Intellectual Property and Commercialization

1. Intellectual Property and Commercialization Erica BessoResearch Innovations Office Faculty of Science Spring 2008

2. Defining Innovation • All innovation begins with creative ideas . . . One definition for innovation is the successful implementation of creative ideas within an organization… • Innovation is the process that translates knowledge into economic growth and social well-being. It encompasses a series of scientific, technological, organizational, financial and commercial activities.... • It is the process whereby ideas for new (or improved) products, processes or services are developed and commercialized in the marketplace. INNOVATION = INVENTION + COMMERCIALIZATION Research Innovation Office

3. Enabling Innovation • Nurturing innovation is a process • In the university context, the process is to transform intellectual resources (thoughts, ideas and insights) into intellectual assets • Intellectual assets become intellectual property (“IP”) through legal protection. • IP defines the value on which a company depends for successful commercialization. REFINEMENT of our Value Proposition: INNOVATION = IP + COMMERCIALIZATION Research Innovation Office

4. The VALUE Proposition • Funding a research project • Licensing a technology • Starting a company / spin-off • Buying a product All of these invest in VALUE Research Innovation Office

5. IP - a Valuable Asset • IP is any product of the intellect protectable by law • IP implies ownership • guaranteed by law once protected • IP can also be sold (assigned) or leased (licensed) • may be used free of charge, owner permitting • Technology transfer is the process of identifying, evaluating and commercializing IP • In a university, why bother? • Can capture research and license dollars • Can increase personal income • Broad definition includes transfer through contractual research, licensing and know-how (via personnel) Research Innovation Office

6. University compared to Company • In a UNIVERSITY, • Professors, TA’s, Support Staff are all considered employees of the university – but there is wide variability in work definition • All are bound by their university’s IP policy • At McGill, inventions are jointly owned by inventors and University at the outset • There is no obligation to commercialize the IP developed, although it is encouraged • In a COMPANY, • Your employment contract is based on “Work for Hire” • As an employee, you work on what the Company tells you to do • all Intellectual Property belongs solely to the company • You agree to work towards the company’s prime objectives of • commercial activity • profitable sale of products Research Innovation Office

7. Work for Hire All Rights to IP Employee Company Salary and Benefits Research Innovation Office

8. Inventions • What is an invention? A technical concept, development, method or composition of matter that : • Is novel, non-obvious and useful • Reflects creative thinking, makes a distinct contribution to and advances the science • Is recognized by masters of that science as such an advance • How do we get from invention to IP? Research Innovation Office

9. From Invention to IP in the University Identification of intellectual assets R & D Grants & Contracts Due diligence Discovery-Invention Commercialization Existing Co. Licence IP created Assessment of Protectability Decision to Commercialize Alternatives Evaluation of Commercial Potential Spin-off Co. New Research $$ Opportunities: POP, I2I Inventor Contracts Research Innovation Office

10. PATENTS – some background • A landmark in the transition of England’s economy from the feudal to the capitalist was, in 1623, the Statute of Monopolies of James I . It rendered void all grants of monopolies and dispensations with one exception. The exception was the grant of letters patent for inventions.These provided the true and first inventor(s) of a given item 14 years of exclusive rights to their invention. In exchange, the invention had to be fully described and disclosed. These monopolies of short duration aimed to encourage innovation and its application for the public good. • The ‘letters patent for inventions’ is the direct ancestor of today’s patents. • The earliest known patent for an invention in England is dated 1449 (granted by Henry VI for making stained glass for Eton College). • On July 31, 1790 Samuel Hopkins was issued the first US patent for a process of making potash, an ingredient used in fertilizer. The patent was signed by President George Washington. Research Innovation Office

11. What is a PATENT ? • Intellectual property (IP) • Exclusive monopoly to make, use or sell an invention for a limited period of time • Tool conferring legal protectionto the holder of the patent rights • Explicit description of how to practice the innovation / invention IMPORTANT to KNOW: Public disclosure of an invention prior to filing a patent application makes the invention un-patentable Research Innovation Office

12. Further IP characteristics • IP is valuable • Often, the value is not predictable at onset of a project • In universities, IP is usually at a very early stage • Early IP requires large $$ and time investments to result in commercially successful product(s) • High risk • Exclusivity of eventual profit encourages investment • IP position needs contractual agreement • Agree with non-University partner BEFORE starting to collaborate • Agree IN WRITING [IP rights, publication rights, etc.] Research Innovation Office

