Extramural Intellectual Property 11 th Annual NIH SBIR/STTR Conference June 30, 2009 – Omaha, Nebraska Intellectual Property: Considerations for Success J.P. Kim, J.D., M.B.A., M.Sc., M.A.L.S., Directory & Policy Officer, Division of Extramural Inventions & Technology Resources (DEITR), OPERA, NIH Office of Extramural Research (OER), OD, National Institutes of Health (NIH), U.S. Department of Health & Human Services (HHS)

Intellectual Property What is Intellectual Property? The why and how of protecting Intellectual Property Patents & Copyrights Generally Patents specifically Additional Data and Copyright Issues The Bayh-Dole Act: Recipient Rights & Responsibilities Special Considerations for STTRs

What is Intellectual Property? The concept of legal protection for original creations Certain creations of the human mind that have commercial value and are given the legal aspects of a property right, such as: patent, trademark, unfair competition, copyright, trade secret, the right of publicity, and plant variety protection

Patents & Copyrights: What They Protect Patents - embodiments of new and useful ideas (utility patents), designs, and plants Copyrights – original works of authorship (including literary, dramatic, musical, artistic, and certain other intellectual works) that are fixed in a tangible form of expression

Plant Patents vs. Plant Variety Protection: Two Forms of IP for Plants Plant Patent: Asexually propagated plants - USPTO/Commerce ( A patent is a right granted to an inventor Excludes all others from making, using, and/or selling the patented invention for 20 years Criteria for a patent are novelty, inventiveness (non-obviousness), utility, and reproducibility Plant Variety Protection (PVP): Sexually produced (by seed) or tuber- propogated - PVPO/USDA ( Provides patent-like rights to plant breeders Exclusive rights to multiply and market the seed of that variety Protects genetic makeup of a specific plant variety for years Criteria for protection are novelty, distinctness, uniformity, and stability

Patents & Copyrights: Rights Granted under IP Patent – the right to exclude others from making, using, offering for sale or selling the invention throughout the United States, or importing the invention into the United States and its territories and possessions Copyright – the right to reproduce, prepare derivative works, distribute, and to perform and display the work publicly, including performing the work by a digital audio transmission

Patents – 20 years from earliest filing claimed (subject to the payment of maintenance fees as provided by law) Terms may be extended for certain pharmaceuticals and for certain circumstances as provided by law Copyrights – the life of the (last) author plus 70 years (for Post-1977 creations) For Works-Made-For-Hire or Anonymous Works, the shorter of 95 years from publication or 120 years from creation For Pre-1978 creations, up to 95 years Patents & Copyrights: Term of Rights Granted under IP

The Why and How of Protecting Intellectual Property Why To attract investors To secure market position/exclusivity For further research & development How U.S. Constitution Federal statutes Others: state statutes, common law, contracts

Patents: What Is Patentable Can be any new and useful: Processes (process, act or method, and primarily includes industrial or technical processes); Machines; Articles that are Manufactured; Compositions of matter; or Any new and useful improvement thereof

Patents: Conditions for Obtaining a Patent Novelty (Newness) Useful (having utility) – specific, credible, and substantial utility Non-obviousness (e.g., the improvement was not obvious to a person having ordinary skill in the area of technology related to the invention)

Not a mere idea or suggestion Extensive data is not necessarily required A patent application with prophetic claims could be granted Additional supporting data could be submitted later during patent prosecution in a subsequent Rule 132 Declaration Patents: Support for Filing A Utility Application

Most international rights can be lost by making an enabling public disclosure before filing a patent application (limited exceptions may include the U.S. (1), Canada (1), Australia (0.5;1), Japan (0.5)) U.S. rights can be lost by making an enabling public disclosure more than one (1) year before filing a patent application Risk of losing all rights by failing to timely disclose an SBIR/STTR invention to the Government (see Bayh-Dole) Patents: Losing Rights Through Public Disclosure

