1. Technology Transfer Practice Ken Porter Steamboat Mountain Solutions copyright 2011 all rights reserved

2. Overview Invention Management Process Resources and Support
Idea Submission
Evaluation
Patent Prosecution
Marketing
Negotiation and Licensing
Resources and Support
Start-up Companies

3. Patent Filing and Prosecution
Process from Invention Disclosure to License
Invention Management Process Overview
New IDF
Hold or release No
Marketing
Patent Filing and Prosecution
Evaluation
Go/No Go NPV > 0 Go
Market
Interest
No-go
Yes
Yes
Hold or release
Valuation and Negotiation
Invest
NPV > 0 No
Patent
Milestone
Agreement Executed No
Yes
Manage License

4. Invention Disclosure Form (IDF)
Invention Timeline: Conception to Patent Protection pat app is a resource allocation tool
$10 3
$10 4
$10 5
PTO
Provisional
Patent
File US Patent
File PCT
PCT National
Phase
Priority
Date months months
TTO
Invention Disclosure Form (IDF)
Provisional
Patent
Marketing and Patenting Licensing
Research
Observation Hypothesis Prediction Experimentation
INVENTION

5. EPO & US Patent Timeline

6. Key Process Steps 1 2 3 4 5 Idea Submission Evaluation
Patent Prosecution 4
Marketing 5
Negotiation and Licensing

7. Inventor Idea Submission1
Inventor Idea Submission
Routinely discuss questions informally by phone or in person prior to a first time submission – encourage early dialog
Inventors describe invention on a standard invention disclosure form (IDF)
When should inventors disclose an invention?
An idea has been reduced to practice that has an industrial application
Form is available on the Protto website

8. Evaluation 2 An invention’s value includes 3 components:
Scientific value and/or technical merit
Elucidation of concepts not previously recognized
Patent value
The likelihood of securing valuable and defensible claims
Commercial value
The feasibility/likelihood that a technology can be turned into a differentiable, marketable product and a licensee secured

9. Evaluation 2 Keys to evaluation Invention assessment
What is it? Describe the invention
How is it better compared to what is available today or anticipated by prior art?
How can application of this technology result in a differentiable product offering for a potential licensee?
Market assessment
Who is the target market
How large is the market
Is it an incremental improvement or disruptive technology?
Industry interest – phone and personal interviews with knowledgeable industry representatives 9

10. 2 Patent assessment Novelty Non-obviousness Usefulness
Predict key claims
Determine support for the claims enabled, i.e., experimental evidence
Evaluate the patent landscape and freedom to operate
Based on the anticipated claims
Anticipate obviousness challenges
An unexpected result?
Success where others have failed?

11. Evaluation 2 Patent Assessment Tools Google Scholar USPTO
Scientific literature
USPTO
Issued patents
Published Patent Applications
PAIR
European Patent Office
WIPO
Automated patent classification tool

12. Conception – formulation in the mind of the inventor
Invention requires:
Conception – formulation in the mind of the inventor
Reduction to practice
Creation of the invention (demonstrate how to make it)
Testing or validation (explain how it works)
Patentable invention must be, under title 35 US Code:
Useful §101 Novel §102 Non-obvious §103
In view of Prior Art
Prior art is anything published or publicly disclosed before the date of invention, including combinations
Recently in KSR v. Teleflex the Supreme Court raised the bar for nonobviousness, i.e., chapter 35 section 103 no longer relies on TSM (teaching-suggestion-motivation), which increases the likelihood that hindsight may creep into decisions

13. Evaluation 2
Go/No Go decision made by positive patent and economic analyses (net present value, NPV)
If a Go, most often the next step is filing a US provisional patent application
IP can also be protected by copyright, trade secrets or trademarks
For a positive NPV Go decision, a partnership with a patent attorney can lower costs, and therefore lower the financial hurdle
Go or no-go

14. Patent Prosecution 3 Hire a patent attorney
Sign engagement letter or contract
Provide key background information (enhances quality and reduces legal fees)
Invention Disclosure Form
Inventor technical description
Invention analysis form and checklist
Patent search results form

15. Patent Prosecution 3
Patent application draft is prepared for review by manager and inventors
Comments, corrections and revisions are relayed to the patent attorney, often via conference call
Final application draft is prepared based on the agreed revisions
Final application is reviewed
Patent application is filed
Key to minimizing expenses is to provide a thorough review of the initial draft and avoid multiple revision-review cycles

16. 4
Marketing Success depends on a deep understanding of the context of the technology
Identify marketing targets (right companies)
Prepare key marketing and technology facts (right message)
Inventor(s) participate as technology experts
Right tools and methods
Non-confidential marketing brochure
Personal contact (calls and s)
Meeting posters
Website

17. ***** ** *** * 4 Strategic Growth Initiatives
Market D.
Market C.
Market A.
Market B.
Product
Extensions
Other
Ancillary
Products
Next
Generation
Of Market A.
Advanced Technology for Market A.
New & Line
Minimal
New Products
Cost
Reductions
Control
New
*****
*** ** *
Companies will tend to pursue new products in segments where there is significant growth potential and strategic interest
5 = Most attractive growth segment, 1 = least attractive growth segment

18. Marketing 4 Sources of marketing leads Inventor contacts
Industry analysis
Professional organizations
Personal contacts
Current clients
Industry studies
Industry databases
Google and Industry Websites

19. Negotiation and Licensing5
Preparation before contact
Research companies in detail
Understand overall market and competitive technology options
Survey comparable deals (SEC EDGAR database)
Understand technology value
published deals
industry norms
25% rule

20. Negotiation and Licensing5
Initial contact and discussion
CDA executed, if necessary
Three levels of commitment:
Letter of Intent
Option Agreement
Patent License Agreement (PLA)

21. Negotiation and Licensing5
Due diligence requests
What do you intend to do with the technology?
Product development plan (PDP)
What is a fair royalty? – or – What is the deal worth?
Pro-forma product level income statement
Draft Term Sheet:
Royalty rate
Quarterly maintenance fee
Milestones and due dates
Minimum royalty
Sales milestones
Others as appropriate 21

22. Negotiation and Licensing5
Memorialize financial terms and due diligence obligations in a Term Sheet
Once Term Sheet is agreed upon, then negotiate other legal issues, responsibilities and restrictions
The Term Sheet can become the 1st part a two-part Patent License Agreement
The contract comprises the Term Sheet, a preamble and a signature page at the end, to which is attached
The Terms and Conditions, which specify the definitions, License Grant, confidentiality and publication rights, etc.

23. Resources and Support Proof of Concept Funding Overview
Short research projects to confirm proof-of-concept
Purpose is to accelerate commercialization efforts and execute a license agreement
Effective projects can accomplished on very small budgets, but should be completed in 6 months or less
Proposals must include concrete objectives and milestones

24. Start-ups
Pursue when start-up is the best option for commercialization, which is often the case for disruptive technology
Link inventors to a network of entrepreneurs, financiers, and experienced managers
Key Requirements to be in place prior to license
Business plan
COI management plan, for faculty
Finance plan, access to capital
Management team