Intellectual Property and Initiatives to Commercialize Technology David Barbe Professor ECE Executive Director, MTECH

Outline Background IP: Importance and Protection Encouraging IP Development and Disclosure Technology Entrepreneurship Education and Culture Building

Background

Bayh-Dole Act of 1980  Universities retain rights to inventions made from government-funded research  Universities are encouraged to collaborate with commercial entities to promote the use of university research  Universities must share licensing income with faculty inventors and use royalty income to further research activities

UMD Patent Policy The University has an ownership interest in all inventions of University personnel which are conceived of or first actually reduced to practice as a part of or as a result of:  A University-administered program of research activities within the scope of the inventor’s employment by the University or  Activities involving the use of University time, facilities, or materials. This includes all funded research projects whether from public or private resources

Disclosure Policy  Any invention or discovery which is or may be patentable or which may be commercially licensable  Patentable technology  Copyrightable software or other works  Tangible research property (biological materials, etc.)  Accepted from all paid and unpaid full time and part-time faculty members and staff, all paid employees (including those on approved leave), students and fellows

IP: Importance and Protection

IP is the Lifeblood of Tech Companies Competitive differentiation  Important to customers  Confidence  The ones who developed the technology vs. licensed it Important to investors Proprietary technology - Barrier to entry Control of core technology Drives profit margins Asset on the balance sheet Patent portfolios = a strong company asset

Four Basic Types of IP Patents  monopoly on functionality Trade Secrets  protect secret processes (Coke Cola Formula) Trademarks  Word, name, symbol or device  Xerox, Kleenex, Coke, Pentium jingle Copyright  Protects original works of authorship which have been fixed in a tangible medium of expression  protect unauthorized copying of software – not function

Patents The fundamental basis of patent protection is disclosure in exchange for a limited monopoly The right to exclude others from making, using, selling or offering to sell

U.S. Patent Requirements Patentable subject matter Novel Unobvious

Patentable Subject Matter New and useful process, machine, manufacture, or composition of matter Any new and useful improvement

Novelty Not novel if:  Known or used by others, or described in a publication before date of invention (prior art)  “Public use” or “on sale” more than 1 year before U.S. filing date !!!  Publication of idea on Internet, in trade journals  Disclosure to third party for purposes of commercialization  Offering system for sale in this country  Publicly displaying the system such as at a trade show or convention

Non-obviousness Non-obvious to a person of “ordinary skill in the art” At the time of invention

Other Considerations Disclosure requirements  Written description sufficient to allow one to make and use  Best mode The best version (preferred embodiment) must be divulged

Parts of a Patent Specification  describes invention in detail Drawings  show the invention graphically & correspond with specification Claims  set out scope of the invention

Reading a Patent Specification & drawings are used to interpret the meaning of the claims  Specification may contain more than claimed, but not less Compare the claims with a potentially infringing device, composition, method, etc.  All elements of a claim must be present in an infringing device

16. In a charge coupled circuit, the combination comprising: Example Claim a substrate formed of a semiconductor material of one conductivity type; first and second spaced regions at a surface of said substrate, both formed of a semiconductor material of another conductivity type, said second region comprising an electrically floating region; means for maintaining said first region at a given potential; control electrode means spaced from said substrate and positioned between said first and second regions; means for storing a charge of minority carriers with respect to the substrate conductivity type adjacent to said second region; means for transferring at least a portion of said stored charge to said second region; an output line connected to said second region on which an output signal related to said minority charge carriers transferred to said second region may be sensed; and means for applying a signal to said control electrode means for selectively resetting said floating second region to a reference potential.

Provisional Patents First allowed in the USA in 1995 Convenient to achieve “patent pending” status for two-year grace period Inexpensive < $200 Must clearly and exactly cover all of the claims in the final patent application  Can give a false sense of security

The Patent Application Process Application is filed in US Patent & Trademark Office In due course, an Examiner picks up the application for examination - reviews application content; and - searches the prior art, e.g., old patents A negotiation process is initiated Application is allowed or abandoned

Invention Activity Keep accurate log books and other materials to demonstrate dates of conception and reduction to practice Importance of “diligence”

Confidentiality Agreements Must be signed by all outside parties Should clearly identify subject matter – specific better than general Helps avoid disclosure problems

