BIOSAFETY, ETHICS, REGULATIONS & IPR

“BIOTECHNOLOGY INVENTIONS AND

INTELLECTUAL PROPERTY RIGHTS”
 Course Objectives
• To describe the concept of Intellectual Property
Rights and Their Role in Technology Transfer.
– Definitions
– Justification and background
– IPR management authorities & membership subscription
– IP conventions and treaties
– IP objectives and ethics
– Rationale for IPR Protection
– Infringement of IPR and remedies
– Different kinds of IPRs
– IPRs and Licensing/Technology transfer/ownership
– IP procedures
• To describe the application of IPR to
biotechnological inventions.
– Case studies for each category of IP aspect 2
 Introduction

Objectives of lecture
1. To define IP and IPR.
2. To define the different forms of IP and IPR.
3. To describe the importance of IP and IPR.
4. To define the framework of IP and IPR.
5. To identify the conventions governing IPR.
INTELLECTUAL PROPERTY RIGHTS
Remember Biotech is a business and one
of the most lucrative businesses at the
moment world over.

7
 What is intellectual property? (WIPO)
• Creations of the human mind
• Relates to items of information or knowledge,
which can be incorporated in tangible objects at
the same time in an unlimited number of copies
at different locations anywhere in the world
• Intellectual property rights protect the interests
of the creators by giving them property rights
over their creation
What is intellectual
property

Intellectual
Property is
property created
from the mind
 Creativity (Creation Of The Mind)
Creativity is the ability to
– Think / come up with new idea
– Design new “inventions”
– Produce “works of art”
– Solve problems in new ways, or develop a
new idea based on an “original” knowledge.

– Novel or unconventional approach.

 Think Away
From The
Box

Generate Ideas…..
And Own Them…..IPR !
 IP Evolution
Property  Right
INTELLECT – PROPERTY – RIGHT
Idea  Expression  COPYRIGHT
Idea  Innovation  Invention  PATENT
Idea  Quality + Identity  TRADEMARK
Idea  Appearance  DESIGN

Idea  Keep Confidential

No Disclosure  TRADE SECRETS
 Definition of Intellectual Property
• “Intellectual Property shall include the rights relating to
– Literary, artistic and scientific works,
– Performances of performing artists, phonograms, and broadcasts,
– Inventions in all fields of human endeavour
– Scientific discoveries
– Industrial designs
– Trademarks, service marks and commercial names and
designations
– Protection against unfair competition
• And all other rights resulting from intellectual activity in the
industrial, scientific, literary or artistic fields.”
(WIPO Convention)
 What is Intellectual Property?
Definition by WIPO
• Intellectual property (IP) refers to
creations of the mind:
− Inventions
− literary and artistic works
− Symbols
− Names
− Images
− designs used in commerce.
 Two Branches of IP
• Copyrights
– Artistic creations
• Poems, novels, music, paintings, and cinematographic work.
• Excludes others from making copies of the expressions
without permission

• Industrial properties:
– Patents to protect inventions
– Industrial designs – aesthetic creations determining the
appearance of industrial products
– Trademarks to protect reputation
– Service marks
– Layout Designs/Topographies Integrated Circuits
– Commercial names and designations
– Geographical locations/ indicators
– Protection against unfair competition
– Trade Secrets
– Protection of New Plant Varieties
 Kinds of Property
• Movable Property
− Car, Pen, Furniture, Dress

• Immovable Property
− Land, Building

• Intellectual Property
− Property created from the mind
− Literary works, inventions

17
 Real Property vs. IP
• Real Property:
– Tangible
• Research materials such as vectors, genes, cell lines, etc.
• Are usually obtained under the terms of a material transfer agreement etc.
– Ownership is rarely limited by either geography or time
• Intellectual Property:
– Intangible
• Legal products of your mind
• Intangible wealth
– Easily appropriated and reproduced
– Once created the marginal cost of reproduction is negligible
– IP right is geographically limited to the specific countries in which
protection is obtained for a limited time
 The role of IP as intangible property
• Awards economic rights of creators
– Rewards
• Commercial exploitation of owner of IP
– Development of products and industry
• Capital expenditure
– Require investment commitment to materialize.
• Investment funds may not be readily available
• Transfer of technology
– IP is transferable
• Technology transfer issues
 What is IP
• Not ideas.
– Ideas are not protectable, except by confidentiality
• Embodiments of ideas are protectable
• Intangible (intellectual property)
– Patents
– Copyrights
– Trademarks
– Trade Secrets
– Competition laws
 Nature of Intellectual Property
• Creation of human mind (Intellect)
• Intangible property
• Exclusive rights given by the law
• Provided with limitations and exceptions
• Time-bound
• Territorial

21
 Why IPR Protection is Awarded
• Capital expenditure for new products
– R and D
• To open access to new markets.
• To avoid unnecessary litigation (legal trials)
• Marketing and advertisement
– To increase the company’s market value.
• Maintaining loyal followers
– Builds a reputation
• Profit
• To enhance access to finance.
– Just like any other property.
 IP as a Property

• Can be sold
• Can be bought
• Can be lease or rent
• Can pass under a will
• Can be assigned
 The IP Chain of Activities

• Creation
• Innovation
• Commercialization
• Protection
• Enforcement
IP Policies Should Pave the Way for Technology
Transfer

• Steps in technology commercialization:

1. Technology generation
2. Invention report
3. Assessment
4. Patent filing
5. Valuation
6. Marketing
7. Licensing
8. Commercial development
Who should own the IPR in a university setting?

• The university owns the IPR normally

– All contributors share the royalties, including the
funding agencies
– Thesis outputs with potential commercial value must be
decided before hand with regards to patent ownership
 IPR Infringement

• Occurs at various levels

• Primary infringement
–Making the product
• Secondary infringement
–Selling
–Letting for hire or by way of trade
exposes or offer for sale or hire any
infringing copies.
–Distributing infringing copies.
 Duration of IP Protection
• Varies according to the nature of the IP
– Life + 50
– 50
– 20
– 15
– 10
• Payment of statutory fee.
Forms of IP Protection
 International Organizations in IP
• World Intellectual Property Organization (WIPO)
• World Trade Organization (WTO)
• Other organizations that subscribe to the above or
are subsidiaries.
– Eg. ARIPO
• African Regional Intellectual Property Organization
• A regional subsidiary of WIPO
• Based in Harare
 WIPO
http://www.wipo.int/about-wipo/en/
• United Nations (UN) organization
• Created in 1967
• Dedicated to promoting the use and protection of
works of the human spirit.
• Headquarters in Geneva, Switzerland.
• 185 nations as member states.
• Manages all IPs.
• Training through Academy and Seminars
 General Coverage of IP Protection
(Convention Establishing the WIPO,
1967)
• Literary, artistic, and scientific works
• Performances of performing artists, phonograms,
and broadcasts
• Inventions in all fields of human endeavor
• Scientific discoveries
• Industrial designs
• Trademarks, service marks, and commercial names
and designations
• Protection against unfair competition
• All other rights resulting from intellectual activity in
the industrial, scientific, literary or artistic fields.
 WTO
• The World Trade Organization (WTO) is the only
global international organization dealing with the
rules of trade between nations.
• At its heart are the WTO agreements, negotiated
and signed by the bulk of the world’s trading
nations and ratified in their parliaments.
• The goal is to help producers of goods and services,
exporters, and importers conduct their business.
 International IPR Treaties
• Paris Convention for the Protection of Industrial Property
(1883)
– http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html
• Berne Convention for the Protection of Literary and Artistic
Works (1886)
• International Union for New Varieties of Plants (UPOV)
(1961, 1972, 1978 and 1991)
• Convention on Biodiversity (1992)
• Internet Treaties (1996)
• Trade-related aspects of Intellectual Property (TRIPS)
Agreement 1994 (1995) – Trade, IP
• WIPO Copyright Treaty (WCT) - digital agenda
• Patent Cooperation treaty (PCT) (2004) - Patents
 IP International Conventions &
Treaties:
Basic Principles
• Basic principles of international IP conventions & treaties
– Laying down the minimum requirement for the national
legislation.
• “members may but shall not be obliged to implement more extensive
protection in their law than is required by the agreement [TRIPS 1(1)].
• Contract between creator and sovereign state
– Protection for revelation
• Exposure, leakages, disclosure
• Balance between rights of creator and public interest
– Rights and limitations and exceptions
 Paris Convention (1883)

• Protection for industrial property

– Trade mark
– Patent
– Unfair competition
• Governed by domestic legislation
 Berne Convention (1886)

• Protection of literary and artistic work

• Governed by national legislation
 TRIPS 1994 (1995)
• Trade Related Aspects of Intellectual Property
Rights.
• Agreement came into being with the establishment
of the WTO (World Trade Organization).
• Effective from 1st January, 1995.
• Additional to Paris and Berne.
• Stipulates minimum requirements for IPR
protection.
• Most favoured nation treatment.
• Provides a strong enforcement procedure.
 WIPO Copyright Treaty
• Digital agenda.
• Technological measures such as
circumvention of technological measures.
Patent Cooperation Treaty (2004)

• Making it easier to make patent

application
• Applies to a designated country.
• Also applies from international
phase to national phase.
The Laws For Intellectual Property
Protection
• Copyright Act (1988)
• Trademarks Act (1994)
• Patent Act (1983)
• Industrial Design Act (1996)
• Geographical Indications Act (2000)
• Law of Tort
– Passing-off
• Confidential information
COPYRIGHT AND RELATED RIGHTS
 Lecture Objectives
1. To define a copyright

2. To define the protection provided under copyrights

3. To describe the benefits provided under copyright

4. Describe the ownership and transfer issues

5. To describe copyright infringement

6. To describe remedies for copyright infringement

7. In all cases describe the provisions of the TRIPS and the
Copyright Act
 Copyrights & Related Rights
• Copyright is a legal term
describing rights given to
creators for their literary and
artistic works.

