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19th Annual HHS SBIR/STTR ConferenceMilwaukee, WisconsinNovember 7-9, 2017

Topics Covered• Selected Data and Copyright Issues• Intellectual Property

• Definitions / Protection / Confidentiality• Invention Reporting and Compliance under Federal Awards

• The Bayh-Dole Act• Timeline• Ongoing Requirements• Sale of technologies/company

• Requirements and Ongoing Responsibilities• Preference for United States Industry

• Edison Functions overview• New User Guides and Online Help• https://era.nih.gov/iedison/user_guides.cfm

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National Institutes of Health,Office of Extramural Research (OER)

The SBIR/STTR Program Office is part of the Office of Extramural Programs (OEP) under the NIH Office of Extramural Research (OER) and is responsible for developing, implementing, and monitoring extramural program policies under the Small Business Innovation Development Act of 1982.

The SBIR/STTR program office ensures proper administration and utilization of NIH-funding under the Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program, and is also responsible for facilitating the appropriate distribution and sharing of data generated under NIH extramural funding.

http://sbir.nih.gov

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Division of Extramural Inventions and Technology Resources (DEITR)

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Division of Extramural Inventions and Technology Resources (DEITR) is part of the Office of Policy for Extramural Research Administration (OPERA) and is responsible for developing, implementing, and monitoring extramural intellectual property policies and invention reporting under the Bayh-Dole Act.

The Division also promotes the proper utilization of NIH-funded patents, data, and inventions in extramural programs, and facilitates the distribution and sharing of research resources.

http://inventions.nih.gov

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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 consentUse is for Government purposes onlyAfter 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 IssuesUnder the SBIR/STTR5

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)).

Selected Data and Copyright IssuesUnder the SBIR/STTR6

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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

Sample model agreement can be found here: https://sbir.nih.gov/sites/default/files/STTRModelAgreement.doc

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What is Intellectual Property? Intellectual Property =

Creations of the mind.Protected by laws:

Patent, trademark, unfair competition, copyright, trade secret, the right of publicity, and plant variety protection.

IP system aims to foster an environment in which creativity and innovation is created, supported, developed, protected, all with benefits to the public.

Enables creator(s) to earn recognition or financial benefit from what they invent or create.

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Patents – What Do They Protect? Patents – protect inventions = a discovery a finding.

Invention must be:Novel – new – not known before; not a product of nature;Useful – has utility, specific, and credible; andNon-obvious – was not obvious to a person having ordinary skill in the

area of the invention.

Types of patents: utility, design, plants.See the U.S. Patent and Trademark Office (USPTO) website for

more information: http://www.uspto.gov

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Protection Granted

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

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Patents – What is Patentable?Can be anything 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 of the above (derivative).

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Patents – Rights & Terms

Patent Protection (Rights): 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.

Patents – 20 years from earliest filing claimed Terms may be extended for certain pharmaceuticals and for

certain circumstances as provided by law.

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Patents – Utility Application

Not an idea or suggestion.

Extensive data is not required but good to have.

A patent application with descriptive claims describing the metes and bounds of the invention to be protected.

Usually diagrams are included.

Additional supporting data can be submitted later during patent prosecution.

Usual length of patent prosecution = 3 years; $40-50K+.

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Patents: Losing Rights through Public Disclosure

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 invention to the Government (See, the Bayh-Dole Act).

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Patents: Protecting Rights through Public Disclosure

File enabled patent application prior to disclosing, e.g., disclosing 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.

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Patents: Protecting Rights through Public Disclosure

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

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 as soon as possible.

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Freedom Of Information Act (FOIA) – Safeguarding Grant Application Information & Inventions

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”

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Bayh-Dole Act

The Bayh-Dole Act (1980) – few changes since 1980. Codified at 35 U.S.C. § 200; Implemented at 37 C.F.R. 401.

Applies to most federal funding agreements.

Sets forth rights and responsibilities of grantee/contactor and Government for inventions and discoveries made in whole or in part with federal funding.

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Bayh-Dole Act:Federal Funding AgreementsPolicy & Objective (35 U.S.C. 200):

Use the patent system to promote the utilization of inventions arising from federally supported research or development;

Encourage participation of small businesses; Promote collaboration between commercial concerns and nonprofit

organizations; Ensure inventions are used in a manner to promote free competition and

enterprise without unduly encumbering future research and discovery; Promote the commercialization and public availability of inventions made

with federal support; and Ensure that the Government obtains sufficient rights in federally supported

inventions.

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The Bayh-Dole Act:Recipient Rights & Responsibilities

Recipient owns Rights in discoveries by having appropriate assignments in place and timely electing title to subject inventions

Recipient has responsibilities to meet reporting requirements, starting with disclosing inventions to the Government

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Government Use License.

Conditions When the Government May Obtain Title.

