Intellectual Property: You, the University, and UTRF Richard Magid, Ph.D. Licensing Associate, UTRF Memphis September 1, 2006.

Intellectual Property:Intellectual Property:

You, the University, and UTRFYou, the University, and UTRF

Richard Magid, Ph.D.Richard Magid, Ph.D.Licensing Associate, UTRF MemphisLicensing Associate, UTRF Memphis

September 1, 2006September 1, 2006

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Types of Intellectual PropertyTypes of Intellectual Property

• TrademarkTrademark

• CopyrightCopyright

• Trade secretTrade secret

• PatentPatent

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TrademarkTrademark

• Brand name or logoBrand name or logo• Used in trade and is distinctiveUsed in trade and is distinctive• Protection is perpetual by renewalProtection is perpetual by renewal• Protects against confusion in tradeProtects against confusion in trade• Need to demonstrate use, or intent to useNeed to demonstrate use, or intent to use

A Trademark is a word, phrase, symbol, or design, that A Trademark is a word, phrase, symbol, or design, that identifies and distinguishes the source of the goods identifies and distinguishes the source of the goods

(or services) of one party from those of others.(or services) of one party from those of others.

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CopyrightCopyright

• Literary, artistic, musical, audiovisual, and graphic Literary, artistic, musical, audiovisual, and graphic worksworks

• Original in expressionOriginal in expression

• Can include softwareCan include software

• Effective immediately upon completion of workEffective immediately upon completion of work

• Protection is for term of life + 70 yearsProtection is for term of life + 70 years

• Protects against copying of expressionProtects against copying of expression

• Registration of copyright not requiredRegistration of copyright not required

Copyright protects “original works of authorship” that Copyright protects “original works of authorship” that are fixed in a tangible form of expression.are fixed in a tangible form of expression.

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Trade SecretTrade Secret

• Know-how of current or potential competitive valueKnow-how of current or potential competitive value• Must be safeguarded by reasonable measuresMust be safeguarded by reasonable measures• Indefinite protection period (= life of secrecy)Indefinite protection period (= life of secrecy)• Protects against unauthorized use and disclosureProtects against unauthorized use and disclosure• Right to use can be licensedRight to use can be licensed

A trade secret is any formula, pattern, device or A trade secret is any formula, pattern, device or compilation of information which is used in one's compilation of information which is used in one's

business, and which gives him an opportunity to obtain an business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. advantage over competitors who do not know or use it.

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PatentPatent

• Protected for a term of 20 years from filing dateProtected for a term of 20 years from filing date

• Does not guarantee the “freedom to operate”Does not guarantee the “freedom to operate”

– Patents are fences, not permission slips.Patents are fences, not permission slips.

• Obtained by government grant after examination of Obtained by government grant after examination of

patent applicationpatent application

– US Patents only provide protection in the USUS Patents only provide protection in the US

A patent for an invention is the grant, to the inventor, of A patent for an invention is the grant, to the inventor, of the right to exclude others from making, using, selling, the right to exclude others from making, using, selling,

or importing the invention into the United States.or importing the invention into the United States.

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Why does IP have to be disclosedWhy does IP have to be disclosed to the University? to the University?

To assure compliance with:To assure compliance with:

• Legal obligations under the Federal Bayh-Dole Act Legal obligations under the Federal Bayh-Dole Act (37 CFR 401)(37 CFR 401)

• The University of Tennessee Intellectual Property The University of Tennessee Intellectual Property Policy (utrf.tennessee.edu/tto/policy.html)Policy (utrf.tennessee.edu/tto/policy.html)

• Contractual obligations with non-federal sponsors Contractual obligations with non-federal sponsors and providers of proprietary materialsand providers of proprietary materials

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The Bayh Dole Act Permits and Promotes The Bayh Dole Act Permits and Promotes Technology Transfer from AcademiaTechnology Transfer from Academia

Permits commercialization of research results Permits commercialization of research results funded by the federal governmentfunded by the federal government

Allows universities (and other non-profits) to:Allows universities (and other non-profits) to:• Retain title to inventions produced under federal Retain title to inventions produced under federal

supportsupport• Patent technologiesPatent technologies• License technologiesLicense technologies

