Protect Your Idea

EVALUATION OF THE INVENTION

A technology transfer professional in the Innovation Partnership Services Office will interview and consult the inventor regarding the invention disclosure. The office personnel will carry out a patent literature search and review (this is a review of the written professional journals, refereed papers, conference presentations, and public disclosures that are related or similar in nature to your invention) to determine the status of the prior patent art and will assess the market to determine the commercial potential of the invention. Together we will discuss the invention and make a preliminary evaluation of novelty and usefulness of the invention, likelihood of patentability, possible markets (industrial interest in technology) and manufacturing feasibility (projected development time and cost). Inventor’s expertise is especially helpful during the evaluation for patentability, in the patent application process, in identifying licensing prospects, and in meeting with companies expressing interest. Inventors typically provide technical evaluation of previous patents and publications in their field, supply information to the patent attorney, review draft applications and responses to government actions, and discuss technical aspects with interested companies.

The ultimate goal of these joint efforts between the Innovation Partnership Services Office and the Inventor is to decide if the invention is patentable and if it is licensable (will a company pay UNCG for the right to commercially practice the invention). Normally, an invention is considered patentable if it is:

• Novel – the invention must be demonstrably different from any prior art (it must be the inventor’s original work). It cannot be described in prior public disclosures or any prototype of the invention made available to the public.
• Useful – the invention has some qualitative benefit, i.e., the patent application must specify a demonstrable utility for the invention.
• Non-obvious – the invention cannot be obvious to a person of “ordinary skill” in the art. Non-obviousness usually is demonstrated by showing that practicing the invention yields surprising, unexpected results.

The Innovation Partnership Services Office will often submit the invention to the Science Committee for consideration. The Science Committee will test the scientific rigor of the invention and see if important research practices were inherent in the research process.

The disclosure evaluation process may take anywhere from a week to three months, and possibly longer, depending on the complexity of the invention and the target industry. Inventors are kept informed of the evaluation process and any actions taken, and their input is considered in making decisions about the University’s protection and licensing of the invention.

If the invention appears to be patentable and licensable, Innovation Partnership Services Office Staff will proceed with the patent application. UNCG has limited funds for the expensive process of patenting, so IPSO staff must make informed decisions about which inventions have the most potential to be legally protected and become valuable products.

WHAT IS A PATENT?

A U.S. Patent for an invention is the grant of a property right to the inventor(s), issued by the U.S. Patent and Trademark Office. A patent permits its owner to exclude members of the public from making, using, or selling the claimed invention. Most countries of the world have patent systems, although the patent terms and types of patents vary.
There are 3 major types of patents:

1. Utility patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or compositions of matters, or any new useful improvement thereof.
2. Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture.
3. Plant patents may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant.

A Patent Application is a set of papers that describe an invention and that are suitable for filing in a patent office in order to apply for a patent on the invention.

HOW LONG DOES IT TAKE TO OBTAIN A PATENT? WHAT IS THE COST OF OBTAINING A PATENT?

The entire process may take from two to six years. The cost of a U. S. patent typically ranges from $15,000 to $50,000.

WHO PAYS FOR THE PATENT?

If the University is interested in the invention, then all legal expenses and fees for the preparation, prosecution and maintenance of patent filings are paid by IPSO. However, IPSO tries to recover such costs from research sponsors or licensees.

IS COMPUTER SOFTWARE PATENTABLE?

Under current U. S. law, not all computer software may be patentable. It is, however, covered by the Copyright Act of 1976, under which computer software (as well as all other copyrightable work) is protected by Federal Statute from the moment it is “fixed” in a tangible form

HOW DO I SEARCH FOR PRIOR ART PATENTS?

You can use the site listed below to search for prior art patents:

• U.S. Patent & Trademark Office Web Patent Databases – Contact Innovate and our staff can conduct a search for you.

Copyright is given to an author, artist, composer or programmer to exclude others from publishing or copyrighting literary, dramatic, musical, artistic or software works.

The type of works that copyright protects are:

• original literary works, e.g. novels, instruction manuals, computer programs, lyrics for songs, articles in newspapers, some types of databases, but not names or titles
• original dramatic works, including works of dance or mime
• original musical works
• original artistic works, e.g. paintings, engravings, photographs, sculptures, collages, works of architecture, technical drawings, diagrams, maps, logos
• published editions of works, i.e. the typographical arrangement of a publication
• sound recordings, which may be recordings on any medium, e.g. tape or compact disc, and may be recordings of other copyright works, e.g. musical or literary
• films, including videos
• broadcasts and cable programs

The above works are protected by copyright regardless of the medium in which they exist, and this includes the internet. You should also note that copyright does not protect ideas. It protects the way the idea is expressed in a piece of work, but it does not protect the idea itself.

