Overcoming Challenges In Transferring Technology In Academia and Beyond

Balance the competing objectives of academic disclosure and non-disclosure for IP protection by:

• Keeping abreast of developments and new efforts in the university's research programs;
• Informing researchers of what constitutes a public disclosure for purposes of patent and trade secret law; and
• Allowing researchers to disclose their research findings with tailored disclosures to avoid public disclosure of information pertinent to obtaining patent or trade secret protection.

Budget Sensitivity

Compared with their for-profit counterparts, TTOs (and pre-revenue companies) have relatively small budgets available for protecting IP and for subsidizing and working with industry to commercialize the innovations related to that IP. Additionally, the impact of a poor return on investment for a failed protection and/or commercialization effort can be significant for these entities. TTOs therefore cannot afford to pursue patent protection for an innovation that may or may not be patentable and that ultimately may not be revenue generating.

Ways to minimize the costs of protecting and commercializing innovations include:

• Determining the cost-effectiveness of seeking protection by weighing the cost of obtaining protection and commercializing against commercialization potential:

1. Estimate the costs associated with protecting the IP by determining the type of technology and the complexity of the invention.
2. Evaluate market investment trends by monitoring relevant technological sectors and conducting IP landscape studies, to determine what business opportunities exist for the innovation and to estimate the fair market price of the technology.

• Efficiently collecting information on innovations by implementing a standard invention disclosure form that elicits information on the relevant technological market.
• Strategically filing and “bundling” various types of IP protection:

1. File less expensive copyright, trademark, and design patent applications, when appropriate, to supplement utility patent applications, especially when utility patentability is unlikely.
2. Consider filing a design patent application when a researcher's innovation involves a product having unique ornamental features.

• Delaying costs of pursuing utility patent protection by filing provisional patent and/or PCT applications to maximize time for identifying business and development partners.
• Finding business and development partners quickly and efficiently:

1. Seek to transfer the early costs of technical development, market development, manufacturing, and regulatory clearance.
2. Exploit state and local economic development efforts.

• Employing in-house counsel, instead of outside counsel, to perform license and commercialization performance review.

Patent Timing and Funding for Development

Commercialization partners often expect patent applications to be filed, if not issued as patents, in advance of licensing discussions. However, like their industry counterparts, universities must balance the desire to lock in an early filing date with the need for a refined and thorough disclosure that satisfies the legal requirements for patent applications and that ultimately provides the desired protection for the innovation. Moreover, the patenting process is expensive and TTOs prefer to, and often must, rely on industry partner funding to support IP protection efforts.

Effectively time patent application filings and initiation of relationships with industry partners by:

• Obtaining translational funds to support early stage research efforts.
• Capitalizing on recent industry research and development (R&D) trends to increase external collaboration and decrease in-house R&D costs (see, Industrial Research Institute (IRI), “2015 R&D Trends Forecast: Results from the IRI's Annual Survey“).
• Filing provisional patent applications early and often:

1. Err on the side of filing a provisional patent application on early stage research.
2. File supplemental provisional applications as meaningful development updates occur within the year pendency of the initial provisional application.
3. Consider not converting a provisional application to a non-provisional application if the innovation is still in early stage development with changes likely and no known intervening prior art, and instead re-file the provisional application(s).

Incentivizing Researchers to Think Like Innovators

Universities are typically required by their missions and the Bayh-Dole Act, which concerns federally-funded research, to promote the public accessibility and utilization of their researchers' discoveries and innovations, such as by transferring this technology to the marketplace. Academic researchers, however, often conduct early-stage research, which may have no immediate practical benefit to the public and is not conducive to unmediated public utilization. Thus, encouraging researchers to think like innovators by proactively considering the commercial uses and potential applications of such research is an essential first step toward identifying and commercializing IP.

