1. UTSA DRA Introduction to Intellectual Property
Cory Hallam
With adaptations from S. Chandler, Jackson Walker LLP.
© 2009 Cory Hallam

2. Cory Hallam, Ph.D.
Assistant VP for Commercialization Alliances and Innovation
VPR Web Site vpr.utsa.edu
Click on left hand side “Commercialization and Tech Transfer”
(c) 2009 Cory Hallam

3. Types of Intellectual Property
Patents – the inventor has the right to exclude others from making the invention, requires enforcement
Trade Secrets/Know How – by keeping it secret no one else can copy it
Trademarks/Service Marks – Logos, words, and/or phrases that identify a unique source of goods or services
Copyrights – protection against others copying original works (i.e. music, books, software code)
(c) 2009 Cory Hallam

4. Examples Business name: MacDonald’s………trade name
Product marks/logos: trademark
Software, texts, music …….copyright
art, creative works
Inventions – new drug formulation………..patent
Recipe for Coca-Cola…… …...trade secret
(c) 2009 Cory Hallam

5. What We Need to Know
Inventions made by faculty, staff and students as part of sponsored research and/or employment at UTSA belong to the UT System Board of Regents (Series 9000 rules)
Sponsored research may involve the creation of IP, use of existing IP, or use of proprietary materials – ensuring these issues are addressed prior to proposal submittal and/or contract execution is important to preserve UTSA’s rights to invention
Making an unprotected invention public via a proposal, presentation, or paper can cause the university to lose its rights to the invention – it is considered “public”
The Bayh-Dole act also requires that universities actively work to protect and commercialize IP created from federally funded projects
(c) 2009 Cory Hallam

6. Patents
Definition: A patent is a grant from the U.S. government allowing its owner to exclude others from making, using, offering to sell, selling, or importing into the U.S. her invention
There are three types of patents:
Utility patents, which protect new and useful inventions and processes
Design patents, which protect new and ornamental designs for articles
Plant patents, which protect new and distinct plant varieties that are asexually reproduced
Utility patents are the most common: approx. 90% in 1999
(c) 2009 Cory Hallam

7. What is Patentable? Any new and useful Process Machine
Method of manufacture
Composition of matter
Improvements on existing things
Software
Methods of doing business
(c) 2009 Cory Hallam

8. Patents What is protectable?
Can’t patent laws of nature, mental processes, mathematical algorithms per se or abstract ideas
Utility patents are available for the invention or discovery of any new, useful and non-obvious process, machine or invention
Novelty means that the invention is new – even a minor difference conveys novelty. A single prior art patent that claims the same invention is enough to defeat novelty.
Only “useful” inventions are patentable. Must have some utility or achieve some objective. Inoperative inventions do not have utility.
Non-obviousness means that the differences between what is “out there” and your invention are not trivial to one skilled in the art. Somewhat subjective determination of the PTO examiner.
(c) 2009 Cory Hallam

9. Duration of Protection
17 years from issue date
(pre-June 8, 1995)
20 years from earliest U.S. filing date (post-June 8, 1995)
Outside of U.S. – typically 20 years from filing date
** Maintenance Fees must be paid to keep in force.
(c) 2009 Cory Hallam

10. Patents – Loss of Rights to File
Bar Dates:
For U.S. patent: application will be barred if not filed within one year of the first:
Public use
Public disclosure (e.g., printed publication)
Sale/Offer for sale
For International patent: application will be barred if not filed before any public disclosure/public use of the invention anywhere. USPTO filing considered “filing” for this purpose
Best policy: File with the USPTO prior to any disclosure if possible to preserve foreign filing rights
(c) 2009 Cory Hallam

11. Patents - Other Considerations
Patents are issued on a country-by-country basis
A U.S. patent will not stop someone in Japan, etc. from exploiting the patent (you can stop imports of infringing goods, though)
No “international patent”
International process for obtaining national patents (Patent Cooperation Treaty, or PCT)
(c) 2009 Cory Hallam

