This is a guest post from Mark D. Shtilerman1 and Joseph Eng Jr.
Dr. Shtilerman is Senior Counsel at Deerfield Management, and Dr. Eng is Counsel at Hogan Lovells.
Science and engineering graduate students usually do not learn about patents and the patenting process during their formal coursework. However, even as a junior researcher it is possible to create patentable intellectual property that could eventually be the subject of lucrative patent licenses. This article discusses some fundamental aspects of patents and the patenting process to provide a brief introduction for scientists and engineers.
A patent is a legal document that provides a right to exclude others from making, using or selling the invention that is claimed in the patent. As a practical matter, the “right to exclude” typically translates into a right to collect some form of economic return. Patents are valuable because (1) they can give the patent holder a competitive advantage by preventing competitors from practicing the patented invention, and/or (2) they can be the subject of a royalty-bearing license agreement between the patent holder and a third-party interested in practicing the patented invention. However, because a patent only confers exclusionary rights with respect to other parties, the mere fact that one owns a patent does not mean that one is free to practice or commercialize the invention claimed in the patent. For instance, commercial exploitation may be prohibited or limited based on considerations unrelated to patent laws, such as morality or national security. Such restrictions exist in fields such as nuclear power, stem cell research, or human cloning. Also, patents owned by third parties may cover certain aspects of an invention claimed in a patent holder’s patent. In such cases, the patent holder will infringe on the patent rights of others when practicing his or her own patent. If the third parties refuse to grant a license to the patent holder, the patent holder could be prevented from practicing his or her own patented invention.
Article I, Section 8, Clause 8, of the United States Constitution grants Congress the 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.” The thought behind this so-called “patent and copyright” clause of the Constitution is to provide economic incentives for innovation. In fact, there is evidence that the patent system works as intended2. The prospect of obtaining lucrative license agreements or a competitive advantage provides strong economic incentive to innovate and to patent inventions. Even in the academic environment, which traditionally favors the unrestricted exchange of information, the economic benefits of patenting usually promote rather than impede innovation.3
Society also benefits when inventors patent their inventions. In exchange for the right to exclude others from practicing a patented invention for a limited time (usually, 20 years from the filing date), an inventor must disclose the invention in sufficient detail for a person of ordinary skill in the art to make and use the invention. The exclusivity granted by a patent acts as a powerful economic incentive for an inventor to disclose to the public what would have otherwise been hidden as a trade secret. As a result, both the inventor and the public are better off—the public gains knowledge of the invention and upon the expiration of a patent, society may freely practice the invention. Even more, parties who are unable to secure the right to practice a patented invention may also be forced to develop alternative technologies or “design around” the patented invention, thereby leading to further technological innovations.
Despite these benefits, some researchers may be reluctant to obtain patents for fear that their own patents could discourage colleagues from conducting research. However, those fears are generally unsupported. Empirical data shows that even industry-sponsored academic research is both accessible and highly valuable for future innovation at both academic and commercial enterprises.4
Many brilliant ideas would not be turned into commercial products without patents. Product development is often an expensive undertaking and those who fund the development want to see returns on investment. For example, the costs of research and clinical trials required to bring a new drug to market are breathtaking, averaging close to $2.6 billion per drug.5 Patents provide some degree of assurance to the investors that the company will have sufficient time to recoup development costs and to generate the expected economic returns. This assurance is critical to the company’s ability to secure the investment capital needed to develop new ideas into products. Robert Nelson, cofounder of ARCH Venture Partners, and Hans Bishop, the CEO and co-founder of Juno Therapeutics, wrote: “Let us be clear: investments in the biotech industry are based entirely on patents. Without strong patents, we cannot raise money to find cures for disease.”6
In academic or not-for-profit settings, however, one might be tempted to argue that economic incentives do not play a significant role. Indeed, high quality innovation is already happening at universities nationwide—much of it unpatented—and the careers of most academic researchers depend more on publications and grants than on patents. So, why would academic researchers consider pursuing patents?
