IP Issues in Research

Jim Baker, Executive DirectorInnovation, and Industry Engagement

Objectives

• Inform researchers on issues related to intellectual property in research.– Relevant laws, policies, and rationale for University

approach to IP rights.– Basics of patenting, commercialization, and patent

licensing.– Relationship of IP rights to general progress and

advancement of academic research programs.• Breadth versus depth – follow up for details.

Outline• Background

– Terminology– University Policies– Federal Rules

• Federal Contracting Issues• Industrial Contracting Issues• Patent Commercialization and Licensing Basics• Using IP to grow your Research Program

Terminology

• Ownership– Sole control of an asset (Intellectual Property (IP) in this context).– Subject to any legal encumbrances.

• License– The right to use an asset/IP.

• Exclusive License– A license under which the licensor agrees to not provide licenses to any

third party.

• Non-Exclusive License– A license under which the licensor reserves the right to provide

licenses to third parties.

University Policies

Relevant Federal Rules• 37 CFR 401 (Bayh-Dole Act)

– Universities own inventions created from work sponsored by the federal government

• IRS Revenue Procedure 2007-47 (Tax Free Bond Act)– Prohibits use of tax-exempt financed buildings

for “private use”– Private use includes transferring IP ownership to

sponsors at less than market value

Federal Contracting Issues

• Bayh-Dole provides the University with ownership of inventions

• Simplifies contracting but comes with conditions– Legal and contractual obligations to disclose

inventions to the funding agency.– Obligation to pursue commercialization

• in the United States• with a preference for small businesses if possible.

Industrial Contracting Issues

• University owns project generated IP • University grants sponsors:

– A royalty-free right non-exclusive license.– The first option to a royalty bearing exclusive

license.• Tax-free bond act generally prohibits transfer

of ownership and up-front designation of license terms.

• Research rights/Freedom to operate

Technology Commercialization Process

Enablement

Demonstration

Development

Pro

babi

lity

of S

ucce

ss

Effort/Time

Idea Invention Patent License

Invention Disclosure

Commercialization Stage

Commercialization Steps

Get Started – Invention Disclosure

• University forms

• Know the details

• Identify applications/partners

Technology Assessment

• Technical maturity– What needs to be done to reach the market– What are the related research needs/opportunities

• Patentability• Is the invention ‘enabled’ – can it be reproduced• Will a patent impact our ability to attract research funding and

commercial partners.

• Market• Is there sufficient probability and magnitude value of revenue

(research or royalty) to justify the investment.

Leveraging IP for Research

• Technology commercialization produces funding opportunities:– Corporate partner research sponsorship– Federal Small Business Innovation and Technology

Transfer Research (SBIR/STTR)– Private Investment– Specialized technology gap funds– Business plan competitions

Example of Research and Commercialization Alignment

• Discovery from federal research that has potentially significant public benefit and commercial potential.– $20k proof of concept study

• Michigan Universities Commercialization Initiative (MUCI).– $60k next stage proof of concept

• Funded by MUCI • Support letter from private sector partner.

– $230k validation study• $70k MUCI• $160k from private sector partner with an option to license technology

– $230k development/further research• NIH STTR Phase I• $110k subcontract to Michigan Tech

– Currently preparing $1.3M NIH STTR Phase II• $370k subcontract to Michigan Tech

Example Outcomes to-date

• ~ $800,000 in sponsored research– 3 years Ph.D. student funding– 2 years lab tech funding

• 4 publications in preparation• 6 published conference proceedings• $25,000 in royalties• Equity in startup company (indeterminate value)

Funding Opportunities

• Early stage technologies– Funding available through traditional research funding

programs

• Mid-stage technologies– Technology gap funds– SBIR/STTR – need corporate partner

• You can create that partner or we can seek one out

– Startup company with private investment

• Demonstrated Technology– Corporate sponsored research and development

Michigan Tech Experience Base

• Michigan Tech is a national leader in:– Proportion of research sponsored by industry– Number of license agreements per dollar of research– Number of invention disclosures per dollar of research

• As a result we have staff experienced in:– Appropriate contract term negotiation– Managing conflicts of interest– Startup business development– Commercialization planning and implementation

ContactsContactsJim BakerExecutive Director, Innovation and Industry Engagementjrbaker@mtu.edu 487-2228

Robin KolehmainenPatent/License Managerrakolehm@mtu.edu 487-2228

Web Resources

Intellectual Property Internal Forms:http://www.mtu.edu/research/references/forms/#ted