1. Technology Commercialization: a bit of a primer on IP and some thoughts about value Richard Cox Office of Technology Transfer January 25, 2011

2. Evolution of the relative value of tangible and intangible assets to total corporate value 75 - 100 years ago, tangible assets generally accounted for 90+% of a company’s value... 90% 10% Today, many companies’ value is derived from their intangible assets. 100 years agoToday

3. Patents, Copyrights, Trademarks, & Trade Secrets

4. Patents Utility patents – covers machines, manufactured articles, compositions of matter, processes, any new and useful improvement of these things. Right to exclude...not an affirmative right to practice Term – 20 years from filing – 21 years if first file provisional patent application Estimated costs – PPA: $110, Utility: $8,000 - $25,000 Effect of public disclosure - US system vs rest of world – US – 1 year grace period – Everywhere else – absolute novelty

5. Patents (cont.) Test for patentability – new, useful, non-obvious Ownership follows inventorship – employees are usually contractually obligated to assign their rights to employer Inventors are inventors and no one else – conception of idea and reduction to practice Research exemption to infringement (?)

6. Patent issues to watch for Conveyance of title – from all inventors, no competing claims on IP rights Completeness of patent portfolio – divisionals, CIPs, continuations, foreign counterparts, terminal disclaimers Coverage of claims – a well-challenged patent is a strong(er) patent

7. Copyrights Original works of authorship fixed in a tangible medium of expression – protects the expression of the idea, not the idea itself. No exclusionary right against independent creation. Authors have certain exclusive rights – make and distribute copies, make derivative works, display and perform the work publicly. Fair use exception – subjective, no bright line test

8. Copyrights (cont.) Works are “born” copyrighted, no requirement to register – registration helps enforcement Term of copyright – life of author plus 50 years Different rules for works created before 1/1/78 “Works for hire” – authorship remains with employer, term is shorter of 100 years from creation or 75 years from publication.

9. Copyright issues to watch for Acknowledge/identify ALL authors “Work for hire” contracts to assure ownership rights Authors have a duty to account to each other

10. Trademarks & Service Marks Word, phrase, symbol, sound, color, smell, or combination that identifies source of goods or services Establishes an expectation of quality Rights arise out of use – extent of use determines extent of rights – Protects against use of similar marks on similar products

11. Trademarks (cont.) Strongest marks are fanciful/coined or suggestive marks – Descriptive marks are weak/not allowed Registration not required, but probably advisable – Federal registration – requires intent to use – State registration – requires actual use Cost – a few hundred to a few thousand $ – $375 per class of goods

12. Trademark issues to watch for Perform professional trademark search prior to registration – helps prevent claims of willful infringement Unlimited life IF maintained – Federal and state renewal requirements different Enforcement – prevent trademark from becoming generic term for the class of products – elevator, thermos, aspirin vs Kleenex, Xerox, Polaroid

13. Trade Secrets Confidential/proprietary information – that is not generally known (i.e. – is secret) – that is maintained as a secret using reasonable measures – that provides economic benefit Covers virtually all types of information – Formulae, customer lists, recipes, processes, etc. Does not prevent independent discovery or reverse engineering by competitors

14. Trade Secret issues to watch for Must assertively identify, secure, and maintain confidentiality of protected information Inadvertent disclosure is not a defense Unlimited life IF maintained Enforcement – Limit access to protected information – Employee awareness, confidentiality agreements – Proactive enforcement (eg. - employee turnover) – Injunction vs damages

15. Technology Commercialization - some thoughts about goals, and factors affecting our ability to reach those goals

16. The Brass Ring Signed license agreement With up-front $$/equity, and Solid diligence requirements, and Commitment for royalties on sales, and With sponsored research commitment Healthy working relationship with licensee Channel to market for future technologies

17. Identify/Quantify the Real Benefits As consumers, we buy benefits, not products, not science What are the benefits? Where can they be applied? Who cares? Quantify the benefits for each application How much better/faster/cheaper?

18. What do we mean by value? Value has little to do with cost Value changes – often suddenly, often dramatically To licensor (seller) – what they’re willing to take for the technology To licensee (buyer) – what they’re willing to give for the technology True value – terms the parties agree upon to do the deal at that time

19. Factors affecting value Technology factors Stage of development Availability of resources for R&D Personnel, facilities, equipment, materials Market factors Market size/income potential Competitors Regulatory facto rs FDA, USDA, EPA, OSHA, etc.

20. Factors affecting value (cont.) Licensing factors Degree of exclusivity requested/required Fields of use Other limiting factors Geographic territories selected/assigned Rights to sublicense Royalty-stacking Cross-licensing