COMP 323: Research Administration For Scientists Intellectual Property Wednesday, April 19, 2006.

COMP 323: Research Administration For Scientists

Intellectual Property

Wednesday, April 19, 2006

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What is Intellectual Property?

Any product of the human mind:• Idea• Invention• Expression• Unique Name• Business Method• Industrial Process• Chemical Formula

that has value in the marketplace and can be reduced to a tangible form.

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United States ConstitutionArticle 1, Section 8

“The Congress shall have power:

… to promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries …”

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There are 4 categories of IP law that address different types of IP:

• Patent Law

Important: Understand all 4 before seeking coverage for your creation.

• Copyright Law• Trademark Law• Trade Secret Law

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Intellectual Property Law -

Legal Principles that determine:• Who owns IP

In short, IP law determines when and how a person can capitalize on a creation!

• When and how owners can exclude others from exploiting IP

• Degree of recognition courts are willing to afford IP

Application of Intellectual Property

Bayh-Dole Act of 1980

• Background– Before 1980, government restrictions limited the

commercialization of inventions developed with the support of federal funds

• Bayh-Dole Act changed that– Authorized recipients of federal funds to retain

ownership of patents

– Charged recipients with ensuring commercial use

– Government retains license to practice the invention (plus march-in rights)

– Tech transfer was “born”

Application of Intellectual Property

AUTM Report

• Association of University Technology Managers FY 2000 Survey Summary– In 2000 alone, 347 new commercial products

were introduced– Since 1980 3,376 new companies formed– As of 2000 2,309 start ups still operating– 2000 adjusted gross income - $1.26 billion

(licenses and options)

IP Protection

• Disclose and Protect (CDAs/NDAs, Provisionals) Patentable Inventions BEFORE:

– Publication Submission– Proposal Submission– Presentations– Discussions w/ Non-

University Personnel– Web Postings – Thesis/Dissertation Submission

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Patent Law

What is a patent?A right granted by the government to a person or legal entity

What “right” does a patent grant?The right to exclude others from making, using, or selling the patented invention for a fixed period of time

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Patent Law

How long can you exclude others from making, using, selling?

• 20 years from date of filing• You must pay maintenance fees

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Patent Law

How do you stop someone from making, using, selling?

• File a patent infringement lawsuit in federal court• Infringement – battle between a product/process

and a patent• Interference – battle between two patents (may

occur up to twelve months after patent issues) filed with PTO

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Patent Law

Who can apply for a patent?• Any true inventor regardless of

• Age

• Nationality

• Mental Competency

• Incarceration

• Even deceased persons (through their personal representatives)

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Patent Law

What form of property is a patent?• Personal property• Comparison with land

Land• Sold• Leased• Willed• Boundaries Defined by Deed• Exclusionary Rights• Yours Till You Dispose of It

Patent• Sold• Leased (Licensed)• Willed• Boundaries Defined by Claims• Exclusionary Rights• Limited Life

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Patent Law

What is the scope of a U.S. patent?

• U.S. patent rights extend throughout the U.S., its territories and possessions

• But not to foreign countries

• Must file country by country

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Patent Law

U.S. vrs. rest of the world (after GATT and WTO)

• U.S. = first to invent

• Rest of the world = first to file

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Patent Law

35 USC 101 Inventions Patentable

“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement there of, may obtain a patent therefore, subject to the conditions and requirements of this title.”

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Patent Law

Role of PTO Examiner:

• Advocate of the public

• Tries to prevent you from getting a patent (first opponent)• If he finds patentable material and you have difficulty writing a

proper claim, the law requires the examiner to write one.

• Adversarial process usually strengthens patent

• Definition of a strong patent

One that can be defended in the courts when infringed.

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Patent Law

In order for an invention to be patentable, what requirements must it satisfy?

• Novelty – different from what is known, any difference, even slight, will suffice (35 USC 102)

• Non-obvious – at the time of invention, it was non-obvious to a person skilled in the art (35 USC 103)

• Useful – has value, works as described in patent (as perceived by patent examiner)

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35 USC 102 Novelty

A person shall be entitled to a patent unless:• Invention was known/used by others in U.S. or

patented/published in U.S. or foreign country before invention by applicant, or

• Invention was patented/published in U.S. or foreign country or in use or on sale in U.S., more than one year prior to date of patent application, or

• Inventor has abandoned invention, or

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35 USC 102 Novelty

A person shall be entitled to a patent unless:

• Invention was patented/filed in foreign country by applicant more than 12 months before filing in US, or

• Before the date of applicant’s invention, the same invention was made in this country by another who had not abandoned, suppressed, or concealed it.

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35 USC 102 Novelty

“In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was the first to conceive and last to reduce to practice, from a time prior to conception by the other.”

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• Diligence

• Actual Reduction to Practice

• Constructive Reduction to Practice

• Document Disclosure Program (DDP)

• Provisional Patent Application (PPA)

• Divisional Application

Definitions

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Diligence – (or reasonable effort) applies only to the time between conception and reduction to practice (prototype development), not between reduction to practice and filing!

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Actual Reduction to Practice – building and testing the “hardware” or prototype of the invention.

Constructive Reduction to Practice – under the law, the act of filing a patent application.

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• PTO date stamps and returns one copy to inventor

• Small fee

Document Disclosure Program (DDP)

• File with PTO two copies of “Proof of Conception” documents

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• One year to file full application

• No claims included (articles and papers)

• Not examined

• Disadvantage – nothing new can be added

Provisional Patent Application (PPA)

• Locks in filing date

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• Withdraw and re-file or• File a “Continuation in Part” (CIP) – a

second patent application that relies heavily on the first

• Danger – double patenting!

Provisional Patent Application (PPA)

• Options if either new material is to be added or some claims are not supported by attached material.

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Divisional Patent Application

• Patent examiner determines that the application addresses more than one invention.

• Divides one application into two or more smaller applications and requires that they be prosecuted separately

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35 USC 103: Non-obvious Subject Matter

“A patent may not be obtained…if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention as made to a person having ordinary skill in the art to which said subject matter pertains.”

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Patent Law

Are there different types of patents?• Utility Patents (most common) – cover inventions

that function in a unique manner to produce a utilitarian result. Examples:

• New Drugs• Electronic Circuits• Software• Manufacturing Processes• New Bacteria, Animals, Plants• Machines• Manufactured Products

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Patent Law

• Design Patents (ornamentation) – cover the unique, ornamental or visible shape or design of an object.

• Uniqueness of shape must be purely for aesthetic reasons• If for functional reasons – utility patent applies

• Plant Patents – cover asexually reproducible plants through use of grafts and cuttings.

• Example:• Workshop wall clock in shape of saw blade – design

patent• Special shape for airplane to reduce turbulence – utility

patent

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Patent Law

What can’t be patented?

• Mental processes and abstract ideas (unless reduced to tangible form)

• Laws of nature

• Naturally occurring articles

• Literary/dramatic/musical/artistic works (copyrightable items)

The Life Of An Invention

Conceived but not documented Inventor has no rights!

Documented, but patent application not filedPotential rights exist if

“first to invent”

Patent pending, filed but not issued1-3 year process

kept secret by PTO

Patent issued: In-force

• Right to exclude• Patent infringement suits• Licensing• Public Record

Patent Expires•20 years after filed•No rights remain•Prior-art reference

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Patent Law

Can a patent right be lost?• Failure to pay maintenance fees• One or more prior-art references (earlier patents or

other publications) are uncovered that show that the invention wasn’t new

• Patent owner engages in illegal conduct, e.g., antitrust violations with patent

• Fraud on PTO by failing to disclose material information (e.g., prior art) while patent was pending

• Re-examination

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Re-examination

• Modest fee• Re-examination conditions

• Prior art that existed at the time patent application was filed has been discovered

• Results of re-examination may include: • Patent is fine• Some claims invalidated• Some claims narrowed • Patent invalidated

• Anyone can initiate

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Common Patent Misconceptions

1. Patent gives owner the right to practice an invention.Fact – if no person holds an exclusionary right (patent) you can practice your invention freely.

2. If a product is patented, it is bound to be superior.

Fact – a patent merely means that the invention is significantly different, not necessarily superior.

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Common Patent Misconceptions

3. Once you get a patent, you’ll make money.Fact – less than 5% of all patents produce enough revenue to pay for their prosecution costs.

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Patent Law

In order for an invention to be patentable, what requirements must it satisfy?

• Novelty – different from what is known, any difference, even slight, will suffice (35 USC 102)

• Non-obvious – at the time of invention, it was non-obvious to a person skilled in the art (35 USC 103)

• Useful – has value, works as described in patent (as perceived by patent examiner)

Parts of a Patent Application

• Title – should reflect the essence of invention without being too long (~ seven words maximum) or so specific that it’s narrower than the full scope of invention.


