Volume XXXIX No. 4

Initial Results of a Survey Conducted in January/February 2004 by the Licensing Foundation of LES (USA & Canada), on behalf of The Licensing Foundation.

University technology transfer is the process by which a university commercializes inventions and innovations developed by university faculty and researchers. Technology transfer takes many forms, from patent licensing to forming start-up ventures on campus. University technology transfer programs are growing exponentially. Universities have long reflected upon, studied, and implemented transfer and commercialization programs. However, due to current economic and legal realities, an intense, if not completely new, era has emerged. Universities are increasing their commitment to, and support of, commercialization programs. Policies and missions have been revisited and reshaped. Campus research is exploding with applied innovation. Faculty and students are being recruited by the strength and virtue of commercialization programs. Economic pressures and competition are intense. Opportunities, as well as pitfalls, abound in this complex field. Universities that proceed with the proper balance of aggressiveness, creativity, and prudence will realize the many benefits of university technology transfer.

The Free Trade Agreement (FTA) that was recently negotiated between Australia and the United States (U.S.) has a number of far-reaching consequences for Australian and U.S. intellectual property law. One, of considerable importance to commercial practice, is the possibility that alterations will be required to the legislation of both countries regarding "exclusive licensees" of copyright and patents.

Biotechnology is the “use of cellular and molecular processes to solve problems or make useful products.”1 Biotechnology can be applied to basic scientific research, development of healthcare products (therapeutics, devices, and diagnostics) and services, agriculture, and nutraceuticals.

Adapted from"The Management of Intellectual Property in Australian Organisations" a keynote address given at The Sixth Annual Commercialising Intellectual Property Conference organised by IIR on 24 August 2004.

Intellectual property rights are essential in todayʼs technology-driven age. A strong intellectual property protection strategy is crucial in the bioinformatic space as monetary and temporal resources are tremendous in finding a blockbuster drug or gene therapy. Current problems and intellectual property practice in the genomic space are presented and analyzed. Various strategy and solutions are proposed to guide bioinformatic companies in forming an aggressive strategy to protect oneʼs intellectual property and competitive positioning.

This paper describes patent pools and explores the potential for additional use of patent pools in the telecommunications industry. The advantages of forming patent pools to cover standards required to implement information technology products are covered as well as advantages to patent holders and licensees of the patent pool. This paper also discusses patent pool governance and patent pool economics.

Valuation of biotechnology is very complex. There are a number of factors impacting the value of biotechnology companies and their assets that are difficult to evaluate. One major question is: will this development company ever have a product that will reach the market and generate sales? Other factors impacting the valuation of biotechnology include: expected time to market, expected market size, product pricing, expected market penetration, the strength of the technology and intellectual property, presence of major pharmaceutical partners, attitudes towards certain scientific developments (e.g. stem cell research, cloning and genetically modified organisms), competitive products in development, competitive products in the market, and management strength.

The nomination of Neelie Kroes as the new Competition Commissioner bodes well for the continued independence of DG Competition

As technology development at corporations becomes ever more competitive on a global scale, having the ability to integrate and to develop quickly key technologies to drive product roadmaps has intensified. The technology licensing industry has an opportunity to play a major role in partnering with the in-house R&D function of major corporations by providing high quality technologies and intellectual property. However, over the last fifty years, technology licensing undertaken by various organizations including law firms, technology brokers, patent development firms, and corporations has traditionally followed a “push” model. In practice what this means is that a firm will identify a new technology opportunity from a source, review the technology for its current attractiveness in the market along with the strength of its associated patents, and then see if a buyer can be found—in other words “pushing” the technology to the end customer. With the wealth of IP at different venues in the world—Universities, Government Research Labs, Individual Inventors, Small to Large Corporations, and failing Start-Ups—this model certainly can turn up a lot of new technologies to go and license. But the key question is, who wants it?

