Patent or Perish?Patent or Perish?

Presented By: John F. Presented By: John F. LetchfordLetchford

Archer & Greiner, P.C.Archer & Greiner, P.C.

October 19, 2006October 19, 2006

Academia historically has Academia historically has held publication in a held publication in a scholarly journal the scholarly journal the premier waypremier way to establish to establish credibility and credibility and gain prestige.gain prestige.

What is Intellectual What is Intellectual Property?Property?

PatentPatent TrademarkTrademark CopyrightCopyright

InventorshipInventorship

Conception of an Conception of an ideaidea

Formulation in the Formulation in the mind of a definitive mind of a definitive way of realizing way of realizing that idea (ie – a that idea (ie – a concrete and concrete and complete solution complete solution to a problem)to a problem)

Who Is Not An Inventor?Who Is Not An Inventor?

Individuals that merely act as research Individuals that merely act as research technicians under the direction of the technicians under the direction of the actual inventorsactual inventors

Those researchersThose researchers who continue who continue with the mindset with the mindset of publish or of publish or perish while not taking perish while not taking advantage of the opportunities advantage of the opportunities that patents provide may be that patents provide may be doing so at their own peril doing so at their own peril (and that of their sponsors).(and that of their sponsors).

Public Disclosure – What Public Disclosure – What Determines Publication?Determines Publication?

Length of time presented/exhibitedLength of time presented/exhibited Expertise of the audienceExpertise of the audience Lack of notice or reasonable expectation Lack of notice or reasonable expectation

that the material displayed would not be that the material displayed would not be copiedcopied

The simplicity with which The simplicity with which the material could have the material could have been copiedbeen copied

The Easiest Way to Protect Your The Easiest Way to Protect Your InventionInvention

January 1, 2007 – PublishJanuary 1, 2007 – PublishJanuary 2, 2007 – PatentJanuary 2, 2007 – Patent

BABADD

The Easiest Way to Protect Your The Easiest Way to Protect Your InventionInvention

January 1, 2007 – PatentJanuary 1, 2007 – PatentJanuary 2, 2007 – PublishJanuary 2, 2007 – Publish

GOOGOODD

Provisional Patent Application Provisional Patent Application AdvantagesAdvantages

Preserves Preserves international filing international filing rightsrights

Defers substantial Defers substantial patent costspatent costs

Permits inventions Permits inventions to be marked as to be marked as “patent pending”“patent pending”

Provisional Patent Application Provisional Patent Application LimitationsLimitations

Not examined by the U. S. Patent and Not examined by the U. S. Patent and Trademark Office (“USPTO”)Trademark Office (“USPTO”)

Lapses in 12 monthsLapses in 12 months Does not form the basis for Does not form the basis for

enforceable patent protectionenforceable patent protection

Provisional Patent ApplicationProvisional Patent ApplicationCostsCosts

$100 USPTO filing $100 USPTO filing feefee

Minimal fees for Minimal fees for legal serviceslegal services

What you can do to What you can do to keep those costs keep those costs from escalatingfrom escalating

Provisional Patent Application Provisional Patent Application What We Need From YouWhat We Need From You

More than a generalized description More than a generalized description of the invention and/or its of the invention and/or its performanceperformance

Legally sufficient disclosure (ie - what Legally sufficient disclosure (ie - what you are doing, lab results, working you are doing, lab results, working papers)papers)

We need your researchWe need your research

What Happens After the What Happens After the Provisional Provisional Application is Filed?Application is Filed?

At the USPTO… nothingAt the USPTO… nothing Provisional applications are never Provisional applications are never

published by the USPTOpublished by the USPTO Patentability SearchPatentability Search AnalysisAnalysis

Evolving ResearchEvolving Research

When Additional Provisional When Additional Provisional Applications May Be Necessary Applications May Be Necessary

Non-provisional/Utility Non-provisional/Utility ApplicationApplication

Must be filed within 1 year of the Must be filed within 1 year of the provisional applicationprovisional application

Formally examinedFormally examined Provides enforceable patent Provides enforceable patent

protection if grantedprotection if granted Considerable cost and timeConsiderable cost and time

If you’ve followed the If you’ve followed the Patent then Patent then PublishPublish doctrine and a patent doctrine and a patent

issues…issues…

The Benefits are NumerousThe Benefits are Numerous

The Dawning of The Dawning of the Age of Aquarius – the Age of Aquarius – The Bayh-Dole Act of 1980The Bayh-Dole Act of 1980

In 2004, U.S. Universities filed 10, In 2004, U.S. Universities filed 10, 517 patent applications – 517 patent applications – 3 times more than IBM, the 3 times more than IBM, the corporate corporate leader in leader in worldwide worldwide patent patent filings. filings.

WHY?WHY?

