judson R. HightowerAssociate General Counsel

Oak Ridge National Laboratory

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Basic Review of Relevant Intellectual Property Concepts

Bundle of rights allowing one to exclude others from unauthorized use of one’s creative output

Intangible personal property Ownership of intellectual property rights

(IPR) separate from ownership of tangible products

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Types of Intellectual Property

Patents (protect inventions) Utility Design Plant

Copyrights Mask works (integrated circuit topographies)

Trademarks Trade secrets

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Intellectual Property Rights (IPR) under STCU Party Project Agreements

Institute holds all rights except for rights in Financing Party’s territory

Financing Party has ownership of rights in its territory Financing Party and Recipient Entity (Institute)

agree on appropriate compensation for inventors and authors

Financing Party pays for cost of protecting intellectual property in its territory

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Intellectual Property Rights (IPR) under STCU Party Project Agreements…..

Each STCU Party and STCU entitled to nonexclusive, royalty-free copyright license in scientific and technical journal articles, reports and books

Each non-Financing Party (upon request) may obtain nonexclusive license in its territory on fair and reasonable terms

Each STCU Party and STCU granted non-commercial license

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Intellectual Property Rights (IPR) under STCU Party Project Agreements…..

Inventors and authors entitled to 15% of royalties earned by entity having rights

Recipient Entity shall grant rights to background intellectual property necessary to exploit intellectual property arising from project (foreground intellectual property)

Recipient Entity and other financing entity can agree to terms different from above

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Outline of STCU IPR Guidance and Procedures Handbook

Introduction Definitions Procedures for protecting information Identification of Background Intellectual Property Equitable allocation of IPR in Partner projects Protecting inventions Protecting computer software Protecting integrated circuit topographies Project implementation Commercialization Exhibits

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Procedures for Protecting Information (Article III)

Employee confidentiality agreements STCU nondisclosure agreements (NDAs)

Information exchanged between STCU and Institutes

Institute nondisclosure agreements Information provided to a third party (“Out”) Information received from a third party (“In”) Mutual exchange of information between

parties (“Mutual”)

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NEW IDEAConception

Notebook Entry

Reduction to Practice

Record of Invention

Prepare Patent

Application

[Disclosure to Others]

File Patent Application

Patent Issues

Commercialization1. License2. Start-Up3. Joint Venture4. Partnership

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Employee Confidentiality Agreements (Exhibit 1)

Each STCU employee signs as a condition of employment

Agreement to protect technical and non-technical information during employment and for five (5) years after termination

Documents created by employee are property of STCU and must be left with the STCU upon termination of employment

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STCU Nondisclosure Agreements (Exhibit 2)

Between STCU and Institutes Protects proposal, invention and business-

confidential information exchanged for STCU projects

Term in model exhibit is two (2) years and period of obligation to protect information is five (5) years

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Institute Nondisclosure Agreements (Exhibit 3)

Effective date Identity of parties – legal entities Description of business-confidential

information Purpose for exchange Term of nondisclosure agreement Term of secrecy and non-use obligations

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Institute Nondisclosure Agreements…..

“Out” Description of Institute’s information to be

protected should be as general as possible Requirement that information be marked Term of agreement should be as long as

possible Obligation to protect Institute’s information

should be as long as possible

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Institute Nondisclosure Agreements…..

“In” Description of information to be protected by

Institute should be as specific as possible Requirement that written information be

marked “Business-confidential” and that oral information be reduced to writing, identified as “Business-confidential” and sent to Institute in timely manner

Term of agreement should be as short as possible

Institute’s period of obligation to protect information should be as short as possible

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Why Background Results Should Be Identified in Project Agreements

Helps parties distinguish between intellectual property created under project agreement and intellectual property created outside of project agreement – allocation of rights made easier

Informs each party whether it will be necessary to license Background Results in order to practice intellectual property created under project (Foreground Results)

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Identification of Background Intellectual Property (Article IV)

Definitions

"Background Results" means Background Information and Background Rights.

"Background Information" means information, excluding Foreground Information, owned or controlled by the Recipient in the same or related fields as the research under this Agreement and generated outside the Agreement.

