Intellectual Property and Commercialization Erica Besso Research Innovations Office Faculty of Science Spring 2008

Intellectual Property and Commercialization

Erica BessoResearch Innovations Office

Faculty of Science

Spring 2008

Erica M. Besso, Ph.D. Research Innovation Office 2

Defining Innovation All innovation begins with creative ideas . . . One definition for

innovation is the successful implementation of creative ideas within an organization…

Innovation is the process that translates knowledge into economic growth and social well-being. It encompasses a series of scientific, technological, organizational, financial and commercial activities....

It is the process whereby ideas for new (or improved) products, processes or services are developed and commercialized in the marketplace.

INNOVATION = INVENTION + COMMERCIALIZATION


Enabling Innovation

Nurturing innovation is a process

In the university context, the process is to transform intellectual resources (thoughts, ideas and insights) into intellectual assets

Intellectual assets become intellectual property (“IP”) through legal protection.

IP defines the value on which a company depends for successful commercialization.

REFINEMENT of our Value Proposition:

INNOVATION = IP + COMMERCIALIZATION


The VALUE Proposition

Funding a research project Licensing a technology Starting a company / spin-off Buying a product

All of these invest in VALUE


IP - a Valuable Asset

IP is any product of the intellect protectable by law

IP implies ownership guaranteed by law once protected IP can also be sold (assigned) or leased (licensed) may be used free of charge, owner permitting

Technology transfer is the process of identifying, evaluating and commercializing IP

In a university, why bother? Can capture research and license dollars Can increase personal income

Broad definition includes transfer through contractual research, licensing and know-how (via personnel)


University compared to Company

In a UNIVERSITY, Professors, TA’s, Support Staff are all considered employees of the

university – but there is wide variability in work definition All are bound by their university’s IP policy

At McGill, inventions are jointly owned by inventors and University at the outset

There is no obligation to commercialize the IP developed, although it is encouraged

In a COMPANY, Your employment contract is based on “Work for Hire” As an employee, you work on what the Company tells you to do

all Intellectual Property belongs solely to the company You agree to work towards the company’s prime objectives of

commercial activity profitable sale of products


Work for Hire

Employee Company


Inventions

What is an invention?A technical concept, development, method or

composition of matter that : Is novel, non-obvious and useful Reflects creative thinking, makes a distinct

contribution to and advances the science Is recognized by masters of that science

as such an advance

How do we get from invention to IP?


From Invention to IP in the UniversityFrom Invention to IP in the University

Identification of intellectual assets

Discovery-Invention

Evaluation of

Commercial Potential

Assessment ofProtectability

Decision toCommercialize

R & DGrants

&Contracts

Due diligence

Commercialization

Licence

Alternatives

Spin-off Co.

ExistingCo.

Contracts

Inventor

IP created

New Research $$ Opportunities: POP, I2I



PATENTS – some background

A landmark in the transition of England’s economy from the feudal to the capitalist was, in 1623, the Statute of Monopolies of James I . It rendered void all grants of monopolies and dispensations with one exception. The exception was the grant of letters patent for inventions. These provided the true and first inventor(s) of a given item 14 years of exclusive rights to their invention. In exchange, the invention had to be fully described and disclosed. These monopolies of short duration aimed to encourage innovation and its application for the public good.

The ‘letters patent for inventions’ is the direct ancestor of today’s patents.

The earliest known patent for an invention in England is dated 1449 (granted by Henry VI for making stained glass for Eton College).

On July 31, 1790 Samuel Hopkins was issued the first US patent for a process of making potash, an ingredient used in fertilizer. The patent was signed by President George Washington.


What is a PATENT ?

Intellectual property (IP)

Exclusive monopoly to make, use or sell an invention for a limited period of time

Tool conferring legal protection to the holder of the patent rights

Explicit description of how to practice the innovation / invention

IMPORTANT to KNOW: Public disclosure of an invention prior to filing a patent application makes the invention un-patentable


Further IP characteristics

IP is valuable Often, the value is not predictable at onset of a project

In universities, IP is usually at a very early stage

Early IP requires large $$ and time investments to result in commercially successful product(s)

High risk Exclusivity of eventual profit encourages investment

IP position needs contractual agreement Agree with non-University partner BEFORE starting to

collaborate Agree IN WRITING [IP rights, publication rights, etc.]


