UTSA DRA Introduction to Intellectual Property
Cory Hallam With adaptations from S. Chandler, Jackson Walker LLP. 2009 Cory Hallam Cory Hallam, Ph.D. Assistant VP for CommercializationAlliances and Innovation VPR Web Site vpr.utsa.edu Click on left hand sideCommercialization and TechTransfer (c) 2009 Cory Hallam Types of Intellectual Property
Patents the inventor has the right to excludeothers from making the invention, requiresenforcement Trade Secrets/Know How by keeping it secretno one else can copy it Trademarks/Service Marks Logos, words,and/or phrases that identify a unique source of goodsor services Copyrights protection against others copying original works (i.e. music, books, software code) (c) 2009 Cory Hallam Examples Business name: MacDonaldstrade name
Product marks/logos: trademark Software, texts, music.copyright art, creative works Inventions new drug formulation..patent Recipe for Coca-Cola ...trade secret (c) 2009 Cory Hallam What We Need to Know Inventions made by faculty, staff and students as part of sponsoredresearch and/or employment at UTSA belong to the UT SystemBoard of Regents (Series 9000 rules) Sponsored research may involve the creation of IP, use of existingIP, or use of proprietary materials ensuring these issues areaddressed prior to proposal submittal and/or contract execution isimportant to preserve UTSAs rights to invention Making an unprotected invention public via a proposal,presentation, or paper can cause the university to lose its rights tothe invention it is considered public The Bayh-Dole act also requires that universities actively work toprotect and commercialize IP created from federally funded projects (c) 2009 Cory Hallam Patents Definition: A patent is a grant from the U.S. governmentallowing its owner to exclude others from making, using,offering to sell, selling, or importing into the U.S. herinvention There are three types of patents: Utility patents, which protect new and useful inventionsand processes Design patents, which protect new and ornamentaldesigns for articles Plant patents, which protect new and distinct plantvarieties that are asexually reproduced Utility patents are the most common: approx. 90% in 1999 (c) 2009 Cory Hallam What is Patentable? Any new and useful Process Machine
Method of manufacture Composition of matter Improvements on existing things Software Methods of doing business (c) 2009 Cory Hallam Patents What is protectable?
Cant patent laws of nature, mental processes,mathematical algorithms per se or abstract ideas Utility patents are available for the invention or discovery ofany new, useful and non-obvious process, machine orinvention Novelty means that the invention is new even a minordifference conveys novelty. A single prior art patent that claimsthe same invention is enough to defeat novelty. Only useful inventions are patentable. Must have some utilityor achieve some objective. Inoperative inventions do not haveutility. Non-obviousness means that the differences between what isout there and your invention are not trivial to one skilled in the art. Somewhat subjective determination of the PTO examiner. (c) 2009 Cory Hallam Duration of Protection
17 years from issue date (pre-June 8, 1995) 20 years from earliest U.S. filing date (post-June 8, 1995) Outside of U.S. typically 20 years from filingdate ** Maintenance Fees must be paid to keep in force. (c) 2009 Cory Hallam Patents Loss of Rights to File
Bar Dates: For U.S. patent: application will be barred if not filedwithin one year of the first: Public use Public disclosure (e.g., printed publication) Sale/Offer for sale For International patent: application will be barred ifnot filed before any public disclosure/public use of theinvention anywhere. USPTO filing considered filingfor this purpose Best policy: File with the USPTO prior to any disclosure if possible to preserve foreign filing rights (c) 2009 Cory Hallam Patents - Other Considerations
Patents are issued on a country-by-countrybasis A U.S. patent will not stop someone in Japan,etc. from exploiting the patent (you can stopimports of infringing goods, though) No international patent International process for obtaining nationalpatents (Patent Cooperation Treaty, or PCT) (c) 2009 Cory Hallam Provisional Patents Provisional Patent Applications
Inexpensive way to get an invention on file with theUSPTO; Filing fee ($160/$80) + legal fees is typicallyless than $2,500 Must enable; no new matter in the later, regularapplication Must file regular application within 12 months tomaintain priority of filing date (c) 2009 Cory Hallam Patents First to Invent in U.S.