− Anything in a tangible form of

expression, in a fixed form
→ This means that if you can see it,
hear it, and/or touch it, then it is
protected.
 Copyright
• A right to prevent unauthorised reproduction of
your original works and to recover damages for
infringement
• Unregistered right in most of the world
– Therefore there are no registration costs
 Restricted acts
• Copying the work
• Issuing copies of the work to the public
• Rent or lend copies of the work
• Perform, show or play the work in public
• Broadcast or include the work in a cable
programme
• Make an adaptation of the work
 What is not Copyrighted
• Works that have not been fixed in a tangible form
of expression.
– Eg., improvisational speeches or performances that
have not been written or recorded.
• Titles, names, short phrases and slogans; familiar
symbols or designs; variations of typographic
ornamentation, lettering or coloring; listing of
ingredients or contents.
• Ideal procedures, methods, systems, processes,
concepts, principles, discoveries, or devices, as
distinguished from a description, explanation or
illustration.
From US Copyright Office Circular 1
 Copyright Related Rights

• Rights granted by law to communicators of works

to the public
– Performers
– Broadcasting Organizations
 Performer’s Rights
• Performer’s rights include rights for the following:
– Recording
– Broadcasting and
– Communicating to the public of a live performance.
• It is assumed that performer’s rights are transferred
the to cinematographic film producer.
• Duration: 50 years
 Rights Of Broadcasting Organisations
• Broadcast reproduction right
• Re-broadcasting to the public of a broadcast
– Eg., TV rights

• Recording to the public of a broadcast

• Communicating to the public of a broadcast
• Duration: 25 Years
 Scope of Copyright
• Original Literary works
– Research publications in biotech
• Who owns your publications?
» University, you, publishing house?????
• Dramatic works
• Musical works
• Artistic works
− Work:
− Ideas expressed in material form
− No copyright in ideas or facts
• Cinematograph Films
• Sound Recordings
 Copyright Exclusive Rights
• A copyright confers the following rights:
– To reproduce (copy) the work into copies and
phonorecords,
– To create derivative works of the original work,
– To distribute copies and phonorecords of the
work to the public by sale, lease, or rental,
– To perform the work publicly (if the work is a
literary, musical, dramatic, choreographic,
pantomime, motion picture, or other
audiovisual work), and
– To display the work publicly (if the work is a
literary, musical, dramatic, choreographic,
pantomime, pictorial, graphic, sculptural,
motion picture, or other audiovisual work).
 Copyrights
©
• Copyright:
– Protection for authors of original
works…whether published or unpublished
– Covers original works of authors, composers,
screenwriters, and computer programmers
– Owner has the sole right to print, reprint,
sell & distribute, revise, record, & perform
the work
– Lasts for the life of the holder + usually 50 years
 Copyrights (continued)
• International protection
– The Berne Convention gives protection for the
life of the author +50 years
 Registration
• Must copyright rights be registered to obtain
protection?
• No
– Not for works created on or after January 1, 1978.
• But you must register to sue for infringement.
• According to section 408 of the US Copyright Act:
– Registration of a work with the Copyright Office is not a
prerequisite for copyright protection.
– The Act does, however, allow for registration.
 Copyright Notice
• Do you have to mark your work with © to get
copyright protection?
– No, not at law
– But it’s generally a good idea
» Some kind of a warning sign
 IPR & Copyright Warnings
Quoting References from Journals and Books

“Copyright” / “All rights reserved”

“Do not use, reprint, reproduce or distribute without prior
permission”
• Avoid verbatim reproduction (plagiarism) - Likely to cause
Copyright violations.
• Always acknowledge / obtain prior permission.
• Abstract / Summary may be written in one’s own language /
quote the source (reference).

Copyright violations could lead to criminal/civil suits

Could lead to imprisonment too !
 Rights Under Copyright

• Two Kinds of Rights

− Moral Rights
− To protect personality of author

− Economic Rights
− To bring economic benefits
 International Copyright Protection
• Copyright protection rules are fairly similar worldwide.
• Due to several international copyright treaties.
• The Berne Convention most important.
• Under this treaty, all member countries (> 100), including
virtually all industrialized nations must:
– Afford copyright protection to authors who are nationals of any
member country.
– This protection must last for at least the life of the author plus 50
years.
– Protection must be automatic without the need for the author to
take any legal steps to preserve the copyright.
PATENTS
 Lecture Objectives
1. To define a patents
2. Describe the requirements for patentability
3. Describe the scope of patentability
4. Describe the outline of patent composition
5. Describe the patenting process
6. To define the protection provided under a patent
7. To describe the benefits provided under a patent
8. Describe the ownership and transfer issues
9. To describe patent infringement
10.To describe remedies for copyright infringement
• In all cases describe the provisions of the TRIPS &
Patent Act
• And describe how this applies to biotechnology
• Case studies
 Patents
• Patents are the primary means of protecting
an original invention.

• Designed by Thomas Jefferson in 1790.

– To provide a brief legal monopoly.
– To give the inventor an opportunity to get the
invention into the market and recoup
development costs before competitors entered
the market.
 What is a PATENT
• A patent is an exclusive right granted for an
invention, which is a product or a process that
provides a new way of doing something, or offers a
new technical solution to a problem
• The limited monopoly right granted by the state
enables an inventor to prohibit another person
from manufacturing, using or selling the patented
product or from using the patented process,
without permission.
• Period of Patents - 20 Years
 What is a Patent ?
• A patent is a protection given to a patentee for an
invention for a limited term by the government
for disclosing the invention

• Right to exclude others from using your invention.

• Owner has a qualified right to use the invention.

 What is a Patent?
 A Conditional grant

 Balance of Rights and Obligations

 Subject to other laws of land

 Granted to owner of invention/

assignee
 Patents Protect Inventions
You need a patent if:

– You have invented a product you want to

market yourself or sell to a manufacturer.

– You believe someone else could sell the product

by copying your invention.
 Why seek patent protection?

• Patents protect your development work

• Patents are important to commercialization of
your technology
• Patent licenses to third parties potentially provide
research support and/or royalty income for
inventors
 Why Patent?
• To gain a competitive advantage
– Exclude others from practicing invention
– Build fences around your invention
• Secure investment
– Gives confidence to investors
– Can be used as collateral
• Licensing revenue
– Allow others to practice invention for $$
• Mark of innovation, cutting edge research
– Annual reports
– Hiring
 Types of Patents:
Protecting Products & Services
• Patents – Two Types
– Utility Patents
• Functional inventions
– toys, coatings, tools, machines
– good for 20 years
– Can also include Plant Patents in other countries
» A controversial issue under patents
• The term "Utility Patent" is used to distinguish between
patents and other specific forms of intellectual property
claims that exist in some jurisdictions, such as:
– "Plant Patents".
– "Innovation Patents".
– "Petty Patents".
– Design Patents
• Nonfunctional inventions
– A decoration, apparel, jewelry
• Can easily be designed around...no functionality to protect
 Role of Patents
What are patents good for?
• Patent system gives incentive to invest in R&D and
to promote:
»New inventions
»Dissemination of the new inventions so that
they are not kept secret but published
• Provides rewards for new inventions
• Provides rewards for publishing inventions
• Facilitates technical progress
– E.g., huge investments to bring a medicine with a new active
ingredient to the market
 Role of Patents
What is a patent not?
• A patent is not a positive right
–By having a patent the patentee is not
automatically entitled to use the patented
invention
–Provisions of other laws may make it
impossible for patentee to use patented
invention, e.g.
» Health safety Law
» Environmental Law
» Restrictions of activities by Embryonic Protection Law
» Earlier dominating Patent
 Utility Patents
What kinds of things are generally patentable?
• New chemical entities
• Including new intermediates, new salts, and enantiomers.

• Methods of making new compounds.

• New methods of changing/amending biochemical
processes, which are carried out in a human, animal, or
plant.
• New kits
• Eg., containing a new combination of materials or of
materials and equipment used for diagnosis or treatment.
 Utility Patents
What kinds of things are generally patentable
• Newly identified DNA, so long as it is claimed in a form
which differs from that in which it occurs naturally.
• It must be claimed in purified or isolated form.
− Newly created DNA is treated as a new chemical compound.

• New organisms and parts of organisms

• Eg.
− Seeds

− Those parts of/ organisms containing modified DNA.

 What is an invention?
• An “invention” occurs when there
Invention is a “conception” and “reduction
to practice.”
– Conception is the mental part.
Coming up with the idea.
– Reduction to practice is actually
making the invention.
• Filing of an application is considered
a type of reduction to practice.
 Who is an inventor?
• Someone who contributed to the conception of an
invention claimed in one or more of the claims of
the patent.
• Someone who merely acts as the “hands” of an
inventor without more is not an inventor.
• Authorship and inventorship are different
 Conditions of Patentability
• Novelty:
– New invention, not known to public prior to claim by inventor.
– Must DISTINGUISH from “State of the Art” knowledge
• PRIOR ART
• Inventive Step:
– Invention would not be obvious to a person with ordinary skill in
the art.
– Non-obvious to a person “Skilled in the Art”
• Industrial Application:
– Invention can be made or used in any useful, practical activity as
distinct from purely intellectual or aesthetic one
» Must be useful and have a utility
• Patentable subject matter (depending on country)
• Lifespan of 20 years
 Requirements of Patentability
1. Novelty
• An invention shall not be considered new
if it forms part of a prior art.
(Sec. 23, IP Code)
 Non-Obvious

THE DIFFERENCES BETWEEN THE

CLAIMED INVENTION and the PRIOR ART are such
that the subject matter as a whole WOULD NOT
HAVE BEEN OBVIOUS at the time the invention
was made to a PERSON SKILLED IN THE ART, to
which the subject matter pertains.
 Non-Obvious
It would not be obvious to one with
ordinary skills in the art to come up with
your invention.
Obviousness is determined by considering
combined prior art references:
What is claimed:

Prior Art 1 1. A compound

Prior Art 2
having:
A compound Suggest that D
A
having A, B, C and and E are
E. equivalent. B
C and
Substituting D for E D
would be obvious
 Prior Art- everything made
available to the public by means of:

PRIOR
ART
 Requirements of Patentability
2. Inventive Step
• An invention involves inventive step if,
– With regard to a prior, it is not obvious to a person
skilled in the art at the time of the filing date or
priority date of the application.
• (Sec. 26, IP Code)
 Inventive Step
Section 2(1)(ja):
"inventive step" means a feature of an
invention that involves technical advance as
compared to the existing knowledge or
having economic significance or both and
that makes the invention not obvious to a
person skilled in the art.
 Requirements of Patentability
3. Industrial Applicability

• An invention that can be produced and used in

any industry shall be industrially applicable.
– Must have at least one recognized, verifiable and
practical end-use
• (Sec. 27, IP Code)
 Useful
Your invention must be useful.
• Most biotech and pharmaceutical inventions satisfy the utility
requirement (i.e., they are useful).
• Exception:
– Expressed Sequence Tags (ESTs)
• Short nucleotide sequences that represent a fragment of a cDNA clone
of unknown function (e.g., massive sequencing of genes as Human
Genome Sequences (HGS) without determination of function)
 Patentability Filter
 Prior use/ prior publication/ prior disclosure

 Industrial applicability

 Novelty

 Non-obviousness: inventiveness

 Sec. 3 – Exceptions not patentable?