Protect / Create IP

Report ofReport of InventionInvention

ResearchResearch

Risk and Investment

CommercializeCommercialize

•Grants•ContractsContracts

Publish

Tech Risk Tech Risk HIGHHIGH

Investment

Idea Invention Early IP Proof of Principle /

Proof of Concept Product


• Novel• Non-Obvious• Useful

STRATEGY:Decrease the Risk / Strengthen the Invention

1. Ascertain invention is:

2. Protect invention IP

3. Add value by:- developing- demonstrating reliability

4. Establish that the invention has: - a market - acceptable competition - willing Licensees


Note:

All that is Patentable is NOT necessarily Commercializable !


Protecting an Invention

File a patent application for potentially promising invention

To be eligible for patent protection must be: Novel

In Canada and the US only, one-year grace period after first public disclosure

Absolute novelty in the rest of the world Non-obvious (prior art!!!) Useful

Invention must perform some function (general utility) Invention must actually be operable and do what is claimed Invention must be of some benefit to society

Protection begins from the date of filing an application This is called the “Priority date”


Example: Electricity from Garbage 1

Eric, a professor, working in his laboratory invented a machine that produced electricity from garbage.

Eric recorded all of his efforts in his laboratory notebook.

The invention was incredible: • it produced cheap energy, • it released no pollutants, • it reduced the amount of garbage; However, it had a problem - it did not work for more than one minute at a time.

Eric could not solve this problem.

Sophie, a graduate student in Eric’s group, thought of a way to solve the problem.



Many things needed to be done to apply Sophie's idea.

Eric's department chair, Mark, was asked to provide support dollars to conduct the research and the support was granted.

Eric sent Chris, an undergraduate student assistant, to get all equipment necessary for the work to be done.

Finally, after two months and many hours of work by Eric, Sophie, and Chris, the garbage machine was creating electricity for hours at a time.

All of the work they did was recorded in Eric's laboratory notebook.

Sophie also kept a separate notebook of her research activities and contributions.



Chris provided data for both Eric and Sophie.

The improved invention was a success.

The scientific world was amazed by the results.

The university is now telling Eric the invention is worth millions and it will patent the invention.

Eric's university has a patent policy similar to McGill’s.

A publication describing the invention is co-authored by Sophie, Chris and Eric. Are they all inventors? Who will receive the millions?


NOTE:

Authorship

does NOT equal

Inventorship !


Inventorship

Who is an inventor? Someone who has created something new or

contributed intellectually thereto What is an intellectual contribution?

An inventor enables an idea An invention is “enabled” if someone of ‘ordinary skill-

in-the-art’ could make or use the invention without an undue amount of research or experimentation

Mark, Eric, Sophie, and Chris all contributed to reduce the invention to practice – but they are not all inventors.


Inventorship 2

WHO THINKS THAT:

a student be an inventor or co-inventor?

a co-inventor has rights?

someone who worked on an invention but did not contribute intellectually is a co-inventor?

HOW MUCH does someone have to contribute intellectually to be considered an inventor?

How are Mark, Eric, Sophie, and Chris best described?


Inventorship Disputes

What if there is an inventorship dispute? Each person must provide documents

explaining their contribution to the invention Link contribution to the claims, as they

appear in the patent application

Failure to resolve such dispute can be cause to abandon commercialization efforts.


How can one protect oneself ?

DOCUMENT your work (preferably in a bound and dated lab notebook)

Complete a Report of Invention and send it to OTT for assessment

Don’t negotiate a “deal” without consulting knowledgeable professionals (RIO, OTT are a good start)

Don’t sign any document before fully understanding what it means and what effect it will have

Be informed, ask questions


Sharing the Benefits

Typically, the patent will be licensed to a company in exchange for cash and royalties based on sales.