12. Provisional Patents Provisional Patent Applications
Inexpensive way to get an invention on file with the USPTO; Filing fee ($160/$80) + legal fees is typically less than $2,500
Must enable; no new matter in the later, regular application
Must file regular application within 12 months to maintain priority of filing date
(c) 2009 Cory Hallam

13. Patents – First to Invent in U.S.
Laboratory Notebooks – What are they?
Technical diary;
Ideas, completed work, and accomplishments;
Chronological order;
Helps avoid repeated mistakes; and
Helps to track successes and failures.
Good Laboratory Practice is documentation that maintains an accurate technical diary containing detailed documents of your ideas, completed work and accomplishments. Good technicians record their developments in chronological order so that they can refer back to their diary days, weeks or months later. This enables them to avoid running up the same blind alley twice. Second, good records will shed light on subsequent developments, will allow the inventor to find needed data and details of past developments and will provide a base for new paths of exploration and ramifications, especially if failures have occurred.
(c) 2009 Cory Hallam

14. What should be entered into notebook?
Title (what is the invention called)
Purpose (what the invention does)
Description (functional and/or structural)
Sketch (informal sketch)
Ramifications
Novel features
Closest know prior art
Advantages
Laboratory notebook paper – paper towels.
(c) 2009 Cory Hallam

15. or Little Commercial Value
A Patent May Have Huge
or Little Commercial Value
(c) 2009 Cory Hallam

16. PATENTABILITY VS. INFRINGEMENT
1. Everything new is patentable (almost) - if you add enough elements to the claim.
2. But the more elements needed to get a patent, the less its value (maybe zero) - because fewer accused devices and methods infringe.
(c) 2009 Cory Hallam

17. Patent Process at UTSA Beginning with Research
Invention Disclosure (STTM)
Formal written description to technology licensing office
Non-Disclosure Agreement
Agreement for others to see/hear about invention without making it public
Material Transfer Agreement
Between organizations
Patent Assignment to UTSA
Regents Rules Series (
License
Right to use/produce/sell invention
Royalty Sharing
Moneys paid for license split amongst recipients (university and inventors)
(c) 2009 Cory Hallam

18. Step 1 - RESEARCH
1. Research: Observations and experiments in UTSA laboratories or other research facilities often lead to discoveries and inventions. An invention is any useful process, machine, composition of matter, or any new or useful improvement of the same. Often, multiple researchers may have contributed to the invention. Keeping good lab notebooks is an important part of the invention process: Maintaining Laboratory Books.
(c) 2009 Cory Hallam

19. Step 2 – Pre-Disclosure
2. Pre-Disclosure: Any early contact with our tech transfer personnel to discuss your invention and to provide guidance with respect to the disclosure, evaluation, and protection processes described below. South Texas Technology Management (STTM) is our technology transfer office, jointly with the UTHSCSA.
(c) 2009 Cory Hallam

20. Step 3 – Invention Disclosure
3. Invention Disclosure: The written notice of invention or discoveries that begins the formal technology transfer process. An invention disclosure remains a confidential document and should fully document your invention so that the options for commercialization can be evaluated and pursued. The disclosure helps establish the timing of your invention or discovery and assists the licensing specialist with evaluating the commercial potential of the technology. While the university owns the invention or discovery if a patent is pursued, it is the inventor(s') name(s) that will appear on the patent. Disclosure forms available at
(c) 2009 Cory Hallam

21. Step 4 - Assessment
4. Assessment: The period in which you and your licensing specialist review the invention disclosure, conduct patent searches (if applicable), and analyze the market and competitive technologies to determine the invention's commercialization potential. This evaluation process, which may lead to a broadening or refinement of the invention, will guide the licensing strategy. The four key points for assessment include
technology readiness
patentability
commercial potential, and
licensing potential.
(c) 2009 Cory Hallam

22. Step 5 - Protection
5. Protection: The process in which protection for an invention is pursued. Patent protection, a common legal protection method, begins with the filing of a patent application with the U.S. Patent Office and, when appropriate, foreign patent offices. Once a patent application has been filed, it typically will require several years and tens of thousands of dollars to obtain issued U.S. and foreign patents. Other protection methods include copyright, trademark, trade secrets, and contractual use restrictions (e.g., for databases and materials).
(c) 2009 Cory Hallam