 Written description / enablement requirements

 Application/ specification/ claims

 Patent prosecution

 Maintenance / Defense after grant

 WHAT CAN BE PATENTED?

Inventions in all fields of technology, whether

products or processes, if they meet the criteria
of:
– Novelty;
– Non-obviousness (inventive step);
– Industrial application (utility).
– Agriculture, industry or medicine
 Examples of Pharmaceutical/Biotech
Inventions
• Novel compounds
• New uses of old compounds
• Processes for making compounds
• Methods for screening for compounds against
certain targets
• Novel nucleic acids / proteins / antibodies
• Transgenetic non-human animal models
• Recombinant cell line
• Vaccines
 Special Patentability Requirements
for Biotech Inventions
• Priority
– Who is the first true inventor?
• Sufficiency of Disclosure
– Includes filing for a patent application?
• Deposition of material.
– Microorganism
– DNA or protein sequene
– Budapest Treaty)(Rules 408 & 409, IP Code
• The claims:
– The requirement of clarity & support by the description
 Biotechnological Inventions
• Are inventions which concern products
consisting of or containing biological
materials or processes by means of which
biological materials are produced,
processed or used.

Biological material
- any material containing genetic information and capable of
producing itself or being reproduced in the biological system
 Patentable Inventions in the
Field of Biotechnology
• Products
– Including cellular and non-cellular organisms

• Processes

• Uses
 List of Patentable Biotechnological
Inventions
PRODUCTS PROCESSES USES
1. Chemical 2.Live organisms 1.Processes for 1. Use of the
– Antibiotics, natural chemicals – Microorganisms preparing: product in
(gums,sec. metabolites) 3. Cellular – Proteins the
– Peptides or proteins – Bacteria – Genes process
– Monoclonal antibodies – Fungi/yeasts – RNA – To prepare
– Genes, other DNA & RNA – Algae – DNA another
– Molecules, e.g. – Protozoa – Microorganisms product
– expression control signals – Animal or plant – Cell lines
– Promoters cells or cell lines – Viruses
– Enhancers etc.
2. Medical uses
– Medical products
– Antisense oligonucleotides
– Ribozymes 4. Non-cellular
– Viruses & phages 2. Processes for
– Plasmids or other vectors
– Viroids producing
– Pharmaceutical compositions
– Fungi products
containing any of the above
5. Apparatus by fermentation
 Grant of a Patent
• Patents are granted by national patent offices
after publication and substantial examination of
the applications
• Provisions exist for pre-grant and post grant
opposition by others
• Valid within the territorial limits of the country
• Foreigners can also apply for patents

180
 The various route for application
• The national route
• The Paris route
• The PCT route
 Where and How can I patent an invention ?

National Patent ONE country – Italian Patent Office

National patent office: USPTO, CIPO,...

European Patent
European patent office 38 countries: Europe and 11 extra-european countries
http://www.epo.org/

Eurasian Patent Armenia, Azerbaijan, Belarus, Kyrgystan,

Eurasian Patent Organization Kazakhstan, Republic of Moldova, Russian
http://www.eapo.org/index_eng.html Federation, Tajikistan, Turkmenistan

Anglophone
ARIPO Patent Ghana, Gambia, Kenya, Lesotho, Malawi,
African Regional Industrial Property Organization Mozambique, Sudan, Sierra Leone, Swaziland,
system United Rep. Tanzania, Uganda, Zambia, Zim
http://www.aripo.org/

OAPI Patent Burkina Faso, Benin, Central African Rep.,

Francophone Congo, Cote d’Ivoire, Cameroon, Gabon, Guinea,
system Organisation Africaine de la Propriété Intellectuelle
Equatorial Guinea, Guinea Bissau, Mali,
http://www.oapi.int/
Mauritania, Niger, Senegal, Chad, Togo

International patent
World Intellectual Property Organization 144 countries
http://www.wipo.int/portal/index.html.en
 Pathway to a Patent
• File a Disclosure Document (Disclosure Statement)
– Establishes date of conception of idea (who has the rights?)
– Get a two year grace period
• File a Provisional Patent Application
– Protect your ideas while talking to manufacturers/potential
funders
– Can use the term “patent pending” on the invention
– Only good for 12 months...then must file non-provisional
application
• File Non-Provisional Patent Application
– File complete description with the PTO (Patent & Trademark
Office)
– “Patent applied for” good for two years’ of protection
– Denials allow an appeal process
 Patent Process

PATENT
0 YEARS EXAMINATION ALLOWANCE ISSUES
CONCEPTION

IS
PUBLICATION
APPLICATION
REGULAR

RESPONSE(S)
PROVISIONAL
APPLICATION

N
A
DW
PEAF
Y

MAINTENANCE
FEES
G
R
/ES
WITHIN 1 YEAR

TERM: 20 YEARS FROM EARLIEST FILING DATE

 The Patent Process
• Communicating the Idea
• Preparing and filing an Application
• The Patent Prosecution Proceedings
• The Issued Patent
• Licensing the Patent
 Requirements for Filing a Patent
Application
• Completely filled-out request form for a
patent grant
• Specification and claim(s)
• Drawing necessary for understanding the
invention
• Abstract of the invention
• Filing fee
 Patent Infringement
• Patent: A right to exclude others from commercially
making, using, distributing or selling the invention without
the patent owner’s consent.
− Any person who performs any of these exclusive rights in respect of the
invention without the patentee’s authorization infringes
• Patent Infringement
• Patents give the holder the right to enforce the patent
– Defense costs in time and money make it difficult for small business to
enforce.
– The patent holder may choose to sue the infringing party to stop his or her
activities, as well as to receive compensation for the unauthorized use.
– Patent holders must bring infringement actions within six years from the date
of infringement; if the suit is not brought in this time limit, it is time-barred,
ratifying the infringement. legal issues surrounding patent validity and
infringement are reserved for the court's determination.
– legal issues surrounding patent validity and infringement are reserved for the
court's determination.
– alleged infringer typically counters the patent holder's suit by alleging that
the patent is not valid.
 Patent Infringement
– The patent holder bears the burden of proof to show that the
defendant infringed the patent.
– When a court finds infringement, the infringer usually must pay
damages to the patent holder, either in the form of actual
damages or a reasonable royalty for the unauthorized use.
– Actual damages include lost profits the patent holder would have
realized but for the infringement, while a reasonable royalty
depends on the type of product, other royalty arrangements, time
remaining on the patent, and other issues. In addition to
damages, the prevailing party is also entitled to costs. Costs
include court filing fees and related litigation expenses.
– In addition to infringement damages, a patent owner may stop
the infringer from continuing to produce infringing products. The
court typically, as a matter of course, issues a permanent
injunction after the infringer is held liable for violating the patent.

• Fighting a patent infringement is serious battle and

requires patent attorneys.
– A costly operation.
END
TRADE MARKS
 Origins of Trademarks
• Marks or symbols have been found on ancient
artifacts discovered in the Mid and Far East

• Trademarks were used in medieval times by

members of guilds to identify the work of craftsmen
within the guild

• Trademarks were employed by Anglo-Americans to

prevent “palming off” by junior producers trading
on the good will of senior producers
 Characteristics of Trademarks
• A trademark is always associated with
commercial activity

• Trademarks are appropriated (acquired)

through adoption and prior use
 Why Do We Need Trademarks?
• Consumers tend to buy well known brands & recognize
brands by their trademarks.

− Prevent consumers from being misled or confused by use of

similar names & other identifiers
− Consumers may rely on source as an indication of quality.

• Prevent businesses from stealing goodwill others have

generated by creatively & consistently identifying &
marketing their products.

• Encourages investment in quality & service by

protecting investment in creating favorable reputation
 Goals of Trademarks
• Prevent mistake, deception, and confusion with regard to
the origin of goods

• Identification of goods or services

• Marketing or competitive advantages

• Protect the public from unscrupulous vendors

• Protect a prior user’s good will

 Trademarks
• Trademark:
– A symbol, logo, word, sound, color, design, or other
device that is used to identify a business or a product
in commerce.
• It has a longer life than a patent.
• It grants a business exclusive rights to a
trademark for as long at it is actively using it.
• ® Registered trademark
• ™ Intent to use application filed for product
• SM Intent to use application filed for services
 Requirements For Trademark
Protection
• Inherent Distinctiveness

• Acquired secondary meaning

• Nonfunctionality
 Degree of Distinctiveness:
Generic Marks
• Do not function as
trademarks
− Eg. Painkiller

• Describe type of
product rather than a
particular brand

• Genericide: A term
becomes so generic as
to lose protection
 Secondary Meaning
• Provides for trademark protection of marks that are not
inherently distinctive
• Descriptive marks usually rely upon special proof of
distinctiveness before protection will be afforded by
common law and statute
• Descriptive marks must be shown to have acquired
customer recognition (secondary meaning), which serves
primarily to identify the source of the products or services,
and not merely to describe their nature, quality,
characteristics, ingredients, or geographic origins
• Generic marks constitute the very product and, therefore,
cannot be registered or appropriated exclusively to one
manufacturer’s use, even upon a showing of secondary
meaning, because competition would be unjustifiably
impaired
 Nonfunctionality
• Trademark protection is granted to symbols or features
that are not functional

• Protection of functional features would deprive producers

of the right to use those features necessary to make a
product work

• Doctrine of functionality:
– If a feature is required to perform a particular utilitarian function,
and if there are insufficient commercially viable alternatives to
perform the same function equally well, no single producer will be
allowed to claim exclusive rights in the feature
 Kinds of Trademarks
• Marks on goods
• Device Marks
• Service Marks
• Certification trademark
• Collective Marks
• Well known marks
• Trade Names
 Trademarks & Service Marks
• Trademark = word, phrase, symbol, or design to
set your product apart
• Service mark = same as trademark, but for a
service
– Rights are reserved exclusively for owners for 17 years…can be
renewed…lasts indefinitely
– There are advantages to owning them on the U.S. Patent &
Trademark Office Principal Register
– TM = unregistered trade mark, SM = unregistered service mark,
® = registered trade mark
• Service Marks include banking, education,
finance, insurance, real estate, entertainment,
repairs, transport, conveying news and
information, advertising, etc.,
Trademarks & Service Marks
 Collective Mark
• Collective Mark is a Mark that distinguishes the
goods or services of members of association from
marks of other undertakings
• Who owns collective Mark?
– Association of persons
• It could be manufacturers, producers, suppliers,
traders or other profession bodies like institute of
chartered accountants, test cricketers association
etc.
What Can Be Used As a Trademark?

