1. Marvin C. Guthrie, Esq.
Senior Advisor for
Technology Transfer
mguthrie@skgf.com
Presented at:
International Engineering Consortium
NanoEngineering World Forum
June 23, 2003 - Marlborough, MA
© 2003, Sterne Kessler, Goldstein & Fox P.L.L.C. 147476v1.ppt

2. l Patent applications and Patents – US and
Foreign Copyrightable works
- software, reports, films, records
l Research and Business Information
- trade secrets – policy for keeping secret
- know-how
- Business information – customer lists,
etc.
2 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 2

3. l Who you are ( academia, industry, venture capital), to
a significant extent, determines –
l Your IP strategies
l The manner in which IP is -
- created
- acquired (purchase, licensing-in)
- used (enabling product manufacture, use or sale)
- sold or out-licensed
l The nature of the technical assessment
l The nature of the value created or value added
3 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 3

4. l Transferring technology to the public.
l Facilitating faculty hiring and retention.
l Acquiring technology for faculty to use in their
research or patient care.
l Revenue generation
4 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 4

5. l Right to make, use or sell products, processes
or services.
l Right to prevent others from making, using or
selling competitive products, processes or
services.
l Revenue generation.
l Building an IP portfolio for trading (cross-
licensing) purposes.
5 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 5

6. l Build technology platforms for start-ups.
l Revenue generation through sale or licensing
of IP portfolio.
l Occasionally to acquire trading stock.
6 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 6

7. l Research funding sources impose encumbrances on
IP
– Statutes, regulations or contracts (policies) affect how IP is
protected, used and transferred –
l governments
l academic institutions
l foundations
l industry
l venture capital
l Know these encumbrances and understand their
impact on your IP strategy.
l Use “Due Diligence”
7 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 7

8. l NIH,NSF, Small Business Admin.-SBIR/STTR – Bayh-Dole i.e.,
– inventions made by participating academic collaborators owned by the
academic institution, but, check for agency declared “exceptional
circumstances”
– contract data and software clauses
– often affect ownership and exclusivity expectations
l Advanced Technology Program (ATP), Dept. Commerce –
– all IP owned by company (many univ. will not accept funding)
l Industrial Sponsorship & Material Transfer Agreements
often impose IP ownership or licensing restrictions
l Foundations -
– Almost all have IP ownership clauses that defer to university IP
Policies, as long as the university retains title, and many have due
diligence clauses that trump due diligence clauses in licenses.
8 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 8

9. Caveat Emptor
l Are you acquiring what you bargained for ?
l Know who had rights – have they been
properly conveyed to you?
l At academic institutions use the technology
licensing office.
l Use “due diligence” in determining what rights
you are acquiring.
9 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 9

10. l Always use written documents – no
handshakes!
l Assignments – convey all right, title and
interest (ownership)
l Licenses – convey less than all of the
Licensor’s rights.
l In-licensing and out-licensing terms should
advance the licensor’s and licensee’s IP
strategy.
10 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 10

11. l IP Licensed - specifically and clearly identified.
l Type of License
– Degree of exclusivity
– Term
– Territory
– Field
l Consideration
l Maintenance of IP –application prosecution and taxes
l Enforcement – who sues infringers or defends validity
l Indemnification
Nanotech licensing appears to be following
biotechnology licensing strategies.
11 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 11

12. l Degrees of Exclusivity
– Non-exclusive – Others may get rights
l Most favored nation clause your protection
– Semi- or co-exclusive –limited # get rights
– Exclusive – all of the rights in the area of exclusivity
l If licensor wants to practice – reserve the right
12 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 12

13. l IP strategies are often implemented by limiting
exclusivity in the following ways – both sides
can bargain for these;
l Field of use” – right to make, use and sell
– certain products
– products for certain markets
– right to use certain processes
– right to use process at certain conditions
l Territory - license by geographical area
– country, political (EU, NAFTA) or business market
l Period of Exclusivity
– years
– until milestone reached
13 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 13

14. l In exchange for the license, the licensee
promises -
– anything of value-
l $$,
l equity,
l goods
l services,
l IP ( related or unrelated to the licensed technology)
– present
– future
14 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 14

15. l Consideration can also be delivered at a variety of
times
– Upfront
– At the time of option or license
– Milestone achievement
– Earned royalties or payments based on sales or use
l Escalating –% royalty increases upon reaching X volume of sales
l Deescalating-% royalty decreases upon reaching x vol.sales
l “Royalty stacking” provisions
– “Due diligence” payments rather than milestone events
l Often annual increases to insure use of licensed technology
15 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 15

16. l Make sure you can follow and contribute to these
crucial maintenance decisions -
– pre-issue
l prosecution, (including interferences) and
l payment of fees
– post-issuance
l reissue,
l reexamination,
l extension and
l payment of maintenance fees
l The degree of contribution usually depends on the
degree of exclusivity.
16 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 16

17. l Crucial to both the licensor’s and licensee’s IP
strategies
– who controls litigation ?
l usually depends on –
– degree of exclusivity
l licensee’s willingness to bear costs
17 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 17

18. l The wide diversity of nanotechnologies will
result in a wide variety of IP creation,protection
and acquisition strategies.
18 © 2003, Sterne, Kessler, Goldstein & Fox P.L.L.C. 18