Office of Technology Management - Strategies & Tactics

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Invention Management

Disclosure

Innovators of technologies that might have commercial utility need to inform the Office of Technology Management (OTM) about their work. The OTM requests that innovators contact the OTM as soon as they first have their technology in hand and not wait until a few days, weeks, or a month or two before they submit a manuscript for publication or otherwise decide to publicly present any aspects of their technology. Early disclosure to the OTM gives it the time it requires to thoughtfully evaluate the technology and determine next steps. Although a phone call, visit or e-mail is sufficient to start the disclosure process, the OTM will invariably require the innovator to complete and sign the Technology Disclosure Form that can be downloaded HERE.

Case Assignment

The OTM logs the disclosure in its technology database, reports it to the federal government (when federal funding is involved in whole or in part), and assigns it a docket number. The Office of Technology Management Director first evaluates the technology and assigns it to a specific Licensing Officer (LO) who thereafter is responsible for its management through all phases of the evaluation and transfer process. The innovator should work directly with the LO assigned to his or her case who will be identified in the acknowledgement e-mail the OTM sends to the innovator upon receipt of the signed Technology Disclosure Form.

Evaluation

The LO will make a preliminary evaluation of the patentability and, more importantly, the licensability of the technology. This analysis includes, but is not limited to, assessing the competitive environment, requirements for freedom-to-operate under other parties' intellectual property rights, manufacturing feasibility, novelty, regulatory issues, other possible commercial applications not anticipated by the innovator, market scope and market dynamics, investor and industry perspectives, competitive advantage afforded, breadth and enforceability of possible patent claims, stage of development of the technology, the innovator's ability and willingness to advance it to a stage more attractive to industry, etc.. The innovator's prompt and responsive input and answers to the LO's questions are important for this evaluation to proceed in a timely manner. In addition, the LO will present a non-confidential description of the technology to companies that are likely to be interested in order to solicit their reactions as indicative of market interest and licensing potential.

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IP and Prosecution Process

IP Strategy

Based on the Director's and LO's evaluations, input from other OTM staff at weekly group meetings, and industry-specific feedback, the LO will develop and implement an IP management strategy that includes whether or not UCSF will elect title and file a patent application on the technology. The decision to file a patent application is not solely based on the likely patentability of the technology, but rather, and more importantly, on its licensability. Not every technology needs to be patented in order to be licensed and not every patentable technology is licensable. The OTM often licenses unpatented technologies including software (license of UC’s copyrights) and Tangible Research Properties such as cell lines, mouse lines, plasmids, etc. (license of UC’s property rights). Companies frequently license these unpatented technologies for internal research use to save the time and expense of re-creating them.

Patent Filing

The OTM prefers to have identified a licensee before investing in a patent application filing for two reasons: 1) The OTM can pass the patent costs to the potential licensee, and 2) the potential licensee can work with the OTM to draft an optimum patent application that takes into account the commercial landscape and the licensee's business strategy and thereby produce a license of greater value for the company. However, the OTM will file a patent application "at risk" (without a potential licensee in hand) if it believes the technology has a good likelihood of being licensed. But, if the OTM has not been able to identify a licensee after a reasonable period, it will most likely abandon such at-risk patent applications in order to cut its financial loss because of the high cost of obtaining and maintaining a patent in the United States and especially abroad.

Patent Counsel

The filing and prosecution of patent applications is done by outside patent attorneys from law firms approved by The Regents of the University of California. The LO chooses the attorney based on the attorney’s technical expertise, experience with related technologies, and licensee preference, as applicable. The outside patent counsel works together with the LO and inventor to prepare the application and prosecute the patent rights. The inventor's timely and responsive cooperation is essential for obtaining meaningful patent protection.

 

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Licensing and Agreements

Licensees

Prospective licensees come from many sources: a) leads provided by the innovator, b) OTM’s marketing campaign, c) corporate sponsors of the research that created the technology or providers of proprietary research materials the innovator used to create the technology, and d) company or investor outreach to the OTM. The OTM markets the technology both actively and passively. Active marketing entails identifying companies or investors likely to be interested in the technology and contacting one or more individuals in each company to discuss the technology initially on a non-confidential basis. Passive marketing entails posting a non-confidential description of the technology on not only OTM’s and UC's internet sites but also on several such sites hosted by organizations seeking to bring licensors and licensees together.

Confidentiality

Once a company expresses an interest in licensing a technology, the LO will usually first negotiate a Confidential Disclosure Agreement with the prospective licensee that allows the OTM to share confidential information and introduce the company to the innovator. The innovator’s participation in technical discussions with a prospective licensee is critical to the success of OTM’s marketing and licensing campaign.

Term Sheet

If the company remains interested in licensing the technology after completing its own detailed analysis, the LO may negotiate a Letter of Intent with the company that commits the OTM to negotiate exclusively with that party for a specified period of time. At this point, the parties anticipate that these negotiations will result in a license. The first step towards the actual license is for the parties to negotiate a Term Sheet, which is a short document that defines the high-level financial and business terms to which the parties can agree and that are most important to the parties.

License Agreement

Once the Term Sheet is in place, the parties will commence negotiating the actual license agreement which entails multiple iterations during which time numerous other points will emerge that need to be discussed and resolved to mutual satisfaction. Successful license negotiations invariably require flexibility, creativity, and commitment by both parties. A technology can be licensed exclusively to one company (or to more than one company for different field-limited uses), or non-exclusively to many different companies. A company may prefer first entering into an Option Agreement to license the technology at a later date during which time it can fully evaluate the technology in-house for a specified period without the risk of seeing it licensed to a competitor. A license agreement for an exclusive patent license can range around 40-50 pages. All of the OTM’s licenses must pass independent legal review by UC's Office of the General Counsel before Technology Management’s Director will sign them.

Amendments

It is often necessary to re-configure a license agreement to adapt to changed circumstances. Either party can request an amendment to the agreement at any time during its life but both parties must agree to the amendment before it can be added to the agreement and become effective.

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Compliance

Conflict of Interest

If an innovator has or will have a financial relationship with a prospective UCSF licensee (e.g. the innovator, spouse, or dependent child receives money from or has stock in the licensee), the innovator needs to disclose this financial interest to the LO for guidance about this potential conflict of interest. Technology Management’s Director is a member of the Chancellor's Advisory Committee on Conflict of Interest and can advise the innovator accordingly.

Post-Agreement Management

The signing of a license agreement is the beginning of a long-term relationship between the OTM and the corporate development partner. The LO monitors the licensee's performance for the duration of the license which can exceed 20 years. Exclusive license agreements require that the licensee diligently commercialize the technology according to mutually agreed-upon product development milestones and provide regular financial reports and progress reports to the OTM. The OTM distributes net license income once in the fall after the end of the fiscal year in which the net income was received.