- What is the role of the Office of Technology Commercialization?
- Why does the University patent technology?
- I have an invention – What do I need to do?
PATENTS & INVENTIONS
- What is a patent?
- What can be patented?
- How do I get a patent?
- What is an invention?
- Who is the inventor?
- What if one of the inventors is from another institution?
- Who owns the patent?
- I have an invention. What do I need to do?
- Are written notebook records important?
- Can plants be protected by a patent?
- What about publications?
- How will a publication affect patent rights?
- What constitutes a publication?
- Can oral presentations or public disclosure affect patent rights?
INVENTION AND SOFTWARE DISCLOSURES
- Must I disclose my invention?
- When should I make my invention disclosure?
- What information is needed for an invention disclosure?
- What happens to my disclosure after it is submitted?
- Who is the author of software?
- Do I need to disclose software I have developed?
- How do I disclose software?
- How do I copyright software?
- What protection does a copyright offer?
- Can software be patented?
- Can software be released under an open source license?
- What are the types of software licenses?
- What is a license?
- Does the University sell intellectual property rights?
- Does the University ever take equity as part of the license?
- How will you market/license my invention?
- Do you license to start-up companies?
- Who conducts the licensing negotiations?
- Who signs the license agreement?
- Are royalty payments to inventors reported to the IRS?
OVERVIEW(back to top)
What is the role of the Office of Technology Commercialization?
The Office of Technology Commercialization (OTC) is responsible for identifying, protecting and licensing intellectual property of the University. Key steps include:
- Receive invention and copyright disclosures
- Evaluate disclosures
- Initiate and follow-up on appropriate type of protection (patent, copyright, trademark, etc.)
- Market inventions
- Negotiate license agreements
- Monitor patent filings and licenses
- Review other agreements: MTAs, IIAs, NDAs
- Work with start-up companies (business development roles)
- University outreach and education
Sponsored Programs Administration is responsible for all research agreements, master agreements, memorandums of understanding, etc. related to research programs. However, the OTC will assist with a review of any terms associated with intellectual property matters.
Why does the University patent technology?
It is required under federal grants – The University is required to patent and commercialize the technology under terms of the Bayh-Dole Act. If the University elects not to patent the discovery, the sponsoring federal agency may request ownership of the patent rights.
It is generally required for commercial utilization – Patented technology is a driver of regional economic development, an expected outcome from state and federally funded research. And, commercial utilization of the University’s research is an important factor in evaluating the success of our research programs. Without patent protection, companies generally will not invest the millions of dollars necessary to bring new products to the market.
It benefits the inventor and the public – Patented technology provides for the public good through commercialization of technology by the private sector. A portion of the licensing income is distributed to the inventor(s) to provide incentives for them to be creative.
I have an invention. What do I need to do?
The first step in protecting the discovery is to submit a completed Invention Disclosure Form. The disclosure will be evaluated for patentability and marketability. For licensable technology, a provisional patent application may be filed.
PATENTS & INVENTIONS (back to top)
What is a patent?
A U.S. patent excludes others from making, using, or selling the invention in the United States. The terms “patent pending” and “patent applied for” are used to inform the public that an application for a patent has been filed. Patent protection does not start until the actual grant of a patent. Marketing of an article as patented, when it is not, is illegal and subject to penalty.
- Composition of matter
- Article of manufacture
- Any new and useful improvement to the above
Software can be patented provided it demonstrates useful, tangible results which fall under the above categories. A patent cannot be obtained on a mere idea or suggestion.
Once a U.S. patent application is filed, it takes about 18 months before it is reviewed by a patent examiner from the United States Patent and Trademark Office (USPTO). At that time, the examiner conducts a patent search, identifies several related patents, and often concludes your discovery has already been patented or would be obvious based on the existing prior art. Our patent attorney will work with you to craft a response indicating reasons the invention is new and not obvious in view of the prior art. If allowed, the patent will issue about 24 -36 months after filing.
What is an invention?
A patentable invention is a new, useful and non-obvious:
- Composition of matter
- Article of manufacture
- Or, any new and useful improvement to the above
If you think your idea may qualify, please contact the OTC and we can help with a patent search or literature search.
Who is the inventor?
The person(s) who actually conceives the invention is the inventor - not all the inventors need to make the same level of contribution. Inventorship is determined by a patent attorney based on the individual’s contribution to the inventive steps as defined in the patent claims. Note: Individuals that only carry out work at the direction of the inventor are not considered to be inventors under patent law.
Care must be given to naming/determining the inventors as a patent can be invalidated if the wrong inventors are listed. Keep in mind that authorship and inventorship are distinctly different in that co-authors are typically not inventors unless they participated in conception of one or more of the patent claims.
What if one of the inventors is from another institution?
Many research projects involve collaborators from another university, company, or research laboratory, so it is not uncommon to have non-MSU co-inventors. In such cases, each institution will have an unrestricted right to commercialize the technology without any accounting to the other – unless there is a written agreement specifying how the IP rights are to be handled.
