Inventors and Inventions

Abstract: Intellectual property (IP) is inherent to many of the research, teaching, and extension functions of the university, and IP issues can occur in all phases of the corresponding programs. A research program may utilize IP generated and protected by others in its planning and execution phases. As a research program advances, decisions made regarding disclosure of results may affect whether or not discoveries made by the program can eventually be protected.

A successful research program will generate discoveries—and therefore IP—and decisions must be made regarding whether to protect, and how to deploy, those discoveries. The decisions must consider the management of IP as well as the goals and priorities of the research program and the university. It is also important to consider IP in the teaching and extension functions of the university, including the creation or use of written materials, software, networked resources, or designs.

IP and IP issues are not the sole or even the primary focus of a university. However, failure to properly consider IP issues can lead to frustrating and costly problems. Fortunately, realistic and efficient management of IP in research, teaching, and extension requires only a minimal working understanding of the issues and an ability to access on-campus assistance in dealing with them.

This chapter presents basic information that any scientist should know about IP, discusses the importance of IP management in a scientist’s work, and reviews additional sources of information regarding IP. We hope, this chapter will assist the reader in avoiding simple yet costly errors in IP management.

Abstract: A laboratory notebook is an important tool that goes well beyond research management and can have important implications for issues ranging from intellectual property management to the prevention of fraud. This chapter discusses the key elements of a laboratory notebook, types of notebooks, what should be included in the notebook, ownership issues, archiving, and security. The chapter provides sample notebook pages that illustrate some of the recommended practices.

Abstract: Documentation of research is a critical aspect of best practices in IP management. This is true because research and development activities that give rise to inventions must be thoroughly documented in order to successfully manage patents, including determining patentability, drafting and prosecuting patent applications, and later, if the need arises, protecting patents against third party challenges, for example, a patent interference proceeding. Maintaining, for each invention, a complete record of who made the invention, when it was made, and how it was made, must therefore become a formal component of a university’s policy and training programs and must be carried our according to specific protocols. An organized and methodical approach to documentation will support patent management, provide a readily accessible source of critical information, ensure the capture of maximum value of inventions, and protect patent portfolios against challenges when, and if, the need arises.

Abstract: This chapter is intended to assist intellectual property professionals, in working with inventors, to develop a high-quality invention disclosure and, eventually, to prosecute a patent application. Major topics include the importance of data records, utility and reduction to practice of inventions, understanding prior art (including the inventors’ own art), and determination of inventorship.

Abstract: The potential for personal interests to influence institutional decisions in universities and public sector research institutions continues to grow. This is because of the increasing activity in intellectual property (IP) management and technology transfer undertaken by these institutions. The activities have the potential to generate both personal and institutional financial gain, making conflict of interest and conflict of commitment issues unavoidable. This chapter explains the nature of these conflicts and discusses the policies, regarding conflict of interest, of several universities, offering them as potential models for crafting these indispensable policies.

Abstract: This chapter is about university spinouts: why they are created, who founds them, and how they are developed. It also considers many of the issues that a university and its faculty have to address to successfully launch and develop new for-profit ventures. Spinouts carry risks, but they may also be the best vehicle for developing early-stage university technologies and providing a host of other benefits. The chapter offers examples from the past five years at Yale University, as well as from the private sector, that suggest ways to minimize the risks and maximize benefits.

Abstract: This chapter provides a practical guide for organizations seeking to transfer their intellectual property (IP) rights to a spinout company (normally through a licensing agreement) so that the company can convert the IP into products or services that benefit the public. Based on experiences at Stanford University over the past three decades, key issues have been identified for negotiating transfer to a spinout, and guidance on best practices for reaching a successful agreement is provided. The chapter briefly reviews potential conflict-of-interest and conflict-of-commitment issues that inevitability arise when employees of public research organizations become involved in spinout companies.

Abstract: The patenting strategies of research institutions are based on three key decisions. The first involves whether or not to file a patent. This decision must be based on sound information about the market, the uniqueness and usefulness of the invention and/or technology, the likelihood of being able to obtain patent protection, factors related to the inventor, and the potentially paradoxical impact of patenting on the institution’s social and humanitarian responsibilities. The second decision involves whether to market the invention to established companies or to develop a spinout business. The third involves how much to charge for a license. Related to all of these decisions is the key question of whether patenting is the most effective route to global access. Negotiating licensing agreements that are fair to the research institution, the private company, and developing countries can be challenging because research institutions may have difficulty determining fair market values. In addition to outlining a process for obtaining these values, this chapter offers some rough numbers for guidance. In general, the author concludes that it is far better to conclude a deal than to wait for the best agreement while fighting interminably for perfect financial terms.

Abstract: Public sector technology transfer offices (TTOs) are in the business of “moving” technology from research and development to eventual commercialization in order to advance their missions of serving the greater public good. Intellectual property (IP) management is integral to this process, and integral to IP management is patenting. Maximal captured value for public sector technologies will be greatly affected by the quality and scope of the patent coverage and this, in turn, is greatly influenced by the quality of work done by patent counsel. It is therefore essential for a TTO to select a patent attorney whose work will enhance the institution’s prospects for obtaining optimal licensing arrangements. From selection to hiring to ongoing interactions, it is important for the TTO and the patent counsel to develop and maintain a good working relationship. Central to this relationship is ensuring that patent counsel can prepare and prosecute patent applications in a manner that achieves positive results cost effectively. This is a complex process, and there are many responsibilities that both counsel and the TTO must assume. In addition, patent attorneys can provide general counseling: resolving inventorship issues, providing licensing and agreement support, and settling disputes. The TTO will be the patent attorney’s actual client and function as the interface between counsel and the institution. By selecting qualified patent counsel and then developing a good relationship, a TTO can ease its workload and facilitate its mission. Therefore, retaining a skilled patent attorney and one that is well suited to the particular needs of the TTO is an essential element for operating a viable technology transfer program. The search for such an attorney must be approached thoughtfully.