Ways to incentivize researchers to think like innovators include:

• Offering monetary and in-kind compensation:

1. Implement agreements in which researchers receive a proportion of the royalties generated from commercializing their inventions. (Royalty sharing is a requirement for federally-funded research under the Bayh-Dole Act. Typical royalty agreements with university researchers award in the range of 10% to 50%.)
2. Offer researchers an equity stake in any company that results from their innovations.
3. Publicly acknowledge and award meaningful prizes to university researchers who successfully commercialize an invention.

• Emphasizing how profit-sharing benefits university researchers as compared to industry counterparts (who typically receive no profit-sharing).
• Considering IP activity in the evaluation and recruitment of faculty and other researchers.
• Informing researchers of their peers' invention and commercialization successes.

Trade Secret Protection

Given the goals of publication, collaboration, and transparency in academia, trade secret protection is used less frequently than other forms of IP; however, when identified and monitored correctly, trade secret protection offers a relatively low cost means of indefinitely protecting certain innovations.

Determine the appropriateness of trade secret protection and subsequently preserve protection by:

• Implementing a standard trade secret analysis as part of the innovation assessment process:

1. Consider the application of any mandates to broadly disseminate the results, data, and information that result from work conducted using federal funds, such as the Bayh-Dole Act.
2. Consider whether the innovation can be reverse-engineered.
3. Consider whether maintaining the confidentiality of the innovation significantly detracts from the technology's achievable public benefit.
4. Consider whether maintaining confidentiality of the innovation is feasible in view of the researcher's goals, e.g., publication of research results.
5. Consider whether someone else is likely to discover the innovation by legitimate means.

• Establishing and maintaining secrecy protocols for researchers and TTO.
• Executing confidentiality agreements before disclosing and avoiding public disclosures.
• Pursuing any suspected violations of a confidentiality agreement.

Researcher Cooperation With Patent Filing and Licensing Process

The patenting and commercialization processes are most efficient and effective when inventors and other relevant technical specialists (e.g., research team members) are appropriately engaged. TTOs therefore should strive to encourage researcher participation during patent application drafting and prosecution, as well as in the identification of potential industry partners.

Ensure research team cooperation with patenting and commercialization processes by:

• Creating an institutional culture of IP awareness:

1. Educate researchers on the practical IP issues they face every day in the university setting.
2. Inform researchers of how IP is used in the operation of the university and how it positively affects their jobs.

• Establishing a sustainable personnel structure that allows the TTO to identify and utilize the most technically appropriate contact in the case of faculty turnover.

Conclusion

In pursuit of their goals to transfer technology to the marketplace and generate revenue for the university, technology transfer offices experience unique challenges. These challenges largely result from tensions between the academic mission of the university and its researchers and the prerequisites to obtaining IP protection and securing commercialization partners. The proposed best practices urge TTOs and entities facing similar challenges to keep informed of market trends and developments in university research programs, to educate researchers about the benefits of IP and how to identify and protect it, to be strategic about the types and costs of IP protection sought, and to be introspective about the effectiveness of protection and commercialization programs.

Randi Isaacs is Patent Counsel at Emory University, where she focuses on intellectual property counseling, including patent preparation and prosecution, for medical device and software technologies for the Emory Office of Technology Transfer. She can be reached at [email protected]. Stacy Fredrich is an Intellectual Property Attorney at Sutherland Asbill & Brennan LLP, where she works with universities, start-up companies, and corporations to protect their innovations around the world. She can be reached at [email protected]. Alyssa Walker is a student at the University of Michigan Law School.

University technology transfer offices (TTOs) bridge the gap between innovation and commercialization by identifying ways to protect university-generated innovations from unauthorized exploitation, by obtaining the appropriate protection for such innovations, and by facilitating commercialization of these innovations. Of course, the process of protecting and commercializing intellectual property (IP) is not exclusive to universities. For-profit companies worldwide engage in a similar process; however, universities (as well as start-up and other pre-revenue companies) face unique challenges in these efforts. Six such challenges are identified herein, along with best practices for overcoming those challenges.