It is desirable to find model solutions that will be regarded both by the universities and by industry as a positive basis on which to transpose the new legal standards into a form of practical co-operation which all concerned will consider tolerable and positive. In the search for these solutions, a working party of experts from the university and industrial sectors has been set up, at the suggestion and with the active participation of the IPAL Gesellschaft für Patentverwertung Berlin mbH, the Society for Patent Exploitation in Berlin, which is the central tech- nology transfer institution for the majority of the Berlin universities, namely Charité, the Free University of Berlin, Humboldt University Berlin and Berlin Technical University. Intensive efforts, involving lengthy discussions, have been made to put together some components for a model contract, under the general heading “Berlin Contract,” which is intended to make it easier in practice for academics, universities and industrial companies to handle the new legal situation that has arisen as a result of the abolition of the university lecturers’ privilege.

Instead, companies should give IP the profile it deserves by ensuring its management is placed at the heart of their business processes. This should start by ensuring that existing decision-making processes and corporate governance make visible both the strength of the IP portfolio and the quality of its management. Further, IP policy, strategy and accountabilities should not only clearly identify the actions individuals should take in the management of the company’s IP, but also provide guidance to facilitate decision-making.

Any product of human intellect that is unique and un-obvious with some potential value in the marketplace. Intellectual property can include patents, copyrights, designs, trademarks and trade secrets.

On June 27, 2003, the Supreme Court refused to grant review of Madey v. Duke University. One year later, in spite of all the dire predictions, our interviews of technology transfer of- ficers indicate that the effect of the landmark patent decision, Madey v. Duke, on academic research has been minimal so far, but future implications remain unclear. What is clear in the wake of this decision that effectively destroyed the assumption of immunity from patent infringement for academic research is that successful research management now requires a heightened degree of patent awareness.

In the last ten years, we have had strong individuals who have revitalized long-respected but lagging multi-national corporations, strong individuals who have built large corporations by disrespecting all established norms and then shattered those corporations by their greed and desire for power, and strong individuals who have destroyed respected corporations. We all pay the price for those who focused on their own desires for wealth and power through our experience of increased suspicion of businesses and reduced retirement savings plans.

A U.S. patent is invalid if the claimed invention was offered for sale more than one year prior to filing the patent application. However, understanding what constitutes an offer to sell the invention requires an analysis of the subject matter of the offer and whether it is an offer to sell the patent rights to the invention or sell the product covered by the patent claims.

The new Transfer of Technology Block Exemption (TTBE) and accompanying Guidelines have been described as even more prescriptive, formalistic and complex than their predecessor. They involve an assessment of

Intellectual property (IP) represents a valuable asset for any organization- be it a commercial company, a research university, or a government laboratory. In addition to the value that the technologies, software, and other inventions in the IP portfolio bring to the ownerʼs processes, products, and/or services, they also might have value to other (noncompeting) organizations in new applications.

The 2003 Annual Meeting of LES (USA & Canada) began with a plenary session featuring the leaders of nine large, successful corporate licensing programs. The panelists represented a cross-section of industries in the United States and Europe: Amgen, Boeing, Eli Lilly, Ford, IBM, Motorola, Philips, Procter & Gamble, and Thompson. Each panelist was the senior executive responsible for leading the IP function at their respective corporation.

In April 2004, Japanese National Universities became independent administrative organizations. This change results in universities owning most of the inventions made by their faculty members and even by graduate students. Management of IP should become more rational and transparent. As a result, it will be more likely that licenses will go to companies that are able and committed to developing seed technologies.

Take a look at the life sciences industry these days and one can see that most start-up technology is licensed-in or developed through sponsored research arrangements with built- in licensing provisions. The danger for many companies who license-in these technologies is that they fall into the not-so-glaring traps of intellectual property licensing. Although these traps may not cause damage to the company on day one, they could be extremely harmful to the future of the product and the life sciences company as a whole.