"Background Rights " means rights in patent applications, patents, copyrights, plant variety rights and other equivalent statutory rights excluding Foreground Rights, owned or controlled by the Recipient in the same or related fields to the research executed under this Agreement and originating outside this Agreement.

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Proposed Model Party Project Agreement Language

8.4 The Institute has indicated that the following Background Results as defined in Article XX of Annex II may be needed and used in the performance of work under this Agreement and may be needed to use any technology resulting from the Agreement: _________________________________. The Institute represents that such Background Results are available for licensing as of the effective date of this Agreement. (Remarks: If there are several owners of the Background Results, the name of owner of each Background Result shall be indicated.)

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Proposed Model Partner Project Agreement Language

Article 8.4 - Background Results

The Recipient and the Partner have identified and agreed that the following Background Results may be used in the performance of work under this Agreement and may be needed to practice any Foreground Results of this Agreement:

Recipient’s Background Results: _________________.

Partner’s Background Results: ___________________.

Recipient and Partner represent that the above-identified Background Results are available for licensing as of the effective date of this Agreement.

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How to Identify Background Results in Project Agreements Records of Invention, patent applications and

issued patents Provide specific record of invention, patent application

and patent numbers, filing and issue dates, inventors, title “STCU Record of Invention File # 1802, dated

July 4, 2003, for ‘Novel Compositions’ to Dr. A.K. Siminov”

“PCT/UA04/534698, filed Jan. 4, 2004, for ‘Novel Nitrate Compounds’ to Andrey Velikov”

“U.S. Patent No. 6,238,451, issued Jan. 8, 2004, for ‘Novel Method for Producing Nanoparticles’ to James Madison”

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Background Results Identification.….

Copyrights “Computer Software: ‘MASTER’ (Mathematical

Application Software for Teaching, Education and Research), copyrighted 2004 – Paton Welding Institute”

“Paton Welding Institute Technical Report # 43 for ‘Experimental Analysis of Iron Alloys,’ copyrighted 2004”

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Background Results Identification.….

Know-how, trade secrets, proprietary information Identify the information but do not disclose it “Know-how on creating novel antiviral agents

in aqueous solutions as described in pages 45-67 of Merck Corporation’s Internal Report # 641, dated April 20, 2003.”

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Protection of Background Results

Law Patents Published copyrighted materials

Nondisclosure agreements Records of invention, patent applications Know-how, trade secrets, proprietary

information Databases, source code, and other

unpublished materials, even if copyrighted

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Equitable Allocation of IPR in Partner Projects (Article V)

Partner, STCU and Institute are parties to Partner Project Agreement

STCU Patent Officer (supported by Senior Specialists) responsible for working with Institutes and Partners to achieve goal of equitable IPR allocation;

Equitable allocation could include ownership or licenses (exclusive or non-exclusive, limited by field of use and/or territory)

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Equitable Allocation of IPR in Partner Projects…..

Factors to consider in determining “fair and reasonable” allocation of IPR Nature of cooperation Contribution of each party, including

Background Results Intent, commitment and ability of parties to

protect intellectual property created Manner in which parties will commercialize the

intellectual property created

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Protecting Inventions (Article VI)

Maintaining laboratory notebooks Recording and reporting inventions Evaluation of commercial potential Tracking inventions Patent Consideration Committee Patent applications Assignments and invention licenses Compensation of inventors

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Maintaining Laboratory Notebooks

Useful in resolving future disputes related to invention

Should answer: What was done What the results were When it was done Who did it Who knew about it

Entries should be in ink in chronological order For more detailed guidance, see:http://www.stcu.int/documents/general/Lab_Notebook_Guidelines.pdf

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Recording and Reporting Inventions

Institute scientist completes Record of Invention (ROI) Form (Exhibit 4)

Institute transmits ROI to STCU within two months of making invention

ROI sent to all financing Parties by STCU Transmittal of ROI to STCU and financing

Parties is not a public disclosure that prevents patenting since transmittals are under nondisclosure agreements

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Recording and Reporting Inventions…..

