Intellectual Property at USC

October 27, 2003

Dr. Michael Muthig

Blockbusters

•Google

•Taxol

•Gatorade

•Fax Machine

Presentation Outline• IP Office Organization, Mission, Goals, and Services

• IPO Activity and Benchmarks

• USC IP Policy

• Invention Disclosure and Commercialization Overview– Disclosure– Intellectual Property Protection– Marketing– Licensing

• Take Home Points

• Open Discussion

IPO Organization

• USCRF– Sponsored Programs– Research Compliance– Incubator– Intellectual Property

• VP of Research (Executive Director of USCRF)

• IPO Staff & Contact Information– Michael Muthig, 803-777-4031, mgm@sc.edu– Trina Nealy, 803-777-9394, TrinaN@gwm.sc.edu– Natarajan Sethuraman, 803-777-9515, Patents@gwm.sc.edu

Michael G. Muthig, Ph.D.Senior Licensing Officer• Education

– BS University of South Carolina– MS University of Kentucky– PhD University of South Carolina

• Professional Experience– State Government– International Consulting Firm– Privately Owned Chemical Distribution Company– Start up Consulting Firm– Nonprofit Organization– University IPO

• Technology Transfer Experience– Environmental remediation (review and use of innovative technologies)– Technology marketing & business development (Various small companies) – DOE Technology Transfer (Savannah River and Oak Ridge)– DOD Technology Commercialization (Army tech transfer project)– University IP Assessment & Commercialization

IPO Mission & Goals

• Mission– Protect & Leverage University Intellectual Property– Benefit to University, State of SC, and Humanity

• Goals– Identify and Protect University Intellectual Property– Transfer University Technologies– Manage Intellectual Property Assets of the University

IPO Services

• Faculty & Staff Outreach

• Invention Disclosure Management

• Government Reporting Related to Inventions

• Assessment of University Intellectual Property

• Commercialization/Transfer Planning & Implementation

• IP Protection and Management

• Marketing University IP Assets

• License Negotiation and Management

Invention Disclosures & Licensing (1994-2003)

1015

29 27 25

3643

3847

53

0 0 1 1 07

37 5

11

0

10

20

30

40

50

60

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Invention Disclosures Received

Licenses/Options Signed

Disclosure, Patent & License Benchmarks (2000)

0

10

20

30

40

50

60

70

Clemson UK MUSC USC U of L

Invention DisclosuresReceived

Total U.S. PatentApplications Filed

Licenses & OptionsExecuted

USC IP Policy Overview

• Applies to anyone using University resources (faculty, staff, students, etc)• Requires disclosure of all discoveries• Includes patentable and copyrightable discoveries• Identifies inventor and University rights• Establishes invention categories

– Category 1 (Limited University rights)– Categories 2 & 3 (University full right and title)

• Describes patent and commercialization alternatives• Provides for royalty sharing with inventors

– Patent (typical 60%-40%)– Copyright (typical 25%-25%-25%-25%)

Technology Commercialization Process

• Invention Conception

• Disclosure to IPO

• Government Reporting

• IP Protection I

• Commercialization Strategy and Marketing

• Licensing

• IP Protection II

• License Management

Marketing let ter• Abstract• NDA• Exclusivity of fer for ____ days

Submitdisclosureto IPC

Send to potentiallicensee• technology description• draft license• SCRI/IPMO information

Offer to visit

Resolvetechnical issues

Seek expressionof interest Regular US pat . application

(licensee or SCRI)

Negotiate license

Call toconfirmreceipt/interest

Repeat cycle withcompany 2, 3, etc.

Positive reply tomarketing letter

InterestNo Interest

No Interest

Unsuccessful

No reply

Interest Success

Releaseto

inventor

License/royalties

Constantawareness

of patentbar dates

Inventorsubmitsinventiondisclosureform (IDF)

IDFassigned to

licensingteam

Team reviewsIDF forcompleteness

Cantechnologybeprotected?defended?

Ownership,inventorshareissues?

Break-throughtechnologyordiscovery?

Keywordreview -prior artfound?