When the co-inventor is from another University, the institution of the lead inventor will generally prepare a written inter-institution agreement whereby it agrees to take the lead in patenting and commercializing the technology. Under the agreement, royalty income is shared between the institutions in an equitable manner and each institution distributes its share in accord with its own policies.
When the co-inventor is from a company, a license agreement may be negotiated defining the rights of the parties in commercializing the technology.
Who owns the patent?
Generally, the University owns all patents discovered in the course of research under grants or the course of University employment. Refer to the Intellectual Property Policy for details.
I have an invention - What do I need to do?
The first step in protecting the discovery is to submit a completed Invention Disclosure Form. This will assure that the intellectual property rights of both you and the University are protected.
Are written notebook records important?
Written laboratory records provide evidence of the date of conception of the invention, provide proof of inventorship, and show that the inventors used diligence in developing an idea. Such documentation is often needed if a third party contests the validity of the patent. Best practices include:
- Keep a written record of all ideas and experiments in ink.
- Keep all records in bound notebooks with all pages numbered permanently in ink.
- Keep lab notebooks intact and free from mutilation.
- Record all experiments contemporaneously with the performance of the actual events.
- If the notebook entry records the conception of an idea, both the inventor and witnesses should sign and date the notebook entry and indicate that the witness has read and understood what has been written.
Note: Use of electronic records may not be sufficient to prove dates of conception as these records can be altered without the alteration being readily detectable. Accordingly, it is advisable to print hard copies of any records documenting conception of an invention and/or reduction to practice. The hard copy can then be signed and dated by the inventors and appropriate witnesses.
Can plants be protected by a patent?
Yes - New plants can be protected by utility patents and plant patents issued by the US Patent Office. They can also be protected by plant variety protection certificates which are issued by the US Department of Agriculture. Please contact the Office of Technology Commercialization for more information on the selection of the type of protection that is most applicable to your material.
PATENT SEARCHING (back to top)
How do I search for patents?
Patent searching varies in complexity, based on particular needs. If you are searching for an existing patent, this can be done relatively easily on the USPTO web site. If, however, you are an inventor, looking to see if anyone has claims to a similar patent, patent searching can be a time-consuming endeavor.
- One must make sure that the item has not been patented. This would require examining each patent in the subject area to determine if there is prior claim to the idea(s).
- One must search as far back in time as the invention has been technologically possible.
- Anything that has been previously patented cannot be patented again, even though that patent may have expired. Once a patent expires, the invention becomes part of the public domain, meaning that anyone may be able to use or manufacture the invention listed within.
How do I get copies of patents?
There are several ways to get complete copies of patents. You can either contact the United States Patent and Trademark Office or contact a commercial document supplier. Please note that you will need to know the exact patent numbers in order to obtain copies.
PUBLICATIONS (back to top)
What about publications?
Generally, a patent application should be filed before your manuscript is published. This can take the form of a provisional patent application which protects the technology for one year at minimum cost. And, it can usually be completed quickly so it can be prepared and filed even after you’ve submitted a manuscript for publication.
How will a publication affect patent rights?
Unfortunately, if you publish your discovery before a patent application is filed; all foreign patent rights will be lost. However, you still have a one year grace period to file for US patent protection.
What constitutes a publication?
There are many factors which determine whether a written description of the invention constitutes a publication under patent law. Depending on the circumstances, the following may constitute publication:
- A manuscript published in a journal or book
- A thesis (after it is catalogued)
- A funded grant application which discloses the invention and is published
- A published abstract which discloses the invention
- A class handout which becomes publicly available
- Any description of the invention which is published on-line
Can oral presentations or public disclosure affect patent rights?
Yes. The following events may have the same effect as a publication in that they bar foreign rights and require any US patent to be filed within one year. Depending on the circumstances, the following may constitute public disclosure:
- Any public disclosure such as an oral presentation or poster presentation
- The invention was sold or offered for sale
- The invention was used commercially
- The invention was publicly displayed or used
- Disclosures to colleagues in absence of a confidentiality agreement
INVENTION AND SOFTWARE DISCLOSURES (back to top)
Must I disclose my invention?
Yes. If your research was funded in whole or in part by a federal, state or industrial grant, you are required to file an invention disclosure under terms of the grant. The University in turn, is required to notify the sponsor. For federal grants, the University must report the invention to the sponsoring agency within 60 days and actively work to commercialize the technology to meet the requirement that federally funded inventions should be licensed for commercial development in the public interest.
When should I make my invention disclosure?
You should file the disclosure as soon as you realize your research has uncovered something new and useful – two of the key elements for patentability. While the experimental work need not be complete, a clear and complete written description is required. A working model is not required – drawings and a written description are sufficient.
What information is needed for an invention disclosure?