• Title

• Field of Invention – a one-sentence paragraph stating the general and specific field in which your invention falls, e.g., “This invention relates to bicycles, specifically to an improved petal mechanism for a bicycle”.

Parts of a Patent Application• Title

• Field of Invention

• Background – discuss how the problem to which your invention is directed was approached previously, and then list all the disadvantages of the old ways of doing it.

• Don’t be too derogatory, but make your invention look as good as possible by explaining why the prior art isn’t as good

• Keep statements factual – not opinionated

• Explain why a solution to the problem is needed


• Title


• Background

• Objects and Advantages• Objects – “What the invention accomplishes”

• Advantages – “Sing the Praises” of invention over prior art

• The more information placed here the better

• Remember – once patent issues, the entire application becomes part of the public record (prior art)

• Less likely that someone else can get an improvement patent due to non-obviousness


• Title


• Background

• Objects and Advantages

• Detailed Description• Description of drawings – a series of separate paragraphs,

each briefly describing a respective figure of your drawing, e.g., “Figure 1 is a perspective view of the invention.”

• Description of invention – detailed description of the static physical structure of invention. If a process, describe the procedures or machinery involved in it.


• Title


• Background


• Detailed Description

• Claims – the claim is the invention


• Title


• Background


• Detailed Description

• Claims

• Abstract – a one paragraph (~250 words) concise summary of the invention.

• Usually read first

• While at end of application, it goes on first page of issued patents

• Write last!


• Title

• Field of the invention

• Background

• Objects and advantages

• Detailed description

• Claims

• Abstract

Patent Application Tips• The claim is the invention

• Claim has three parts:• Preamble• Body• Whereby clause

• Purpose of claim – to unambiguously define the invention in words (no diagrams/charts)

• Structure of claim – one “sentence” (can use , ; : but no period except at end). It does not need to follow proper rules of grammar.

Patent Application Tips

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• Characterization of claim• Broad (the less said, the broader)• Narrow (the more said, the narrower)

• Five types of claims:• Process or method• Machine• Article or article of manufacture• Composition of matter• New use of previous four statutory classes

(always a method claim)

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Sample Process Claim

A method for joining two pieces of cloth together at their edges, comprising the steps of:

a. Positioning said two pieces of cloth together so that an edge portion of one piece overlaps an adjacent edge portion of the other piece, and

b. Passing a thread repeatedly through and along the length of the overlapping portions in sequentially opposite directions and through sequentially spaced holes in said overlapping adjacent portions,

whereby said two pieces of cloth will be attached along said edge portions.

SEWING

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Process/Method Claim

• If possible, try to include a process claim (the process followed to use the invention) in every patent application

• Even if an infringer can “design around” the physical claims, you will retain some protection from the process claim

Sample Machine Claim

A self-propelled vehicle, comprising:

a. a body carriage having rotatable wheels mounted there under for enabling said body carriage to roll along a surface,

b. an engine mounted in said carriage for producing rotational energy, and

c. means for controllably coupling rotational energy from said engine to at least one of said wheels,

whereby said carriage will be self-propelled along said surface.

AUTOMOBILE

Sample Software Machine Claim

A machine of inserting additional characters within an existing series of characters on a display, comprising:

a. a memory which is able to store a series of characters at an adjacent series of addresses in said memory,

b. a character input means which a human operator can use to store a series of characters in said memory at said adjacent series of addresses,

c. A display which is operatively connected to said memory for displaying said series of characters stored in said memory at said adjacent series of addresses,

d. a pointer means which said operator can manipulate to point to any location between any adjacent characters within said series of characters displayed on said display,

Sample Machine Claime. a memory controller which will:

1) direct any additional character which said operator enters via said character input means to a location in said memory, beginning at an address corresponding to the location between said adjacent characters as displayed on said display, and

2) cause all characters in said series of characters which are stored in said memory at addresses subsequent to said location in said memory to be transposed to subsequent addresses in said memory so that said additional characters will be stored in said memory at said location and before all of said subsequent characters,

whereby said display will display said additional characters within said series of characters at said location between said adjacent characters, and

whereby a writer can add words within the existing body of text and the added words are displayed in an orderly and clean fashion without having to reenter said existing body of text.

WORD-PROCESSOR

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Sample Article of Manufacture Claim

A hand-held writing instrument comprising:

a. elongated core-element means that will leave a marking line if moved across paper or other similar surface, and

b. an elongated holder surrounding and encasing said holder being removable from an end thereof to expose an end of said core-element means so as to enable said core-element means to be exposed for writing, whereby said holder protects said core-element means from breakage and provides an enlarged means for holding said core-element means conveniently.

PENCIL

Sample Composition of Matter Claim

A rigid building and paving material comprising a mixture of sand and stones, and a hardened cement binder filling the interstices between and adhering to sand and stone, whereby a hardened, rigid and strong matrix for building and paving will be provided.

CONCRETE

Sample New Use Claim

A method of stimulating the growth of swine comprising feeding such swine aspirin in an amount effective to increase their rate of growth.

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Comprising – including the following items, but can also include others (open-ended).

Definitions

Consisting of – including the following items only (closed-ended).

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Food item comprising the following items: bananas, strawberries, ice cream and whipped cream.

Banana Split Example

Food item consisting of the following items: bananas, strawberries, ice cream and whipped cream.

Question: If I add walnuts, do I infringe on either claim?

• Write claim based upon your understanding of invention

• Broaden based upon results of prior art search• Narrow based upon your instincts concerning non-

discovered prior art• Don’t be greedy! Seek adequate protection for

your invention – don’t try to “cover the waterfront”

Writing Claims

Strategy

If too broad, the claim may include some prior art that was never intended and may invalidate patent.

Remember

• Ways to make a claim narrower• Qualify an existing element• Add an additional element

Writing Claims

• Limit claim to what something is:• Not what it is not• Not its advantages

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• First claim is always independent

Writing Claims

• Write a series of dependent claims in successively narrower terms

• If broader claim is disallowed, a more specific (narrower) one may be allowed (becomes the new independent claim)

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Important: Always chart claims to be certain no claims are “left hanging”!

Writing Claims

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Independent Claim

An article of furniture for holding objects for a sitting human, comprising:

(a) a sheet of rigid material of sufficient size to accommodate use by a human being for writing and working

Writing Claims

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Writing Claims: Simple Claims Map

1. An article of furniture . . .

4. The article of furniture of Claim 3 wherein said sheet of chipboard has a rectangular shape.

1 2 3 4 5 6 7 8

2. The article of furniture of Claim 1 wherein said sheet of rigid material is made of wood.

3. The article of furniture of Claim 2 wherein said sheet of rigid material of wood is made of chipboard.

I D D D D D D D

Independent ClaimAn article of furniture for holding objects for a sitting human, comprising:(a) a sheet of rigid material of sufficient size to accommodate use by a human being for writing and working;(b) a plurality of elongated support members of equal length; and(c) means for joining said elongated support members at right angles to the underside of said top at spaced locations so as to be able to support said top horizontally.

Writing Claims

15D

14D

13D

1I

9D

10D

11D

12D

2D

3D

4D

5D

6D

7D

8D

Writing Claims: Multiple Path Dependent Claims Map

(a) a sheet of rigid material of sufficient size to accommodate use by a human being for writing and working

(b) a plurality of elongated support members of equal length

(c) means for joining said elongated support members at right angles to the underside of said top at spaced locations so as to be able to support said top horizontally.

Strategies for developing multiple independent claims:

• Describe the invention from several different perspectives

• Write a claim on part of the invention, then on the remainder of invention, then on both parts combined

Writing Claims

• Initial filing fee allows 20 claims total with up to 3 being independent

• More allowed for additional fee

• Multiple dependent fees allowed for additional fees

• Must be expressed in Bolian “and/or” terms

Writing Patent Claims

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Understanding Infringement

Battle between a product/process and a patent

1 2 3 4 5 6 7 8

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Infringed


1 2 3 4 5 6 7 8

Are any other claims infringed?

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Infringed


1 2 3 4 5 6 7 8


Yes, 1 and 2 but not 4-8!

15D

14D

13D

9D

10D

11D

12D

5D

6D

7D

8D


4D

1I

2D

3D

15D

14D

13D

9D

10D

11D

12D

5D

6D

7D

8D


4D

Infringed


1I

2D

3D

15D

14D

13D

9D

10D

11D

12D

5D

6D

7D

8D


4D

Infringed


1I

2D

3D

Yes, 1, 2 and 3 but not 5-15!