Requires universities (and other non-profits) to:Requires universities (and other non-profits) to:• Share royalties with inventorsShare royalties with inventors

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Opportunities Provided By Opportunities Provided By Bayh-DoleBayh-Dole Act Act

Universities can:Universities can:

• Commercialize research for public goodCommercialize research for public good– Products that may not otherwise existProducts that may not otherwise exist

• Generate income for inventors and the universityGenerate income for inventors and the university

• Foster collaborations with industryFoster collaborations with industry– New sources of research supportNew sources of research support

– Expanded opportunities for graduate student trainingExpanded opportunities for graduate student training

• Promote economic growthPromote economic growth– Regional competitiveness and jobs for graduatesRegional competitiveness and jobs for graduates

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What does the Act Require of the Inventors?What does the Act Require of the Inventors?

• Requires employees to assign rights to universityRequires employees to assign rights to university• Requires Investigators to report inventions to Requires Investigators to report inventions to

university in writing and in a timely manneruniversity in writing and in a timely manner• Investigator must list inventions in annual Progress Investigator must list inventions in annual Progress

Reports and Competing Renewal applicationsReports and Competing Renewal applications• Investigator must complete/verify accuracy of Investigator must complete/verify accuracy of

information in Final Invention Statement at grant information in Final Invention Statement at grant closeoutcloseout

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What does the Act Require of the University?What does the Act Require of the University?

• Disclose inventions to government within 60 daysDisclose inventions to government within 60 days• Elect title within two years of disclosure or within Elect title within two years of disclosure or within

statutory bar period. If not filing, give government 60 statutory bar period. If not filing, give government 60 day notice.day notice.

• Provide federal government with a non-exclusive license Provide federal government with a non-exclusive license to practice inventionto practice invention

• Share royalties with inventors when available Share royalties with inventors when available • Make preferences in licensing to U.S. industry and small Make preferences in licensing to U.S. industry and small

business where feasible (to facilitate product business where feasible (to facilitate product manufacturing in U.S.)manufacturing in U.S.)

• Provide reports to federal agency on utilization of Provide reports to federal agency on utilization of inventionsinventions

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• Rights in inventions resulting, Rights in inventions resulting, even in part, even in part, from federal fundingfrom federal funding may not be assigned to a may not be assigned to a third party without agency approval. third party without agency approval. – The University retains the rights to inventions that The University retains the rights to inventions that

may result industry-sponsored Research may result industry-sponsored Research AgreementsAgreements

– The first right to negotiate a license is offered to a The first right to negotiate a license is offered to a sponsoring company, not title to the IPsponsoring company, not title to the IP

Additional Rights and ObligationsAdditional Rights and Obligations Under Bayh-DoleUnder Bayh-Dole

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What is a Patentable Invention?What is a Patentable Invention?

1.1. UsefulUseful

2.2. Novel (new)Novel (new)• U.S. PTO provides one year grace period after U.S. PTO provides one year grace period after

public disclosurepublic disclosure• Most foreign countries require application prior Most foreign countries require application prior

to ANY public disclosureto ANY public disclosure

3.3. Non-obviousNon-obvious

4.4. Reduced to PracticeReduced to Practice• ActualActual• Conceptual (or constructive)Conceptual (or constructive)

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Disclosure Filing ProcessDisclosure Filing Process

• Prepare Invention Disclosure FormPrepare Invention Disclosure Form– Electronic copies availableElectronic copies available

• Signatures - Dept chair, College Dean, and Campus Research Signatures - Dept chair, College Dean, and Campus Research Officer, PCL committeeOfficer, PCL committee

• Assignment to UTRF for ManagementAssignment to UTRF for Management• Disclosure EvaluationDisclosure Evaluation

– Local Prior Art SearchLocal Prior Art Search– Marketing and Technology EvaluationMarketing and Technology Evaluation

• Patent Application Filing DecisionPatent Application Filing Decision• Work with Patent Attorney to prepare applicationWork with Patent Attorney to prepare application• Submit to US Patent and Trademark OfficeSubmit to US Patent and Trademark Office

