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Beyond Knowledge for Knowledge’s Sake
Introduction
Academic research has traditionally been viewed as a noble pursuit in which white coat-clad scientists toil at the laboratory bench in search of the next great discovery. There is undoubtedly truth to that perception, as some of the world’s greatest scientific discoveries have come about that way… think of Rosalind Franklin struggling to get the perfect X-ray image of a DNA crystal and James Watson and Francis Crick building models in their laboratory based on that image and a fundamental understanding of the chemical make up of the molecule. That discovery arguably stimulated the biotechnology revolution that continues today, 55 years after the publication of Watson and Crick’s seminal letter to Nature. This is but one example of the far-reaching effect a single scientific discovery, with all of its import, can have on society and the economy.
The potential for basic science to have profound effects on society has been recognised by governments worldwide and has driven their investment in their native research laboratories since World War II. In his report to the President in 1945, Vannevar Bush, Director of the Office of Scientific Research and Development in the United States, wrote of the Reservoir Theory of Knowledge. Under this theory, basic scientific discoveries can result in increased industrial efficiency, create new industries and produce new companies (along with the jobs that accompany them). The reservoir needs to be constantly refilled with new knowledge and discoveries, and he proposed that it was a role of the federal government to fund that basic research. As a result, in a cyclical manner, a portion of the funds derived from taxpayers is funnelled back into basic research that creates the new knowledge to create new industries, companies and jobs that spin off still more funds for reinvestment, and so on. As recently as 2005, the US government invested nearly $30 billion in research at US universities, according to the US Licensing Survey: FY2005 of the Association of University Technology Managers (AUTM).
The government was not the only group to recognise the value of basic research. Industry has also long recognised the value of this type of innovation and the role that universities can play in it. As industry develops new products and services, they undoubtedly do their own share of innovation, but the riskiest kind of research, namely open-ended study with no defined endpoint or guaranteed return, is not generally performed by companies. Their management and shareholders demand as much financial return as possible from the funds they invest, and risky research is frequently avoided, with their scientists focusing on the technology and product development that will produce a real return. For innovation, they frequently rely on the basic, fundamental work done in universities funded by public resources, but industry, too, will work directly with academic scientists on focused questions that can benefit the company. To that end, according to AUTM’s US Licensing Survey: FY2005, industry invested approximately $3 billion in research at universities, an amount that has been fairly consistent over the last 5 years. The value of this cannot be overstated, as Daniel Vasella, President of the Swiss pharmaceutical giant Novartis, says ‘External alliances (with universities and biotechnology companies) accelerate the pace of drug discovery far more rapidly than a company establishing research capabilities solely in-house’. Indeed, university research has produced many seminal discoveries that resulted products and technologies that are in wide use today, including the following:
- Recombinant DNA (Stanford University and the University of California)
- Methods for the production of recombinant proteins (Columbia University)
- Methods to treat cancer using drugs that contain platinum (University of Illinois)
- Anti-HIV drugs (Yale University and Emory University)
- ‘MPEG Compression’ technique from the Motion Picture Expert Group (Columbia University)
Transition from University to Industry
The discoveries made in universities can be very important, and may have a major impact on the products and services offered by companies. Most of these technologies, however, are very raw and require substantial additional development before they can become new products. This requires a company to invest substantial time and financial resources to bring a technology’s promise to fruition. Few companies are willing to invest those types of resources if they do not have some protection from others taking advantage of their financial investment and hard work and introducing competing products. Fortunately, intellectual property can provide a measure of that protection, by giving a company a tool it can use to keep competitors from the marketplace for a period of time. Each of the following provides a way for companies or individuals to stop others from developing or selling competing products or services.
Types of Intellectual Property
Patents
Protect useful inventions such as machines, processes, chemicals, drugs, software and ways to treat disease.
Copyrights
Protect’ original works of authorship’, such as music, art and literature (among other things), but, importantly, protect software code.
Trademarks
Protect things like logos and other things that indicate products or services. These are generally not developed through university research, with a few notable exceptions, including the University of Florida’s Gatorade®.