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Understanding Invalidation

1 2 3 4 5 6 7 8

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Are any other claims lost?

Prior art reads on claim

1 2 3 4 5 6 7 8

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Yes, 1-3 but not 5-8!


1 2 3 4 5 6 7 8

15D

14D

13D

1I

9D

10D

11D

12D

2D

3D

4D

5D

6D

7D

8D




15D

14D

13D

1I

2D

3D

4D

5D

6D

7D

8D



Yes, 1-4 and 9-15!


9D

10D

11D

12D

15D

14D

13D

1I

9D

10D

11D

12D

2D

3D

4D

5D

6D

7D

8D



Yes, 1-4 and 9-15!

How should you respond?


11D

10D

9I

5I

6D

7D

8D

1I

2D

3D

4D

Understanding InvalidationPrevious dependent claims become new independent claims!

13 5

9

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Can You Sue For Infringement If?

Product comes on market that infringes Claim 6. They find prior art that reads on Claim 5.

1 2 3 4 5 6 7 8

Prior Art

Infringement

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Can You Sue For Infringement If?

Product comes on market that infringes Claim 6. They find prior art that reads on Claim 5.

1 2 3 4 5 6 7 8

Prior Art

Infringement

Yes, Claims 6-8 remain!

Tip: Patent Prosecution

• Never say anything negative about your invention in writing

• If examiner raises an issue in an action and you agree, simply ignore the issue in your response thus conceding the point

• If examiner uses prior art in an action to argue obviousness, check for diverse fields

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History of Copyright in the U.S.• Late 15th Century England – Introduction of Printing Press

• 1710 – Statute of Anne• Established principles of author’s ownership of copyright

• Fixed term of protection (14 years, renewable for 14 more if author is alive upon expiration of protection)

• Created a “public domain” for literature by limiting term of protection and ensuring that once a work was purchased the author no longer had control over its use

• 1787 – U.S. Constitution• According to Article I, Section 8, Clause 8 of the U.S. Constitution,

“the Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries”

History of Copyright in the U.S.

• 1831 – Revision of the U.S. Copyright Act• Extended term of protection to 28 years with possibility of a 14 year

extension

• Conformed with European law

• 1870 – Revision of the U.S. Copyright Act• Administration of copyright registrations moved from District

Courts to the Library of Congress Copyright Office

• No change in term of protection

• 1790 – U.S. Copyright Act• Granted American authors the right to print, re-print or publish

their work for a period of 14 years and to renew for another 14 years


• 1908 – Berlin Act• Set duration of copyright protection at life of author plus 50 years

• Expanded scope to include newer technologies

• 1909 – Revision to the U.S. Copyright Act• Broadened scope to protect all works of authorship

• Extended term of protection to 28 years with possibility of a 28 year renewal

• 1886 – Berne Convention• Mutual recognition of copyright between sovereign nations

• Uniform law to replace need for registration in every country

• U.S. did not become a signatory until 1988


• In anticipation of U.S. adherence to the Berne Convention (1886), extended term of protection to life of author plus 50 years (75 years for works for hire)

• Allowed for library copying without permission for purposes of

• scholarship

• preservation

• inter-library loan

• “Fair Use” Doctrine was Codified

• the “fair use” of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright”

• 1976 – Revision to the U.S. Copyright Act


• 1988 – U.S. becomes Berne Convention Signatory

To determine whether use is a “fair use”:1. purpose and character of use (including whether the use is

commercially motivated or instead is for nonprofit educational purposes)

2. nature of copyrighted work

3. amount and substantiality of the portion used in relation to whole

4. effect of use on potential market

• 1990 – Revision to the U.S. Copyright Act• Allowed libraries to lend computer software provided “copy of a

computer program which is lent by such library has affixed to the packaging containing the program a warning of copyright”


• 1991 – Basic Books, Inc. v. Kinko’s Graphics Corp.

A Federal District Court in New York ruled that Kinko’s Graphic Corporation infringed copyrights, and did not exercise fair use, when it photocopied coursepacks that included book chapters, and then sold them to students for classwork. The court found that most of the fair use factors worked against Kinko’s in this case, especially given Kinko’s profit motive in making the copies. Additionally, the court found that the classroom guidelines did not apply to Kinko’s. The court did not rule that coursepacks cannot constitute fair use in other circumstances.


• 1991 – Feist Publications v. Rural Telephone Service Co., Inc.

The U.S. Supreme Court found that the U.S. Constitution requires that, for a work to receive copyright protection, it must reflect creative expression or originality. Thus, the compilation of a telephone directory by Feist was not an infringement even though it was compiled from the information in the Rural Telephone Service White Pages. The information in the white pages was not copyrightable because it comprised “comprehensive collection of facts arranged in conventional formats.”

New Challenges to Intellectual Property Rights in the Digital Age

• Copyright and Printed Matter• Copying a book is expensive (poor quality)

• Loaning it to someone means you can’t use it

• Somewhat self-enforcing

• Law, public policy, economics and technology were in relative balance

• Copyright and Electronic Information• Infinite number of high quality copies

• Free and instantaneous distribution (world-wide)

• Expectations of internet users access to information

• Copyright infringement is relatively easy to accomplish

• Law, public policy, economics and technology are no longer in relative balance


• The Digital Dilemma• The promise of more quantity, quality and access to information while

• Imperiling the means for rewarding those who create and publish thus

• Reducing the incentive to create!

• 200 Years of Intellectual Property History• Rethinking our fundamental premises and practices

• Test cases of significant importance occur almost daily

• Changes are every bit as significant to society as those associated with the industrial revolution

• All this occurring in the context of a global economy where laws and practices vary widely


• Remember – Balance of Private Rights and Public Interest

“the Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries”

Copyright Law in the Digital Age

• 1985 – License agreement between Apple and Microsoft concerning screen display

• 1988 – Copyright and breach of contract lawsuit by Apple alleging that in Windows 1.0 Microsoft (and HP’s NewWave) went beyond license agreement

• 1994 – 9th Circuit Court of Appeals Ruled

• Copyright law protects the original expression of ideas in tangible form (not ideas alone)

• Normal standard – infringing copy is substantially similar to original work

• New standard – Virtually identical (higher standard)

• 1988 – Apple v. Microsoft

• 1993 – Playboy Enterprises Inc. v. Frena

The Florida Northern District Court held that Frena, an electronic bulletin board operator, had violated Playboy’s copyright when one of their photographs was digitized and placed on the bulletin board system by one subscriber and downloaded by another subscriber. According to the decision, “it does not matter that Defendant Frena may have been unaware of the copyright infringement. Intent to infringe is not needed to find copyright infringement. Intent or knowledge is not an element of infringement, and thus even an innocent infringer is liable for infringement; rather innocence is significant to a trial court when it fixes statutory damages, which is a remedy equitable in nature.”


• 1998 – Digital Millennium Copyright Act (DMCA)• Implemented WIPO Internet Treaties

• Facilitated Internet Broadcasting

• Section 1201 “prohibits gaining unauthorized access to a work by circumventing a technological protection measure put in place by the copyright owner where such protection measure otherwise effectively controls access to a copyrighted work”

• 1998 – Sonny Bono Copyright Term Extension Act• Extended protection to life of the author plus 70 years (95 years for

works for hire)

• Applied to current as well as future copyrighted materials

• 1-15-03 Supreme Court upheld law


• 1998 – 19 year old Shawn Fanning (nickname Napster), a college student at Northeastern University, developed a software application to search for MP3 files on line.

• MP3’s – greatly compressed file size (12:1) and high sound quality, made them the preferred means to digitally transmit music files over internet

• His peer-to-peer (P2P) file sharing technology allowed users to connect with each other and share individual files stored on their individual hard drives (without regard to copyright)

• June 12, 2000 – RIAA files lawsuit against Napster for copyright infringement

• February 12, 2001 – 9th Circuit Court of Appeals ruled Napster liable for both contributory and vicarious copyright infringement


• 2000 – Recording Industry Association of America v. Napster

• Dmitri Sklyarov, a Russian programmer accused of circumventing copyright protections in Adobe Systems’ eBook Reader while working for a Russian software firm, ElcomSoft. Sklyarov was arrested in July 2001. ElcomSoft was charged with one count of conspiracy and four counts of trafficking in technology used to circumvent copyright protections.

• ElcomSoft’s attorneys argued that the actions at issue in the case occurred outside of the U.S., and that the law banned tools that consumers could use for legitimate purposes, such as blind people converting e-books to audio files to be read aloud by their computers. Finally the attorneys argued that computer code is speech and is therefore protected under the first amendment to the U.S. Constitution.