Today a number of patent valuation methods are known which are used in different situations as licensing, tax payments, credit valuation and patent portfolio valuation. The various valuation methods are performing valuation from a defined perspec- tive, e.g. the perspective of a potential licensor or the perspective of a buyer of a company. The resulting values are, therefore, subjective values tailored to a specific viewpoint. Citations analysis, contrary to that, uses neutral citation data to assign a value to patents. It, therefore, could be called an objective valuation method since a priori no subjective data or viewpoints are included. Another approach includes the so called criteria methods which value IP according to specific criteria. Such criteria can be objective in the sense that they are accepted by the whole peer group or can be subjective. Nevertheless weighting of the employed valuation criteria is always necessary and, therefore, subjective elements are present in this valuation concept as well.

Biotechnology by definition is the use of biological processes to solve problems or make useful products.1 Since the 1970ʼs our understanding of biology has expanded significantly. We now talk about biotechnology as “a collection of technologies that capitalise on the attributes of cells, such as their manufacturing capabilities, and put biological molecules, such as DNA and proteins to work for us.”2

Technology inventions and advances are the universal driver of economic growth and commercial value. There are several methods, approaches and tools for measuring and predicting the commercial value of a new technology. This article presents one more perspective for deeming if a new technology merits an investment to commercialize the technology, an expenditure to acquire the technology or a commitment of resources to sell the technology. It is a qualitative starting point for an important decision-making process.

It is inherently obvious to all readers of les Nouvelles that intangible assets and intellectual property have become increasingly important to companies in recent years. These intangible assets take on many forms, including patents, trademarks, trade secrets, and license agreements. What may not be so obvious is that most companies do not regularly make it a business practice or priority to maximize the economic impact that these assets can and should generate to their firm. This means that many companies, large and small, in industries such as hi-tech, software, biotechnology, pharmaceutical, and branding, consistently leave money on the table.

In Fieldturf, Inc. v. Southwest Recreational Industries, Inc., 69 U.S.P.Q.2d 1795 (Fed. Cir. 2004), the United States Court of Appeals for the Federal Circuit held that an exclusive licensee who did not possess all substantial rights in a patent lacked standing to bring a patent infringement lawsuit against a third party.

In April 2004, Japanʼs 87 national universities, which include all but a few of Japanʼs major university research centers,1 will become “National University Corporations,” in other words, “independent administrative units” within the Japanese governmental structure.2 This two-part article analyzes how this change will affect the transfer of university discoveries to industry as well as other aspects of university-industry cooperation. It is based upon more than six years studying the system of academic-industry cooperation from the vantage of a research center established 17 years ago in one of Japanʼs leading universities to promote interdisciplinary science and engineering research and cooperation with industry. This first part will discuss the evolution of the current Japanese technology transfer system up to the present time and end with the rationale for the transfer of intellectual property (IP) ownership to universities. The second part will discuss problems but also likely benefits of the new system of IP management that will take effect in April. It will also discuss other issues related to university-industry cooperation in Japan, particularly the contract research and the mobilization of human resources for research and development (R&D) relevant to industry.

Congress enacted the Intellectual Property Licenses in Bankruptcy Act (IPLBA) in 1988, adding an important provision to the U.S. Bankruptcy Code to protect licensees of intellectual property from losing their licensed rights after the licensor has filed a petition for bankruptcy. The protection afforded by the Act, codified as 11 U.S.C. § 365(n), extends to all forms of intellectual property except trademarks. While Congress determined that it would allow “the development of equitable treatment of this situation [protection of trademark licensees] by bankruptcy courts” S. Rep. No.100- 505, at 6 (1988), reprinted in 1988 U.S.C.C.A.N. 3200, 3204, the bank- ruptcy courts have declined to act on Congressʼ expressed intention.