Pertinent parts of ROI (Exhibit 4) Identifying numbers Inventor information Actual and potential uses Existing documents describing invention Background Detailed description Dates of conception and reduction to practice Disclosures of invention outside Institute

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Evaluation of Commercial Potential

Process for pursuing Patents on US Party Funded Projects (see diagram) US Government will evaluate commercial

potential of invention US Government will have patent applications

prepared for inventions it wishes to protect Costs of application paid by US Government Patent applications provide broad coverage

Institutes will be provided copies of patent applications prepared for US Government which they can then file in their own countries

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Recipient Institute submits Record of Invention to STCU. STCU distributes Record of Invention to USG.

STCU Patent Support Program

Patent Consideration Committee - Does Committee support Recipient Institute’s pursuit of patent (national, PCT, US)?

If DOE says “Yes” to US Patent

DOE has patent application prepared & sends it to Patent Consideration Committee for Recipient Institute to use in filing national or PCT patent application.

DOE Office of Technology Transfer and Intellectual Property (administers USG rights to IP on behalf of State Department’s Science Centers Program)

STCU Patent Support Program provides Institute assistance and the DOE patent application for filing national or PCT patent application.

DOE reviews invention - Does USG want to file application for U.S. Patent?

Yes

If DOE says “No” to US Patent, Consideration Committee and Recipient Institute may still decide to pursue patents

After any required “grace period”, DOE files U.S. Patent application and administers any resulting patent. STCU awards Inventor from US Patent Award Fund (financed by US Party)

No

STCU Patent Support Program may assist Recipient Institute in filing US, national and/or PCT patent applications

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Tracking Inventions

Computer tracking system keeps track of inventions from time ROI is received at STCU until patents issue (Exhibit 5) Details of invention identification, ownership,

type of application, countries where filed, financing Party, etc.

Status at any particular time Due dates (Table VI-1) Dates action taken

Responsibility of Patent Officer

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Patent Consideration Committee

Provides financial support for Institutes to prepare and file patent applications Institutes must submit Patent Application

Grant Request Form (Exhibit 7) and Invention Evaluation Form (Exhibit 8)

Committee considers the above two forms as well as the ROI in making is decision

STCU encourages filing of PCT applications

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Patent Applications

Institute should file patent application in country invention is made within one year of sending ROI to STCU Copy of patent application sent to STCU Patent Officer sends copy of patent application

to financing Party Institute should be diligent in filing patent

applications in other countries within required time periods – otherwise, potential patent rights will be lost

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Assignments and Invention Licenses

Financing Party provided ownership of invention in its territory by assignment Prepared by STCU Patent Officer Signed by Institute

STCU Parties and STCU provided non-exclusive, non-commercial license Prepared by STCU Patent Officer Signed by Institute

Non-Financing Party non-exclusive, commercial licenses negotiated between Institute and non-Financing Party

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Compensation of Inventors

Inventors entitled to “appropriate compensation” from financing Party for invention rights U.S. will pay inventors up to $500 when U.S.

decides to file patent application in U.S.

Inventors and authors are to receive at least 15% of royalties from licensing intellectual property which they create

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Project’s Financing Party

Non-Financing STCU Parties

PatentRights to Invention

Held by Government of Financing Party in its

territory(for commercial use)

Assignment

License Negotiated with

government of non-Financing Party

(for commercial use)

Licensing with Royalties

Sub-License Obtained by

Company(for commercial use)





Institute

License Obtained by


License Obtained by


License Obtained by


$15%

$ 85%

$ fair & reasonable

$

LicenseHeld by Government

of any STCU Party (non-commercial)

Sub-License (non-commercial)










Royalty-Free Licensing

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Computer Software (Article VII)

Maintaining computer software notebooks Recording and reporting computer

software Procedures similar to those for inventions Critical dates and time periods provided in

Table VII-1 Exhibits 9 and 10 specifically for computer

software

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Integrated Circuit Topographies (Article VIII)

Maintaining integrated circuit (IC) topography notebooks

Recording and reporting IC topographies Procedures similar to those for inventions Critical dates and time periods provided in

Table VIII-1 Exhibits 11 and 12 specifically for IC

topographies

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Process for Transferring IP to U.S. Commercial Entities (see diagram)

U.S. company expresses interest in U.S.-funded developed technology

Project completed Licenses technology from DOE

Project not completed Company commits to become STCU Partner U.S. Party amends project agreement to give

its rights to Institute to negotiate with Company

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U.S. company interested in US-FundedSTCU-developed technology:

Sub-License From USG?