There are five exclusive rights authors obtain with copyright protection:

• the right to reproduce the work
• the right to prepare derivative works based on the original
• the right to distribute copies to the public
• the right to perform the work publicly
• the right to display the work publicly

COPYRIGHTABLE DISTANCE LEARNING MATERIALS

These include:

• Copyrightable instructional materials include (print materials such as books, texts, glossaries, bibliographies, study guides, laboratory manuals, and syllabi)
• material performed or intended for performance such as lectures, musical or dramatic compositions and scripts;
• visual materials such as films, filmstrips, slides, charts, and transparencies
• video and audio recording of presentations, programs or performances
• programmed instructional materials and computer programs
• computer software and on-line and web-based courses and education multimedia projects incorporating various copyrighted media formats (i.e., motion media, music, text material, graphics, illustration, photographs and digital software), which are combined into an integrated presentation and developed for delivery via the distance education mechanism at a particular institution

COPYRIGHTS: COMPUTER SOFTWARE

Under current U. S. law, not all computer software may be patentable. It is, however, covered by the Copyright Act of 1976, under which computer software (as well as all other copyrightable work) is protected by Federal Statute from the moment it is “fixed” in a tangible form.

A trademark (service mark) is any symbol, such as a word, number, picture, or design, used by manufacturers or merchants to identify their own goods and distinguish them from goods made or sold by others.

An Intellectual property is any product of the human intellect that is unique, novel, and unobvious such as:

• an idea
• invention
• expression or literary creation
• unique name
• business method
• industrial process
• chemical formula
• computer program process
• presentation

Intellectual property has some value in the marketplace, and it can be reduced to tangible form, such as a computer, a process a chemical etc.

The Tax Reform Act of 1986 requires that the University owns patents developed by University personnel using University resources or results from use of facilities built or renovated with tax- exempt bond proceeds. The tax exempt status of the bonds is lost if the facilities are used for private rather than public research. While the patents are owned by the University, the University can license those patents out. The Bayh-Dole Act prohibits the University from assigning its rights to any third party without the approval of the federal agency funding the research.

Inventorship

Under U.S. law, inventorship has a strict legal meaning; it is not necessarily the same as authorship. The law specifies that only those who have made independent conceptual contributions to an invention are “inventors.” If an invention involves more than one inventor, it is a joint invention. All co-inventors are co-authors of a publication describing an invention, but co-authors may not necessarily be co-inventors.

Courts have ruled that unless a person contributes to the conception of the invention, that person is not an inventor. Conception of the invention under patent law has been defined as “the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice.” An invention is complete and operative “if the inventor is able to make a disclosure which would enable a person of ordinary skill in the art to construct or use the invention without extensive research or experimentation.”

A patent must be filed, and may issue lawfully, only in the name of those who meet the criteria of inventorship. Willful failure to identify correctly all legal inventors on a patent application is regarded as fraud against the Patent Office. A patent application incorrectly specifying inventorship is defective; such error must be corrected since it gives a basis for invalidating the patent.

Co-Inventorship

In order to determine inventorship, one must focus on the claims. The test is whether a person has made an original, conceptual contribution to any element of any claim. Only those who meet this test qualify as inventors. To be a sole inventor, a person must be responsible for the conception of the invention as described in all the patent claims.

Joint inventorship requires communication between the inventors. However, it is not necessary for the inventors to physically work together, for the ideas to have occurred to both inventors at the same time, for each inventor to have conceived the same part of the ultimate invention or made the same type of contribution, or for the inventive contributions to be of equal importance.

Independent, conceptual contributions are identified without regard to their relative scientific or commercial importance to the total invention. The patent system does not attempt to evaluate or rank the relative contributions of individual co-inventors. Each co-inventor is considered to have the same legal interest in a joint invention as any other co-inventor.

For legal and practical reasons, the status of co-inventor may not be conferred merely as a reward for hard work, friendship or even outstanding science. This means that colleagues, students, research assistants, technicians, machinists, or those who supervise them, even though they may gather supporting data or construct a practical embodiment of the invention, are not inventors unless they satisfy the legal requirements.

Determining inventorship is almost always difficult. However, it is important that this issue be settled, insofar as possible, before the patent application is filed. Determination of inventorship requires expert knowledge of the legal criteria for inventorship and is best done by the patent attorney or agent at the time the patent application is prepared. Institutional investigators involved in the invention disclosure process should understand that preliminary determinations of inventorship made prior to the preparation of a patent application are tentative and subject to change based on the advice of the patent attorney or agent who prepares the application.

