1. http://otl.stanford.edu

2. Overview OTL Mission Inventor Responsibility Stanford Royalty Sharing Disclosure Form Patent View Inventor Agreements Patent Resources

3. Office of Technology Licensing (OTL) MISSION To promote the transfer of Stanford technology for society’s use and benefit while generating unrestricted income to support research and education.

4. The POLICY I will disclose to Stanford all potentially patentable inventions conceived or first reduced to practice in whole or in part in the course of my University responsibilities or with more than incidental use of University resources. I further agree to assign to Stanford all my right, title and interest in such patentable inventions and to execute and deliver all documents and do any and all things necessary and proper on my part to effect such assignment.” - http://www.stanford.edu/dept/DoR/rph/su18.html

5. Inventor’s Role in Licensing Process Submit Invention Disclosure to OTL Review Prior Art Patent Landscape Participate in Patent Preparation and Prosecution Help Identify Potential Licensees Host Visits by Potential Licensees Provide Input into Licensing Strategy Consultant Licensee, formally or informally (optional)

6. Stanford’s Royalty Sharing Policy Royalty Distribution Policy - Cash Royalties Deduct 15% for administrative expenses out-of-pocket expenses (e.g., patent costs) Equals Net Royalties 1/3 to Inventors 1/3 to Inventors’ Departments 1/3 to Inventors’ Schools

7. Invention Disclosure Form (General Information) Inventors information –Contact information (address, phone, email!) –Citizenship –Social Security Number –School Department Sponsorship –Government/Companies –Grant/Contract Numbers Event Dates –Initial Idea –First description (conception) –First actual reduction to practice –Publication bar

8. Invention Disclosure Form (Description) General purpose of invention Technical description of invention Advantages or improvements Possible variations and modifications Features believed to be new Close or related patents

9. Invention Disclosure Form (Points to Note) It is a legally important document and should be carefully prepared Purpose is to establish a record –What was invented –Circumstances under which it was invented Description should be as detailed as possible All information provided to OTL is kept confidential Must have adequate information –To allow OTL to completely evaluate licensing potential –To allow OTL to obtain an accurate legal patent opinion

10. When to Submit When something new or useful has been conceived or developed (reduced to practice) When unusual, unexpected, or nonobvious research results have been achieved To be patentable, an invention must be novel, useful, and nonobvious

11. OTL Licensing Process Technology Evaluation Patent Decision Marketing Licensing Maintaining Relationships

12. Technology Evaluation What is the development status? Is it evolutionary or revolutionary technology? What is the intellectual property position? Does it have commercial potential? Will it be licensed?

13. Patenting Decision What are the applications and markets? Will the claims be broad or narrow? Is it patentable (novel, useful, non-obvious)? Is it enforceable? Does it have the potential to create meaningful income?

14. Patents OTL’s decision to not patent an invention does not affect the scientific merit of the invention Patent protection is expensive –The initial application costs about $7 – 10K –Over its lifetime one U.S. patent costs about $25 – 30K –Higher patent costs for foreign coverage ~$250k+ If the inventor disagrees with OTL’s decision to not file a patent application, arrangements may be made for the inventor to assume responsibilities for patenting and marketing their invention

15. Inventor Agreements If OTL decides it will discontinue its efforts to find a licensee or to prosecute/maintain any related patents, OTL may, at its sole discretion, offer the inventor(s) the option to continue the process: – License Back to Inventor Agreement – Patent and Marketing Agreement

16. License Back to Inventor Inventor must not be at Stanford Financial terms –1% of Net Sales –15% of Sublicensing Revenue –Payment of future patent costs

17. Patent and Marketing Agreement Inventor is at Stanford Inventor is responsible for –Marketing invention –Paying patent costs Inventor will not use Stanford funds or resources –To pay patent costs –To further commercialize technology OTL negotiates license with Licensee

18. Patent and Marketing Agreement (Royalty Distribution) If invention is licensed –15% deducted for administrative costs 8% to inventor(s) 7% to OTL –Reasonable patent costs are reimbursed –Remaining distributed as normal 1/3 to inventor(s) school 1/3 to inventor(s) department 1/3 to inventor(s)

19. Patent and Marketing Agreement (OTL Reassumes) If OTL reassumes responsibility –Inventor(s) terminates agreement –Inventor(s) associated with licensee –Inventor(s) conflict of issues arise Then inventor(s) will not receive 8%

20. Inventor Agreement Points to Note All patents are Assigned to Stanford Stanford retains all rights to inventions Government rights adhered Stanford shall have right to practice

21. OTL Disclosure and Licensing History Received 5000+ cumulative disclosures –1700+ disclosures currently active –Received 277 new disclosures in year 2001 –Received 321 new disclosures in year 2002 Executed 2000+ licenses –800+ licenses currently active –Completed 145 license agreements in year 2001 –Completed 115 license agreements in year 2002

22. Online Patent Resources Patent Searches –http://www.delphion.com –http://www.uspto.gov/web/menu/search.html General information –http://www.patents.com/patents.htm –http://www.derwent.com/patentglossary/ –http://www.lawnotes.com/default.htm

23. Types of License Agreements Option agreement Non-exclusive agreement Exclusive agreement –Limited by Field of Use –Limited by Geographic Territory –Limited Period of Time

24. Licensing Strategy Technology position –Core technology, basic tool, improvement –Market size –Development cycle Exclusive vs. non-exclusive –Field of use exclusive –Term of exclusivity Large company vs. small/startup company –Competitive advantage –Barriers to entry

25. Key License Terms Financial terms –License issue fee –Annual creditable payments –Running royalties % of Net Sales $ per product sold –Reimbursement of patent costs –Equity in start-up companies

26. Key License Terms Financial terms –License issue fee –Annual creditable payments –Running royalties % of Net Sales $ per product sold –Reimbursement of patent costs –Equity in start-up companies Non-financial terms –Definitions –Grant –Diligence milestones Prototype First Commercial Sale –Warranties and indemnities –Infringement actions –Dispute resolution

27. Medical Device Trend 2000-Current Recent invention disclosures: 77 Recent licenses issued: 10