The answer is that patents can offer significant benefits to almost all organizations and to individual inventors.7 In many cases, research institutions own patents because graduate students, postdocs and research faculty are required to sign employment agreements that transfer ownership of their inventions to the institution. Typically, ownership is transferred in a special assignment document, or in the initial employment contract. When academic institutions license patents to commercial entities, universities share economic returns with the inventors.8 For example, Columbia University earned approximately $790 million in revenue from the Axel patents on co-transformation techniques. The revenue was divided between the university and three inventors, with an estimated $110 million paid to the inventors.9
Today, it is well recognized that patent licensing revenues support research and the educational mission of academic institutions, and help to establish a researcher’s visibility and recognition. Like publications, patents signal to the marketplace that a particular university or non-profit research organization is on the cutting edge of a particular technology. This signaling can lead to lucrative consulting opportunities or fruitful collaborations. Additionally, although patents may not always be the main driver of innovation at academic institutions, patents can create an economic windfall to both institutions and individual inventors.10 After paying out to the inventors of Axel patents, Columbia University’s royalties supported “the Columbia University Medical Center, as well as a fund for general university purposes, such as establishing a new Department of Biomedical Engineering at the Fu School of Engineering; the interdisciplinary Judith P. Suzlberger, MD, Genome Center; and the Columbia University Earth Institute.”11 “A blockbuster discovery can alter a university’s fortunes, like the patents on inserting foreign DNA into cells, which brought $790 million to Columbia University, or the patents leading to the drug Remicade, used to treat autoimmune diseases, from which New York University collected more than $1 billion.”12
A decision to pursue a patent is a commercial decision, a question that a researcher may not be well equipped to resolve. Fortunately, academic researchers can often rely on a sophisticated Technology and Licensing Office (TLO)13 at their “home” institution, which has market research and business development professionals to answer business questions.
To obtain a patent in the United States, the invention must be in one of the four patent-eligible categories: process, machine, manufacture, or composition of matter. The law on what constitutes patentable subject matter has been evolving rapidly, and in the wake of certain recent Supreme Court decisions, certain types of inventions are no longer patentable, such as isolated, purified DNA. In addition, while there has been a long-standing prohibition against patenting “laws of nature” or “abstract ideas,” the Supreme Court recently has expanded the definition of what constitutes a “law of nature” or an “abstract idea,” thereby narrowing the scope of patentable subject matter. Rather than trying to stay abreast of this evolving body of law, researchers should ask the TLO at their respective institutions for guidance in evaluating each invention. When in doubt, we recommend filing a patent application as a precaution. The law continues to evolve and may be substantially different by the time the patent application is under examination by the U.S. Patent and Trademark Office.
In addition to qualifying as patent-eligible, a patentable invention also must be novel, useful, and non-obvious. Most researchers have an intuitive understanding when the work they are doing is new, but the statutory requirement of novelty is less intuitive. For researchers, an important concept to remember is that, under certain circumstances, an inventor’s own earlier publications can be used to challenge the novelty of the inventor’s later filed patent application. Thus, one must be careful not to publish an invention before filing a patent application, as discussed more fully below.
An invention must be useful in order to be patented. Under U.S. law, the utility must be “substantial and credible” and demonstrated via a “real world” use. In other words, any proposed use that (1) requires further research; (2) is not realizable or realistic; or (3) is not sufficiently specific will fail the test for utility. The U.S. Patent and Trademark Office (USPTO) has provided an example to illustrate the utility requirement in the context of using transgenic (i.e., genetically engineered) mice for snake food. According to the USPTO, in most situations, the utility requirement would not be met by this suggested utility, as it is not specific (all mice, not just transgenic mice, could serve as snake food) nor substantial (the high cost of creating a transgenic mouse would make it commercially unrealistic to use such a mouse as snake food). The USPTO noted, however, that the use of a transgenic mouse for snake food could have a credible utility if the inventor could show that the transgenic mouse in question has a particular protein profile that makes it a superior food source for snakes. With this guidance in mind, a researcher should not just focus on a single immediate commercial application of the invention, as many types of inventions have multiple applications. A broad view should be taken of all potential applications of the newly discovered technology.