The Value of Academic The Value of Academic Technology Technology TransferTransfer

For the UniversityFor the University – gives the academic – gives the academic community the opportunity to have a positive community the opportunity to have a positive impact on products and the marketplaceimpact on products and the marketplace

For the Industrial CommunityFor the Industrial Community – gives the – gives the private, for-profit sector the means to tap the private, for-profit sector the means to tap the very significant work of new discovery found in very significant work of new discovery found in the academic labthe academic lab

For the General PublicFor the General Public – provide the – provide the opportunity to benefit from extraordinary new opportunity to benefit from extraordinary new advances being made by the brightest mindsadvances being made by the brightest minds

Other Advantages of Other Advantages of Patenting Before Patenting Before PublishingPublishing

Provides an additional quantitative indicator Provides an additional quantitative indicator to assess the quality and quantity of to assess the quality and quantity of university scientific workuniversity scientific work

Gives private investors convincing evidence Gives private investors convincing evidence that the dollars they spend on academic that the dollars they spend on academic research and development are yielding research and development are yielding resultsresults

Unlike publishing, can have a tangible Unlike publishing, can have a tangible valuation applied to it that can be compared valuation applied to it that can be compared equally with other patents on a global scale equally with other patents on a global scale

Trends in University Trends in University PatentingPatenting

16,871 invention disclosures – 82% deemed 16,871 invention disclosures – 82% deemed potentially patentable ¹potentially patentable ¹

183 institutions reported filing 10,571 new 183 institutions reported filing 10,571 new applications – 32.8% more than the previous applications – 32.8% more than the previous year ¹year ¹

Patenting and Publishing are not mutually Patenting and Publishing are not mutually exclusive – 9 of the top 10 Universities filing exclusive – 9 of the top 10 Universities filing patents in 2005 in the United States were also patents in 2005 in the United States were also in the top 100 of an international ranking of in the top 100 of an international ranking of Universities based on publication output in Universities based on publication output in 20002000

¹ Based on results of a survey of 198 universities conducted by the Association of University ¹ Based on results of a survey of 198 universities conducted by the Association of University Technology Managers (“AUTM”) in Fiscal Year 2004Technology Managers (“AUTM”) in Fiscal Year 2004

The Dollar Value of Patent The Dollar Value of Patent Applications¹Applications¹

Licensing – The Gift that Keeps on GivingLicensing – The Gift that Keeps on Giving 11,414 licenses/options 11,414 licenses/options

yielding income - $1.385 yielding income - $1.385 billionbillion

6,116 licenses/options 6,116 licenses/options generated running royalties generated running royalties - $1.122 billion- $1.122 billion

33% of respondents 33% of respondents reported having at least reported having at least one licenses that generated one licenses that generated more than $1 millionmore than $1 million

¹ Based on results of a survey of 198 universities conducted by the ¹ Based on results of a survey of 198 universities conducted by the Association of University Technology Managers (“AUTM”) in Fiscal Association of University Technology Managers (“AUTM”) in Fiscal Year 2004Year 2004

Trends in Trends in Licensing Licensing RevenueRevenue

In 1991, University revenue from In 1991, University revenue from patenting was only $200 million patenting was only $200 million compared the $1.385 billion in 2004. compared the $1.385 billion in 2004. That’s nearly a 600% increase in 13 That’s nearly a 600% increase in 13 years.years.

More Specifically…More Specifically…

In 2005, the University of California In 2005, the University of California and San Diego reported making $21 and San Diego reported making $21 million on patent royaltiesmillion on patent royalties

MIT reports making MIT reports making $45 million from $45 million from IP revenue annuallyIP revenue annually

Additional Benefits from Additional Benefits from Licensing PatentsLicensing Patents

Collaborative partnerships help move Collaborative partnerships help move new discoveries from the laboratory new discoveries from the laboratory to the marketplaceto the marketplace

Ongoing partnerships enable Ongoing partnerships enable researchers who make discoveries in researchers who make discoveries in the early stages of a University’s the early stages of a University’s tech transfer program to participate tech transfer program to participate in future developments with industryin future developments with industry

What Is Being Licensed? What Is Being Licensed? ¹¹ 56% of Universities report making at least 56% of Universities report making at least

one new product commercially available one new product commercially available to the public – total 567 new productsto the public – total 567 new products

More than 3,100 new products More than 3,100 new products have entered the marketplace have entered the marketplace from FY1998 through FY2004from FY1998 through FY2004

¹ Based on results of a survey of 198 universities conducted by the Association ¹ Based on results of a survey of 198 universities conducted by the Association

of University Technology Managers (“AUTM”) in Fiscal Year 2004of University Technology Managers (“AUTM”) in Fiscal Year 2004

Licenses Provide More Than Licenses Provide More Than Just aJust a Revenue Steam Revenue Steam

ARM Ltd., a leader in microprocessor ARM Ltd., a leader in microprocessor technology, sponsors 10 research technology, sponsors 10 research assistants at an annual salary of $65,000 assistants at an annual salary of $65,000 at the University of Michigan in return for at the University of Michigan in return for taking co-ownership of any patents they taking co-ownership of any patents they file.file.

Patents are an Indicator of the Patents are an Indicator of the Relationships Between Academic Relationships Between Academic

Research and Research and Commercial Application Commercial Application

of New Technologiesof New Technologies Since 1980 there have been nearly Since 1980 there have been nearly

5000 startup companies spun out 5000 startup companies spun out from U.S. University license of from U.S. University license of patentspatents

2/3 of these are still in operation2/3 of these are still in operation IN FY2004, Universities spun out 462 IN FY2004, Universities spun out 462

new companies and received an new companies and received an equity interest in 51.9% of themequity interest in 51.9% of them

Simply put, the difference Simply put, the difference between not patenting your between not patenting your

ideas and seeking patent ideas and seeking patent protection…….protection…….

Baby Gets A New Pair of Baby Gets A New Pair of ShoesShoes

oror……

Baby Gets A New Beach Baby Gets A New Beach HouseHouse

Patent or Perish?Patent or Perish?

Presented By: John F. Presented By: John F. LetchfordLetchford

Archer & Greiner, P.C.Archer & Greiner, P.C.

October 19, 2006October 19, 2006