• ElcomSoft verdict: Not guilty (12-17-02)

• Jury found there was insufficient evidence to prove ElcomSoft acted “willfully” and knew their actions were intended to violate the law.

Copyright Law in the Digital Age• 2001 – Russian Programmer Arrested for Copyright

Circumvention

• Two photographers claimed that inclusion of their photographs in the NGS’s CD-ROM version violated their copyrights.

• NGS argued that Section 201 (c) of the Copyright Act permits the owner of copyright in a collective work, such as a magazine or encyclopedia, to reproduce and distribute an individual author’s freelance contribution “as part of that particular collective work, any revision to that collective work, and any later collective work in the same series.”

• Furthermore, NGS argued that since the CD-ROM included every magazine published between 1888-1996, it would be impossible to locate every free-lance photographer who owns copyrighted pictures.

• Greenberg argued that the copyright law prohibits new uses for existing photographs without negotiated royalty payments.

• 11th Circuit Court agreed with Greenburg and Supreme Court refused to hear the case, thus upholding lower court decision which found for Greenburg.

Copyright Law in the Digital Age• 2001 – Greenberg v. National Geographic Society

Parody: Fair Use or Copyright Infringement

• A parody, because it is a method of criticism, must inevitably make use of another creative work. This inherently creates a conflict between the creator of the work that is being parodied (as no one likes to be criticized, made fun of or ridiculed) and the creator of the parody. It is also highly unlikely that a copyright owner will grant permission or a license to a parodist to use their copyright protected work in creating a parody.


• Since copyright law prohibits the substantial use of a copyrighted work without permission of the copyright owner, and because such permission is highly unlikely when the use is to create a parody, it may be necessary for the parodist to rely on the fair-use defense to forestall any liability for copyright infringement.

• Another defense – first amendment right of free speech!

• A parody, because it is a method of criticism, must inevitably make use of another creative work. This inherently creates a conflict between the creator of the work that is being parodied (as no one likes to be criticized, made fun of or ridiculed) and the creator of the parody. It is also highly unlikely that a copyright owner will grant permission or a license to a parodist to use their copyright protected work in creating a parody.

• 1994 – Campbell v. Acuff-Rose Music Inc.

The Supreme Court ruled that 2 Live Crew’s parody of Roy Orbison’s song, “Pretty Woman,” was a fair use. The court found that a commercial use could be a fair use especially when the markets for an original work and a transformative work are different.


COMP 290-083

Copyright Law

What is a copyright?

A right that the government gives an author of any original work of expression to exclude others from copying or commercially using the work without approval.

• Literary/dramatic/musical/artistic works• Software• Any work of authorship

What does a copyright cover?

COMP 290-083

Copyright Law

When does a copyright go into effect?

• Common – at moment of creation

• Registered – with U.S. Copyright Office (USCO)

• Helps to prove “first to create” in infringement suits (also can collect damages plus legal fees)

• Copyright Notice –

Copyright 2003 Timothy L. QuiggAll Rights Reserved

“[TITLE of SOFTWARE]”

Copyright © [DATE], The University of North Carolina at Chapel Hill All rights reserved. No part of this software may be sold or distributed in any form or by any means without the prior written permission of the Department of Computer Science, University of North Carolina at Chapel Hill. Distribution and use of this software is subject to the Software License Agreement [ incorporated in this software][set forth below]. By having, retaining or using a copy of this software, you agree to be subject to the terms of the Software License Agreement.

*******

Software License Agreement Permission is given to copy [“Name of Software”], and its files (“the Software”) and to use them locally, as long as foregoing Copyright Notice is not removed and the Software name is retained unaltered. By opening, possessing, retaining, using, or having a copy of the Software, you are deemed to have agreed to the terms of this Software License Agreement. The Software is provided strictly on an "as is" basis without warranty of any kind. Neither the University of North Carolina at Chapel Hill, its faculty, staff or students, nor anyone else who has been involved in the creation, production or delivery of the Software shall be liable for any direct, indirect, consequential or incidental damages arising out of the use or inability to use the Software even if such entities or persons may be advised of the possibility of such damages. No part of this software may be sold or distributed in any form or by any means without the prior written permission of the Department of Computer Science, University of North Carolina at Chapel Hill. Your use of the Software is limited to non-commercial, not-for-profit uses and activities. To secure permission to make any other use of the Software, you should contact the person named below. Contact person: ______________, University of North Carolina at Chapel Hill email: @cs.unc.edu

phone:fax:

COMP 290-083

Copyright Law

How long does a copyright last?

Life of author + 70 years

• Directly copying or commercially using the particular arrangement of words in a published work

• You can use the ideas/concepts if expressed in your own words

What constitutes a copyright infringement?

COMP 290-083

Computer Software: Where Patents and Copyrights Overlap

Software as a creative work of expression - copyright

Software as a set of instructions that make a machine operate in a certain way - patent

COMP 290-083

Computer Software

Advantages to patent protection:• 20 years, broad protection

Disadvantages to patent protection:• > 2 years to issue (may not be valuable)• Cost

COMP 290-083

Computer Software

Advantages to copyright protection:• Inexpensive• Immediate protection• Life of author + 70 years

Disadvantages to copyright protection:• Copyright only covers the way program is written, not

what it does (all word processors do the same things)• Easy to “design around”

COMP 290-083

Comparison of Design Patent with Copyright

Design Patent• Aesthetic Aspects of

Manufactured Articles

• Broad Rights

• Expensive Filing/Prosecution with PTO

Copyright• Literary/Artistic Works

• Narrow Rights Against Copiers, Not Against Independent Creators

• Small Filing Fee

COMP 290-083

Trademark Law

What is a trademark?

• Any word or symbol that is consistently attached to a product to identify and distinguish it from others in the marketplace, e.g., a brand name

• Often used with patents for extra protection• Xerox has patents on photocopiers and the Xerox

trademark name• If patent expires, trademark still offers some

protection• Also used with products that are not patent protected

(Hula Hoop, Crock Pot)

COMP 290-083

Trademark Law

Other protected words/symbols include:

• Service Marks (Blue Cross/Blue Shield Emblem)

• Certification Marks (Good Housekeeping Seal of Approval)

• Collective Marks (FDIC Symbol)

• Trade Name (Proctor & Gamble is trade name - Ivory is trademark)

Trademark Law

• So, you need a Band-Aid (sterile bandage strip) and some aspirin (acetylsalicylic acid), because while you were in the park roller-blading (in-line skating) and rocking out to your Walkman (portable stereo device), a Frisbee (plastic flying disk toy) clocked you on the noggin (head).

Trademark Law

• So, you need a Band-Aid (sterile bandage strip) and some aspirin (acetylsalicylic acid), because while you were in the park roller-blading (in-line skating) and rocking out to your Walkman (portable stereo device), a Frisbee (plastic flying disk toy) clocked you on the noggin (head).

• The word “aspirin” is a trademarked brand owned by the German company Bayer AG. Only Bayer may legally use that word everywhere in the world, with the United States being the lone exception. That’s a legacy of World War II.

• Trademark laws are specific per country. Some countries don’t even have trademark laws.

Trademark Law

• June, 2002

Austria’s Supreme Court ruled that Sony can no longer claim exclusive trademark rights for the name “walkman,” the hand-held portable tape player it introduced in 1979. The court reasoned that the word had passed into common usage once it had been defined in a German dictionary as any portable stereo player. In the United States, however, the Walkman – name and product – remains solely under Sony’s ownership, and will probably remain so for the foreseeable future.

Trademark Law

• January, 2003 – the case involved a Kentucky mom-and-pop business called Victor’s Secret that sells “adult novelty” and “wild outfits.” The claimed the name was inspired by Victor Moseley’s desire to keep the business secret from a former employer. The lingerie manufacturer Victoria’s Secret, which has held the trademark on its name since 1981, claimed unfair competition, trademark infringement, and sued him.

• At issue for the Supreme Court was whether Victoria’s Secret had to show its trademark was “diluted,” or whether there was merely the likelihood of economic harm if the store was allowed to keep the name.

• A unanimous court ruled that while Victoria’s Secret unquestionably has an interest in protecting its famous name, federal trademark law requires more evidence that a competitor actually caused harm by using a sound-alike or knockoff name. Ruling for Victor’s Secret.

Victoria’s Secret v. Victor’s Secret

Trademark Law

• January, 2003 – The Supreme Court declined without comment to hear a rancorous appeal from Mattel in a trademark battle over the right to parody Barbie in song. Mattel sued after Aqua, a Danish band, called Barbie a “blond bimbo” in their smash 1997 dance single “Barbie Girl.”