Non-Disclosure vs. Operation Of University Research Program

A TTO often acts as the sole advocate of non-disclosure and secrecy within a community in which disclosure and transparency are highly valued. On one hand, non-disclosure is critical to the ability to protect an innovation by patent or trade secret. On the other hand, prolific publication is directly correlated obtaining to grant funding for research, receiving tenure at a university, and improving standing in the researcher's field of study. Consequently, university researchers are often impatient to disseminate their work to interested colleagues and the scientific community and may not ensure that the underlying IP in their research findings is properly protected before disclosure.

Balance the competing objectives of academic disclosure and non-disclosure for IP protection by:

• Keeping abreast of developments and new efforts in the university's research programs;
• Informing researchers of what constitutes a public disclosure for purposes of patent and trade secret law; and
• Allowing researchers to disclose their research findings with tailored disclosures to avoid public disclosure of information pertinent to obtaining patent or trade secret protection.

Budget Sensitivity

Compared with their for-profit counterparts, TTOs (and pre-revenue companies) have relatively small budgets available for protecting IP and for subsidizing and working with industry to commercialize the innovations related to that IP. Additionally, the impact of a poor return on investment for a failed protection and/or commercialization effort can be significant for these entities. TTOs therefore cannot afford to pursue patent protection for an innovation that may or may not be patentable and that ultimately may not be revenue generating.

Ways to minimize the costs of protecting and commercializing innovations include:

• Determining the cost-effectiveness of seeking protection by weighing the cost of obtaining protection and commercializing against commercialization potential:

1. Estimate the costs associated with protecting the IP by determining the type of technology and the complexity of the invention.
2. Evaluate market investment trends by monitoring relevant technological sectors and conducting IP landscape studies, to determine what business opportunities exist for the innovation and to estimate the fair market price of the technology.

• Efficiently collecting information on innovations by implementing a standard invention disclosure form that elicits information on the relevant technological market.
• Strategically filing and “bundling” various types of IP protection:

1. File less expensive copyright, trademark, and design patent applications, when appropriate, to supplement utility patent applications, especially when utility patentability is unlikely.
2. Consider filing a design patent application when a researcher's innovation involves a product having unique ornamental features.

• Delaying costs of pursuing utility patent protection by filing provisional patent and/or PCT applications to maximize time for identifying business and development partners.
• Finding business and development partners quickly and efficiently:

1. Seek to transfer the early costs of technical development, market development, manufacturing, and regulatory clearance.
2. Exploit state and local economic development efforts.

• Employing in-house counsel, instead of outside counsel, to perform license and commercialization performance review.

Patent Timing and Funding for Development

Commercialization partners often expect patent applications to be filed, if not issued as patents, in advance of licensing discussions. However, like their industry counterparts, universities must balance the desire to lock in an early filing date with the need for a refined and thorough disclosure that satisfies the legal requirements for patent applications and that ultimately provides the desired protection for the innovation. Moreover, the patenting process is expensive and TTOs prefer to, and often must, rely on industry partner funding to support IP protection efforts.

Effectively time patent application filings and initiation of relationships with industry partners by:

• Obtaining translational funds to support early stage research efforts.
• Capitalizing on recent industry research and development (R&D) trends to increase external collaboration and decrease in-house R&D costs (see, Industrial Research Institute (IRI), “2015 R&D Trends Forecast: Results from the IRI's Annual Survey“).
• Filing provisional patent applications early and often:

1. Err on the side of filing a provisional patent application on early stage research.
2. File supplemental provisional applications as meaningful development updates occur within the year pendency of the initial provisional application.
3. Consider not converting a provisional application to a non-provisional application if the innovation is still in early stage development with changes likely and no known intervening prior art, and instead re-file the provisional application(s).