Trade Secrets
Formulas, processes, methods, etc., that are not generally known (and cannot be easily determined) by the general public. Universities, which typically publish their discoveries as quickly and often as possible, do not generally develop trade secrets. Examples include the formula for Coca Cola® and recipe for Kentucky Fried Chicken®.
Developing Intellectual Property at a University
Given that trademarks and trade secrets are rarely developed at universities, the remainder of this chapter will focus on copyrights and patents. Generally, copyrights and patents developed at a US university are owned by it. Virtually, all major US research institutions have policies outlining how intellectual property is handled, and should be consulted to determine how individual authors and inventors are treated. Universities have specialised business groups that handle the management and commercialisation of their intellectual property through a process known as ‘technology transfer’. Technology transfer offices go by various names, including ‘technology licensing’, ‘technology commercialisation’, ‘patents and licenses’, etc. All of these offices are tasked with guiding faculty, researchers and graduate students through the commercialisation process, and are excellent resources for the details of intellectual property protection and licensing that will not be described here. The AUTM is another good place to start for basic resources about the process (www.autm.net).
Around the world, each country has different ways of dealing with university intellectual property. For example, Japan and India have developed laws and systems that are similar to those in the United States, in which universities are the owners of intellectual property developed by their researchers. By contrast, European universities have very different policies, varying from university to university, in which the inventors of the technology are the owners in some cases and the university is the owner in others. Each institution’s policies should be consulted to determine which rule applies.
Authors and Inventors
For both copyrights and patents, it is important that the authors of a work and inventors of an invention carefully document the process by which the works and inventions are created. It is very important in both cases to know exactly who the authors and inventors are, because the validity of the intellectual property can depend on having that determination be correct. Unlike scientific publications, in which authors are added for work, comment or advice they may have contributed to the paper, authorship and inventorship for works and inventions are determined according to prevailing copyright and patent laws. Intellectual property attorneys are trained to make those determinations, and should be consulted when pursuing copyrights and patents. The criteria for authorship and inventorship are clearly defined under the law, and attorneys apply those criteria to sort out who contributed to the work and who made an inventive contribution to the invention. It is very common for the authors and inventors of copyrights and patents to be only a subset of the authors listed on the scientific publication.
Copyright Protection
Under the law, copyright protection attaches to a work as soon as it is fixed into a tangible medium. As soon as pen meets paper, brush touches canvas or finger meets keyboard, copyright protection is in play. A copyright can be registered via a simple process and for relatively low cost with the managing organisation in each country (The Library of Congress in the United States). One does not need to register the copyright to benefit from its protection, but in the event that one wished to enforce a copyright a registration would be required. This allows a court to compare an allegedly infringing work with the registered work and determine if infringement actually occurred.
Patent Protection
Discovery Phase
Protecting an invention with a patent is a much more involved process, as the invention typically results from a great deal of work and research. To be patentable, an invention needs to be useful (e.g. it does something), novel (e.g. it has not been done before) and non-obvious (e.g. is not something that someone trained in the field could reasonably say is a logical, expected outgrowth of the scientific field as it existed at the time). Researchers should thoroughly document the research as it is being conducted, so that there is a clear record of how an invention is originally conceived and then put to practice. This includes documenting all experiments and their results, and identifying what worked. This should provide a clear picture of what was done, documenting what the invention is, and examples that demonstrate it. Although there is no requirement in the United States that an inventor actually demonstrate a working invention, solid data that truly demonstrate it can provide a compelling reason for the patent to be granted. What did not work during the research programme can be equally important. For example, if the patent office contends that the invention is obvious, one can provide evidence of all of the things that did not work to demonstrate that achieving the invention was not as obvious as one may think. Ideally, the research is chronologically documented in an indelible ink in a bound notebook, the researcher periodically signs the pages of the notebook and a witness to the research (who is not actually part of the research team) periodically signs the notebook as well. There are electronic notebook systems that provide similar benefits, but pen and paper are tried and true.
