Technology Transfer Foundations

Ken Porter Steamboat Mountain Solutions

copyright 2011all rights reserved

Inventor

IP Management

Industry

Invention

Market, Patent

License

Technology Transfer Practice

Participants

Process

IDF Align interests

$$ExpertiseAccess

Inventions are transferred to

through thesystem

conveyed by

• US Constitution–Article 1, Section 8, 1790–US Patent Act (revised), 1793, 35 US Code, T Jefferson

“any new and useful art, machine, manufacture or composition of matter and any new and useful improvement on any art, machine, manufacture or composition of matter” (≈ 35 USC §101)

•Bayh-Dole–Patent Act of 1980–CAFC, 1982; Hatch-Waxman Act, 1994

• University Policy

Legal Foundation for Technology Transfer in the US

Economic Policy Individual Rights• Venice, 1474

–Exclusive rights for inventors as economic incentiveoLimit inventor emigration of artisansoProvide tax benefits to skilled worker immigrants

• England, Statute of Monopolies, 1624–Limit Crown grant of monopoly to 14 yrs

= 2 apprentice training periods–Basis for US law

• France, 1791–Inventor monopoly for 5, 10, or 15 yrs–Emphasized inventor rights, rather than benefit to society–Copyright precursor, droit d’auteur (author’s rights)

Patents through Time

Economic Policy Individual Rights

• French Patent Law of 1844–Exclusive rights for inventors as just compensation

oImmanuel Kanto“the presentation of a service rendered to Society. The former supply

the noble products of their intelligence and Society grants to them in return the advantages of an exclusive exploitation of their discovery for a limited period”

oAbraham Lincolno“The Patent System added the fuel of interest to the fire of genius”oMark Twaino“a country without a patent office and good patent laws was just a crab

and couldn't travel anyway but sideways or backwards”

Patents through Time

Patent ReformUS Patent Reform Act of 2009, S.515

• First inventor to file, providing– provisional applications– grace period (disputes resolved by Patent Board)– inventor oath, provides for obligated assignee

• Retain best mode – under §112– eliminate as a reason to invalidate

• Post-grant opposition – limit first-window to 12 months

• Limit damages– curtail willfulness, i.e., treble damages

US Academic Technology Transfer

Birth Invention TTO

Maturation Coincident with federally sponsored research

Codification Bayh-Dole Act Case Law

Johns Hopkins University(1st US research university)

• 1879: Remsen (prof) and Fahlberg (fellow), through toluene research, discovered saccharin

• 1884: Fahlberg (entrepreneur) patented and sold• Remsen (bitter university president) later denounced

Fahlberg (fabulously wealthy businessman)

Issuance of Fahlberg’s patent tiedPure Scientific Research to Profit/Loss

i.e., Technology Transfer

•5,200 Inventions •1,600 Patents•1,500 Licenses•$860,000,000 to fund research•WiCell Research Institute

WARFWisconsin Alumni Research Foundation

Founded 1925, 1st TTO

•Vannevar Bush–Science – The Endless Frontier (1945)

ONR: defense NSF: basic science NIH: health

Eventually 26 granting agencies with 26IP policies. In general, US govt assignment,

licensed non-exclusively; waivers permitted, but process cumbersome. Many patents, few licensed,

fewer products. Tragedy of the commons. Investment requires

control, e.g., exclusive license.

Government-Sponsored Research

•Jerome Weisner & John Kennedy (1963)– Policy statement calls for a uniform

IP policy

•Richard Nixon (1971)– Statement of Government Patent Policy

“A flexible IP policy wrt ownership of IP created through government sponsorship best serves the public interest”

Government-SponsoredResearch

Statement of Government Patent Policy– Lots of $$ expended

– Inventions are a valuable resource

– Inventions should stimulate inventors, meet the needs of the US, be fair to contractor, serve the public interest

– Exclusive rights considered

– International utilization benefits US foreign policy

– Policy should be uniform, but flexible

•Federal Commercialization, e.g., NASA–US-retained title — 1%–Waived title — 20%

•Institutional Patent Agreements (IPA) granted to

the University of Wisconsin & others –NIH (1969)–NSF (1972)

IPAs guaranteed ownership of resulting IP, enabled exclusive licenses, i.e.,Cohen-Boyer cloning patent licensed by UC & Stanford under NIH IPA (1976)

