1. (Session #40 -- 10:30-11:45 a.m.) Intellectual Property (IP) 101: “What Research Administrators Should Know about Faculty IP Responsibility” by Tom Kelly, Office of Intellectual Property Administration (OIPA), WSU Research Foundation (WSURF), and WSU Ag Research Center (ARC)

2. What You Should Take Away from This Presentation: --An general understanding of intellectual property (IP) and the invention disclosure process at WSU --The rights and obligations of WSU faculty regarding invention disclosure --The function of the Office of Intellectual Property Administration (OIPA) and the WSU Research Foundation (WSURF) in invention disclosure, IP protection, and technology licensing

3. What Is Intellectual Property? Standard Definition: Intellectual property (commonly referred to as “IP”) is anything that is created by the intellect in a tangible form. Translation: An invention, such as a new and useful process, machine, manufactured item, composition of matter, and any new, useful improvement of the above (which is disclosed on the invention disclosure form) Some basics first…

4. Purpose of Protecting Intellectual Property: By protecting your invention—and depending upon the form of protection used and the type of invention involved—you can exclude others from making it, growing it, propagating it, using it, selling it, offering to sell it, importing a protected product, or importing a product made using a protected process. By not protecting your IP, it may become part of the public domain, where anyone can use it, and it’ll be outside of your control.

5. Pros & Cons of Patenting Risks of not patenting -Legitimate re-discovery -Reverse Engineering -Patenting may be forever barred if application is not filed Cons – Exposure -Invention and research strategy exposed to the public -Infringement is difficult to detect -Trade secret status destroyed

6. Protecting Your IP: Forms of U.S. Intellectual Property Protection Patents Copyrights Plant variety protection (PVP) Trademarks Trade secrets and Know-how

7. The Most Common Form of IP Protection: The Patent To be patented, an invention must be useful, novel, non-obvious to one skilled in the art, and it must work. Patents are governed by federal law. They are property ownership documents similar to a lease on a car. Patents give the owner the right to exclude others from making, using, or selling the invention. They are valid for 20 years from the first filing date of the patent. But, patents are expensive and involve a long-term commitment and on-going maintenance payments.

8. Advantages of Disclosing, Protecting, and Licensing WSU IP Extends WSU’s research mission by fostering investment in innovation, through licensing and start-up company development. Furthers WSU’s extension mission by providing new products and services to society. Promotes economic development in the state of Washington and in the nation. Provides income to WSU to further its research and scholarship activities. Improves WSU’s standing in the research institution hierarchy, which tends to attract leading researchers and high quality students. Provides a financial incentive to inventors.

9. Who Owns Faculty IP? Official WSU Policy: “The University shall own the rights to all patentable property and other tangible research and scholarship developed as a result of University employment, or when the equipment, supplies, facilities, employee time or proprietary information of the University are used. After the employee terminates his or her Washington State University employment and is re-employed elsewhere, the University retains ownership of subsequent inventions where the invention is a direct outgrowth of the University's business or University research and development.”

10. WSU’s Copyright Policy “The University shall not assert ownership in the following works created by faculty within the faculty’s scope of employment, unless (1) substantial kinds or amounts of University resources...were used to create the works; (2) the works are created pursuant to a written agreement between the employee and the University; or (3) the works are created pursuant to a third-party sponsored

11. agreement, contract, or grant, specifically allocating ownership rights to the University: Scholarly material Educational material Art works Musical compositions Dramatic and non-dramatic literary works”

12. Invention Disclosure Process/Faculty Requirements: Faculty, during their employment at WSU, are required to disclose all potentially patentable inventions and discoveries (i.e., IP) to WSU’s Office of Intellectual Property Administration (OIPA). The disclosure process starts when the faculty member completes an invention disclosure form available on the OIPA website.

13. Confidentiality --Prior to disclosure of IP to OIPA: When a faculty member needs to discuss a potentially patentable invention with a company prior to disclosure of the IP to OIPA, whether it’s prior to submission of a research proposal or while conducting the research, The faculty member should so inform OGRD, and OGRD should sign a non-disclosure agreement (NDA) with the company prior to the discussion. --Following disclosure of IP to OIPA: Once the IP has been disclosed to OIPA by the faculty member, prior to the discussion, OIPA should sign a confidential disclosure agreement (CDA) with the company.

14. IP Protection Scenario A company wants to sponsor research but first wants to discuss the research with the faculty member. What should the researcher do next?  Set up an NDA via OGRD.  Discuss the research; submit proposal to company.  OGRD negotiates the SRA.  Company wants to send materials to researcher. Material Transfer Agreement (MTA) negotiated by OGRD. Company sends materials.  Conduct the research. An invention results.  Submit invention disclosure to OIPA.  OIPA evaluates disclosure, negotiates with company. Perhaps another CDA and/or outgoing MTA needed.

15. Why is Confidentiality Important? --If a faculty member discloses confidential information to a company without a signed NDA/CDA in place, the company may use that information to file its own patent on the invention. --Such public disclosures could result in loss of patent rights. --In the U.S., you have one year to file a patent after public disclosure. --In most other countries, except for Canada and Australia, loss of patent rights occurs upon public disclosure.