Exploit technology via CommercialPartnership with Recipient Institutes?

Company Negotiates with DOE for License

Company commits to become a STCU Partner and funds Partner Project related to the Intellectual Property in the Regular Project (IP division agreed to in Partner Project Agreements)

US Party may amend the Project Agreement to give its IP rights to Recipient Institute to facilitate the future commercial partnership

DOS Science Centers Program and DOE make public possible opportunities for U.S. companies to exploit results from USG-funded ISTC/STCU projects

Nonexclusive License- Royalty arrangement negotiated with DOE- Licensee commits to pay 85% of royalties to Recipient Institute/Inventor and 15% to USG- USG retains march-in rights

Exclusive License- DOE publishes intent to award exclusive license in Federal Register-Royalty arrangement negotiated with DOE-Licensee commits to pay 85% of royalties to Recipient Institute or Inventor, 15% to USG- USG retains march-in rights

Is the STCU project completed? Oris it still active or not yet started?

Active/Not yet started

Completed(Must License

from USG)

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Project Implementation (Article IX)

Handling project reports Senior Specialists review to determine if any

portions have been marked as business-confidential or invention information

If marked, take special precautions to protect Review of proposed publications

Premature public dissemination can prevent patenting

Patent Officer will review to ensure patent protection not lost

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In Summary:

Phase I: Recording & Reporting Inventions Phase II: Tracking Inventions Phase III: Patent Applications Phase IV: Assignments & Licenses

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PO=Patent Officer; ROI=Record of Invention

* See separate diagram for US evaluation of commercial potential

Institute Financing PartiesSTCU

Review(PO)

Institute Letter: File Number NNN,No State Secrets

Record of Invention(in Russian, Ukrainian or

English)

Record of Invention(in English)

ROI FileNumber XXX

Record of Invention

EU

Canada

USA*

STCU File Number &

Interest in Protecting Invention in this Party’s Territory

Phase I: Recording & Reporting Inventions

Invention

blank Patent Application Request Form

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STCU Invention Evaluation Form

Patent Application Grant Request

ROI=Record of Invention; PCC=Patent Consideration Committee

* See separate diagram for US evaluation of commercial potential


Review(PCC)

USA*

Interest in Protecting Invention

Phase II: Tracking Inventions

Notification of Intent to File Patent Application naming specific countries)

USA-prepared

patent application*

Optional

STCU DecisionIf yes, then $

ROI FileNumber XXX

EUCanada

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ROI=Record of Invention; PA=Patent Application

** In Ukraine, patent application cannot be shared until security review completed; assume 3-month wait.


Phase III: Patent Applications

Primary Patent Application

filed where invented

ROI FileNumber XXX

Primary Patent Application

filed where inventedPA File

Number XXX

ROI

Primary Patent Application**

English translation


Provide Notice if Patent Application Filed

Secondary Patent Application/s

Filed in territories other than that of financing

party PA FileNumber XXX

Receipt from Patent Office


Secondary Patent Application/s

Filed in other countries/ territories


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Phase IV: Assignments & LicensesInstitute Financing PartiesSTCU

Generate Proper Forms


Desire to License

Signature-ready Documents

License Non-exclusive,

irrevocable, non-commercial, with right to

sub-license

Assignment of Invention

From Institute to Financing Party

Signed Documents

License*** Non-exclusive,

irrevocable, non-commercial, with right to

sub-license


From Institute to Project’s Financing Party

LicenseAssignment of

Invention

STCU Party not involved

in ProjectRequest to license, proposing “fair & reasonable” terms

Acceptance/modification of proposed terms

License


Optional:

*** See separate diagram for US sub-licensing process

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