Intellectual Property and Commercialization

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Intellectual Property and Commercialization

• Erica BessoResearch Innovations Office Faculty
  of Science
• Spring 2008

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Defining Innovation

• All innovation begins with creative ideas . . .
  One definition for innovation is the successful
  implementation of creative ideas within an
  organization
• Innovation is the process that translates
  knowledge into economic growth and social
  well-being. It encompasses a series of
  scientific, technological, organizational,
  financial and commercial activities....
• It is the process whereby ideas for new (or
  improved) products, processes or services are
  developed and commercialized in the marketplace.
• INNOVATION INVENTION
  COMMERCIALIZATION

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Enabling Innovation

• Nurturing innovation is a process
• In the university context, the process is to
  transform intellectual resources (thoughts, ideas
  and insights) into intellectual assets
• Intellectual assets become intellectual property
  (IP) through legal protection.
• IP defines the value on which a company depends
  for successful commercialization.
• REFINEMENT of our Value Proposition
• INNOVATION IP COMMERCIALIZATION

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The VALUE Proposition

• Funding a research project
• Licensing a technology
• Starting a company / spin-off
• Buying a product
• All of these invest in VALUE

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IP - a Valuable Asset

• IP is any product of the intellect protectable by
  law
• IP implies ownership
• guaranteed by law once protected
• IP can also be sold (assigned) or leased
  (licensed)
• may be used free of charge, owner permitting
• Technology transfer is the process of
  identifying, evaluating and commercializing IP
• In a university, why bother?
• Can capture research and license dollars
• Can increase personal income
• Broad definition includes transfer through
  contractual research, licensing and know-how (via
  personnel)

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University compared to Company

• In a UNIVERSITY,
• Professors, TAs, Support Staff are all
  considered employees of the university but
  there is wide variability in work definition
• All are bound by their universitys IP policy
• At McGill, inventions are jointly owned by
  inventors and University at the outset
• There is no obligation to commercialize the IP
  developed, although it is encouraged
• In a COMPANY,
• Your employment contract is based on Work for
  Hire
• As an employee, you work on what the Company
  tells you to do
• all Intellectual Property belongs solely to the
  company
• You agree to work towards the companys prime
  objectives of
• commercial activity
• profitable sale of products

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Work for Hire
All Rights to IP
Employee
Company
Salary and Benefits
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Inventions

• What is an invention?
• A technical concept, development, method or
  composition of matter that
• Is novel, non-obvious and useful
• Reflects creative thinking, makes a distinct
  contribution to and advances the science
• Is recognized by masters of that science as such
  an advance
• How do we get from invention to IP?

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From Invention to IP in the University
Identification of intellectual assets
R D Grants Contracts
Due diligence
Discovery-Invention
Commercialization
Existing Co.
Licence
IP created
Assessment of Protectability
Decision to Commercialize
Alternatives
Evaluation of Commercial Potential
Spin-off Co.
New Research Opportunities POP, I2I
Inventor
Contracts
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PATENTS some background

• A landmark in the transition of Englands economy
  from the feudal to the capitalist was, in 1623,
  the Statute of Monopolies of James I . It
  rendered void all grants of monopolies and
  dispensations with one exception. The exception
  was the grant of letters patent for inventions.
  These provided the true and first inventor(s) of
  a given item 14 years of exclusive rights to
  their invention. In exchange, the invention had
  to be fully described and disclosed. These
  monopolies of short duration aimed to encourage
  innovation and its application for the public
  good.
• The letters patent for inventions is the direct
  ancestor of todays patents.
• The earliest known patent for an invention in
  England is dated 1449 (granted by Henry VI for
  making stained glass for Eton College).
• On July 31, 1790 Samuel Hopkins was issued the
  first US patent for a process of making potash,
  an ingredient used in fertilizer. The patent was
  signed by President George Washington.

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What is a PATENT ?

• Intellectual property (IP)
• Exclusive monopoly to make, use or sell an
  invention for a limited period of time
• Tool conferring legal protection to the holder of
  the patent rights
• Explicit description of how to practice the
  innovation / invention
• IMPORTANT to KNOW
• Public disclosure of an invention prior to
  filing a patent application makes the invention
  un-patentable

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Further IP characteristics

• IP is valuable
• Often, the value is not predictable at onset of a
  project
• In universities, IP is usually at a very early
  stage
• Early IP requires large and time investments
  to result in commercially successful product(s)
• High risk
• Exclusivity of eventual profit encourages
  investment
• IP position needs contractual agreement
• Agree with non-University partner BEFORE starting
  to collaborate
• Agree IN WRITING IP rights, publication rights,
  etc.