Abstract: One of the primary missions of the University of California Agricultural Experiment Station (AES) is to create knowledge and develop technologies that improve the productivity and environmental sustainability of agriculture in California. In addition to the public release of information and the educational activities of cooperative extension services, the University of California places the inventions of AES faculty directly into commerce through the process of patenting and technology transfer. This channel is particularly useful—and often essential—when further financial investments are necessary to develop the technology for practical applications or to manufacture, market, and distribute new products that incorporate the new technology. This report documents the patenting and formal technology transfer activities of the University of California Agricultural Experiment Station over the last 40 years.

More than 800 inventions have been reported by AES researchers between 1960 and 2001. These inventions are categorized into the five broad technology areas: biotechnology (49%), plant varieties (19%), chemicals (14%), equipment/machinery (13%), and environmental (1%). Biotechnology inventions were entirely absent until the mid-1980s, but the category has grown rapidly over the last 15 years. The growth in the number of biotechnology-related inventions has occurred not at the expense of inventions reported in the areas of plant varieties, agricultural equipment, or novel chemicals, all of which have shown a relatively stable level of activity.

Financial returns from the licensing of AES inventions was US$1.4 million in fiscal year 1982 (2.5 million in 2001 dollars) but had grown to US$12 million by fiscal year 2001. After accounting for expenses associated with patenting new inventions and distribution of a share of income to inventors, AES inventions returned over US$6 million to the university in fiscal year 2001. Since 1982, the cumulative financial return has totaled US$105.2 million in fees and royalties. About 87% of that income has been derived from the licensing of plant varieties in spite of the fact that they compose only 19% of the AES inventions, indicating the commercial importance of UC plant varieties. To date, relatively few biotechnology- or environmental-related inventions have been commercialized, but the extensive and growing UC portfolio in these areas should provide a strong base for future licensing activity.

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Abstract: Several factors help to establish who owns a university invention and what rights the university may, or may not, have. These factors include whether (1) there are express or implied agreements to assign ownership, (2) the inventor is employed by the university, (3) the invention was made within the scope of employment, and (4) where and when the invention was made. Under U.S. law, individuals own their inventions, except where there is an express agreement providing for assignment of ownership of inventions to an employer or where an implied agreement to assign is found because the employee was hired or assigned to invent or solve a specific problem or served the employer in a fiduciary capacity. Therefore, in addition to implementing clearly delineated policies, it is critically important for a university to absolutely require all employees and visitors to sign invention assignment agreements (IAAs) on their date of arrival. It is unwise to rely on policy statements to determine whether or not a university employee owns his or her invention: universities should always obtain signed (express) agreements, and both the employee and the technology transfer office should retain copies. Research contracts with the government and other sponsors should have a checklist item on the existence of IAAs for the principal investigator and other researchers (whether or not a university should have undergraduates routinely sign IAAs is up to each university). Upon termination of employment, personnel should be asked to sign an exit form indicating that they have disclosed all inventions falling within the terms of the IAA to the university licensing office.

Abstract: Without inventors, there would be no technology to transfer. But without technology transfer professionals, there would be limited transfer of technology. Good relations between inventors and technology transfer professionals are therefore essential for the commercialization enterprise to succeed. Relationships should be established long before the transfer services of the technology transfer office (TTO) are required. A healthy relationship will allow technology managers to negotiate both faculty and business concerns about licensing agreements. Making sure that the inventor is sympathetic to the aims of the TTO will also make it much easier for everyone to understand how a technology may meet market needs, recognize potential licenses, and determine whether a licensee is fulfilling its obligations. For all of these reasons and more, a TTO should always go the extra mile to educate, develop, and maintain good working relationships with inventors.

Abstract: The strawberry improvement program located at the University of California, Davis focuses on breeding cultivars for the strawberry industry in California, yet today it supports the majority of production of fresh-market strawberries globally. Around the world, UPOV-compliant Plant Breeders’ Rights (PBR) are the most common form of IP protections sought by University of California (UC) to protect its strawberry cultivars. Inside the U.S. and Canada, cultivars are licensed on a nonexclusive basis directly to nurseries. Outside of the U.S. and Canada, UC relies on business partners, referred to as “master licensees,” as intermediaries. A master licensee is provided with exclusive rights within a defined territory that includes the right to issue nonexclusive sublicenses to nurseries within that territory. Overall, a three-tier royalty structure is utilized, with growers inside California paying the least, growers in the U.S. outside of California and in Canada pay slightly more, and all other growers pay even more, a percentage of which is shared with the master licensee. The ultimate future of the UC strawberry breeding program is tied to the continued development of competitive cultivars, but the team is highly skilled and, partly due to the licensing program, funding is stable.