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Do’s and Don’ts For ResearchersDo’s and Don’ts For Researchers

• Publicizing your discovery prior to Publicizing your discovery prior to protecting it may lose the monetary valueprotecting it may lose the monetary value

• Small items could have commercial valueSmall items could have commercial value

• Keep accurate laboratory notebooks Keep accurate laboratory notebooks – Best primary record of invention is numbered, Best primary record of invention is numbered,

bound laboratory notebooks – documents date of bound laboratory notebooks – documents date of conception conception

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Do’s and Don’ts For Researchers (cont’d)Do’s and Don’ts For Researchers (cont’d)

• Only transfer or receive materials from an Only transfer or receive materials from an outside entity with the protection of a outside entity with the protection of a Material Transfer AgreementMaterial Transfer Agreement• Maintains confidentialityMaintains confidentiality• Defines intellectual property rightsDefines intellectual property rights

• Only discuss the enabling aspects of your Only discuss the enabling aspects of your research with the protection of a research with the protection of a Confidential Disclosure Agreement Confidential Disclosure Agreement

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Public DisclosurePublic Disclosure

• Public disclosure can include:Public disclosure can include:• Publications in open literaturePublications in open literature• Poster Sessions & AbstractsPoster Sessions & Abstracts• Presentations to open forumPresentations to open forum• Personal communications without expectation of Personal communications without expectation of

confidentialityconfidentiality• Anything catalogued in a libraryAnything catalogued in a library

• Primary discriminators are:Primary discriminators are:• Good faith attempt to maintain secrecyGood faith attempt to maintain secrecy• Substantiality of material disclosedSubstantiality of material disclosed

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Considerations and PitfallsConsiderations and Pitfalls

• Protection of Intellectual PropertyProtection of Intellectual Property– Invention/discovery review prior to public disclosureInvention/discovery review prior to public disclosure

• Conflicting obligationsConflicting obligations– MTAsMTAs– Pre-existing IPPre-existing IP– Competing agreementsCompeting agreements

• Inability to publishInability to publish– Theses and dissertationsTheses and dissertations– Reasonable publication review period?Reasonable publication review period?

• Inability to pursue future researchInability to pursue future research– Right to use subject IPRight to use subject IP– Ability to attract other industry sponsorsAbility to attract other industry sponsors

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UT Research Foundation (UTRF)UT Research Foundation (UTRF)

An independent, not-for-profit corporation formed in An independent, not-for-profit corporation formed in 1934 to manage IP for The University of Tennessee1934 to manage IP for The University of Tennessee

UTRFUTRF

LicenseesLicensees

ResearcherResearcher

Start Start upsups

SponsorsSponsors

Material Material ProvidersProviders

CollaboratorsCollaborators

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UTRF StatisticsUTRF Statistics

Fiscal Year 2005 Data (7/1/04-6/30/05)Fiscal Year 2005 Data (7/1/04-6/30/05)• 66 Invention Disclosures66 Invention Disclosures

– 33 from UTHSC (Memphis)33 from UTHSC (Memphis)• 17 Issued U.S. Patents17 Issued U.S. Patents• 8 (New) Licenses Granted8 (New) Licenses Granted

– Over $1M in royalties and feesOver $1M in royalties and fees• More than $300,000 of license or option-based More than $300,000 of license or option-based

research awardedresearch awarded

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Commercialization3675 License and Option Agreements

339 Start up Companies$950M Gross Revenue

Technology Transfer Statistics - 2003Technology Transfer Statistics - 2003Association of University Technology Managers (AUTM)Association of University Technology Managers (AUTM)

Intellectual Assets7,133 New U.S. Patent Applications

3,378 U.S. Patents Issued

Discovery13,475 Disclosures(1 per $2.5 million)

Research$34 billion

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UTRF MissionUTRF Mission• Manage and commercialize UT inventionsManage and commercialize UT inventions

– Seek optimal development of research for the good of the University, Seek optimal development of research for the good of the University, the Inventors, and the Publicthe Inventors, and the Public

• Support the UT research enterpriseSupport the UT research enterprise– Grow research enterprise as means of supporting all university Grow research enterprise as means of supporting all university

missionsmissions

• Contribute to state economic development through start ups and Contribute to state economic development through start ups and job creation job creation – Grow and cultivate entrepreneurial education and business activities Grow and cultivate entrepreneurial education and business activities

within UT and the regionwithin UT and the region

– Improve the quality of life for Tennessee citizens through technology-Improve the quality of life for Tennessee citizens through technology-based economic developmentbased economic development

What do we do?What do we do?

