# Presentation: 316016

## Government Funded Inventions

- Mark L. Rohrbaugh, Ph.D., J.D.
- Acting Director
- Office of Technology Transfer
- National Institutes of Health

## Office of Technology Transfer

- Evaluates, Protects, Markets, Licenses and  Monitors the Use of Intellectual Property Generated by Intramural Scientists at NIH to Advance the Health of the Public.
- Lead Agency for Technology Transfer at US Department of Health and Human Services (DHHS).

## The Credo

- Funding for Basic Research
- Publication and Dissemination of Findings
- Access to Research Tools
- Appropriate Patenting
- Strategic Licensing
- Education of Scientists

## Government Funded Inventions

- The Bayh-Dole Act governs
- University can retain title
- Government has residual rights

## Goals of the Bayh-Dole Act 

- Utilization
- Commercialization – economic activity
- Free competition and enterprise
- Public availability
- Prevent nonuse or unreasonable use

## If University Elects Title

- University can patent and license
- University retains royalties
- Prohibition on assignment

## If University Declines Title --Inventor Can Seek It

- University requests on behalf of inventor
- NIH grants/denies request
- If granted, inventor can patent, license, and
- retain royalties
- Government has residual interests

## What Are the Government’s Residual Rights?

- Utilization Reporting
- U.S. Manufacturing Requirement
- Government Use License
- March-in

## Research Tools:  A Special Category

## Properties of Research Tools

-   Useful lifecycle is generally short
-   Does not require significant R&D
-   Generally does not require IP incentive
-     to make/use
-   Desire broad access and availability

## Examples of Research Tools

- Animal Models
- Cell Lines
- Bulk DNA Sequences
- Drug Targets
- Clones/Cloning Tools

- Libraries
- Software
- Databases
- Lab Techniques
- Antibody Reagents

## NIH Director’s Working Group on Research Tools

- Convened (1997)
- Members from academia, industry, not-for-profit
- Inquired into access problems encountered by NIH-funded scientists
- Issued four recommendations (1998)
- Guidelines for NIH funding recipients

**Notes:**
In 1997 then NIH director Harold Varmus convened a working group of his external advisory committee to look into issues of access problems encountered by NIH scientists and grantees.  The sense of NIH at that time was that issues of patents, licenses, and technology transfer were interfering with the ability of scientists to get access to the tools that they needed.

NIH has had a long-standing policy position that the fruits of its research must be made available to the scientific community.  The NIH Grants Policy Statement has stated for years that grantees are expected to ensure the dissemination of unique research resources that arise out of its grant funding.  

The group was chaired by Becky Eisenberg from the Univ. of Michagan and included members from industry, academia, and not-for-profit biomedical research sector.  The NIH OTT provided staff support.

The group issued a report (website) and made four recommendations to the NIH, one of which was to issue guidance to its funding recipients in this area.

## Principles and Guidelines

- Adopted after Public Comment
- Applicable to Funding Recipients
- Internal Practices will be Consistent
- Call for Other Institutions to Adopt

**Notes:**
NIH staff drafted a two-part document, Principles and Guidelines, which are intended to be a “best-practices” type of guidance to funding recipients on how to reconcile the unique research resources policy, which says go forth and disseminate NIH-funded tools, with the tenants of the Bayh-Dole Act, which says go forth and patent.

We had a very significant degree of public vetting and comments, and they  were issued in final last December.  

Although they are applicable only to funding recipients, NIH will be amending its own internal practices to be consistent with the guidelines, and we are calling for other institutions to adopt them as well.

## Principles for Recipients of NIH Funds

- Academic Freedom and Publication
- Appropriate Implementation of Bayh-Dole
- Dissemination of NIH-Funded Tools
- Minimize Impediments to the
-         Research Enterprise

**Notes:**
There are four basic principles articulated by the Guidelines.  These are the goals that NIH is expecting that funding recipients achieve:

ENSURE ACADEMIC FREEDOM AND PUBLICATION

ENSURE APPROPRIATE IMPLEMENTATION OF BAYH-DOLE

ENSURE DISSEMINATION OF RESEARCH RESOURCES DEVELOPED WITH NIH FUNDS

MINIMIZE ADMINSTRATIVE IMPEDIMENTS TO ACADEMIC RESEARCH

## Guidelines for Implementing the Principles 

- Importing tools into NIH-funded research
- Disseminating tools developed with NIH funds
- Uniform one-page MTA proposed
- Strategic licensing to achieve balance

**Notes:**
As I said earlier, along with the Principles we have issued Guidelines for Implementing the Principles.   The Guidelines give further clarifying information on all four principles and examples, including examples of what we mean and strategies for implementing.

We are getting the most questions and comments on issues surrounding appropriate implementation of Bayh-Dole and ensuring dissemination of tools developed with NIH funds, so I’m going to focus on 4 aspects of the guidelines that speak to these:

Importing tools from third parties for use in NIH-funded projects
Disseminating tools that arise from NIH-funded projects
the Simple Letter Agreement
Using strategic licensing to achieve balance 

## Guidelines for Implementing the Principles 

- 	Importing Tools Into NIH-Funded Research
- 		-- preserve distribution of future tools
- 		-- ensure agreements with third parties
- 			are consistent

**Notes:**
Importing Materials

The only reason for including guidance on importing tools is due to the potential effect that incoming MTAs or sponsored research agreements can have on the funding recipient’s ability to disseminate new tools, or variations on those tools, that arise from the research.

