Home > Topics > Evaluation and Valuation of Technologies > Evaluating Inventions from Research Institutions > Editor's Summary, Implications and Best Practices

When devising a patent strategy, three questions need to be considered. First, should a patent be filed or not? The answer to this question depends on a number of factors: what the needs of the market are, and how dynamic the market is; the uniqueness and usefulness of the invention; the likelihood that patent protection can be obtained; and the “attitude”? of the inventor (for example, whether he or she is interested in assisting the technology transfer office [TTO]). A public institution should also consider whether or not the patent will help further its social and humanitarian goals.

The second question is: should the invention be marketed to existing companies or should it be used to develop a spinout company? Each approach has different advantages and disadvantages. An existing company usually has an established infrastructure, as well as access to financial instruments and distribution networks. Its financial health can be readily assessed. However, getting the attention of existing companies is difficult, partly because they have already determined their research agendas and priorities. The biggest risk with an established company is that it will lose interest in the technology before anything comes of it. Spinout companies, on the other hand, are focused on their own inventions, but they are fragile and conflict of interest issues are unavoidable.

Third, how much should the institution charge for a patent license? Assessing the value of an invention is more of an art than a science, though the rough numbers provided by a careful assessment can be valuable. Fortunately, the “full worth” of an invention need not be calculated at the time the technology is transferred (besides, the “full worth” is most of the time impossible to know until years after the technology has become obsolete). Both conventional and spinout licenses can be structured so that revenues by TTOs increase as the value of a technology grows.

These are the fundamental questions addressed in this chapter based on 20 years experience in managing and licensing intellectual property at the Massachusetts Institute of Technology.

There are a number of factors to take into consideration when deciding whether or not patenting a new invention is in the public interest:

• Is the technology self-evidently useful as-is? Will it be widely used even if it is not patented but instead put in the public domain?
• If the answer to the previous questions is yes, can the patent-holding institution devise a nonexclusive licensing strategy that will bring in revenue without restricting the availability of the technology?
• If, on the other hand, the technology will not be useful without substantial high-risk investment, the technology will have to be patented and exclusively licensed in developed countries in order to bring in the necessary revenue. However, in that case, should the technology not be patented in developing countries in order to encourage companies to produce competing (and therefore lower-cost) generics in those countries?
• Can the patent holder require the licensee to sublicense in order to promote low-cost manufacture and distribution of the technology?
• If the drug or vaccine is expected to be used only in developing countries, will patenting and the distribution of a limited number of licenses incite sufficient investments and create a market? Put differently, will such a market be sufficiently profitable that it will encourage further development and testing of the drug or vaccine?
• Should the patent holder reserve for itself the unrestricted use of a patented research tool?

An institution’s decision to patent an invention depends, to some extent, on the nature of the institution and the geographic location in question. For example,

• In under-developed regions (of both developed and developing countries), institutions can promote technologies that are well suited to local industry in order to create jobs and strengthen the local economy. This kind of promotion can be particularly beneficial if legislators use the amount of technology transfer as one way to determine how much funding a public institution should receive.
• Medical research institutions may decide to patent a product with a relatively small market, because of the potential benefit to patients.

Above all, institutions should determine whether or not patenting is the most effective way to ensure global access to their technologies. It can be challenging to negotiate a licensing agreement that is fair to everyone: licensor, licensee(s), and the public sector. However, it is far better to make an imperfect deal than none at all. After all, the public—rich and poor alike—does not benefit until the technology is developed and brought to market.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• Allocate resources to national R&D institutions to that they can train and retain staff who are experienced in technology transfer.
• Government policies and laws should give research institutions the ability to customize their technology transfer strategies and a lot of freedom to implement them. One approach does not generally serve different types of research and academic organizations across different disciplines and cultures. Hence the most effect government policies are broad and lay down the principles but leave ample freedom to institutions to implement procedures and institutional policies that best meet their needs.

For Senior Management (university president, R&D manager, etc)

• A public institution’s decision to patent its technologies should depend on several factors: whether such patenting would be socially responsible, whether there is public interest in the technology, and whether or not patenting would help the local economy (where applicable).
• The technology transfer offices (TTOs) of public institutions should not seek to maximize their revenues, but to stimulate innovation that will contribute to the public good.
• Filing a patent is risky; not filing a patent is also risky. Encourage your employees to take calculated risks, and support them even when some endeavors do not go as expected.
• Make sure that the conflict-of-interest and conflict-of-commitment guidelines are clear. Clear guidelines encourage inventors to collaborate with their TTOs and the licensees of their technologies.
• Technology evaluations should be taken with a grain of salt: evaluating a new technology is difficult and the evaluation will necessarily be imprecise. It is better to encourage your TTO to get deals done creatively and expeditiously, without the imposition of minimum royalties and other restrictive terms.
• Patents are the result of collaboration between scientists and technology transfer officers. Therefore, it is helpful to increase the dialogue between these two groups by asking them to attend occasional seminars.

For Scientists

• Your expertise and interest are invaluable. Work with your technology transfer offices (TTOs) to determine the best IP strategies for your inventions.
• If your TTO officers decide not to file for patents, don’t be discouraged. This is in no way a comment on your science, on it’s importance or relevance. The TTO has many priorities to balance, including financial.
• Insist, however, that the TTO has transparent procedures in place on how they review your invention disclosures and how they make decisions. You should not only be informed on the grounds and rationale for a decision, but also, in ideal circumstances, be fully involved in the process.

For Technology Transfer Officers

• Licensing is always risky, and no deal will be perfect. It is better to make an imperfect deal than none at all.
• When devising a patenting strategy, you will need to make three decisions: First, should you seek patent protection? Second, what is the best patent-marketing approach? Third, what license fees and/or royalties should be levied?
• When deciding where to file patent applications, take into account the social and economic impact (both on a local and a global scale) of your actions.
• Ensure that your TTO has transparent procedures in place on how you review your scientists invention disclosures and how you make decisions. Ideally, involve the scientists in your process and share the rationale for your decisions.