• Names - most commonly used

– Coca-Cola

– Starbucks

– Nike

– The Beatles
Trademarks & Service Marks
What Can Be Used As a Trademark?

◾Logos
What Can Be Used As a Trademark?

◾ Band Logo Examples

What Can Be Used As a Trademark?

◾ Record Label Logo Examples

 Trademarks
• Must be graphically represented
• Must be distinctive / distinguishable
• Must not be descriptive
• Must not be deceptively similar to known /well-
known marks /Generics

Avoid:
Geographical Indications / Divinity/
National Leaders / Heroes / Symbols /
Congratulatory words
 What Is Protected & What’s Not?
• Right to use TM in relation to goods/ services as registered
are protected
• If TM consists of several parts, protection is for TM as a
whole
• State Emblems, Official Hallmarks, Emblems of
Intergovernmental Organizations cannot be used as TMs.
 Unregistered Trademarks

 Protected where products are sold

 Rights acquired by use in commerce, but only

in area of use

 Can be source of conflict

 2 Users in different areas

 TM Rights
• What are the rights of the trademark owner?
– Prevent trademark infringement
– Use of mark in commerce where use is likely to cause
confusion or deceive
– Prevent trademark dilution
– Use of mark in a disapproving manner
» Tarnishment
» Overuse of mark
» Distortion
 Trademark Infringement,
Counterfeiting & Dilution
• Infringement
– A mark that is likely to cause confusion with a trademark
already existing in the marketplace

• Counterfeiting
– The deliberate copying of a mark

• Dilution
– The value of the mark is substantially reduced through
competition or through the likelihood of confusion from
another mark
◾ Likelihood of Confusion Test: Whether consumers
are likely to be misled or confused as to source or
sponsorship of goods. Lanham Act ; 15 U.S.C.
§1114(1)

McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC :

Company that makes Splenda® sued competitor.
Would this be likely to confuse consumers?
 Apple v. Apple

Series of disputes began in 1980:

George Harrison saw Apple
Computers ad in a magazine and
thought potential for trademark
conflict
Beatles sued & settled twice - Apple Computer agreed not to use the
word Apple to sell music

3rd lawsuit in 2006 over iTunes – Case decided on contract grounds rather
than TM
- Settlement gave Apple Computer right to name in connection
with “electronic goods, computers, telecommunications equipment, data
processing equipment” and “data transmission services”
 TM Duration

• Ownership & rights based on use

– TM can be abandoned by non-use

• Federal Registration: 10 years

– Can renew for 10 year periods as long as mark still

being used
END
GEOGRAPHICAL INDICATIONS OF GOODS
 Geographical Indication (GI)
• An indication which identifies goods
• As agricultural goods, natural goods or manufactured
goods
• As originating, or manufactured in the territory of country, or a
region or locality in that territory
• Where a given quality, reputation or other characteristic of such
goods is essentially attributable to its geographical origin.
• GI need not be a geographical name
− E.g. Alphonso, Basmati
• Goods include goods of handicraft or of industry
and also foodstuff.
 Geographical Indications

Name or sign used on goods

originating from specific
geographical origin or location
and possess qualities, reputation
or characteristics that are
essentially attributable to that
place of origin.
 Geographical Indications

• “An indication which identifies any goods as

originating in a country or territory, or a
region or locality where a given quality,
reputation or other characteristic of the goods
is essentially attributable to their geographical
origin”
Protection for geographical indication
• Product must come from a particular
geographical territory
• Uses a name link to the particular
geographical nature of the territory
• Used to stop others from using it
 Examples of GIs
• Swiss made
• Swiss chocolates
• Sarawak pepper
• Salted egg
• Sweet tamarind
 Registration
• Geographical indications have to be
registered.
• Geographical Indications Registry examines
and publishes the application before
registration
• Registration is valid for 10 years but can be
renewed indefinitely
 GI Rights
• Exclusive right to use the Geographical
Indication on the goods

• Right to obtain relief for infringement of the

Geographical Indication
END
TRADE SECRETS

328
 Trade Secrets
• Some inventions such as data and information cannot
be protected by any of the available means of IPRs.
• Such information is held confidential as a trade secret.
• Trade secret can be an:
– Invention,
– idea,
– survey method,
– manufacturing process,
– experiment results,
– chemical formula,
– recipe,
– financial strategy,
– client database,
– Etc. 329
 Trade Secrets
• A trade secret consists of
– a formula, device, idea, process, pattern, or
compilation of information that gives the owner
a competitive advantage in the marketplace,
– a novel idea that is not common knowledge and
is kept in a confidential state.

• A trade secret is not protected by federal law

• Can only be protected through employment
contracts and/or maintaining tight security
 What Kind Of Information
Qualifies As A Trade Secret ?
 TRADE SECRET

•Provides
competitive Kept
advantage confidential
•Potential to
make money
 Technical &
Financial
scientific
information
information

TRADE SECRET

Commercial Negative
information information
 What are trade
secrets?

Do-it-yourself
form of IP

• Idea: By keeping valuable information secret,

you can prevent competitors from learning about
and using it and thereby enjoy a competitive
advantage in the marketplace.
 General Principles
• Information that has commercial value and that
has been scrupulously kept confidential will be
considered a trade secret (TS).
• Owner will be entitled to court relief against
those who have stolen or divulged it in an illegal
manner.
 Trade Secrets: Requirements
• A trade secret means information, including a formula,
patent, compilation, program, device, method, technique,
or process, that:
– derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic
value from its disclosure or use, and
– is the subject of efforts that are reasonable under circumstances
to maintain its secrecy

• No threshold of creativity or innovation is required before

protection becomes available; the only requirement is
secrecy of information that derives independent economic
value from remaining secret
 When Trade Secrets are preferred?
• When invention is not patentable.
• Patent protection is limited to 20 years.
– When secret can be kept beyond that period.
• When cost of patent protection are prohibitive.
• When it is not difficult to reverse engineer.
What Makes Something A Trade
Secret ?

When do you have legal protection?

What Makes Something A Trade Secret
?
Three essential legal requirements
1. The information must be secret

2. It must have commercial value because it’s

secret

3. Owner must have taken reasonable steps to

keep it secret
What Makes Something A Trade Secret ?
Three essential legal requirements
1. Secret
• “Not generally known among or easily accessible to
persons within the circles that normally deal with this kind
of information”
• What is ‘generally known’ in the industry?
– matters of common knowledge
– information you find at library, online database, trade journals,
patent information, etc
– price list on website
– graphics & object code of software application you sell off-the-
shelf
• What is not required that be known only by one person
– e.g. based on supplier relationship, joint development agreement,
due diligence investigation, etc.
– If you license software which has limited distribution  possible
to protect object code by contractual means
What Makes Something A Trade Secret ?
Three essential legal requirements
2. Commercial value
• Must confer some economic benefit on the holder
• This benefit must derive specifically from the fact
that it is not generally known (not just from the
value of the information itself)
• How to demonstrate:
– benefits derived from use
– costs of developing the TS
– licensing offers; etc.
– actual or potential
What Makes Something A Trade Secret ?
Three essential legal requirements
3. Reasonable steps
• Under most TS regimes, you cannot have a TS
unless you have taken reasonable precautions to
keep the information confidential
• ‘Reasonable’  case by case
– reasonable security procedures
– Non-disclosure agreements (NDA)
– such that the information could be obtained
– by others only through improper means
• Importance of proper TS management program
 Reasonable Steps
How To Guard Trade Secret?
• Restricting number of people having access to secret
information

• Signing confidentiality agreements with business

partners and employees

• Using protective techniques like digital data security

tools and restricting entry into area where trade
secret is worked or held

• National legislations provide protection in form of

injunction and damages if secret information is
illegally acquired or used.
How Are Trade Secrets Lost Or Stolen
?
How Are Trade Secrets Lost Or Stolen?
A Growing Problem: Why Does It Occur?
• Way we do business today
– Increased use of:
• Contractors
• Temporary workers
• Out-sourcing
• Declining employee loyalty
– More job changes
• Organized crime:
– Discovered the money to be made in stealing high tech
IP
• Storage facilities
– DVD
– External memories
– Keys)
• Expanding use of wireless technology
 Who owns the Trade Secret?
• E.g. new technology developed by employee.
• TS developed by external contractor

To avoid disputes:

WRITTEN AGREEMENT
+
ASSIGN
in advance all trade secrets developed
during employment or commission
Protection of Confidential Information
• Protection under the law of tort
• Protection for confidential information under
– Contract
– Employer-employee relationship
– Husband and wife
– Etc
• What do you need to show (prove) to be
protected?
– Information are confidential
– Recipient who obtained the information uses it
– Damages suffered by the owner
 Grounds For Claiming Violation
• What elements are required to state a claim for
misappropriation, theft, or improper use?
• What are the tests for each of these elements?
• Generally, there are three elements (and their tests) to a
trade secret claim:
– The subject matter involved must qualify for trade secret
protection
• it must be the type of knowledge or information that trade secret law was
meant to protect; and
• it must not be generally known to all
– A showing of misappropriation
• through deception or theft
• through breach of an explicit obligation
• through breach of an implied duty
– A showing of reasonable precautions to prevent disclosure
• diligence
• constructive knowledge standard
 Court Relief

Only theft if wrongful !