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Risk and Investment

• Grants
• Contracts

Report of Invention
Protect / Create IP
Research
Commercialize
Publish
Idea
Invention
Early IP
Proof of Principle / Proof of Concept
Product
Tech Risk HIGH
Investment
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STRATEGY Decrease the Risk / Strengthen the
Invention
1. Ascertain invention is

• Novel
• Non-Obvious
• Useful

2. Protect invention ? IP 3. Add value by -
developing - demonstrating reliability 4.
Establish that the invention has
- a market - acceptable competition - willing
Licensees
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Note

• All that is Patentable
• is NOT necessarily
• Commercializable !

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Protecting an Invention

• File a patent application for potentially
  promising invention
• To be eligible for patent protection must be
• Novel
• In Canada and the US only, one-year grace period
  after first public disclosure
• Absolute novelty in the rest of the world
• Non-obvious (prior art!!!)
• Useful
• Invention must perform some function (general
  utility)
• Invention must actually be operable and do what
  is claimed
• Invention must be of some benefit to society
• Protection begins from the date of filing an
  application
• This is called the Priority date

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Example Electricity from Garbage 1

• Eric, a professor, working in his laboratory
  invented a machine that produced electricity from
  garbage.
• Eric recorded all of his efforts in his
  laboratory notebook.
• The invention was incredible
• it produced cheap energy,
• it released no pollutants,
• it reduced the amount of garbage
• However, it had a problem - it did not work for
  more than one minute at a time.
• Eric could not solve this problem.
• Sophie, a graduate student in Erics group,
  thought of a way to solve the problem.

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Example Electricity from Garbage 2
Many things needed to be done to apply Sophie's
idea. Eric's department chair, Mark, was asked
to provide support dollars to conduct the
research and the support was granted. Eric sent
Chris, an undergraduate student assistant, to get
all equipment necessary for the work to be done.
Finally, after two months and many hours of
work by Eric, Sophie, and Chris, the garbage
machine was creating electricity for hours at a
time. All of the work they did was recorded in
Eric's laboratory notebook. Sophie also kept a
separate notebook of her research activities and
contributions.
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Example Electricity from Garbage 3
Chris provided data for both Eric and Sophie.
The improved invention was a success. The
scientific world was amazed by the results. The
university is now telling Eric the invention is
worth millions and it will patent the invention.
Eric's university has a patent policy similar
to McGills. A publication describing the
invention is co-authored by Sophie, Chris and
Eric. Are they all inventors? Who will receive
the millions?
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NOTE

• Authorship
• does NOT equal
• Inventorship !

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Inventorship

• Who is an inventor?
• Someone who has created something new or
  contributed intellectually thereto
• What is an intellectual contribution?
• An inventor enables an idea
• An invention is enabled if someone of ordinary
  skill-in-the-art could make or use the invention
  without an undue amount of research or
  experimentation
• Mark, Eric, Sophie, and Chris all contributed
  to reduce the invention to practice but
  they are not all inventors.

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Inventorship 2

• WHO THINKS THAT
• a student be an inventor or co-inventor?
• a co-inventor has rights?
• someone who worked on an invention but did not
  contribute intellectually is a co-inventor?
• HOW MUCH does someone have to contribute
  intellectually to be considered an inventor?
• How are Mark, Eric, Sophie, and Chris best
  described?

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Inventorship Disputes

• What if there is an inventorship dispute?
• Each person must provide documents explaining
  their contribution to the invention
• Link contribution to the claims, as they appear
  in the patent application
• Failure to resolve such dispute can be cause to
  abandon commercialization efforts.

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How can one protect oneself ?

• DOCUMENT your work (preferably in a bound and
  dated lab notebook)
• Complete a Report of Invention and send it to OTT
  for assessment
• Dont negotiate a deal without consulting
  knowledgeable professionals (RIO, OTT are a good
  start)
• Dont sign any document before fully
  understanding what it means and what effect it
  will have
• Be informed, ask questions

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Sharing the Benefits

• Typically, the patent will be licensed to a
  company in exchange for cash and royalties based
  on sales.
• Do the co-inventors share the royalties equally?
• This is decided by the inventors
• share is usually indicated on the Report of
  Invention
• If different share distribution, then a written
  statement signed by each party must be prepared.
• Can the workers share the royalties?
• This is decided by the inventors

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McGills Policy on IP

• Applies to all employees of McGill
• If inventors wish to commercialize their
  invention, then they must disclose it to the OTT
• Students, if they are the sole inventors, are not
  subject to this IP Policy.

