Patenting

What is a patent?

A patent is an agreement between the US government and the inventor(s) in which they agree to an exchange, wherein the US gives the inventor(s) the exclusive right to benefit from their invention for a period of years. In exchange, the inventor discloses to the public the knowledge of what the invention is, how to make it and how to use it.

What is the United States Patent and Trademark Office (USPTO)?

The USPTO is the federal agency organized under the Department of Commerce that administers patents on behalf of the US government. The USPTO employs patent examiners skilled in all technical fields in order to appraise patent applications. The USPTO also issues federal trademark registrations.

Are all inventions patentable?

No, not all inventions are patentable. Patentable inventions are defined in the Patent Act. To be patentable, an invention must be useful, novel and non-obvious. This means an invention must not have been previously described in a publication; it must have some real-world use; it cannot be something found in nature or be a naturally occurring process, and in the judgment of a person of ordinary skill in the art, the invention must not be obvious when looked at in comparison to prior literature in that field.

The conditions for patentability constitute a very large body of law, and UT Southwestern retains professional and experienced patent attorneys to apply for patents on our inventions. The Office advances all legal fees and costs; the UT Southwestern inventor does not have to provide any such funding. Note that inventions comprised of combining known elements, whose combination is non-obvious, may be patentable, as are new uses for previously-known compositions or devices.

How does UT Southwestern decide to patent inventions?

Filing a patent application is an expensive process. Thus, before UT Southwestern files any patent application on behalf of the Board, it considers the following with respect to the invention:

• Needs of a patient population or research community
• Commercial utility
• Obligations to the sponsors of the research
• Competitive superiority
• Necessity for extensive development work
• Licensee interest

How is inventorship determined?

Inventorship is determined in accordance with US patent law. Inventorship is limited to those individuals who have made an intellectual contribution to the conception of the invention which is embodied by one or more claims described in the patent application. The Office for Technology Development does not determine who should be named as an inventor. This is the responsibility of outside counsel assigned to the file. No individual at UT Southwestern can decide inventorship, although it is important to identify any individuals connected with the project. Inventorship may be amended by the attorney during the course of patent prosecution.

Sometimes, patent prosecution may require dividing the claims into separate applications, which may require amendment of the inventors on each case. In rare circumstances, an inventor may be named in the case in error, or an inventor may have been omitted. Provided there was no intent to deceive the USPTO, these errors can be fixed. In fact, it is important to fix any such errors. If inventors are intentionally named incorrectly, any resulting patent may be invalidated.

Can software be patented?

Yes, software can be patented, but in many cases, copyrighting the software provides adequate protection much more efficiently. In some cases, it may be most practical to keep the source code unpublished and resident within computers on local drives or within cloud-based applications. Under Board policy, software created by faculty, staff, and students for educational or training purposes is not owned by the Board of Regents. Where the creator or author may own the copyright, educational uses are still reserved to UT Southwestern. For this reason, the OTD encourages the disclosure of the software to the Office by submitting an Intellectual Property Questionnaire (IPQ) online through our website. Any media intended to be protected should carry a notation on the title or cover page (e.g., “Copyright, UT Southwestern Medical Center, [Year]”).

How can I preserve UT Southwestern's ability to claim patent rights?

To preserve US patent rights, a patent application must be filed within one year of an enabling public disclosure of the invention. “Enabling” means a description that teaches what the invention is, and how it is made. BUT, to preserve foreign patent rights, a patent application must be filed before any enabling public disclosure of the invention. An inventor should complete an Intellectual Property Questionnaire (IPQ) describing an invention to facilitate the filing of a patent application before disclosing it to the public.

An enabling public disclosure may occur when a poster, abstract or manuscript appears in public. Posting anything on the internet and speaking to an audience that may include individuals not employed by UT Southwestern can also be an enabling public disclosure.

What is the patenting process?

Once OTD determines that the product can be patented, a patent application is drafted and filed with the US Patent Office by a patent attorney retained by the Office for Technology Development. Depending on the US Patent Office (USPTO) backlog, in about one year or longer, the patent attorney will receive a written notice from the USPTO as to whether the application and its claims have been accepted or rejected. The letter sent by the USPTO is referred to as an “Office Action” or “Official Action.”

If an application is rejected, the patent attorney will file a written response. This procedure is referred to as “patent prosecution.” Often, it takes several Official Actions and responses by the patent attorney before an application is resolved and the USPTO agrees to issue a patent. Patent examination can take many years. Patent examiners look for eligibility, novelty, obviousness, sufficient description, enablement, specificity of the claim language, and patentable utility of the claimed invention.

