1. WIPO Dispute Resolution in International Science & Technology April 25, 2005 Ann M. Hammersla Senior Counsel, Intellectual Property Massachusetts Institute of Technology Immediate Past President AUTM

2. 2 Trends in US Research Collaborations US University Research and Technology Transfer Culture MIT Mission for Research Collaboration and Technology Transfer Types of US University Research Collaborations Types of US University Technology Transfer Collaborations

3. 3 US University Culture Foundation for Successful University Research and Technology Transfer Programs: Bringing interested parties together that are equally committed to the advancement of science and education and the eventual commercialization of technology.

4. 4 US University Culture Continued Primary university business is to educate and conduct state-of-the-art research. University research is curiosity-driven with the requirement to publish and to grant degrees. Increasing research goal of some US universities and research faculty is for economic benefit to their community and personally.

5. 5 US University Culture Continued Most US faculty do not research in areas for which commercial IP will be developed. –Reported by Thursby and Thursby, March 5, 2004 4,702 faculty they followed from 11 major US research universities from 1983-1999 (61,407 observations). Only 2,939 in science and engineering disclosed IP.

6. 6 US University Culture Continued Physical Science = 19% of all disclosures Engineering = 45% of all disclosures Biological Sciences = 35% of all disclosures Percent of Faculty who disclosed by field –Physical Science - 5.5% –Engineering = 11% –Biological Science = 8.5%

7. 7 Benefits for MIT to Participate in Research and Technology Transfer MIT Mission – based on 4 values Unfettered transmission of knowledge through educational activities. Creation of new knowledge through research and other scholarly activities. Service to the nation (and world). Service to humanity.

8. 8 Technology Transfer Unlimited in types, forms, and definitions –Publications, presentations, education –Patents, copyrights Formal licensing programs –Increasing in number and a heightened focus on covering costs, economic development (especially public institutions vs. private institutions;) increasing revenues for institution Public Domain Defensive Patenting Increase value of software

9. 9 Research Collaboration Trends MIT Fiscal Year 1996: Total Sponsored Funds –US Government = 68% –Industry = 18% –State, Local and Foreign Govs. = 4% –Other = 10%

10. 10 Research Collaboration Trends Continued MIT Fiscal Year 2005: Total: 1.028B –U.S. Federal Government: 79% –Industry: 11% –Local, state & foreign governments: 4% –Other: 6%

11. 11 2003 AUTM Licensing Survey Research $38.525 billion Discovery 15,510 disclosures 1 per $2.3 million Intellectual Assets 7,921 new U..S. patent applications Transfer for Commercialization 4,507new licenses and options(25,864 active) 374 company starts and 471 New Commercial Products FY2003 data reported by 198 North American academic institutions.

12. 12 FY 2003 AUTM U.S. Results +10.1%$38.525 BResearch Expenditures +7.7%15,510Invention Disclosures +8.2%7,921New U.S. Patent Applications +12.3%3,933U.S. Patents Issued +4.5%4,507Licenses Signed -6.7%374New Companies Formed +5.7%$1.306 billionLicense Income % Change vs. FY2002 FY2003 (n=198) ACTIVITY Source: FY01 AUTM Licensing Survey.

13. 13 University Technology Transfer Productivity $310.7 B Research 139,830 Disclosures Commercialization Strategy 41,597 Licenses (30,593 still active) 4,694 Start-Ups (3,115 still operational) products Triage platforms 61,507 U.S. Patent Applications 32,026 U.S. Patents Issued Source: AUTM Licensing Surveys, FY91-FY03

14. 14 US Trends for Increasing Need For Dispute Prevention and Dispute Resolution Increasing research collaborations Increasing number of formal technology transfer programs Increasing number of non-exclusive licenses Increasing “value” of patents from both universities and industry New IP industry: Assignment of patents from 1 company to another for the sole purpose of patent prosecution – no added technical value by 2 nd company

15. 15 US Trends for Increasing Need For Dispute Prevention and Dispute Resolution Continued Increasing collaborative research and technology transfer with international for profit and non-profit organizations Dotcom bubble and its collapse and heightened interest on protection of IP Increased world-wide competition

16. 16 Examples for Increasing Need For Dispute Prevention and Dispute Resolution Continued “Universities are realizing that intellectual property can be a profit center.” “A lot of fundamental research in biotech and pharmaceuticals is coming out of the universities, but the pharmaceutical industry doesn’t want to pay unless prodded.”

17. 17 Examples for Increasing Need For Dispute Prevention and Dispute Resolution Continued “In most agreements for exclusive licenses the licensee indemnifies and covers defense costs. Only the exclusive licensees have the right to bring and control a lawsuit.” –US universities control infringement lawsuits if it non-exclusively licenses because “one nonexclusive licensee could put the validity of the patent at risk.”

18. 18 Examples for Increasing Need For Dispute Prevention and Dispute Resolution Continued Not all lawsuits are seeking to enforce patents held by the institutions. In a lawsuit by the university of ______ a lawsuit was brought by the university against a company who had as determined by the US courts committed copyright infringement by using the university’s faculty paper and results in their patent application.

19. 19 Examples for Increasing Need For Dispute Prevention and Dispute Resolution Continued “Despite the possible recoveries (universities) are not actively searching for litigation….” The costs of litigation are often prohibitive. Increasing collaborative research = increased difficulty in determining where the invention occurred, who the owner is, etc.

20. 20 Increasing US University Dispute Resolution Needs Neutral Evaluation Process Neutral Evaluators who understand the science Neutral evaluators who are familiar with and understand university policies and practices and the student environment Neutral Location - ??? Binding and non-binding

21. 21 Increasing US University Dispute Resolution Needs Understanding of the body of law that is applicable to universities: Bayh-Dole; tax laws, federal research regulations, international law, publication requirements, export laws, tax-exempt laws, unrelated business income tax, privacy issues of students, research relationships, corporate partners, etc. etc.

22. 22 Questions????? Thank you! Ann Hammersla Senior Counsel for Intellectual Property Massachusetts Institute of Technology Office of Intellectual Property Counsel 5 Cambridge Center, NE25-230 Cambridge, MA 02142 Phone: (617) 258-8980 Fax: (617) 253-1850 E-mail: ahammer@mit.edu