U.S. AU.S. ARMYRMY M MEDICALEDICAL R RESEARCH ESEARCH & M& MATERIELATERIEL C COMMANDOMMAND

Robert E. McCarthy PhD, JDChief, Office of Research and Technology Applications

Technology Transfer and Insertion

Telemedicine & Advanced Technology Research Center Cutting Edge Medical Technology

Top Patenting Organizations: Calendar Year 2004(Utility Patents granted by the US PTO)Top Patenting Organizations: Calendar Year 2004(Utility Patents granted by the US PTO)

Rank Number Patents Organization1 3,248 IBM2 1,934 Matsushita Electric 3 1,805 Canon Kabushiki4 1,775 Hewlett Packard 5 1,760 Micron Technology6 1,604 Samsung Electronics7 1,601 Intel Corporation8 1,514 Hitachi Ltd.9 1,310 Toshiba Corp.10 1,305 Sony Corp.

Rank Number Patents OrganizationRank Number Patents Organization

11 1,296 Fujitsu Ltd.

12 1,217 Philips Electronics

13 1,025 Fuji Photo Film

14 976 General Electric

15 913 Renesas Technology

16 903 Robert Bosch Gmbh

17 898 Texas Instruments

18 839 Seiko Epson Corp.

19 829 US Government

20 813 NEC Corp.

Only 3 to 5% of US Government Inventions make it to commercial success. Why?Only 3 to 5% of US Government Inventions make it to commercial success. Why?

• Lack of inventor interest• Lack of funds to further R&D on the invention• Invention easily superseded by another technology• Inadequate marketing to showcase the invention• Difficulty in identifying the “right” commercial

partner• Invention requires significant regulatory hurdles• No mechanisms to aid in transferring the technology

out

Technology Transfer Technology Transfer

What Is It?

Who Does It?

Who Benefits?

How Is It Done?

What Laws/Rules Apply?

Technology Transfer LegislationTechnology Transfer Legislation

• Stevenson-Wydler Tech. Innovation Act 1980

• Bayh-Dole Act 1980

• Small Business Innovation Develop. Act 1982

• Federal Technology Transfer Act 1986

• Executive Order 12591 (1987)

• Technology Transfer Commercial. Act 2000

• United States Code (USC Title 15, Chapter 63)

Stevenson-Wydler Technology Innovation ActStevenson-Wydler Technology Innovation Act

• Established technology transfer as a mission of the federal government

• Required federal labs to set apart a percentage of the lab budget for technology transfer

• Established an Office of Research & Technology Applications in each lab

• Gave preference to industrial technology transfer partners that manufacture products in US

Bayh-Dole Act of 1980 Bayh-Dole Act of 1980

• Provided exclusive rights to inventions arising under funding agreements with federal agencies to nonprofits and small businesses

• Permitted universities and nonprofit organizations, and small businesses to obtain title to inventions developed with government support

• Government owned and operated labs were permitted to grant exclusive licenses to commercial organizations

Federal Technology Transfer Act of 1986 Federal Technology Transfer Act of 1986

• Enabled federal labs to enter into CRADAs and to negotiate licensing arrangements for patented inventions made at the labs

• Required that government employed inventors share in royalties from patent licenses

• Provided for the exchange of personnel, services, and equipment among federal labs and nonfederal partners

• Provided a charter and funding for the Federal Lab Consortium (FLC) for technology transfer

Types of Technology Transfer Agreements Types of Technology Transfer Agreements

• Material Transfer Agreement (MTA)

• Educational Partnership Agreement (EPA)

• Test Services Agreement (TSA)

• Cooperative Research & Development Agreement (CRADA)

• Patent License Agreement (PLA)

