# Presentation: 806975

## Intellectual Property

- Kathleen Sybert
- Clinical Technology Transfer Group, P.L.L.C.
- 7th Annual NIH SBIR/STTR Conference
- July 28-29, 2005
- © 2005 CTTG

- 	The information in this presentation is provided for general educational purposes only, and does not constitute business or legal advice on the subject matter, especially as it may be applied to the facts of a specific situation.

## Intellectual Property

- Brief introduction to the why and how of intellectual property protection
- Overview of the four main kinds of intellectual property
- Focus on patents
- Focus on trademarks
- Focus on copyrights
- Focus on trade secrets
- The Bayh-Dole Act: Patent rights and responsibilities
- Special IP considerations for STTR
- IP issues to watch

## Brief Introduction to the Why of Intellectual Property Protection

- To attract investment
- To secure market position/exclusivity

## Brief Introduction to the How of Intellectual Property Protection

- U.S. Constitution
- Federal and State statutes
- Common law
- Contract

## Overview of the Four Main Kinds of IP:The Authority for Them

- Patents (Article 1, section 8 of the U.S. Constitution; 35 U.S.C.)
- Trademarks (Article 1, section 8 of the U.S. Constitution; 15 U.S.C. § 1051 et seq.; state laws)
- Copyrights (Article 1, section 8 of the U.S. Constitution; 17 U.S.C.)
- Trade Secrets (Economic Espionage Act; Uniform Trade Secrets Act; and state laws)

## Overview of the Four Main Kinds of IP:What They Protect

- Patents - embodiments of new and useful ideas (utility patents), designs, and plants
- Trademarks – marks identifying the source of goods or services
- Copyrights – original works of authorship fixed in a tangible medium
- Trade Secrets – valuable, secret information

## Overview of the Four Main Kinds of IP:The Rights of the IP Owner

- Patent – the right to exclude others from making, using, selling or importing
- Trademark – the right to protect against confusion, deception and unfair competition
- Copyright – the right to duplicate, generate derivative works, distribute, perform and display
- Trade Secret – the right to control disclosure and use, and to protect against theft

## Overview of the Four Main Kinds of IP:How Long They Last

- (Utility) Patents – 20 years from earliest filing
- Trademarks – as long as used in commerce
- Copyrights – usually the life of the author plus 70 years (“works made for hire” 95 or 120 years)
- Trade Secrets – as long as valuable and secret

## Focus on (Utility) Patents:What Is Patentable

- Processes
- Compositions of matter
- Articles of manufacture
- Machines
- Combinations of these

## Focus on (Utility) Patents:What the Requirements for Patentability Are

- Utility – substantial, specific, credible
- Novelty
- Non-obviousness

## Focus on (Utility) Patents:How Much Data Is Needed to File a Patent Application

- Don’t need a superabundance of data
- Technically, could even file an application with some prophetic claims
- For new drugs, don’t need to have FDA approval; “all that is required is a reasonable correlation  between the activity and the asserted use” (MPEP §2107.03(I) - Special considerations for asserted therapeutic or pharmacological utilities)

## Focus on (Utility) Patents:How to Lose Patent Rights

- Lose most foreign rights by making an enabling public disclosure before filing a patent application
- Lose U.S. rights by making an enabling public disclosure more than 1 year before filing a patent application
- Risk losing all rights by failing to disclose an SBIR/STTR invention to the Government

## Focus on (Utility) Patents:Protecting Patentable Inventions

- Use confidential disclosure agreements for discussions with potential collaborators, licensees, investors, etc.
- File patent applications before presenting posters, giving talks, publishing papers, etc.
- Keep good laboratory notebooks

## Focus on (Utility) Patents:Is an SBIR application a public disclosure?

- Proposal abstracts or summaries should be written as if they will be made publicly available immediately
- Know whether the agency you are working with will make even more information publicly available; and take the appropriate steps to protect confidential information – including such things as marking it, withholding it and submitting something in lieu of it, and/or filing a corresponding patent application ASAP

## Focus on (Utility) Patents:Frequently Asked Question about Patent Costs

- Can I use SBIR/STTR funds to pay for patent prosecution expenses?
- A.	No.  But by filing a provisional patent application, qualifying for small entity filing fees, and effectively managing the use of patent counsel, you may be able to reduce your costs.

## Focus on Trademarks:A Definition

-      “The term “trademark” includes any word, name, symbol or device or any combination thereof –
-   1.  used by a person, or
-   2.  which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act,
- 	to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.”
-         15 U.S.C. § 1127

## Focus on Trademarks:How to Protect Trademarks

- Automatically protected when used in commerce
- Registration adds more protection and remedies

## Focus on Trademarks:How to Lose Trademarks

- Abandon them
- Allow them to become generic
-    (e.g., escalator)

## Focus on Copyrights:A Definition

-    “Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”
-     17 U.S.C. § 102 (a)

## Focus on Copyrights:Some Things Can’t Be Copyrighted

- Ideas
- Facts/data (while databases as compilations may be copyrightable, there is no protection for the underlying data)

## Focus on Copyrights:What They Can’t Protect Against

- Independent creation of similar works
- “Fair use”

## Focus on Copyrights:How to Protect Them

- Fixation establishes copyright
- Registration adds remedies

## Focus on Copyrights:How Not to Lose Them

- Be sure contracts with employees address the issue of copyright ownership
- Be sure contracts with non-employees (consultants, contractors, etc.) expressly address copyright ownership (either as “works made for hire” or by assignment)

## Focus on Copyrights:Copyrights under SBIR

- SBIR recipient may assert copyright without prior approval, unless the contract provides otherwise
- Normally Government gets license to copyrighted material

