Disclosure Assessment and Triage: An Innovative Model for Patent Decision Making

Joy Goswami, MS, MBA, RTTP

Office of Economic Innovation & PartnershipsUniversity of Delaware

2012

TTOs facing all round budget cuts

Being confronted with issues such as down-sizing their patent portfolios to prioritize focus on the more ‘licensable’ patents

Number of new invention disclosures being received is on the rise but proportionally, the number of license deals are NOT

Requirements to develop a more structured screening process to reduce accrual of ‘non-licensable’ patents

Demands to increase efficiency of already under-staffed and over-worked offices!

1. What is triage? 2. Major elements of triage3. Properties of a triage tool4. Interpretation of ‘licensable’ technology5. In the shoes of potential licensee6. Objectives defined7. Decision matrix 8. Interpretation of the Decision Matrix9. Proposed Model for adoption (9-month rule)10. Conclusion ‘licensable’ technologies

Triage is:

Preliminary screening assessment undertaken in an effort to ….

Identify high potential projects that may be worthy of significant effort and investment in commercialization.

AUTM- 09 US Licensing Activity Survey reported

20,309 disclosures 4,374 licenses executed 18,214 total U.S. patent applications filed

University of Oregon’s Innovation Center (1970s) developed a list of 33 areas and factors that should be determined for commercial potential of invention.

Desired:

1. Objective analysis2. Not ranking based3. Simple to use and apply4. Easy and reliable interpretation of results

Commonly known tools:

TechAccess ™ (Texas A&M) TechAdvance™ point system, based on 43 researched and validated criteria,

provides an easy-to-use system for ranking your technologies Innovation Assessment Program at Washington State University Others: mostly from commercial organizations

Triage is the preliminary screening assessment undertaken by us in an effort to identify high potential projects (‘licensable technologies’ ) that may be worthy of significant effort and investment in commercialization.

“We do not want to leave any scope of MAYBE in our assessment here”

An invention that is legally protectable.

Is relevant to a market need (has commercial value)

Can be envisioned as a material product (mature)

Is supported by inventors showing willingness to facilitate ‘technology transfer’

What Licensees really want from the technology:

What Licensees really want from the technology:

Strong Buy technologyDevelop

technological capability

Concentrate on opportunity(in-license)

Average

Keep out Look for opportunities

Strengthen marketing function

Weak Keep out Find niche Look for partners

Weak Average Strong

MarketStrength

Technological capability

1. Licensing Revenue2. Sponsored Research3. University – Industry Partnership development4. Start-ups (Spin-outs and Spin-ins)5. Economic Development

Patents are the media and NOT the end point for success

Even best patents might not be licensable

Patents can be obtained for almost everything if aimed low at claims

Defining a ‘good’ versus ‘bad’ patent is subjective but important

‘Good’ Patent = Licensable ; ‘Bad’ Patent = Non-licensable

All disclosures mandates close scrutiny and good screening to get ‘good’ patents

THE DECITION MATRIXTHE DECITION MATRIX

1. Very clear idea of the invention (technology for protection)

2. Precise idea of what the end (commercial) product will look like

3. Value Proposition: Faster/ Better/Cheaper (1992 NASA initiative)

4. Inventor(s) background

Receive well documented invention disclosures that:

Describes invention clearly and concisely. Highlight why it is unique, non-obvious and useful

Attach all prior patent art, literature, citations

Mention Funding Source and Agencies

State the invention’s commercial value (with justifications)

Attach all commercial contacts (names/addresses) that may be interested in the invention

List Inventors (each inventor having at least one contribution to the patent claims)

Look for non-favorable ‘licensing characteristics’ (commonality in disclosures that have been not been successfully licensed in the past).

One size does not fit all…

Screen-out disclosures that have such non-favorable ‘licensing characteristics’.

Some of these characteristics include:

▪ Simple artifacts, involve rudimentary use of scientific principles▪ Disclosures involving know-how or process only (and not part of a portfolio) ▪ Comprise non-cooperative inventors ▪ Have specific and narrow application base▪ Is not amongst the list of emerging technologies*

Advanced Materials Superconductors Advanced semiconductor devices Digital Imaging Technology High Density Data Storage High-performance computing Optoelectronics Artificial Intelligence Flexible computer-integrated manufacturing Sensor technology Chemical Engineering Agriculture and Plant Science Medicine Biotechnology Medical devices and diagnostics

(Source: Technology Administration Division, US Department of Commerce)

1. Patentability

2. Commercial Viability

3. Stage of Technology Maturity

Decision Matrix

Category Patentability Marketability Maturity Stage Go/No-Go Activity

I Narrow Low Early or Late No-Go Abandon or Assign rights back to inventors

2 Broad Low Early or Late No-Go Abandon or Assign rights back to inventors

3 Narrow High Early Further diligence required

Seek collaborators for sponsored research

4 Narrow High Late Go Seek Licensee with non-exclusivity terms

5 Broad High Early Go Actively seek licensee with option terms

6 Broad High Late Go Actively seek licensee for exclusivity

1. To what extent has the invention already been disclosed to the public? (i.e. is it novel)

2. Obviousness - TSM test, an invention is obvious (and therefore un-patentable) only if there is a teaching, suggestion or motivation to combine prior art references.