The minimum requirement includes the names of the inventors, a working title, and a description of the invention. In addition, we ask for background information on the prior art, commercial potential, research sponsors, etc. This information allows us to make a preliminary assessment of the patentability and commercial potential of the invention.
What happens to my disclosure after it is submitted?
Once we receive your disclosure, we will meet with you to discuss your invention in more detail to assess its patentability and commercial potential. For technologies with commercial promise, we often file a provisional patent application (cost ~ $500) to allow sufficient time to find a commercial partner. Generally, we do not file a regular patent application without a commitment from a prospective licensee or MSU department to fund the $10,000 - $20,000 cost of patenting.
COPYRIGHTS AND SOFTWARE (back to top)
Who is the author of software?
Generally, software created under research grants or in the course of University employment is considered to be a “work for hire” under US Copyright law so the University is considered as the author of the software. In other circumstances, the “author” of software is the original creator(s) of the code and the author(s) owns the copyright to the software. Refer to the Intellectual Property Policy and also see MSU Software Policy in Plain English for details.
Do I need to disclose software I have developed?
Yes. Software should be disclosed to the Office of Technology Commerciaization before it is distributed outside the University so we can determine under what circumstances it can be distributed legally. For example, if the software was developed under a grant or contract, there may be certain restrictions or requirements limiting distribution. Also, we may be required to notify the sponsor prior to distribution. In addition, it may be desirable to patent certain elements of the software and distribution could negatively affect our ability to obtain any patents.
How do I disclose software?
Use the Software Disclosure Form which describes the software and provides an indication as to how you wish to release the software. In most cases, we will provide information on the type of copyright notice to affix to the software prior to its release.
How do I copyright software?
Copyright is automatic and is granted through the process of writing the code (i.e. “when it is fixed in tangible form”). In some cases, it is desirable to register the material with the US Copyright Office - this provides a written record of the material which can be useful in prosecuting infringers. The registration requires completion of a two page form and the first 25 pages and last 25 pages of the code in question.
The Office of Technology Commercialization will register any software that is being considered for license.
What protection does copyright offer?
Copyright protects the fixed tangible expression of an idea – not the idea itself. This means that no one can use your code without permission, but they can independently develop their own code that will accomplish the same objective. The copyright holder has the right to:
- Reproduce or copy the work
- Create derivative works
- Distribute the work
- Perform the work in public
- Display the work in public
- Digital transmission performance
- Refer to the US Copyright Office for additional details
Can software be patented?
Yes. Since copyright does not protect facts, ideas, systems, or methods of operation; a patent can be very useful in protecting algorithms and business methods provided they have commercial value and can not be easily circumvented.
Can software be released under an open source license?
Yes. If there are no obligations to research sponsors, co owners or other third parties, and all the authors/creators agree, the software can generally be released under an open source license.
What are the types of software licenses?
Software can be licensed for commercial use, for non-commercial or academic use and may be released simultaneously under several different types of licenses. In some cases, an evaluation copy of the software can be provided on a trial basis with a key code that disables the software at the end of the evaluation period.
LICENSING (back to top)
What is a license?
A license is a written agreement which defines the intellectual property and conveys the right to make, use, and sell product and processes using the intellectual property.
Does the University sell intellectual property rights?
No. Generally, IP rights are not sold or assigned to third parties. Instead, we typically negotiate an exclusive or nonexclusive license. Financial terms include:
- An up-front fee (or equity)
- A running royalty on sales
- A minimum royalty or license maintenance fee
- Recovery of patent costs
- In addition, due diligence terms are included to assure the Licensee uses its best efforts to commercialize the technology
Does the University ever take equity as part of the license?
Yes. The University, through its Research and Technology Corporation, may take equity in a company as part of the consideration for the license – usually in lieu of up-front licensing fees. Typically, equity deals are associated with licensing to start-up companies that need cash for operations.
How will you market/license my invention?
Marketing is an important first step in the licensing process. Generally, companies known by and/or working with the inventor are the best candidates for licensing University technology. In addition, the Office of Technology Commercialization can provide market research to identify potential licensees and may utilize consultants and other experts to assist in defining target market opportunities. In some cases, the College of Business and Industry will assist in providing a market assessment and a list of target companies.
Do you license to start-up companies?
Yes. Often, University technology is in such an early stage of development that existing companies are unwilling to undertake the risk of development. In such cases, a start-up company may be able to move the technology further down the “pipeline” so that it can be commercialized, licensed, and/or acquired by an existing company.
Who conducts the licensing negotiations?
License negotiations are handled by the staff of the OTC.
Who signs the license agreement?
The president of the University signs the license agreement on behalf of the University.
Are royalty payments to inventors reported to the Internal Revenue Service?
You will receive a FORM-1099 MISC if you are paid more than $600 in royalty income. Your royalties are reported as Other Income in Box 3. In many cases, inventors may receive capital gains treatment if the inventors assigned ownership of the patent to the University. Check with your accountant for details.
If you are a resident alien, you will receive Form 1042-S with the income identified as royalties.