Independent Contractors Use engagement letters Use confidentiality agreements Use assignment agreements - ensure that any inventions discovered by an independent contractor working for you becomes your property

Patent Validity An issued patent is not necessarily valid  Prior art  Improper documentation of invention  Scope may be limited by prosecution history Diligence, thoroughness, good counsel are of extreme importance  Cost and effort in obtaining a patent may be lost  Protection lost

Monitoring the Competition Monitoring patents and applications as they are published Use the US Patent & Trademark Office “Patent Database” - term search with Use a commercial database - identify top patent holders

Encouraging IP Development and Disclosure

Encouraging Invention What’s in it for me?  Incentives Culture that supports Invention - MTECH  Education  Resources  Hands-on assistance Get the word out about successes

Obtaining Invention Disclosures Use a disclosure template  How is the invention different/better over existing technology?  What problem does it solve? What benefits?  How does it solve the problem?  Who are the inventors?  Public disclosure, sale or experimental prototypes? Anticipated?

To file or not to file Usually a committee of respected and objective individuals make recommendations  Based on technical soundness and market analysis  Costs for U.S. patent $10-20K

Incentives Universities – IP belongs to university  Inventors share strongly in proceeds  Recognition Companies – Employee inventions are assigned to the company  Recognition  $ for disclosures  $$ for patents filed

UMD Royalty Distribution

Paths for Return on IP for the Organization that owns the IP Licensing  Find existing companies to take the IP to market Royalties Low risk/Generally Low payoff Office of Technology Commercialization at UMD Startups  Form a new company to develop the technology and take the product to market Equity Higher risk/Higher potential payoff MTECH at UMD

Technology Entrepreneurship Education and Culture Building

MTECH Major Emphases Technology Entrepreneurship Technology Transfer - MIPS Technology company incubation - TAP

Technology Entrepreneurship Hinman CEOs Program Technology Ventures Club Entrepreneurship graduate course Technology Startup Boot Camp Business Plan Competition VentureAccelerator

Hinman CEOs Program 100 undergrads, one-half majoring in technical disciplines Community Technology Seminars and Workshops Product Development Projects; Internships Business School Entrepreneurship Courses Start companies (more than 30 now being formed)

Stanford Award The University of Maryland’s Hinman CEOs Program was recognized as a national leader in entrepreneurship at Stanford University on Thursday, October 25, when the program received the Price Foundation Innovative Educators Award during the prestigious Roundtable on Entrepreneurship Education for Engineers (REEE).

Tech Ventures Club Dynamic forum for technical graduate students to network and explore commercializing an idea and forming a venture 75 active members Monthly meetings include start-up workshops, speakers, and social mixers Members have opportunity to network with local VCs, service providers, business students and entrepreneurs

Course: Fundamentals of Technology Startup Ventures 30 technical graduate students Boardroom setting Study basic processes of tech company formation and operation Form into teams Teams develop business plans during semester Teams present plans to “judges” Course co-taught by engineering professor and venture capitalist

Tech Startup Boot Camp Kicks off the academic year 200+ students and faculty Regional sponsors Basic startup processes  Evaluating tech ideas  IP basics and licensing  Legal fundamentals  Building a team  Obtaining financing  Entrepreneur experiences Presented by experienced VCs, service providers, and tech executives Networking

Business Plan Competition Culmination of academic year $50,000 in prizes raised from sponsors 60+ entries Select top 16 based on executive summaries Judging panel selects top six for full plans and presentations Usually three awards Networking and mentoring sessions between six finalists and judges/sponsors during the Spring semester

VentureAccelerator Substantial Hands-on consultation and advice to selected entrepreneurs and young firms:  Introductions to funding sources  Preparation of presentations and business-plans  Strategic planning  Executive recruitment Play same roles as active Advisory Board members Former VC Partner manages Accelerator

MTCH Entrepreneurship Programs

4/20/9841 Technology Transfer - MIPS  423 different projects with 280 different companies UMD = R&D Lab for Companies

Technology Company Incubation Program - TAP  45 companies graduated; 70 percent still in business after 5 years  created more than 800 jobs  $376 million in investment funds Early stage company incubator offering technical & business assistance, as well as state-of-the-art biotech equipment and modern office facilities.

Contact Information Dr. David Barbe