13. Risk and Investment • Grants • Contracts Report of Invention Protect / Create IP Research Commercialize Publish Idea Invention Early IP Proof of Principle / Proof of Concept Product Tech Risk HIGH Investment Research Innovation Office

14. STRATEGY: Decrease the Risk / Strengthen the Invention 1. Ascertain invention is: • Novel • Non-Obvious • Useful 2. Protect invention  IP 3. Add value by:- developing - demonstrating reliability 4. Establish that the invention has: - a market - acceptable competition - willing Licensees Research Innovation Office

15. Note: All that is Patentable is NOT necessarily Commercializable ! Research Innovation Office

16. Protecting an Invention • File a patent application for potentially promising invention • To be eligible for patent protection must be: • Novel • In Canada and the US only, one-year grace period after first public disclosure • Absolute novelty in the rest of the world • Non-obvious (prior art!!!) • Useful • Invention must perform some function (general utility) • Invention must actually be operable and do what is claimed • Invention must be of some benefit to society • Protection begins from the date of filing an application • This is called the “Priority date” Research Innovation Office

17. Example: Electricity from Garbage 1 • Eric, a professor, working in his laboratory invented a machine that produced electricity from garbage. • Eric recorded all of his efforts in his laboratory notebook. • The invention was incredible: • it produced cheap energy, • it released no pollutants, • it reduced the amount of garbage; • However, it had a problem - it did not work for more than one minute at a time. • Eric could not solve this problem. • Sophie, a graduate student in Eric’s group, thought of a way to solve the problem. Research Innovation Office

18. Example: Electricity from Garbage 2 Many things needed to be done to apply Sophie's idea. Eric's department chair, Mark, was asked to provide support dollars to conduct the research and the support was granted. Eric sent Chris, an undergraduate student assistant, to get all equipment necessary for the work to be done. Finally, after two months and many hours of work by Eric, Sophie, and Chris, the garbage machine was creating electricity for hours at a time. All of the work they did was recorded in Eric's laboratory notebook. Sophie also kept a separate notebook of her research activities and contributions. Research Innovation Office

19. Example: Electricity from Garbage 3 Chris provided data for both Eric and Sophie. The improved invention was a success. The scientific world was amazed by the results. The university is now telling Eric the invention is worth millions and it will patent the invention. Eric's university has a patent policy similar to McGill’s. A publication describing the invention is co-authored by Sophie, Chris and Eric. Are they all inventors? Who will receive the millions? Research Innovation Office

20. NOTE: Authorship does NOT equal Inventorship ! Research Innovation Office

21. Inventorship • Who is an inventor? • Someone who has created something new or contributed intellectually thereto • What is an intellectual contribution? • An inventor enables an idea • An invention is “enabled” if someone of ‘ordinary skill-in-the-art’ could make or use the invention without an undue amount of research or experimentation Mark, Eric, Sophie, and Chris all contributed to reduce the invention to practice – but they are not all inventors. Research Innovation Office

22. Inventorship 2 WHO THINKS THAT: • a student be an inventor or co-inventor? • a co-inventor has rights? • someone who worked on an invention but did not contribute intellectually is a co-inventor? HOW MUCH does someone have to contribute intellectually to be considered an inventor? How are Mark, Eric, Sophie, and Chris best described? Research Innovation Office

23. Inventorship Disputes • What if there is an inventorship dispute? • Each person must provide documents explaining their contribution to the invention • Link contribution to the claims, as they appear in the patent application • Failure to resolve such dispute can be cause to abandon commercialization efforts. Research Innovation Office

24. How can one protect oneself ? • DOCUMENT your work (preferably in a bound and dated lab notebook) • Complete a Report of Invention and send it to OTT for assessment • Don’t negotiate a “deal” without consulting knowledgeable professionals (RIO, OTT are a good start) • Don’t sign any document before fully understanding what it means and what effect it will have • Be informed, ask questions Research Innovation Office

25. Sharing the Benefits • Typically, the patent will be licensed to a company in exchange for cash and royalties based on sales. • Do the co-inventors share the royalties equally? • This is decided by the inventors • % share is usually indicated on the Report of Invention • If different share distribution, then a written statement signed by each party must be prepared. • Can the workers share the royalties? • This is decided by the inventors Research Innovation Office