23. Step 6 – Find Licensee
6. Find Licensee: STTM staff will identify candidate companies that have the expertise, resources, and business networks to bring the technology to market. Your active involvement can dramatically shorten this process, as two thirds of all licenses are derived from inventor contacts.
(c) 2009 Cory Hallam

24. Step 7a – Start-Up
7a. Start-up Company: If creation of a new business start-up is being pursued, the UTSA AVP for Commercialization Alliances and Innovation ( ) will work to license to the start-up. In the event of faculty/staff involvement in the company, the appropriate Conflict of Interest forms (COI) will need to be submitted and a conflict management plan will be created. The COI office will help first time faculty/staff on their COI forms. The procedure is fully defined with the forms at and the COI committee can be contacted via Martha Reyes Trevino at (210)
(c) 2009 Cory Hallam

25. Step 7b – Existing Business
7b. Existing Business: If an existing company is the licensee, STTM will develop the license agreement. In the event of ongoing industry partnerships, the UTSA AVP for Commercialization Alliances and Innovation will be involved to ensure the long-term growth and success of these relationships. In the event that faculty/staff have roles or financial interest in the company involved in the license, then Conflict of Interest (COI) forms will also need to be filed.
(c) 2009 Cory Hallam

26. Step 8 - Licensing
8. Licensing: A license agreement is a contract between the University and a third party in which the University's rights to a technology are licensed, without relinquishing ownership, for financial and other benefits. An option agreement is sometimes used to enable a third party to evaluate the technology for a limited time prior to making a decision about licensing.
(c) 2009 Cory Hallam

27. Step 9 - Commercialization
9. Commercialization: The licensee continues the advancement of the technology and makes other business investments to develop the product or service. This step may entail further development, regulatory approvals, sales and marketing support, training, and other activities, eventually resulting in sales of a product or service to the public.
(c) 2009 Cory Hallam

28. Step 10 - Revenue
10. Revenue: Royalties and/or license fees are paid to the University by the Company that obtains a license to market or commercialize the invention or the discovery. To encourage further participation in the technology transfer process, 50% of the royalty revenues received by the University after patents expenses are reimbursed, are distributed to the inventor(s) as taxable income. All patent costs must be recovered by the university before royalty distributions are made to the inventors.
(c) 2009 Cory Hallam

29. Royalty Sharing at UTSA
Faculty 50% additional taxable income
Other – Discretionary accounts for reinvestment in UTSA
(c) 2009 Cory Hallam

30. Bayh-Dole
The U.S. Bayh-Dole Act of 1980 allows universities and other non- profit institutions to have ownership rights to discoveries resulting from federally funded research, provided certain obligations are met. These obligations include making efforts to protect (when appropriate) and commercialize the discoveries, submitting progress reports to the funding agency, giving preference to small businesses that demonstrate sufficient capability, and sharing any resulting revenues with the inventors. The Bayh-Dole Act is credited with stimulating interest in tech transfer activities and generating increased research, commercialization, educational opportunities, and economic development in the United State
(c) 2009 Cory Hallam

31. Office of Contracts and Industrial Agreements (OCIA)
Affiliation Agreements; Confidential Disclosure Agreements; Cooperative Research and Development Agreements (CRADAs); Consortium Agreements; Limited Use Agreements; Material Transfer Agreements; Memorandum of Agreement; Memorandum of Understanding; Non-Disclosure Agreements; Product Supplier Agreements; Proprietary Information Exchange Agreements; Research Breeding Agreements; Security Assessment Agreements; Service Agreements (tied to sponsored program accounts--"26" accounts); Sponsored Research Agreements; Teaming Agreements; Testing Agreements; Subcontracts.
(c) 2009 Cory Hallam

32. MOU
A memorandum of understanding (MOU) is a written agreement between parties. In the case of UTSA it may define the terms of a working relationship between the university, a lab, and or an inventor and an external party, such as a company or research lab.
MOUs are not typically used as contractual agreements, but rather as guidelines for working relationships. The contractual agreement might take the form of a sponsored research agreement (SRA)
(c) 2009 Cory Hallam

