The Academic Commercialization and Technology Transfer Pathway by opt11785

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									 The Academic Commercialization
and Technology Transfer Pathway:
University of Pittsburgh as a Model

                    Technology
                     Transfer



                Marc S. Malandro, Ph.D.
               msmalandro@otm.tt.pitt.edu

              Associate Vice Chancellor for
      Technology Management and Commercialization
              Why Does the Government
                Invest in Research?
      Government
       Funding of                     Reservoir of
     Basic Research                   Knowledge
      In Academia


                                                         New
                         Increased       New
                                                      Companies
                         Efficiency    Industry
                                                        (Jobs)




                                         Taxes
                                                     Vannevar Bush
                                                     Reservoir Theory of
Science, The Endless Frontier, 1945                  Knowledge
            Expectation

“Society, having funded much of the
 University based research, has an
 expectation that the fruits of that
  research will improve the human
             condition.”
       Niels Reimers, Co-Founder AUTM 1987
What is Technology Transfer?
  Within the context of the academic
  research environment, technology
    transfer is the migration of new
 discoveries and innovations resulting
     from scientific research to the
commercial sector, principally through
      patenting and licensing new
                inventions.
  Overview of Technology Transfer

                          Patent Office

Investigator                                  Commercial Entities




               University/Technology Transfer Office
                       Why Care About Technology
                               Transfer?
    • While academic R&D is a small proportion of total U.S. R&D, academic
      basic research comprises roughly 40-50 percent of total U.S. basic
      research
    • Nearly 60 percent of academic R&D is funded by the federal
      government




Source: NSF Science and Engineering Indicators, 2002.
                    History of Academic Patenting
     • While patenting activity dates back to 1900s, most universities resisted
       direct involvement and some discouraged it
     • Rights to inventions from federal funds typically remained in the public
       domain
     • Cumbersome waiver process required for patenting




Source: NSF Science and Engineering Indicators, 2002.
                 Increase in Academic Patenting
    • University patenting surged from less than 250 patents granted in 1975
      to over 3,000 patents granted in 2000
    • Publicly funded biomedical research accounts for a major share of
      patents




Source: NSF Science and Engineering Indicators, 2002.
       The BAYH-DOLE Act
        Public Law 96-517
Patent and Trademark Act of 1980
 • Allow small business and non-profit
   organizations to retain title to innovations
   made under federally-funded research
   programs
 • Promote investment by the private sector in
   commercialization of federally funded
   research discoveries for the public good
         Bayh-Dole Provisions
• Ensure that licensees of the technology
  diligently pursued commercialization of the
  inventions
• Must file patents on inventions they elect to
  own
• Government retains non-exclusive license
  and march-in rights
    Why Do Universities License
           Technology
• Generate licensing revenue and research
  funding
• Dissemination of new knowledge for the
  benefit of society
• Development of University technology into
  products
• Provide avenue for faculty members to
  interact with business
• Stimulate economic development
• Generate favorable publicity for the University
                         Outcome of Technology
                               Transfer
         Research
           $38.52 billion


                          Invention
                      15,510 disclosures
                      1 per $2.47 million


                                           IP Protection
                                   7,921 new patent applications
                                        1 per $4.86 million


                                                  Commercialization
                                                  4,516 licenses and options
                                                     374 company starts
2003 Licensing Survey
Association of University Technology Managers
        Top Five Recipients of License
           Income – 1998 vs 2004
                                          1998                   1998        2004
•   University of California System                             $73.1.0 M   $74.3 M
•   Columbia University                                         $61.6 M     N/A
•   Florida State University                                    $46.6 M     $14.3 M
•   Stanford University                                         $43.2 M     $47.2 M
•   Yale University                                             $33.3 M     N/A
                                          2004                   1998        2004
•   New York University                                         $2.5 M      $109 M
•   University of California System                             $77.0 M     $74.3 M
•   Wisconsin                                                   $16.1 M     $47.7 M
•   Stanford University                                         $43.2 M     $47.2 M
•   University of Minnesota                                     $3.2 M      $45.5 M
                              1998 and 2004 Licensing Survey
                        Association of University Technology Managers
       Evolution of Technology
        Transfer Office Models
        1990’s                     2000’s
• Legal or Administrative • Business/Marketing
  Model                     Model
  • Viewed as a legal or     • Viewed as a ‘business’
    administrative process     within University
  • Based in the Office of   • Independent
    Research or University     organization within
    General Counsel            University
University of Pittsburgh Research
      Research Expenditures in Fiscal
                Year 2005
• Total Sponsored Grants and Contracts                  $602 M
•   Non-Federal Funding                                 $193 M
•   Federal Funding                                     $489 M
•   Number of Grants                                      3011
•   Number of Grants $ 1 M                                  60

