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Intellectual Property and Initiatives to Commercialize Technology
David Barbe
Professor ECE
Executive Director, MTECH
Outline
Background
IP: Importance and Protection
Encouraging IP Development and Disclosure
Technology Entrepreneurship Education and Culture Building
Background
Bayh-Dole Act of 1980
Universities retain rights to inventions made from government-funded research
Universities are encouraged to collaborate with commercial entities to promote the use of university research
Universities must share licensing income with faculty inventors and use royalty income to further research activities
UMD Patent Policy
The University has an ownership interest in all inventions of University personnel which are conceived of or first actually reduced to practice as a part of or as a result of: A University-administered program of research
activities within the scope of the inventor’s employment by the University or
Activities involving the use of University time, facilities, or materials. This includes all funded research projects whether from public or private resources
Disclosure Policy Any invention or discovery which is or
may be patentable or which may be commercially licensable Patentable technology Copyrightable software or other works Tangible research property (biological materials,
etc.) Accepted from all paid and unpaid full
time and part-time faculty members and staff, all paid employees (including those on approved leave), students and fellows
IP: Importance and Protection
IP is the Lifeblood of Tech Companies Competitive differentiation
Important to customers Confidence
The ones who developed the technology vs. licensed it
Important to investors Proprietary technology - Barrier to entry Control of core technology Drives profit margins Asset on the balance sheet Patent portfolios = a strong company asset
Four Basic Types of IP Patents
monopoly on functionality Trade Secrets
protect secret processes (Coke Cola Formula) Trademarks
Word, name, symbol or device Xerox, Kleenex, Coke, Pentium jingle
Copyright Protects original works of authorship which have
been fixed in a tangible medium of expression protect unauthorized copying of software – not
function
Patents
The fundamental basis of patent protection is disclosure in exchange for a limited monopoly
The right to exclude others from making, using, selling or offering to sell
U.S. Patent Requirements
Patentable subject matter
Novel
Unobvious
Patentable Subject Matter
New and useful process, machine, manufacture, or composition of matter
Any new and useful improvement
Novelty Not novel if:
Known or used by others, or described ina publication before date of invention (prior art)
“Public use” or “on sale” more than 1 year before U.S. filing date !!! Publication of idea on Internet, in trade journals Disclosure to third party for purposes of
commercialization Offering system for sale in this country Publicly displaying the system such as at a
trade show or convention
Non-obviousness
Non-obvious to a person of “ordinary skill in the art”
At the time of invention
Other Considerations
Disclosure requirements Written description sufficient to
allow one to make and use
Best mode The best version (preferred
embodiment) must be divulged
Parts of a Patent
Specification describes invention in detail
Drawings show the invention graphically &
correspond with specification Claims
set out scope of the invention
Reading a Patent
Specification & drawings are used to interpret the meaning of the claims Specification may contain more than
claimed, but not less Compare the claims with a
potentially infringing device, composition, method, etc. All elements of a claim must be
present in an infringing device
16. In a charge coupled circuit, the combination comprising: Example Claim
a substrate formed of a semiconductor material of one conductivity type;
first and second spaced regions at a surface of saidsubstrate, both formed of a semiconductor materialof another conductivity type, said second region comprising an electrically floating region;
means for maintaining said first region at a given potential;
control electrode means spaced from said substrate andpositioned between said first and second regions;
means for storing a charge of minority carriers with respect to the substrate conductivity type adjacent to said second region;
means for transferring at least a portion of said stored charge to said second region;
an output line connected to said second region on which an output signal related to said minority charge carriers transferred to said second region may be sensed; and
means for applying a signal to said control electrodemeans for selectively resetting said floatingsecond region to a reference potential.