Courts will only grant relief if someone
has improperly acquired, disclosed or
used the information
 Case
Coca-Cola Trade Secret Trial
• Prosecutors say a former Coca-Cola secretary took
confidential documents from the beverage giant
and samples of products that hadn't been launched
with the aim of selling them to rival Pepsi

• Faces up to 10 years in prison if convicted of

conspiracy.
AP Business, January 15, 2006
 Coca-Cola Secret
• Deep in a bank vault somewhere in Atlanta is a piece of paper with
17 or 18 common ingredients on it. Mix those items in the right
proportions under the proper conditions, and you re-create the
world's most popular soft drink: Coca-Cola.
• rumour has it that only 3 or 4 company executives, including the
company's chief chemist, know the exact formula from that piece
of paper in that mysterious vault
• Special undisclosed measures are taken to ensure the safety of
these individuals, as if they were royalty. They rarely travel
together, and when one dies, the others must approve his
successor.
• Bill Poundstone published a recipe based on an analysis of coke,
and among the 17 ingredients in his recipe are nutmeg oil, lemon
oil, cassia oil, alcohol and coca leaves from which the cocaine has
been extracted (that last ingredient might be hard … and illegal …
to do at home)
May Trade Secrets Be Sold Or
Licensed?
 Transfer of Trade Secrets
• Sale
– Most TS sales occur as part of the sale of the business
• License
– Examples of trade secret license
• In combination with patent license
• Software license for highly specialized program
– Advantages of TS licensing:
– additional revenues
– Disadvantage of TS licensing:
• risk of disclosure (potential loss)
– In some countries, restrictions
 Remedies For TS Misuse
1. Order to stop the misuse
2. Monetary damages
• Actual damages caused as a result of the misuse (lost profits)
• Amount by which defendant unjustly benefited from the
misappropriation (unjust enrichment)

3. Seizure order
• Can be obtained in civil actions
• To search the defendant's premises in order to obtain the
evidence to establish the theft of TS at trial

4. Precautionary impoundment
• Articles that include misused TS
• Products that resulted of misusing
 Things To Bear In Mind

• Any innovative idea should be kept as a secret in

the beginning

– To preserve option of patenting (or industrial design) at

later stage
 INNOVATIVE IDEA
Initially Later stage

Not patentable patentable

Secret !

Strategic
TS business
patent
decision
TS
© ID
TS
• Part of the idea
 Things To Bear In Mind
• Choice between patent or TS must be made
both from the legal and business perspectives

– If patentable
 Things To Bear In Mind

• If you apply for a patent, only give up what is

necessary.

– The decision to apply for a patent does not necessarily

require giving up all of one’s TS!

– However, patent application must contain:

• Enough to enable skilled person to practice the invention.
• the best mode known to the applicant for practicing the
invention.
 Innovative Idea
Inventions on A, B, C

A A
TS TS P
B B
C C

Applying for patent on

C may not require
giving up TS on A & B
 Things To Bear In Mind

• Once patent published

» TS is lost in all countries.
– Patent documents “easily accessible” to public
– If patent application is published and later rejected
» You lose both patent and TS rights
 Things To Remember About TSs
• No registration, but 3 requirements for legal protection
• No need for absolute secrecy, but ‘reasonable measures’
• Developing and maintaining TS program
− Good business practice to prevent
− Legal requirement to enforce TS protection
• Only legal protection against dishonest
acquisition/disclosure/use
• Can sue for violation of TS, but may not often save the TS
− Might have to consider alternative protection
• The choice between TS and patent protection for an
invention is irrevocable
• Carefully consider all relevant advantages and disadvantages from each
choice both from legal and business viewpoint
• Patent and TS are often complementary to each other.
– Patent applicants generally keep inventions secret until the
patent application is published by the patent office.
– A lot of valuable know-how on how to exploit a patented
invention successfully is often kept as a trade secret.
– Some businesses disclose their trade secret to ensure that no
one else is able to patent it (defensive publication).
END
 PLANT VARIETIES RIGHTS/ PLANT

VARIETIES RIGHTS

&

FARMER’S RIGHTS

http://www.patentlens.net/daisy/bios/1234#plant_breeders_rights
 Plant Protection
• Under the TRIPS Article 27(3)(b).
– Provision for member countries to design their own
system of protection for plant varieties.
• If they have elected not to use their patent system for plant
protection.
• UPOV provides a framework by which countries can
implement a protection system that generally
fulfills the TRIPs requirement.
– Providing 'an effective sui generis system' (an
independent legal system)
 International Union for the Protection of
New Varieties of Plants (UPOV)
• An intergovernmental organization.
• Not a 'treaty’
– Countries are not obligated to join UPOV.
– Membership is purely voluntary.
• Each member of the organization becomes bound
to the UPOV Convention.
– Requires member countries to provide an intellectual
property right for plant varieties.
» Often referred to as Plant Breeder's Rights (PBR).
 Plant Variety/ Breeder’s Rights
• As a result of the PBR
– Plant breeder is granted a legal monopoly over the
commercialization of plant varieties.
– Protection allows the breeder to try to recover the costs
associated with the development of the variety.
– UPOV also aims to provide an incentive to individuals or
companies to invest in plant breeding.
• Provides a positive stimulus in the plant breeding industry.
– The rights granted are for a specific time only
(depending on the plant variety).
– Upon expiry, the protected variety passes into the public
domain.
 Plant Breeder's Rights (PBRs)
a.k.a Plant Variety Rights

• Plant Breeder's Rights (PBRs) provide an

alternative form of protection.
–Encourages and promotes plant breeding.
–Encourages the importation of foreign
varieties.
–Promotes the exportation of plant varieties.
–Generally benefits the market place.
 Requirements For Protection Under
UPOV
• Distinctness is the main requirement.
• The variety must be distinguishable from any other variety
which is publicly known at the time of filing the application.
• The variety must have predictable characteristics and be
able to be reliably reproduced.
• The additional requirement under the 1991 Convention
states that the variety must be 'new'.
– A variety that has not been sold or otherwise disposed of by the
breeder for commercial purposes prior to filing for protection.
• However, similarly to a utility patent
– Natural source material is not protectable.
– The UPOV Convention allows a 12 month 'grace period' for sales
of the new variety before protection is no longer available (Article
6(1b)).
 Researchers’ Rights

• Free and complete access to protected materials

for research use in developing new varieties of
plants.
• Authorisation of the breeder is required
– “whose repeated use of such variety as parental line is
necessary for commercial production of such other
newly developed variety”.
 Protection Offered to Plant Variety
Exclusionary Right
• Protection confers the right to exclude others from the
following with the protected variety:
– Producing or reproducing,
– Propagating
– Offering for sale
– Selling or other marketing
– Exporting
– Importing or
– Stocking for any of the above purposes
• However, the protected plant can be used for non-
commercial acts and for experimental purposes without
infringement.
– Provided they are done privately
 Rights of Breeders
• Production
• Sale
• Marketing
• Distribution
• Export
• Import

However, if the breeders’ variety is essentially derived

from a farmers’ variety, the breeder cannot give any
authorisation without the consent of the farmers or
communities from whose varieties the protected
variety is derived.
 Farmers’ Rights
• To do the following in the same manner as he was
entitled earlier (seeds for sale should not be
branded)
– Save
– Use
– Sow
– Re-sow
– Exchange
– Share
– Sell his farm produce including seed
• Rights to full disclosure of the expected
performance of the seeds or planting material by
the plant breeder.
– Where these fail to perform in the manner claimed by
the breeder, the farmer may claim compensation from
the plant breeder.
 Protection of Plant Varieties
• Registrable varieties and criteria:
– New Varieties
• Novelty
• Distinctiveness
• Uniformity
• stability
– Existing varieties
• Distinctiveness
• Uniformity
• Stability
• Persons who can Register
– Breeders
– Farmers
– Universities
– Agricultural institutes
• Period of protection
– 15 years for annual crops
– 18 years for trees and vines
END
INDUSTRIAL DESIGNS (ID)