                  12th in Total Federal Awards
          7th in National Institutes of Health Awards
       University of Pittsburgh
 Office of Technology Management

                  Mission
To facilitate the development of products and
processes from University technology for the
benefit of the University, its faculty and staff,
               and the community.
     OTM Services to Innovators
• Counseling and education on intellectual property
  and technology transfer issues
• Assistance on the preparation of invention
  disclosures
• Strategic planning for transfer of technology to
  commercial interests
• Negotiation of contracts for transfer of technologies
  to commercial interests
• Management of post-licensing reporting, revenue
  collection and proceeds distribution
                                Pitt Innovator
          Education, Networking and Assistance
•   Coursework
     •   Academic Entrepreneurship: The Business of Commercial Innovation
     •   From Bench-top to Bedside: What Every Scientist Needs to Know
•   Workshops and Seminars
     •   Faculty and Staff Development Program: Protecting Intellectual Property: Patents and
         Copyrights
•   University Outreach
     •   Department, Center, Institute and School: Sessions on protecting IP and technology
         licensing
•   Lectures and Events
     •   Limbach Lecture Series – Peer scientists share their experiences in
         commercialization
     •   Bio-blasts – quarterly regional networking events
     •   Science 2006 Technology Showcase
•   Publications
     •   OED – Bi-weekly newsletter on entrepreneurship for faculty
     •   OTM – Monthly newsletter on new technologies and innovations
     Other Innovator Resources
                        University of Pittsburgh
              Technology Commercialization Alliance


                           Office of
                          Technology
                          Management



  Office of                                             Institute for
 Enterprise                                            Entrepreneurial
Development                                              Excellence
                           Swanson Center
                             for Product
                             Innovation
       University                                   External
       Resources                                   Resources




         A collection of University and
      external resources available to Pitt
     Innovators interested in commercial
           innovation and academic
                entrepreneurship
        Evolution of Technology
        Commercialization at Pitt
                              1996   2006

•   Licensing Professionals     3      6
•   BD Professionals            0      2
•   Marketing Professionals     0      2
•   IP Professionals            0      2
•   Support Staff               2     10
•   Invention Disclosures      46    165
•   Patents Issued             10     22
•   Licenses                    6     54
•   Companies Formed            2      6(2)
       OTM Sources of Pre-
     Commercialization Funding
• Provost
  • University Development Fund
• Innovation Works
  • University Innovation Fund
• Pittsburgh Life Science Greenhouse
  • Technology Development Fund
• MPC Corporation (Heinz Foundation)
  • Technology Transfer Grants
• DCED
  • Keystone Innovation Zone Grants
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
       What is an Invention?
An invention is anything made by the hand of
  man that is a new, useful, and unobvious
      process, machine, manufacture, or
    composition of matter, or any new and
          useful improvement thereof

 • Conception
 • Reduction to Practice
 • An invention may or may not be
   patentable
     Discovery versus Invention
    Discovery                  Invention

• Identification of a       • Method of Treating a
  Biochemical Pathway         Disease
• Identification of a New   • A Chemical Purified
  Species of Plant            from a New Species
• Observation of a            of Plant
  Phenomena                 • Computer Software
              Inventorship
• Those who conceive of the new ideas that
  are embodied in the claims of the patent
• Inventorship is legally determined
• Based on participation, contribution and
  value as perceived by others
• Inventorship is not authorship and
  inventorship is not credit

