An Introduction to Technology Transfer

Technology transfer the process of providing private sector access to technological advances developed by scientists and researchers. Rapid growth in biomedical research and funds allocated for such research has transformed the process of commercializing scientific results. The Bayh-Dole Act of 1980 allowed for universities to establish Technology Transfer Offices (TTO) to aid inventors in licensing, marketing, filing, and negotiating the potential use of their inventions and discoveries. The process of technology transfer allows universities, rather than industry, to license academic research patents to companies for further development. The Act allows for the university to own and control any intellectual property developed by its researchers, regardless of whether the invention is federally funded or not. The inventor is given a percentage of the licensing income gained by the university, which can include a number of revenue sources. Inventors should meet regularly with the TTO to discuss maximizing the commercial potential of their Intellectual Property (IP).

How the Technology Transfer Office is useful in the development and commercialization of research:

• Practical Application: Even inventions that provide groundbreaking research for industries must be able to implement and apply the discovery on a large scale to benefit a significant number of people. The Office of Technology Transfer provides a means to gain wide public recognition for research and related discoveries.
• Financial Returns: Researchers receive a share of monetary compensation through license agreements and revenue distributions for the transfer of their academic technology to industry. These returns may also help provide the financial means to conduct additional research in laboratory settings by providing additional funding.
• Economic Benefits: Licensing of inventions often result in U.S. patents and helps create revenues in the local, regional, and national economic spheres through the production and application of the new product or concept.

The Process of Technology Transfer

First and foremost, there must be established intellectual property (IP). IP includes, but is not limited to, works in the form of scientific discoveries and inventions, designs, patents, trademarks, books, monographs, papers, paintings, drawings and sculpture, performances, computer software, and lecture and conference presentations. In most texts, individual items of intellectual property are referred to as works or properties. The IP has two steps involved in valid establishment: 1.) conception, and 2.) reduction to practice. Reduction to practice is sub-classified as either: Constructive Reduction to Practice or Actual Reduction to Practice.

• Constructive Reduction to Practice is simply the filing of a patent despite the lack of a working physical model of the IP. The information contained in the patent application should be sufficient for an individual of ordinary skill in the field to make use of the IP without unnecessary research.
• Actual Reduction to Practice requires a working model demonstrating the effectiveness of the IP as it is intended for use.

Disclosures of IP Before Protection

The actual licensing of IP can sometimes be a long and arduous process for the inventor. However, it is critical that no disclosure of the IP is made prior to the completion of the patent and licensing agreement. Public disclosure includes oral presentations at scientific meetings, external seminars, publication as a thesis or dissertation, as well as a publication in a scientific journal. In the United States, there is a 12 month grace period after public disclosure during which a domestic patent may be filed. However if there is any disclosure, the ability to patent your invention outside the United States is lost.
The typical steps to the completion of the licensing agreement include:

1. Discussion of the IP to the university or institutional TTO. This allows the TTO to assess the development of the IP, make suggestions for further research, and begin the process of evaluating the IP.
2. Disclosure of the IP to the TTO using the institution’s disclosure forms found on PINE. These documents are: Confidential Disclosure Agreements, MTA- Background Questionnaire, MTA- Material Transfer Agreement (http://pine.pbrc.edu/ipt/ipttrf/default.asp)
3. Evaluation of the patentability and marketability of the IP by the TTO.
4. Filing and Commercialization of the IP if the TTO deems the IP to be marketable. In some cases, if the TTO has no further suggestions for development for and IP or is unavailable to market the IP, the university of institution may “waive title” of the IP to the inventor. Waive title allows the inventor full ownership rights to the IP. However the university may impose certain criteria on the inventor for waive title, such as reimbursement or a payment of cost incurred for income gained from the IP.
5. Marketing of the IP by the TTO to investors
6. Licensing of the IP. Licensing is negotiated by the TTO to investors and companies.

It is important to remember that only a small percentage of IP’s reported to the TTO are licensed. The licensing process is very long often requiring revisions and further research on the IP. However, in the end the process is mutually beneficial to both the university and the inventors.

Legal Terms and Agreements

Patents:
A patent is a set of exclusive rights granted by a state to a patentee (the inventor or assignee) for a fixed period of time in exchange for the regulated, public disclosure of certain details of a device, method, process or composition of matter (substance) (known as an invention) which is new, inventive, and useful or industrially applicable.

• The exclusive right granted to a patentee in most countries is the right to prevent or exclude others from making, using, selling, offering to sell or importing the claimed invention. The rights given to the patentee do not include the right to make, use, or sell the invention themselves. The patentee may have to comply with other laws and regulations to make use of the claimed invention.
• Once a patent application has been filed, a patent office examines that application for compliance with the requirements of the relevant patent law. If the application does not comply with all of the requirements, the objections are communicated to the Applicant (or his representative), who can then respond to those objections to attempt to overcome them to obtain the grant of a patent.