33. NDA
A non-disclosure agreement (NDA) is used to enable UTSA researchers and external parties discuss confidential and/or proprietary information.
The NDA allows the parties to engage in discussions concerning new discoveries and new IP.
The NDA acts as an umbrella agreement that ensures the information discussed is not considered public and acts to protect the inventors from losing rights to the invention.
(c) 2009 Cory Hallam

34. MTA
A material transfer agreement (MTA) is used when material used in a sponsored research agreement (SRA) is being transferred from a party to or from the university
The MTA defines the terms of ownership and use of the material and what rights re afforded the parties providing and using the material
MTA’s may have long lasting terms that go beyond the time of the SRA
(c) 2009 Cory Hallam

35. I think I have an Invention, What should I do?
Call STTM at when you believe you have created or discovered something unique with potential commercial or research value.
Complete and submit the Disclosure Form (see before publicly disclosing your technology or submitting a manuscript for review and publication. Include companies and contacts you believe might be interested in your invention or who may have already contacted you about your invention.
To avoid risking your patent rights and possibly hindering the opportunity to market your invention, contact the Office of Contracts and Industrial Agreements (OCIA) to ensure you have the appropriate non-disclosure agreements in place.
Some aspects of the patent and licensing process may require significant participation on your part. You will be required to participate with the lawyers and licensing staff in drafting the patent material and responding to information requests as part of the patenting and licensing process.
Keep licensing staff informed of upcoming publications or interactions with companies related to your intellectual property to ensure you are protected!
(c) 2009 Cory Hallam

36. How long does the process take?
From disclosure to having STTM render a patent filing decision should take 1 month.
Once the patent has been filed, the patent process however, might take years, as the United States Patent and Trademark Office (PTO) currently has a 3-5 year backlog of patents to review.
The commercialization process may take months to years depending on the level of development of the invention and the approval timeline for the invention. For example, new drugs take years to develop and achieve FDA approval before sale, compared to software that may be developed and sold in a matter of months with no regulatory approval.
(c) 2009 Cory Hallam

37. Trade Secrets
Definition: Trade secrets consist of any valuable information not generally known to others that gives its owner a economic or competitive advantage and for which reasonable steps are taken to maintain its secrecy
(c) 2009 Cory Hallam

38. Patents vs. Trade Secrets
Pros:
Patents protect against independent development and reverse engineering
Trade secret lost if not maintained secret
Cons:
Patents have a more limited life (20 yrs vs. indefinite); Thereafter, anyone can use
The recipe for Coca-Cola has been a trade secret for over 100 years and counting
Patents are more expensive to obtain and maintain; Trade secrets cost nothing other than expense of keeping secret
(c) 2009 Cory Hallam

39. YOUR TRADE SECRETS ARE ONLY PROTECTABLE IF THE JURY FINDS THAT:
The items were relatively secret; and
The defendant knew the items were secret.
(c) 2009 Cory Hallam

40. Trademarks
Definition: a trademark is a word, name, symbol, device or combination thereof that identifies and distinguishes one’s goods and services from those of another
Technically, a trademark is used to identify a good or product and a servicemark is used to identify a service
(c) 2009 Cory Hallam

41. PROTECTABILITY OF TRADEMARKS
Generic – Unprotectable (soda for a beverage or TV for a television)
Descriptive - May be protectable (Jury question: Does it primarily describe or identify?) (such as “Tax Preparation Software” for a software program that enables users to prepare tax returns)
Suggestive – Protectable (such as Greyhound for bus services and Jaguar for automobiles, with both marks suggesting the speed of their products; 7-ELEVEN for convenience stores)
Arbitrary or Fanciful - Very protectable (such as Kodak, Starbucks, Verizon, Exxon)
(c) 2009 Cory Hallam

42. Trademarks How trademarks arise:
Trademarks arise through use of a mark
Simple use of a mark grants rights in the mark against later users in the location of use and a reasonable area of expansion
Can prevent use of mark on similar products or for similar services
Federal registration, although not required, protects the mark nationwide against later confusingly similar uses
Common law also applies
Can be lost if mark becomes generic: e.g., Kleenex, Xerox
(c) 2009 Cory Hallam

