INTELLECTUAL PROPERTY IN ACADEMIA Nadya Reingand Patent Hatchery

INTELLECTUAL PROPERTY IN ACADEMIA Nadya Reingand Patent Hatchery LLC http: //us-patent. ru © Nadya Reingand. All rights reserved.

INTELLECTUAL PROPERTY IN ACADEMIA 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 © Nadya Reingand. All rights reserved.

Types of intellectual property relevant to university research Patents Utility patents: protect processes, devices and materials Design patents: protect ornamental appearance 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 acquisition Company revenue licensing

Role of patenting Two options: Licensing IP via Office of Technology Transfer Creating a start-up and starting business yourself “Up to 75% of the company value is in its intellectual property” In both cases patenting is a key element of achieving revenue

Influence of Bahl-Dole act 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 7

University patenting has grown much faster than other patenting activity in the U. S Total U. S. Patents (Left Scale) Domestic U. S. Patents (Left Scale) University Patents (Right Scale) Domestic U. S. Patents (Left Scale) www. yale. edu/aidsnetwork/Spring%202003%20 Univ%20 IP%20 History. ppt

University patenting: Pro and contras 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. 9

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. 10

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 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% 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)

IP ownership Before formal transfer of your rights to the University or elsewhere: it is under employment legislation Inventing 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 Missouri Stanford University _____________ Conclusion: It depends on the university involvement in the invention Student developer Tony Brown displays the applications he helped develop, Near. Buy and Newsy, on an Apple i. Pad and i. Phone 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

Legal restrictions on University business 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 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 Funding Contract studies IR&D 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

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 i. Phone 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 GB Japan A separate corporation owned by university professors

is pa cip Inv a k atio ento ey n a r’s to nd su in cc ter es es s t rti Office of Technology Transfer

Top Patent revenue-generating Universities in 2006 Research Expenditures (Million $) Research. Related Income (Million $) Yield University 1 New York University 210 157 75% 2 Wake Forest University 146. 3 60. 5 41% 3 Stevens Institute of 28 4. 56 16% Technology 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] On average, the income from patent licensing corresponds to about 2% of the university expenditures. [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.

Academic IP licensing The 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 formation The 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 n Non-exclusive rights give the licensee rights to make, use, import, offer to sell and/or sell the licensed technology Licensing does not constitute a change in ownership of the patent Licensing agreement for federally funded research may require U. S. manufacturing and retained Government rights

Revenue from the patent licensing 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%; 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)

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 PCT (Patent Cooperation Treaty) is an agreement for international cooperation in the field of patents serves to coordinate efforts on filing, searching and the examination of patent applications does not grant international patents. Entering national stage 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

World intellectual property organization • is a specialized agency of the United Nations • dedicated to developing a balanced international intellectual property (IP) system Patents: WIPO PCT Publications start with letters WO Remember that WO patent documents are patent applications

Software protection by patents Programming of cyclic running machines Software patents are valid on the territory of that country where the patent was granted

Copyrights What is copyrightable? Publications Illustrations Software Mask works 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 © 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 33

Software protection Copyright law 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 Patent law Protects a new way of doing something The patent is granted after examination Different in different countries

Copyrights COPYRIGHT -copy -distribute -create derivative works Fair use - teaching - commentary USE OF COPYRIGHTED MATERIAL - read a book or an article - use somebody’s experimental results - borrow from a library in case of international collaboration No “international copyright law” Contract rules

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

Dispute resolution Itar-Tass Russian News Agency v. Russian Kurier, Inc. defines rules: which the copyright laws of the country of origin or those of the U. S. are applicable in international disputes over copyright 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

Electronic publishing Advantages: keyword browsing convenient editing, publication and reviewing low cost wider dissemination No common approach to copyrights for electronic material Examples: Scientific journals E-books Websites Online newspapers CD-ROM -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. Free access to trademark database: http: //tess 2. uspto. gov/bin/gate. exe? f=searchss&state=4004: 79 t 2 vm. 1. 1 39

Trademark ® a registered trademark ™ an unregistered trade mark, the mark to promote goods ℠ an unregistered service mark, the mark to promote services National application Madrid system Country #1 Country #2 Country #3

Conclusions Specifics of university inventions: Early stage in development University ownership Special department , OTT, dealing with licensing Government rights in government-sponsored research Typically unfavorable agreements for industrial partner Thank you for your attention