For a complete list of all rules and regulations pertaining to obtaining and maintaining a U.S. patent, visit http://www.uspto.gov/main/patents.htm.

What Does a Patent Do?
A patent gives the owner the right to exclude others from creating, using, and/or selling the patented material for a given period of time. Patents give owners these protections within the country where the patent was granted. Applicants may file for a patent up to one year after public disclosure in the United States. However, rights outside the United States are lost if disclosure occurs before a patent application is filed. Please be sure to consult the TTO regarding any questions on public disclosure and what it constitutes, before such an act is carried out.

Patentable material includes: 1.) tangible property, 2.) Know-how or specific techniques, special knowledge, and/or experimental systems, 3.) Copyrighted works such as formulas, software, and source codes.

The Patent Application
After the TTO has assessed the IP and determined its potential for commercial success, the patent application is prepared. Universities most often hire patent law firms or patent specialist to procure patent applications. These specialists often require further information from the inventor and the TTO to complete the patent application. Inventors should be prepared to meet often with both the patent specialist and the TTO over the course of the weeks prior to submission of the application. The inventor will also be asked to look over a final draft of the application before it is submitted. It is important the inventors list correctly all other inventors who contributed to the IP (the patent may be invalid if this is not done properly). Furthermore, it is important to remember the names of the inventors may differ from the names of the authors on the paper describing the invention. Inventors and researchers should maintain concise notes during the development of the IP to avoid confusions in patent application stage.

From the time the patent application is filed, the USPTO normally takes between 12 and 18 months to complete the examination and issue “Office Action.” The first Office Action is generally a rejection, so one should not be discouraged. The applicant is then required to narrow patent claims and/or clarify specifics of the invention as dictated by the USPTO. Subsequent Office Actions most often result in issuance of a patent, if all criteria are met. The process takes an average of three years.

Researchers and inventors have the option of a provisional patent, which does not require USPTO oversight. However, this patent expires automatically after one year. During this year the university or institution may file for a regular patent.
The benefits of the provisional patent are:

1. Temporary filing protection is far less expensive.
2. If filed before public disclosure, the inventor preserves the right to file for foreign patent protection.
3. The one year provisional patent does not count toward the 20 year, regular, patent term.

The provisional application buys the university time to further develop technologies in early stage development. This allows further additions to be made on the final technology, which will all be protected by the full 20 year term patent. Despite the fact the provisional patent is only good for one year, it should not be overlooked or done hastily. An attorney or patent specialist should still oversee the filing of the provisional patent.
For a complete list of all rules and regulations pertaining to obtaining and maintaining a U.S. patent, visit http://www.uspto.gov/main/patents.htm.

Copyrights

A copyright is a legal grant by the government that covers original works of authorship and must be fixed in a tangible medium of expression (e.g., printed book, sound recording, videotape, or script). Any author can have copyright protection even without registration because copyrights exist from the moment of material creation. Literary works, photographs, software, distance learning material, music, and lyrics are protected by copyrights.

• A copyright, or aspects of it, may be assigned or transferred from one party to another. The creator (and original copyright holder) benefits, or expects to, from production and marketing capabilities far beyond those of the author. A copyright holder need not transfer all rights completely. Under the U.S. Copyright Act, a transfer of ownership in copyright must be memorialized in a writing signed by the transferor. For that purpose, ownership in copyright includes exclusive licenses of rights. Thus exclusive licenses, to be effective, must be granted in a written instrument signed by the grantor. No special form of transfer or grant is required. A simple document that identifies the work involved and the rights being granted is sufficient. Non-exclusive grants (often called non-exclusive licenses) need not be in writing under U.S. law. They can be oral or even implied by the behavior of the parties. Transfers of copyright ownership, including exclusive licenses, may and should be recorded in the U.S. Copyright Office. (Information on how to do that is available on the Office's web site.) While recording is not required to make the grant effective, it offers important benefits, much like those obtained by recording a deed in a real estate transaction. Copyright may also be licensed. Some jurisdictions may provide that certain classes of copyrighted works be made available under a prescribed statutory license.

Licensing Agreements

A license is a legal contract that allows a company to produce, use, and/or sell a university’s invention. The company agrees to pay the university a specific sum, through the licensing agreement, for the use of the IP. However, the University maintains the ownership of the IP.

Licenses can be either exclusive or nonexclusive. The primary distinction is that nonexclusive license can be granted to multiple companies. The TTO and the inventor will decide together whether an invention or IP should be licensed exclusively or not. Keep in mind that companies granted exclusive licenses often expect improvements and additions to the invention to be licensed to them as well. Inventors should be aware between tensions between the interests of the University and the companies granted licenses.

Option Agreements

An option agreement is a right to negotiate a license. It is the agreement before a license is issued, often on projects that are not yet complete. It is far less complex an informal than a license. An option agreement is often easily negotiated and does not always include the financial terms of the future license agreement. Option agreements are usually limited between 6 and 12 months. This allows for smaller companies to have time to secure the funds and resources before entering into a formal license agreement. It helps establish trust and a working relationship.