Laboratory Notebooks What are they? Technical diary; Ideas, completed work, and accomplishments; Chronological order; Helps avoid repeated mistakes; and Helps to track successes and failures. Good Laboratory Practice is documentation that maintains an accurate technical diary containing detailed documents of your ideas, completed work and accomplishments.Good technicians record their developments in chronological order so that they can refer back to their diary days, weeks or months later.This enables them to avoid running up the same blind alley twice.Second, good recordswill shed light on subsequent developments, will allow the inventor to find needed data and details of past developments and will provide a base for new paths of exploration and ramifications, especially if failures have occurred. (c) 2009 Cory Hallam What should be entered into notebook?
Title (what is the invention called) Purpose (what the invention does) Description (functional and/or structural) Sketch (informal sketch) Ramifications Novel features Closest know prior art Advantages Laboratory notebook paper paper towels. (c) 2009 Cory Hallam or Little Commercial Value
A Patent May Have Huge or Little Commercial Value (c) 2009 Cory Hallam PATENTABILITY VS. INFRINGEMENT
1.Everythingnew is patentable (almost) -if you add enough elements to the claim. 2.But the more elements needed to get apatent, the less its value (maybe zero) -because fewer accused devices andmethods infringe. (c) 2009 Cory Hallam Patent Process at UTSA Beginning with Research
Invention Disclosure (STTM) Formal written description to technologylicensing office Non-Disclosure Agreement Agreement for others to see/hear aboutinvention without making it public Material Transfer Agreement Between organizations Patent Assignment to UTSA Regents Rules Series (www.utsystem.edu/BOR/rules.htm) License Right to use/produce/sell invention Royalty Sharing Moneys paid for license split amongstrecipients (university and inventors) (c) 2009 Cory Hallam Step 1 - RESEARCH 1.Research: Observations andexperiments in UTSA laboratoriesor other research facilities oftenlead to discoveries andinventions. An invention is anyuseful process, machine,composition of matter, or any newor useful improvement of thesame. Often, multiple researchersmay have contributed to theinvention. Keeping good labnotebooks is an important part ofthe invention process: MaintainingLaboratory Books. (c) 2009 Cory Hallam Step 2 Pre-Disclosure 2.Pre-Disclosure: Anyearly contact with our techtransfer personnel to discussyour invention and to provideguidance with respect to thedisclosure, evaluation, andprotection processesdescribed below. SouthTexas TechnologyManagement (STTM) is ourtechnology transfer office,jointly with the UTHSCSA. (c) 2009 Cory Hallam Step 3 Invention Disclosure
3.Invention Disclosure: The writtennotice of invention or discoveries thatbegins the formal technology transferprocess. An invention disclosure remainsa confidential document and should fullydocument your invention so that theoptions for commercialization can beevaluated and pursued. The disclosurehelps establish the timing of yourinvention or discovery and assists thelicensing specialist with evaluating thecommercial potential of the technology.While the university owns the inventionor discovery if a patent is pursued, it isthe inventor(s') name(s) that will appearon the patent. Disclosure forms availableat (c) 2009 Cory Hallam Step 4 - Assessment 4.Assessment: The period inwhich you and your licensingspecialist review the inventiondisclosure, conduct patent searches(if applicable), and analyze themarket and competitive technologiesto determine the invention'scommercialization potential. Thisevaluation process, which may leadto a broadening or refinement of theinvention, will guide the licensingstrategy. The four key points forassessment include technology readiness patentability commercial potential, and licensing potential. (c) 2009 Cory Hallam Step 5 - Protection 5.Protection: The process inwhich protection for an invention ispursued. Patent protection, acommon legal protection method,begins with the filing of a patentapplication with the U.S. PatentOffice and, when appropriate, foreignpatent offices. Once a patentapplication has been filed, it typicallywill require several years and tens ofthousands of dollars to obtain issuedU.S. and foreign patents. Otherprotection methods include copyright,trademark, trade secrets, andcontractual use restrictions (e.g., fordatabases and materials). (c) 2009 Cory Hallam Step 6 Find Licensee 6.Find Licensee: STTMstaff will identify candidatecompanies that have theexpertise, resources, andbusiness networks to bringthe technology to market.Your active involvement candramatically shorten thisprocess, as two thirds of alllicenses are derived frominventor contacts. (c) 2009 Cory Hallam Step 7a Start-Up 7a.Start-up Company: If creation of anew business start-up is being pursued,the UTSA AVP for CommercializationAlliances and Innovation ( )will work to license to the start-up. In theevent of faculty/staff involvement in thecompany, the appropriate Conflict ofInterest forms (COI) will need to besubmitted and a conflict management planwill be created. The COI office will help firsttime faculty/staff on their COI forms. Theprocedure is fully defined with the forms at and the COI committee can be contactedvia Martha Reyes Trevino at (210) (c) 2009 Cory Hallam Step 7b Existing Business
