The technology transfer office (TTO) acts as the caretaker for the intellectual property (IP) generated by universities: protecting, licensing, selling, and litigating intellectual property. Given the high intellectual output and the professorial flair for free exchange of ideas, these offices are often overwhelmed by their duties.
In doing their job, one task is to help creative university people get started in protecting their IP. Having met with some of these people in the last year, I asked them, a la Family Feud, “What are the top 5 things you wish your university start-ups knew about intellectual property?” Being a child of the 70s, I picture Richard Dawson in a ruffled powder blue suit asking the question, but no matter what your pop culture reference, here were their responses:
1. Cost of securing IP. Setting aside copyrights and trademarks, which are less common for university start-ups, the biggest costs in the university IP universe are those associated with securing a patent. Tech transfer officers I spoke with said that while most of their inventors understand that patents are expensive, they don’t understand just how expensive, or that the cost extends well beyond the initial application filing. To help educate people on the costs of securing a patent both in the US and abroad, the following Gantt chart shows the accrued cost for securing and maintaining a patent, using cost estimates based on various sources.
Most universities look to help the start-up at its beginning, but then want to see it take off and not require future funding. So the Gantt chart above helps a start-up understand what kinds of funds it needs to protect its technology in the future. These are critical numbers as the start-up begins to raise money.
2. Focus your invention. Too often, say tech transfer officers, the brilliant minds at their school branch out in search of a wide array of applications for which their invention might apply. In doing so, professors display their intellectual flexibility. More useful, however, is a tech transfer office understanding the true focus of the invention. They want an answer to, “What is this invention most likely to be used for?” This not only helps the tech transfer office understand the invention, but it helps to focus the university’s patent attorneys on the expensive drafting process.
Bob McGrath, Senior Associate Vice Provost at Drexel University’s Office of Technology Commercialization, put it this way, “We certainly do want to understand the full range of uses of an invention, but we ask our professors to focus on the best-developed applications of that invention when working with our patent counsel. This allows the patent application to be focused and well-defined, and by addressing the broader range of possibilities in the specification, we give ourselves the opportunity to pursue the other uses of the invention in subsequent patent filings.”
3. Does getting a patent matter? Many inventors need a primer on what a patent is good for. Scanning the Internet yields headlines from “Do patents really matter to start-ups?” to “For start-ups, patents can be a gold rush.” Given the array of popular advice, what is a patent good for? It’s important that a patent owner understands that venture capitalists (VC) and large companies (the start-ups’ future sources of income) believe in patents. As Techcrunch found,
- 33% of funded companies have filed for patent protection, 20% filed before ever receiving funding
- 65% of semi-conductor and biotech start-ups filed for protection (20% of soft technology like video games and eCommerce filed)
- Companies that a VC invests in will apply for a patent at some point
- Companies that a large company VC invests in have applied 88% of the time (companies like Samsung, J&J, Motorola Ventures); in healthcare, that number is a staggering 96%
4. What other IP tools are out there? If patents are the focus of technology transfer offices, they are not the only IP tools available. Other useful tools include:
- Claim charts. A chart that specifically shows how a product may infringe a patent or application. Few things get an infringer’s attention faster than a claim chart. Claim charts let a potential infringer know that they are in the start-up’s crosshairs.
- Cease and desist letters. Along with claim charts, these are attention-getters. A cease and desist letter will usually at least open a dialogue with a potential infringer. Such a dialogue could lead to license or purchase negotiations.
- Infringement and validity analysis. These analyses are professional legal opinions about the validity of the start-up’s patent or its infringement claim. They are costly but when shared with an adversary, can carry a lot of weight.
- Non-disclosure agreements (NDAs). These agreements are common in technology settings and contractually bind a party not to disclose the information that the start-up shares with them.
- Trademarks. A trademark protects words or marks used in commerce.
- Copyrights. Copyrights are inexpensive and protect expression from copying.
- Employee agreements. Employment agreements protect the start-up from employees leaving and taking IP with them.
5. What shouldn’t I do? There are many things that a start-up must be careful with to preserve its IP.
- Be wary of disclosures. Universities are known for publishing and sharing insights. But if these public disclosures are done before filing for patent protection, the right to patent may be lost or diminished. Start-ups and all university staff should be aware of this danger.
- Document improvements with your tech transfer office. Improvements to a technology in progress often don’t get passed on to the technology transfer office until they’ve been shared publicly, when it’s too late. All improvements should be passed on the tech transfer office for evaluation.
- Be timely. In the patent process at the US Patent and Trademark Office, there are deadlines that can be extended. These extensions are costly but people routinely take them, enriching only the US government, for which they thank you.
- Let your attorney do the work. Once the attorney is working, let them work and don’t deluge them with comments. Compile your comments on drafts in one document. Comment fragmentation, or constant comment and feedback only drive the cost higher.
I hope you find these tips helpful, and if you would have answered the survey differently, please be sure to let me know by email (SSchott@vklaw.com)– I’d love to add to my list.