Incentivizing Researchers to Think Like Innovators

Universities are typically required by their missions and the Bayh-Dole Act, which concerns federally-funded research, to promote the public accessibility and utilization of their researchers' discoveries and innovations, such as by transferring this technology to the marketplace. Academic researchers, however, often conduct early-stage research, which may have no immediate practical benefit to the public and is not conducive to unmediated public utilization. Thus, encouraging researchers to think like innovators by proactively considering the commercial uses and potential applications of such research is an essential first step toward identifying and commercializing IP.

Ways to incentivize researchers to think like innovators include:

• Offering monetary and in-kind compensation:

1. Implement agreements in which researchers receive a proportion of the royalties generated from commercializing their inventions. (Royalty sharing is a requirement for federally-funded research under the Bayh-Dole Act. Typical royalty agreements with university researchers award in the range of 10% to 50%.)
2. Offer researchers an equity stake in any company that results from their innovations.
3. Publicly acknowledge and award meaningful prizes to university researchers who successfully commercialize an invention.

• Emphasizing how profit-sharing benefits university researchers as compared to industry counterparts (who typically receive no profit-sharing).
• Considering IP activity in the evaluation and recruitment of faculty and other researchers.
• Informing researchers of their peers' invention and commercialization successes.

Trade Secret Protection

Given the goals of publication, collaboration, and transparency in academia, trade secret protection is used less frequently than other forms of IP; however, when identified and monitored correctly, trade secret protection offers a relatively low cost means of indefinitely protecting certain innovations.

Determine the appropriateness of trade secret protection and subsequently preserve protection by:

• Implementing a standard trade secret analysis as part of the innovation assessment process:

1. Consider the application of any mandates to broadly disseminate the results, data, and information that result from work conducted using federal funds, such as the Bayh-Dole Act.
2. Consider whether the innovation can be reverse-engineered.
3. Consider whether maintaining the confidentiality of the innovation significantly detracts from the technology's achievable public benefit.
4. Consider whether maintaining confidentiality of the innovation is feasible in view of the researcher's goals, e.g., publication of research results.
5. Consider whether someone else is likely to discover the innovation by legitimate means.

• Establishing and maintaining secrecy protocols for researchers and TTO.
• Executing confidentiality agreements before disclosing and avoiding public disclosures.
• Pursuing any suspected violations of a confidentiality agreement.

Researcher Cooperation With Patent Filing and Licensing Process

The patenting and commercialization processes are most efficient and effective when inventors and other relevant technical specialists (e.g., research team members) are appropriately engaged. TTOs therefore should strive to encourage researcher participation during patent application drafting and prosecution, as well as in the identification of potential industry partners.

Ensure research team cooperation with patenting and commercialization processes by:

• Creating an institutional culture of IP awareness:

1. Educate researchers on the practical IP issues they face every day in the university setting.
2. Inform researchers of how IP is used in the operation of the university and how it positively affects their jobs.

• Establishing a sustainable personnel structure that allows the TTO to identify and utilize the most technically appropriate contact in the case of faculty turnover.

Conclusion

In pursuit of their goals to transfer technology to the marketplace and generate revenue for the university, technology transfer offices experience unique challenges. These challenges largely result from tensions between the academic mission of the university and its researchers and the prerequisites to obtaining IP protection and securing commercialization partners. The proposed best practices urge TTOs and entities facing similar challenges to keep informed of market trends and developments in university research programs, to educate researchers about the benefits of IP and how to identify and protect it, to be strategic about the types and costs of IP protection sought, and to be introspective about the effectiveness of protection and commercialization programs.

Randi Isaacs is Patent Counsel at Emory University, where she focuses on intellectual property counseling, including patent preparation and prosecution, for medical device and software technologies for the Emory Office of Technology Transfer. She can be reached at [email protected]. Stacy Fredrich is an Intellectual Property Attorney at Sutherland Asbill & Brennan LLP, where she works with universities, start-up companies, and corporations to protect their innovations around the world. She can be reached at [email protected]. Alyssa Walker is a student at the University of Michigan Law School.