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Patent Licensing Agreements (PLAs) Mr. Paul Fritz ORTA, Naval Air Warfare Center Aircraft Division Patuxent River (NAWCADPAX), MD.

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Presentation on theme: "Patent Licensing Agreements (PLAs) Mr. Paul Fritz ORTA, Naval Air Warfare Center Aircraft Division Patuxent River (NAWCADPAX), MD."— Presentation transcript:

1 Patent Licensing Agreements (PLAs) Mr. Paul Fritz ORTA, Naval Air Warfare Center Aircraft Division Patuxent River (NAWCADPAX), MD

2 NAWCADPAX Mission

3 NAWCADPAX Background

4 NAWCAD Technology Transfer Team Commander, NAWCADPAX Vice Commander, NAWCADPAX Executive Director, NAWCADPAX Business Office Director/ORTA Lakehurst, NJ – Hans Kohler Business Office Manager – Ella Tennyson ORTA PAX – Paul Fritz ORTA PAX Assistant – Michelle Miedzinski Patent Counsel – Ron Billi Security Team – Joyce Foca, Barbara Fenwick Contracts – Vicki Fuhrmann Technical Review Lead – Fred Kuster CSA Lead – Rick Tarr CSA Assistant – Tina Guy SBIR – Carol Van Wyk IP/T2 Class Scheduler – Robin Joy Marketing Team –Geo-Centers – Tim Wittig, Dick Stern –TechLink –NAWCAD Reserve Unit 0193

5 Patent License Agreement (PLA)

6 What is Technology Transfer?

7 Technology Transfer

8 What company filed the first patent for a microwave oven that cooked food? DuPont IBM General Electric Raytheon

9 What company filed the first patent for a microwave oven that cooked food? Raytheon

10 When was the first GPS satellite launched?

11 When was the first GPS satellite launched? 1978

12 How many GPS satellites are currently in operation?

13 How many GPS satellites are currently in operation? 24

14 15 inches 22 inches 31 inches 38 inches What is the maximum wall-height that a HUMMER® can scale?

15 22 inches

16 Night Vision Goggles

17 What is a US Patent?

18 What is a License?

19 Authorities

20 Types of Licenses

21 Non-Exclusive License

22 Exclusive or Partially Exclusive License

23 License Policy

24 Application for License to Practice Invention

25 Business Plan Policy

26 Time Line

27 Patent License Agreement

28 License Outline Introduction Page Preamble Article IDefinitions Article IILICENSE Grant Article IIILICENSEE’s Performance Article IVRoyalties Article VPatent Marking and Non-endorsement Article VI Representation and Warranties Article VIIReports Article VIIIModification and Termination Article IXNotice Article XSublicensing Article XIReservations of Rights Article XIILitigation Signature page

29 Licensing Terminology Preamble

30 Preamble Example 1 WHEREAS LICENSOR has an assignment of title to the invention disclosed and claimed in: PCT Application Number: PCT/US 01/45434 for “Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” in China, Japan and contracting states of the European Patent Convention, and PCT Application Number: PCT/US 02/35599 for “Post- Treatment for Anodized Aluminum” in China, Japan and contracting states of the European Patent Convention, and PCT Application Number: PCT/US 02/35490 for “Post- Treatment for Coated Substrates” in China, Japan and contracting states of the European Patent Convention; and

31 Preamble Example 2 WHEREAS LICENSOR has an assignment of title to the invention disclosed and claimed in: U.S. Patent Number 6,375,726 in the United States issued on 23 April 2002, for “Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” (PCT Application Number: PCT/US 01/45434 in Canada), and U.S. Patent Number 6,511,532 in the United States issued on 28 January 2003, for “Post-Treatment for Anodized Aluminum” (PCT Application Number: PCT/US 02/35599 in Canada and Mexico), and U.S. Patent Number 6,521,029 in the United States issued on 18 February 2003, for “Pretreatment for Aluminum and Aluminum Alloys”, and U.S. Patent Number 6,527,841 in the United States issued on 4 March 2003, for “Post-Treatment for Metal Coated Substrates” (PCT Application Number: PCT/US 02/35490 in Canada and Mexico); and

32 Licensing Terminology Recitals (“whereas” clause)

33 Licensing Terminology Article I –Definitions

34 Definitions Example 1 The following definitions shall apply to the defined words where such words are used in this LICENSE: a. The “Licensed Patents means –PCT Application Number: PCT/US 01/45434 for “Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” in China, Japan and contracting states of the European Patent Convention, and –PCT Application Number: PCT/US 02/35599 for “Post-Treatment for Anodized Aluminum” in China, Japan and contracting states of the European Patent Convention, and –PCT Application Number: PCT/US 02/35490 for “Post-Treatment for Coated Substrates” in China, Japan and contracting states of the European Patent Convention b. A “Licensed Invention” means an invention claimed in PCT Application Number: –PCT Application Number: PCT/US 01/45434, PCT Application Number: PCT/US 02/35599, and PCT Application Number: PCT/US 02/35490;