Faculty

Intellectual properties developed by university faculty within the scope of their employment or through the use of their time, facilities, equipment or materials owned or paid for by the university are considered by Federal patent and copyright law to be the property of the university. In claiming title to the inventions or developments of its faculty, the university follows a policy long practiced by other universities and private corporations. However, unlike most private corporations, universities traditionally share the economic benefits with their inventors and developers.

Students

Inventions or technology developments made by a student who is supported by the university (i.e., by a fellowship) or employed by the university or is working voluntarily on a faculty member’s research and makes substantial use of university resources, are considered by Federal patent and copyright law to be the property of the university.

Federal Government Support

The Federal government initially retains assignment of all intellectual property rights developed under federal support. However, the university may obtain assignment of all commercial rights by applying to the government. Therefore, if there is any Federal support involved in the development of a technology, notify the Innovation Partnership Services Office. The government will retain a royalty-free license for the government to use any invention made with any Federal support.

Due to Public Record Law, agreements to confidentiality must be made in a way that is consistent with NC Public Records Act G.S. 132. The marketing requirements are necessary so employees know what information to treat as confidential. It would be too burdensome to keep track of random information that is not easily recognizable as confidential.

Perpetual confidentiality agreements: The expiration of confidentiality restrictions must be limited due to the University setting. The University cannot keep track of students once they have matriculated or left the University.

The following confidentiality template has been approved by UNCG’s legal council as of August, 2013. A Confidential Disclosure Agreement (CDA) should be obtained before discussing a technology with anyone outside the University, such as a company or a colleague at another institution. Please utilize this template as a starting point in discussions with any external party. Companies may ask researchers to sign CDAs prior to discussing any possible research collaborations. Please do not sign a CDA as an individual, it should be reviewed by IPSO and signed by the Director of IPSO for the university.

Due to export control regulations, the University cannot agree to withhold publication. However, the University can agree to delay publication for 60-90 days in order for intellectual property issues to be addressed.

An assignment is a transfer of rights to a third party. Assignments are dangerous for the University because they may interfere with the exclusive emoluments clause of the NC constitution by privileging a party to public funds without consideration. Furthermore, assignments may interfere with the duties owed to the University.

Under the North Carolina Tort Claims Act, (NC Gen. Stat. 143-291), a public University cannot waive the State’s governmental immunity and assume liability for actions not covered under the act. Only the General Assembly has the authority to go beyond the scope of the NC Tort Claims Act. The University is not allowed to purchase liability insurance to cover an indemnity promise. An indemnity clause would be against public policy conveyed by the NC constitution.

Forum Selection Provisions are not allowed under NC Stat. 22B-3. The statue holds that such contracts are void and unenforceable.

The University, as a state agency, cannot agree to “choice of law” clauses requiring the University to consent to litigation in a jurisdiction other than North Carolina. Choice of law clauses are prohibited under NC Gen. Stat. 22B-3. These clauses interfere with the Attorney General’s exclusive duty to defend the University, and they also go beyond the scope of the waiver of sovereign immunity.

A material transfer agreement is used when a researcher sends out or receives materials, such as biological materials or compounds. It enables researchers to share materials while safeguarding proprietary rights to the materials. Materials can be cell lines, viruses, bacteria, monoclonal antibodies, compounds, etc.

For more information and guidance please contact us.

WHAT TO INCLUDE

• What is your intended use of the material? Provide a brief yet detailed description of proposed experiments.
• Will you be modifying the material? If so, how?
• Will any progeny be produced (i.e. – unmodified descendants from the material, such as virus from virus, cell from cell, etc. as in routine cell/viral culturing and maintenance of cell/virus lines)?
• Will the requested material be used with other materials provided by a third party outside of UNCG, either academic or commercial? If so, please list the materials and who provided them.
• Will the material be used/sent outside your laboratory? If so, please specify where.
• If students will be involved, will this work be part of a thesis?
• Do you intend to publish the results of the research project making use of these materials?
• Will you be sharing/sending your data/results with the provider prior to publication?