What does the "first-to-file" rule mean?

In 2013, the America Invents Act went into effect, which states that the first person to file a patent on an invention owns the rights to that invention. Because of this Act, the rule now in the US, as well as in the rest of the world, is that the first to file a patent application will be awarded the patent, regardless of who invented it first.

What is a provisional patent application?

The US Patent Office (USPTO) offers inventors the option of initially filing a provisional application for a patent. The provisional application is designed to provide a lower-cost initial patent filing in the United States. A provisional application is not required to name the inventors or to have a formal patent claim or an oath or declaration, and it lasts 12 months from the date the provisional application is filed. See Provisional Application for Patent on the USPTO website. At the end of the twelve month period, the provisional application is converted to a formal, or non-provisional, application to be reviewed and examined by the USPTO.

What is the effect on patenting if I publish the results of my research?

Publishing or presenting your research results can prevent OTD from obtaining patent protection, so it is important to submit an Invention Disclosure (IPQ) through our website and/or contact with our office with any questions you may have prior to any publication or presentation. Whenever the OTD receives an IPQ, the Office will ask what the publication plans are in order to arrange for a patent application filing in advance of the publication. Remember, the OTD will not block, delay, or otherwise interfere with publication plans.

Copyright and Trademark

What is a copyright and how is it useful?

Copyright is a form of protection provided by the laws of the United States to the authors of "original works of authorship." This includes literary, dramatic, musical, artistic, and certain other intellectual works as well as computer software. This protection is available to both published and unpublished works. The Copyright Act generally gives the owner of Copyright the exclusive right to conduct and authorize various acts, including reproduction, public performance and making derivative works.

Who at UT Southwestern Medical Center handles commercialization of copyrightable materials?

UT Southwestern follows the Copyright Law of the United States. Management is controlled by the Board of Regents’ Rule 90101 Sections 7 and 8 regarding copyright. Please contact The Office for Technology Development for questions regarding copyright.

How do I insert a proper University copyright notice?

Although copyrightable works do not require a copyright notice, the OTD recommends that you use one. For works owned by UT Southwestern, use the following template: © The University of Texas Southwestern Medical Center, [Year of first publication]. (e.g., © The University of Texas Southwestern Medical Center, 2019).

What is a trademark or service mark and how is it useful?

A trademark includes any word, name, symbol, device, or combination that is used in commerce to identify and distinguish the goods of one manufacturer or seller from those manufactured or sold by others, and also to indicate the source of the goods. In short, a trademark is a brand name. A service mark is any word, name, symbol, device, or combination that is used, or intended to be used, in commerce to identify and distinguish the services of one provider from those others, and to indicate the source of the services.

What is trademark registration?

Trademark registration is a procedure in which the United States Patent and Trademark Office (USPTO) provides a determination of rights based upon legitimate use of the mark. With a federal trademark registration, the registrant is presumed to be entitled to use the trademark throughout the United States for the goods or services for which the trademark is registered.

Public Disclosures

Definition of Public Disclosure

A public disclosure is any disclosure that is patented, published in a printed publication, in public use, on sale, or otherwise available to the public prior to the filing date of a patent application. Patent rights can be lost where a public disclosure of an invention is made prior to filing a patent application claiming that invention.

Disclosures that Do Not Lead to Loss of Patent Rights

Not all public disclosures lead to the loss of patent rights. Public disclosures that do not provide a detailed or “enabling” description of the invention such that a person of ordinary skill in the art could make and use the invention will not result in the loss of patent rights.

Grace Period for Public Disclosures in the United States

In the United States, an inventor’s public disclosure of their own invention less than one year prior to the filing date of their patent application is not considered prior art. In most foreign countries, there is no inventor grace period, and any public disclosure made prior to filing a patent application will prevent patenting of the invention. Therefore, it is always most desirable to file a patent application before any public disclosure.

Examples of Public Disclosures:

• A printed abstract or paper (on-line or hard copy) or pre-print server
• A poster presented at a conference meeting
• A talk given at a conference meeting
• Master’s theses and Ph.D. dissertations
• Thesis defenses open to the public
• Department level and campus level seminars if open to the public
• A public disclosure made by an inventor more than one year before the inventor’s patent application filing date
• A sale or an offer to sell research materials or prototypes of an invention
• Funded federal agency grant proposals

Note that funded federal agency grant proposals are public disclosures because they can be obtained under the Freedom of Information Act. Steps can be taken, however, to maintain certain information as confidential where necessary. For example, the first page of the proposal should be marked “Confidential Information--Pages __ to __ of this proposal contain potentially patentable information.” Each of these pages should also be marked “CONFIDENTIAL.”