7b.Existing Business: If anexisting company is the licensee,STTM will develop the licenseagreement. In the event ofongoing industry partnerships, theUTSA AVP for CommercializationAlliances and Innovation will beinvolved to ensure the long-termgrowth and success of theserelationships. In the event thatfaculty/staff have roles or financialinterest in the company involvedin the license, then Conflict ofInterest (COI) forms will also needto be filed. (c) 2009 Cory Hallam Step 8 - Licensing 8.Licensing: A licenseagreement is a contractbetween the University and athird party in which theUniversity's rights to atechnology are licensed,without relinquishingownership, for financial andother benefits. An optionagreement is sometimes usedto enable a third party toevaluate the technology for alimited time prior to making adecision about licensing. (c) 2009 Cory Hallam Step 9 - Commercialization
9.Commercialization: Thelicensee continues theadvancement of the technologyand makes other businessinvestments to develop theproduct or service. This stepmay entail further development,regulatory approvals, sales andmarketing support, training,and other activities, eventuallyresulting in sales of a productor service to the public. (c) 2009 Cory Hallam Step 10 - Revenue 10.Revenue: Royalties and/orlicense fees are paid to theUniversity by the Company thatobtains a license to market orcommercialize the invention or thediscovery. To encourage furtherparticipation in the technologytransfer process, 50% of the royaltyrevenues received by the Universityafter patents expenses arereimbursed, are distributed to theinventor(s) as taxable income. Allpatent costs must be recovered bythe university before royaltydistributions are made to theinventors. (c) 2009 Cory Hallam Royalty Sharing at UTSA
Faculty 50% additional taxable income Other Discretionary accounts for reinvestment in UTSA (c) 2009 Cory Hallam Bayh-Dole The U.S. Bayh-Dole Act of 1980 allows universities and other non- profit institutions to have ownership rights to discoveries resultingfrom federally funded research, provided certain obligations aremet. These obligations include making efforts to protect (whenappropriate) and commercialize the discoveries, submittingprogress reports to the funding agency, giving preference to smallbusinesses that demonstrate sufficient capability, and sharing anyresulting revenues with the inventors. The Bayh-Dole Act is creditedwith stimulating interest in tech transfer activities and generatingincreased research, commercialization, educational opportunities,and economic development in the United State (c) 2009 Cory Hallam Office of Contracts and Industrial Agreements (OCIA)
Affiliation Agreements; Confidential Disclosure Agreements;Cooperative Research and Development Agreements (CRADAs);Consortium Agreements; Limited Use Agreements; MaterialTransfer Agreements; Memorandum of Agreement; Memorandum ofUnderstanding; Non-Disclosure Agreements; Product SupplierAgreements; Proprietary Information Exchange Agreements;Research Breeding Agreements; Security Assessment Agreements;Service Agreements (tied to sponsored program accounts--"26"accounts); Sponsored Research Agreements; Teaming Agreements;Testing Agreements; Subcontracts. (c) 2009 Cory Hallam MOU A memorandum of understanding (MOU) is a writtenagreement between parties. In the case of UTSA it maydefine the terms of a working relationship between theuniversity, a lab, and or an inventor and an externalparty, such as a company or research lab. MOUs are not typically used as contractual agreements,but rather as guidelines for working relationships. Thecontractual agreement might take the form of asponsored research agreement (SRA) (c) 2009 Cory Hallam NDA A non-disclosure agreement (NDA) is used to enableUTSA researchers and external parties discussconfidential and/or proprietary information. The NDA allows the parties to engage in discussionsconcerning new discoveries and new IP. The NDA acts as an umbrella agreement that ensuresthe information discussed is not considered public andacts to protect the inventors from losing rights to theinvention. (c) 2009 Cory Hallam MTA A material transfer agreement (MTA) is usedwhen material used in a sponsored researchagreement (SRA) is being transferred from aparty to or from the university The MTA defines the terms of ownership anduse of the material and what rights re affordedthe parties providing and using the material MTAs may have long lasting terms that gobeyond the time of the SRA (c) 2009 Cory Hallam I think I have an Invention, What should I do?