Do the co-inventors share the royalties equally? This is decided by the inventors % share is usually indicated on the Report of Invention If different share distribution, then a written statement signed by

each party must be prepared.

Can the workers share the royalties? This is decided by the inventors


McGill’s Policy on IP

Applies to all employees of McGill

If inventors wish to commercialize their invention, then they must disclose it to the OTT

Students, if they are the sole inventors, are not subject to this IP Policy.


Steps leading to Commercialization

Assessment of report of invention Is the invention novel? Can it be protected? Is there a market? How large is the market? What is the competition? How far is it from becoming a product? Are there resources to further

strengthen, demonstrate and refine the invention?

Filing for patent protection now have IP

Finding partners to develop this IP into product(s) Making presentations (conferences, companies, VCs) Prosecuting patent application(s) Identifying a licensee

Finding financing

Negotiating license agreement(s)


From Invention to IP From Invention to IP in the Universityin the University

Identification of intellectual assets

Discovery-Invention

Evaluation of Commercial Potential

Assessment ofProtectability

Decision toCommercialize

R & DGrants

&Contracts

Due diligence

Commercialization

Licence

Alternatives

Spin-off Co.

ExistingCo.

Contracts

Inventor

IP created

RIORIO

OTTOTT




To License, one must: Satisfy a customer need Solve a “pain” Have a product, a process, a service Know industry/company entry points

For a “successful” Spin-off, must have: A market A viable business model and plan A management team Critical resource mass ($, people, know how) Defensible technology

Commercialization: Thinking in Commercial Terms


Commercialization stages beyond the University


Some McGill Spin-offs

McGill physicists John Strom-Olsen and Peter Rudkowski pioneered a process by which molten liquids – metal, ceramics, or anything else that

melts – can be transformed into fine threads. This melt extraction process is the only one of its kind. Pitney-Bowes purchased the intellectual property rights to this process in 1987.

MXT Inc. formed in 1996 to realize the commercial potential of this technology. Located in Montreal

Need addressed: Electronic article surveillance (EAS)

PRODUCT: Antitheft Tagging Technology

MXT specializes in the production of antitheft tagging material, ultra-fine fibers, and electroplating.

Extremely fine wire with detectable sheath is only 137.5 microns thick. Just 5 cm of this wire is needed to trigger EAS gates.


ANAGENIS

McGill chemist Masad Damha and molecular biologist Michael Parniak Developed proprietary antisense technologies Anagenis Inc. formed in 1999 to realize the commercial potential of this technology. Company was recently acquired by Topigen Inc. Located in Montreal

Need addressed: Novel therapeutic approaches

PRODUCT: Technology inhibiting synthesis of protein encoded by mRNA Several new classes of drugs currently under development

two drug candidates in Phase II trials for COPD [Chronic obstructive pulmonary disease, a term referring to the two lung diseases, chronic bronchitis and emphysema] and for asthma.

focused on inhibiting multiple inflammation targets underlying the chronic pulmonary diseases.


McGill chemist Mark Andrews and electrical engineer Ishiang Shih Developed liquid crystal displays that use solid state polymer structures with

embedded optical, electrical and mechanical functionality. Silk Displays Inc. formed in 2004 to realize the commercial potential of this

technology. In 2008, company changed its name to Plastic Knowledge Inc. Located in Montreal

Need addressed: Lightweight, flexible electronic devices

PRODUCT: Electronic circuits embedded in plastic

Promising new platform technology Initially focused on rugged displays, used in harsh mobile and aerospace

applications. Company working towards consumer applications such as large, wall mounted

televisions. Aim is to replace a broad range of "dumb" glass display substrates by smart polymer structures.


THANK YOU

Questions for me?

Four questions for YOU


HOW MANY of YOU

Found most of this information novel? Found most of this information

interesting? Believe information on IP and

commercialization will be useful to you?

Would like more info on Entrepreneurship or innovation awards? Patents and process? If so give me your name & e-mail address


Research Innovation Office

Erica Besso – tel ext 3897 Dawson Hall Room 303

Documents

Intellectual Property and Commercialization Erica Besso Research Innovations Office Faculty of Science Spring 2008