Material Transfer Agreements (MTA)

MTA’s often result from publication or presentation of research materials. Such things as cell-lines, animal models, purified proteins, etc… are generally what the MTA constitutes. Some universities require MTA’s be signed before material is sent out. Others simply send the form to be filled upon delivery of the material. Almost all MTA’s for incoming material require signatures from authorized representatives of the University. Always check with the TTO about who needs to approve the MTA for incoming material.

Typically, MTA’s require the following from recipients of materials:
• Use the material for noncommercial research purposes only
• Acknowledge the providing scientist in publications
• Not to send the materials to third parties without consent
• Assume responsibilities for damages caused by use
• Not to use the materials on human subjects

MTA’s used for academia to industry usually do not permit materials to be used for commercial gain, and usually provide defined internal research parameters for the companies using the materials. Use most often requires a fee to be paid to the provider.

MTA’s from industry to academia are far more complex and restrictive. Allow the TTO carefully evaluate the wording of the MTA before any of the materials are used. Always consult the TTO when dealing with any MTA, especially ones from industries.

Consulting Agreements

Faculty members are usually allowed to spend some time consulting outside the institution. A manual should be provided explaining the exact rules governing consulting options (do we have a manual???).

Most importantly, review the agreement. Be sure there are no conflicts of interest in the agreement between the university, the other institution, and yourself. Have the TTO evaluate the consulting agreement before you enter in to it.
Consulting agreements vary widely to fit particular situations and restraints; however there are some general themes and guidelines they all follow:

• Companies should engage in consulting only for the exchange of ideas, not to work directly on research.
• One must have consent to use the name of the consultant and/or university in any publication
• Consultants should have limited and reasonable time commitments
• A provision should be allowed for the consultant to terminate the agreement; the company should have the same right.
• Scientist should not disclose sensitive information from their institution. Nothing should be disclosed that could not be disclosed in normal conversation.
• Consulting agreements should acknowledge the consultant is an employee of another institution and is subject to the particular policies that govern that institution. Some companies may require a noncompetitive clause before consultation begins.
• Consultants may also assign university or institutional rights to inventions arising from consultation activities.

US and International Laws

US Copyright Office has a nice site with general information on US copyright law, legislation, announcements, and international treaties. http://www.copyright.gov/

US Copyright Office circulars are very helpful brochures on a variety of topics regarding copyright laws, length of protection, and other subjects. http://www.copyright.gov/circs/index.html

The Digital Millennium Copyright Act (DMCA) was enacted in 1998 and is affecting research and education in important, and some would say detrimental, ways. For a summary of the law click on the link. http://www.copyright.gov/legislation/dmca.pdf

Intellectual Property Commercialization

1. Research: discovering or developing a new concept or technology.
2. IP/ Technology Disclosure: Following the development of a new concept or technology, the researcher must officially disclose the information to the Office of Intellectual Property via the Technology Disclosure Form.
3. Filing for Intellectual Property Protection: form/link
4. Commercialization Process: The Office of Intellectual Property helps find investors and corporate partners interested in the new IP. The process may require negotiating material transfer, agreements, and other legal contracts.

Important Issues for Inventors to Remember:

1. Maintain comprehensive and organized records of inventorship. Such information is critical for any future legal proceedings for both inventor and investors.
2. Do not disclose your invention publicly until after the patent is filed or until consultation with the Office of Intellectual Property. Public disclosure includes oral presentations at scientific meetings, external seminars, publication as a thesis or dissertation, as well as a publication in a scientific journal. In the United States, there is a 12 month grace period after public disclosure during which a domestic patent may be filed. However, the ability to patent your invention outside the United States is lost.

Terms

The following definitions are provided to aid inventors in the interpretation of policy.

Creator- means the originator of intellectual property
Fellows- persons admitted to work within the University/ Facility who enjoy privileges of access to and use of facilities and services for independent study.
Intellectual property- the material or communicable result of scientific, humanistic, literary, and artistic endeavor. It includes, but is not limited to, works in the form of scientific discoveries and inventions, designs, patents, trademarks, books, monographs, papers, paintings, drawings and sculpture, performances, computer software, and lecture and conference presentations. In the text, individual items of intellectual property are referred to as works or properties.
Project Employees- (Trust Employees) Persons paid from funds held and administered by Pennington Biomedical Research Center in special purpose (non-budget) accounts.
Sponsor- a government department or agency, a private foundation or charitable organization, a business or corporation, or a private individual which provides grant or contract funds to assist with the cost of research carried out by Pennington Biomedical Research Center.

Reference:
Understanding Technology Transfer, chp 11.
University of South Carolina. Technology Transfer Website
University of Southern California. Technology Transfer Website
Harvard Business School
Cornell Law School. Legal Information Institute