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GLOBAL INTELLECTUAL PROPERTY ISSUES

Cláudia Montenegro* and Manuel Heitor**

*IST - Technology Licensing Officegaltec@servicos.ist.utl.pt

** Center for Innovation, Technology and Policy Research, IST

http://in3.dem.ist.utl.pt

© 1999, Instituto Superior Técnico

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1. Intellectual Property Protection: some concepts

2. The Patent Systems

3. The process of Technology Transfer:

university-based practices

CONTENTS

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1- Intellectual Property: What is it?

A Case Study:

During a master degree in Biotechnology, the student and herCoordinator developed an improved process for “clavulanic acid production” with licensing potential to the pharmaceutical industry…

• Which are the rights of the student in this invention?

• Which are the rights of the University?

• Which kind of protection will be provided?

• What could be considered a disclosure?

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2 - Intellectual Property: What is it?

• creations of the human knowledge

• based on two principles:moral - the authorship should be protected and

recognized to the authors

economic - the warranty of exclusiveness and loyalty competition provided by the

State, favours the exploitation of inventions/creations.

… but the fundamental goal is to promote “institutional integrity”!

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3 - Intellectual Property: What is it?

Industrial Property:

• utility patents

• trademarks

• designs

• service marks

• trade secrets

Copyrights:

• literary works

• computer programs

• multimedia works

• audiovisual works

• informational databases

• authored works

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COPYRIGHT PROTECTION

1. Right to reproduce the work

2. Right to prepare derivative works

3. Distribution rights

4. Right to public display and public performance

5. Prevents unauthorized copying

EXCLUSION FROM COPYRIGHT

1. Ideas as opposed to the creative expression of ideas2. Short names and slogans (generally not subject)3. Factual information

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COPYRIGHTS

COPYRIGHT REGISTRATION

1. Not mandatory

2. Prerequisite to filing an infringement lawsuit

3. Consists in filling out of a form and sending it to theCopyright Office, with at least one deposit copy of the work

4. Much less expensive than a patent application

TERM OF COPYRIGHT

1. Life of the author plus 70 years or…

2. In the case of works for hire, 70 years from publication

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COPYRIGHT NOTICE

Copyright “ © ” - year of first publication - owner

© 1999, Instituto Superior Técnico

A copyright notice is no longer mandatory, but can help to defeat a claim to innocent, non-willful, infringement.

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What is a patent and what are its advantages?

• a title that gives to the proprietor the exclusive right tomanufacture, market or exploit for gain the invention claimed in the patent

• excludes others from the use of an invention without theconsent of the proprietor (negative right), for 20 years from dateof the filing

• also prohibits the import of protected products from countriesin which the invention is not patented

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What is a patent and what are its advantages?

• Promotes institutional integrity

• Promotes commercialization strategies

• Patents are a source of information of new products and processes

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What is patentable?

Inventions which are:

1. NEW

2. Involve an INVENTIVE STEP

3. Susceptible of INDUSTRIAL APPLICATION

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An invention is new if...

…prior to the date of filing or to the “priority date”,

it was not already known to the public in any form

(written, oral or through use), i.e. it did not form part

of the “state of the art”.

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What is the grace period?

The period that the inventor has to file a patent application from the time of the invention’s disclosure (by printed publication, public use or sale, etc).

Portugal - 1 year Mexico - 1year

USA - 1 year Japan - 6 months

European patent - 6 months

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Novelty Check List

1. Open literature2. Inclusion in a thesis or other accessible document deposited in a library3. On Internet4. Oral disclosure at scientific meetings (including poster sessions)5. Any talk or demonstration at colloquium, lecture, or the like6. To any visitors to the laboratory, in a non-confidential manner7. By being put to public use after experimental trial8. By advertisement, sale, or any other form of commercial activity which is public

(based on R S Crespi, Patenting in the Biological Sciences, John Wiley 1982)

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An invention involves an inventive step if...

…based on the state-of-the-art, it is not

obvious to a person skilled in the art.

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An invention is susceptible of industrial application if...

…it can be made or used in any kind of

industry (including agriculture).

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What is not patentable?