Provisionalpatentapplication(PPA)

Draftnon-enablingabstract(post toweb)

Determinemarketingapproachwithinventorandlicensingteam

Refer toIPC toresolve

Yes

No Yes

No Yes

No

Processas tradesecret

Accelerateut ilityapplication(also PPA)

Resolvewithinventor

Yes

No

Constant awareness o fpatent bar dates

Intellectual Property Management Office Commercialization Process

Technology Commercialization Process

Invention Disclosure & Review Process

• Invention Conception

• Initial Notice to IPO

• Draft Disclosure to IPO

• Meeting with IPO to Discuss Draft Disclosure

• Final Invention Disclosure

• IP Committee Review (Category I Only)

• Provost Decision

• Notification to Inventor

The Invention Disclosure Form

• Available online (http://ip.research.sc.edu/forms.htm)

• Section 1 – Title and Contact

• Section 2 – Declaration, Ownership, and Assignment

• Section 3 – Notification

• Section 4 – Witnesses

• Attachment 1 – Additional Inventors

• Attachment 2 – Description of Invention

• Attachment 3 – Public Disclosure

• Attachment 4 – Research Funding

Disclosure Assessment Process

• Initial Assessment– Interview with Inventor– Inventor Interest in Technology– Market Research– IP Research– Sponsored Research Potential

• Secondary Assessment– Marketing Results– Additional IP Assessment– Status of additional R&D

Invention Screening Parameters

Fundamental Properties (Novelty, Development Status, Validation, Ownership, IP potential)

Market Potential (Total revenue, profit potential, versatility)

Competitive Forces (Existing products, patents, ongoing R&D)

Inventor Factor (Reputation, patent success, commercialization success)

Revenue Potential (License fees, royalties, sponsored research)

Intellectual Property Protection

• Patents– Provisional US Patent Application– Regular US Patent Application– International Patent Application (PCT)

• Copyrightable Material– Instant Copyright– Registered Copyright

• Other IP Protection– Trademark (Instant and Registered)– Trade Secret

Marketing Process

• Prepare Technology Brief (with Inventor review)

• Perform Market Research

• Distribute Tech Brief (primarily via email and web sites)

• Develop Technology Prospectus (with Inventor review/assistance)

• Sign Confidentiality Agreements with Interested Companies

• Provide Level I Confidential Information

• Meeting and/or Conference Call with Potential Licensees

• Provide Level II Confidential Information

License Process

• Develop License Strategy (with inventor input)

• Identify Potential Licensees

• Negotiate License Terms and Conditions

• Finalize License Agreement

• Prepare Royalty Distribution Agreement

• Monitor Licensee Activity

• Distribute Royalty Revenue

Enhancing Value of University Discoveries

Disclose to IPO before publishing

Disclose to IPO before publishing

Disclose to IPO before publishing

Focus on need

Be familiar with patent literature

Understand competing technologies

Work closely with IP Office

Enhancing Value of University Discoveries

Disclose to IPO before publishing

Keep detailed lab notebooks

Focus on need/end use

Be familiar with patent literature

Understand competing technologies

Work closely with IP Office

Royalty Realities

$2.5 Million Sales, 10% profit, 5% Profit Share (.5% royalty) = $12,500

$2.5 Million @ 15%-15% (2.25%)= $56,250

$2.5 Million @ 25%-25% (6.25%) = $156,000

$10 Million@ 5%-5% (0.25%) = $25,000

$10 Million @ 10%-10% (1%) = $100,000

$10 Million @ 25%-25% (6.25%) = $625,000

$500 Million @ 5%-5% (0.25%) = $1,250,000

$500 Million @ 30%-10% (3%) = $4,500,000

Take Home Points

• Disclose Early and Often

• Call the IPO for assistance with disclosure preparation

• Read the IP clauses of any Sponsored Research Agreement

• Discoveries include software and other copyrightable material

• Include the patent database in your literature searches

• Limit discussion with outside parties until a patent application is filed

Questions, Answers, and Feedback

Inventorship

• Inventor – Contributes to conception

• Conception – Complete mental part of inventive act

• Inventive Act – Formation of a definite and permanent idea of the complete and operative form of the invention