AFMR meetingApril 21, 2009

Indrani Mukharji, Ph.D.

Executive Director

Northwestern University

Technology Transfer

Academic Technology Transfer

What we doWhy we do itHow we do it

What we have achievedChallenges we face

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What we do

Facilitate commercialization of innovative university technologies from the bench to the market for

public use and benefit by

implementing university intellectual property policies

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Why we do itBayh-Dole Act [Public Law 96-517]

December 12, 1980 mandated

Technology Transfer of inventions arising from federally sponsored research

We do it forMarket launch of new product for public benefit Entrepreneurship leading to new businesses

Sustaining an innovative cultureNew source of revenue

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How we do it

Technology and market evaluation

Make decision on protection (patent, copyright, trademark)

Promote to attract commercial partner

Business development for new companies

Structure, negotiate, and sign license deals

Invention DisclosuresData from AUTM Survey

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2007 Inv

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Characteristics of Academic Inventions

Highly embryonic with long development phase Assessment of value or success difficult

Invention may be ahead of market demand

Market or customers not always clearly defined Inherent high-risk

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Patent

A patent gives to its owners the right to exclude others from making, using, selling, offering for sale, or importing the patented invention for the term of the patent, which is 20 years from the filing date, subject to the payment of maintenance fees.

A patent is a limited property right granted by the government in exchange for sharing the details of the inventions with the public.

A patent may be sold, licensed, assigned, or abandoned.

Patent enforceability depends on ability to detect Infringement, and ability to withstand litigation

Patent should not expire before product launch, and technology should not be obsolete before patent issues

Patent Protection

Patent Criteria

Novel and enablingMust have utilityNon-obvious to one

skilled in the art

Patent Claims

CompositionProcessMethod of useNew use

Design patents

When to File Patent Applications

For worldwide protection, patent application must be filed before any public disclosure

Oral presentation Poster presentation Published article Abstracts, if enabling, in conference proceedings Public demonstration of a prototype

For US patent protection only, patent application must be filed within 12 months of public disclosure

Patents are active for 20 years from the date of first filing

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Patent Applications

Provisional Patent Application less expensive to file

not examinednot published renders only 12 month protection, and must be converted within 12 months to utility application

Utility Application published 6 – 12 months after filing dateexamination leads to Office Actions (patent prosecution)takes 4 – 10 years to issueexpensive

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Patent Expenses

Worldwide Protection for 30 MonthsProvisional applications $1,500 – $7,000

Utility applications in U.S. only $8,000 - $15,000Patent Cooperation Treaty (PCT) extra $4,000

U.S. Prosecution and MaintenanceProsecution cost in U.S. $ 15,000 – $ 35,000

Patent maintenance $5,000 for each issued patent

Nationalization to Continue Worldwide ProtectionEPO $50,000+ (plus translation costs)

Canada, Australia, Japan etc. extra $3,000 - $20,000Annuities for 17 years $5,000 – 25,0000 / year

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What makes less sense to patent?

Targets, mechanism of action without novelty of composition or useNew use of countertop medication or deviceResearch tools, e.g., Animal models, Cell linesNew use of a patented composition where patent

owner has no interest in the new use

(no freedom to operate)

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Inventors in Patent

Inventors include those who conceived and intellectually contributed to the enablement or reduction to practice

Not the same as journal authorship

Incorrect inventorship may cause patent invalidation

Inventorship may be corrected anytime before patent issues

Tech Transfer Office is responsible to make it correct

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What happens to my IP if I move

To another university – Original IP or patent rights remain with first university. Additional research done at the next university may be sole or joint property, determined by the Tech Transfer offices. For joint property an Inter-institutional Agreement is signed by both universities to decide on the sharing of the work and the cost. Royalty, if any, is shared with inventors according to each institutions Patent Policy

To industry – Original patent rights remain with university. If research continues at company, company may want to negotiate a license for original patent rights. Any royalty received by university will be distributed to all inventors according to university Patent Policy.

