Commercialization of Intellectual Property by Bob Reader Vice President, Licensing National Institute for Strategic Technology Acquisition and Commercialization

Commercialization of Commercialization of Intellectual PropertyIntellectual Property

by Bob Readerby Bob ReaderVice President, LicensingVice President, Licensing

National Institute for Strategic National Institute for Strategic Technology Technology

Acquisition and CommercializationAcquisition and CommercializationPatent Law Professor, Washburn Law Patent Law Professor, Washburn Law

SchoolSchool

June 2007June 2007Idea-to-Market Worship Idea-to-Market Worship

KazakhstanKazakhstan


Bob Reader: joined NISTAC in 2000 to Bob Reader: joined NISTAC in 2000 to manage the nation’s leading manage the nation’s leading patent donation program, patent donation program, acquiring 1,100 patents from 16 acquiring 1,100 patents from 16 corporations. Bob received his corporations. Bob received his law and MBA degrees from law and MBA degrees from University of Illinois at Urbana. University of Illinois at Urbana.

NISTAC is a nonprofit technology NISTAC is a nonprofit technology transfer entity affiliated with transfer entity affiliated with Kansas State University and the Kansas State University and the State of Kansas. State of Kansas.


OVERVIEW: OVERVIEW: Protecting Your Invention Protecting Your Invention Licensing Your Intellectual Licensing Your Intellectual

PropertyProperty Doing a University Startup Doing a University Startup

CompanyCompany

Protecting Your Protecting Your Invention Invention

Forms of Intellectual Property: Forms of Intellectual Property: • Patents*Patents*• CopyrightsCopyrights• Trademarks Trademarks • Trade SecretsTrade Secrets

*The best protection for Inventions. *The best protection for Inventions.


U.S. Universities and Nonprofit U.S. Universities and Nonprofit Research: Research:

• $42 billion in Research & $42 billion in Research & DevelopmentDevelopment

• 4,932 4,932 licenses per year licenses per year • 28,349 28,349 current licenses current licenses • 628 628 startup companies per startup companies per

yearyear• 5,171 5,171 startups since 1980 startups since 1980 • 1,695 1,695 licensing professionalslicensing professionals

Data taken from 2005 AUTM Annual Survey.


U.S. Universities and Nonprofit U.S. Universities and Nonprofit Research: Research:

• 17,282 17,282 Inventions Disclosed Inventions Disclosed • 14,757 14,757 U.S. Patent Applications U.S. Patent Applications • 3,278 3,278 U.S. Patents Issued U.S. Patents Issued • $ 1.3 billion $ 1.3 billion Licensing RevenuesLicensing Revenues• $213 million $213 million Patent ExpensesPatent Expenses• $ 92 million $ 92 million Reimbursements Reimbursements Data taken from 2005 AUTM Annual Survey, Revenues extrapolated from 2003 Annual Survey.


Kazakh Equivalent: $42 million in Kazakh Equivalent: $42 million in R&D: R&D:

• (if R&D costs are 40%: $16m in (if R&D costs are 40%: $16m in R&D)R&D)

• 5 5 licenses per year licenses per year • 28 28 current licenses current licenses • 0.6 0.6 startup companies per yearstartup companies per year• 5 5 startups since 1980 startups since 1980 • 2 2 licensing professionalslicensing professionals


Kazakh $42 million in R&D (or $16 Kazakh $42 million in R&D (or $16 million): million):

• 17 17 Inventions Disclosed Inventions Disclosed • 15 15 U.S. Patent Applications U.S. Patent Applications • 3 3 U.S. Patents Issued U.S. Patents Issued • $1.3 million $1.3 million Licensing RevenuesLicensing Revenues• $ 213,000 $ 213,000 Patent ExpensesPatent Expenses• $ 92,000 $ 92,000 Reimbursements Reimbursements

Licensing Your Licensing Your Intellectual Property Intellectual Property

Standardizing Negotiations: Standardizing Negotiations:

Step One - Define ScopeStep One - Define Scope: Exclusivity, : Exclusivity, IP, Geography, Fields of Use and IP, Geography, Fields of Use and Duration Duration

Step Two – Set TermsStep Two – Set Terms: Signing Fee, : Signing Fee, Patent Reimbursement, Annual Patent Reimbursement, Annual Minimums, Royalty PaymentsMinimums, Royalty Payments

Step Three – Use a Friendly TemplateStep Three – Use a Friendly Template

Licensing Your Licensing Your Intellectual PropertyIntellectual Property

• PreamblePreamble• Grant Grant • Payment Payment • WarrantiesWarranties• IndemnificationIndemnification• Sublicensing Sublicensing • Enforcement Enforcement

• MFNMFN• Best Efforts Best Efforts • Royalty Reporting Royalty Reporting • Breach ProvisionsBreach Provisions• TerminationTermination• AssignabilityAssignability• ADRADR

Standard Clauses in a License Standard Clauses in a License AgreementAgreement

Licensing Your Licensing Your Intellectual PropertyIntellectual Property

Examples of Licensing Deals at Examples of Licensing Deals at NISTAC:NISTAC:

• Stem Cells to a Venture Capitalist Stem Cells to a Venture Capitalist • Infringement by Automotive Infringement by Automotive

CompanyCompany• Sale to a Patent Investment GroupSale to a Patent Investment Group• Ceramics to Japan, nonexclusively Ceramics to Japan, nonexclusively • Feed Encapsulation to South Feed Encapsulation to South

Africa Africa • Lasers to Austria Lasers to Austria

Doing a University Doing a University Startup CompanyStartup Company

Highlights: Highlights: • $67 million in annual R&D justifies $67 million in annual R&D justifies

one startup company per year one startup company per year • 36% of licenses to existing 36% of licenses to existing

companies are nonexclusive or companies are nonexclusive or field of usefield of use

• 92% of licenses to startups are 92% of licenses to startups are exclusive! exclusive!

Data taken from 2005 AUTM Annual Survey.

Doing a University Doing a University Startup CompanyStartup Company

Examples of Startups Created by Examples of Startups Created by NISTAC:NISTAC:

• Nanoscale Materials Inc. Nanoscale Materials Inc. • Nutrijoy Inc. Nutrijoy Inc. • Global Lipidomics LLCGlobal Lipidomics LLC• The Company Engine Co. The Company Engine Co.


Contact Information: Contact Information:

Bob ReaderBob Reader

NISTACNISTAC

2005 Research Park Circle2005 Research Park Circle

Manhattan, KS 66502Manhattan, KS 66502

785.532.3903 ph785.532.3903 ph

[email protected]@ksu.edu

Documents

Commercialization of Intellectual Property by Bob Reader Vice President, Licensing National Institute for Strategic Technology Acquisition and Commercialization