• The 9th Circuit ruled last summer that Aqua’s free-speech rights in their parody outweighed Mattel’s right to see its trademark untarnished and undiluted by Aqua’s mean lyrics.

• Barbie broke her silence today to speak out about the lawsuit, issuing the following press release from the steps of her Barbie Dreamhouse in Malibu:

Matel v. MCA Records and Aqua

Trademark LawBarbie’s Response

Ladies and Gentlemen:

It is with a heavy chest that I learned of the Supreme Court’s decision this week not to hear the appeal of my case against Aqua. I want to say for the record that I believe strongly in free speech and that for only $1.99 I will phone you or your child at home and speak freely to them about all things Barbie TM. So call now. I also want to add that as a feminist, an international spokesmodel, and an artist, I respect the court’s decision about the right of everyone to capitalize on and exploit me and not just the people at Mattel.

Finally, I want to express my deep regret about the court’s decision to hear Mickey Mouse’s intellectual property lawsuit earlier this year, while refusing to hear mine. It’s hard to believe that the Supreme Court would be more interested in the fate of that tired little Disney rodent than they would be in mine, but I guess that just goes to show you that sexism is still alive and well in America. Maybe someday when everyone on the Supreme Court looks like and/or Ann Coulter, women, feminists, and America’s downtrodden will finally be treated equally in the eyes of the law.

Thank you.

Disclaimer: The above material is intended purely as a parody of Barbie and in no way reflects an attempt by Slate to capitalize on Barbie’s name, likeness, or image. Any references herein to “Barbie” are purely coincidental.

Trademark Law

Offensive rights for trademark protection:• Arbitrary (Apple Computers), fanciful (Double

Rainbow Ice Cream), or coined terms (Intel) are strongest terms

• Generic (“The Pill” for birth control pills) or descriptive (“Electric Fork”) are weak and yield little offensive rights

• Don’t select a mark already in use (or close enough to cause customer confusion, mistake or deception)

• Use the name or file an intent-to-use (ITU)• Register with PTO

COMP 290-083

Trade Secret Law

What is a trade secret?

Any information, design, devise, process, composition, technique, or formula that is not known generally and that affords its owner a competitive business advantage

• Examples

• Formula for paper used to make U.S. currency

• Chemical recipes for soft drinks, cosmetics, etc.

• Manufacturing process for forming eyes in needles

COMP 290-083

Trade Secret Law

Trade secrets may also take the form of “Business Information.”

• Customer lists

• Names of suppliers

• Pricing data

Both technical and business information trade secrets can be protected!

COMP 290-083

Trade Secret Law

The law affords protection for trade secrets:

1. Proportional to their business value and

2. Based upon how well the business protected the secret

The courts have rejected requests for relief if company had sloppy procedures for protecting secrets!

COMP 290-083

Relationship of Patents To Trade Secrets

• Pending patent applications are confidential, thus the information can be protected as a trade secret

• Rejected patent applications remain confidential, thus the information can be protected as a trade secret

• Even if a decision is made by PTO to grant a patent, it can be rejected

COMP 290-083


Why would an owner choose to reject patent protection in favor of protection under trade secret law?

• Perpetual protection is possible• Cost• Confidentiality makes it hard to “design around”• Inventors aren’t named in trade secret rights• Trade secret rights are obtained immediately

COMP 290-083


Why would an owner choose patent protection over trade secret law?

• Reverse engineering is possible with trade secrets.• Patents are presumed valid by the court, trade secrets

must be proven to exist before the suit may proceed.• Trade secrets discovered by legitimate means may be

patented by others (if an invention is protected under trade secret law and put to commercial use, a patent must be filed within one year or any subsequently issued patent may be invalided).

COMP 290-083

Important

Inventors should consider the relative

advantages/disadvantages available for

protecting their creations under

U.S. intellectual property law!

University/Industry Research Collaboration Issues

2. Licensing Agreements

3. Industry-Sponsored Research

4. Conflict of Interest

1. NDA/CDA/PIA

Non-Disclosure AgreementsOne or Two Way

PROPRIETARY INFORMATION EXCHANGE AGREEMENT

This Agreement is entered into by and between Corporation, a corporation organized and existing

under the laws of Delaware, by and through its Electronic Systems, having offices at Baltimore,

Maryland (hereinafter referred to as “Corporation”) and the University of North Carolina, Chapel Hill,

a corporation organized and existing under the laws of by and through its Division, having

offices at 245 Sitterson Hall, UNC Chapel Hill, NC 27599 (hereinafter referred to as “UNC ”).

Subject of Corporation information: Strategy and proposal information for DARPA Class Program.

Subject of UNC information: Strategy and proposal information for DARPA Class Program.

Purpose of exchange: To enable teaming discussions for the DARPA Class Program.

The parties hereto desire to exchange the information described above, and considered by them to

be proprietary, for the above-stated purpose. The party furnishing the proprietary information will

be referred to as the “Disclosing Party” and the party receiving the proprietary information will be

referred to as the “Receiving Party”. In order to provide for the protection of such proprietary

information from unauthorized use and disclosure, the parties hereby agree that the disclosure of

such information between them shall be subject to the following terms and conditions:

Non-Disclosure Agreements

1. Only that information disclosed in written form and identified by a marking thereon as

proprietary, or oral information which is identified as proprietary at the time of disclosure and

confirmed in writing within thirty (30) days of its disclosure, shall be considered proprietary

and subject to this Agreement.

2. The exclusive points of contact with respect to the delivery and control of proprietary

information disclosed hereunder are designated by the parties as follows:

UNC: Faculty Member name, address and

phone

Corporation: Contact name, address and phone

Either party may change its point of contact by written notice to the other.

Definition of Confidential Information

Non-Disclosure AgreementsDuration

3. Information identified and disclosed as provided in this Agreement shall be held by the

Receiving Party in confidence for a period of 5 year(s) from the date of receipt. During such

period, such information shall be used only for the purpose stated above and shall not be

disclosed to any third party. Neither party shall be liable for disclosure pursuant to judicial

action or government regulation or requirement, provided that the originating party is given

prompt notice of such government or judicial action and is afforded an opportunity to respond

prior to disclosure by the Receiving Party.

Non-Disclosure AgreementsDegree of Care

4. The parties shall have no obligation under this Agreement to hold information in confidence

which, although identified and disclosed as stated herein, has been or is:

a) developed by the Receiving Party independently and without the benefit of information

disclosed hereunder by the Disclosing Party;

b) lawfully obtained by the Receiving Party from a third party without restriction;

c) publicly available without breach of this Agreement;

d) disclosed without restriction by the Disclosing Party to a third party, including the

United States Government; or

e) known to the Receiving Party prior to its receipt from the Disclosing Party.

5. Each party shall use not less than the degree of care used to prevent disclosure of its own

proprietary information to prevent disclosure of information received in accordance with this

Agreement. In no event, however, shall less than a reasonable standard of care be used.

Non-Disclosure AgreementsExport Control

6. All information received and identified in accordance with this Agreement shall remain the

property of the Disclosing Party and shall be returned upon request. Nothing contained herein

shall be construed as a right or license, express or implied, under any patent copyright, or

application therefore, of either party by or to the other party.

7. Any U. S. Government classified information disclosed by one party to the other shall be

handled in accordance with the Department of Defense Industrial Security Manual for

Safeguarding Classified Information (DoD 5220.22-M) or the National Industrial Security

Program Operating Manual (NISPOM), their supplements, and other applicable U. S.

Government security regulations.

8. The Receiving Party represents and warrants that no technical data delivered to it by the

Disclosing Party shall be exported from the United States without first complying with all

requirements of the International Traffic in Arms Regulations and the Export Administration

Act, including the requirement for obtaining any export license, if applicable. The Receiving

Party shall first obtain the written consent of the Disclosing Party prior to submitting any

request for authority to export any such technical data.

Non-Disclosure AgreementsGoverning Law – Authorized Signature

9. The terms and conditions herein constitute the entire agreement and understanding of the

parties and shall supersede all communications, negotiations, arrangements and agreements,

either oral or written, with respect to the subject matter hereof. No amendments to or

modifications of this Agreement shall be effective unless reduced to writing and executed by

the Parties hereto. The failure of either party to enforce any term hereof shall not be deemed a

waiver of any rights contained herein.

10. The effective date of this Agreement shall be the date of the last signature below. This

Agreement shall expire one (1) year from the effective date hereof unless extended in writing

by the parties hereto. The obligations of the parties contained in paragraph 3 above shall

continue in effect notwithstanding the expiration of this Agreement.

11. This Agreement shall be governed and interpreted in accordance with the laws of the State of

Maryland except its rules in regard to choice of laws.