To qualify for a patent, an invention must also not be “obvious” over all information available to the public before the patent filing date (collectively known as the “prior art”). This requirement prevents the undesirable situation where a party patents an invention already in the public domain by making an insubstantial change to the invention. The legal concept of “obviousness” can be complicated and currently is based on an analysis of whether the invention would have been obvious to a hypothetical “person of ordinary skill in the art” at the time of the effective filing date of the patent application corresponding to the claimed invention. The need to specify the timeframe when analyzing obviousness is important, for several reasons. First, the level of skill in the art changes over time, and what may have been non-obvious at one point in time could be obvious at a later point as the technological field advances. Second, after inventions are completed, inventors—or patent examiners examining the corresponding patent application—may consider the invention obvious through the benefit of hindsight. A researcher must be careful not to sabotage his or her own attempts to obtain a patent by making careless statements regarding the obviousness of his or her own invention. For example, sometimes—perhaps as a part of a misguided effort to appear prescient—a researcher might be tempted to say that the outcome of an experiment was obvious. Even though obviousness is evaluated from the viewpoint of a person of ordinary skill in the art, statements by the inventor such as “it was immediately obvious to me that this experiment will work,” or “when I read the paper of Dr. X, I immediately knew that I could apply it to my research” are admissions that may be used to show the obviousness of the invention. Indeed, the patentability of many great inventions have been destroyed by careless statements by the inventors. Thus, researchers should refrain from making any such statements. Moreover, if the outcome of the experiment was unknown and the result was surprising, it is beneficial to document it.
A patent application must describe the invention in sufficient detail to (1) show that the inventor was in possession of the claimed invention; and (2) allow others to make and use the invention without having to undertake undue experimentation. After all, a patent is a reward for public disclosure and this level of detailed disclosure is the quid pro quo for obtaining patent rights. The concept of providing a detailed disclosure is not foreign to most researchers, as journals require published articles to contain sufficient detail to allow others to repeat experiments. Note, however, that the patent disclosure requirement is not as strict. Patent law recognizes that some additional experimentation may be required to fully use an invention, so long as that level of experimentation is common in the field. Thus, the level of disclosure depends on the specific field of endeavor and the specific invention.
Louis Pasteur once said: “Fortune favors the prepared mind.” A modicum of preparation before an invention is made can drastically improve the chance of obtaining a patent. Most importantly, a researcher should implement a straightforward and non-disruptive process for consistently documenting experiments that takes patent needs into consideration. Often, TLOs can suggest model processes and are happy to assist with setting up a process.
The first step in the process is to develop familiarity with the best practices for recordkeeping from a patent perspective. These are not significantly different from standard laboratory practices, but there are a few additional points to keep in mind. At a minimum, it is recommended that each laboratory notebook page be signed and dated by the person creating the record, and then counter-signed and dated by an observer. An observer does not need to understand the science or technology but only to verify that the entry was made by the date of the countersignature, which is preferably the same date as or, at most, just a few days later than the date on which the record was created. It is also considered a good practice to start a new notebook for each project. In this way, if there is any dispute over the invention, an attorney can easily review a single notebook (or a group of notebooks dedicated to a project) rather than sifting through years of notebooks that intermingled data from multiple projects.
The rules of who should be named as an inventor on a patent differ from the rules of authorship. Patents are granted to inventors who contributed to the “conception” of the invention that is claimed in the patent. In this context, “conception” is defined as a “formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention.” Conception does not require an inventor to actually build the invention or to perform the necessary process or steps to arrive at the invention. Thus, when identifying members of a research group that should be named as inventors on a patent application, it is important to distinguish between the members of the group who actually contributed to the conception of the invention and those who were only following instructions of the group members who had conceived of the invention. For this reason, it is important that the notebooks document the contributions of each researcher, the discussions of the work leading to the invention, and any help with planning experiments. The final determination of inventorship for a particular patent application should be made by qualified legal counsel, such as those working in a TLO, because patents that do not name correct inventors may be unenforceable.
Most institutions have a standardized invention disclosure form that can serve as a template for describing the invention to a patent attorney. Typically, an invention disclosure form will ask the inventor to formulate clearly and concisely the problem that is being solved by the invention and to describe what was known before the invention was made. The invention disclosure form will also ask for a brief description of the invention itself. When describing the invention, however, it is important to describe what the invention is, and not just what it does. For example, a description such as “this invention provides an efficient, cost effective way to cure the common cold” would be insufficient, because it does not apprise the reader of the chemical identity of the therapeutic ingredient or the specific therapeutic steps that one should take to cure the common cold. The invention disclosure form may also ask for an explanation as to how the invention is an improvement over a standard product or process. In order to assist the patent attorney in delineating the invention, the invention disclosure form may ask the inventor to describe or list any relevant prior patents or publications of which the inventor is aware. Note, however, that an inventor is not required to research literature, patents, or standard practices, and is only required to explain what was known to the inventor at the time the invention was made.
