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Innovation Transfer Center

Innovation Transfer Center. Carl Mahler Marty Vander Velde. What is “Property”?. A collection of rights pertaining to a particular object The most important right is the ability to keep other people from using YOUR “property”. What is “Intellectual Property”?.

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Innovation Transfer Center

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  1. Innovation Transfer Center Carl Mahler Marty Vander Velde

  2. What is “Property”? A collection of rights pertaining to a particular object The most important right is the ability to keep other people from using YOUR “property”

  3. What is “Intellectual Property”? IP consists in ideas (or the particular expression of ideas) that the government allows a person to exclude others from using. Note: usually the government allows you to enforce the right, but usually doesn’t enforce it for you.

  4. Why would a University want to Keep People from Using Its Ideas? Academia does basic research; usually much more work must be done to turn an “idea” into a “product.” Most companies won’t make the investment to create a product unless they are sure that others won’t steal it.

  5. Thus, paradoxically, Universities have to make sure that they can prevent third parties from practicing their ideas before they can persuade others to make the benefits of these ideas available to the public!As an often cited example, it costs over $250 million to bring a new drug to market. No company will undertake this cost unless the potential drug has been patented.

  6. Most Research done at US Universities is Funded by the Federal GovernmentThe government wants society in general to benefit from this research.It therefore enacted the Bayh-Dole Act of 1980 to allow academic institutions to patent and own the results of government funded research.

  7. Bayh-Dole Act of 1980 • Senators Birch Bayh and Bob Dole sponsored the bill that passed in 1980. • Allows universities to own patents to technologies that are developed using federal funding. • Requires universities to share income with inventors and apply remainder to support research. • Public Law 96-517, 35 USC 200-212, 37 CFR 401.1-.14

  8. Bayh-Dole Act, Part 2 • University researchers must agree to assign patents to University prior to accepting federal funds. • Prohibits universities from assigning patents to 3rd parties (if university declines to patent, rights revert to federal government). • Requirement for “substantial manufacture” within the US on any exclusive license. • Preference for licensing to small business.

  9. Bayh-Dole Act, Part 3 • Significant reporting requirements are placed on universities. • Government has royalty-free right to use patent inventions that it funded. • If government feels university hasn’t commercialized technology “appropriately” it can exercise “march-in rights.”

  10. Results of Bayh-Dole • Initially, most universities were slow to establish tech transfer offices. • First well-publicized success: “Cohen Boyer” patent that issued jointly to Stanford and the University of California. • Now, most universities have TTO’s; the Association of University Technology Managers lists over 225 of them, including many outside of the US.

  11. Research $25.7 billion 1999 AUTM Survey Discovery 11,607 disclosures 1 per $2.2 million Intellectual Assets 5339 new patent applications 1 per $4.8 million Transfer for Commercialization 3687 licenses and options 344 company starts Jim Severson, NASULGC Annual Meeting, 2000

  12. What is commercialization? A way to bring the results of research to the marketplace in exchange for payment Other ways include publication of research results and hiring students who have performed the research

  13. Why Do Tech Transfer • Government mandate (for government-sponsored research) • Benefit society in general • Benefit the local economy • Recruit, reward, and retain faculty • Increase the stature and reputation of the University • Make Money

  14. What Are the Usual Methods of Technology Transfer? • Licensing to existing companies • Creation of new companies based on the new technology

  15. Academia Knowledge Education Research Service Academic Freedom Industry Knowledge for Profit R&D Marketing Sales Confidentiality and Trade Secrets Key Differences in Perspective

  16. Licensing from Carnegie Mellon • Greatest weight is given to the prospect which is most likely to succeed in commercializing the innovation • Large companies have the finances and established sales channels – many of the resources necessary for success • Small companies’ entire business may revolve around a university licensed technology – a critical element in motivation

  17. Required Elements • A business or marketing plan that describes the commercialization path • Non exclusive license • Best efforts • Running royalty • 50% reimbursement of patent costs • Exclusive license • Best efforts and milestones • Upfront fee • Running royalty and annual minimums • Full reimbursement of patent costs

  18. In return, the typical licensee gets: • A high risk, high potential, disruptive technology that can leap frog the competition • A US patent (or application) that enables exclusion of the competition and the right to enforce • A twenty year (or life of the patent) term

  19. Why create spin-offs? • University research results are often either “too early” in product cycle or “far ahead of the market” for corporations; Also “not invented here” • Large company focus sales and marketing to established customer not disruptive technologies • Regional economic growth & job creation • Growth & retention of entrepreneurial faculty • Potential to share in “upside” via equity arrangements

  20. Spin-offs Risks • Confidentiality requirement of industry vs. free flow of knowledge • Conflicts of interest and commitment • Increased institutional business costs/risks • Equity management

  21. Carnegie Mellon Tech Transfer Office established

  22. Exclusive vs Non- Exclusive Licenses From “Measuring Product Development Outcomes of Patent Licensing at M.I.T.” By Lori Pressman and Don Kaiser, M.I.T. Technology Licensing Office, 2000

  23. Automated Cell Technologies Sonic Foundry Carnegie Learning Wisdom Technologies Bonecraft Carnegie Interactive Medrespond Pogojive AskChildren’s Chromodynamics Carnegie Technology Education Driver Training and Safety Casurgica Servus Robots Carnegie Speech Akustica PlexTronics Helium Networks CMU Equity

  24. Resource Investment Committee • 2000+ Faculty/Scientists/Post Docs/PhD Students generating ideas/inventions and 10 (really 5) individuals in the Innovation Transfer Center • Deep technical knowledge in faculty, basic technical background/strong business skills in ITC (but impossible to be specific to a more defined market every time) • Goal of implementing RIC : better decisions faster

  25. Questions?

  26. BACKUP

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