OSPA Symposium II

Patents and LicensesMichael F. Moore

Manager, Business Dev & Compliance OTC

2/17/09

Knowledge Transfer

• University mission:– Research and discovery– Teaching and learning– Outreach and public service

• Expertise and technologies are transferred to society in many ways – Academic publications– Presentations, posters, web – Education of students – Licensing intellectual property for

development into commercial products

Technology Transfer Simplified

• Technologies developed at the U by:– Faculty– Students– Staff

• Are protected by patent and/or copyright • Then, licensed to an existing company

– Or a new start-up company is formed• The company sells a product• Net income obtained from the license

agreement is distributed to the inventors, department, college and University

• U retains equity in startups which later may be sold to provide cash proceeds

Why Technology Transfer?

• Faculty and researchers benefit…– See your work practically benefit

society– Increased industry contact– Attracts research sponsors– Potential financial reward– Recognition– Policy

• Students benefit…– Increased opportunities for employment

Why Technology Transfer?

• University benefits…– Recognition and financial reward– Provides critical financial resources to

support U’s academic mission– Tech Transfer is now more important as

other funding sources dry up

• The public benefits…– Creates new businesses and jobs– Leads to new products and services

that improve the quality of life

Technology Transfer Process

Strategy

Technology Marketing

•Compliance•Contracts•Accounting

Invention Evaluation

• Technologies are evaluated based on– Commercial potential

• Solves a known problem (unmet need)• Market size• Market growth rate

– Ability to protect the IP (usually by patent)

• Technologies must have reasonable commercial potential and expected return on investment

• We must understand the funding mechanism that led to the development of the invention!!

Protection Decision

• IPCC (Intellectual Property Commitment Committee) approves filing of all patent applications

• Business case for protecting and licensing the technology is presented to IPCC

• IPCC determines if and recommends how the University will pursue commercialization of the technology

Marketing (Selling)

Finding the best possible licensee

• Prepare marketing materials• If necessary, travel to visit the company• Find the right person in the company• Marketing usually has a scientific

component as well as a selling component

Licensing Phase

Striking the best deal for both parties

• A contract granting rights to make, use and sell products covered by the U’s IP

• Can be exclusive or non-exclusive• There are usually up front payments• Most of the time the company picks up

patent costs• Royalty on product sales• Minimum annual payments• Developmental Milestones• Right to audit, reps, warranties etc.

Commercialization Phase

Making a product based on our IP

• The licensee almost always must invest in some infrastructure to make a product based on the IP they have licensed from us

• There is a compliance function here too– They must meet developmental

milestones we place in our agreements• They will need to finance any regulatory

clearance that is required

IP Policy

The University is sole owner of all IP• Created through the use of University

resources or facilities• Supported directly or indirectly by funds

administered by the University– Through SPA

• Developed within the scope of employment by University employees

• Agreed in writing to be a specially commissioned work

Revenue Distribution

Division of proceeds (net of expenses)

• 33-1/3% to University (OVPR)• 33-1/3% to inventor(s)• 8% to inventor’s college or school• 25-1/3% to inventor’s department,

division, or center to be spent in support of the inventor’s research or other directly related University work

IP Commercialization Success Stories

• Carbovir compounds to Glaxo SmithKline• PRRS vaccine to Boehringer Ingelheim• Honeycrisp Apples• Image Sensing Systems, Inc.

• Others that fall into the public good realm– Retractable seatbelt– The “Black Box” on airplanes– Taconite process

Facts and Figures

University of Minnesota Technology Transfer

FY 2007• 193 disclosures• 51 new US patent applications• 44 US patents issued• 77 new licenses and options• 4 start-up companies• $63.5 million gross revenues*

* >$55M from a single technology (Ziagen™ AIDS drug)

Types of Intellectual Property

• Copyright– Protects idea fixed in tangible medium of expression

(Expression, not idea, is protected)– Must be original and have at least minimal creativity

• Can copyright original selections and arrangement of facts

– Copyright vests automatically with the author(s)– There may be multiple contributors

• Joint work• Derivative work• Compilation

– Faculty publications are copyright works

Types of Intellectual Property

• Trademarks• Names, titles, short phrases, symbols,

logos

• Used in commerce to identify source of goods/services

• Obtain protection through use but perfect it nationwide through filing with the USPTO via a trademark application