As revenues from intellectual property licensing have increased, efforts have been undertaken to generate value from these assets in alternative ways. It is believed by some that “collateralization and securitization...will rapidly surpass conventional licensing as the most efficient [intellectual property right] monetization strategy.”1 One of the most cited transactions of this type was the securitization ofroyalties generated by musician David Bowieʼs IP. In 1997, Prudential Securities issued $55 million in bonds backed by the expected future royalty income from David Bowieʼs personal intellectual property.2 On the patent side, in one of the first of such transactions by a university, Yale used a royalty trust to trade future royalty payments on an HIV drug, Zerit, for an upfront payment of $115 million

Welcome to the fascinating world of non-traditional trademarks! The topic for this paper is non- traditional trademarks. I will deal with the non-traditional trademarks in general, (not necessarily limited to taste, smell, and sound marks) and give examples of such marks from the Scandinavian and the European practice.

Lithuania is presently one of the fastest growing economies in the world. According to the Stateʼs Department of Statistics, Lithuaniaʼs GDP grew more than 6% in2001,7% in 2002 and 8% in2003. Lithuaniaʼs low inflation, low taxes (VAT is 18%, profit tax is 15%), good infrastructure, educated population and local laws in accordance with EU requirements make Lithuania one of the most attractive places for doing business in Eastern and Central Europe. Lithuania is joining the EU on May 1, 2004 which should contribute even more to the growth of the country. Such a fast-developing business environment should not remain terra incognita to companies involved in international licensing.

Latvia is one of the three Baltic countries and is situated between the other two—Lithuania and Estonia. In comparison with the neighboring countries, the legal framework of Latvia provides for a competitive edge in attracting more businesses. The corporate income tax is set at a rate of 19%, which shall go down to 15% this year, making it one of the lowest in the Eastern Europe. VAT is set at a rate of 18% and is also applicable to licensing fees. Wealth tax is not imposed; instead, a real property tax in amount of 1.5% is applicable.

In publicly traded companies the capital asset pricing model can be used in conjunction with historical financial returns from intellectual property licensing portfolios to provide useful information for evaluating the quality of past licensing activity and aid in determining future licensing decisions.

The marketing and the distribution of pharmaceutical products is very complex and normally requires a long period of time not only because of the drug regulatory proceedings, but also because of the necessary activities to prepare and to build up the market for a new product by introductions and presentations in the medical and scientific community. The normal instruments used in marketing to reach a large number of consumers and a fast penetration of the market, such as TV spots or right spread advertisements can not be used in the pharmaceutical market. The complexity of the marketing activities in the pharmaceutical field requires substantial investments alongside to the investment and research development for the new compounds used. Competitors using a similar product name after a product has been successfully implemented in the market must be considered as an enormous threat considering the investments and the long period of time which is normally necessary to establish a new product name in the medical and the scientific community. Pharmaceutical companies are therefore very vulnerable to counterfeiting activities and it quite often makes no difference, whether the copying activities cover only the name of the product or the name of the product and the product itself, which means the active ingredient. It is not only that the pharmaceutical companies are suffering under counterfeits, moreover the public is alarmed that counterfeit pharmaceuticals are appearing on the market with ever increasing frequency, which are difficult to distinguish and therefore become a risk for those who need high quality medical aid.

Although this book is two years old, it is still valuable; indeed with the rise in merger and acquisition activity, it may be more valuable now than when published. This book is a compendium of sixteen separate chapters, each written independently of the other. Thus it has all the defects of a compendium—repeated basics building and repetition of themes that take the space of more in depth review. However, it also has the benefits of sixteen different contributions (some written by multiple authors)—differing perspectives, emphases and examples. So bear with the negative and access the valuable resources offered here.

Generally, when a consumer purchases a patented product, the sellerʼs patent rights to further royalties and control of the patented product are exhausted, and the product may be reused in its intended manner without restriction from or further payment to the patent owner. However, patent owners may avoid exhausting their rights if they place appropriate conditions on the sale of the product.

On 20 January 2004, the Council of Ministers adopted proposals making major changes to the EUʼs merger regime. There are to be changes to the substantive test for determining whether a merger should be allowed, the merger timetable, the triggering event, the rules on jurisdiction and the treatment of ancillary restraints.