# Presentation: 331395

## Extramural Intellectual Property 

- 9th Annual NIH SBIR/STTR Conference
- Feb 26-27, 2007 – Las Vegas, Nevada
*Intellectual Property:*
*Considerations for Success*

*J.P. Kim, J.D., M.B.A., M.Sc., M.A.L.S.,*
*Directory & Policy Officer,*
*Division of Extramural Inventions & Technology Resources (DEITR), OPERA, NIH Office of Extramural Research (OER), OD,*
*National Institutes of Health (NIH),*
*U.S. Department of Health & Human Services (HHS)*
*Email: *_[jpkim@nih.gov](mailto:jpkim@nih.gov)_

## Intellectual Property

- What is Intellectual Property?
- The why and how of protecting Intellectual Property
- Patents & Copyrights Generally
- Patents specifically
- Additional Data and Copyright Issues
- The Bayh-Dole Act: Patent Rights and Responsibilities
- Special Considerations for STTRs

## What is Intellectual Property?

- The concept of legal protection for original creations
- Certain creations of the human mind that have commercial value and are given the legal aspects of a property right, such as:
- patent, trademark, unfair competition, copyright, trade secret, the right of publicity, and plant variety protection

## Patents & Copyrights:What They Protect

- Patents - embodiments of new and useful ideas (utility patents), designs, and plants
- _[http://www.uspto.gov](http://www.uspto.gov/)_
- Copyrights – original works of authorship (including literary, dramatic, musical, artistic, and certain other intellectual works) that are fixed in a tangible form of expression
- _[http://](http://www.copyright.gov/)__[www.copyright.gov](http://www.copyright.gov/)_

## Plant Patents vs. Plant Variety Protection: Two Forms of IP for Plants

- Plant Patent: Asexually propagated plants - USPTO/Commerce (_[http://](http://www.uspto.gov/)__[www.uspto.gov](http://www.uspto.gov/)_)
- A patent is a right granted to an inventor
- Excludes all others from making, using, and/or selling the patented invention for 20 years
- Criteria for a patent are novelty, inventiveness (non-obviousness), utility, and reproducibility
- Plant Variety Protection (PVP): Sexually produced (by seed) or tuber-propogated - PVPO/USDA (_[http://](http://www.ams.usda.gov/science/PVPO/PVPindex.htm)__[www.ams.usda.gov/science/PVPO/PVPindex.htm](http://www.ams.usda.gov/science/PVPO/PVPindex.htm)_)
- Provides patent-like rights to plant breeders
- Exclusive rights to multiply and market the seed of that variety
- Protects genetic makeup of a specific plant variety for 20-25 years
- Criteria for protection are novelty, distinctness, uniformity, and stability

## Patents & Copyrights:Rights Granted under IP

- Patent – the right to exclude others from making, using, offering for sale or selling the invention throughout the United States, or importing the invention into the United States and its territories and possessions
- Copyright – the right to reproduce, prepare derivative works, distribute, and to perform and display the work publicly, including performing the work by a digital audio transmission

## Patents – 20 years from earliest filing claimed (subject to the payment of maintenance fees as provided by law)
Terms may be extended for certain pharmaceuticals and for certain circumstances as provided by law

Copyrights – the life of the (last) author plus 70 years (for Post-1977 creations)
For Works-Made-For-Hire or Anonymous Works, the shorter of 95 years from publication or 120 years from creation
For Pre-1978 creations, up to 95 years

- Terms may be extended for certain pharmaceuticals and for certain circumstances as provided by law
- Copyrights – the life of the (last) author plus 70 years (for Post-1977 creations)
- For Works-Made-For-Hire or Anonymous Works, the shorter of 95 years from publication or 120 years from creation
- For Pre-1978 creations, up to 95 years

- Patents & Copyrights:Term of Rights Granted under IP

## 

Trademarks and Service Marks
A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others.
A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product.
http://www.uspto.gov/main/trademarks.htm

Trade Secrets - Protect commercially valuable, protected information so long as the information remains secret and valuable in fact

- Trademarks and Service Marks
- A **trademark **is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others.
- A **service mark** is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product.
- _[http://](http://www.uspto.gov/main/trademarks.htm)__[www.uspto.gov/main/trademarks.htm](http://www.uspto.gov/main/trademarks.htm)_
- Trade Secrets - Protect commercially valuable, protected information so long as the information remains secret and valuable in fact