             …if not but for…
          Public Disclosure of
              Inventions
• Any publicly available description of work
  • Obvious – publication, presentation
  • Not Obvious – student thesis, discussions with
    other parties

• Do not disclose inventions before properly
  protecting intellectual property

• Use a confidentiality agreement to have
  discussions
Invention Disclosure
    Submission




    www.otm.pitt.edu
         Invention Disclosure
             Submission
• File as early as possible
• Cleary describe the invention and the
  differences from what exists (prior art)
• Identify and quantify the advantages over
  prior art
• Identify applications and uses of the
  invention
• Identify potential commercial markets and
  companies
        Invention Disclosure
            Submission
A complete invention disclosure can answer
            the patent questions

• Is the invention novel?
• Is the invention useful?
• Is the invention not obvious?

 If you have any questions or need help, call the
                       OTM.
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
 Pitt Invention Evaluation Process
              Invention                Electronic
Invention
              Disclosure              Submission




                                      Technology
                                       Transfer
                                      Committee


                         Technical                  Patent Search
                          Review                    Market Analysis


                                      Technology
                                       Transfer
                                      Committee



                                                 Hold for
              Patent          Release to                               Test
                                                 Further
            Technology         Inventor                               Market
                                                Evaluation
       Pitt Invention Evaluation
                Process
• Is it protectable?
  • Patent, copyright, know how
• Is it enforceable?
  • Infringement
• Is it licensable?
  • The primary reason for investing in intellectual
    property protection is the ability to license the
    invention.
             Evaluation Criteria
•   Level of IP Protection
•   Related Industry R&D Activity
•   Inventor Reputation and Participation
•   Inventor R&D Activity
•   Promised Benefits and Novelty
•   Market Size
•   Competing Products
•   Development Status and Time to Market
•   Validation and Performance
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
            Types of Patents
• Provisional – Establishes a filing date and
  provide 1 year to file a full patent application
  with claims
  • No claims are necessary in provisional
  • May be developed from a publication
• Utility – How something works or is used;
  multiple claims
• Design – How something looks; only one
  claim
 Differences Between US and
     International Patents
• US – First to Invent
• Most International – First to File
  • Very important to file protection before
    publicly disclosing to preserve foreign patent
    rights
  • Foreign protection very important to most
    companies
   What Does Patent Protection
           Provide?
• The right to exclude others from making,
  using, selling or offering to sell the claimed
  invention during the patent term
• Patent term typically 20 years from date of
  filing
• Design patent typically 14 years from date of
  issue
    Standards for Patentability
• Is the invention novel?
  • Not done before by someone else
  • Not previously put into the public domain
  • Not patented
• Is the invention non-obvious?
  • Not a trivial extension
  • Not anticipated by someone reasonably
    skilled in the art
• Is the invention useful?
  • Some data to show claimed activity
                 Copyrights
• Copyright is a form of protection to the
  authors of original works of authorship
  • To reproduce the work
  • To prepare derivative works based upon the
    work
  • To distribute copies of the work
• Copyright arises automatically once an
  original effort has been fixed in a tangible
  medium
  • Written, computer disk, recording
                     Copyrights
Copyrightable                     Not Copyrightable

  • Books, periodicals and
                                    •   Ideas
    manuscripts
  • Computer programs and           •   Facts
    databases                       •   Titles
  • Stage plays and screenplays     •   Names
  • Music and motion pictures
                                    •   Short phrases
  • Fine art, graphic art,
    photographs, prints and art     •   Blank forms
    reproductions
  • Maps, Globes, Charts
  • Technical drawings,
    diagrams, models
        Copyright Registration
Registration not required but beneficial:
• establishes a public record of the copyright
  claim;
• necessary for filing an infringement suit;
• establish prima facie evidence of validity if
  made within 5 years of publication;
• registration made within 3 months of
  publication or prior to an infringement allows
  statutory damages.
     Other Aspects of Protecting
        Intellectual Property
• Confidentiality agreement should be put in place
  before commercial discussions
• Use material transfer agreements (MTA) for both
  incoming and outgoing materials
  • Defines intellectual property playing field
  • Be wary of MTAs from outside sources
• Keep accurate, dated and countersigned records
• Keep projects, funding, lab notebooks separate for
  different funding sources
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
     Licensing Strategy
            Intellectual
             Property