3. Anticipated scope of claims?

Rate: Broad or Narrow

1. Nature of the technology in the market: breakthrough or incremental improvement?

2. Competitive products: currently available in the market?

3. Market Assessment: size, fields of use, company players?

4. Value Proposition: Does the added value exceed the cost of development?

Rate: High or Low

1. Anticipated time to license?

Rate: Early or Late

Category Patentability Marketability Maturity Stage Go/No-Go Activity

I Narrow Low Early or Late No-Go Abandon or Assign rights back to inventors

Category Patentability Marketability Maturity Stage Go/No-Go Activity

2 Broad Low Early or Late No-Go Abandon or Assign rights back to inventors

Category Patentability Marketability Maturity Stage Go/No-Go Activity

3 Narrow High Early Further diligence required

Seek collaborators for sponsored research

Category Patentability Marketability Maturity Stage Go/No-Go Activity

4 Narrow High Late Go Seek Licensee with non-exclusivity terms

Category Patentability Marketability Maturity Stage Go/No-Go Activity

5 Broad High Early Go Actively seek licensee with option terms

Category Patentability Marketability Maturity Stage Go/No-Go Activity

6 Broad High Late Go Actively seek licensee for exclusivity

Category Patentability Marketability Maturity Stage Go/No-Go Activity

I Narrow Low Early or Late No-Go Abandon or Assign rights back to inventors

2 Broad Low Early or Late No-Go Abandon or Assign rights back to inventors

3 Narrow High Early Further diligence required

Seek collaborators for sponsored research

4 Narrow High Late Go Seek Licensee with non-exclusivity terms

5 Broad High Early Go Actively seek licensee with option terms

6 Broad High Late Go Actively seek licensee for exclusivity

Category Patentability Marketability Maturity Stage Go/No-Go Activity

I Narrow Low Early or Late No-Go Abandon or Assign rights back to inventors

2 Broad Low Early or Late No-Go Abandon or Assign rights back to inventors

3 Narrow High Early Further diligence required

Seek collaborators for sponsored research

4 Narrow High Late Go Seek Licensee with non-exclusivity terms

5 Broad High Early Go Actively seek licensee with option terms

6 Broad High Late Go Actively seek licensee for exclusivity

Getting market ‘cues’ is most critical for fruitful decision making

1. Enforcement Licensing2. Opportunity Licensing3. Opportunistic Licensing4. Divestiture licensing5. Partnering Licensing6. Startup Licensing

Identify sensitivity of the technology to various risks: Technology itself The market IP issues Government and society

Consider economics Identify application fit to an unmet need Review production capacity Study scale-up or mass production feasibility

Invention disclosure

submitted to TTOProvisional Filed:

0 months

“Marketing Active”

Decision to convert or abandon: 9 months

Review disclosure using

DECISION MATRIX

Patent Prosecution: 12 months

Prepare technical flyer, Assess target market and contact companies (20 +), review start-up

interest assess technology and gather data

“9 months rule” – No conversion unless favorable marketability response

Within the 9 month period of provisional filing:

1. Perform ‘push’ marketing to pertinent target market2. Collect data (positive, negative and no responses)3. Analyze data in light of the decision matrix to determine conversion decision

USE INTERNET AS THE PRIMARY TOOL

Contact Potential Licensees

E-mail first If a known contact, either e-mail or call, but respect their time.

Follow up

Ensure receipt by phone or e-mail

Respond to requests for more info in a timely manner

Have a draft CDA ready to send out within a day of the request Call faculty to get answers to speed up response to the company

Keep complete records of your marketing activities (data collection)

Lots of good ideas are patentable but may not be licensable

Take a comprehensive approach to your screening process

Identify ‘good’ (licensable) technologies using a well designed triage tool

Define your objectives (… merely getting patents is NOT an objective)

Get all critical pieces of the invention

Adopt a simple two-step triage process comprising of preliminary screening , and decision matrix

Decision matrix comprising of a minimum of the three criteria: patentability, marketability and stage of maturity

Analyze – go or no-go (no intermediates)

Capitalize on the provisional period to gather data (market cues)

Lowe Paul. The Management of Technology – Perception and Opportunities: 1st edition. Chapman & Hall, 1995

Kotler, Philip and Kevin Lane Keller. Marketing Management, 12th edition. Upper Saddle River, NJ: Prentice Hall, 2006

Razgaitis, Richard. Valuation and Pricing of Technology – Based Intellectual Property, 2nd edition. Hoboken, NJ: John Wiley and Sons, Inc., 2003.

Christopher M. Arena and Eduardo M. Carreras. The Business of intellectual Property. 1st edition. Oxford University Press, 2008.

Stim Richard. License your invention – sell your idea and protect your rights with a solid contact. 3rd edition. Nolo, 2002

THANK YOU

It is better to debate a question without settling than to settle a question without debating it.

-Jeseph Joubert

Joy Goswami (MS, MBA, RTTP)

Licensing AssociateRegistered Technology Transfer Practitioner

University of Delaware Office of Economic Innovation & Partnerships1, Innovation Way, Suite 500Delaware Technology ParkNewark, DE 19711Phone:       302-650-9710 (Cell)Fax:             302-831-3411Web:           www.udel.edu/oeip 

Joy Goswami (MS, MBA, RTTP)

Licensing AssociateRegistered Technology Transfer Practitioner

University of Delaware Office of Economic Innovation & Partnerships1, Innovation Way, Suite 500Delaware Technology ParkNewark, DE 19711Phone:       302-650-9710 (Cell)Fax:             302-831-3411Web:           www.udel.edu/oeip