March-In Rights (35 U.S.C. § 203):Compare to non-federally funded patents under 28 USC

§ 1498NIH decisions:

https://era.nih.gov/iedison/iedison_faqs.cfm#XV

Inventor, 3rd Party Waivers and U.S. Manufacturing Approvals.

Subawardee’s Bayh-Dole rights.

Bayh-Dole Act:Government Rights21

Bayh-Dole Act:Invention 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)

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)

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Invention Reporting Requirements of NIH Grantees and Contractors

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

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Bayh-Dole: Compliance Requirements The Final Invention Statement

The Invention Disclosure: Needs to be complete in technical detail, include inventor names,

date of disclosure, grant numbers.

The Government Support Clause: Required in all patent applications/issued patents; Two sentences that include the grant numbers.

The Confirmatory License:Grants to the U.S. Government its license to use the subject invention

and resulting patents.

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The Final Invention Statement and Certification25

Main Provisions of the Bayh-Dole Act (1980) and Reporting

Requirements Enables grantee/contractor organization to elect title to subject inventions. Requires all grantees/contractors to take effective steps to achieve practical

application of the subject invention. Requires acknowledgment of the government’s support and license

Government use license

Federal support clause in the patent

Requires timely reporting of initial patent applications and issued patents. Requires disclosure of FIRST publication. Applicable to ALL U.S. Government-funded SBIR/STTR grantees and

contractors: Domestic and Foreign Annual reports of utilization data of commercialization efforts.

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NIH Process for the FIS27

Final Invention Statement and Certification shall be executed and submitted through commons within 120- days following the expiration or termination of a grant or cooperative agreement, coordinated with the Grantee OTT office;

Ensure the grant number is complete and accurate, include leading zeroes, search iEdison for disclosed inventions under the grant or award;

Inventions that are generated, determine if the title, grant number and Investigators match (can be accepted);

Inventions that are NOT generated, communicate the findings directly with the grantee institution’s invention reporting office with a 30 day reminder that failure to report may result in the risk of losing title to the invention, or other actions will be taken as appropriate (reject);

Original effective date of support through the date of completion or termination;

If no inventions were involved, insert the word “None” in the first block under item Title of Invention;

Each Statement requires the signature of an institution official authorized to sign on behalf of the institution.

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When should inventions be reported?29

What is iEdison?

Electronic Database used by 25+ federal agencies to enable grantees/contractors to report their federally funded discoveries/inventions.

Information submitted is confidential under statute. Information provided by grantees/contractors:

Technical information on inventions;

Identifies legal protection is timely and properly obtained;

Monitors regulatory compliance;

Reminder messages for required reports; and

NIH – annual commercialization reports.

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Where does iEdison fit in the Award Process?

At the End (but starts in the middle)

- Always post award.- Registrant has award number.- Direct or indirect party to award or assignee (usually Inventor) thereof.

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Recipient Process

Awards research funds

Funds researcher

Discovers Invention

Report to NIH Using iEdison

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Invention Disclosure37 CFR 401.14(c) Invention Disclosure, Election of Title and Filing of Patent Application by Contractor

(1) The contractor will disclose each subject invention to the Federal Agency within two months after the inventor discloses it in writing to contractor personnel responsible for patent matters. The disclosure to the agency shall be in the form of a written report and shall identify the contract under which the invention was made and the inventor(s). It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention…

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Invention Disclosure (Cont’d)37 CFR 401.14(c) Invention Disclosure, Election of Title and Filing of Patent Application by Contractor

The disclosure shall also identify any publication, on sale or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication at the time of disclosure. In addition, after disclosure to the agency, the Contractor will promptly notify the agency of the acceptance of any manuscript describing the invention for publication or of any on sale or public use planned by the contractor.

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Initial Patent ApplicationFederal or Government Support Clause

37 CFR 401.14 (f)(4) The contractor agrees to include, within the specification of any United States patent applications and any patent issuing thereon covering a subject invention, the following statement:

“This invention was made with government support under (identify the contract) awarded by (identify the Federal agency). The government has certain rights in the invention.”

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Confirmatory License to the Government

A funding recipient can retain the rights to a federally funded invention as long as the recipient complies with certain conditions, including submitting a confirmatory license to the government.

The recipient must provide to the government, within one year from the election of title, a nonexclusive, nontransferable license for the invention to be used for limited government purposes.

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Confirmatory License to the Government

37 CFR 401.14(b) Allocation of Principal RightsThe Contractor may retain the entire right, title, and interest throughout the world to each subject invention subject to the provisions of this clause and 35 U.S.C. 203.

With respect to any subject invention in which the Contractor retains title, the Federal government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject invention throughout the world.

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Using iEdison to Generate a License

A version of the confirmatory license can be generated either from the public area of the iEdison site (requiring no log in) or after log in from the secure area of the iEdison site.

