Patents for University Research:
What the Researcher Should Know to Help
Protect a Valuable University Asset

Thomas D. MacBlain*

1. Introduction
   

   According to the most recent survey of the Association of University Technology Managers (AUTM), 576 million dollars in patent royalties flowed to colleges and universities in 1998. Companies continue to recognize university engineering, basic science and medical schools as rich sources of research brainpower. Many companies know that funding of research is prized highly by the University researcher. They may seek to pay minimal or no continuing royalty payments for continuing rights to practice developments from research they have partially funded. However, that could contravene state law and university policies. A continuing royalty stream for research developments will often be available, and that has the possibility of longer range and perhaps increasing benefits to the university, the researcher, and the researcher's department.

   In addition to income generation, in 1998 college and university research spawned at least 279 start-up companies. These fuel the economy, create jobs and offer possible long-term income to the researcher and her or his institution.

   To pursue the full benefits of innovation, academic researchers should have a passing familiarity with certain aspects of United States and foreign patent laws. That familiarity coupled with good recordkeeping procedures and a strong representative at the bargaining table will ultimately open the door to a share of rewards of the kind reported in the AUTM survey.(1)

2. The U.S. Patent
   1. Term and Exclusionary Right
      Under Section 154 of the patent code (35 U.S.C. § 1 et seq.), the grant of a U.S. patent is a grant of the right to exclude others from making, using or selling an invention ordinarily for a term beginning with the issuance of the patent and ending 20 years from the date of filing of the patent application in the United States Patent and Trademark Office. To compensate for delays in marketing resulting from the regulatory approval process, a term extension may be afforded for patents relating to drugs and medical devices that are subject to agency review, for example, by the Food and Drug Administration. A term extension may be afforded where patent issuance was delayed by either an appeal from an adverse decision in the Patent and Trademark Office or an interference proceeding between conflicting patent application.

   The patent law's exclusionary right is founded in the U.S. Constitution. (1 U.S.C., Art. 1, § 8.) It is this property right that enables its owner to permit another to exploit the invention for a price, which is to say, to license or assign the invention for an appropriate royalty or fee.

   2. Patentable Subject Matter
      Section 101 of the U.S. patent statute provides that patent protection is available for any new and useful device, process or composition of matter. These are the subjects of so-called "utility" patents. New and ornamental designs for useful articles and new, asexually propagated plants can also be protected under U.S. patent law. It is, however, the utility patent that most often has its origin in the laboratories of a research university. An invention must pass three tests to be eligible for a utility patent: it must be technologically useful, not previously known to the public ("novel"), and nonobvious at the time of its invention.
      

      Pharmaceuticals and methods of treatment can present special questions of utility. The Patent and Trademark Office has at times been reluctant to recognize effectiveness of such inventions on the basis of in vitro test results. Chemical, pharmaceutical and biological practice before the U.S. Patent and Trademark Office differs from mechanical and electrical practice in another way. Description of a single operative embodiment of a mechanical or electrical invention can support broad protection of any number of alternate embodiments of that same invention. However, description of a single chemical, pharmaceutical or biological compound, composition or method will not support broad claims to a generic class of such compounds, compositions or processes relating to same. Rather, multiple examples of compounds in the class will be necessary to be able to pursue patent protection for the class.

      To meet the patent statute's utility requirement, an invention need not perform perfectly. An inoperative device will not qualify for protection by patent, but one that has only a very low level of operability will satisfy the requirement of the statute.

      Historically, certain developments have been considered not to constitute patentable subject matter. These have included pure ideas, laws of nature, printed matter, pure mathematical algorithms, formulae or equations and methods of doing business. Recent cases have had a very limiting effect on the application of these patentable subject matter exceptions. As discussed below, the method of doing business exception has been discarded in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149F. 3d 1368 (Fed. Cir. 1998). The presence of a mathematical formula or algorithm in a claimed invention has been found not fatal to a patent or patent application if it is applied in a useful manner and does not simply stand alone as an abstract idea or law of nature. AT&T Corp. v. Excel Communications, Inc., 172 F. 3d 1352 (Fed. Cir. 1999). Consequently, the researcher should not lightly conclude that an innovation will not qualify for patent protection, but she or he should err in favor of submission of an invention disclosure to the officer with technology transfer authority. Furthermore, innovators, such as business school and mathematic professors and graduate students whose work lies outside the engineering and science disciplines need to be aware of the expansive nature of patentable subject matter.

      1. Computer Programs
         Once in doubt, there should be no lingering misconception about the availability of patent protection for the computer program. The computer program has an ambiguous nature, however. It is, in a sense, both a machine part and a writing. The law reflects this. Both patent and copyright protection are available.

         Since 1995, the U.S. Patent and Trademark Office has had guidelines that recognize that a computer program can be patented as such. These guidelines followed the United States Court of Appeals for the Federal Circuit decision in In re Beauregard, 53 F. 3d 1583 (Fed. Cir.1995). The court's decision and the Patent and Trademark Office's clear indication that computer programs would be afforded patent protection came just as courts throughout the country were retreating from the broadest copyright protection that in some cases had been afforded judicially for computer programs and their nonliteral characteristics. Other, more recent court decisions have largely stripped away hard-to-apply tests for program patentability in favor of the protection of such programs.

      2. Methods of Doing Business
         Methods of doing business were long believed to lie outside the realm of U.S. patent protection. This changed in July 1998, when the U.S. Court of Appeals for the Federal circuit decided State Street Bank & Trust Co.v. Signature Financial Group, Inc., 149 F. 3d 1368. The court reversed a lower court holding that a patent to a computer system implementing an investment construct was invalid as directed to a business method. The court held that the business method exception was not, in fact, a viable basis for finding lack of patentable subject matter, calling the exception “ill-conceived.” When applied to the recent proliferation of e-commerce innovations, this could have far-reaching implications in coming years.

   3. Novelty
      A patentable invention must be "novel" or new as defined under Section 102 of the patent code. A "novel" invention is one not previously published anywhere in the world nor on sale or publicly used in the United States. In determining whether previously published, sold or used technology ("prior art") is the same as the invention for which a patent is sought, one must look at each publication, sale or use individually. If each and every element of the claimed invention is present in one prior art publication, sale or use, then the claimed invention is anticipated and is unpatentable.
      
      1. Scientific Publications
         Issues of novelty arise often from the inventor's own acts. In a business setting, an offer for sale or a commercial use by the inventor may defeat the subsequent pursuit of patent protection. A year's grace period is provided in the United States for filing a patent application after a publication, public use or offer for sale. In almost all other countries, public divulgence of the invention anywhere in the world prior to filing a patent application will defeat patent rights. Fortunately, by international treaty, filing in the United States prior to divulgence will satisfy a foreign signatory country's requirement of filing before divulging.

         In the academic setting, a conflict exists between the scientist-professor's appropriate desire to publish in learned journals and his or her institution's need to protect valuable patent rights. The rush to publish can have disastrous consequences if no thought is given to patent filing. Internet publication on a website can pose a threat to patent rights as well.

         Yet another potential trap for the unwary exists in the research associate's doctoral thesis. The Ph.D.candidate's full exposition of scientific inquiries and discoveries in a dissertation that is made publicly available in the university library is a publication that begins the U.S. grace period for filing. This is easily overlooked and so presents a danger to rights in related developments.

         1. Provisional Applications
            In 1995, the U.S. Patent Laws were modified to provide for the filing of "provisional" applications under Section 111 of the patent code. With less exacting requirements for filing, these applications can be used to file about-to-be-published research results to obtain a patent application filing date quickly. Such filing in advance of an imminent publication can prevent loss of foreign rights, or loss of rights by expiration of the one year U.S. grace period.

            There is a danger in filing research papers "as is," however. Like any U.S. patent application, provisional filings must meet the law's requirement of an adequate disclosure, i.e., one capable of enabling the practice of the invention, and the disclosure must be the "best mode" of practicing the invention known to the inventor at the time of filing. Moreover, because patent applications are written, or should be written, in a manner quite different from research publications, there exists a danger that the research paper may unintentionally contain either statements that could be viewed as admissions, detracting from the patentability of described inventions, or a narrow description of a single chemical embodiment or range of ingredients may prove insufficient to support broad protection. Where time permits, the filing of a carefully written complete patent application or the filing of a carefully written provisional application is preferable to a hasty provisional filing.

   4. Nonobviousness
      To be patentable, Section 103 of the patent code requires that an invention must not have been obvious to a person of ordinary skill in the art at the time the invention was made. While many new improvements are regularly made in many fields, these improvements may nevertheless be unpatentable if that new improvement would have been obvious to a person of ordinary skill in that technology. In a landmark case of Graham v. John Deere Co., 383 U.S. 1 (1966), the Supreme Court laid out the guidelines for determining when an invention is nonobvious. The question of whether the invention, as claimed, is nonobvious lends itself to several basic factual inquiries including the scope and content of the prior art, the differences between the prior art and the invention to be claimed, and the level of the ordinary skill in that pertinent art. However, certain secondary considerations may be relevant as indicia of nonobviousness.

      Unlike novelty, the question of nonobviousness can take into account multiple prior art documents or occurrences to show multiple aspects of an invention and the obviousness of combining them. Although the secondary considerations mentioned above are not controlling, one should be aware that at times both the Patent and Trademark Office and the courts rely heavily upon these factors. For example, before the date of the invention, such factors as long felt need, widely known but unsolved problems, prior failures at solving the problem, widely used prior art, uncombined known elements, and contrary teachings in the literature may be used to show nonobviousness. After the date of the invention other secondary factors (identified in Graham v. John Deere) may suggest the nonobviousness of the invention, such as adoption and use over the prior art, commercial success not attributable to advertising, licenses to others, copying by others, recognition in the trade, and patenting of improvements on the invention. These secondary factors can help the examiner or a court determine if the invention is sufficiently different from the prior art.

   5. Proof of Invention, Diligence and Recordkeeping
      Under United States law, the first to invent an invention is entitled to patent protection rather than the first to file an application. It sometimes occurs that two or more scientists invent the same invention, particularly where more than one research institution is pursuing similar lines of research. If all of the inventors file patent applications, then the U.S. Patent and Trademark Office has to decide who was the first inventor. Under Section 135 of the patent code, this is done in an interference proceeding, an inter partes proceeding in the Patent and Trademark Office that is in many ways like a litigation. One needs to prove conception of the invention and diligent work on it until either it was actually reduced to practice or a patent application was filed. For these and other purposes, good recordkeeping is essential.

      Additionally, it is important for the researcher to be aware that, when collaborating with the private sector, companies will often perceive that their personnel may have made an inventive contribution. Intended or not, this can be a significant "trap" to fall into. Joint inventorship results in joint ownership of patents unless otherwise agreed. Unless a company wants exclusive rights to a patent, joint ownership may deprive the university the ability to license the innovation, since the company's joint ownership is tantamount to having a non-exclusive royalty-free right to practice the invention. Thus, by establishing an inventive contribution by a company employee with whom the university researcher collaborates, the company avoids having to pay the university a royalty, and seriously undercuts the ability to license the technology elsewhere. Whether or not the company employee made an actual inventive contribution under patent law is often a contentious matter of opinion, which accentuates the need for excellent recordkeeping and witnessed laboratory notes on the part of university researchers.

      The researcher should keep an orderly notebook into which he or she regularly (daily is preferable) records his or her work. These pages should be witnessed by a coworker competent to understand the entry, but who is not a coinventor of the subject matter described in the notebook. An acknowledgement such as "Read and understood, May 10, 1997" followed by the coworker's signature is satisfactory. Setting aside a regular time for doing this each week can help assure that this important act is not overlooked.

3. Conclusion
   By being aware of some of the basic concepts of patentability, the patenting process and certain requirements, the researcher is in a position to bring to the university officer who is responsible for technology transfer a sound package of rights that can provide long-term rewards of the kind reported by the numerous schools responding to the AUTM survey cited above. Industry is, of course, enriched by its acquisition of rights in the new technology, and the public is served by the movement of research out of the laboratory and into the marketplace.

1.   A monthly publication, Technology Access Report, regularly ranks technology transfer at research universities and institutions in the United States and Canada. Using a combination of such factors as numbers of inventions, patent applications and licenses executed per 10 million of research funding, the publication has in the past ranked institutions on a normalized basis that eliminates the weighting that comes with bigger research budgets. ASU has placed as high as 21st among United States and Canadian institutions in this ranking. M. Odza, Technology Access's Six-Faxtor Tech Transfer Rankings, Technology Access Report, May 1998. And recently, ASU placed 6th in the individual category of inventions per 10 million of funding and 5th in patent applications per 10 million of funding. 1998 Technology Transfer Leaders Among U.S. Universities, Research Hospitals and Centers, Technology Access Report, December 1999.

* This article was contributed to the ASU Office of General Counsel Briefing Series by Thomas D. MacBlain. Mr. MacBlain is a shareholder with Gallagher & Kennedy, P.A. and currently represents ASU on certain patent and technology transfer matters.

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