- Trademarks & Trade SecretsWhat They Protect

## The Why and How of Protecting Intellectual Property

- Why
- To attract investors
- To secure market position/exclusivity
- For further research & development
- How
- U.S. Constitution
- Federal statutes
- Others: state statutes, common law, contracts

## Patents:What Is Patentable

- Can be any new and useful:
- Processes (process, act or method, and primarily includes industrial or technical processes);
- Machines;
- Articles that are Manufactured;
- Compositions of matter; or
- Any new and useful improvement thereof

## Patents:Conditions for Obtaining a Patent

- Novelty (Newness)
- Useful (having utility) – specific, credible, and substantial utility
- Non-obviousness (e.g., the improvement was not obvious to a person having ordinary skill in the area of technology related to the invention)

## Not a mere idea or suggestion
Extensive data is not necessarily required
A patent application with prophetic claims could be granted
Additional supporting data could be submitted later during patent prosecution in a subsequent Declaration

- Extensive data is not necessarily required
- A patent application with prophetic claims could be granted
- Additional supporting data could be submitted later during patent prosecution in a subsequent Declaration

- Patents:Support for Filing A Utility Application

## Most international rights can be lost by making an enabling public disclosure before filing a patent application (limited exceptions may include the U.S. (1), Canada (1), Australia (0.5;1), Japan (0.5))
U.S. rights can be lost by making an enabling public disclosure more than one (1) year before filing a patent application 
Risk of losing all rights by failing to timely disclose an SBIR/STTR invention to the Government (see Bayh-Dole)

- U.S. rights can be lost by making an enabling public disclosure more than one (1) year before filing a patent application
- Risk of losing all rights by failing to timely disclose an SBIR/STTR invention to the Government (see Bayh-Dole)

- Patents:Losing Rights Through Public Disclosure

## File enabled patent application prior to disclosing, e.g., through posters, presentations, publications, talks, etc.
Limit discussions/exchanges with parties who are under confidentiality obligations
E.g., use confidential disclosure agreements (CDAs) whenever possible for discussions or other exchanges with potential investors, collaborators, licensees, et al.

- Limit discussions/exchanges with parties who are under confidentiality obligations
- E.g., use confidential disclosure agreements (CDAs) whenever possible for discussions or other exchanges with potential investors, collaborators, licensees, et al.

- Patents:Protecting Rights from Public Disclosure

## Grant application abstracts or summaries should be written as if they will be made publicly available immediately

Take appropriate steps to protect confidential information, e.g., marking it as “confidential”, withholding it if appropriate, submitting a substitute, or simply filing a patent application on it as soon as possible

- Take appropriate steps to protect confidential information, e.g., marking it as “confidential”, withholding it if appropriate, submitting a substitute, or simply filing a patent application on it as soon as possible

- Patents:Protecting Rights from Public Disclosure

## Freedom of Information Act (FOIA) – Safeguarding Grant Application Information and Invention Disclosures

- Take the appropriate precautions (markings, etc.)
- 5 U.S.C. § 552(b)(4) provides an exemption for “trade secrets and commercial or financial information obtained from a person and privileged or confidential”
- Predisclosure Notification: Executive Order # 12600. Predisclosure Notification Procedures for Confidential Commercial Information

## Contractor may establish claim to copyright subsisting in any data first produced in the performance of the contract (FAR 52.227-20(c))
Databases as compilations may be copyrightable, there is no copyright protection for the underlying data
SBIR Data Rights: “SBIR Rights Notice” (FAR 52.227-20(d))
Four (4) year period of “non-disclosure” by Government without contractor’s consent
Use is for Government purposes only
After 4 year period, non-disclosure prohibitions no longer apply – Government may use for Government purposes but may also authorize others to use on its behalf

- Databases as compilations may be copyrightable, there is no copyright protection for the underlying data
- SBIR Data Rights: “SBIR Rights Notice” (FAR 52.227-20(d))
- Four (4) year period of “non-disclosure” by Government without contractor’s consent
- Use is for Government purposes only
- After 4 year period, non-disclosure prohibitions no longer apply – Government may use for Government purposes but may also authorize others to use on its behalf

- Selected Data and Copyright Issues:Under the SBIR/STTR

## Contractor may withhold limited rights data and restricted computer software, and “furnish form, fit, and function data in lieu thereof” (FAR 52.227-20 (f))
Limited rights data, as used in this clause, means data (other than computer software) developed at private expense that embody trade secrets or are commercial or financial and confidential or privileged. (FAR 52.227-20(a)). 