Provisional Patents
First allowed in the USA in 1995 Convenient to achieve “patent pending”
status for two-year grace period Inexpensive < $200 Must clearly and exactly cover all of the
claims in the final patent application Can give a false sense of security
The Patent ApplicationProcess Application is filed in US Patent
& Trademark Office In due course, an Examiner
picks up the application for examination- reviews application content; and- searches the prior art, e.g., old patents
A negotiation process is initiated Application is allowed or abandoned
Invention Activity
Keep accurate log books and other materials to demonstrate dates of conception and reduction to practice
Importance of “diligence”
Confidentiality Agreements
Must be signed by all outside parties
Should clearly identify subject matter – specific better than general
Helps avoid disclosure problems
Independent Contractors
Use engagement letters Use confidentiality agreements Use assignment agreements -
ensure that any inventions discovered by an independent contractor working for you becomes your property
Patent Validity
An issued patent is not necessarily valid Prior art Improper documentation of invention Scope may be limited by prosecution history
Diligence, thoroughness, good counsel are of extreme importance Cost and effort in obtaining a patent may be lost Protection lost
Monitoring the Competition
Monitoring patents and applications as they are published
Use the US Patent & Trademark Office “Patent Database”- term search with www.uspto.gov
Use a commercial database- identify top patent holders
Encouraging IP Development and
Disclosure
Encouraging Invention
What’s in it for me? Incentives
Culture that supports Invention - MTECH Education Resources Hands-on assistance
Get the word out about successes
Obtaining Invention Disclosures
Use a disclosure template How is the invention different/better over
existing technology? What problem does it solve? What benefits? How does it solve the problem? Who are the inventors? Public disclosure, sale or experimental
prototypes? Anticipated?
To file or not to file
Usually a committee of respected and objective individuals make recommendations
Based on technical soundness and market analysis
Costs for U.S. patent $10-20K
Incentives
Universities – IP belongs to university Inventors share strongly in proceeds Recognition
Companies – Employee inventions are assigned to the company Recognition $ for disclosures $$ for patents filed
UMD Royalty Distribution
Net Income
Admin Fees
Expenses
1st $5000 to developer
Copyrighted Works Patentable Technology
75% to developer *25% to department *50% to department 50% to developer
Paths for Return on IP for the Organization that owns the IP Licensing
Find existing companies to take the IP to market Royalties Low risk/Generally Low payoff Office of Technology Commercialization at UMD
Startups Form a new company to develop the technology and take the
product to market Equity Higher risk/Higher potential payoff MTECH at UMD
Technology Entrepreneurship Education and Culture Building
MTECH Major Emphases
• Technology Entrepreneurship
• Technology Transfer - MIPS
• Technology company incubation - TAP
Technology Entrepreneurship
• Hinman CEOs Program
• Technology Ventures Club
• Entrepreneurship graduate course
• Technology Startup Boot Camp
• Business Plan Competition
• VentureAccelerator
Hinman CEOs Program 100 undergrads, one-half
majoring in technical disciplines
Community Technology Seminars and Workshops Product Development
Projects; Internships Business School
Entrepreneurship Courses Start companies (more than
30 now being formed)
Stanford Award
The University of Maryland’s Hinman CEOs Program was recognized as a national leader in entrepreneurship at Stanford University on Thursday, October 25, when the program received the Price Foundation Innovative Educators Award during the prestigious Roundtable on Entrepreneurship Education for Engineers (REEE).
Tech Ventures Club Dynamic forum for technical graduate
students to network and explore
commercializing an idea and forming a
venture
75 active members
Monthly meetings include start-up
workshops, speakers, and social mixers
Members have opportunity to network
with local VCs, service providers,
business students and entrepreneurs
Course: Fundamentals of Technology Startup Ventures 30 technical graduate students
Boardroom setting
Study basic processes of tech company
formation and operation
Form into teams
Teams develop business plans during
semester
Teams present plans to “judges”
Course co-taught by engineering professor
and venture capitalist
Tech Startup Boot Camp Kicks off the academic year 200+ students and faculty Regional sponsors Basic startup processes
Evaluating tech ideas IP basics and licensing Legal fundamentals Building a team Obtaining financing Entrepreneur experiences
Presented by experienced VCs, service providers, and tech executives
Networking
Business Plan Competition Culmination of academic year
$50,000 in prizes raised from sponsors
60+ entries
Select top 16 based on executive summaries
Judging panel selects top six for full plans
and presentations
Usually three awards
Networking and mentoring sessions between
six finalists and judges/sponsors during the
Spring semester
VentureAccelerator Substantial Hands-on consultation
and advice to selected entrepreneurs and young firms: Introductions to funding sources Preparation of presentations and
business-plans Strategic planning Executive recruitment
Play same roles as active Advisory Board members
Former VC Partner manages Accelerator
MTCH Entrepreneurship Programs
4/20/98 41
Technology Transfer - MIPS
423 different projects with
280 different companies
UMD = R&D Lab for Companies
Technology Company Incubation Program - TAP
45 companies graduated; 70 percent still in business after 5 years
created more than 800 jobs
$376 million in investment funds
Early stage company incubator offering technical & business assistance, as well as state-of-the-art biotech equipment and modern office facilities.