35 Definitions Example 2 The following definitions shall apply to the defined words where such words are used in this LICENSE: a. The “Licensed Patents” means –U.S. Patent Number 6,375,726 in the United States issued on 23 April 2002, for “Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” (PCT Application Number: PCT/US 01/45434 in Canada), and –U.S. Patent Number 6,511,532 in the United States issued on 28 January 2003, for “Post-Treatment for Anodized Aluminum” (PCT Application Number: PCT/US 02/35599 in Canada and Mexico), and –U.S. Patent Number 6,521,029 in the United States issued on 18 February 2003, for “Pretreatment for Aluminum and Aluminum Alloys”, and –U.S. Patent Number 6,527,841 in the United States issued on 4 March 2003, for “Post-Treatment for Metal Coated Substrates” (PCT Application Number: PCT/US 02/35490 in Canada and Mexico)

36 Net Selling Price Example 1 The “Net Selling Price” shall mean the invoice price of the Royalty-Bearing Product sold and not returned f.o.b. factory, before deduction of trade or quantity discounts or any other items, including, but not limited to, freight allowances, cash discounts or commissions. A Royalty-Bearing Product will be considered to be sold when shipped to a customer

37 Cost of Patent Protection Example 1 “Cost of Patent Protection” means all costs incurred by LICENSOR on or after January 1, 2006 for maintaining patent protection for granted patents in the Licensed Territory from the PCT applications noted within the definition of Licensed Patents;

38 Territory Definitions Example 1 “North America” means the United States of America including its territories and possessions, the Dominion of Canada and the United Mexican States. “United States” means the United States of America, its territories and possessions, the District of Columbia, and the Commonwealth of Puerto Rico; “Canada” means the Dominion of Canada “Mexico” means the United Mexican States “North America” means collectively the United States, Canada and Mexico;

39 Territory Definitions Example 2 “Licensed Territory” means People’s Republic of China (CH), Japan (JA) and contracting states of the European Patent Convention which are the Republic of Austria (AT), Kingdom of Belgium (BE), Republic of Bulgaria (BG), Swiss Confederation (CH), Republic of Cyprus (CY), Czech Republic (CZ), Federal Republic of Germany (DE), Kingdom of Denmark (DK), Republic of Estonia (EE), Kingdom of Spain (ES), Republic of Finland (FI), French Republic (FR), United Kingdom of Great Britain and Northern Ireland (GB), Hellenic Republic (GR), Republic of Hungary (HU), Ireland (IE), Italian Republic (IT), Principality of Liechtenstein (LI), Grand Duchy of Luxembourg (LU), Principality of Monaco (MC), Kingdom of the Netherlands (NL), Republic of Poland (PL), Portuguese Republic (SO), and the Republic of Turkey (TR), to the extend that patent protection is achieved, LICENSEE elects such countries and pay the Cost of Patent Protection in accordance with Articles III and IV for such countries;

40 Licensing Terminology Article III –Licensee’s Performance

41 Licensing Terminology Example 1 The LICNESEE shall pay to the LICENSOR a nonrefundable licensing fee in the amount of fifty thousand dollars ($50,000), which shall accrue upon the execution of the LICENSE by LICENSEE and shall be due and payable as follows: Ten thousand dollars ($10,000) immediately upon the execution of this LICENSE by LICNESEE; Fifteen thousand dollars ($15,000) no later than three (3) months after execution of this LICENSE by LICENSEE; and The balance of twenty five thousand dollars ($25,000) no later than six (6) months after execution of this LICENSE by LICENSEE.

42 Licensing Terminology Example 2 LICENSEE shall pay to the LICENSOR a non-refundable licensing fee in the amount of fifty thousand dollars ($50,000), which shall accrue upon the execution of the LICENSE by LICENSEE and shall be due and payable as follows: Twenty five thousand dollars ($25,000) immediately upon execution of this LICENSE by LICNESEE; and Twenty five thousand dollars ($25,000) no later than one (1) year after execution of this LICENSE by LICENSEE; and LICENSEE agrees to pay to LICENSOR one half of any licensing fee collected from any sublicensee.

43 Licensing Terminology Article IV Royalties –Upfront payment –Running royalty –Topping payments –Sublicensing payments

44 Royalties and Fees

45 License Fees can include: –Upfront fees –Royalties –Combination of Upfront fees and Royalties

46 Royalties and Fees Upfront Fees

47 Royalties and Fees Royalties

48 Royalties and Fees Annual Minimum Royalties

49 Royalty Rates

50 Royalties Example 1 LICENSEE shall pay a royalty to LICENSOR in accordance with the following: a. LICENSEE shall pay to LICENSOR an amount equal to five percent (5%) of the Net Selling Price of each Royalty-Bearing Product made, used, or sold by LICENSEE or its sublicensees and five percent (5%) of the net selling price of any other item(s) made, used with or sold in conjunction with a Royalty-Bearing Product made, used, or sold by LICENSEE or its sublicensees. b. LICENSEE shall pay to LICENSOR an amount equal to five percent (5%) of the dollar amount charged for all services, excluding Operational and Maintenance (O&M) services, provided by LICENSEE, or its sublicensees, relating to a Royalty-Bearing Product. Such services shall include services provided by LICENSEE, or its sublicensees, for the expansion, upgrade or modification of an existing fully operational system.