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Steps leading to Commercialization

• Assessment of report of invention
• Is the invention novel? Can it be protected?
• Is there a market? How large is the market? What
  is the competition?
• How far is it from becoming a product? Are there
  resources to further strengthen, demonstrate and
  refine the invention?
• Filing for patent protection ? now have IP
• Finding partners to develop this IP into
  product(s)
• Making presentations (conferences, companies,
  VCs)
• Prosecuting patent application(s)
• Identifying a licensee
• Finding financing
• Negotiating license agreement(s)

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From Invention to IP in the University
Identification of intellectual assets
R D Grants Contracts
RIO
Due diligence
Discovery-Invention
Commercialization
Existing Co.
Licence
IP created
Assessment of Protectability
Decision to Commercialize
Alternatives
Evaluation of Commercial Potential
OTT
Spin-off Co.
New Research Opportunities POP, I2I
Inventor
Contracts
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Commercialization Thinking in Commercial Terms

• To License, one must
• Satisfy a customer need
• Solve a pain
• Have a product, a process, a service
• Know industry/company entry points

• For a successful Spin-off, must have
• A market
• A viable business model and plan
• A management team
• Critical resource mass (, people, know how)
• Defensible technology

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Commercialization stages beyond the University
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Some McGill Spin-offs

• McGill physicists John Strom-Olsen and Peter
  Rudkowski
• pioneered a process by which molten liquids
  metal, ceramics, or anything else that melts
  can be transformed into fine threads. This melt
  extraction process is the only one of its kind.
  Pitney-Bowes purchased the intellectual property
  rights to this process in 1987.
• MXT Inc. formed in 1996 to realize the commercial
  potential of this technology.
• Located in Montreal
• Need addressed Electronic article surveillance
  (EAS)
• PRODUCT Antitheft Tagging
  Technology
• MXT specializes in the production of antitheft
  tagging material, ultra-fine fibers, and
  electroplating.
• Extremely fine wire with detectable sheath is
  only 137.5 microns thick. Just 5 cm of this wire
  is needed to trigger EAS gates.

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ANAGENIS ?

• McGill chemist Masad Damha and molecular
  biologist Michael Parniak
• Developed proprietary antisense technologies
• Anagenis Inc. formed in 1999 to realize the
  commercial potential of this technology.
• Company was recently acquired by Topigen Inc.
• Located in Montreal
• Need addressed Novel therapeutic approaches
  
• PRODUCT Technology inhibiting synthesis of
  protein encoded by mRNA
• Several new classes of drugs currently under
  development
• two drug candidates in Phase II trials for COPD
  Chronic obstructive pulmonary
  disease, a term referring to the two lung
  diseases, chronic bronchitis and emphysema and
  for asthma.
• focused on inhibiting multiple inflammation
  targets underlying the chronic pulmonary
  diseases.

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• McGill chemist Mark Andrews and electrical
  engineer Ishiang Shih
• Developed liquid crystal displays that use solid
  state polymer structures with embedded optical,
  electrical and mechanical functionality.
• Silk Displays Inc. formed in 2004 to realize the
  commercial potential of this technology.
• In 2008, company changed its name to Plastic
  Knowledge Inc.
• Located in Montreal
• Need addressed Lightweight, flexible electronic
  devices
• PRODUCT Electronic circuits embedded in
  plastic
• Promising new platform technology
• Initially focused on rugged displays, used in
  harsh mobile and aerospace applications.
• Company working towards consumer applications
  such as large, wall mounted televisions. Aim is
  to replace a broad range of "dumb" glass display
  substrates by smart polymer structures.

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THANK YOUQuestions for me?Four questions for
YOU

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HOW MANY of YOU

• Found most of this information novel?
• Found most of this information interesting?
• Believe information on IP and commercialization
  will be useful to you?
• Would like more info on
• Entrepreneurship or innovation awards?
• Patents and process?
• If so ? give me your name e-mail address

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Research Innovation Office

• Erica Besso tel ext 3897
• Dawson Hall Room 303