It is exciting to discover or invent something new. Many researchers find it difficult to resist the temptation of immediately discussing results with colleagues, presenting results at conferences, and/or publishing in prestigious journals. But without filing a corresponding patent application first, such disclosures may render the inventions unpatentable by turning the inventor’s own presentations and publications into prior art against the inventor’s patent application. This inadvertently created prior art may foreclose the possibility of obtaining a patent. Thus, prior to submitting an abstract to a conference or an article for publication, one should first contact the TLO to discuss whether to file a patent application at the same time or—more ideally—before submission of any abstract or article. A brief consultation with the TLO may preserve patent rights without impeding the ability to communicate the results. For example, the TLO may recommend filing a “provisional application” prior to any disclosure or publication by the inventor. A provisional application is a type of U.S. patent application that acts as a placeholder. It preserves the inventor’s right to later file a “non-provisional” application, which is the only type of U.S. application that can be granted as a patent. In some cases, the filing of a provisional application can be fairly simple and inexpensive. For example, if faced with an imminent disclosure of the invention at a conference, a patent attorney at the TLO may simply file the final draft of a paper or poster presentation with the USPTO. Such a “cover sheet provisional application”—so named because it essentially involves putting a cover sheet on the paper or poster presentation prior to filing—at least prevents the paper or poster presentation from being used as prior art against the inventor’s later filed non-provisional application, provided that certain criteria are met. Of course, the disclosure contained in a cover sheet provisional application is typically not as detailed as a provisional application that is drafted by a patent attorney during the normal course of business. Therefore, even with a cover sheet provisional application on file, inventors should be careful to limit their disclosure to the subject matter that is actually disclosed in that filed provisional application.
More typically, when an invention is made and documented, the process to obtain a patent begins with an appointment to meet with the TLO. To have a productive meeting, an inventor should complete the institution’s invention disclosure form and bring copies of relevant notebook pages. An inventor may also want to prepare a slide deck or rough sketches to explain the invention to TLO personnel. Inventors should recognize that, because TLO personnel come from a variety of fields and backgrounds and work with researchers in multiple departments, they sometimes may not have a sufficient technical background to allow them to grasp the invention immediately. However, TLO professionals are accustomed to handling new and different technologies, and with the appropriate background materials should be able to draft a suitable patent application.
In working with a TLO, researchers should keep in mind that the U.S. patent system has moved from a “first-to-invent” system to a “first-to-file” system. Under the old “first-to-invent” system, an inventor could overcome certain patentability challenges by presenting evidence of earlier conception of the invention and of diligent reduction of the invention to practice. Under the new “first-to-file” system, one cannot overcome prior art by presenting such evidence, and thus early identification of patent-worthy inventions and early filing of corresponding patent applications is of paramount importance. Accordingly, researchers must be diligent and efficient when working with their TLO to obtain patents.
The process of patenting an invention may seem unnecessary and cumbersome to an academic researcher, especially if not driven by financial compensation. However, in most cases, the patent process is required to support future development effort and eventual commercialization of the invention. Many researchers ultimately find great satisfaction in seeing their idea evolve into something used commercially, appreciated, and admired by many people. A commercially successful invention that generates economic returns to the institution and the inventor and supports education and research and development of new technologies can also be a source of great pride and satisfaction. And with help and support from a sophisticated TLO, the patenting process can be quite easy and non-disruptive.
Mark Shtilerman is a Senior Counsel at Deerfield Management Company L.P. He joined Deerfield in 2014 with more than 14 years’ experience of counseling companies in all aspects of intellectual property procurement, enforcement and licensing. Mark is a technically trained patent attorney registered to practice before the US PTO. Prior to Deerfield, Mark was an attorney in nationally recognized law firms, and he was a patent agent at a biotechnology company before then. Mark received a Ph.D. in Biochemistry and Molecular Biophysics from University of Pennsylvania, post-doctoral training at Harvard Medical School and Brigham & Women’s Hospital, and a J.D. from Fordham University School of Law.
Joseph Eng is Counsel at Hogan Lovells based in the firm's New York office. As a patent litigator, Joe has represented clients in federal courts and before the International Trade Commission. His cases have covered many technologies, including microelectronics, semiconductor processing, polymer coatings, and medical devices, to name just a few. Joe also represents brand pharmaceuticals in Hatch-Waxman litigation. Joe holds a Ph.D. in physical chemistry from Columbia University, and B.S. degrees in both chemistry and physics from MIT.