The European Patent Convention (1973) excluded fromthe European patent the following:• aesthetic creations;• mathematical formulae;• business methods• computer programs• discoveries• immoral or anti-social inventions• animal and plant varieties• essentially biological processes• medical methods - surgery, etc.

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The Patent Systems

No World Patent System / various regional treaties instead

European Patent Convention: a regional system for Europe (19 States)

Patent Cooperation Treaty: the broadest international scope (70 States)

National Patent Systems continue to grant national patents

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European Patent Convention

• European Patent Organization is an inter-governmental bodyestablished by the European Patent Convention (EPC), which entered into force in 1977.

• All member States of the European Union are EPC Contracting States

- Infringement of EP = National Law in each contracting state

• European Patent Office (EPO) grants European Patents, which can obtain protection in all 19 member states

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What is a European Patent?

it is a bundle of National Patents, for example: - European Patent (UK) = UK National Patent - European Patent (Germany) = German National Patent (more countries we want it to cover, more expensive it is)

Translations must be presented in English, French or German

applications filed with the EPO in Munich, its branches in Hague and Berlin, and with the national patent authorities of the member states

Granted after Legal and Technical examination by the EPO

Infringement of EP = National Law in each contracting state

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How much does a European patent cost? …

EUROS 2 710 - filing, search and designation fees due at the beginning

EUROS 5 650 - average European application (with 8 designated States), includes the filing, search, designation, examination and grant fees, as well as the

renewal fees for the 3rd and 4th year

Please don’t forget …- the translation costs (most countries require a translation of the patent in their official language)- patent attorney’s fees (if your residence or principal place of business is in one of the member states, you are not obliged to be represented by apatent attorney)

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Comparative Costs of Patent Applications

EuropeanPatent

USPatent

JapanesePatent

Patent Office Fees 8 250 3 304 2 000

Representationexpenses

25 771 9 000 12 859

TOTAL 34 221 12 304 14 859

Source: IRDAC, 1996, in “IPR: Patents and Innovation in the International Context” OCDE, June 1997, pp. 22

(in DM)

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Green Paper on the Community Patent

1975 - Community Patent Convention (not yet in operation)

1997 - Green Paper on the Community Patent (consultation is underway)

Community patent:• single application through the EPO will mature in a single title of property covering the whole of the European Union• English as the Community patent language ? (political difficulties and implications)

• litigation - Whose court should have jurisdiction over a Community patent ? (political and constitutional issues)

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Patent Cooperation Treaty (PCT) Application

Patent Cooperation Treaty is a multilateral treaty, concluded in Washington in 1970

entered into force 1978

administered by the International Bureau of WIPO (World Intellectual Property Organization - Geneva)

70 members states

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PCT BENEFITS

PRO

• Postpone fees (filingand maintenance) up to30 months

• International search

• Allows commercial evaluation

• Selection of countries

• English prosecution

CON

• Extra expense

• Delays prosecution

• Non-binding patentability opinion

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PRINCIPAL PATENTING OPTIONS

E xerc ise op tion to p roceedin e lec ted cou n tries /reg ion s

O ffic ia l ad viso ry op in ionh an d ed d ow n

In even t o f o ffic ia l ob jec tion s ,am en d c la im s if n ecessary

P ay fees fo r su b s tan tiveexam in a tion

E xerc ice op tionto p roced e ind es ig n a ted

cou n tries /reg ion s

P C T ap p lica tion p u b lish edw ith o ffic ia l search

F ile P C T ap p lica tion inan y m em b er cou n try

F ile p a ten t ap p lica tionin h om e cou n try

File patent applicationsin all countries /regionsof interest

Many countries publishapplications with

official search

Pay fees for substantiveexamination (not in USA).