- Limited rights data, as used in this clause, means data (other than computer software) developed at private expense that embody trade secrets or are commercial or financial and confidential or privileged. (FAR 52.227-20(a)).

- Selected Data and Copyright Issues:Under the SBIR/STTR

## Federal Funding Agreements
Selected Definitions
Recipient Rights & Responsibilities 
Government Rights

- Selected Definitions
- Recipient Rights & Responsibilities
- Government Rights

- The Bayh-Dole Act:Special Considerations

## The Bayh-Dole Act:Federal Funding Agreements

- 	The Bayh-Dole Act addresses _***patent***_ rights for a contractor under funding agreements by a federal agency (e.g., grants, contracts,  and cooperative agreements) for performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.

## The Bayh-Dole Act:Selected Definitions

- 	Invention: “Any invention or discovery which is or may be patentable or otherwise protectable under this title or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).”
- 	35 U.S.C. § 201(d)

## The Bayh-Dole Act:Selected Definitions

- 	Subject Invention: “Any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement: Provided, That in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act (7 U.S.C. 2401(d))) must also occur during the period of contract performance”
- 	(35 U.S.C. § 201(e))
- 	_Caveat_: A preexisting company invention could fall under the definition of a “Subject Invention” if it was conceived of prior to funding but was first actually reduced to practice under the SBIR/STTR.

## Recipient owns Rights in discoveries by timely electing title to subject inventions

- The Bayh-Dole Act:Recipient Rights & Responsibilities

## Recipient has Responsibilities to meet reporting requirements
Extramural Invention Reporting Compliance Responsibilities
https://s-edison.info.nih.gov/iEdison/timeline.jsp

*Extramural Invention Reporting Compliance Responsibilities*
- _[https://s-edison.info.nih.gov/iEdison/timeline.jsp](https://s-edison.info.nih.gov/iEdison/timeline.jsp)_

- The Bayh-Dole Act:Recipient Rights & Responsibilities

## Implement Employee Agreements  as needed
Disclose Each Invention  within 60 days
Resolve Election or Waive of Title  within 2 years 
File Patent  within 1 yr. of election
Provide License to the Govt.  upon title election
Indicate Govt. Support on Patent  with patent appl.
Product Manufacturing in U.S.  required
Report on Invention Utilization  annually
Final Invention Report  at award close out

- Disclose Each Invention  within 60 days
- Resolve Election or Waive of Title  within 2 years
- File Patent  within 1 yr. of election
- Provide License to the Govt.  upon title election
- Indicate Govt. Support on Patent  with patent appl.
- Product Manufacturing in U.S.  required
- Report on Invention Utilization  annually
- Final Invention Report  at award close out

- Invention Reporting Requirements of SBIR/STTR Grantees & Contractors

## Government Use License
March-In Rights (35 U.S.C. § 203)
Compare to Non-Federally Funded Patents under 28 USC § 1498
U.S. Manufacturing Requirement
Approval of Assignments by Nonprofit Organizations
Subawardee’s Bayh-Dole rights

- March-In Rights (35 U.S.C. **§** 203)
- Compare to Non-Federally Funded Patents under 28 USC **§** 1498
- U.S. Manufacturing Requirement
- Approval of Assignments by Nonprofit Organizations
- Subawardee’s Bayh-Dole rights

- The Bayh-Dole Act:Government Rights

##    “With respect to any invention in which the contractor elects rights, the Federal agency shall have a nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any subject invention throughout the world.”
	35 U.S.C. § 202 (c)(4)

- 	35 U.S.C. **§ **202 (c)(4)

- The Bayh-Dole Act:Government Use License

## The Federal funding agency shall have the right...to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee, or exclusive licensee refuses such request, to grant such a license itself.

	35 U.S.C. § 203(a)

- 	35 U.S.C. **§** 203(a)

- The Bayh-Dole Act:March-In Rights

## The Bayh-Dole Act:Has the Government Ever Marched-In?

- No.
- CellPro, Inc. (1997)
- _[http://www.nih.gov/icd/od/foia/cellpro/](http://www.nih.gov/icd/od/foia/cellpro/)_
- Norvir (2004) Abbott Laboratories, Inc.
- _[http://www.ott.nih.gov/policy/March-In-Norvir.pdf](http://www.ott.nih.gov/policy/March-In-Norvir.pdf)_
- Xalatan (2004) Pfizer, inc.
- _[http://www.ott.nih.gov/policy/March-In-Xalatan.pdf](http://www.ott.nih.gov/policy/March-In-Xalatan.pdf)_