If the license is generated after log in from the secure area, the iEdison system will automatically fill in the form with the correct information from the selected patent report. Please do not change the content of the generated Confirmatory License. If something is incorrect, (e.g., mailing address of TTO office at the recipient institution) please let us know or fix from within iEdison so that the license will then print accurately.

NOTE: Each license should only have one patent or one application listed.

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Common MisconceptionsThe government owns my invention.

•No. The funded organization can elect title to any subject invention.

If I report an invention, the government will take my invention.

•No.•All subject inventions must be reported in iEdison.•The government requires you to report that you are taking steps towards practical application.

By not reporting my invention to the government, I will secure rights to an invention.

•No, there is a greater risk of loss of rights by not reporting.

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Sale of Invention or Business Acquisition

Small Businesses may sell their Subject Inventions or Company owning a Subject Invention without Funding Agency pre-approval (i.e., ‘Waiver’) New owner is required to registered in Edison Continue all obligations of original award Demonstration of the sale/transfer purchase.

All Bayh-Dole and other original award terms flow-down to purchaser. Sharing of Unique Research Resources Consortium Obligations, if any Publication Data – including human subject

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NIH Waiver Process – SBIR/STTR

Annually NIH receives and reviews more than 50 requests per year (all types)

Only Waivers of the Preference for United States Industry are required for SBIR/STTR awards

Important all compliance requirements are completed BEFORE beginning application to waive U.S. Manufacturing requirement. View and Resolve any outstanding Notification

Messages.

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US Manufacturing Waiver Requests at NIH

All information required to be submitted for a waiver of preference for U.S. industry need to be submitted through http://Edison.gov.

Only information submitted through http://Edison.gov will be considered.

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35 U.S.C. § 204

Preference for United States Industry: No Grantee or Contractor or Assignee…shall grant to any

person the exclusive right to use or sell any subject invention in the United States,

UNLESS Such person agrees:

(1) that any products embodying the subject invention, or

(2)produced through the use of the Subject Invention will be manufactured substantially in the United States.

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35 U.S.C. § 204

Waiver of Preference for United States Manufacturing Requirement need to show with details:

(1) 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

(2) under the circumstances domestic manufacture is not commercially feasible.

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Other Helpful Information

Benefits to United States Link product to economic benefits Identify any associated activities that will occur in the

United States (be clear if only “expected’ or “projected” activities)

Link to public health benefits - identify any disease burdens to which product is directed – provided factual support

Identify with detail the U.S. manufacturing facilities that you contacted and the reasons why they aren’t acceptable.

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Why is Invention Reporting so important?

We share data with the NIH Reporter that recipients report only about issued patents attributable to NIH funding.

Who looks at the NIH Reporter?

Congress and others for research outcomes

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Resources

The NIH Guide for Grants and Contracts is the official publication for NIH medical and behavioral research grant policies, guidelines and funding opportunities.

This is where we publish NIH Guide Notices to announce reminders of and changes to Intellectual Property policy as it relates to the Bayh-Dole Act, iEdison, and invention reporting.

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Resources Updated Guide Notices

Reminder Notice Regarding Requirements of the Bayh-Dole Act and the NIHs Implementing Regulations(NOT-OD-15-004)

Notice About Updates to iEdison Regarding Reporting Requirements and Compliance Messages (NOT-OD-15-119)

Notice Regarding Requirement of Grantees and Contractors to Submit Invention Disclosures, Related Reports and Documents Via iEdison (NOT-OD-15-080)

Reminder: All Subject Inventions Must Be Reported on the HHS 568 - Final Invention Statement and Certification (For Grant or Award) and in iEdison (NOT-OD-16-066)

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Resources Where do I get information to appropriately manage data,

inventions, publications, and other resources developed with NIH funding? NIH Grants Policy Statement (GPS):

https://grants.nih.gov/policy/nihgps/index.htm Notice of Award: terms and conditions of award NIH Grants Information:

GrantsInfo@nih.gov NIH Data Sharing Resources:

sharing@nih.gov iEdison & Intellectual Property FAQs and Resources:

https://era.nih.gov/iedison/iedison_faqs.cfm

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Contact InformationQuestions about extramural invention reporting, data and resource sharing, or other related extramural intellectual property policy issues:Contact:

Scott A. Cooper, J.D., Policy OfficerWebsites: http://sharing.nih.gov; http://iEdison.gov; http://inventions.nih.gov; https://era.nih.gov/iedison/iedison_faqs.cfm

Email: Sharing@nih.gov; Edison@nih.gov; Inventions@nih.gov

eRA iEdson Help Desk:Submit a web ticket (preferred method of contact for Grantees)Toll-free: 1-866-504-9552Phone: 301-435-1986Hours: Mon-Fri, 7:30 a.m. to 5 p.m. Eastern Time (closed on federal holidays)edison@od.nih.govReturn e-mail is from “Edison Support”

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