1. IP 101 for LA BioMed Michael J. Shuster, Ph.D., J.D. October 9, 2013

2. Agenda n Types of intellectual property n Overview of patent system n Interesting developments in life science patent law n Working with LA Biomed tech transfer n Challenges protecting early stage innovation n Few words about IP diligence

3. Types of intellectual property n Patent – Protects Inventions n Copyright – Protects Expression of Ideas n Trade Secret – Protects Business Secrets that Have Commercial Value n Trademark/Service Mark – Protects Consumers and Manufacterers by Associating Goods and Services with Source or Sponsorship

4. Patent system overview n Promote innovation by bargain with inventor Inventor discloses invention to public and teaches how to make and use it – Specification portion provides disclosure Government grants the inventor a period of exclusivity – Claims portion provides exclusivity

5. Why have a patent system? n Incentivize investment in innovation n Critical for endeavors that require heavy investment and otherwise lack barriers to entry n Based on grand bargain – disclosure exchanged for exclusivity n Has the patent system become imbalanced? n How can imbalances be addressed?

6. Incentivizing Investment n Patents traditionally used to incentivize investment by providing limited period of exclusive rights in exchange for disclosure of invention to public. n “The Congress shall have Power To promote the Progress of Science and useful Arts, by securing for limited Times to authors and Inventors the exclusive right to their respective Writings and Discoveries.” U.S. Constitution Article 1 Section 8 6

7. Assuring Access n Concerns that patent system is “out of balance” and impeding technological progress Tragedy of the anti-commons – existence of numerous rights holders frustrates achieving socially desirable outcome (Michael Heller) 7

8. Patent Law Evolution Creates Uncertainty n Rules of the game do not remain fixed over time Legislation Case Law Patent Office Rule changes n Long lag between preparing patent application and enforcement 8

9. Patent system overview n US just moved to first to file system (like the rest of the world) n Can still file a US patent within one year of public disclosure n But need to file first to secure foreign patent rights n For innovations that are regulated (devices/drugs, etc.) can be difficult to commercialize with US only patent

10. Patent system overview n Patent term starts on day patent issues n Ends 20 years from date first “utility” application was filed n Provisional applications Can hold your priority date Can be lower cost to prepare (don’t require claims) Don’t start the clock on term – Can effectively extend term 1 year

11. 11 PATENT TIMELINE Invention Disclosure File Patent Foreign or International Filing Review by PTO 0m-3m36m30m18m 12m Foreign or International Publication US Patent Issues National Phase 40m 1 m.f. 3yr 3 m.f. 11yr 2 m.f. 7yr Foreign Patent Issues (4-6 yrs) US Publication

12. Interesting developments 35 U.S.C. §101 Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. n Exceptions Laws of Nature (Scientific Principles) Natural Phenomena/Products of Nature Abstract Ideas/Mental Processes Policy objectives behind the exceptions?

13. Supreme Court and Federal Circuit Duke it out over 101 n Bilski Abstract idea exception n Mayo v. Prometheus Law of nature exception n Myriad Product of nature exception n The noose is getting tighter!!

14. Working with LA BioMed Tech Transfer n Disclose your ideas in invention disclosure form n Provide input as to who would want to license or n Identify champion who is willing to carry the ball into a new startup n Long hard slog to get a startup off the ground, but rewards can be great n If successfully commercialized, portion of royalty income goes back to inventor

15. Challenges for early stage innovation n Simple biomarker correlations with risk or outcome no longer patent eligible (Mayo v. Prometheus) n Classifiers build using multiple inputs and algorithms probably still protectable n Discovery of target involvement in disease process not protectable absent disclosure of agents that can modulate target activity (Univ. Of Rochester v. Searle; Ariad v. Lilly)

16. Challenges for early stage innovation n Provisional application can be useful tool to explore commercial viability and allow additional time to get experimental results n But if provisional specification doesn’t meet “disclosure requirements” (written description of invention, and a teaching of how to make and use the invention), might not be sufficient to hold priority date Provide non-confidential general disclosures in discussions, show provisionals to potential partners using CDAs

17. Challenges for early stage innovation n Work closely with trained IP/licensing professionals in your tech transfer office n Be careful about sending or receiving materials without material transfer agreements Ounce of prevention n Can seem cumbersome but important to get ducks in a row, especially for investor diligence Errors can mess up title to invention and make technology difficult to fund/invest in

18. A few words about IP diligence n Two objectives Vet strength of portfolio covering technology Determine whether third party patents might be infringed by someone practicing the technology

19. Discussion and questions? n We are here to help! n Contact your tech transfer office to learn more n They and we will work closely together to create maximum value for the innovations you bring to life n Ruben Flores (rubenflores@labiomed.org) n Michael Shuster (mshuster@fenwick.com)