##   “(a) Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.” (28 U.S.C. § 1498(a))

- Compare to Non-Federally Funded Patents under 28 USC § 1498

## 28 U.S.C. § 1498 was reportedly part of the discussions the Government had with Bayer regarding CIPRO supplies after the anthrax scare

Authorization and Consent
FAR 52.227-1

- Authorization and Consent
- FAR 52.227-1

- Compare to Non-Federally Funded Patents under 28 USC § 1498

## No licensee shall be granted the exclusive right to use or sell any subject invention in the United States unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States.
This requirement may be waived by agency upon showing that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.
35 U.S.C. § 204
For NIH, see https://s-edison.info.nih.gov/iEdison/ManufacturingWaiver.jsp

- This requirement *may be waived by agency* upon showing that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.
- 35 U.S.C. § 204
- For NIH, see _[https://s-edison.info.nih.gov/iEdison/ManufacturingWaiver.jsp](https://s-edison.info.nih.gov/iEdison/ManufacturingWaiver.jsp)_

- The Bayh-Dole Act:U.S. Manufacturing Requirement

## Approval of the Federal Agency required for assignments by “Nonprofit Organizations” which includes universities under an STTR
Exception “where such assignment is made to an organization which has as one of its primary functions the management of inventions (provided that such assignee shall be subject to the same provisions as the contractor).”  35 U.S.C. § 202 (c)(7)(A)
Nonprofits would retain a reversion of rights if the subject invention is no longer pursued by the management organization

- Exception “where such assignment is made to an organization which has as one of its primary functions the management of inventions (provided that such assignee shall be subject to the same provisions as the contractor).”  35 U.S.C. § 202 (c)(7)(A)
- Nonprofits would retain a reversion of rights if the subject invention is no longer pursued by the management organization

- The Bayh-Dole Act:Approval of Nonprofits’ Assignments

## The Bayh-Dole Act:Subawardee’s Bayh-Dole Rights

- “The subcontractor will retain all rights provided for the contractor in this clause, and the contractor will not, as part of the consideration for awarding the subcontract, obtain rights in the subcontractor's subject inventions. ”  37 CFR § 401.14 (g)(1)

## Special Considerations for STTR:Model Agreement for Rights

- STTR subcontractor research institution also has Bayh-Dole rights
- Agreement provides for the company’s ability to further develop and commercialize STTR inventions, including those made by the research institution

## Special Considerations for STTR:Model Agreement for Rights

- Model agreement for allocation of rights (e.g., _[http://grants2.nih.gov/grants/funding/sbirsttr1/STTRModelAgreement.doc](http://grants2.nih.gov/grants/funding/sbirsttr1/STTRModelAgreement.doc)__)_

## The Bayh-Dole Act:Bountiful Benefits, De minimis Drawbacks 

- SBIR/STTR awardees benefit from Bayh-Dole because:
- SBIR STTR awardees own their inventions
- Bayh-Dole is about encouraging maximum participation of small business firms in federally supported research and development efforts
- Bayh-Dole is about ensuring that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery

## The Bayh-Dole Act:Bountiful Benefits, De minimis Drawbacks 

- SBIR/STTR awardees also benefit from Bayh-Dole because:
- Bayh-Dole is about promoting the commercialization and public availability of inventions made in the United States by United States industry and labor
- Government rights are not there to compete or interfere with commercialization
- Bayh-Dole is also about getting inventions to the marketplace to make them available to the public (e.g., NIH’s mission is to benefit the public health)

## NIH Extramural Intellectual Property Resources for SBIR/STTR Awardees

- Extramural Inventions
- J.P. Kim, (_[jpkim@nih.gov](mailto:jpkim@nih.gov)_)
- 	Director & Policy Officer,
- 	Division of Extramural Inventions & Technology Resources (DEITR), OPERA, Office of Extramural Research, OD, NIH, HHS
- John Salzman, (_[js99a@nih.gov](mailto:js99a@nih.gov)_)
- 	Assistant Extramural Inventions Policy Officer,
-    	Division of Extramural Inventions & Technology Resources (DEITR), OPERA, Office of Extramural Research, OD, NIH, HHS
- iEdison User Support
- _[edison@od.nih.gov](mailto:edison@od.nih.gov)_
- (301) 435-1986
- Websites:
- _[http://](http://iedison.gov/)__[iEdison.gov](http://iedison.gov/)_
- _[http://inventions.nih.gov](http://inventions.nih.gov/)_