Funding

• Please list ALL government sources of funding which will be used to support the research utilizing the requested material. Include the granting agency and the applicable OSP account number or grant number.
• Please list ALL non-government sources of funding (i.e., industrial, commercial, private foundation, corporate or other gift) which will be used to support the research utilizing the requested material. Include the name of the granting organization and the applicable OSP account number and/or award title.
• Will students/post-docs be using the material? If so, please include fellowships or other funding sources for those students and/or post-docs who will be working on this research.
• Will the requested material be used in any research funded by the provider? If so, please provide the applicable project title(s) and account number(s).
• Is the material known to be toxic?
• In October 2001, Congress passed and the President signed the USA Patriot Act. This Act expanded the investigative powers of U.S. law enforcement agencies to deter and punish terrorist acts. It applies to a growing list of chemical and biological agents. Please indicate if you believe there are any potentially harmful chemical or biological properties of the material to be transferred.

PROCESS FLOW

• Material Transfer Agreement is submitted to the Innovation Partnership Services Office
• IPSO negotiates the terms of the agreement for the two parties
• The agreement is signed by the Director of IPSO

For inventions to reach the marketplace for the benefit of society, the cooperation of industry is necessary. A patent license allowing a company to use the invention formally establishes this cooperation. Through licensing, the University retains ownership of a technology, and the companies obtain the right to use the technology to make and sell products or services.

The Innovation Partnership Services Office takes a direct approach in finding a potential commercialization partner for a specific technology. Non-confidential information (also called an executive summary) about the technology is submitted to the potential sponsor. Confidential information is then provided to interested parties after they have signed a confidentiality agreement. This information may include patent applications, research proposals, and other relevant research data. The researchers can make a valuable contribution to the search of potential licensees because they are probably familiar with potential markets for the invention. If a potential commercialization partner demonstrates interest in a technology as a result of reviewing the confidential information, a license agreement is negotiated.

Different inventions require different licensing strategies. For example, a basic new scientific tool likely to be widely used is typically licensed on a non-exclusive basis. In contrast, an invention which requires significant investment of resources by a company is typically licensed on an exclusive basis. The exclusive license provides an incentive to the licensee to commit risk capital investments required for product development.

Inventions made by UNCG faculty or staff in the course of their employment, using University time, facilities, or funds, are considered the property of the institution. If you’re not sure whether your invention should become the property of the University, clarify your rights by checking with the director of the Innovation Partnership Services Office. Because licensing technologies provide a financial benefit to licensees, the University shares in that benefit in the form of license issue fees, minimum royalties, and/or running royalties.

The revenues that the University receives from a patent or invention will be applied first to reimburse the University for any incremental expenses incurred by it in obtaining and maintaining patents and/or in marketing, licensing, and defending patents or licensable inventions. After provision for such expenses, the inventor’s share of such revenues received by the University shall normally be as follows:

However, the Chancellor may negotiate a different revenue sharing arrangement if the Chancellor deems it to be in the best interests of the University. In the case of co-inventors, each such percentage share shall be subdivided equally among them unless the University in its sole discretion determines a different share to be appropriate. Applicable laws, regulations, or provisions of grants or contracts may, however, require that a lesser share be paid to the inventor. In no event shall the share payable to the inventor or inventors in the aggregate by the University be less than 15% of gross royalties received by the University.

TECHNOLOGIES AND START-UP COMPANIES

Under some circumstances, it may be preferable to take a technology to the marketplace through a start-up company. University policy allows faculty to be shareholders, advisors/consultants or directors in such a company, but they may not be an officer of the corporation or have direct responsibility for operation of the company while maintaining a full-time faculty position. Before a license is granted to a start-up company, the company must demonstrate its capabilities to properly commercialize the technology.

A Business Plan must be submitted and approved. The plan must include a well-balanced management team, identification of the target market, a plan and schedule for product development, a marketing plan, financial documents that cover company operations until profitability is expected, and commitments for the required financing.

A license agreement will be negotiated with the start-up company that will be very similar to agreements with established companies; however, the licensing fee will usually be in the form of stock in the company in order to conserve the cash needed for company operations.

There is a sequence of questions to be answered prior to making a decision of creating a start-up venture. Some of them are:

• Is there a good reason for licensing the technology to a start-up corporation instead of established corporation?
• What level of authority will be needed for each of the decisions to be made (policy, licensing, oversight)?
• Who should be consulted or informed?
• If approved, how will the proposed relationship be monitored?
• Who will do it?
• What will be the relationship of the proposed company and the principals to the University?
• How will the technology related issues (ownership, pre-existing rights, intellectual property protection, licensing) be evaluated, handled, and negotiated in the process?
• Have all possible conflicts of interest, real and apparent, been considered?
• How will disclosed information be handled?
• Have the decisions been documented for the files?

