Patent and License Overview. Kirsten Leute, Senior Associate Office of Technology Licensing, Stanford University
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1 Patent and License Overview Kirsten Leute, Senior Associate Office of Technology Licensing, Stanford University
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4 Patent Overview History Patentable subject matter Statutory subject matter Filing process/timelines Costs
5 Why have patents? In the constitution: The Congress shall have Power... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. Short term monopoly Invention is published; eventually patent will expire.
6 Patentable subject matter Cannot be a law of nature Cannot be a naturally occurring organism Can depend on the country E.g., business methods not patentable at EPO In the U.S.: New Useful Non-obvious
7 Statutory subject matter See MPEP 2106 Process an act, or a series of acts or steps. Machine a concrete thing, consisting of parts, or of certain devices and combination of devices. Manufacture an article produced from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by handlabor or by machinery Composition of matter
8 A-ha! I have a great idea! Is it patentable? Does it qualify under statutory subject matter? Could someone skilled in the art reading your patent be able to produce the claimed invention? (Enablement) Has it published?
9 America Invents Act (AIA) Fully implemented in March of 2013 Switched the U.S. from a first-to-invent to a first-inventor-to-file system Most of the rest of the world is a first-to-file system Therefore, even if you invented first, if someone else filed before you without using your information, that person would get the patent
10 Starting the process Filing a patent application Patent attorney or agent On your own When to file Prior to publication? If a hot field, sooner the better due to AIA
11 Provisional Patent Application One year placeholder Does not count against patent term and is not examined by the patent office Less expensive USPTO fees Under AIA, may qualify for micro-entity May use the time to do further experimentation or Depends on how quickly you need an issued patent
12 Filing a nonprovisional Within one year of provisional filing or without a provisional filing first Full application Cannot add new subject matter after filing Will publish 18 months from date of first filing date
13 PCT Patent Cooperation Treaty Must be filed within one year of preliminary filing date Gives option of filing in member countries within 30 months of preliminary filing date Notable exception to PCT: Taiwan
14 Timeline of patent prosecution Link to UCSD site
15 Patent costs Control costs early Agreed upon limits or budgets with attorneys US patent likely $30-40K PCT - $6K to file, placeholder Europe depends on which countries filed in Japan translation costs very expensive AU and CA not too costly
16 Licensing areas Definitions Grant Financials/Royalties Patent information Diligence Warranties, Liability and Indemnification Termination Software
17 Definitions Clear and concise For words that will be used throughout the agreement License, Licensee, Licensor, Invention, Exclusive, Field of Use, Royalty, Licensed Product, Licensed Patent
18 Grant What the licensor (the IP holder) is giving to the licensee (the recipient of certain rights on the IP) What kind of license it is (exclusive, non-exclusive) What it is for (patent rights, materials) In what areas they can practice the technology (field of use, territory) For an academic licensor, will want to retain a right to use its technology
19 Financials/Royalties Many types of payments to chose from: Upfront Payment Annual Minimums Running/Earned Royalties Patent Expenses - past and/or future Milestone Payments/Lump Sum Fully Paid (Single Payment)
20 Royalties continued Types of milestone payments: Therapeutics: Upon IND filing, initiation of Phase I, II, III Clinical Trials, NDA filing, FDA approval Prototype First commercial sale Strategic Partner signed Funding (e.g. 1,000,000) Patent Grant Proof of Concept Number of years of survival of agreement
21 More on Royalties Earned Royalties Can be: a percentage a set amount per item scaled gross amount per sales Definition of Net Sales (or whatever you are deriving your earned royalties from Gross sales minus any deductible expenses both parties agreement on (e.g. returns, certain taxes)
22 Patent information Define the Licensed Patent Does it include any future IP not yet created? Patent prosecution Who chooses the prosecuting attorney? Who has final say on decisions? Who pays? Patent infringement Notifications Taking the lead Payments (outgoing and incoming)
23 Diligence Basic that Licensee will diligently develop the technology into a product Specific milestones Termination if Licensee cannot fulfill its obligations?
24 Warranties, Liabilities and Indemnification What is a Warranty? a written guarantee of the integrity of a product... What is Indemnification? security against hurt, loss, damage or liability for licensed technology What is Liability? responsibility
25 W, L and I cont. Things to consider: What risks is your company willing to take? What kind of insurance do you have? Do you want the licensee to insure you? What kind of knowledge do you have to allow for any warranties? Can you enter the agreement? What do you know about the patent situation? What do you know about the potential development and productization?
26 Termination Who can terminate when? For what causes? Can licensee overcome termination notification? If so, how? What provisions of the license survive after termination?
27 Software licensing What kind of code is being given? If licensing to end user, how broad is the license (seat, site, company-wide, other)? What is the IP (patent included)? Who owns and can use enhancements? Use sublicensing
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