Government-Sponsored Research

A recognition by Congress that:– Imagination and creativity are a national resource– The patent, not copyright, system is the vehicle for

delivery of the resource to the public – Stewardship best managed by contractors,

e.g., universities– Existing federal policy was placing the nation in peril at

a time when IPR and innovation were becoming the preferred currency in foreign affairs

Bayh-Dole Act Patent & Trademarks Law Amendment of 1980

Widespread TTO raison d’êtreExceptions to the rule: WARF (1925), Cohn-Boyer (1974), Stanford & UCSF, Stanford manages 50/50 less 15%; NIH

institutional patent agreement); prior 26 agencies & policies

Bayh-Dole Act Objectives

It is the policy and objective of the Congress to use the patent system to promote the utilizationof inventions arising from federally supported research:

• to encourage maximum participation of small business firms;

• to promote collaboration between commercial concerns and nonprofit organizations, including

universities;

• to ensure that inventions made by nonprofit organizations and small business firms are used in a

manner to promote free competition and enterprise without unduly encumbering future research

and discovery; Walba/Displaytech; PHS stipulates that obligations of up to 5 years do not impede

future research

* to promote the commercialization and public availability of inventions made in the United States by

United States industry and labor;

• to ensure that the Government obtains sufficient rights in federally supported inventions to meet

the needs of the Government and protect the public against nonuse or unreasonable use of

inventions; and Promega/PerkinElmer PCR, doesn’t mean that a company cannot profit from selling

to gov’t, rather gov’t doesn’t have to pay a royalty

• to minimize the costs of administering policies in this area. $Bs generated, $0 appropriation

• Applies to all federally-sponsored research, in whole or in part

• Researchers are obliged to disclose inventions• University must disclose to agency within 2

months; iEdison electronic reporting• Election of ownership within 2 years• File a patent within 1 year• Indicate government support in patent• Provide confirmatory license to US government

Bayh-Dole ActRegulations

• Report periodically regarding utilization• For exclusive licensees, US sales requires US

manufacture (waivers available)• Licensing preference offered to small business• Assignment is not permitted (waivers available);

NREL (GOCO), adversarial licensingJILA/NIST (GOGO), passive licensing

• Revenue must be shared with inventors, net revenue to support research or education; incentive, object to variance for inventors

• Funding agencies may retain title; (release)• March-in rights if no practical utilization within a

reasonable time. never enforced, Johns Hopkins to BD to Baxter (stem cell selection)/CellPro petitioned NIH/David-Goliath (small company)/Rx $$ (people pay twice)

Bayh-Dole ActRegulations (cont)

University Patent Policy• Presumption that University owns IP created by

employees, or by use of its facilities• Assignment effected prior to invention,

e.g., “I do hereby assign…”

• Narrow circumstances create a few exemptions to this presumption, i.e. flexible upon appropriate incentive, approvals and proper conflict of interest disclosure and management, e.g., MS Windows

• Faculty Oversight

• Division of income stipulated to provide incentive for faculty and administrators, which includes discretionary funds for research

19

Joany Chou vs. Univ. of Chicago

•Worked for Professor Bernard Roizman 1983-1996•Invention 1991; HSV and its use as a vaccine•Sued for correction of inventorship•District court dismissed•Federal Circuit Court of Appeals (July 3, 2001) reversedbased on U Chicago IP policy•No ownership, but financial (through IP policy)and reputational interest

University Patent PolicyCase Law

Univ. of W. Va. v. VanVoorhies•Kurt VanVoorhies engineering graduate student•June 3, 1991 Contrawound Toroidal Helical Antenna•Coinvented with advisor Dr. James Smith•Disclosed November 1991. Smith incorporated Integral

Concepts (6/92) and licensed the 1st patent (4/94)•December 29, 1993 Ph.D. awarded VanVoorhies•February 4, 1994 started as Research Assistant Professor

Invented Half-Wave Bifilar Toroidal Helical Antenna in the interimPatent Agent VanVoorhies filed as did U WVaCAFC ruled in 2002 that the 2nd invention is

—properly a CIP, —unlikely that KV invented in January (unbound notes from 1/94)—and by U WVa Patent Policy he must assign the invention to U

WVa

University Patent PolicyCase Law

Technology Transfer is solidly supported by legislation, judicial action, and policy

•Western European Tradition

•US Constitution

•US Law

•University Policy

Summary