CORPORATION UNIVERSITY OF NORTH CAROLINA, CHAPEL HILL

BY: BY:

TYPED NAME: TYPED NAME:

TITLE: TITLE:

DATE: DATE:

AGREEMENT NO.:


1. NDA/CDA/PIA


Licensing AgreementTHIS LICENSE AGREEMENT is made and entered into this ___ day of _______, 199__ between THE

UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL having an address at CB #4105, 308 Bynum Hall, Chapel Hill,

N.C. (hereinafter referred to as University) and _________________ , a corporation organized and existing under the

laws of _________ and having an address at ____________________________________, (hereinafter referred to as

Licensee).

W I T N E S S E T H

WHEREAS, University owns and controls an invention known as " ________"; file #OTD ______ (hereafter,

"Invention"); and

WHEREAS, the Invention was developed by __________ (hereafter, "Inventor"), of the University; and

WHEREAS, Licensee is desirous of producing, using and selling products which include the use of Invention

and is willing to expend its best efforts and resources to do so if it can obtain a license to use the Invention under

the terms and conditions set forth herein; and

WHEREAS, University desires to facilitate a timely transfer of its information and technology concerning the

Invention for the ultimate benefit of the public and this transfer is best accomplished by the grant of this license; and

WHEREAS, in the opinion of the University, this transfer can best be accomplished consistent with its mission

by affiliation with Licensee;

NOW, THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set

forth, it is agreed by and between the parties as follows:

Licensing Agreement1. Definitions

1.1 "University Technology" means any unpublished research and development information, know-how,

and technical data in the possession of the Inventor prior to the effective date of this Agreement which relates to and

is necessary for the practice of the Invention and which University has the right to provide to Licensee.

l.2 "Licensed Products" means any method, procedure, product, or component part thereof whose

manufacture or sale includes any use of University Technology or Patent Rights.

1.3 "Patent Rights" means any U.S. patents and/or patent applications covering the Invention owned or

controlled by University prior to or during the term of this Agreement and which University has the right to provide to

Licensee, as well as any continuations, continuations in part, divisionals, provisionals, continued prosecution

applications, or reissues thereof, and any foreign counterpart of any of the foregoing.

1.4 "Net Sales Price" means the invoiced sales price, less any charges for (a) sales taxes or other taxes

separately stated on the invoice and (b) shipping and insurance charges.

1.5 "Net Sales" means the total Net Sales Price of Licensed Products, after deducting actual allowances

for returned or defective goods, less trade discounts, but before cash discounts. Licensed Products will be

considered sold when billed out, or when delivered or paid for before delivery, whichever first occurs.

1.6 "Licensed Territory" means ___________________.

1.7 "Licensed Field" means, and is limited to, the practice of the Invention for _________________.

Licensing Agreement2. Grant of License and Term

2.1 University grants to Licensee to the extent of the Licensed Territory a non-exclusive right and license

to use University Technology in the Licensed Field, subject to all the terms and conditions of this Agreement.

2.2 University grants to Licensee to the extent of the Licensed Territory, an exclusive license under the

Patent Rights and the right to make, use and sell Licensed Products in the Licensed Field, upon the terms and

conditions set forth herein.

2.3 Any license granted herein is exclusive for a term beginning on the date of execution of this

Agreement and, unless terminated sooner as herein provided, ending at the expiration of the last to expire patent

included in the Patent Rights, or if no patents mature from said Patent Rights, such license shall terminate 15 years

from the date of its commencement.

2.4 Licensee shall not disclose any unpublished University Technology furnished by University pursuant

to Paragraph 2.1 above to third parties during the term of this Agreement or any time thereafter, provided, however,

that disclosure may be made of any such University Technology at any time: (1) with the prior written consent of

University, or (2) after the same shall have become public through no fault of Licensee.

2.5 Notwithstanding the foregoing, any and all licenses granted hereunder are subject to the rights of the

United States Government which arise out of its sponsorship of the research which led to the Invention.

Licensing Agreement3. License Fee and Royalties

3.1 Licensee shall pay to University a license issue fee in the amount of _______________. Licensee will

pay a further license fee in the form of reimbursement of the costs (including attorney's fees) arising out of the

patenting of the Invention pursuant to Article 9 of this Agreement. Both the license issue fee and the reimbursement

of patenting costs shall be non-refundable and shall not be a credit against any other amounts due hereunder except

as may be provided for elsewhere in this Agreement. Reimbursement of patenting costs shall be due upon monthly

billings from University.

3.2 Beginning on the effective date of this Agreement and continuing for the life of this Agreement,

Licensee will pay University a running royalty of ___________ of all Net Sales of the Licensed Product(s).

3.3 Licensee agrees to make quarterly written reports to University within 30 days after the first days of

each January, April, July, and October during the life of this Agreement and as of such dates, stating in each such

report the number, description, and aggregate Net Selling Prices of Licensed Products sold or otherwise disposed of

during the preceding three calendar months and upon which royalty is payable as provided in Article 3.2 hereof. The

first such report shall include all such Licensed Products so sold or otherwise disposed of prior to the date of such

report. Until Licensee has achieved a first commercial sale of a Licensed Product a report shall be submitted by

Licensee at the end of each January, April, July and October after the effective date of this Agreement and will include

a full written report describing Licensee’s technical and other efforts made towards such first commercial sale for all

Licensed Products under development.


3.4 Concurrently with the making of each such report, Licensee shall pay to the University royalties at

the rate specified in Article 3.2 of this Agreement on the Licensed Products included therein.

3.5 If in any calendar year during the term of this Agreement, total amounts payable under Paragraph 3.2

hereof are less than the minimum amount indicated in the Schedule below corresponding to such calendar year,

Licensee shall pay the University within thirty (30) days after the end of such calendar year, the difference between

the amounts payable for such calendar year and said minimum amount.

SCHEDULE

Calendar Year Minimum Amounts

199__

199__

199__

199__ and all

subsequent years

3.6 Should this Agreement become effective or terminate or expire during a calendar year, the minimum

royalty under paragraph 3.5 for such portion of a year shall be determined by multiplying the minimum royalty set

forth in said paragraph for the year in which this Agreement becomes effective, terminates or expires, by a fraction,

the numerator of which shall be the number of days during such calendar year for which this agreement shall be in

effect and the denominator of which shall be 365.


3.7 In the event of default in payment of any payment owing to University under the terms of this

Agreement, and if it becomes necessary for University to undertake legal action to collect said payment, Licensee

shall pay all legal fees and costs incurred by University in connection therewith.

3.8 University may, by written notice to Licensee, terminate this Agreement during any April subsequent

to the year ______________, if Licensee has not practiced the Invention during each calendar year which precedes

each such April to the extent of generating earned royalties under paragraph 3.2 of this Agreement in the amount of

___________________.

4. Best Efforts

4.1 Licensee shall use its best efforts to proceed diligently with the manufacture and sale of Licensed

Products and shall earnestly and diligently offer and continue to offer for sale such Licensed Products, both under

reasonable conditions, during the period of this Agreement.

4.2 In particular, Licensee will use its best efforts to meet the performance milestones set forth in

Appendix A, which is attached hereto.

Licensing Agreement5. Cancellation by University

5.1 It is expressly agreed that, notwithstanding the provisions of any other paragraph of this contract, if

Licensee should fail to deliver to University any royalty at the time or times that the same should be due to University

or if Licensee should in any material respect violate or fail to keep or perform any covenant, condition, or undertaking

of this Agreement on its part to be kept or performed hereunder, then and in such event University shall have the right

to cancel and terminate this Agreement, and the license herein provided for, by written notice to Licensee if Licensee

has failed to cure any such breach within 30 days of receipt of written notice from University describing such breach.

Licensee's right to cure a breach will apply only to the first two breaches properly noticed under terms of this

Agreement, regardless of the nature of those breaches. Any subsequent breach by Licensee will entitle University to

terminate this Agreement upon proper notice.

5.2 Alternatively, should Licensee be in breach or default as set forth above, and should University be in

a position where it could rightfully terminate this Agreement, then in its sole discretion, University may convert this

exclusive license to a non-exclusive license upon giving notice of such decision to Licensee.

5.3 If Licensee should be adjudged bankrupt or enter into a composition with or assignment for the

benefit of its creditors, then in such event University shall have the right to cancel and terminate this Agreement, and

the license herein provided for, by written notice to Licensee.

5.4 Any termination or cancellation under any provision of this Agreement shall not relieve Licensee of

its obligation to pay any royalty or other fees (including attorney's fees pursuant to Article 3.1 hereof) due or owing at

the time of such cancellation or termination.