Cooperative Research & Development Agreement CRADA

Cooperative Research & Development Agreement CRADA

• Primary Instrument for federal technology transfer

• Authorized by Title 15, Ch 63, section 3710• Not a contract (cooperative agreement or

grant)• IT IS: Mutual assent to work collaboratively

with a nonfederal party• 2 types – full CRADA or Transfer of Material

or Information CRADA

CRADA RULES CRADA RULES

• CRADAs are not government acquisitions• Must have at least one non-federal party• Funds can flow to federal party, but not from federal

party• Resources are used for R & D and is consistent with

mission of the organization• Contains a Statement of Work (SOW)• Gov’t retains a nonexclusive, nontransferable,

irrevocable paid-up license to inventions developed under the CRADA

• An export control license may be required

CRADA COMPONENTS CRADA COMPONENTS

• True collaboration between parties- either funded or not• Defines topic of research with a detailed SOW• Background- what each partner brings to the effort;

responsibilities of each partner• Financial obligations• Reports• Inventions and Patents• Data Rights and Publications• Termination and Disputes• Duration of Agreement and Effective Date; Modifications• Proper signatories to the agreement

Patent License Agreement Patent License Agreement

• Definition: Grant by an IP owner to another party of the rights to use the IP. It may be non-royalty (X-license) bearing or royalty bearing (paid up or a running royalty based on sales of goods or services.

• Licenses are either exclusive or non-exclusive/field of use• Patent license is an important vehicle for granting permission

to share in IP rights• In the US, royalties from patent licensing have increased from

$15 billion in 1990 to more than $110 billion in 2000• Provides an opportunity to do business in a market without

upfront R&D expenditure• DoD Services and Agencies are eager to identify NEW

licensees for DoD patented technologies

Structure of a Patent License Agreement Structure of a Patent License Agreement

IntroductionsDefinitionsRecitalsGrant ClauseReserved RightsRoyalties/ License FeesReports & RecordsSublicensing RightsPatent Enforcement and ProsecutionRepresentations & WarrantiesTerm & TerminationAssignment & TransferSignaturesDETAILS, DETAILS, DETAILS

Requirements for Patentability in U.S.A.Requirements for Patentability in U.S.A.

• 35 U.S.C. 101 Utility

• 35 U.S.C. 102 Novelty

• 35 U.S.C. 103 Nonobviousness

• 35 U.S.C. 112, P2 Definiteness

• 35 U.S.C. 112, P1 Written Description

Enablement, Best Mode

Considerations in Licensing a PatentConsiderations in Licensing a Patent

• Due diligence in assessing the scope of the patent claims- seek assistance of a patent atty

• Assess commercial potential of patent

• Language to include in the License

• Establish goals before entering into negotiations

• Develop a negotiation strategy that can lead to a win-win for both parties

Technology Transfer Partnership Intermediaries Technology Transfer Partnership Intermediaries

• DoD Tech Match: web-based used to enhance industry/university interactions with DoD; opportunities, patents, labs, success stories, lab contacts; 30,000 site visits per month, 1800 registered users .Web site: www.dodtechmatch.com

• TechLink: helps the DoD and NASA commercialize leading-edge technology by partnering with private companies for the licensing, transfer, development of technology. In FY ’05, did 258 p’ships between 58 DoD labs and 271 companies. Web site: www.techlinkcenter.org

• First Link (Univ of Pitt): Focuses on first responder needs by supporting the development of commercial pathways between DoD technologies and private industry. Focuses on early stage need requirements. Facilitator with CRADAs, PLAs, and SBIRs. Web site: www.DoDFirstLink.com

• RTI International (RTP, NC): Offers full range of commercialization support services which span across multiple technology areas. Identifies partners, market and commercial potential, does licensing support and structuring deals. Web site: www.rti.org/technology

Triple Helix Facilitates R & D…Through Linked Communications

CeMBR CompanyFaculty

Concepts & Expertise

Collaborative PrototypeDevelopment

Ideas & Expertise

Laboratory $ Support

DoD

$

BiomaterialProduct

$

Triple

Helix

Government

“Intermediaries”

$

Medical

IndustryAcademia “Pioneers”

“Colonizers”

“Consolidators”

TATRC Geographic Distribution of Triple Helix Partnerships