Commercialization via Start-Up Company

Increasingly, at universities, faculty, staff and students are interested in seeing their research results reach the marketplace by starting a new company rather than the more traditional way of licensing the technology to an existing company. Innovation Commercialization staff is prepared to assist in this process by offering the following services:

• Identification of Commercialization Options: Through an initial meeting and follow-up, the OIC staff learns about the business opportunity and discusses various ways to move it forward. OIC staff present and discuss the attached Checklist of issues for a start-up company at UNCG.
• Business Opportunity Analysis: Following an agreement to work together, OIC staff will work with the researcher to understand the research background and its applicability to particular markets. A Business Opportunity Document will be prepared which, in 1 -2 pages, describes: the opportunity (how the products will make money); the technology; the intellectual property situation; the products/services arising from the technology; the markets; the commercialization process; and next steps.
• Preparation of a Commercialization Plan: A brief document outlining why a start-up company is appropriate, how ownership might be apportioned, legal incorporation of a company; company site, financing of the company, Business Plan preparation, and company management.
• Dealing with the University: OIC staff can assist researchers to address and resolve the following issues:
  • internal UNCG sign-off/information to appropriate administrators.
  • how to provide a portion of commercialization proceeds to all parties who have such an expectation – students, other faculty, the University.
  • UNCG may have an interest in the intellectual property through policy or prior funding. This needs to be resolved and documented in an agreement.
  • structural relationships with UNCG – will UNCG hold equity, will the company launch initial activities while housed at the university, technology transfer into the company, etc.
• Preparation of the Business Plan: A plan is required to run the company, and provide performance milestones for any license. OIC staff can assist researchers in its preparation. A plan normally discusses how the necessary human and financial resources can be gathered to create a product flow, which is put into the market to satisfy a need and create a cash flow, which allows the company to survive and grow. This document is an expansion of the Business Opportunity Document, but provides more description, details the financial projections including cash flow, as well as describing the investment opportunity. Such a plan has a series of action plans for product development; market development including sales and marketing; obtaining investment; strategic partnering, etc. There must be specific information about governance (Board of Directors) and advice (business mentors and advisors). The individuals who will manage the company prepare the plan. The staff of the OIC can provide comments on a draft plan.
• Launching Company Activities: As company activities increase, hands-on involvement by the OIC will decrease – – the sooner the company has its own employees and advisors, the better it will survive in the marketplace. The OIC will monitor company activities in a manner, which is negotiated, and can continue to provide advice and assistance as mutually agreed upon.eived by the University.

Looking to start a business of your own? This section highlights the stages of starting your business and problems that may arise during each stage.

Entrepreneur Guide

As an entrepreneur you will have to learn to identify your company’s strengths and weaknesses and analyze the market opportunity and threats. You must know how to compete and thrive in a dynamic, uncertain and risky environment, and to manage resource effectively to meet the challenges.

As a guide, we have outlined the four stages of small businesses and the common problems associated with each.

Early Stage

Characteristics: Startups often operate with minimal support staff and struggle to survive. The true main goal of the business, more often than not, is to give a financial assurance to the startup owner.

Problems: Most businesses fail in the early stage from the lack of management skills, poor marketing, lack of financing, and cash flow problems. Major concerns are in expansion of company, recruitment of employees and safety environment.

Growth Stage

Characteristics: A company has refined its business plan, has some of its management team in place and is starting to develop products and sales. The value of the business has grown to a point where is it necessary to protect and preserve the business.

Problems: Many businesses fail in the growth stage because they lack the knowledge to face continual challenges and to recognize a time-sensitive opportunities. The primary concerns are cash flow, hiring and retaining key employees and growth.

Pre-Maturity State

Characteristics: A company has made good progress on its plan, sales have started to increase and the business is expanding. Cash flow reaches break-even point and the business is able to examine ways to finance future growth. The primary concern is with the expansion of the business. If this issue has not been addressed, attention turns to providing complete employee benefit packages to all employees, as well as additional selective benefits that are needed to reward and retain key people.

Problems: Many businesses fail in the prematurity stage because they do not understand the importance of expanding or finding successful ways to duplicate products or to penetrate the markets. Again, expansion and recruiting often top the list of concerns, followed by safety, personal benefits and the transfer of the business.

Maturity Stage

Characteristics: At this stage, the business has reached the point where the fruits of labor can be realized. The company has done well, attacked its market, refined its product and is gearing up for an initial public offering or other major progress. By this point, the owner has some decision to make. Does he/she concentrate on continuing to run a successful venture, pursue new ventures, or devise a plan for succession of the business so he/she can retire.

Problems: Many businesses fail in the maturity stage from the lack of experience in managing their financial and human capital aspects. Taxation may become a concern, as well as the transfer of the business.