TRIPS Article 25 - 26
 What is an Industrial Design?
• The ornamental or aesthetic aspect of a useful article.
• The visual features of or any combination of these
features applied to a finished article made by hand, tool
or machine.
• Ornamental & aesthetic features may depend on or refer
to the following:
– Shape
– Configuration
– Pattern
» 3-D or 2-D features such as shape or surface, patterns, lines or color.
• It is all about the visual design of the article.
• The design must have features that appeal to the eye.
 What is an Industrial Design?
• ‘Design’ means only the features of shape,
configuration, pattern, ornament or composition of
lines or colours applied to any article whether in
two dimensional or three dimensional or in both
forms, by any industrial process or means, whether
manual, mechanical or chemical, separate or
combined, which in the finished article appeal to
the eye and are judged solely by the eye.
 Industrial Designs
• A unique design for a chair is an example of an
industrial design.
• A well-designed chair is not just a pleasure to sit on.
– But also a pleasure to behold.
• For most manufactured products:
– The value depends not only on what they do.
• But how they look.
 Industrial Designs
• Rights granted by Industrial Design refers to right to
protect the original, ornamental and non-functional
features of a product that result from design activity.
– Designs dictated solely by the article’s function art excluded from
protection.
– An ID is primarily of an aesthetic nature.
• Does not protect any technical features of the article to which it is applied.
• ID protection serves as an incentive to invest resources in
design activities.
• ID protection stimulate the design element of production.
• The condition of utility is a notable difference between
industrial design protection and copyright.
 Industrial Designs
Justification & Historical Perspective
• Designers worked with specialists in human engineering
during each societal developmental stage.
– Research develops products or processes that meet & suit human
needs and wants.
– Instrumental in the creation of new products and processes of
variant utility as dictated by societal aspirations and expectations.
• In this regard designers are vitally important.
– Crucial and critical role in contributing immensely towards
knowledge-based and innovation-driven investment promotion
and wealth creation.
• Industrial designs important for:
– Transformation and prosperities of nations
– Proliferation and betterment of opportunities
– Guaranteed ever improved quality and standard of life for all
generations.
• Past, present and future.
• Examples
– Industrial design, Interior design, Architecture, Clothing design,
Mechanical design.
 Industrial Designs
• Applied to products of:
– Industry and handicraft.
– Technical and medical instruments.
– Watches
– Jewelry
– House wares
– Electrical appliances
– Luxury items
– Vehicles
– Architectural structures
– Textile designs.
• But not any technical features of the article to
which it is applied to.
Consumer Products
Medical Products
Textile & Jewellery
 Industrial Designs
• Also produced against considerations of cost
constraints.
• Also produced against the following implications:
– Enhancement of market share.
– Competitive advantage.
– Response to satisfying current and future social needs
and wants.
– Strengths and weaknesses to competition.
– Technological trends.
– Influences of the operating environment.
• Crucial role in shaping consumer patterns that give
impetus and momentum to the socio-economic
development of nations.
 Industrial Designs
• The very essence lies in their individual outward visual
appeal.
• Influences customer perceptions, choices or preferences of
a particular product.
– Over a range of other products performing the same or similar
function in the marketplace.
• Like trademarks, their intrinsic value lies in their
uniqueness or individuality to attract customers.
– Hence potency & prowess to sell the goods or services of their
proprietors in modern day consumer markets.
• The more distinct the design the more its potency and
prowess to sell the goods.
– Paradoxically, the more vulnerable and prone to piracy by lurking
unscrupulous predators.
 Industrial Designs
Criteria/ Requirements
• The design must satisfy the following criteria:
(a) Have visual appeal,
(b) Must perform its intended function,
(c) Must be able to be reproduced by industrial means.
(d) Must be new or original.
 Summary: What is Not Registrable?
• Calendar
• Certificates
• Forms
• Greeting cards
• Leaflets
• Maps
• Building plan
• Medals
• Labels, tokens, stamps
• Religious symbols
• Mere mechanical contrivance
• Building and construction or real estate
• Flags, emblems, or signs of any country
• Computer icons Parts of articles not manufactured and soled
separately
• Layout designs of integrated circuits Basic shape
• Variations commonly used in the trade.
• Mere workshop alteration
• Mere change in size
• Any principle or mode of construction of article.
 Industrial Designs
Protection
• Applies only for registered and "new" or "original" designs.
• Definitions of such terms & registration process vary by
country.
– Generally, "new" means that no identical or very similar design is
known to have existed before.
• Term of protection is generally five years, with the
possibility of further periods of renewal up to, in most
cases, 15 years.
• May also be protected as a work of art under copyright
law.
– In some countries, industrial design and copyright protection can
exist concurrently.
– In other countries, they are mutually exclusive.
 Industrial Designs
Rights Conferred to Registered Proprietor
• The proprietor of the registered design has the exclusive
right to apply the design to any article in the class in which
the design is registered
• Industrial Design rights exclusive rights to do the following
to articles to which the design is applied :
– Make
– Import
– Sell
– Hire or
– Offer for sale.
• Period of protection is ten years extendable by 5
years.
 Industrial Designs
Infringement: Remedies & Enforcement
• Holder of rights could, firstly, decide to send a “cease or
desist letter” to the alleged infringer.
– Informing him of a possible conflict between his industrial design
rights and the alleged infringing product and asking him to cease
said infringement.
• If the infringement persists, the holder of the industrial
design rights could decide to take all appropriate legal
measures.
• Provided for by the applicable law.
– Remember the many different kinds of protection that can apply.
• Enforcement may be a complex issue.
• Advisable to seek professional assistance to settle any
dispute.
END
INTEGRATED CIRCUITS LAYOUT-
DESIGNS (TOPOGRAPHIES)

“Layout-Designs”

TRIPS Article 35 - 38
 What is An Integrated Circuit Layout-
Design?
• The 3D character (topology) of the elements and
interconnections of an integrated circuit.
• An integrated circuit (IC) is an electronic circuit in which the
elements of the circuit are integrated into a medium, and
which functions as a unit.
• Currently the medium used to create this unit is a solid
semiconductor such as silicon.
• The circuit is integrated into the piece of silicon, commonly
called a "chip" or a "silicon chip".
– The terms "integrated circuit", "semiconductor" and "silicon chip"
are used synonymously as commercial ICs are usually fabricated
from silicon semiconductors.
• Integrated circuits are used in a wide range of products
including watches, televisions, traffic lights and computers
& related accessories.
 Protectable Layout-Designs
• Original and novel Layout-Designs
– Protection through registration.

• Registration after examination and publication of

the application.
 Non-registrable Layout-Designs
• Not original

• Commercially exploited anywhere in a convention

country prior.

• Not inherently distinctive.

• Not inherently capable of being distinguishable

from any other registered layout-design.
 Protection of Layout-Design Rights
International Protection

• International protection provided under the

following conventions:
– Treaty on Intellectual Property in Respect of Integrated
(IPIC Treaty).
– TRIPS Article 35 – 38.
 Layout Design Rights
Rights Conferred & Infringement (TRIPS, Article 36)
• Following not allowed for a protected layout-design if
performed without the authorization of the right holder:
– Importing.
– Selling.
– Distributing for commercial purposes.
• Restrictions also apply to the following:
– An integrated circuit in which a protected layout-design is
incorporated.
– An article incorporating such an integrated circuit only in so far as
it continues to contain an unlawfully reproduced layout-design.
• Restrictions also apply for ignorance:
– Where the person performing or ordering such acts or when
acquiring the integrated circuit or article incorporating such an
integrated circuit:
• Did not know and had no reasonable ground to know that it incorporated
an unlawfully reproduced layout-design.
 Layout-Design Rights
Transfer & Unauthorized Usage
• Voluntary licensing like any other form of IP.
• TRIPS Article 36
• Non-voluntary licensing or unapproved usage can
occur:
• TRIPS Article 36
• TRIPS Article 31
– Make provision for use by the government without the
authorization of the right holder.
 Layout-Design Rights
Terms of Protection
• May or may not require registration as a condition
of protection.
– Registration is optional.
• In Members requiring registration:
– Term shall not end before the expiration of a period of
10 years.
– That is for at least 10yrs.
– Counted from the date of filing an application.
– OR from the first commercial exploitation wherever in
the world it occurs.
• In Members not requiring registration:
– Protected for a term of no less than 10 years.
– From the date of the first commercial exploitation
wherever in the world.
• Protection shall lapse 15 years after the creation of
the layout-design.
 Layout Design Rights
Infringement & remedies (TRIPS, Article 37)

• Such person served with sufficient notice that the

layout-design was unlawfully reproduced.
– Person may perform any of the acts with respect to the
stock on hand or ordered before such time.
• But shall be liable to pay to the rightful holder a
sum equivalent to a reasonable royalty.
• Royalties paid equated to amount payable under a
freely negotiated licence.
– In respect of such a layout-design.
END
INDIGENOUS RESOURCES,TRADITIONAL
KNOWLEDGE & GENETIC RESOURCES