Examples of Non-Public Disclosures:

• A disclosure made under a confidentiality agreement
• Lab meetings attended by only university employees and students
• Department or faculty meetings attended by only university employees and students
• Papers submitted for publication prior to acceptance and publication
• An unfunded federal agency grant application
• A high-level disclosure that does not provide enough details for another person skilled in the art to make or use the invention
• A disclosure of the invention by the inventor less than one year before the inventor files a patent application (U.S. only)

Commercializing

What kind of agreements are used in licensing and commercializing technologies?

• Confidential Disclosure Agreement – to share or receive confidential unpublished/nonpublic information from outside organizations
• Collaborative Research Agreement – for conducting non-clinical research in collaboration with a university, non-profit organization, or for-profit entity
• Data Use Agreement – a license for the disclosure and use of created or derived data from research or clinical trials (e.g., a limited data set)
• Inter-Institutional Agreement – an agreement between research institutions, used when inventors or creators reside at more than one institution, that defines how to protect and market an invention or creation and how expenses and revenues will be shared
• License Agreement – for granting a company the right to make, use, or sell an invention developed at UT Southwestern Medical Center
• Material Transfer Agreement – for sending UT Southwestern materials or data to outside scientists in academia, government or industry, or obtaining materials or data from scientists in academia, government or industry
• Option Agreement – for granting a company an option to be exercised in the future at the company’s discretion, to negotiate a license to a UT Southwestern invention
• Sponsored Research Agreement – for conducting non-clinical research that is sponsored by a for-profit entity
• Startups/Equity Deal Agreements – a family of agreements used for investors to evaluate a technology, obtain a license, and grant equity in the newly-formed company to the institution
• Visiting Scientist Agreement – for conducting non-clinical research which is sponsored by a for-profit entity

Must inventions be patented to be commercialized?

No, inventions may be commercialized without patent protection. Common examples of such inventions include biomaterials such as cell lines, antibodies, animal strains and software.

How does UT Southwestern commercialize technology?

UT Southwestern may commercialize patented, patent-pending and unpatented technology. Representatives of the Office for Technology Development work together to identify parties most likely interested in the invention. Often, inventors are best able to identify potentially interested parties.

Commercial parties potentially interested in the invention are contacted and provided a non­confidential description of the invention. If these parties request additional confidential information, a Confidential Disclosure and Limited Use Agreement (CDA) can be provided to the company to enable the transfer of such information.

Representatives from the Office for Technology Development are, by law, the only representatives authorized to negotiate license and option agreements on behalf of the University. The OTD is responsible for enforcing and administering all licenses and options, and distributing monies, paid by third parties, to inventors.

What activities occur during commercialization?

The licensee should continue to develop the technology to satisfy market requirements for adoption by customers. This usually involves preclinical and clinical testing, prototyping for manufacturing, and further development. Benchmark tests are often required to demonstrate the product or service viability in the target market. Medical products will require extensive animal and clinical trials for regulatory approvals.

How will I be compensated when my invention is commercialized?

If an invention is commercialized, any cash license revenues are first used to reimburse UT Southwestern's expenses, including patent costs. The amount remaining is subject to the following sharing formula: 50 percent to the inventors as personal income, 25 percent to the labs of the inventors, and 25 percent to the Office of the President of UT Southwestern.

If an inventor leaves UT Southwestern, their continuing share of lab disbursements is distributed to the President, but their personal income disbursements are unaffected. If there is no lab, then an account will be created to receive such lab shares.

What should I do if a company wants me to share unpublished information related to my invention?

If you are willing to share unpublished information with a company, contact a Licensing Associate in the Office for Technology Development, who will work with a representative of the company to draft a Confidential Disclosure and Limited Use Agreement (CDA). Once the agreement is signed, you will be free to share the information with the company. However, you are under no obligation to share all available information with the company. The investigator must be able to judge what information may be shared and what information might be best not to share at this stage. If a license is entered into, then you will be expected to share all information with the company that is needed to practice the invention. Sometimes there is no time to put an agreement in place, for example when engaging another colleague in a discussion at a conference. The best thing to do is to discuss what your invention can do, or discuss the research results, but not to discuss what the invention is, and especially not disclosing a chemical structural formula.

How can I send research reagents to my colleague at another university?

Research reagents sent outside UT Southwestern should only be shared after completion of an appropriate Material Transfer Agreement (MTA). The Office for Technology Development's Cooperative Research Group is responsible for negotiating such agreements.