Licensing Agreement6. Disposition of Licensed Products On Hand Upon Cancellation or Termination

6.1 Upon cancellation of this Agreement or upon termination in whole or in part, Licensee shall provide

University with a written inventory of all University Technology and Licensed Products in process of manufacture, in

use or in stock. Except with respect to termination pursuant to Paragraph 5.1, Licensee shall have the privilege of

disposing of the inventory of such Licensed Products within a period of one hundred and eighty (180) days of such

termination upon conditions most favorable to University that Licensee can reasonably obtain. Licensee will also

have the right to complete performance of all contracts requiring use of the University Technology, Patent Rights

(except in the case of termination pursuant to Paragraph 5.1) or Licensed Products within and beyond said 180-day

period provided that the remaining term of any such contract does not exceed one year. All Licensed Products which

are not disposed of as provided above shall be delivered to University or otherwise disposed of, in University's sole

discretion, and at Licensee's sole expense.

7. Use of University's Name

7.1 The use of the name of University, or any contraction thereof, in any manner in connection with the

exercise of this license is expressly prohibited except with prior written consent of University.

8. University Use

8.1 It is expressly agreed that, notwithstanding any provisions herein, University is free to use University

Technology, Patent Rights and Licensed Products for its own research, public service, clinical, teaching and

educational purposes without payment of royalties. Furthermore, University shall be free to publish University

Technology, as it sees fit.

Licensing Agreement9. Patents and Infringements

9.1 Licensee shall bear the cost of filing and prosecuting U.S. Patent applications included within the

Patent Rights. Such filings and prosecution shall be by counsel of University's choosing and shall be in the name of

University. University shall keep Licensee advised as to the prosecution of such applications by forwarding to

Licensee copies of all official correspondence, (including, but not limited to, Applications, Office Actions, responses,

etc.) relating thereto. Licensee shall have the right to advise University as to such prosecution, and further, shall

have the right to make reasonable requests as to the conduct of such prosecution.

9.2 As regards filing of foreign patent applications corresponding to the U.S. applications described in

paragraph 9.1 above, Licensee shall designate that country or those countries, if any, in which Licensee desires such

corresponding patent application(s) to be filed. Licensee shall pay all costs and legal fees associated with the

preparation and filing of such designated foreign patent applications and such applications shall be in the

University's name. University may elect to file corresponding patent applications in countries other than those

designated by Licensee, but in that event University shall be responsible for all costs associated with such non-

designated filings. In such event, Licensee shall forfeit its rights under this license in the country(ies) where

University exercises its option to file such corresponding patent applications.

Licensing Agreement9. Patents and Infringements

9.3 If the production, sale or use of Licensed Products under this Agreement by Licensee results in any

claim for patent infringement against Licensee, Licensee shall promptly notify the University thereof in writing, setting

forth the facts of such claim in reasonable detail. As between the parties to this Agreement, Licensee shall have the

first and primary right and responsibility at its own expense to defend and control the defense of any such claim

against Licensee, by counsel of its own choice. It is understood that any settlement of such actions must be

approved by University. Such approval shall not be unreasonably withheld. University agrees to cooperate with

Licensee in any reasonable manner deemed by Licensee to be necessary in defending any such action. Licensee

shall reimburse University for any out of pocket expenses incurred in providing such assistance.

9.4 In the event that any Patent Rights licensed to Licensee are infringed by a third party, Licensee shall

have the primary right, but not the obligation, to institute, prosecute and control any action or proceeding with

respect to such infringement, by counsel of its choice, including any declaratory judgment action arising from such

infringement.

9.5 Notwithstanding for foregoing, and in University's sole discretion, University shall be entitled to

participate through counsel of its own choosing in any legal action involving the Invention. Nothing in the foregoing

sections shall be construed in any way which would limit the authority of the Attorney General of North Carolina.

Licensing Agreement10. Waiver

10.1 It is agreed that no waiver by either party hereto of any breach or default of any of the covenants or

agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

11. License Restrictions

11.1 It is agreed that the rights and privileges granted to Licensee are each and all expressly

conditioned upon the faithful performance on the part of the Licensee of every requirement herein contained, and that

each of such conditions and requirements may be and the same are specific license restrictions.

12. Assignments

12.1 This Agreement is binding upon and shall inure to the benefit of the University, its successors and

assigns. However, this Agreement shall be personal to Licensee and it is not assignable by Licensee to any other

entity without the written consent of University, which consent shall not be withheld unreasonably.

Licensing Agreement13. Indemnity

13.1 Licensee agrees to indemnify, hold harmless and defend University, its officers, employees, and

agents, against any and all claims, suits, losses, damage, costs, fees, and expenses asserted by third parties, both

government and private, resulting from or arising out of the exercise of this license.

14. Insurance

14.1 Licensee is required to maintain in force at its sole cost and expense, with reputable insurance

companies, general liability insurance and products liability insurance coverage in an amount reasonably sufficient to

protect against liability under paragraph 13, above. The University shall have the right to ascertain from time to time

that such coverage exists, such right to be exercised in a reasonable manner.

15. Independent Contractor Status.

15.1 Neither party hereto is an agent of the other for any purpose.

16. Late Payments

16.1 In the event royalty payments or fees are not received by University when due, Licensee shall pay to

University interest and charges at the maximum rate of interest allowed by law on the total royalties or fees due.

Licensing Agreement17. Warranties

17.1 University makes no warranties that any patent will issue on University Technology or Invention.

University further makes no warranties, express or implied as to any matter whatsoever, including, without limitation,

the condition of any invention(s) or product(s), that are the subject of this Agreement; or the merchantability or

fitness for a particular purpose of any such invention or product. University shall not be liable for any direct,

consequential, or other damages suffered by Licensee or any others resulting from the use of the Invention or

Licensed Products.

18. Accounting and Records

18.1 Licensee will keep complete, true and accurate books of account and records for the purpose of

showing the derivation of all amounts payable to University under this Agreement. Such books and records will be

kept at Licensee's principal place of business for at least three (3) years following the end of the calendar quarter to

which they pertain, and will be open at all reasonable times for inspection by a representative of University for the

purpose of verifying Licensee's royalty statements, or Licensee's compliance in other respects with this Agreement.

The representative will be obliged to treat as confidential all relevant matters.

18.2 Such inspections shall be at the expense of University, unless a variation or error exceeding U.S.

$1,000, or the equivalent, is discovered in the course of any such inspection, whereupon all costs relating thereto

paid by Licensee.

18.3 Licensee will promptly pay to University the full amount of any underpayment, together with interest

thereon at the maximum rate of interest allowed by law.

Licensing Agreement19. Compliance with Laws

19.1 In exercising its rights under this license, Licensee shall fully comply with the requirements of any

and all applicable laws, regulations, rules and orders of any governmental body having jurisdiction over the exercise

of rights under this license. Licensee further agrees to indemnify and hold University harmless from and against any

costs, expenses, attorney's fees, citation, fine, penalty and liability of every kind and nature which might be imposed

by reason of any asserted or established violation of any such laws, order, rules and/or regulations.

20. U.S. Manufacture

20.1 It is agreed that any Licensed Products sold in the United States shall be substantially

manufactured in the United States.

21. Notices

21.1 Any notice required or permitted to be given to the parties hereto shall be deemed to have been

properly given if delivered in person or mailed by first-class certified mail to the other party at the appropriate address

as set forth below or to such other addresses as may be designated in writing by the parties from time to time during

the term of this Agreement.

UNIVERSITY LICENSEEAssociate Vice ProvostOffice of Technology DevelopmentCB #4105, 308 Bynum HallUNC-CHChapel Hill, NC 27599-4105

Licensing Agreement22. Governing Laws

22.1 This Agreement shall be interpreted and construed in accordance with the laws of the State of North

Carolina.

23. Complete Agreement

23.1 It is understood and agreed between University and Licensee that this license constitutes the entire

Agreement, both written and oral, between the parties, and that all prior agreements respecting the subject matter

hereof, either written or oral, expressed or implied, shall be abrogated, canceled, and are null and void and of no

effect.

24. Severability

24.1 In the event that a court of competent jurisdiction holds any provision of this Agreement to be

invalid, such holding shall have no effect on the remaining provisions of this Agreement, and they shall continue in

full force and effect.

25. Survival of Terms

25.1 The provisions of Articles 6, 7, 8, 9, 13, 14, 17, 18, 19, 21, 22, and 23 shall survive the expiration or

termination of this Agreement.

Licensing Agreement IN WITNESS WHEREOF, both University and Licensee have executed this Agreement, in duplicate originals, by their

respective officers hereunto duly authorized, the day and year first above written. Inventors have likewise indicated

their acceptance of the terms hereof by signing below.