Disclosure Phase
After the invention has been identified and documented, the inventors should prepare a disclosure package. This should include a concise description of the invention itself, saying what it is, what it does and what it can do. It should include drawings (if applicable) with sufficient detail that a reader skilled in the scientific field can understand the invention. Accompanying the concise statement should be draft manuscripts, grant applications, figures and data that document the invention in great detail. Including too much information is preferable to providing too little. The disclosure package should allow a technology transfer office and/or patent attorney to review it and understand exactly what the invention is. If one is not truly sure what the invention is, the best thing to do is discuss it with the institution’s technology transfer office or patent attorney.
Inventions should be disclosed to the university or patent attorney before they are presented to the public. Public presentations include journal articles, plenary talks, poster presentations, funded grants, news reports, press releases, description/publication on the Internet and standing on a soapbox on a street corner telling everyone what the invention is. Applications submitted for grant funding and manuscripts submitted for publication are generally considered confidential and do not constitute public disclosures until funded or published (in print or electronically). Public disclosure prior to filing patent applications will disqualify the invention from obtaining patents outside the United States. The United States has a 1-year grace period to file a patent application after public disclosure. If a patent application is not filed by the first anniversary of the first public disclosure, all patent rights are lost. Ideally, a disclosure is made to the technology transfer office or patent attorney at the same time a grant or manuscript is submitted for publication, or 3–4 weeks in advance of a talk or poster presentation. This will provide the attorneys ample time to file patent applications in advance of publication and preserve all patent rights.
Filing the Patent Application
A patent attorney will take the disclosure materials, review them, assess the patentability of the invention and draft the patent application. The attorney will make use of manuscripts and grant applications to draw most of the background and detail included in the patent application. The relevant examples of the invention will be drawn from these materials, and figures will be included in the application to document the invention. The patent attorney will draft claims that describe in legal terms exactly what the invention is. The language can seem unclear and obtuse, but a good attorney will draft them in a way that provides as broad a protection for the invention as possible. It is critical that the inventors work closely with the patent attorney and review the work in detail to ensure that the invention is claimed appropriately. This is a very interactive process and the participation of the inventors is indispensible. After all, no one knows the invention or the field better than the inventors. After the patent application is filed, it will sit in the patent office for up to several years. At a certain point, a designated examiner in the patent office will review the application and determine whether a patent should be awarded. The first answer, typically, is ‘no’ and the examiner provides the reasons for rejecting the application. This begins a negotiation process in which the patent attorney seeks to convince the examiner otherwise. Once again, the inventors and their specialised knowledge is critical to rebutting the examiner’s arguments. The patent attorney can address the arguments directly to rebut them and/or modify the claims in a way that the examiner agrees to allow a patent on the invention to issue.
Commercialisation
It is easy to get lost in the minutiae of patent prosecution and forget that the entire point of the process is to convince a company to license the technology and develop the technology into new products or services. The patent or copyright is the tool used to attract the companies and give them an advantage over their competitors. Working closely with the technology transfer office, inventors and authors can help identify companies that would be appropriate licensees of the technology. Majorities of licensed university technologies, while innovative, fit nicely into the licensee’s existing research and development platform, and they are the logical developers of the new technology. It is a rather straightforward matter for the technology transfer office to negotiate the terms of a license that allows the company to develop the technology, while providing a financial return to the inventors.
In some cases, a technology is sufficiently novel, revolutionary, paradigm shifting, disruptive or can produce multiple products that existing companies would still view it as too risky to commit resources to a new market or product line. In those rare cases, a new company is created to commercialise the technology. This is a much more difficult undertaking because it requires the identification of an entrepreneur and fund raising from investors to develop both the company and technology. These transactions are usually more difficult because in addition to the license agreement, the new company pays the university in equity (since it commonly has no cash) and additional agreements cover that aspect of the transaction. The notoriously early state of university technology makes these ventures very risky, but with high risk can come high reward if a lot of things go right.
Regardless of the manner in which the technology is commercialised, via license to established company or new start-up, the key goal is to make sure that the public benefits from the invention. The inventions can have tangible economic development through the creation of new companies or hiring of new employees at established companies, and can forge closer ties between industry and universities. License income can provide a nice reward to the faculty, students and staff who created the invention in the first place, and proceeds retained by the university can be reinvested into the research programme and refill the university research reservoir, hopefully creating a new, local cycle of discovery, invention and economic benefit.