## Focus on Copyrights:What About SBIR Data, Including Those That Are Not Copyrightable?

- FAR 52.227-20 addresses SBIR data
-  “SBIR Rights Notice” (paragraph (d))
- 4 year non-disclosure period
- Government purposes only
- Ability to withhold limited rights data and restricted computer software, “and furnish form, fit, and function data in lieu thereof” (paragraph (f))

## Focus on Trade Secrets:A Definition

- 	“...information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
- 	Uniform Trade Secrets Act, as amended 1985

## Focus on Trade Secrets:How to Protect Them

- Take reasonable steps to keep secret (employment contracts, controlled environment, etc.)
- Be aware of FOIA when working with the Government, and 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”

## Focus on Trade Secrets:How to Lose Them

- 	One way you might not have thought of – by filing a patent application which will be published at 18 months, and whose prosecution history (file wrapper) will be publicly available upon issue.

## The Bayh-Dole Act:Patent Rights and Responsibilities

- Grants, contracts, and cooperative agreements
- Definition of subject invention
- Recipient rights and responsibilities
- Government rights

## The Bayh-Dole Act:Grants, Contracts, and Cooperative Agreements

-    The Bayh-Dole Act concerns patent rights (and not copyrights, trademarks, or trade secrets) under grants (including SBIR/STTR), contracts (including SBIR/STTR), and cooperative agreements.

## The Bayh-Dole Act;Definition of Invention

- 	“Any invention or discovery that is or may be patentable or protectable under this title . . .” (35 U.S.C. § 201(d))

## The Bayh-Dole Act:Subject Invention

- _Definition_: Any invention conceived or first actually reduced to practice in the performance of work under the grant, contract, or cooperative agreement
- _Caveat_: A preexisting company invention can become a subject invention if it is first actually reduced to practice under the SBIR/STTR

## The Bayh-Dole Act:Recipient Rights and Responsibilities 

- Right to elect title under standard patent rights clause (B-D codified at 37 C.F.R. § 401.14; standard patent rights clause later established at FAR 52.227-11; many agencies have their own version)
- Responsibility to meet reporting requirements (Interagency Edison @ http://www.iedison.gov), including:
- Disclose (2mo)
- Elect (2yr)
- File (1yr)
- Provide license
- Provide issue information
- Provide annual utilization reports

## The Bayh-Dole Act:Government Rights

- Government use license
- March-in rights
- U.S. manufacture requirement
- Right of approval over most assignments by nonprofit organizations

## The Bayh-Dole Act:Government Use License

-    “nonexclusive, nontransferable, 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)

## The Bayh-Dole Act: March-In Rights

-   The right to mandate licenses to third parties under certain circumstances (35 U.S.C. **§** 203)

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

- 43 U. Pitt. L. Rev. 73 (1981)
- 50 Admin. L. Rev. 515 (1998)
- 14 Berkeley Tech. L. J. 1095 (1999)
- More recently:
- http://ott.od.nih.gov/Reports/March-in-xalatan.pdf (2004)
- http://ott.od.nih.gov/Reports/March-In-Norvir.pdf (2004)

## The Bayh-Dole Act:28 U.S.C. § 1498 Puts March-In in Perspective 

-   “(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))

## The Bayh-Dole Act:28 U.S.C. § 1498 Puts March-In in Perspective

- 28 U.S.C. § 1498 has been used (e.g., Decca Limited)
- 28 U.S.C. § 1498 was (indirectly) part of the Government’s dialogue with Bayer regarding CIPRO supplies after the anthrax letters

## The Bayh-Dole Act:U.S. Manufacture Requirement

- Licensees of the exclusive right to use or sell are subject to a requirement that subject inventions be “manufactured substantially in the United States”
- This requirement may be waived
- 35 U.S.C. § 204

## The Bayh-Dole Act:Right of Approval Over Most Assignments by Nonprofits

- “Nonprofits” include universities under STTR
- Exception “where such assignment is made to an organization which has as one of its primary functions the management of inventions”  35 U.S.C. § 202 (c)(7)

## The Bayh-Dole Act:Putting Government Rights in Perspective

- Government rights are not there to interfere with commercialization
- Bayh-Dole, like the SBIR/STTR program, is about promoting commercialization (march-in “to achieve practical application” or “to meet requirements for public use”)
- Bayh-Dole, like the SBIR/STTR program, is about “inventions made in the United States by United States industry and labor” (march-in when manufacture “substantially in the United States” is not met, absent a waiver)
- Bayh-Dole is also about making inventions available to the  public (march-in “to alleviate health or safety needs not reasonably satisfied by the contractor”)
- 	35 U.S.C. §§ 200, 203, and 204

## Special Considerations for STTR

- Model agreement for allocation of rights (e.g., http://grants2.nih.gov/grants/funding/sbirsttr1/STTRModelAgreement.doc)
- CREATE Act of December 10, 2004

## Special Considerations for STTR:Model Agreement for Allocation of 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:The CREATE Act of December 10, 2004

- The transfer of confidential information from one party to the other under a joint research agreement can render a subsequent subject invention unpatentable
- The CREATE Act provides a safe harbor for this situation
- To anchor in this safe harbor, you need to include appropriate language in the STTR and the patent application

## IP Issues to Watch

- Recent Supreme Court *Merck v. Integra *decision
- Legislation proposed (again) that would make the United States a “first inventor to file” nation

-    Contact Information:Kathleen Sybert, Ph.D., Esq.Of CounselClinical Technology Transfer Group, P.L.L.C.www.cttg-law.comCL    301-514-5097                         EM   ksybert@cttg-law.com