Types of Intellectual Property

• Trade Secrets– Information not publicly known, kept

reasonably secret– Produces economic benefit and

business advantage to the owner

• Not classically used at the U– Unpublished info/data is a “trade

secret”, but only until it is published

• Example, the formula for Coca-Cola

Types of Intellectual Property

• Mask Works– Protects design of circuits on chips

• Plant Variety Protection Act – Certificate– Protects sexually reproducing plants

(seeds)

Types of Intellectual Property

• Patents– Protects processes, machines, articles of manufacture,

inventions– Must be non-obvious and novel– Patented product must be useful– Inventors are individuals(s) who made substantial

contributions to the invention• Ownership may be separate from inventorship

– Must file for protection before disclosure ( 1 year US grace period)

– Priority matters• U.S.: who created it first• International: first to file• Record-keeping is vital

PATENT

• Legal document• Granted and enforceable in individual

countries (e.g., U.S., Canada and France)• Gives you the right to prevent others from

making, using, selling, importing or offering the claimed invention for sale

• Patent term– Used to be 17 years from issuance– Now 20 years from date of filing

• Patent types (utility, design and plant)

THEORY OF PATENTING

• What is an inventor to do?

• Keep it secret → No value to public (no patent rights)

• Full disclosure → Value to public (patent rights)

• To encourage early and full disclosure of inventions, countries offer inventors exclusive rights in the invention for a set period of time.

PATENTABILITY MAIN REQUIREMENTS

NOVELNONOBVIOUS

(INVENTIVE STEP)

USEFUL

PARTS OF A (U.S.) PATENT

1. TITLE2. DESCRIPTION

• INTRODUCTION• BACKGROUND TO INVENTION• SUMMARY OF THE INVENTION• DETAILED FEATURES OF THE INVENTION

– HOW TO MAKE INVENTION– HOW TO USE INVENTION– WORKING EXAMPLES (SPECIES)

3. CLAIMS-DEFINES “METES AND BOUNDS” OF

INVENTION4. ABSTRACT

Exemplary Patentable Inventions

• New composition of matter (e.g., compound, formulation or device)

• New method (process) of making known composition of matter

• New method of using known composition of matter

Examples of commercially successful patents

3M Corporation, U.S. Patent 6,572,945, issued June 3, 2003, “Removable adhesive tape laminate and separable fastener”

Aerobie Corporation, U.S. Patent 6,682,449, issued January 27, 2004“Flying Toy and Method of Making Same”

Regents of the University of MinnesotaU.S. Plant Variety patent PP 16,478, issued Feb. 10, 2004, “Frontenac gris”

Foreign Patent Filing Timeline

Patent “priority” is available for the basic invention and minor developments

PRIORITY APPLICATION

FILEDSUBSTANTIVE

APPLICATION FILEDFIRST PUBLICATION

OF SUBSTANTIVE

0 12 MONTHS 18 MONTHS FROMEARLIEST PRIORITY

CLAIMED

Typically a USProvisional Application

Typically a USUtility and PCTApplication

Typically file Foreign nationalStage applications

BEGIN THE NATIONALSTAGE

30 MONTHS FROM PRIORITYAPPLICATION

PatentApplicationPublishes

Foreign Patents

• Rest of the world is “first to file” and in U.S., “first to invent”

• File US first then file (Patent Cooperative Treaty-PCT) foreign patent apps in a year

• PCT - Only need to initially file one patent application with the PCT and claim all relevant territories, Like Europe.

• Prosecution standards are a bit more rigid

CONCLUSION

• Intellectual Property is important to the U– Patents– Copyright’s– Trademarks– Plant Variety patents– Know How

• OTC deals mostly with patents– Value can be derived from all types of IP though

• Other types of IP are important, just not as prevalent

• OTC has significant experience in the management of IP at the U including licensing it to companies for the development of products to help society and to bring a value based return to the U which we re-invest back into the University

THANKS FOR YOUR ATTENTION

Mike Mooremoore045@umn.edu

References

• Office for Technology Commercializationwww.research.umn.edu/techcomm

• United States Patent and Tradmark Officewww.uspto.gov

• U of M Available Technologieswww.research.umn.edu/techcomm/technologies

• Google Patentswww.google.com/patents

• PatentScope – Search Foreign Patentswww.wipo.int/pctdb/en/search-adv.jsp