Relinquish IP or patent rights - If university is no longer interested to pursue patent protection, university relinquishes its ownership rights in IP to all inventors, thereby claiming no part of the revenue after release

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Inter-university collaboration

May occur via Exchange of research tools or reagents – Material

Transfer Agreements (MTA) outline terms and render protection if needed

Joint grant application Sponsorship of inter-university research projects by

Foundations or Industry Use of instrumentation, facility, or data analyses

Inventions should be reported to each institution Tech Transfer offices by the respective inventors

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Inter-institutional Agreements

Negotiated and signed by tech transfer offices for joint inventions that delineate the management of the IP evaluation, patent filing and prosecution, marketing to industry, license negotiations, litigation matters, and sharing of the costs and revenue.

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License

A license is a contractual agreement which is granted by the patent owner (the licensor) to the licensee to use the patent rights to make, use, sell, offer for sale or import, usually in return for a royalty or other payment.

It is common for companies to enter into numerous license agreements associated with the production of a single product.

A license may be exclusive or non-exclusive

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Licensing

Best to remain flexible and reasonable

No fixed formula - Every deal is different

Seek partners based on interest, compatibility, resources and willingness to develop products for the market

Identify internal champions within existing companies, orform new company for development and commercialization

May need collaborative sponsored research alongside development of technology by Licensee

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Deal Breakers

Restriction or ban on publication of research

Publication delays beyond a reasonable period

Restriction on university’s nonexclusive rights for research and teaching to comply with federal guidelines if federally supported research led to invention

Assignment of patents to Licensee

Restriction of research and future development of competing technologies

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Who Receives License Revenue?

University receives license revenue according to license terms

University Patent Policy sets the rules for distribution of revenue Sharing revenue with inventors, their departments / centers, and schools is common

An inventor may share his/her income with non-inventor colleagues

Northwestern Policy shares the revenue with inventors, departments, and schools but not with

non-inventor colleagues

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Spin-off Companies Entrepreneur

Novel idea or IP AssetManagement

FinancingPersonal, family & friendsSBIR / STTRAngelsCorporate partnershipVenture investment

ExitIPOMerger or Acquisition

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Transfer of Therapeutics for Public Use

Old Approach

Direct Licensing to Pharma

Invention disclosure to Northwestern Patent filing by NorthwesternNorthwestern signs License Agreement with

PharmaPatent prosecution in conjunction with PharmaPharma performs all preclinical development

and clinical trialsProduct launch after Pharma gets regulatory

approval

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Current Approach

NewCo Formation

Invention Disclosures to NorthwesternPatent filing by Northwestern New company (NewCo) is incorporated with private

capital Northwestern grants license to NewCo NewCo may fund additional research in inventor’s

lab while performing preclinical development on its own or by CRO.

Northwestern may grant additional licenses to NewCo

NewCo files IND, conducts Phase I and/or Phase IINewCo forms partnership with Pharma to conclude

clinical trials or NewCo exits by assigning License to Pharma or NewCo has an IPO

What has been achieved?

Partial list of Therapeutics from University Patents & Licensing

1990s

1990 – Exosurf; Cardiolite

1993 – Betaseron

1995 – Epivir; Zinecard

1996 – Gliadel; Humatrope; Xalatan; Elmiron

1997 - Synthetic Taxol; Benefix; Reopro; Miraluma

1998 – Actiq

1999 – Doxil; Habitrol; Platinol; Ontak; Nutropin/Protropin;

Busulfex

2000s

2000 – Recombivax; Prevnar

2001 – Periostat

2002 – Remicade; Sarafem

2003 – Emtriva; Fabrazyme; Restasis; Kineret;

Botox/Hyperhydrosis

2004 - Erbitux; Menostar; Silvadine; Ziagen; Macugen; Lyrica

2005 – Zemplar; BiDil

2006 – Zolinza; Zostavax; Urocit-K

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2007

10 Universities reported license income of more than $50 M

27 Universities reported license income more than $10 m

New York University reported $791 M license income [includes monetization of Remicade]

2006

5 Universities reported license income of more than $50 M

28 Universities reported license income more than $10 m

New York University reported $157 M license income

AUTM License Survey(Association of University Technology Managers)

FY 2007 License Revenue (M)AUTM Survey

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License Revenue

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Challenges

Academic research is not market-drivenNecessity to publish immediately

Little capability for development

Technology Transfer is complex and expensiveManaging expectations

High risk endeavorConflicts of Interest

Public Opinion of Technology Transfer

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