  Option     License       Start-Up
Agreement   Agreement      Company
           Licensing Strategy
• Option Agreement
  • Early stage technology that requires further
    development
  • Proof of principle – add value or reduce risk
  • Reach some minimal level of progress to be of
    interest to investors
  • Does not give rights to develop or sell products
  • Exclusive or non-exclusive
  • Convertible to license agreement on agreed
    terms
           Licensing Strategy
• License Agreement – Existing Company
  • Technology likely to lead to a single product
  • Small number of large firms that dominate the
    field
    • Exclusive or non-exclusive
  • Capital requirements to enter the industry
    prevent startups from being competitive
  • Existing company may be able to get the
    technology to market faster
              Licensing Strategy
• Start-Up Company Formation
  • Platform or disruptive technology with broad patent
    protection
  • Ability to generate interest from investors
     • Market size sufficient
     • Gross margins attractive
  • Viable business model
  • Begins with an option agreement conditioned upon
    milestones
     • Investment
     • Management team
Overview of the Technology
Commercialization Pathway

   Research




  Invention                     IP
  Disclosure                Protection              Licensing



                  TTC                    Strategy
               Evaluation
        Technology Marketing
• Inventors are the single most important step
  in marketing
  • 70% of licensing leads come from the inventor
• Identify companies in technology area
• Network at scientific and industry
  conferences
• Respond in a timely manner
• Have a plan for next steps in research
• Forward all licensing interest to the OTM
        Technology Marketing
• OTM Marketing Efforts
  • Technologies available for licensing are on the
    OTM web site
  • Focused business development relationships in
    specific technology areas
  • Relationships with local and national venture
    capital groups
  • Industry conferences
           Licensing Process
• Identification of interest
• Confidentiality agreement for scientific and
  IP due diligence
• Discussion of license type
  • Option versus license agreement
  • Exclusive versus non-exclusive
• Negotiation of financial, business, and legal
  terms
        License Agreement terms
• License grant
  •   Exclusive or non-exclusive
  •   Field of use
  •   Territory
  •   License term
• License Consideration
  •   Upfront fee
  •   Maintenance fees / Minimum annual royalty
  •   Royalties
  •   Other – Milestones, equity
 University Approach to Start-Up
      Company Formation


 PLATFORM              CORPORATE PARTNER/
TECHNOLOGY              SOPHISTICATED VC




   LEAD                      SEED
MANAGEMENT                  FUNDING
         Faculty Involvement with
           Start-Up Companies
• Permitted activities
   •   Holding of equity
   •   Sponsored research from company
   •   Consulting relationship
   •   Scientific Advisory Board
   •   Entrepreneurial leave
• Prohibited activities
   • Holding of greater than 20% equity
   • Serving as PI for sponsored animal research or clinical
     study
   • Holding Board of Directors seat
   • Holding management position in licensing company
               Licensing Proceeds
                   Distribution
• Patented Invention
   •   Inventor – 30%
   •   Inventor’s Department – 15%
   •   University Development Fund – 10%
   •   Patent Rights Fund – 30%
   •   Office of Technology Management – 15%
• Copyrighted Invention
   • Inventor – 50%
   • Inventor’s Department – 25%
   • Copyright Development Fund – 25%


   Proceeds distributed after expenses have been
                         paid.
                   Summary
• Protection in place before public disclosure
• Novel, useful, non-obvious
• Innovator is key to the technology transfer
  process
  • Complete invention disclosure
  • Contact point for licensing interest
• Contact the OTM with any questions on the
  process
Questions?

								
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