51 Royalties Example 1 (con’t) c. LICENSEE shall pay to LICENSOR an amount equal to two and one half percent (2.5%) of the dollar amount charged for all Operation and Maintenance (O&M) services provided by LICENSEE, or its sublicensees, relating to a Royalty-Bearing Product. d. For the purposes of this LICENSE, Operation and Maintenance (O&M) services shall mean services provided by LICENSEE, or its sublicensees, following completion, installation, testing and customer acceptance of a fully operational system which relates to a Royalty- Bearing Product. Services provided by LICENSEE, or its licensees, for the expansion, upgrade or modification of an existing fully operational system are not 0&M services and shall be included as services under Article IV, paragraph b. above.

52 Royalties Example 1 (con’t) Royalties will not be paid on items sold directly to agencies of the U.S. Government. Notwithstanding the provisions of the preceding paragraphs in this Article IV, LICENSEE agrees to pay, at least, minimum annual royalties as follows: For Calendar YearMinimum Royalty 2004$0 2005$0 2006$62, $447, $626, $795,000

53 Licensing Terminology License Period

54 Terminating A License

55 Distribution of Royalties

56 Incentive Awards

57 New and Innovative Ideas

58 Federal Register Notices

59 Montana State University TechLink

60 Geo-Centers

61 Invention Evaluation Board (IEB)

62 Intellectual Property & Technology Transfer Course

63 Patent Awards Ceremony

64 Come support your fellow Scientists and Engineers NAWCAD Patent Dedication & Awards Ceremony When: Thursday, 19 May 2005 Time:0900 Where:North Engineering Center Atrium, Bldg 2185 Naval Air Station, Patuxent River, MD attend the Call or for additional information

65 Patent Awards Ceremony

66

67 Lessons Learned

68 NAWCADPAX Master Patent List

69 Preparing for the Future

70 Questions To Think About Do we want/need to file a PCT? Do we need to file on National Stage? Who will monitor the Office Actions if any when filing PCT’s? Where will the money come from to pay PCT, National Stage Filing, and or Maintenance fees?

71 Foreign Patent

72 Summary Examples of successful technologies History Process and procedures utilized in our success Issues to think about for your program

73 Back Up Slides

74 Estimated Costs for Patent Applications US Filing –Contract Attorney:$4,000 –General Filing Fees Basic Filing Fee$1,000 Excess Claims$200 Assignment Fee$40 –Prosecution Fees: Contract Attorney to write Amendment$1,000 Submit Information Disclosure Statement$180 Extensions of Time$300 Petition$200 –Issue Fee$1400 –Maintenance Fees: 1 st Maintenance Fee$900 2 nd Maintenance Fee$2,300 3 rd Maintenance Fee$3,800 Total Estimate for filing US Application$15,320

75 Estimated Costs for Patent Applications PCT Applications: –Contract Attorney (submit us file application)$5,000 –International Stage Fees: Transmittal Fee$300 PCT Search$300 International Filing Fee$1,100 –Contracted Attorney (misc: correction etc.)$1,000 Total Estimate for filing PCT application $7,700 –(prior US Filed)

76 Estimated Costs for Patent Applications National Stage Filing EUCanadaJapanChinaMexico –Official Filing Fees Filing$5,000$500$190$135$500 Examination$1,600$460$750$320$675 Grant$800$425$890$35$1,100 Other$0$215$0$195$0 Total Est. Filing Fees$7,400$1,600$1830$685$2,275 –Contracted Attorney Fees Foreign Associate$5,000$3,000$6,000$6,000$3,500 Translation$1,500$0$3,000$3,000$3,000 Domestic Counsel$2,500$1,000$2,500$2,500$2,000 Total Est. Attorney Fees$10,000$4,000$11,500$11,500$9,500

77 Estimated Costs for Patent Applications Maintenance Fees EUCanadaJapanChinaMexico –Total Est. Maint. Fees$175,000$3,800$17,800$10,600$3,600 TOTAL National Estimate:$192,00$9,400$31,130$22,785$14,375 (Maintenance Fees based on 20 years and in EU based on 15 countries. In EU, can estimate $600 for each individual country per year. For 20 years (fees start at approximately $350 and go up to $1,200 towards the last years.

78 Estimated Costs for Patent Applications Total Summary of Estimates from US filing to PCT through National Stage –US Application$15,320 –PCT Application$7,700 –Total for National Stage$23,020 National Stages Estimate by Country –Europe$192,400 –Canada$9,400 –Japan $31,130 –China$22,785 –Mexico$14,375


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