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Conflicting Values - Common InterestConflicting Values - Common Interest

UNIVERSITYUNIVERSITY INDUSTRYINDUSTRY

CommercializationCommercializationof New and Beneficialof New and Beneficial

TechnologiesTechnologies

TeachingTeaching

ResearchResearch

ServiceService

EconomicEconomicDevelopmentDevelopment

ProfitsProfits

Product R&DProduct R&D

Knowledge for Knowledge for Knowledge’s SakeKnowledge’s Sake

Academic FreedomAcademic FreedomOpen DiscourseOpen Discourse

Management ofManagement ofKnowledge for ProfitKnowledge for Profit

ConfidentialityConfidentialityLimited Public DisclosureLimited Public Disclosure

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Industry Perspective on Product DevelopmentIndustry Perspective on Product Development

Path to commercialization is long and uncertain Path to commercialization is long and uncertain Compensation based on risks and rewardsCompensation based on risks and rewards

Idea generation and basic researchIdea generation and basic researchDevelopment into conceptDevelopment into concept Process/manufacturing designProcess/manufacturing design Product/service testingProduct/service testing

Marketing/test marketing of product/serviceMarketing/test marketing of product/service Sale of product/serviceSale of product/service

Initial use of product/serviceInitial use of product/serviceProduct/service market acceptanceProduct/service market acceptance

$

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University Tech Transfer is ComplexUniversity Tech Transfer is Complex

• We are between everyone & “serve many masters”We are between everyone & “serve many masters”• Our technology is embryonicOur technology is embryonic• Typically, our technology is not developed to meet a Typically, our technology is not developed to meet a

market need – we push technology (“door-to-door”)market need – we push technology (“door-to-door”)• Development requires large risk from our partnerDevelopment requires large risk from our partner• Significant cultural gaps between academia & Significant cultural gaps between academia &

industryindustry

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Evaluating DisclosuresEvaluating Disclosures

• PatentabilityPatentability– Existing patent searchExisting patent search– Relevant literature searchRelevant literature search– Prior public disclosuresPrior public disclosures

• MarketabilityMarketability– Commercial potentialCommercial potential– Stage of technologyStage of technology– Useful and practical technologyUseful and practical technology

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How Does UTRF Help Inventors?How Does UTRF Help Inventors?

• Determine patentabilityDetermine patentability• Register copyrightsRegister copyrights• Prosecute patentsProsecute patents• Locate potential licenseesLocate potential licensees• Negotiate license agreementsNegotiate license agreements• Assist with faculty start-upsAssist with faculty start-ups

– Finding entrepreneursFinding entrepreneurs– Finding capitalFinding capital

• Manage Existing LicensesManage Existing Licenses

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Patent FilingPatent Filing

• US Provisional ApplicationUS Provisional Application– Relatively inexpensiveRelatively inexpensive– Provides 12 month “grace period” to file full applicationProvides 12 month “grace period” to file full application

• US Patent ApplicationUS Patent Application– One year to file from public disclosure dateOne year to file from public disclosure date– First to invent ruleFirst to invent rule– ExpensiveExpensive

• International Patent ApplicationInternational Patent Application– No publication or disclosure allowedNo publication or disclosure allowed– First to file ruleFirst to file rule– Very expensiveVery expensive– Industry partner requiredIndustry partner required

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License AgreementsLicense Agreements

• Agreement with a partnerAgreement with a partner– Usually private industry, but could be university or Usually private industry, but could be university or

non-profit agencynon-profit agency

• Grants certain rights to the technologyGrants certain rights to the technology– Can be broad or narrowCan be broad or narrow