Call STTM at when you believe you have created or discoveredsomething unique with potential commercial or research value. Complete and submit the Disclosure Form (seebeforepublicly disclosing your technology or submitting a manuscript for review andpublication. Include companies and contacts you believe might be interested in yourinvention or who may have already contacted you about your invention. To avoid risking your patent rights and possibly hindering the opportunity to marketyour invention, contact the Office of Contracts and Industrial Agreements (OCIA) toensure you have the appropriate non-disclosure agreements in place. Some aspects of the patent and licensing process may require significantparticipation on your part. You will be required to participate with the lawyers andlicensing staff in drafting the patent material and responding to information requestsas part of the patenting and licensing process. Keep licensing staff informed of upcoming publications or interactions withcompanies related to your intellectual property to ensure you are protected! (c) 2009 Cory Hallam How long does the process take?
From disclosure to having STTM render a patent filingdecision should take 1 month. Once the patent has been filed, the patent process however,might take years, as the United States Patent and TrademarkOffice (PTO) currently has a 3-5 year backlog of patents toreview. The commercialization process may take months to yearsdepending on the level of development of the invention andthe approval timeline for the invention. For example, newdrugs take years to develop and achieve FDA approvalbefore sale, compared to software that may be developedand sold in a matter of months with no regulatory approval. (c) 2009 Cory Hallam Trade Secrets Definition: Trade secrets consist of anyvaluable information not generally known toothers that gives its owner a economic orcompetitive advantage and for whichreasonable steps are taken to maintain itssecrecy (c) 2009 Cory Hallam Patents vs. Trade Secrets
Pros: Patents protect against independent development andreverse engineering Trade secret lost if not maintained secret Cons: Patents have a more limited life (20 yrs vs. indefinite);Thereafter, anyone can use The recipe for Coca-Cola has been a trade secret for over100 years and counting Patents are more expensive to obtain and maintain;Trade secrets cost nothing other than expense ofkeeping secret (c) 2009 Cory Hallam YOUR TRADE SECRETS ARE ONLY PROTECTABLE IF THE JURY FINDS THAT:
The items were relatively secret; and The defendant knew the items were secret. (c) 2009 Cory Hallam Trademarks Definition: a trademark is a word, name, symbol, device or combination thereof that identifies and distinguishes ones goods and services from those of another Technically, a trademark is used to identify a good or product and aservicemark is used to identify a service (c) 2009 Cory Hallam PROTECTABILITY OF TRADEMARKS
Generic Unprotectable (soda for a beverage or TV for a television) Descriptive - May be protectable (Jury question: Does it primarily describe or identify?)(such as Tax Preparation Software for a software program thatenables users to prepare tax returns) Suggestive Protectable(such as Greyhound for bus services and Jaguar forautomobiles, with both marks suggesting the speed of theirproducts; 7-ELEVEN for convenience stores) Arbitrary or Fanciful - Very protectable(such as Kodak, Starbucks, Verizon, Exxon) (c) 2009 Cory Hallam Trademarks How trademarks arise:
Trademarks arise through use of a mark Simple use of a mark grants rights in the mark againstlater users in the location of use and a reasonable area ofexpansion Can prevent use of mark on similar products or for similarservices Federal registration, although not required, protects themark nationwide against later confusingly similar uses Common law also applies Can be lost if mark becomes generic: e.g., Kleenex, Xerox (c) 2009 Cory Hallam Copyrights Definition: Copyright is a form of protection to awide variety of works, including literary, musical,dramatic, graphic, sculptural and architecturalworks, motion pictures and sound recordings Not just critically acclaimed works Extends to advertising brochures and copy and computer programs (c) 2009 Cory Hallam Copyrights How copyrights arise:
Copyright protection exists from the moment a work iscreated No registration is required Copyright lasts for the authors life plus 70 years (or inthe case of works created by employees for theiremployers, for 95 years from publication of the work or120 years from creation, whichever is shorter) (c) 2009 Cory Hallam Copyrights What is protectable:
Copyright protects works of original authorship Includes books, magazines, promotional materials,music, posters, movies, slide presentations, danceroutines and website content Does not extend to ideas, procedures, processes,systems, concepts or mere slogans, titles or blankforms (c) 2009 Cory Hallam FY 2006 U.S. Licensing Activity
$45 billion in R&D expenditures were received by U.S. academic centers 697 new products introduced into the market in 2006 4,350 introduced from FY98 through FY06 553 new startup companies launched in 2006 12,672 licenses and options were managed, yielding active income (each single license represents a one-on-one relationship between a company and a university, hospital or research institution that earns income on products that benefit our communities) 5,724 new spinouts from FY80 through FY06 (c) 2009 Cory Hallam License Income New York University $80,908,972
(Average FY Source:Association of University Technology Managers ) New York University$80,908,972 Baylor College of Medicine$ 6,758,000 University of Texas - Austin $ 5,057,647 UTHSCSA $ 2,211,194 UTHSC-Houston $ 1,998,947 University of Houston $ 534,053 University of Tx Med Branch $ 222,994 Texas Tech $ 157,365 Rice University $ 122,000 (c) 2009 Cory Hallam Inventor is Key to Commercialization
Inventor knows field Inventor knows potential licensees Inventor can continue to invent to fill product pipeline for new ventures Get to know the OTV Get to know the University policies this can be very lucrative for a professor (c) 2009 Cory Hallam What You Should Remember
Creating and commercializing new Intellectual property is a goal forthe university and is mandated by federal law (Bayh-Dole) forfederally funded research. The Code of Federal Regulationsprovides information on patent rights and responsibilities currentlyapplicable to universities under the federally sponsored projects. Protecting intellectual property requires filing an inventiondisclosure and working with an STTM licensing associate PRIOR tomaking the invention public knowledge (i.e. publication). Sponsored research might require and MOU, NDA, MTA, or othercontractual agreement that defines the IP and conditions for use.Make sure these have been done with the OCIA prior to contractsigning. Protecting IP may take the form of trademarks, copyright, tradesecrets, and patents. UTSA is committed to world-class research leading to newinnovation, invention, and commercialization. (c) 2009 Cory Hallam Field of Use vs. Territory
Use Limitation Allows multiple licensees to exploit different uses of the same technology Should Smallco limit the Field of Use?Should Bigco demand unlimitedrights (limited only to the scope of the Patents and Know How)? Geographical Limitation on the rightsto exploit Patent Rights and KnowHow (c) 2009 Cory Hallam Payment Terms Advance Fees/Upfront Fees Milestones Royalties
(c) 2009 Cory Hallam TRADEMARKSFederal registrations COPYRIGHTSCopyright registrations
PATENTSKnow how to createvalue rely on the experts TRADE SECRETSCreate good facts LICENSES Clarify expectations (c) 2009 Cory Hallam v1 (c) 2009 Cory Hallam Questions? Dr. Cory R. A. Hallam 210-458-6985 cory.hallam@utsa.edu
Web Sites of Interest VPR: click on commercialization and tech transfer STTM Licensing Associates: UT System IP Rules (Series 9000 IP): US Patent and Trademark Office: (c) 2009 Cory Hallam