1. Gilbert Nicolaon Kiev June 10, 2008
Patenting…or not ?
Gilbert Nicolaon
Kiev
June 10, 2008

2. A « recent » issue 1980 :The « Turning Point » :
For Universities and not for profit organizations protection of Intellectual Property was not an issue until the late 70s
1980 :The « Turning Point » :
The Baye-Dole Act.

3. The « turning » point The Baye-Dole Act (1980)
A Major change in I.P.rights in the U.S.
Before : No interest from public institutions
(Patenting was even a « bad » point for academic scientists)
After : I.P. is a source of revenues

4. The « turning » point : WHY ?
Late 70s in the U.S. :
The perception of Science is changing
Inflation is very high
Unemployment is increasing
Competitiveness is decreasing ?

5. A « Radical » change Before : I.P. is owned by U.S. Gvt.
After : Univ. can own I.P. rights
(Gvt has some preferential rights to license)
I.P. becomes a profit center

6. To make legislations more flexible
A « recent » issue
U.S. Baye-Bole Act 1980
Europe
More recently (90s)
A political issue
Over regulation (90s)
Recent trend all over the world:
To make legislations more flexible

7. Governments and I.P.R. Legal incentives to patent their inventions
Numerous incentives to encourage researchers to protect (and “exploit”) their R&D results
Legal incentives to patent their inventions
Financial incentives
Assistance to patent

8. Two « Very » basic questions
Is it « patentable » ?
Is it worth patenting ?

9. Is it worth patenting ? Who will exploit the patent ?
An industrial licensee
A start up created to do it
The RDI itself ……
Will the owner be able to ? :
Technically detect counterfeiters
Financially sue counterfeiters
Two « major » questions?

10. Patent writing Who should write the patent ?
A patent is a legal document
A scientist usually does not have the legal expertise.
when a scientist writes a patent it is usually :
Too « technical »
Too detailed
Too « narrow »
……A specialist of patent law

11. The owner is usually a Gvt. Organization
Patent ownership
Who should own the patent ?
Writing, filing, extending abroad, and maintaining a patent is expensive.
Few patents generate significant royalties
Usually scientists do not have the financial capability to support these costs.
The owner is usually a Gvt. Organization
BUT….

12. Many organizations have a : « Royalty sharing policy »
Patent ownership
….If a patent generates financial revenues….
The inventor(s) should be financially rewarded (financial reward is a strong incentive)
Many organizations have a :
« Royalty sharing policy »

13. Royalties sharing + Subtract Patent cost Subtract administrative cost
Beneficiaries :
Inventor for personal use
Inventor’s laboratory For R&D
University or RDI for R&D

14. Royalties sharing : Stanford U.
Inventor for personal use
33.3%
Inventor’s dept. For R&D
Inventor’s school for R&D

15. Royalties sharing : Harvard U.
Up to $ 50000
Net royalties
Over $ 50000
Inventor for personal use
35%
25%
To support inventor’s R&D
15%
20%
To inventor’s Dept.
To Dean for academic R&D
To President for acad. R&D

16. Patenting and licensing
Patenting protects an idea having some potential for applications
BUT
Patenting itself does not generates revenue
Few patents from public R&D do reach the market and generate income

17. Patenting and licensing
Having a patent is…
…USELESS !
Unless it is successfully licensed
AND…
it does generate financial revenues

18. Ex.: The French public labs
Year
Nb. of Patents
1995
300
1998
400
2001
500
2004
700

19. Ex.: The French public labs
1997: Strong incentives to patent
A large increase in Nb. of Patents
It almost doubled within 10 years
BUT
No increase in royalties revenues
Royalties revenues are almost constant
Approximately 150M€/year

20. Patenting and Licensing
How to generate revenues from a patent ?
To create a start up
To license the invention to an industrialist +
To sue counterfeiters

21. Exclusive license ? Or Exclusive Non exclusive An important question
(Licensing Know how)

22. Royalties, Royalties, Royalties….!
Learned from experience :
During the negotiation of a licensing agreement the most discussed topic is : the level of Royalties.
This is only one of the issues…and it may not be the most important one !
Also learned from experience :
Making money from licensing takes time
Very successful licenses are not very numerous

23. An example : The French C.N.R.S.
The French basic research institute :
25000 employees
12000 Scientists
3000 M€ annual budget
More than 1200 patents
More than 500 Licenses
47.5 M€ Royalties (2003)

24. Royalties 2003 C.N.R.S. Royalties Nb. Of licences More than 7.5 M€ 1
750 K€ to 7.5 M€
150 K€ to 750 K€ 4
75 K€ to 150 K€ 7
7.5 K€ to 75 K€ 62
Less than 7.5 K€ 83

25. Royalties 2003 C.N.R.S. Nature Amount Royalties 47.5 M€ I.P.R. cost
To inventors
12.1 M€
To laboratories
15.5 M€
Approx. no of labs concerned 95

26. An example : American U. A « slow » learning process
10 years before the first significant revenues were collected
Today IPR is a revenue center for many U.

27. A slow learning process
Year
Royalties for the Nb. 1 Univ.
(Millions U.S. $)
1995 15
1996 38
1997 46
1998 61
1999 89
2000
138
2004
110

28. Conclusion 1980 the Baye-Dole Act A radical change in IPR policy
Spreading all over the world
An irreversible trend

29. Thank you for your attention
Gilbert Nicolaon