Monetizing Your Intellectual Property: Protecting Ideas that Generate Income

Monetizing Your Intellectual

Property: Protecting Ideas that

Generate Income

Kathleen Mekjian, Ph.D., J.D.

Brenden Gingrich, Ph.D., J.D.

The recipient may only view this work. No other right or license is granted.

©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved. ©2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2


3 © 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved.

Overview

• Patents – Value/Patentable Subject Matter

• Inventorship and Ownership

• Loss of Rights and Avoiding Pitfalls

• Sufficiency of Disclosure/Timing

• Freedom to Operate

• Procedural and Monetary Considerations

• The Prometheus v. Mayo Supreme Court Decision


The Value of Patents

• Bring Tremendous Value to Company

– Can be Critical to Obtaining Investment

– Can Provide Revenue

– Cross-Licensing

• Secure Market Position / Exclusivity

– They are Swords (Offensive)

• Can Exclude Competitors from your Business

• Can Protect your Products from Duplication

– They are Shields (Defensive)

• Demonstrates sophistication and professionalism

• Your Competitors (domestic and foreign) are Getting Them!


Patents - The Basics

• Patents protect (1) novel, (2) useful, and (3) non-obvious processes, machines, manufactures, or compositions of matter

• Gives the patent owner the exclusive right to exclude others from selling/offering to sell, using, making, or importing the invention

• Term is 20 years from filing date

• In exchange for this “legal monopoly,” inventor must disclose how to practice the invention


Value of Patents

• “Strong” versus “Weak(er)” Patents

– Value comes from excluding

• Lots of alternatives = weaker patents

–Antibody with a particular CDR

• Critical step = very valuable

–Growing antibodies in CHO cells

–Humanized antibodies


Deciding What to Claim

• Purpose of IP

– V.C. specific (clear/fast exit . . .fast approval)

– Your product (now or future)

– Competitor’s product (now or future)

– License or cross-license (scope v. fast allowance)

– Litigation (focused/validity)

• Protection for commercial embodiment

– Link between customer demand and claims

• Broad v. narrow= scope v. validity


How to Claim Strategically

• Seek protection with value

– Start with relevant market

• Cover your product

• Cover design-arounds


Commercial Product

Block Competitive Alternatives

Patent Scope


Block Competitive Alternatives

Commercial Product

Patent Relevant Scope Market


Multi-Faceted Approach

Patent 1 Scope

Patent 3 Scope

Relevant Market

Patent 2 Scope

Commercial Product


Directly Pursue Competition’s Space

Patent 1 Scope

Patent 3 Scope

Relevant Market

Patent 2 Scope

Commercial Product

Patent 4 Scope


Inventorship

• Who is an “inventor”

– Conception = touchstone of inventorship

• Arriving at a definite and permanent idea of the invention

– Laboratory hands v. Joint inventor

• A joint inventor must make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention

– Improvements, etc. may lead to joint inventorship


Ownership

• Inventors own the invention – undivided interest in the entire patent

• Types of agreements that affect ownership rights

– Employment Agreements

– Consulting Agreements

– Development Agreements

– Manufacturing Agreements

– Collaboration Agreements

– Visitor’s Confidentiality Agreements

– Government Interests

• U.S. laws “inventor friendly” in terms of presumption of ownership


Inventorship & Ownership - Cautionary tips

• Beware of Unintended Co-Inventors

– Contractors, Manufacturers, Collaborators, etc.

– Co-Inventors Own Equally & Can Dispose Unilaterally

• Leaving Off Inventor Can Render Patent Unenforceable!

• Illustrations of the Importance of Ownership Rights

– The Google story – how Stanford was successful

– Roche v. Stanford – how Stanford was unsuccessful


Loss of Rights – “Loose Lips Sink Ships”

• Disclosure of your invention may preclude ability to patent (novelty and obviousness provisions of the patent laws)

• One year grace period in U.S. (but not many foreign jurisdictions!)

• America Invents Act - changes in law relevant to novelty take effect March 2013


Loss of Rights

• Abstracts

• Posters

• Oral Presentations

• Manuscripts v. Online Publication

• Grant Applications

• Theses/Dissertations

• Offer for Sale


Loss of Rights – Precautionary Measures

• Do Not Disclose Invention Outside of Confidentiality

– Use Confidential Disclosure Agreements (CDAs) for discussions with potential collaborators, licensees, investors (when possible), etc.