An example is the cre-lox technology, because one of its big uses is to make new mice.  If an imported tool is going to be used to make new tools and NIH funds are going to be used to do it, then the issue of how, when, and under what terms those new tools are going to be distributed must be discussed with the third party provider of the tool.

An example of what we don’t want to hear from a funding recipient is that they are precluded from distributing that new mouse, or  zebrafish, or cell-line because the terms of a pre-existing agreement give the provider an exclusive option to it.

## Guidelines for Implementing the Principles 

- Disseminating Tools Developed with NIH Funds
- 		Avoid reach-through
- 		Avoid exclusive internal use

**Notes:**
Disseminating tools developed with NIH funds -- 

this is the heart of the guidelines 

Since there are so many appropriate ways to disseminate I thought I would approach it the other way around and highlight the two practices that in our view are the most threatening to the research enterprise
HIT RETURN
We do not want funding recipients to impose license options to new intellectual property  in return for providing an NIH-funded tool.  We believe license options  broadens the web of ties  and considerations and inhibits both the use of the tool and the ultimately, commercialization efforts in that area.

We also do not want to see NIH-funded tools licensed or otherwise provided to one or a few companies for their own internal use.  A screening tool is a good example:  we would not want HIV protease used by one company -- then only one company can develop NIH protease inhibitors; no, we want lots of companies developing HIV protease inhibitors.          

## Guidelines for Implementing the Principles 

- Disseminating Tools Developed With NIH Funds
- 			-- simple letter agreement
- 			-- non-exclusive internal use
- 			-- license to distributor
- 			-- repository

**Notes:**
As I said, there are lots of ways to disseminate tools, from giving it away  under minimal terms to engaging in very  commercially lucrative licensing practices.  To those funding recipients that feel these guidelines will cut into their bottom line on licensing royalties, I would respond that our program has pursued non-exclusive licensing strategies on tools for  several years now and we have made millions of dollars on our receptor and other research tool portfolio.

HIT ENTER

So, we celebrate when we see any of these strategies or other strategies that our funding recipients implement to disseminate tools.     

## Guidelines for Implementing the Principles 

- 			Simple Letter Agreement
- uniform one-page MTA
- can be modified
- not for 100% of the transactions
- scientists will ask for it

**Notes:**
A word about the Simple Letter Agreement

This is a one page uniform agreement that is meant to simplify the majority of transactions between NIH funding recipients.  We want organizations to adopt this as their model MTA, in order to simplify the review and negotiation that arises from every funding recipient having their own model MTA.

It can be modified -- to allow for-profit use, for example,
It is not meant to cover  every single material, there will be materials that are not appropriate
Implementation -- will probably be through scientists -- this is what they wanted out of the Guidelines

UBMTA still available for use, but this is simpler.

## Guidelines for Implementing the Principles 

- Use Strategic Licensing to Achieve Balance

## NIH License Policy

- Non-exclusive where possible
- Exclusive when necessary
- Ensure appropriate scope
- Ensure expeditious development
- Ensure continuing availability of tools

**Notes:**
A patent is the right to exclude others from making, selling, or using the patented subject matter.  Once a patent is obtained, the patent holder must decide how they will use it, and what their license strategy will be.  Non-exclusive licenses, where more that one company has the right to use the patented technology, can open up a patented technology for broad use while still allowing the owner to capture value.

NIH seeks to use patents non-exclusively, where possible, or to narrow the exclusive field of use so that multiple parties can use a patent at the same time to develop different products.  For example, in gene therapy, where you need both a gene and a vector for carrying the gene, we would seek to license the vector non-exclusively, because it could be used with many different types of genes.    

We also ensure that our exclusive licenses have developmental milestones and benchmarks so that if a company is not developing a technology, we can open it up to others

Finally, we try to ensure that if a company has an exclusive license for commercial development, they are continuing to allow scientists to work with the technology for important research.

## The Toll-Road Analogy

-  Prefer Freeways to promote Research Tool (RT) use
-  Willing to Accept Occasional Tolls
-  Avoid Tollbooth Gridlock with patents on RTs

## Status of the Principles/Guidelines

- Period of Implementation
- Intramural and Extramural Implementation
- Term of Award for grants and contracts
- Request for Comments on implementation of Principles and Guidelines (September 2000)

## FFI

- _[http://](http://ott.od.nih.gov/)__[ott](http://ott.od.nih.gov/)__[.](http://ott.od.nih.gov/)__[od](http://ott.od.nih.gov/)__[.](http://ott.od.nih.gov/)__[nih](http://ott.od.nih.gov/)__[.](http://ott.od.nih.gov/)__[gov](http://ott.od.nih.gov/)__[/](http://ott.od.nih.gov/)_  Office of Technology Transfer
- _[http://www.](http://www.bioinfo.com/)__[bioinfo](http://www.bioinfo.com/)__[.com/](http://www.bioinfo.com/)_ Biotech. Information 						Institute
- _[http://www.](http://www.wipo.org/)__[wipo](http://www.wipo.org/)__[.org/](http://www.wipo.org/)_  WIPO
- _[http://www.](http://www.uspto.gov/)__[uspto](http://www.uspto.gov/)__[.](http://www.uspto.gov/)__[gov](http://www.uspto.gov/)__[/](http://www.uspto.gov/)_  USPTO
- _[http://www.](http://www.autm.net/index_ie.html)__[autm](http://www.autm.net/index_ie.html)__[.net/index_](http://www.autm.net/index_ie.html)__[ie](http://www.autm.net/index_ie.html)__[.html](http://www.autm.net/index_ie.html)_  AUTM