In some cases, it may be appropriate to seek reimbursement of the cost associated with production and delivery of such materials. Material Transfer Agreements only provide for non-commercial research use of materials, so when companies request access to materials for commercial or for-profit activities, a license agreement is the more appropriate instrument to enable the transfer of materials to commercial entities.

Startups

What is a startup company and who decides to create one?

A startup company is a new business company formed to commercialize one or more related technologies licensed by the Office for Technology Development at UT Southwestern. There may additionally be inventions from other institutions that may go into the startup company’s portfolio. The decision to create a startup company that is based on UT Southwestern-licensed technology is a joint decision between the OTD and the inventors. It is also based on a number of factors, some of which are:

• Costs vs. return on investment
• Sufficiently large competitive target market
• Sufficient potential revenues to sustain and grow the company
• Potential for multiple products or services from licensed technology
• Market risk

If my invention is licensed to a startup company formed through the Office for Technology Development at UT Southwestern, how can I expect to be compensated?

After paying legal expenses, 50 percent of license revenues that the Office receives are distributed to the co-inventors and 25 percent are distributed to the co-inventors' laboratory sub ledger, with the remaining 25% going to the University. If the OTD receives shares of stock as part of the license, the shares are held by the University of Texas Investment Management Company (UTIMCO) until such time that they can be sold on a public exchange. UT Southwestern then sells the shares and the resulting proceeds are distributed under the same 50/25/25 percent formula.

It may be the case that the co-inventors directly negotiate with the investors and management of the startup company to receive their own shares of stock. This is a separate negotiation and transaction apart from the license. Any shares obtained this way are:

• The sole property of the co-inventors.
• Held by the co-inventors themselves.
• Able to be sold whenever the company allows their sale.
• Not subject to any monetary split with UT Southwestern.

The existence of any equity shares obtained in such a transfer from the startup company does not alter the sharing formula of proceeds that UT Southwestern may realize from the sale of UT Southwestern's shares in the manner described above.

Note that UT Southwestern may enter into agreements with startup companies to receive shares of stock that are not connected to an individual license or not connected to sales of a product covered by a given license. In such circumstances, proceeds from share sales are not distributed since they are not license revenues.

Will UT Southwestern pay for or lead the incorporation of a startup company?

No, UT Southwestern will not pay for the incorporation of a startup company. The startup company should pay for its own business incorporation and any legal matters and/or licensing expenses.

Can UT Southwestern accept equity in a company?

Yes, UT Southwestern often accepts equity as part of the financial terms of a license.

If my invention is licensed to a UT Southwestern startup company, can I perform sponsored research for the company?

Yes, you may perform sponsored research under a UT Southwestern-approved Sponsored Research Agreement. A conflict of interest management plan must also be established to be certain that the research follows University and System guidelines.

If my invention is licensed to a UT Southwestern startup company, can I perform sponsored research for the company?

Yes, you may perform sponsored research under a UT Southwestern-approved Sponsored Research Agreement. A conflict of interest management plan must also be established to be certain that the research follows University and UT System guidelines.

If my invention is licensed to a UT Southwestern startup company, what role will I play in the company?

The Office for Technology Development recognizes that your involvement may be integral to the success of the startup. However, such activities may not interfere with your basic research and primary employment obligation to UT Southwestern. You may enter into a consulting agreement with the company or participate on their Scientific Advisory Board provided this is approved by UT Southwestern.

Compensation for such activity is agreed upon between you and the company; the OTD does not determine or negotiate it. However, in instances where a company is founded (in whole or in part) based on your intellectual property, UT Southwestern policy does not allow you to hold a Board of Directors position or act as an officer or other employee in the company.

How are conflicts of interest managed by UT Southwestern?

Conflicts of interest are managed by the Conflict of Interest Office and the Conflict of Interest Committee. In some cases, a conflict of interest management plan must be finalized concurrently with completion of a license agreement. More information may be obtained at the Conflict of Interest Office website.

If my invention is licensed to a UT Southwestern startup company, will I have to leave my position at UT Southwestern?

No, you only need to leave your employment at UT Southwestern if you decide to become an employee of the startup company. UT Southwestern policy does not permit you to be an employee or director of the startup. However, you are allowed to serve as a member of a scientific or medical advisory board or as a compensated consultant to the startup. With department chair approval, faculty may spend up to a total of 20 percent of their time on all of their outside activities, consistent with UT Southwestern policies. The Office for Technology Development maintains a neutral position in instances where a faculty member might choose to change careers by joining a startup company. This decision is yours and not determined by the OTD.