43. Copyrights
Definition: Copyright is a form of protection to a wide variety of works, including literary, musical, dramatic, graphic, sculptural and architectural works, motion pictures and sound recordings
Not just critically acclaimed works
Extends to advertising brochures and copy and computer programs
(c) 2009 Cory Hallam

44. Copyrights How copyrights arise:
Copyright protection exists from the moment a work is created
No registration is required
Copyright lasts for the author’s life plus 70 years (or in the case of works created by employees for their employers, for 95 years from publication of the work or 120 years from creation, whichever is shorter)
(c) 2009 Cory Hallam

45. Copyrights What is protectable:
Copyright protects works of original authorship
Includes books, magazines, promotional materials, music, posters, movies, slide presentations, dance routines and website content
Does not extend to ideas, procedures, processes, systems, concepts or mere slogans, titles or blank forms
(c) 2009 Cory Hallam

46. FY 2006 U.S. Licensing Activity
$45 billion in R&D expenditures were received by U.S. academic centers
697 new products introduced into the market in 2006 – 4,350 introduced from FY98 through FY06
553 new startup companies launched in 2006
12,672 licenses and options were managed, yielding active income (each single license represents a one-on-one relationship between a company and a university, hospital or research institution that earns income on products that benefit our communities)
5,724 new spinouts from FY80 through FY06
(c) 2009 Cory Hallam

47. License Income New York University $80,908,972
(Average FY Source: Association of University Technology Managers )
New York University $80,908,972
Baylor College of Medicine $ 6,758,000
University of Texas - Austin $ 5,057,647
UTHSCSA $ 2,211,194
UTHSC-Houston $ 1,998,947
University of Houston $ 534,053
University of Tx Med Branch $ 222,994
Texas Tech $ 157,365
Rice University $ 122,000
(c) 2009 Cory Hallam

48. Inventor is Key to Commercialization
Inventor knows field
Inventor knows potential licensees
Inventor can continue to invent to fill product pipeline for new ventures
Get to know the OTV
Get to know the University policies – this can be very lucrative for a professor
(c) 2009 Cory Hallam

49. What You Should Remember
Creating and commercializing new Intellectual property is a goal for the university and is mandated by federal law (Bayh-Dole) for federally funded research. The Code of Federal Regulations provides information on patent rights and responsibilities currently applicable to universities under the federally sponsored projects.
Protecting intellectual property requires filing an invention disclosure and working with an STTM licensing associate PRIOR to making the invention public knowledge (i.e. publication).
Sponsored research might require and MOU, NDA, MTA, or other contractual agreement that defines the IP and conditions for use. Make sure these have been done with the OCIA prior to contract signing.
Protecting IP may take the form of trademarks, copyright, trade secrets, and patents.
UTSA is committed to world-class research leading to new innovation, invention, and commercialization.
(c) 2009 Cory Hallam

50. Field of Use vs. Territory
Use Limitation
Allows multiple licensees to exploit different uses of the same technology
Should Smallco limit the Field of Use? Should Bigco demand unlimited rights (limited only to the scope of the Patents and Know How)?
Geographical Limitation on the rights to exploit Patent Rights and Know How
(c) 2009 Cory Hallam

51. Payment Terms Advance Fees/Upfront Fees Milestones Royalties
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52. TRADEMARKS–Federal registrations COPYRIGHTS–Copyright registrations
PATENTS–Know how to create value – rely on the experts
TRADE SECRETS–Create good facts
LICENSES – Clarify expectations
(c) 2009 Cory Hallam

53. v1
(c) 2009 Cory Hallam

54. Questions? Dr. Cory R. A. Hallam 210-458-6985 cory.hallam@utsa.edu
Web Sites of Interest
VPR: click on commercialization and tech transfer
STTM Licensing Associates:
UT System IP Rules (Series 9000 IP):
US Patent and Trademark Office:
(c) 2009 Cory Hallam