File enabled patent application prior to disclosing, e.g., through posters, presentations, publications, talks, etc. Limit discussions/exchanges with parties who are under confidentiality obligations E.g., use confidential disclosure agreements (CDAs) whenever possible for discussions or other exchanges with potential investors, collaborators, licensees, et al. Patents: Protecting Rights from Public Disclosure

Grant application abstracts or summaries should be written as if they will be made publicly available immediately Take appropriate steps to protect confidential information, e.g., marking it as “confidential”, withholding it if appropriate, submitting a substitute, or simply filing a patent application on it as soon as possible Patents: Protecting Rights from Public Disclosure

Freedom of Information Act (FOIA) – Safeguarding Grant Application Information and Invention Disclosures Take the appropriate precautions (markings, etc.) 5 U.S.C. § 552(b)(4) provides an exemption for “trade secrets and commercial or financial information obtained from a person and privileged or confidential” Predisclosure Notification: Executive Order # Predisclosure Notification Procedures for Confidential Commercial Information

Contractor may establish claim to copyright subsisting in any data first produced in the performance of the contract (FAR (c)) Databases as compilations may be copyrightable, there is no copyright protection for the underlying data SBIR Data Rights: “SBIR Rights Notice” (FAR (d)) Four (4) year period of “non-disclosure” by Government without contractor’s consent Use is for Government purposes only After 4 year period, non-disclosure prohibitions no longer apply – Government may use for Government purposes but may also authorize others to use on its behalf Selected Data and Copyright Issues: Under the SBIR/STTR

Contractor may withhold limited rights data and restricted computer software, and “furnish form, fit, and function data in lieu thereof” (FAR (f)) Limited rights data, as used in this clause, means data (other than computer software) developed at private expense that embody trade secrets or are commercial or financial and confidential or privileged. (FAR (a)). Selected Data and Copyright Issues: Under the SBIR/STTR

Federal Funding Agreements Selected Definitions Recipient Rights & Responsibilities Government Rights The Bayh-Dole Act: Special Considerations

The Bayh-Dole Act: Federal Funding Agreements The Bayh-Dole Act addresses patent rights for a contractor under funding agreements by a federal agency (e.g., grants, contracts, and cooperative agreements) for performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.

The Bayh-Dole Act: Selected Definitions Invention: “Any invention or discovery which is or may be patentable or otherwise protectable under this title or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act (7 U.S.C et seq.).” 35 U.S.C. § 201(d)

The Bayh-Dole Act: Selected Definitions Subject Invention: “Any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement: Provided, That in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act (7 U.S.C. 2401(d))) must also occur during the period of contract performance” (35 U.S.C. § 201(e)) Caveat: A preexisting company invention could fall under the definition of a “Subject Invention” if it was conceived of prior to funding but was first actually reduced to practice under the SBIR/STTR.

Recipient owns Rights in discoveries by timely electing title to subject inventions The Bayh-Dole Act: Recipient Rights & Responsibilities

Recipient has Responsibilities to meet reporting requirements Extramural Invention Reporting Compliance Responsibilities edison.info.nih.gov/iEdison/timeline.jsp edison.info.nih.gov/iEdison/timeline.jsp The Bayh-Dole Act: Recipient Rights & Responsibilities

Implement Employee Agreements  as needed Disclose Each Invention  within 60 days Resolve Election or Waive of Title  within 2 years File Patent  within 1 yr. of election Provide License to the Govt.  upon title election Indicate Govt. Support on Patent  with patent appl. Product Manufacturing in U.S.  required Report on Invention Utilization  annually Final Invention Report  at award close out Invention Reporting Requirements of SBIR/STTR Grantees & Contractors

Government Use License March-In Rights ( 35 U.S.C. § 203) Compare to Non-Federally Funded Patents under 28 USC § 1498 U.S. Manufacturing Requirement Approval of Assignments by Nonprofit Organizations Subawardee’s Bayh-Dole rights The Bayh-Dole Act: Government Rights