THE UNIVERSITY OF NORTH CAROLINA

AT CHAPEL HILL

By:____________________________ By:_____________________

Name:___________________

Associate Vice Provost,

Technology Development Title:__________________

INVENTORS:

__________________________

__________________________

__________________________


1. NDA/CDA/PIA2. Licensing Agreements3. Industry-Sponsored Research

• Unrestricted Gift – Good

• Sponsored Research Agreement – Be Careful• IP Clauses

• Right of First Negotiation/Refusal

• Publication Clauses

• Prime/Sub on Federally Sponsored Research Agreement• IP Clauses

• Appropriate FAR Clauses

• Cultural Issues


1. NDA/CDA/PIA


3. Industry-Sponsored Research

4. Conflict of Interest

It’s About Public Trust

• Longstanding interest in objectivity in research and financial conflict of interest.

• Key Question: “Is the situation likely to interfere or appear to interfere with the independent judgment one is supposed to show as a professional performing official duties?”

Conflict of Interest

• The university held equity in the company developing the drug, and the lead doctor held one-third of its shares of stock.

• Researchers testing new way to replace defective genes to treat enzyme disorders. 18 year old Jesse Gelsinger died from the gene therapy study.

University of Pennsylvania (1999)


• Trust Test– Would relevant others [employers, clients,

professional colleagues, or the general public] trust my judgment if they knew I was in this situation?

It’s About Public Trust


• It must also require that those financial disclosures are updated during the period of the award, either on an annual basis, or as new reportable significant financial interests are obtained.

• Institutional policy must ensure that investigators have provided all required financial disclosures at the time the proposal is submitted to NSF or NIH.


• Management plan required.

• NSF notified only if the institution finds that it is unable to satisfactorily manage an actual or potential conflict of interest.

• NSF requirement – Significant Financial Interest Disclosure in connection with research application. Includes faculty member, spouse or dependent children.


• NIH requirement – Significant Financial Interest Disclosure in connection with research application. Includes faculty member, spouse or dependent children.

• Management plan required.

• Institute Grants Management Officer notified.


• PHS Definition (42 CFR 50.603)– Significant Financial Interest means anything of

monetary value, including but not limited to, salary or other payments for services; equity interests; and intellectual property rights.

Significant Financial Interest


• PHS Definition (42 CFR 50.603)– The term does not include:

• Salary, royalties, or other remuneration from the applicant institution;

• Any ownership interests in the institution, if the institution is an applicant under the SBIR Program;

• Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;

• Income from service on advisory committees or review panels for public or nonprofit entities;

• An equity interest that when aggregated does not exceed $10,000 of FMV and does not represent more than a 5% ownership interest in any single entity; or

• Salary, royalties or other payments that when aggregated are not expected to exceed $10,000.



• Interest must be either…– Managed;– Reduced; or– Eliminated

• Management Plan– Include brief, general explanation of actions taken but

• Exclude personal financial data

• Updates– Conflict of Interest declarations are made annually or

as new SFI’s are obtained



THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

POLICY ON CONFLICTS OF INTEREST AND COMMITMENT

This Policy on Conflicts of Interest and Commitment (hereinafter, the

"Policy") provides guidelines for relationships between the University and its

faculty, staff, and students with private industry, federal and state

government, and the nonprofit sector that will help to assure the primacy of

academic integrity. The University encourages employees to engage in

appropriate outside relationships, but members of the University community

are expected to avoid conflicts of interest that have the potential to directly

and significantly affect the University’s interests, compromise objectivity in

carrying out University responsibilities, or otherwise compromise performance

of University responsibilities, unless such conflicts are disclosed, reviewed, and

managed in accordance with this Policy.

The fact that an individual has a conflict of interest does not imply that the

conflict is unethical or impermissible; it means simply that the relation of the

conflict to the individual’s University responsibilities must be carefully

examined because conflicts of interest - real or perceived - may impair

performance of our missions of teaching, research, and public service, as well

as jeopardize public trust and support.

THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

POLICY ON CONFLICTS OF INTEREST AND COMMITMENT

Examples of Potential Conflicts

CATEGORY I: Activities or relationships that are routinely allowable and are not required to be disclosed pursuant to the Policy because they do not represent significant potential for compromising the objectivity of research results, the welfare and rights of human research subjects, the integrity of faculty-student interactions, or other interests of the University, the sponsor, or the public*

1. Receiving royalties for published scholarly works and other materials or for inventions pursuant to the University's Patent and Copyright Policies.

2. Membership in and service on professional associations, learned societies, professional review or advisory panels and accreditation bodies; presentation of lectures, papers, concerts, or exhibits; participation in seminars and conferences; and reviewing or editing scholarly publications and books are permitted.

3. Ownership of or equity in a corporation used solely for one’s consulting activities.

4. Requiring or recommending one’s own or one’s family member’s textbook or other teaching aids, materials, software, equipment, or the like to be used in connection with University instructional programs.

Examples of Potential Conflicts

CATEGORY II: Activities or relationships that may be allowable following disclosure and,

where necessary, the implementation of monitoring procedures or other forms of

management to ensure the integrity of research and other institutional activities.

CATEGORY III: Activities or relationships presenting such serious risks that they will be

presumed to be inappropriate unless it is determined that they can be managed in

accordance with this Policy. In such cases, a heavy burden will rest with the covered

individual to demonstrate to the University’s satisfaction the compatibility of such

relationships with University policy prior to going forward with the proposed activity.

Required and Suggested Monitoring Activities

1. At the outset, monitors should meet with the affected covered

individual and his or her chair to review the circumstances of

the activities and relationships to be monitored, explain the

monitors’ function and authority, and address questions or

concerns. Monitors must be mindful that conflicts cannot be

managed successfully without cooperation and assistance from

the covered individual being monitored. Monitors should

approach their task in a spirit of collegiality, not adversity, and

such a spirit should inform interactions with the covered

individual to be monitored wherever possible.


2. All monitors must meet annually with the covered individual

and regularly (at least once in approximately the middle of

each semester and as appropriate during the summer sessions)

with students and trainees (e.g., post-doctoral fellows,

residents, or in some cases junior faculty) of the covered

individual who has an activity that is being monitored. Because

students or trainees not directly involved in an approved COI

may still be affected by a covered individual’s commitments,

monitors should meet with every member of the covered

individual’s research group.


3. All students and trainees involved in research studies with a covered individual

who has an approved COI must be informed of the COI in writing either at the

beginning of the student’s or trainee’s involvement with the study or upon

approval of a COI and a management plan for the COI, whichever comes later.

The management plan will assign responsibility for sending written notice to the

students and trainees. Such written notice shall inform the students and

trainees: a) that the approved COI exists, and b) that their concerns, if any, can

be discussed with the Chair of the University Committee on Conflicts of

Interest, University’s Research Compliance Coordinator, Department Chair,

Dean, or, if applicable, the monitor or monitoring panel, as appropriate.

Monitors must work with the affected covered individual to introduce

procedures in the covered individual’s research group sufficient to assure that

such information is communicated on a timely basis to current students and

trainees, and to students and trainees who join the project later.


4. Monitors should meet individually with student and trainee

members of the covered individual’s research group at least

once each year. The primary purpose of both group and

individual meetings is to ascertain whether students or trainees

perceive any untoward influence on their own or others’

research or education as a result of the conflict being

monitored. Students and trainees should be informed that

under University policy they may not be retaliated against for

good faith disclosures of such concerns.


5. Monitors should review any publications made by the covered

individual or members of his or her research group to ensure

that significant financial interests have been reported in

conjunction with the publication and that the publication is

free of any inappropriate influence resulting from such

significant financial interests. Monitors should also look for

the absence of publications by the covered individual or

members of his or her research group, which may indicate

inappropriate withholding of research results.


6. Monitors must keep minutes of their meetings and/or activities.

Where a Dean has delegated monitoring responsibilities,

monitors should report on their activities to the Dean or his

designee and to the University Committee and Dean’s

committee, where applicable, not less than annually. In order

to assist the Dean in ongoing evaluation of approved COIs,

such reports should be filed not later than 60 days before the

next due date for submission of Conflicts Evaluation Forms.

• Conflict of Interest (NIH, OER)– http://grants1.nih.gov/grants/policy/

emprograms/overview/ep-coi.html

• PHS Policy (42CFR50)– http://www.access.gpo.gov/nara/cfr/

waisidx_01/42cfr50_01.html

Resources


COMP 323: Research Administration For Scientists Intellectual Property Wednesday, April 19, 2006.

Documents

Transcript of COMP 323: Research Administration For Scientists Intellectual Property Wednesday, April 19, 2006.