Transcript Document

Technology Transfer and
Licensing with a University
Partner
September 14, 2006
John P. Warren, Jr.
Associate Vice Chancellor for Intellectual Property Management
Associate General Counsel for Research and Intellectual
Property Management
University of Houston System
University Technology Transfer
AUTM 2002 Survey (www.autm.net):
• $37 billion sponsored research
expenditures
•15,573 Invention Disclosures
•7741 New US Patent Applications
•450 start-up companies
•4673 new licenses/options
•$1.2 billion adjusted gross license income
University Technology Transfer
• Disclosure
• Marketing Analysis
• Patent or other form of protection
• License or start-up
• Income/equity partition
University
Technology Transfer Offices
•Interact with faculty/staff to assist in
developing ideas into inventions
•Obtain complete invention disclosures
•Work closely with inventors throughout
entire process
•Interact with business community to ensure
inventions are available for development
University
Legal Offices
•Assist technology transfer offices with
license and patent issues
•Help faculty understand the law of
inventions
•Work with outside counsel in protecting IP
•Approve technology transfer contracts
Types of Licenses (Grant)
A. Non-exclusive worldwide or geographically limited
•
Royalty-free for non-commercial use
•
Royalty-bearing for commercial use
•
No sub-licenses
B. Exclusive worldwide or geographically limited
With right to sublicense
Terms of Licenses
A. Running with patents or copyrights
B. Unlimited based on know-how/trade secrets
C. Limited term
Definitions
A. Invention rights
•
Discoveries, know-how, information, inventions/copyrights
•
Patent or application number and date
B. Products and processes
C. Territory
D. Net Sales=Billed of invoice less
•
Customary trade, quantity or cash discounts, agents commission
•
Repaid for rejection or return
•
Taxes or other governmental charges
E. Field of use
F. Affiliates
Royalties
A. Initial lump sum
B. Minimum annual payments
C. Milestone payments
•
Research goals
•
Clinical trials
•
FDA or other governmental
approvals
•
Single payment
•
Maximum payment
•
Running royalties
Warranty/Indemnification
• Universities are not risk-takers
• Limited or no warranty by
University
• Insurance – important if risk
to University
Termination and Assignment
A. Payments
B. Performance
C. Insolvency
D. Licensee/Sub-licensee rights
E. Assignment to Sub-license
F. Assignment to Third Parties
Bayh-Dole Act
Before the Bayh-Dole Act:
•the federal government retained
ownership of patents;
•non-exclusive licenses were available
to any interested party;
•companies were not eager to invest in
these technologies;
•taxpayers received little benefit.
Bayh-Dole Act
Objectives:
•Promote the use of inventions;
•Encourage small businesses;
•Promote collaborations;
•Promote commercialization by U.S. industry;
•Ensure that the federal government has the
right to protect against non-use.
Bayh-Dole Act
The Bayh-Dole Act:
•created a uniform patent policy;
•provided recipients of federal funding with the
right to retain ownership of inventions;
•charged universities with the responsibility of
ensuring commercial use;
•made each federal agency responsible for
monitoring inventions created with its funding.
Bayh-Dole Act
The federal government retains:
• a non-exclusive, non-transferable, irrevocable, paidup right to practice (or have practiced) the invention;
• the right to retain title to the invention if the
decision is made in writing before entering into the
funding agreement with the university;
• the right to require the university to grant a license
to a third party if the invention is not commercialized
in a reasonable time, for health and safety issues, or if
other legal requirements are not met.
Bayh-Dole Act
Universities must:
•have agreements with employees to disclose and
assign inventions to the university;
•share licensing proceeds with the inventors and
use remaining revenue to support scientific
research and education;
•make certain disclosures and reports to the federal
government;
•claim title to the invention;
•file patent applications within certain time frames.
Bayh-Dole Act
Licensee requirements:
•Universities must give preference to small business
firms (less than 500 employees) when feasible
unless the research that led to the invention was
supported by a large company.
•Any exclusive license to a product that is to be sold
in the U.S. must be substantially manufactured in
the U.S. unless a waiver is granted.
•Universities cannot assign patents to third parties.
University License
Diligent Commercialization
Diligent commercialization is required to:
•comply with the Bayh-Dole Act;
•benefit taxpayers;
•ensure a royalty stream to the university;
•measure the ability of the licensee;
•provide universities with the ability to
terminate a license for non-performance.
University License
Diligent Commercialization
License terms for diligent commercialization
include:
•a standard diligence clause;
•specific timelines related to certain milestones;
•other diligence language proposed by licensees.
University License
Diligent Commercialization
Terms vary based on several factors:
•the type of technology (device,
diagnostic, therapeutic, etc.);
•the stage of the technology at licensing;
•inventor input;
•history of licensee performance.
University License
Reservation of Rights
Rights reserved by the University:
•the right to publish the general
scientific findings related to the
licensed subject matter;
•the right to use the licensed subject
matter in research, teaching, patient
care and other educational purposes.
University License
Reservation of Rights
Universities reserve certain rights for the
federal government as required under the
Bayh-Dole Act, including:
•a non-exclusive, non-transferable,
irrevocable, paid-up right for the federal
government to practice (or have
practiced) the invention;
•“march-in” rights.
Publication
•
Absolute Right to Publish
• No “control” or “approval” of contents
• Principal Investigator owns the copyright
(Faculty Exception to Work-for-hire)
Publication Timing
• Review periods
Must be reasonable
• 30 - 60 days typical with 60 – 90
additional days for patent filing
•