SKGF_Presentation_Intellectual Property Exploitation Strategies_2003

© 2003, Sterne Kessler, Goldstein & Fox P.L.L.C. 147476v1.ppt

Marvin C. Guthrie, Esq.Senior Advisor for Technology [email protected]

Presented at:International Engineering ConsortiumNanoEngineering World ForumJune 23, 2003 - Marlborough, MA

22 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C.

l Patent applications and Patents – US and Foreign Copyrightable works

- software, reports, films, recordsl Research and Business Information

- trade secrets – policy for keeping secret - know-how- Business information – customer lists,

etc.


l Who you are ( academia, industry, venture capital), to a significant extent, determines –

l Your IP strategiesl The manner in which IP is -

- created- acquired (purchase, licensing-in)- used (enabling product manufacture, use or sale)- sold or out-licensed

l The nature of the technical assessmentl The nature of the value created or value added


l Transferring technology to the public.l Facilitating faculty hiring and retention.l Acquiring technology for faculty to use in their

research or patient care.l Revenue generation


l Right to make, use or sell products, processes or services.

l Right to prevent others from making, using or selling competitive products, processes or services.

l Revenue generation.l Building an IP portfolio for trading (cross-

licensing) purposes.


l Build technology platforms for start-ups.l Revenue generation through sale or licensing

of IP portfolio.l Occasionally to acquire trading stock.


l Research funding sources impose encumbrances on IP

– Statutes, regulations or contracts (policies) affect how IP is protected, used and transferred –l governmentsl academic institutionsl foundationsl industryl venture capital

l Know these encumbrances and understand their impact on your IP strategy.

l Use “Due Diligence”


l NIH,NSF, Small Business Admin.-SBIR/STTR – Bayh-Dole i.e., – inventions made by participating academic collaborators owned by the

academic institution, but, check for agency declared “exceptional circumstances”

– contract data and software clauses– often affect ownership and exclusivity expectations

l Advanced Technology Program (ATP), Dept. Commerce –– all IP owned by company (many univ. will not accept funding)

l Industrial Sponsorship & Material Transfer Agreements often impose IP ownership or licensing restrictions

l Foundations -– Almost all have IP ownership clauses that defer to university IP

Policies, as long as the university retains title, and many have due diligence clauses that trump due diligence clauses in licenses.


Caveat Emptor

l Are you acquiring what you bargained for ?l Know who had rights – have they been

properly conveyed to you?l At academic institutions use the technology

licensing office.l Use “due diligence” in determining what rights

you are acquiring.


l Always use written documents – no handshakes!

l Assignments – convey all right, title and interest (ownership)

l Licenses – convey less than all of the Licensor’s rights.

l In-licensing and out-licensing terms should advance the licensor’s and licensee’s IP strategy.


l IP Licensed - specifically and clearly identified.l Type of License

– Degree of exclusivity– Term– Territory– Field

l Consideration l Maintenance of IP –application prosecution and taxesl Enforcement – who sues infringers or defends validityl Indemnification

Nanotech licensing appears to be following biotechnology licensing strategies.


l Degrees of Exclusivity– Non-exclusive – Others may get rights

l Most favored nation clause your protection

– Semi- or co-exclusive –limited # get rights– Exclusive – all of the rights in the area of exclusivity

l If licensor wants to practice – reserve the right


l IP strategies are often implemented by limiting exclusivity in the following ways – both sides can bargain for these;

l Field of use” – right to make, use and sell– certain products – products for certain markets– right to use certain processes– right to use process at certain conditions

l Territory - license by geographical area– country, political (EU, NAFTA) or business market

l Period of Exclusivity– years– until milestone reached


l In exchange for the license, the licensee promises -– anything of value-

l $$, l equity, l goods l services, l IP ( related or unrelated to the licensed technology)

– present – future


l Consideration can also be delivered at a variety of times

– Upfront– At the time of option or license – Milestone achievement– Earned royalties or payments based on sales or use

l Escalating –% royalty increases upon reaching X volume of sales l Deescalating-% royalty decreases upon reaching x vol.salesl “Royalty stacking” provisions

– “Due diligence” payments rather than milestone eventsl Often annual increases to insure use of licensed technology


l Make sure you can follow and contribute to these crucial maintenance decisions -

– pre-issuel prosecution, (including interferences) and l payment of fees

– post-issuance l reissue, l reexamination, l extension andl payment of maintenance fees

l The degree of contribution usually depends on the degree of exclusivity.


l Crucial to both the licensor’s and licensee’s IP strategies– who controls litigation ?

l usually depends on –– degree of exclusivity

l licensee’s willingness to bear costs


l The wide diversity of nanotechnologies will result in a wide variety of IP creation,protection and acquisition strategies.