16. What Constitutes a Publication or Public Disclosure?  A thesis or dissertation  A journal article  A poster presentation or abstract, e.g., an on-line abstract for a conference presentation  A published grant proposal, which is usually considered public information once funded  Proposals to commodity commissions sent out in booklet form or via e-mail to commissions, whether or not funded  A progress report submitted to a funding agency— USDA, NSF, etc.  An oral presentation

17. What is an Invention Disclosure? --Definition: A 6-page form completed by the faculty member that describes the invention --Once completed, the invention disclosure form is signed by the faculty member (and any co- inventors), a witness, the dept chair, and the dean of the college, and sent to OIPA. (In CAHNRS, invention disclosures are sent to the ARC director and not to the dean.) --The invention disclosure form can be found at the following web address: http://www.wsu.edu/~oipa/index.htm

18. What is OIPA and What Happens to Invention Disclosures Sent to OIPA? --OIPA is the WSU office that collects and evaluates invention disclosures and creates a plan of action with the inventor for the disposition of the disclosed technology. --OIPA first evaluates the IP, looks for prior art, and explores possible commercial interest in the technology. (Questions asked: Is the inventor working with a company interested in licensing the technology? Are other companies interested in licensing the technology?)

19. Evaluation of Invention Disclosures Factors to consider:  Stage of dev’t of the technology  Technical merit of the invention  Cost of protection vs. commercial worth of the technology  Cost of dev’t and production of invention vs. size of market  Commercial interest  Existing patents/prior art  Other factors: long-term value, WSU considerations

20. --If there is market interest in the invention, OIPA may choose to patent or otherwise protect the invention. (This adds value to the potential license agreement because it allows the patent holder more control over the technology which the patent holder can give to the licensee of the technology.) --Once license negotiations are underway, and a company is close to signing a license agreement—generally for up-front fees, milestone payments, royalties, etc.—OIPA officially assigns the IP over to the WSU Research Foundation (WSURF), which finalizes and signs the license agreement.

21. --There are variations to the above theme: For example, a WSU technology might be licensed to the WSU inventor’s start-up company in exchange for minimal fees and/or an equity position in the company. Or, an existing company may want to create a start- up company around a WSU technology for any combination of monetary or equity consideration. --On the other hand, if an inventor’s technology proves unmarketable, it is either returned to the inventor or turned over to the federal agency that funded the invention.

22. Once the technology is in WSURF’s hands, WSURF will: Work with the inventor and attorney to prosecute the patent Monitor the continued prosecution of the patent (or other IP protection) Once the patent is granted, pay appropriate issue and maintenance fees Monitor the fulfillment of license agreement terms Do whatever else is required along the way

23. Invention Faculty Patenting Patent Atty Evaluation and Marketing OIPA WSURF Licensing WSURF assignment Invention disclosure Licensing/ Company Formation WSURF Invention Flow Chart patent prosecution

24. What is the Difference between WSURF and OIPA? --The same people work for both OIPA and WSURF, and all are WSU employees. --OIPA is part of WSU and collects and evaluates invention disclosures, markets inventions, and pays initial patent application costs. --WSURF is a separate 501(c)(3) non-profit corporation apart from WSU. (We are not the WSU Foundation, the folks with the big bucks, the endowments, and the 17A accounts.)

25. What Else Do OIPA and WSURF Do? --OIPA also is part of the Office of Research, which includes OGRD. At times, OIPA assists OGRD with the IP portion of complicated research agreements. --Sometimes OIPA gets involved in writing the IP portions of large research proposal submissions, where significant technology transfer activities or IP is expected. --OGRD handles incoming transfers of material under material transfer agreements (MTAs); WSURF handles outgoing transfers of material, and prepares and signs outgoing MTAs. No commercial use of materials is allowed. --WSURF manages the Research and Technology Park and the residents in the Park.

26. Distribution of License Revenue from Patented Technologies WSURF deducts unreimbursed patent expenses and then takes 20% off the top. The rest is distributed as follows:  $1-$10,000: Inventor gets 100% of revenue.  $10,000-$200,000: Inventor and WSU split revenue 50:50.  Above $200,000: Inventor gets 25%, WSU gets 75%.

27. Distribution of License Revenue from Seed-Propagated Crops WSURF deducts the cost of obtaining and maintaining legal protection. WSCIA collects a management fee (currently 2%) for its services in seed production and seed distribution. The rest is distributed as follows:  70% goes to the ARC for the program.  30% goes to WSURF, ARC, and the breeder team (each gets 10%).

28. Distribution of License Revenue from Asexually Propagated Crops WSURF deducts the cost of obtaining and maintaining legal protection. The rest is distributed as follows:  50% goes to the ARC for the program.  20% goes to the ARC and to WSURF (each gets 10%).  30% goes to the breeder team.

29. General Contact Information For all OIPA/WSURF employees: --Tel: 509-335-5526 --Fax: 509-335-7237 --E-mail: westy@wsu.edu --Website: http://www.wsu.edu/~oipa/index.htm