In event of official objections,amend claims if necessary

Patent granted:specification (re)published as amended

Convert regionalpatent into national

patents

Patents expirePay renewal fees on rising scale until expiry

Months

0

12

18

19 20

30

$$

$$

$$

$$$

$$$

$$$

$$

$$

$$/$$$

Adapted from “Patents: An Overview” by BTG

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European Patent Applicationsover the Years

27000

28000

29000

30000

31000

32000

33000

34000

35000

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89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

EuropeanPatentsApplications

Cordis nº121, “The importance of Intellectual Property Rights (IPR) in innovation”

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Worldwide Patent Applicationby origin (1995)

Japan60%

USA25%

Europe11%

Others4%

Cordis nº121, “The importance of Intellectual Property Rights (IPR) in innovation”

Typical published data

BUT, ... international comparisons can be misleading namely when Japanese patents are analyzed

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Why do Universities Protect and License Intellectual Property

1. Induce links with society and promote institutional integrity

2. Attract industrial sponsorship of research

3. Motivate Faculty

See research results become a reality

Share of royalties

Increase consulting opportunities

4. Closer ties to industry

5. Provide opportunities for graduates

6. Income generationSource: “Building Bridges”, Lita Nelsen, MIT

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Patents in US UniversitiesUniversity Patents in 1995

University of California 219Massachusetts Institute of Technology 107University of Texas 90Stanford University 55University of Wisconsin 47Cornell University 41California Institute of Technology 38Iowa State University 37University of Florida 33North Carolina State University 31State University of New York 31University of Michigan 29Virginia Polytechnic Inst. & State University 29Johns Hopkins University 28University of Minnesota 27Duke University 26University of Pennsylvania 26

AUTM Licensing Survey, 1991-95 AUTM (1997)

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UniversityLicense

Start-upCompany X

w/ CoreTechnology

Own Products

(Later)

Company A

Company B

Company C

Product A

Product B

Product C

Source: “Building Bridges”, Lita Nelsen, MIT

Technology Transfer

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START-UP COMPANIES

Advantages• Focus• Commitment to Technology• Product development in Parallel• Multiple Partnering• Upside Potential• If Direction of Product development Changes?• Local Economic Development

Source: “Building Bridges”, Lita Nelsen, MIT

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START-UP COMPANIES

Disadvantages

• High Risks: Financial, Technical, Marketing, People

• Alienate Large Companies / Sponsors

• Conflicts of Interest: real and perceived

Source:“Building Bridges”, Lita Nelsen, MIT

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When is a Start-up Attractive?

Source: “Building Bridges”, Lita Nelsen, MIT

Very Early Stage /High Risk Technology

Multiple Applications

No existing Industry

Active Participation by Inventors

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The Virtual Incubator

“Incubation”

IDEACOMPANY

FORMATIONPRODUCT

DEVELOPMENT

PROFITABLEOPERATIONS& GROWTH

A B

C

Source: “Building Bridges”, Lita Nelsen, MIT

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Phase A

IDEA COMPANYFORMATION

WHAT’S NEEDED?Intellectual Property Protection Introduction to Investors

Company Conceptualization Seed Capital

Management Team Legal Advice

Business Plan Office Space

Source: “Building Bridges”, Lita Nelsen, MIT

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Phase B

COMPANYFORMATION

PRODUCTDEVELOPMENT

WHAT’S NEEDED?

Labs

Money

Staff

Management Guidance

Business Development

Source: “Building Bridges”, Lita Nelsen, MIT

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ON-GOING DEBATE ...

Is IPP compatible with the emergence of the Knowledge Based Society?

Some readings:

• Thurow (1997), Harvard Business Review, September-October, pp. 95 - 103

• Ferné (1998), OECD Observer, (210) February/March, pp. 23 - 27

• Conceição, Heitor and Oliveira (1998) Technovation, 18 (10), pp. 615 - 625

• Conceição, Heitor and Oliveira (1999), Kluwer Academic Publishers

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USEFUL SITES

WIPO - http://www.wipo.org

EPO - http://www.european-patent-office.org

IPR Helpdesk - http://www.cordis.lu/ipr-helpdesk

AUTM - http://www.crpc.rice.edu/autm

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USEFUL SITES Patent Databases

Free Searches

1. Esp@cenet

http://ep.dips.org

2. IBM Server

http://patent.womplex.ibm.com

3. USPTO

http://www.uspto.gov/patft

Paid Searches

1. Dialog

http://www.dialog.com

2. Knowledge Express

...www.KnowledgeExpress.com

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Fim…Fin…The End

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QUESTIONS