• Protect confidential information (e.g., mark it as “confidential” or don’t disseminate it)

• File patent applications before presentations, talks, publishing, meeting with collaborators, licensees, investors, etc.

• Maintain records of research and development (e.g., lab notebooks)

• Use caution with content of submissions and reports (assume they will be publicly available immediately)

©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved. ©2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 19

Brenden Gingrich, Ph.D., J.D.


• Major issue for patents in the “unpredictable” arts

• Must describe the invention

– Demonstrate “possession” of the invention

– Genus claims require:

• Structure / Function relationship

• Representative number of species

• Must enable invention

– Make and use without undue experimentation

– In vivo treatments need in vivo data

• Data from well-accepted animal model is sufficient

When to File – do I have enough data?


When to File – do I have enough data?

• Scope of protection needed is a consideration

– What is the purpose for the IP?

• Protection of product

–Narrower patent may be sufficient

– Therapeutic, diagnostic, research tool

• Blocking competitors

– Broader patent may be needed

– In which countries is protection needed?

• Different standards in different countries


• Purpose of protection is a consideration

– Your product today

• Accelerate allowance

• Parallel filings

– Your product in the future

• Serial filings

• Maximize PTA / PTE

– Funding – exit strategy items first

– Litigation / Licensing

When to File – now or later?


Patentability / FTO Searching

• Patentability Searching

– Optional step to gain understanding of prior art

• Patents and published applications

• Non-patent literature

– Most useful for narrow, targeted applications

• Prosecution costs reduced by focusing claims



• Freedom to Operate / Right to Practice Searching

– Evaluate patent landscape

• Who are potential partners / threats

– Develop strategy for blocking patents

• License

• Design around

• Invalidity / Non-infringement opinion

• Wait for expiration



• §271(e)(1) “safe harbor”

– “It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information” to the FDA

– Created as part of balance between brand-name and generic drug companies

– Courts have extended the “safe harbor” to early product research and development


Filing Procedures – impact of the AIA

• America Invents Act (Patent Reform)

– File Early, File Often

– “First to File”: increases importance of filing early

• Effective March 16, 2013

Invention

Conception

3rd Party Disclosure

or Patent Filing

Invention

Reduction to Practice File Application

“swear behind”

1 day


Filing Procedures

• Provisional Applications

– Official fees: $250 / $150 for small entity

– Establishes priority date for disclosed material

– One-year pendency, no examination

– Can file numerous provisional applications

– Does not publish, can re-file if more time is needed


Filing Procedures

• U.S. Utility Application

– Official fees:$1250 / $530 small entity

– Can claim priority to one or more provisional applications within 1 year of filing

– Examined in ~18-24 months

– Issues 2-5 years


Filing Procedures

• PCT Application

– Official fees: $4154 (no small entity discount)

– “International” application

• Provides priority in 144 member countries

• No such thing as “International Patent”

– Searched and provisionally examined (non-binding)

– Enter “National Phase” within 30 months of priority


Timeline for Filing

12 Months 18 Months

Utility / PCT National Phase

3rd Provisional

(optional)

1st Provisional

2nd Provisional

(optional)

• Typical Filing Strategy


Timeline for Filing – AIA strategy

• Strategy to provide extra year of patent term in U.S.

12 Months 18 Months

Voluntarily Publish

Application

National Phase

Re-file Provisional

1st Provisional

U.S. Utility

12 Months 12 Months

PCT


Supreme Court’s Prometheus Decision

• Discovered correlation between specific drug metabolite levels and safety / efficacy

• Patentable subject matter

– Exceptions: natural laws / phenomena, products of nature, abstract ideas

– “Specific applications” of natural laws are patentable

• Holding: administering, measuring, and then correlating metabolite level to need alter drug dose is not patentable

• Implications for diagnostics

– e.g., inflammation as diagnostic for heart disease


Brenden Gingrich, Ph.D., J.D. [email protected]

[email protected]

Education

Monetizing Your Intellectual Property: Protecting Ideas that Generate Income