1. Intellectual Property at USC October 27, 2003 Dr. Michael Muthig

2. Blockbusters Google Taxol Gatorade Fax Machine

3. Presentation Outline IP Office Organization, Mission, Goals, and Services IPO Activity and Benchmarks USC IP Policy Invention Disclosure and Commercialization Overview –Disclosure –Intellectual Property Protection –Marketing –Licensing Take Home Points Open Discussion

4. IPO Organization USCRF –Sponsored Programs –Research Compliance –Incubator –Intellectual Property VP of Research (Executive Director of USCRF) IPO Staff & Contact Information –Michael Muthig, 803-777-4031, mgm@sc.edumgm@sc.edu –Trina Nealy, 803-777-9394, TrinaN@gwm.sc.eduTrinaN@gwm.sc.edu –Natarajan Sethuraman, 803-777-9515, Patents@gwm.sc.eduPatents@gwm.sc.edu

5. Michael G. Muthig, Ph.D. Senior Licensing Officer Education –BS University of South Carolina –MS University of Kentucky –PhD University of South Carolina Professional Experience –State Government –International Consulting Firm –Privately Owned Chemical Distribution Company –Start up Consulting Firm –Nonprofit Organization –University IPO Technology Transfer Experience –Environmental remediation (review and use of innovative technologies) –Technology marketing & business development (Various small companies) –DOE Technology Transfer (Savannah River and Oak Ridge) –DOD Technology Commercialization (Army tech transfer project) –University IP Assessment & Commercialization

6. IPO Mission & Goals Mission –Protect & Leverage University Intellectual Property –Benefit to University, State of SC, and Humanity Goals –Identify and Protect University Intellectual Property –Transfer University Technologies –Manage Intellectual Property Assets of the University

7. IPO Services Faculty & Staff Outreach Invention Disclosure Management Government Reporting Related to Inventions Assessment of University Intellectual Property Commercialization/Transfer Planning & Implementation IP Protection and Management Marketing University IP Assets License Negotiation and Management

8. Invention Disclosures & Licensing (1994-2003)

9. Disclosure, Patent & License Benchmarks (2000)

10. USC IP Policy Overview Applies to anyone using University resources (faculty, staff, students, etc) Requires disclosure of all discoveries Includes patentable and copyrightable discoveries Identifies inventor and University rights Establishes invention categories –Category 1 (Limited University rights) –Categories 2 & 3 (University full right and title) Describes patent and commercialization alternatives Provides for royalty sharing with inventors –Patent (typical 60%-40%) –Copyright (typical 25%-25%-25%-25%)

11. Technology Commercialization Process Invention Conception Disclosure to IPO Government Reporting IP Protection I Commercialization Strategy and Marketing Licensing IP Protection II License Management

12. Technology Commercialization Process

13. Invention Disclosure & Review Process Invention Conception Initial Notice to IPO Draft Disclosure to IPO Meeting with IPO to Discuss Draft Disclosure Final Invention Disclosure IP Committee Review (Category I Only) Provost Decision Notification to Inventor

14. The Invention Disclosure Form Available online ( http://ip.research.sc.edu/forms.htm) http://ip.research.sc.edu/forms.htm Section 1 – Title and Contact Section 2 – Declaration, Ownership, and Assignment Section 3 – Notification Section 4 – Witnesses Attachment 1 – Additional Inventors Attachment 2 – Description of Invention Attachment 3 – Public Disclosure Attachment 4 – Research Funding

15. Disclosure Assessment Process Initial Assessment –Interview with Inventor –Inventor Interest in Technology –Market Research –IP Research –Sponsored Research Potential Secondary Assessment –Marketing Results –Additional IP Assessment –Status of additional R&D

16. Invention Screening Parameters Fundamental Properties ( Novelty, Development Status, Validation, Ownership, IP potential) Market Potential (Total revenue, profit potential, versatility) Competitive Forces (Existing products, patents, ongoing R&D) Inventor Factor (Reputation, patent success, commercialization success) Revenue Potential (License fees, royalties, sponsored research)

17. Intellectual Property Protection Patents –Provisional US Patent Application –Regular US Patent Application –International Patent Application (PCT) Copyrightable Material –Instant Copyright –Registered Copyright Other IP Protection –Trademark (Instant and Registered) –Trade Secret

18. Marketing Process Prepare Technology Brief (with Inventor review) Perform Market Research Distribute Tech Brief (primarily via email and web sites) Develop Technology Prospectus (with Inventor review/assistance) Sign Confidentiality Agreements with Interested Companies Provide Level I Confidential Information Meeting and/or Conference Call with Potential Licensees Provide Level II Confidential Information

19. License Process Develop License Strategy (with inventor input) Identify Potential Licensees Negotiate License Terms and Conditions Finalize License Agreement Prepare Royalty Distribution Agreement Monitor Licensee Activity Distribute Royalty Revenue

20. Enhancing Value of University Discoveries Disclose to IPO before publishing Focus on need Be familiar with patent literature Understand competing technologies Work closely with IP Office

21. Enhancing Value of University Discoveries Disclose to IPO before publishing Keep detailed lab notebooks Focus on need/end use Be familiar with patent literature Understand competing technologies Work closely with IP Office

22. Royalty Realities $2.5 Million Sales, 10% profit, 5% Profit Share (.5% royalty) = $12,500 $2.5 Million @ 15%-15% (2.25%)= $56,250 $2.5 Million @ 25%-25% (6.25%) = $156,000 $10 Million@ 5%-5% (0.25%) = $25,000 $10 Million @ 10%-10% (1%) = $100,000 $10 Million @ 25%-25% (6.25%) = $625,000 $500 Million @ 5%-5% (0.25%) = $1,250,000 $500 Million @ 30%-10% (3%) = $4,500,000

23. Take Home Points Disclose Early and Often Call the IPO for assistance with disclosure preparation Read the IP clauses of any Sponsored Research Agreement Discoveries include software and other copyrightable material Include the patent database in your literature searches Limit discussion with outside parties until a patent application is filed

24. Questions, Answers, and Feedback

25. Inventorship Inventor – Contributes to conception Conception – Complete mental part of inventive act Inventive Act – Formation of a definite and permanent idea of the complete and operative form of the invention