• Establishes terms and options for each partyEstablishes terms and options for each party– Licensee gains right to use, make, and sell the Licensee gains right to use, make, and sell the

licensed technologylicensed technology– Licensor receives defined compensation (fees, Licensor receives defined compensation (fees,

royalties, equity…)royalties, equity…)– Either or both parties may have obligations to meet Either or both parties may have obligations to meet

to keep licenseto keep license

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Material Transfer Agreements are Contracts Material Transfer Agreements are Contracts Governing Transfer & Use of Proprietary MaterialsGoverning Transfer & Use of Proprietary Materials

• Providers seek access to new information and Providers seek access to new information and inventions made using the provided materialinventions made using the provided material– regardless of whether the provider funds the research projectregardless of whether the provider funds the research project

• Providers wish to limit the use and transfer of their Providers wish to limit the use and transfer of their materialsmaterials

• Providers wish to limit dissemination of information on Providers wish to limit dissemination of information on their timeline (publication)their timeline (publication)

• Providers wish to be rewarded for their contribution to Providers wish to be rewarded for their contribution to the advancement of informationthe advancement of information

Providers of proprietary materials want to protect their investment!

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Recipients of Materials Want to Protect Their Investment!

• Recipients usually want to use the material in a new Recipients usually want to use the material in a new way of their own designway of their own design

• Recipients want to protect their own rights and that of Recipients want to protect their own rights and that of funding sponsors and other partnersfunding sponsors and other partners

• Recipients wish to publish results on their own Recipients wish to publish results on their own timelinetimeline

• Recipients desire to be rewarded for their contribution Recipients desire to be rewarded for their contribution to the advancement of informationto the advancement of information

Material Transfer Agreements are Contracts Material Transfer Agreements are Contracts Governing Transfer & Use of Proprietary MaterialsGoverning Transfer & Use of Proprietary Materials

The “Mousetrap” The “Mousetrap” MythMyth

““If a man write a better book, preach a better If a man write a better book, preach a better sermon, or make a better mousetrap than sermon, or make a better mousetrap than his neighbor, though he build his house in his neighbor, though he build his house in the woods, the world will make a beaten the woods, the world will make a beaten path to his door.”path to his door.”

Ralph Waldo EmersonRalph Waldo Emerson

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University Tech Transfer CharacteristicsUniversity Tech Transfer Characteristics

• A secret – most licensees find you!A secret – most licensees find you!• Recent studies indicate that companies find Recent studies indicate that companies find

technology by:technology by:– Scientist to scientist contactScientist to scientist contact– Screening of publications and issued patentsScreening of publications and issued patents– Last and perhaps least: TLO marketing effortsLast and perhaps least: TLO marketing efforts

• There are few blockbusters!There are few blockbusters!– 43% of the active licenses/options generated 43% of the active licenses/options generated anyany

revenue in 2000.revenue in 2000.– 0.6% (114) of the active licenses/options 0.6% (114) of the active licenses/options

generated over $1 million in 2000.generated over $1 million in 2000.

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SummarySummary

• Research and related discoveries present both Research and related discoveries present both obligations and opportunitiesobligations and opportunities

• UTRF was formed to help UniversityUTRF was formed to help University– Enter into facilitating, not limiting, contractsEnter into facilitating, not limiting, contracts– Understand and manage discoveriesUnderstand and manage discoveries– Establish paths for discovery utilization and financial Establish paths for discovery utilization and financial

benefitbenefit– Establish and maintain an entrepreneurial cultureEstablish and maintain an entrepreneurial culture– Contribute to economic development through start ups Contribute to economic development through start ups

and job creationand job creation

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Questions?Questions?

UTRF Offices are located at 920 Madison, Suite 515UTRF Offices are located at 920 Madison, Suite 515

I can be reached at:I can be reached at:[email protected]@utmem.eduPhone: 901-448-1562Phone: 901-448-1562

More information is available online: More information is available online: utrf.tennessee.edu/ttoutrf.tennessee.edu/tto