26. McGill’s Policy on IP • Applies to all employees of McGill • If inventors wish to commercialize their invention, then they must disclose it to the OTT • Students, if they are the sole inventors, are not subject to this IP Policy. Research Innovation Office

27. Steps leading to Commercialization • Assessment of report of invention • Is the invention novel? Can it be protected? • Is there a market? How large is the market? What is the competition? • How far is it from becoming a product? Are there resources to further strengthen, demonstrate and refine the invention? • Filing for patent protection now have IP • Finding partners to develop this IP into product(s) • Making presentations (conferences, companies, VCs) • Prosecuting patent application(s) • Identifying a licensee • Finding financing • Negotiating license agreement(s) Research Innovation Office

28. From Invention to IP in the University Identification of intellectual assets R & D Grants & Contracts RIO Due diligence Discovery-Invention Commercialization Existing Co. Licence IP created Assessment of Protectability Decision to Commercialize Alternatives Evaluation of Commercial Potential OTT Spin-off Co. New Research $$ Opportunities: POP, I2I Inventor Contracts Research Innovation Office

29. Commercialization: Thinking in Commercial Terms To License, one must: • Satisfy a customer need • Solve a “pain” • Have a product, a process, a service • Know industry/company entry points For a “successful” Spin-off, must have: • A market • A viable business model and plan • A management team • Critical resource mass ($, people, know how) • Defensible technology Research Innovation Office

30. Commercialization stages beyond the University Research Innovation Office

31. Some McGill Spin-offs • McGill physicists John Strom-Olsen and Peter Rudkowski • pioneered a process by which molten liquids – metal, ceramics, or anything else that melts – can be transformed into fine threads. This melt extraction process is the only one of its kind. Pitney-Bowes purchased the intellectual property rights to this process in 1987. • MXT Inc. formed in 1996 to realize the commercial potential of this technology. • Located in Montreal • Need addressed: Electronic article surveillance (EAS) • PRODUCT: Antitheft Tagging Technology • MXT specializes in the production of antitheft tagging material, ultra-fine fibers, and electroplating. • Extremely fine wire with detectable sheath is only 137.5 microns thick. Just 5 cm of this wire is needed to trigger EAS gates. Research Innovation Office

32. ANAGENIS • McGill chemist Masad Damha and molecular biologist Michael Parniak • Developed proprietary antisense technologies • Anagenis Inc. formed in 1999 to realize the commercial potential of this technology. • Company was recently acquired by Topigen Inc. • Located in Montreal • Need addressed: Novel therapeutic approaches • PRODUCT: Technology inhibiting synthesis of protein encoded by mRNA • Several new classes of drugs currently under development • two drug candidates in Phase II trials for COPD [Chronic obstructive pulmonary disease, a term referring to the two lungdiseases, chronic bronchitis and emphysema] and for asthma. • focused on inhibiting multiple inflammation targets underlying the chronic pulmonary diseases. Research Innovation Office

33. McGill chemist Mark Andrews and electrical engineer Ishiang Shih • Developed liquid crystal displays that use solid state polymer structures with embedded optical, electrical and mechanical functionality. • Silk Displays Inc. formed in 2004 to realize the commercial potential of this technology. • In 2008, company changed its name to Plastic Knowledge Inc. • Located in Montreal • Need addressed: Lightweight, flexible electronic devices • PRODUCT: Electronic circuits embedded in plastic • Promising new platform technology • Initially focused on rugged displays, used in harsh mobile and aerospace applications. • Company working towards consumer applications such as large, wall mounted televisions. Aim is to replace a broad range of "dumb" glass display substrates by smart polymer structures. Research Innovation Office

34. THANK YOUQuestions for me?Four questions for YOU Research Innovation Office

35. HOW MANY of YOU • Found most of this information novel? • Found most of this information interesting? • Believe information on IP and commercialization will be useful to you? • Would like more info on • Entrepreneurship or innovation awards? • Patents and process? • If so  give me your name & e-mail address Research Innovation Office

36. Research Innovation Office • Erica Besso – tel ext 3897 • Dawson Hall Room 303 Research Innovation Office