IPR and Biodiversity Conservation

Bioprospecting in Developing Countries

Access to Genetic Resources

 International Protection

• At the international level, the economic and moral

rights are conferred by the Berne Convention for
the Protection of Literary and Artistic Works.
 Heritage: Traditional Knowledge
• Products of the creativity of a large part of
humankind-creations.
– Systematically excluded by concepts of intellectual
property.
• The principal engagement of heritage & commerce
lies in the realm of intellectual property.
• Imbalance between the strongly protected rights
of individuals and lack of protections for cultural
properties of “traditional knowledge holders”.
– Led to a series of meetings by the Intergovernmental
Committee on Genetic Resources, Traditional
Knowledge and Folklore (shortened often to ICG).
– At the WIPO Geneva headquarters.
 Folklore
• Consists of the following that are the traditions of a
culture, subculture, or group:
– Legends
– Music
– Oral history
– Proverbs
– Jokes
– Popular beliefs
– Fairy tales
– Stories
– Tall tales, and
– Customs.
Who Composes a Folksong or Creates a
Folk Remedy?
• If one holds that folklore is an individual act within
a community, then the communal rights are not
sustainable.
• If emphasis is that individuals recreate from the
learned traditions.
– Then communities do have a right of ownership and
new laws are necessary.
– “Communal origination through individual re-creation”.
• Categorical distinction issue:
– Originality versus traditionality.
 Heritage: Traditional Knowledge
• An artist designs a pattern or symbol, drawing on his or
her native tradition.
– It is not unlikely that it be found in a downtown tourist store.
• The artist is not consulted, nor does he or she receive any
royalties.
– Why?
• Because the design is traditional!
• It is, in other words, a node in a network of relations:
• It is not an isolated original, but a reproduction, a copy.
• The unstated assumption here is, of course, that the
downtown artist (dealer) is not working within a tradition.
– That his or her art is original.
• According to this logic.
– A design by a member of the majority population is an individual
achievement.
– A thing unto itself.
– It is a “work”
• A production, not a reproduction.
 Heritage: Traditional Knowledge
Bioprospecting: Catharanthus roseus
• Endemic to the isle of Madagascar, is Catharanthus roseus.
• A leafy plant with pink flowers that has long been part of
the native population’s traditional pharmacopoeia.
• In the 1950s, researchers from Eli Lilly Pharmaceuticals
were led to the rosy periwinkle by local medicine men.
• In subsequent laboratory testing, the plant was found to
have properties valuable in the treatment of various
cancers.
• The pharmaceutical company developed the drugs
vinblastine and vincristine from the rosy periwinkle.
– The former has brought remission rates for Hodgkin’s disease to
80 percent.
– The latter has increased remission rates for childhood leukemia
from 20 percent to 90 percent.
 Heritage: Traditional Knowledge
Bioprospecting: Catharanthus roseus…ctd..
• In the 1990s, these two drugs combined produced sales of
$100 million annually.
• The company does not share in the revenue generated by
these drugs.
• Needless to say, purchasing the drugs produced by Eli Lilly
is beyond the means of the citizens of Madagascar.
– Also, ironically, as a result of the patent system.
• In fact, as a result of poor health care and limited access to
clean drinking water, an average child in Madagascar
stands poorer chances of surviving beyond the age of five
than a Western child diagnosed with leukemia stands of
remission.
 Heritage: Traditional Knowledge
Bioprospecting: Catharanthus roseus…ctd..
Is this really a problem?
• An NGO delegate at WIPO representing the
Indigenous Peoples’ Biodiversity Network
illustrated this charge with a striking contrast.
• According to the advocates, drugs made from
plants that come from indigenous peoples grossed
$485 million in sales in 2001 alone.
• “Meanwhile,” this delegate said, “indigenous
people are dying every day in destitute poverty
from diseases curable with a few aspirins.”
 Heritage: Traditional Knowledge
Music: The case of “Deep Forest”
• Music brought attention to this dilemma.
– Ethno-techno music, popular in dance clubs in Europe and
America in the 1990s.
• In a public relations stunt in 1992, Sony successfully
promoted musical exploitation of this variety.
• Using ethno-musicological recordings they fused “digital
samples of music from Ghana, the Solomon Islands and
African pygmies with ‘techno-house’ dance rhythms”.
– Produced an album, Deep Forest (1992).
– Sold two million copies of this album.
– Also licensed tracks from “Deep Forest”.
• To Coca-Cola, Porsche, Neutrogena, and the Body Shop for advertisements.
– Reaped a generous profit.
– None of the profits benefited musicians in Ghana, the Solomon Islands, or
among African pygmies.
– Several albums have since been released based on the same formula:
• Sampling traditional music from various parts of the world, including Boheme
(1995) on which they fused music from Mongolia, Eastern Europe, East Asia, and
Native Americans.
 Heritage: Traditional Knowledge
Music: The case of “Deep Forest”
Is It really A Problem?
• The case of “Deep Forest” also bears witness to the global
nature of the problem at hand.
– The “primary circulation” of ethno-musicological recordings may
be acceptable to traditional communities whose music circulates
through them.
• The problem is the “secondary circulation” of commercial
records without benefit sharing.
• An important part of the rationale for putting folklore on
the agenda of international organizations such as UNESCO
and WIPO.
• At the fourth meeting of WIPO’s Intergovernmental
Committee in December 2002.
– Ghanaian delegation, in fact, cited “Deep Forest” as an example
of “inappropriate and unauthorized exploitation of Ghanaian
cultural heritage by the music industry.”
 Heritage: Traditional Knowledge
Recommendations
• Formal IP systems have important & widespread
implications for the social, cultural, and economic well-
being of individuals and groups.
• WIPO should recognize:
– The tangible and intangible values of traditional knowledge and
folklore.
– That compensation issues (e.g., benefit sharing) should reflect
procedures and criteria acceptable to and required by indigenous
people and traditional knowledge communities.
– Core right of relevant indigenous peoples and traditional
knowledge communities to grant or not grant free, prior, and
informed consent.
– Advocating for responsible scholarship-carried out in the spirit of
partnership with indigenous people and traditional knowledge
communities.
– Promote research leading to the creation and communication of
artistic, cultural, humanistic, and/or scientific insight essential to
the increase of human knowledge.
 Indigenous Genetic Resources &
Intellectual Property

Genetic material is defined as "any material of plant, animal,

microbial or other origin containing functioning units of
heredity."

"Genetic material" of actual or potential commercial value.

 Background
• Several developing countries are known hotspots for
biological and hence genetic diversity.
– The diversity is potentially applicable to agricultural, industrial
and medical products from which capital may be gained.
• Traditional knowledge often provides hints as to which of
these organisms are of potential commercial interest.
– Especially with regard to medicine.
• Patent laws on living organisms are particularly strict in
Africa; but are weaker in the EU and US where patents are
regularly filed.
• This difference essentially comes down to interpretations
of "discovery" and "invention."
• Property rights can be applied to protect indigenous
communities against bio-piracy of indigenous genetic
resources.
• Issues must be resolved regarding the appropriate way to
reimburse indigenous communities for access to genetic
resources.
 Bio-prospecting & Bio-piracy
• Hunting for exotic genes in developing countries.
• Using these to create patented versions of local
agricultural products.
– The patent system allows companies to steal or
misappropriate genetic resources and associated
traditional knowledge.
– The compay can then claim ownership of and benefit
from these genetic resources or traditional knowledge.
– In this way, the traditional community can be exploited
and/or unfairly compensated.
 Bio-piracy of Genetic Resources
• Collection and use:
– Prospecting and unauthorized use of genetic resources
located in a foreign location.
– Extraction and unauthorized export of genetic resources
in violation of regulations governing access and benefit
sharing in the country of origin.
– Exceeding the authorized contractual use of indigenous
genetic resources.
• Patenting:
– Claiming the patent of a foreign indigenous genetic
resource, a derivative of the resource, or a modified or
purified form.
 Bio-piracy of Traditional Knowledge
• Includes:
– Collection and use of traditional knowledge owned by a
single indigenous group and acquired on the basis of
deception.
– Commercial use of this knowledge.
• Patenting:
– Claiming the patent of traditional knowledge in the form
it was acquired.
– Claiming the patent of a modification of this traditional
knowledge.
– Claiming the patent of some combination of traditional
and modern knowledge.
 What Should be Done About Bio-piracy?
• A question of the appropriate legal framework to deal with the
problem.
• Is all bio-prospecting a form of bio-piracy?
– This would be a strong position that would ban all foreign access to indigenous
genetic resources.
• Does bio-piracy cause significant economic and cultural damage to
the countries or communities of origin?
– Legal and technical assistance should be provided to these communities to
allow them to assess this issue.
• Does the patent system encourage misappropriation of benefits from
indigenous genetic resources?
– More stringent standards should be adopted.
– Limit the patentability of foreign indigenous life forms and natural compounds.
– Impose a requirement for statement of origin of genetic resources.
– Design a system for the protection of indigenous communities, their genetic
resources and associated traditional knowledge.
 Protecting Traditional Knowledge and
Genetic Resources in India
Traditional Knowledge Digital Library (TKDL)
• Searchable database of more than 230,000 remedies already used in
the traditional Indian medicine.
• Produced by summarizing and translating ancient Indian medical
texts.
• Translated from Hindi, Sanskrit, Arabic, Persian, Urdu and other
languages.
• Available in English, French, German, Japanese and Spanish.
• Funded by five Indian governmental organizations including:
– The Council of Scientific and Industrial Research; and
– The National Institute of Science Communication and Information Resources
(SCIR).
• Assists patent examiners in ensuring that patents are original.
• So far, the European Patent Office has been granted access to the
TKDL.
• It is hoped that a similar partnership will be reached with US Patent
Offices.
 Protecting Traditional Knowledge and
Genetic Resources in India
Traditional Knowledge Digital Library (TKDL)
• Arguments for TKDL:
– Helps to ensure that foreign companies cannot patent
drugs derived from traditional medicines.
• Arguments against TDKL:
– Will make it easier for drug multinationals to take leads
from the database (by tinkering with formulations until
they qualify for a patent).
• Counter-argument: But database only open to patent officers
to analyze patents.
– TKDL will reject patents without assisting in the
acceptance of new patents:
Issues With Indigenous Communities &
Intellectual Property
How should benefits be shared with indigenous
communities?
• Problems with distributing this money to a village
chief.
• Quantity of money resulting from successful
patents can be so great compared to what these
communities are used to.
– "... Our case studies have shown that, in practice, this is
very hard to do. In our view, promoting autonomy and
capacity for self-governance for indigenous communities
rather than property is the key."
Issues With Indigenous Communities &
Intellectual Property
Bonn Guidelines on Potential Benefits
• Monetary:
– Access fee for collecting or acquiring samples.
– Royalties or licence fee in case of commercialization.
– Salaries, research funding, joint ownership and ventures.
• Non-monetary:
– Collaboration and cooperation in research and
development.
– Participation in product development.
– Education and training, knowledge transfer, capacity
building.
– Local development plans, social recognition.
– Joint ownership of IPRs.
END
IP & PROTECTION AGAINST UNFAIR
COMPETITION

TRIPS Article 40

Ref: Maria Teresa Lo Greco, WIPO

Geneva, 9 October 2008
 Unfair Competition
What Are & What Are Not Fair Practices?
• What is “unfair competition”? “Any act of competition
contrary to honest practices in industrial & commercial
matters”
– Paris Convention Art., 10bis
• In principle, destroys the trust in the development of
markets and products.
• “Honest practices”?
– To draw a line between what are, and what are not, honest
practices, fair and unfair competition in industrial and
commercial matters will depend on the circumstances of the
case and the business approach proper to the country or
region.
 Unfair Competition
What Are & What Are Not Fair Practices?
• Such practices include acts that:
– Create or are capable of creating confusion as to the enterprise, the goods or
the industrial or commercial activity of a competitor.
– Formulate false allegations in the course of trade so as to discredit the
enterprise, the goods or the industrial or commercial activity of a competitor.
– Indications or allegations that in the course of trade are capable of misleading
the public as to the nature, manufacturing process, characteristics, suitability
for their purpose, or quantity of goods.
– Violation of trade secrets.
– Taking undue advantage of another’s achievement (free-riding, slavish
imitation, parasitic acts).
– Comparative advertising – (a) Positive reference (one’s product as good as the
other) or (b) negative reference (claiming one’s good better than the other). In
(a) possibility of misappropriation of the other’s goodwill if competitor’s
product is well-known; in (b), competitor’s product is criticezed, disparagement
arises. Both involve unauthorized reference to a competitor, either mentioned
by name or easily identifiable by the public.
 Protection Against Unfair Competition
• TRIPS
– Article 40
• Unlawful Competition Act (Local chapter)
Protection Against Unfair Competition
• The repression of unfair competition along with
objects of industrial property protection.
– Patents
– Utility models
– Trademarks
– Industrial designs and
– Designations of origin
• Protection under the Paris Convention, Article 1(2)
and 10bis.
• Who is protected?
– Acts of unfair competition prejudice competitors and
harm consumers :
• Competitors lose customers and market share.
– Economic prejudice.
• Consumers are misinformed and deceived.
– Economic and personal prejudice (including health hazards).
Approaches to Unfair Competition Law
• Different approaches:
– Specific laws or provisions on repression of unfair
competition
• General clause in line with Paris Convention Art. 10bis
combined with specific examples or cases.
• The Lanham Act concretely prohibits false statements about a
company’s products or services that are material for
consumers to choose that company’s products or services over
those of its competitor’s.
– General tort law or law against “passing off” and special
laws on trade secrets, advertising, consumer protection
• E.g. France, Italy, Netherlands (Civil Code)
• E.g. United Kingdom + common law jurisdictions (passing off
plus resort to copyright law to cover the gap)
– Combination of specific and general laws.
END
IPR LICENSING AND TECHNOLOGY
TRANSFER
 Licensing of an IP
• Licence is a permission granted by an IP owner to
another person to use the IP on agreed terms and
conditions, while he continues to retain ownership of
the IP.