“ With respect to any invention in which the contractor elects rights, the Federal agency shall have a nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world. ” 35 U.S.C. § 202 (c)(4) The Bayh-Dole Act: Government Use License

The Federal funding agency shall have the right…to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee, or exclusive licensee refuses such request, to grant such a license itself. 35 U.S.C. § 203(a) The Bayh-Dole Act: March-In Rights

The Bayh-Dole Act: Has the NIH Ever Marched-In? No. CellPro, Inc. (1997) Norvir (2004) Abbott Laboratories, Inc. Norvir.pdf Norvir.pdf Xalatan (2004) Pfizer, inc. Xalatan.pdf Xalatan.pdf

“(a) Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture. ” (28 U.S.C. § 1498(a)) Compare to Non-Federally Funded Patents under 28 USC § 1498

28 U.S.C. § 1498 was reportedly part of the discussions the Government had with Bayer regarding CIPRO supplies after the anthrax situation Authorization and Consent FAR Compare to Non-Federally Funded Patents under 28 USC § 1498

No licensee shall be granted the exclusive right to use or sell any subject invention in the United States unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States. This requirement may be waived by agency upon showing that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible. 35 U.S.C. § 204 For NIH, see edison.info.nih.gov/iEdison/ManufacturingWaiver.jsphttps://s- edison.info.nih.gov/iEdison/ManufacturingWaiver.jsp The Bayh-Dole Act: U.S. Manufacturing Requirement

Approval of the Federal Agency required for assignments by “Nonprofit Organizations” which includes universities under an STTR Exception “where such assignment is made to an organization which has as one of its primary functions the management of inventions (provided that such assignee shall be subject to the same provisions as the contractor).” 35 U.S.C. § 202 (c)(7)(A) Nonprofits would retain a reversion of rights if the subject invention is no longer pursued by the management organization The Bayh-Dole Act: Approval of Nonprofits’ Assignments

The Bayh-Dole Act: Subawardee’s Bayh-Dole Rights “ The subcontractor will retain all rights provided for the contractor in this clause, and the contractor will not, as part of the consideration for awarding the subcontract, obtain rights in the subcontractor's subject inventions. ” 37 CFR § (g)(1)

Special Considerations for STTR: Model Agreement for Rights STTR subcontractor research institution also has Bayh-Dole rights Agreement provides for the company’s ability to further develop and commercialize STTR inventions, including those made by the research institution

Special Considerations for STTR: Model Agreement for Rights Model agreement for allocation of rights (e.g., 1/STTRModelAgreement.doc) 1/STTRModelAgreement.doc

The Bayh-Dole Act: Bountiful Benefits, De minimis Drawbacks SBIR/STTR awardees benefit from Bayh-Dole because: SBIR STTR awardees own their inventions Bayh-Dole is about encouraging maximum participation of small business firms in federally supported research and development efforts Bayh-Dole is about ensuring that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery

The Bayh-Dole Act: Bountiful Benefits, De minimis Drawbacks SBIR/STTR awardees also benefit from Bayh-Dole because: Bayh-Dole is about promoting the commercialization and public availability of inventions made in the United States by United States industry and labor Government rights are not there to compete or interfere with commercialization Bayh-Dole is also about getting inventions to the marketplace to make them available to the public (consistent with NIH’s mission is to benefit the public health)

NIH Extramural Intellectual Property Resources for SBIR/STTR Awardees Extramural Inventions J.P. Kim, Director & Policy Officer, Division of Extramural Inventions & Technology Resources (DEITR), OPERA, Office of Extramural Research, OD, NIH, HHS John Salzman, Assistant Extramural Inventions Policy Officer, Division of Extramural Inventions & Technology Resources (DEITR), OPERA, Office of Extramural Research, OD, NIH, HHS iEdison User Support (301) Websites: