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Intellectual Property Management & Licensing Practices Foreword For over 125 years, the Johns Hopkins University has been at the forefront of discovery and dissemination of new knowledge. Although much of this knowledge has led to new products and services for the public's use and benefit, historically the University had little involvement in the commercialization of its research. All that changed with the passage of the Bayh-Dole Act in 1980, when the U.S. Congress created a technology transfer revolution within our Nation's universities. Prior to 1980, all discoveries and inventions made in the course of federally funded research were the property of the federal government, but few inventions were developed into beneficial products and services. The Bayh-Dole Act empowers research institutions and other non-profit institutions with the right to take title to inventions conceived or reduced to practice in the performance of a federal grant, contract, or cooperative agreement. In exchange for that right, the institutions are obligated to implement comprehensive intellectual property policies, disclose new inventions, attempt to license those inventions, and share license income with inventors. Moreover, the institutions may use the remainder of any licensing income to support research and educational activities. In keeping with the intent of the Act, The Johns Hopkins University's Intellectual Property Policy was adopted by the Trustees of the University in 1983 and revised several times over the intervening years. This policy established our institution's technology transfer and licensing functions so that the benefits of Hopkins’ research may reach society at the earliest opportunity. The policies and guidelines developed over the past decades provide incentives for Hopkins' faculty and employees while protecting the integrity of our institution's research. The primary goal of the University's Johns Hopkins Technology Transfer office is to ensure effective transfer of Hopkins' innovations to the private sector where these discoveries can be developed for public use and benefit. To achieve this goal, the University's Johns Hopkins Technology Transfer office has developed intellectual property management and licensing practices consistent with its responsibility to the public, the University, and its faculty. There can be little debate as to the success of technology transfer from our nation's universities and the benefit to the public. It has been estimated that university innovations have created over $40 billion in economic activity over the last decade and spawned businesses employing over 200,000 people. Our University's Johns Hopkins Technology Transfer office is pleased to be a part of this economic revolution. The following summary of policies and practices for intellectual property management and licensing is intended as a guide to faculty and employees in understanding how the Johns Hopkins Technology Transfer office manages its fiduciary responsibility to the University and its community of science. Johns Hopkins Technology Transfer The University’s Johns Hopkins Technology Transfer office furthers the academic mission of The Johns Hopkins University by facilitating the advancement of University innovations for the public benefit by:
Guiding Principles Technology transfer and faculty entrepreneurial activities are by-products, not the purpose, of the University's academic missions of education, research, and dissemination of knowledge. The following principles guide the University’s licensing mission: All technology licensing activities must conform to University policies on conflict of interest and conflict of commitment. When conflicts arise, the University's academic mission must take precedence; No agreement may unreasonably delay or restrict publication of research results or otherwise prohibit the dissemination of knowledge; All license agreements must provide for fair and equitable return and minimize institutional liability. I. What Is Intellectual Property? Intellectual property* is any new and useful process, machine, composition of matter, life form, article of manufacture, software, trademark, copyrighted work, or tangible research property. It includes such things as new or improved devices, circuits, chemical compounds, drugs, genetically engineered biological organisms, antibodies, clones, cell lines, data sets, software, web-based tools, musical processes, or unique and innovative uses of existing inventions. For an invention or intellectual property to be patented it must be a process, machine, article of manufacture, composition of matter, or related improvement. A patentable invention must also be useful (it must have a specific use); novel (new and original); and non-obvious (even though it is novel, it must not be obvious to a person of ordinary skill in the related technology at the time the invention was made). The disclosure process for patentable inventions consists of two steps: conception (mental formulation of the invention) and reduction to practice (constructing or carrying out the invention and testing for the desired result). Intellectual property can be created by one or more individuals. To be an inventor under U.S. patent law, each of the individuals must have conceived of an essential element or have contributed substantially to its conceptual development. Correct inventorship is critical for patentability. Inventorship is a legal determination made by patent counsel for the University. Many non-patented tangible research properties such as antibodies, clones, cell lines, and data sets may also have commercial value. Although software inventions may be protected by patenting, these works are more often protected by copyright. All such inventions and discoveries, whether or not patentable, may be valuable intellectual property. *Italicized terms can be found in the Glossary of Terms. JHU's faculty, staff, and certain students (1) have an obligation to report new intellectual property developed with University support to the Johns Hopkins Technology Transfer (JHTT) office. University support is defined as financial or other support, regardless of origin, that is used in the discovery or development of intellectual property and is provided through University channels. The Johns Hopkins University Intellectual Property Policy can be found on the web. (See JHTT website) Copyright to, and royalty from, literary or scholarly works in tangible or electronic form (e.g., textbooks and other curricular materials, reference works, journal articles, novels, music, photographs, etc.) produced by faculty members as a part of their usual teaching, service, and research activities, and which do not result directly as a specified deliverable from projects funded in whole or in part by the University or a sponsored research agency, shall belong to the faculty who prepared such works and may be assigned or retained by them. A. Report of Invention To report new intellectual property, a Report of Invention (ROI) must be completed which includes assignment of ownership interest to the University and submitted to JHTT. Some Schools require that ROIs be submitted to an IP committee for evaluation prior to transmittal to JHTT. Inventors should check for specific ROI submission instructions for their individual School. A ROI provides the necessary information about the intellectual property for evaluation by the Johns Hopkins Technology Transfer office. Tangible property inventions, such as research tools for which patent protection is not appropriate, should be reported using an abbreviated Tangible Property Disclosure and Assignment Form. Electronic copies of both reporting forms can be found on the web. (See JHTT website.) A ROI for a potentially patentable invention should be submitted as soon as the inventor can describe completely how to practice the invention, but before any public disclosure, because patent laws limit available patent rights after an enabling disclosure. Examples of public disclosures include journal articles, newspapers, newsletters, bulletins, textbooks, journals, theses, reports, letters to the editor, some oral presentations, and distribution of a paper copy of a poster at a public meeting. The timeliness of ROI submission is therefore very important. The optimum time to report a discovery or invention is when it can be described in detail and there is some data which shows how the invention works. Prior to this, there is seldom sufficient information for the purpose of patent filing. In the U.S., a patent must be filed within one year of public disclosure, whereas most other countries require filing before any disclosure. Publication of an abstract, paper, or oral presentations in seminars and/or meetings prior to submitting a patent application usually results in the loss of foreign patent rights. While patent filings can be done rapidly once all requisite information is available, several weeks’ notice of pending disclosure is best for thorough protection. Works covered by copyright differ from those protected by patent in that copyright vests immediately upon original works of authorship being fixed in a tangible medium. No time bar exists regarding disclosure. B. Evaluation of ROI Upon receipt of the ROI, JHTT will review it for completeness. Incomplete ROIs will be returned to the investigator. JHTT will gladly answer questions and provide guidance on how to complete an ROI. Once the ROI is complete, including assignment by JHU inventors of their rights, title, and interest in the invention to the University, the ROI will be assigned to a Licensing Associate within JHTT for evaluation. For administrative efficiency, JHTT communicates through a lead inventor identified in the ROI. In the case of inventions arising from collaboration with other institutions, the non-Hopkins inventors are not required to assign their interest to Hopkins, but must acknowledge in writing the completeness and correctness of the ROI. Johns Hopkins Technology Transfer strives to manage its intellectual property portfolio in the best interest of the University, the inventors, and for the public benefit. JHTT evaluates reported intellectual property and inventions for :
It typically takes 4 - 6 weeks from the time JHTT receives a completed ROI for full evaluation of the reported invention. During the evaluation period, the Licensing Associate assigned to the ROI will meet with the inventor to learn more about the invention and discuss marketing and licensing strategy. After evaluation of a ROI, JHTT will decide whether to retain title to the invention or release title to the inventors, subject to approval as applicable by any research sponsor. If the University retains title to the invention, JHTT will manage the process of patent or copyright protection as appropriate, and begin the processes of marketing and licensing. In such cases, the University pays all patent, copyright, and licensing costs; there are no costs to the inventors. Whenever possible, these costs are recouped through license agreements. C. Inventor Participation Throughout the evaluation and subsequent patenting, marketing, and licensing efforts, inventor cooperation and participation are critical for effective intellectual property management and licensing. If the inventor cannot or will not fully support the process, JHTT may, after consultation with the Dean’s office of the inventor’s School, choose to inactivate the invention file. In this circumstance, title to the intellectual property remains with the University and does not revert to the inventor. D. Assignment of Rights Before Filing a Patent Application The ability to effectively protect intellectual property and commercial potential are important elements in JHTT’s decision to retain title to an invention. Whereas many inventions represent significant scientific advancements, not all have the commercial potential to justify the significant expense of patent protection or licensing efforts. In such cases, JHTT, after consultation with the inventor’s School, usually elects to waive title to its ownership interest in the invention before filing a patent application, and it may be possible for the inventors to obtain title. At the inventor’s request, JHTT will discuss the associated rules and encumbrances for acquiring title. For example, if the invention was made using any federal funds, (i.e., grants from the NSF, NIH, or DOD) the federal agency has the right to obtain title. Inventors interested in obtaining title to an invention must sign an Assignment of Rights Agreement . This agreement provides for the assignment of JHU’s ownership interest in the invention to the inventors in exchange for certain assurances from the inventors. If the invention was federally sponsored, the inventors must petition the federal funding agency for the right to obtain title. Such petitions are usually granted. 1. In general, the University has the right to obtain title to Intellectual Property developed as a result of support either directly from or channeled through the University. In the absence of University support, rights of ownership of Intellectual Property remain with the inventor. Students receiving remuneration for services or working on federally funded and other research projects also must assign the intellectual property to JHU if the University elects to take title. The greatest expense in the protection of the University’s intellectual property is the patent process. Each year the University spends several million dollars for preparation and filing of patent applications, and maintenance fees for issued patents. The cost of a U. S. patent can range from less than $15,000 to more than $40,000, depending upon the complexity of the application and prosecution. A complete U.S. and international patent portfolio on an individual invention can often exceed $300,000. With the increasing number of ROIs submitted each year, the cost of patent prosecution represents a significant expense. JHTT manages this expense by focusing and supporting those discoveries that have or will have commercial value. JHTT emphasizes that the filing of a patent application does not mean that the University has an issued patent or the right to enforce a patent on the invention. The issuance of the patent typically takes 3 to 5 years from the time of first filing. A. Provisional Patent Application One of the most effective tools for managing the patent process is the provisional patent. Since the U.S. Patent and Trademark Office’s (USPTO) creation of the provisional patent application in 1995, the University has adopted a strategy of first filing provisional rather than full patent applications. A provisional patent application establishes a filing date with the USPTO, provided that the statutory requirements of the patent laws are met. These requirements include a description of the invention sufficient for others to make or use the invention without further undue experimentation (methodology and results). It is the responsibility of the inventors to provide JHTT with the requisite written description of their invention. Provisional patent applications must be converted to a U.S. utility and/or international patent application within one calendar year of the provisional filing or all rights are lost, with one exception. If the invention has never been publicly disclosed, the provisional patent application may be re-filed to restart the provisional year. During this 1-year period the inventor can continue to develop the technology while the Licensing Office begins the marketing process and seeks potential licensees. B. Inventor Responsibility If any disclosure to an outside party is anticipated, the inventor should contact JHTT. Even after a provisional patent application has been filed, a University Non-Disclosure Agreement should be executed with any party before disclosure. In addition, any other disclosures, such as publication, abstract, or oral presentation, should be discussed with JHTT to assure that patent protection will not be compromised. Once a provisional application has been filed, the inventors will be asked to prepare a non-confidential description of the invention to assist the marketing effort. Without this document, marketing activities cannot proceed and, after consultation with the inventor’s School, JHTT may inactivate the file. If research is continuing in the area of the invention, any new data should be reported to the Licensing Associate to determine whether a subsequent provisional patent application should be filed. C. Converting a Provisional Patent Application to a U. S. Utility and/or International Patent Application Conversion of a provisional patent application to a U. S. Utility and/or International Patent Application is not automatic. The decision to convert depends upon a variety of factors such as other dominating patents in the area of the invention, stage of development, and whether there has been any licensing interest during the provisional year. If there is genuine license interest by the time of conversion or there is an Option Agreement that provides for reimbursement of patent cost, the provisional application will usually be converted. If there has been little or no licensing interest, JHTT will not commit to the expense of patent conversion without the concurrence of the inventor’s School and/or Department. Conversion decisions are usually reached 60 days before the 1-year conversion deadline. D. Choosing Intellectual Property Counsel JHTT retains outside intellectual property counsel to prepare and file patent applications and copyright registrations on behalf of the University and its inventors. Through JHTT, the University reserves the sole right to choose intellectual property lawyers and law firms, all of which must be approved by the University's Office of General Counsel. JHTT only works with a limited number of law firms; those that have conflicts of interest will not be engaged. Before drafting a patent application, the selected attorney will review any provisional patent application and other supporting documents and may meet with the inventors to discuss relevant issues. All matters of inventorship and patentability will be determined by the patent attorney in consultation with JHTT and the inventors. The participation and cooperation of the inventors is necessary and expected throughout the patent prosecution process. Inventors should be prepared to provide electronic copies of any abstracts, publications, etc. for ease and efficiency in drafting the patent application. Additionally, inventors must work with the patent attorney as needed to provide, in a timely manner, whatever additional information/data may be required to complete the patent application. Inventors must thoroughly review the patent application before it is filed and sign both a Declaration for Patent Application and a formal assignment document that is recorded in the USPTO. Once an application has been filed, inventors are expected to work with the patent attorneys to respond to Office Actions and other requests from the USPTO in a timely manner. Failure to do so can result in loss of patent rights. E. Copyright/Trademark Some intellectual property created by JHU faculty, such as computer software, survey instruments, assessment tools, web-based applications, films and recordings, and internet-distributed content, represent original works of authorship that are more appropriately protected by copyright rather than patent. When appropriate, copyright is easy to obtain and offers adequate protection without the expense of patenting. A copyright typically secures exclusive rights for the life of the author plus 70 years to reproduction, modification or derivative works, distribution, and public performance and display. Unlike patents where inventorship is key, authorship creates copyright ownership when an author is the person who physically creates the work, not the one who conceives of the idea or merely contributes to the content. Ownership of copyright vests initially with the author. In work for hire situations, the employer is the author and the owner if the work was created within the scope of the developer’s employment. Contractors and consultants hired by the University may create copyright material. If their contract does not stipulate assignment of ownership to the University, copyright remains with the contractor, and rights to use and commercialize the work by the University will be limited. To preserve intellectual property rights, proper work for hire agreements must be executed with independent contractors. JHTT or the Office of the Vice President and General Counsel can identify the appropriate JHU agreement to use. Although not required to maintain rights, affixing a copyright notice to the creative work is useful for providing notice of ownership of rights. JHU’s copyright notice is: Copyright 20— (the year of first publication) The Johns Hopkins University All Rights Reserved. Developers of copyrighted material to be licensed or commercialized by the University must complete a ROI and provide a statement representing that the work described in their disclosure was created originally and within the scope of their employment at the University, clearly identify any elements coming from third party sources, and obtain in writing any necessary permissions for use and distribution of third party material. The original ROI will need to be updated periodically if the work is significantly modified, providing a record of additional creators, sponsors, and/or a description of the modification. If there are modifications, an additional signed statement of assignment and acknowledgment of originality may be required. Copyrighted work that is to be distributed as freeware need not be disclosed to JHTT. Developers who choose to distribute their work as freeware are advised t
Works should not be released to the public domain; copyright should always be retained so use permission may be restricted to the desired users. Works that are distributed initially as freeware may become commercially valuable, once demand has been demonstrated. Developers should use version numbers in subsequent editions, since the latest version is usually the one that is licensed and commercialized. Occasionally there are clever and unique names associated with inventions and biological materials developed at Hopkins that may have commercial value. Acronym names for software are a familiar example, but trademarks can be developed for cell-based technologies as well. JHTT pursues trademark protection for inventions and biological research materials, as applicable. Companies that license these inventions or materials and wish to use the associated trademark are provided permission by licensing the right to use the trademark in conjunction with the materials. IV. Marketing Intellectual Property According to the Association of University Technology Managers, fewer than a third of industry licensing executives acknowledge that they routinely canvas universities for new technologies. The most important source of access to university technologies is through personal contact between the company’s research and development staff and university personnel. JHTT’s marketing effort can be substantially enhanced by the inventor’s knowledge of the marketplace, likely commercial applications of the invention, and specific companies that might be interested in the technology. Once JHTT has decided to retain title to an invention, the inventor may be asked to provide:
This information allows JHTT to market the invention through its website and other web-based technology marketing services, promote the technology through regional and national technology fairs, and provide non-confidential information to licensing inquiries. In the event of licensing interest, a Non-Disclosure Agreement will be executed between the University and the potential licensee (the Company) so that the Company can evaluate the strengths of JHU's patent position, market potential, and the development needs of the technology. Inventor participation in discussions with the Company may be essential at this time. If the evaluations are favorable, the Company typically begins negotiating a licensing term sheet with JHTT. Throughout these negotiations and even after a license agreement is executed, JHTT will continue to promote the invention through its website. JHTT's marketing portal has become an important resource for identifying potential sublicensees that may help to broaden the technology development effort. In addition, the University’s technology marketing efforts foster industry-to-university collaborations by presenting to industry the ongoing research in our laboratories. Industry’s willingness to license and invest in technology development is largely market driven and greatly influenced by trends in the financial marketplace. The inability to identify a licensee through JHTT’s marketing efforts is usually due to a lack of market interest. Nationwide, less than 15% of all inventions reported to university technology licensing offices are ultimately licensed. Strategies for transferring inventions from universities to industry are based upon non-exclusive, exclusive, or limited-field licensing. A non-exclusive license is usually suitable for technologies, such as research tools, that would be of interest to a number of companies. Exclusive licenses are generally granted for technologies where product development requires significant effort and cost on the part of the licensee. An exclusive market position is often necessary to justify the expense. With some technologies, exclusive licensing by discrete fields of use is more appropriate because it allows parallel commercial development in multiple fields or applications. JHTT welcomes inventor participation in developing appropriate licensing strategies and in establishing certain licensing terms. However, since the University holds title to the invention and assumes the role of licensor, it has the sole liability exposure. Accordingly, negotiation of licensing terms in any agreement is the right of the University; however, prior to any negotiation, JHTT will meet with the inventor and School to discuss licensing terms and strategy. To determine if a potential licensee is appropriate for a particular technology, the University may require the Company to submit a brief business plan that outlines its ability and intent to develop the technology and to bring it to market. Information contained in the business plan is used to determine whether the Company is an appropriate match for the technology and will assist in the formulation of a licensing strategy. A. Term Sheet The basic financial terms and conditions under which the University and the Company are willing to enter into a license agreement are summarized in a formal, although non-binding, term sheet that must be agreed upon before a license agreement can be drafted. Many factors contribute to the value of a technology, including both variables intrinsic to the technology (e.g., stage of development as disclosed to JHTT) and extrinsic (e.g., patent enforceability, competitive markets). An exclusive University license agreement commands fair and equitable compensation by balancing the risk with the reward of a Company’s efforts to bring a technology to market. Typical financial considerations include:
Reaching agreement on basic financial terms and conditions for a term sheet commonly requires multiple rounds of negotiation and can take several months. The resultant final term sheet serves as the basis for JHTT’s drafting of a comprehensive license agreement. B. License Agreement All license agreements must protect the mission of the University by ensuring that faculty inventors retain rights to continue research in the licensed field, publish freely, and disseminate tangible research materials related to the technology to other academic researchers. In addition, the University requires that all licensees agree to appropriate indemnity and insurance obligations. In order to ensure these retained rights and protect the interest of the University, JHTT uses a standard agreement format and usually prepares the first agreement draft. Negotiating a license is necessarily an adversarial but civil process. Company and University interests and objectives are seldom totally aligned, and reaching fair and equitable compromises can be both lengthy and challenging. Whereas the University always enters into such negotiations with the desire to reach mutually acceptable licensing terms, no compromise can be made on matters of academic freedom and institutional liability. A license agreement defines the structure of a long-term relationship between the University and the Company. In a simple non-exclusive license, the relationship may be limited to a one-time delivery of materials and/or payment of royalties. In exclusive licenses, this relationship is more extensive and often involves ongoing collaborations via sponsored research and consultation between the inventor and the Company. Although the inventors are not a party to University license agreements, all persons receiving income distributions under a license agreement will be required to review the agreement and sign an acknowledgment agreeing to abide by the terms of the agreement and to any proportional royalty distribution among multiple inventors. C. Option & Inter-Institutional Agreements Option: Since a licensing arrangement can represent a significant long-term investment, most companies will undertake a thorough investigation of the patent and market potential and/or evaluate the University’s rights and materials before entering into licensing negotiations. In some instances, a Company will request an option to the technology. During this evaluation time period, the University cannot license to another party. Unlike a license agreement, which has a typical life span of 10 to 20 years, option agreements last for only a few months (usually less than six). Because the Company is not granted rights through this vehicle, compensation for an option agreement is usually limited to a modest option fee and/or reimbursement of any patent costs incurred during the option period. Inter-Institutional: Collaborations with investigators at other universities often result in jointly owned inventions. An Inter-Institutional Agreement creates a relationship by which JHU and another university can consolidate their licensing efforts and share the costs and revenues associated with the patenting and licensing of a joint invention. Although such agreements can be complex, requiring considerable negotiation time, they add value to the University’s technology by ensuring potential licensees the ability to obtain exclusive rights. Before an inventor shares confidential and/or unprotected information with a researcher at another institution or a potential licensee, a Non-Disclosure Agreement (NDA) should be executed between the University and the outside parties. The NDA provides the necessary protections for confidential disclosure and limits use of the information by the receiving party. The University prefers to limit the "flow" of confidential information to a one-way direction, either from the University to the other party or from the other party to the University (unilateral). In some cases it is necessary to have both parties disclose information. JHTT has developed two NDAs for use by University inventors. The Unilateral Non-Disclosure Agreement is used when only one party is disclosing confidential information. The Bilateral Non-Disclosure Agreement is used when both parties are disclosing confidential information. These NDAs may be downloaded from the JHTT website. The NDA must be signed by the inventor, an authorized representative of the University, and an authorized representative of the other party. A copy of the fully executed NDA should be returned to JHTT before the exchange of any information. E. Assignment of Rights The Intellectual Property Policy of the University allows JHTT to elect to take title, on behalf of the University, to inventions reported to the office. The decision of whether or not to take title rests with JHTT upon consultation with the administration of the inventor’s School. There are many factors that are taken into account when making this decision. When it is determined that it is not in the best interest of the University to pursue or continue to support patent protection on inventions, JHTT can release or waive title to the invention to the inventors. The decision to release or waive title is solely the decision of the University, but it is made in consultation with the inventors and their School. The decision to waive title usually occurs either shortly after the ROI is received and reviewed or after a period of marketing with no commercial interest. Upon mutual agreement, JHTT will prepare a Assignment of Rights Agreement that covers the release of rights from the University to the faculty inventors. This agreement conveys all title to the invention to the inventors and relieves the University of any future rights or obligations to the technology. Additionally, once rights to the invention are released to the inventors, the University is relieved of all reporting obligations to the federal government for those inventions that were sponsored by federal funds. The inventors must then comply with those reporting obligations in full. JHTT will direct the inventors to the appropriate contact person for the federal agency that sponsored the subject invention. Two very important parts of the Assignment of Rights Agreement are:
In those instances where the University has invested in marketing and patent filings, the Assignment of Rights Agreement may contain provisions for recouping such expenses and a small ongoing royalty if the technology is ultimately licensed. VI. Faculty Start-Up Companies As part of its mission to commercialize University innovations, JHTT will consider licensing requests from faculty inventors wanting to start new companies with technologies they have created. Although not obligated to do so, JHTT is willing to license technology to a faculty start-up company, provided that the faculty inventors demonstrate a clear commitment and ability to develop the licensed technology. In addition, a faculty inventor's involvement in such a start-up company must have the prior approval of their School’s Committee on Conflict of Interest (CCOI). A. Launching a Company—Faculty Role If establishing a faculty start-up with University technology is appropriate, JHTT will agree to hold the technology for the inventor while the groundwork for launching the company is completed. Under a Standstill Agreement , JHTT will agree to refrain from licensing the technology to others for a defined period of time. The inventor may elect to proceed without the Standstill Agreement; however, JHTT would then be free to license to another party. In return for the protection of the Standstill Agreement, the inventor must commit to meeting certain obligations within a mutually agreed upon period of time (usually 6 months), which include development of a business plan, assembly of a qualified management team, and identification of sources for initial seed financing. If requested, JHTT can provide a list of professional contacts in areas such as business plan development, finance, and law to assist the faculty inventor with the start-up company. In addition, during the Standstill Agreement period, the faculty inventor’s involvement in the proposed new company must be approved by their School’s CCOI. Once the business plan is complete, the inventor must submit the proposed relationship and business plan to the appropriate CCOI for review and comment. JHTT has experience in the types of inventor/company relationships that are typically allowed and will provide guidance during discussions on the formation of the new company. Once these steps are completed, and with the School’s CCOI approval of the inventor’s proposed involvement, JHTT will negotiate a term sheet for a license to the technology with appropriate representatives of the inventor's start-up company. Negotiations are typically conducted through the company’s lawyers. JHTT will not negotiate directly with inventors. The terms for the license typically include a license fee, payment of past and ongoing patent cost, minimum annual royalties, equity, and other such consideration as is customary in the University’s technology license agreements. To assist faculty start-up companies, license agreements will usually defer most costs and fees for a period of time (typically less than 9 months) so the company can arrange financing. The license agreement will require, however, that $10,000 of any licensee fee be paid upon execution of the agreement. Before beginning any license negotiations, JHTT will require that faculty inventors who have a fiduciary responsibility and/or will be beneficial owners of 10% or more of the outstanding shares of the company or equivalent options, waive their rights to distribution of any personal shares of net licensing or royalty income pursuant to the University’s sharing formula. A fiduciary responsibility includes, but is not limited to, service on the board of directors or as an officer of the company. Consultants and scientific advisory board members are not typically officers of the company and, thus, do not have a fiduciary responsibility. Furthermore, such faculty inventors will be required to release the University from any obligation to represent their interest as inventors in the license negotiation. B. Start-up Companies—Licensing Office’s Role The University’s primary role in any license agreement is that of licensor of technology. While the University may retain visitation rights to board of directors meetings, it does not participate in the management of the company or accept any fiduciary responsibility for the company. Equity received by the University in partial consideration for a license imparts certain shareholder rights but does not create a "Hopkins company." C. Preliminary Business Plan It is recommended that the inventor/founder seek outside advice and guidance regarding the development of their business plan. For JHTT’s purposes, the plan should include:
VII. Tangible Research Properties By far the largest category of intellectual property created by JHU faculty is tangible research materials consisting of new compounds and formulations, biological research materials such as cell lines, genetic constructs, hybridomas and their antibodies, and computer software and applications. The abundance of these research materials developed and produced through research efforts of JHU scientists by virtue of their prominence, uniqueness, and utility, make up a significant and valuable portion of JHU’s intellectual property portfolio. As part of the University’s obligation to share such research materials with other academic researchers throughout the world, JHTT provides Material Transfer Agreements to protect the faculty and University interest in their tangible research materials. A. Material Transfer Agreement When University faculty want to share patented or unpatented tangible properties with their colleagues at non-profit institutions for research purposes, the materials should be transferred under a Material Transfer Agreement (MTA). MTAs are binding legal agreements between the provider of research material and the recipient, which set forth the conditions of transfer and use, protect proprietary interest in the material, and restrict distribution. Most important, the MTA requires the recipient to indemnify the provider from any liability arising from use of the material. Executing an MTA also helps preserve the faculty and University's intellectual property rights while recording the transfer of the invention to another party. The Licensing Office has a web-based MTA that allows for MTA processing without any exchange of paper. Faculty need only to send the "mtaonline" link to any academic researcher requesting their material. (See JHTT website.) Instructions for submitting the document are provided online. JHTT can also provide a paper MTA if required. When faculty wish to obtain research material from other non-profit institutions or commercial sources, the provider will usually require that the faculty and University sign their MTA before transfer of the material. MTAs from other academic institutions are all quite similar to those from Hopkins and seldom impose any reach-through rights . However, material transfers from commercial sources often impose unacceptable encumbrances and reach-through rights on any discoveries made with the research materials. JHTT processes over 1,500 MTAs each year for University faculty. Most agreements can be processed quickly, but delays can occur when the MTAs contain terms that are contrary to University policy. This is often the case with MTAs provided by companies for use of their research materials. Delays of several weeks or even months are common when JHTT must negotiate with the other party for acceptable terms. JHTT processes MTAs for the Schools of Medicine, Engineering, and Arts and Sciences. Faculty in other Schools should request MTAs from their respective Associate Dean for Research or Office of Research Administration. B. Non-Exclusive Tangible Property License Transfers of tangible property to commercial recipients, or to recipients who wish to use the material in commercially sponsored research, should be preceded by the execution of a Non-Exclusive Tangible Property License Agreement. The agreement has many of the same provisions and protections as a typical non-exclusive license agreement and usually provides for a one-time payment of licensing fees or royalties. Faculty wishing to provide their research materials to companies for research or commercial use should complete and submit to JHTT a Tangible Property Disclosure and Assignment Form (a shorter version of the Report of Invention). Once this form has been completed, JHTT will negotiate an appropriate agreement with the company. The form can be found on the web. (See JHTT website.) In many instances, commercial development can add value to the materials developed by JHU researchers and provide the large quantities required for research and commercial use. If the company wishes to sell a product based on the research material or a derivative of the material, such as an antibody from a hybridoma, the license agreement must provide for adequate indemnity and protection from liability for the faculty and University. In adopting the University’s Intellectual Property Policies, the Trustees recognized that issues of conflict of interest require that certain types of research on licensed inventions by the inventor and/or University are prohibited where the integrity of the research may be compromised. Before finalizing any licensing agreement, JHTT will submit the agreement for review and comment by the appropriate School’s Committee on Conflict of Interest. Most committee meetings are held monthly and several weeks’ notice is needed to get an agreement on the agenda. When licensing agreements follow the University’s standard format, conflict of interest committees seldom object to any terms. In some cases, the committee will impose certain conditions to manage conflict of interest. To assure the primacy of the University’s academic mission, conflict of interest committees generally will not recommend approval of any license agreement that provides for sponsored research to the faculty inventor’s laboratory if one or more of the following relationships with the licensee exist:
Exceptions are recommended for approval only in rare cases and only with review and approval by the inventor’s Dean’s office or Vice Provost for Research and with stringent management conditions. IX. Grievances If an inventor has a grievance about the University’s handling of intellectual property, an appeal may be made to the Dean (or his designee) of the inventor’s School. The grievance may be submitted to the University Provost’s Office if there is no school grievance procedure or to appeal a decision by a Dean’s Office. X. Royalty and Income Distribution The first Intellectual Property Policy was adopted by the University Trustees in 1983 and underwent extensive revision in 1992. The revised policy set forth the responsibilities of the University and faculty in managing University intellectual property and stated the following principles for revenue sharing: "Revenue received as a result of licensing agreements in the form of cash royalties and/or equity shall be distributed in such a manner as to encourage technology development within and technology transfer from the University. Revenues shall not include funds received for research support.
A. Royalty Income and Equity Sharing On April 2, 2001, the Executive Committee of the University’s Board of Trustees adopted a simplified distribution formula for net royalty income and equity arising from the licensing of faculty inventions. In granting approval, the Executive Committee also acknowledged the importance of the University’s Intellectual Property Policy in attracting and retaining top research and clinical talent. Previously, net income was distributed pursuant to a complex, multi-tiered formula, adopted in 1992. Under the newly adopted distribution formula, the inventor’s share, along with their laboratory’s and department’s shares, remains constant across all income levels. The new distribution policy applies to all inventions licensed after April 2, 2001. Inventors receiving distributions under the previous formula may chose distributions under the new policy; otherwise, those distributions will be made under the policy in effect at the time of license. Net Royalty and Equity Distributions
(1) In licenses with multiple inventions, the inventor's share is divided equally unless an unequal distribution has been agreed to in writing. Also adopted were two procedural changes to JHTT practices:
B. Semi-Annual Distributions JHTT distributes net income from each invention account annually at the end of each fiscal year. Account reconciliation begins in early June with distributions usually completed within 60 to 90 days. JHTT’s financial manager is available to review account information with inventors upon request after distributions are completed. Since the inventors’ shares are mailed to home addresses, it is imperative that the office be promptly notified of any change of address. XI. Johns Hopkins Technology Transfer Office A. Responsibility The Johns Hopkins Technology Transfer Office (JHTT) has been empowered to manage the University's intellectual property (IP) and to provide IP marketing, patenting, and licensing services to all University Schools and Institutes with the exception of the University's Applied Physics Laboratory. JHTT is authorized, on behalf of the University, to file patent applications and execute other documents for the US patent and Trademark Office; execute license, option, and material transfer agreements; enter into unilateral and bilateral confidentiality and non-disclosure agreements, and execute other documents related to intellectual property and confidentiality. B. Organization JHTT was created in July of 2002 through the consolidation of the School of Medicine's Office of Technology Licensing (OTL) and the Office of Technology Transfer (OTT) on the Homewood campus. JHTT's marketing group is headed by the Senior Director of Technology Development; the patent and licensing group is headed by the Senior Director of Technology Licensing; royalty distribution is managed by the Financial Manager; and office administration is managed by the Business Manager. JHTT is overseen by the Associate Provost of Johns Hopkins Technology Transfer who reports to the Vice Provost for Research. C. Support Financial support of JHTT is provided by the Schools and Institutes along with a subsidy from the University General Administration. At the end of each fiscal year, participating Schools and Institutes share JHTT's direct operating costs proportionally based upon their respective percentage of ROIs accepted and patents filed (excluding provisional applications). Additionally, each School and Institute is responsible for its patent costs. These costs are offset by each School's share of license fees and royalties, license processing and maintenance fees, and patent expense reimbursements from licensees. In those cases with multiple inventors from more than one School, expense allocations follows the inventors’ personal distribution sharing. XII. Economic Development Office A critical step to facilitate more productive relationships with industry and to enhance the process of bringing the benefits of Hopkins innovation to the public has been achieved through the establishment of the University Economic Development Office (EDO) which works closely with the University office of Johns Hopkins Technology Transfer to promote Hopkins innovation. EDO was created by the University in 2003 to seek opportunities for Hopkins to play a more extensive and sophisticated business role through participation in alliances, partnerships, consulting agreements, start-up companies, and joint ventures in key business areas. EDO is adding value by assembling, organizing, and disseminating information concerning transactions and relationships for use by the larger university community. EDO endeavors to achieve the University's goals of more effective business interactions through:
CLOSING This document is provided as a summary of the current policies and practices of the University’s Johns Hopkins Technology Transfer office and as a guide through the processes involved in managing the University’s intellectual property. As government regulations and industry standards change, the University and the licensing office will review and update these policies and practices. Updates to this document will be available through the Licensing Office’s website.
[the underlined words were added to this paragragh November 5, 2003] A. Report of Invention To report new intellectual property, a Report of Invention (ROI) must be completed which includes assignment of ownership interest to the University and submitted to JHTT. Some Schools require that ROIs be submitted to an IP committee for evaluation prior to transmittal to JHTT. Inventors should check for specific ROI submission instructions for their individual School. An ROI provides the necessary information about the intellectual property for evaluation by the Johns Hopkins Technology Transfer office. Tangible property inventions, such as research tools for which patent protection is not appropriate, should be reported using an abbreviated Tangible Property Disclosure and Assignment Form. Electronic copies of both reporting forms can be found on the web. (See JHTT website.) [the following section was added November 5, 2003] XII. Economic Development Office A critical step to facilitate more productive relationships with industry and to enhance the process of bringing the benefits of Hopkins innovation to the public has been achieved through the establishment of the University Economic Development Office (EDO) which works closely with the University office of Johns Hopkins Technology Transfer to promote Hopkins innovation. EDO was created by the University in 2003 to seek opportunities for Hopkins to play a more extensive and sophisticated business role through participation in alliances, partnerships, consulting agreements, start-up companies, and joint ventures in key business areas. EDO will be able to add value by assembling, organizing, and disseminating information concerning transactions and relationships for use by the larger university community. EDO endeavors to achieve the University's goals of more effective business interactions through:
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