• Licensing creates an income source.

• It establishes a legal framework for transfer of

technology to a wider group of researchers and
engineers.

• Creates market presence for the technology or

trademark.
 Licensing Conditions of IPRs
• Owners of IP prefer to transfer technology through
licensing agreements only.
• All rights or limited rights can be licensed.
• Can be exclusive or non-excusive or sole (owner and
licensee).
• Most such agreements provide for royalty payment and
non-transfer to a third party.
• Royalties can be upfront, part upfront and part % per
production/sale, only % per production/sale.
• The particular uses for which the IP can be used are also
generally specified.
• Needs to be careful about the Competition law.
 Is Licensing Profitable?
• IBM revenue from patent licensing $ 1.7 billion (2002).

• Texas Instruments generated $ 3 billion in licensing in 10

years.

• US and Canadian Universities generated $ 1.1 billion in

royalties (2001).

• New York University $ 109 million (2004).

• Ohio University to get $52 M. From royalties on the growth

hormone drug SOMAVERT in 5 years (2011).

• CSIR $ 150 million in milestone payments + royalty

Innovation, Technology Transfer &
Technology Management
 The Bayh-Dole Act of 1980
Allows universities (and other non-profit contractors) to:
– Retain title to inventions produced under federal support
– Patent technologies
– License technologies.
• Requires universities (and other non-profit contractors) to:
– Share royalties with inventors
– Use royalties for laboratory purposes
• Authorizes federal agencies to:
– Protect government-owned intellectual property
– Grant licenses for government-owned intellectual property
– Set restrictions on licensing
 Ways “Technology” is Transferred
• Consulting

• Graduating students (“moving heads”)

• Faculty moving on (“moving heads”)

• Collaborative research

• Patenting and licensing

• Service and outreach (“extension”)

• Spin-off companies
 Definition of Technology Transfer [and
commercialization]
• The transfer of results of basic and applied research
to:
– The design
– Development
– Production, and
– Commercialization.
• This applies to of new and improved products,
services or processes.
• That which is transferred is often not really
technology but rather a particular kind of
knowledge that is a precursor of technology.
• The transfer process emphasizes the value and
protection of the intellectual product of the
researchers.
Gary Matkin, Technology Transfer and the University, 1991
 Technology Transfer is a Process
• It has stages, phases, and typical behaviors.

• It operates and can be understood at different

levels (e.g., technology policy, individual scientists).

• It involves different “stakeholder” perspectives

(e.g., developers and users).

• It is therefore a “communication process.”

 Where to Enter the Process of
Technology Transfer?
• Universities and Research Institutes:
– Mainly on the level of basic and applied research, and
early stage development.

• Entrepreneurial companies:
– Any stage from research and development to the
market.
The Technology Transfer Process

Disclosure

Commercialization
Patenting

Agreement Administration

Licensing
Products/Processes
(Royalties)
THE TECHNOLOGY TRANSFER
PROCESS

Licensing inventions, technology and

copyright protected works

John Fraser, FSU

 Cultural Issues
• Corporate setting:

– Employee owns nothing, company owns

inventions
– Successful commercialization, employee rarely
shares
– Emphasis is on control of information, not
publication and diffusion
– Contract with third parties is a “Work for Hire”
 Nature of the Technology
• Cost of getting to market (final development,
manufacturing costs).
– Some technologies can only be commercialized by
an existing, large company because of high cost.

• Fragility or robustness (how much hands-on

involvement by the inventor is needed?)

• Is the technology an incremental

improvement or a radical innovation?
 Nature of the Market
• Is the market well-developed (mature), or
underdeveloped?
• How differentiated, specialized or “niche-ified” is
the market?
• How much capacity/intelligence do the end-users
have? Do they need hand-holding? Can they
accept innovation?
• How big is the potential market?
• Is product liability a problem?
• What are the regulatory hurdles?
 Marketplace Analysis

• Defensibility of Position
>> Patents
>> Other proprietary protection
>> Cost benefits and scale of operation
>> Marketing channels
 License vs. Start-up Company
Must consider a combination of:
– Industry Structure
– Competing technologies
– Size of market
– Product profitability
– Cost to develop product, bring to
market
– Ability to Raise Capital
STARTING A NEW VENTURE
 The Entrepreneurial Option:
Issues for Research Institutions

• To encourage or discourage?
– Mission of the research institution?
– Culture of the research institution?
• Management of tension with other institutional
missions.
• Management of individual conflicts of interest.
 Starting a New Venture
• Decision to commercialize:
– Based on competitive advantage of
Product/Technology/Service
• Value to end-user (therapeutic efficacy)
• Value to developer (product differentiation)
• Defensibility of commercial position (survival value)
– Accurate marketplace analysis is necessary to determine
strength of competitive advantage
 Start-up Companies
• To be successful, a start-up must have all of the
following ingredients:

– Commercially motivated scientist

– “Flexible” research institution
– Exciting market potential, a “good story”
– Management team

• All of the above will permit the company to obtain

capital resources.
 Starting a New Venture

• Must assemble proper:

– Technology
– People (management team)
– Capital
 New Venture: Technology
• Technology
– Clear, exclusive access to technology
– Usually obtained through license(s)
– Provision for technology transfer
• Inventor joins company?
• Inventor consults with company?
• Company has access to inventor’s research facilities?
 New Venture: People
• People
– Commercial Staff (CEO)
• credibility at raising money, building a business
• usually experienced businessman from industry
– Technical Staff
• experienced in specific technology
• experienced in product development
 New Venture: Capital
• Capital
– Capital raised in stages
– Requires Business Plan
• Market Opportunity
• Technology/ Solution to Opportunity
• Development Plan
• Marketing Plan
• Management
• Financial Projections
 Role of the Inventor
• Option 1: Inventor assumes all aspects of enterprise
management.
» LEAST DESIRABLE.

• Option 2: Inventor assumes primary responsibility for

technology development, and business manager assumes
responsibility for business planning and operations; these
are co-equal or business manager is subservient to
inventor.
» ALSO UNDESIRABLE.

• Option 3: Business management (not the inventor)

assumes primary authority over all functions, including
technology development, which might be directed by the
inventor.
» THIS ONE MIGHT WORK.
FINANCING NEW VENTURES
 Financing New Ventures
Ability to finance new ventures depends upon:

• Quality of management team

• Economic value of business concept

– Value to end-user and developer
– Patents
 Financing New Ventures

• The first million Dollars is the most

difficult to find

• All money is not created equal

 Financing New Ventures
• Financing sources for “early stage” companies:
– Founders, Family and Friends
– Scientific Institutions
– Government programs
– “Angels”
– Corporations
– Venture Capital Funds
 Financing New Ventures

• Founders, Family and Friends:

– Usual source of earliest capital

– Have confidence in ultimate success
– Know the people, technology and business well
– Capital limited, usually less than $100,000
– Strained personal relationships if business fails
 Financing New Ventures

• Research Institutions:

– Most institutions invest in patent costs

– Other funds more difficult to find
– Issues of “conflict of interest”
– Capital limited, usually less than $100,000
 Financing New Ventures
• Government programs (U.S.):
– Small Business Innovation Research Grants
• Phase I - up to $100,000
• Phase II - up to $750,000
• Funding only for research
• Scientist must be employee of start-up company
– State/Local Grants and loans
• Usually limited (less than $100,000), focused solely
on science
 Financing New Ventures
• “Angels”
– Difficult to find
– Can bring more than money
• industrial contacts
• financial contacts
• credibility
• experience
– Typically invest in $200,000 to $1,000,0000 range
 Financing New Ventures
• Corporations:
– Excellent sources of capital
– Funding levels can be very high
– Relationship with corporation builds credibility
• corporation brings more than money
• access to additional technology, facilities, customers
– Decision-making process can be slow
– Corporations may want excessive control
 Financing New Ventures
• Venture Capital Funds
– Professional Investors
– Typically manage $50 - 200 million
– Invest funds in 10 -15 different companies
– Before they invest, they look for an “exit strategy”
• sale of company to larger company
• public sale of stock
 Financing New Ventures
• Venture Capital Funds (continued)
– Invest only in companies that have extremely high
growth potential
– Actively involved in company (Board of Directors)
– Invest “close to home”
– Typically invest from $250,000 to $5 million in early
stage companies
– Hold additional funds in reserve for future investments
– Can be “expensive money”
 Financing New Companies
• Financing early stage companies:
– Debt financing
• Company promises to pay back invested capital plus interest
• Extremely rare for early stage companies
– Equity (stock) financing
• Company gives ownership position (shares of stock) in return
for invested capital
• Investor only makes money if share price increases and shares
can be sold to another buyer at a later date
 Summary & Lessons
• Technology transfer and commercialization can be
compatible with, and in fact enhance, the
traditional missions and roles of a university or
research institute.
• Technology transfer and commercialization requires
a dedicated effort to be successful.
• The skills necessary for successful technology
transfer and commercialization are different than
the skills necessary to do good science.
• The research organization of the 21st century will
be heavily involved in technology transfer.
END