November 2008 Archives

Today we bring a guest post from Professor Marcus Hurn on the Taxonomy of Property with focus on classification on Intellectual Property in the Basics of Property. He broadly looks into Property and narrows down to the issues of Intellectual Property and even Trade Secrets. This post points out to the basics on which our issues of Technology Transfer and Licensing are based on.

Professor Hurn a distinguished Professor at Pierce Law has taught fifteen different subjects during his teaching tenure and is regularly sought by practicing lawyers and legislative committees for expertise on corporate law, financial reorganization, state and local taxation, and charitable trusts.  A recognized expert on white collar crime, he has testified in the prosecution of several multimillion-dollar fraud cases. He is also co-author of several statutes, including the NH Hate Crimes Law, the sexual orientation portions of the NH Law against Discrimination, the Business Corporations Act, and the Limited Liability Company Act. Professor Hurn currently teaches Property, Debtor/Creditor Relations, and Conflicts of Law.

A Brief Taxonomy of Property

There are four major classes of Property: Land, Goods, Obligations, and Intellectual Property.  They differ based on whether they are tangible or not, physically movable or not, universal or not, and exhaustible or not.  The traditional classification system has a superstructure, and there are significant sub-categories.

Property is real or personal.

Real property (immovables in civilian parlance) is space defined with reference to the surface of the earth, including the soil and things contained in or affixed to the soil.  It is tangible but not movable.  It cannot be lost, stolen, or physically destroyed.  It has universal scope in the sense that an owner has rights against the whole world. It is exhaustible in the sense that only limited numbers of people can use it at one time. Its boundaries are physically ascertainable.  It is ultimately controlled through possession and legal registries.

Personal property (movables in civilian parlance) is tangible or intangible.

Tangible personal property is goods/chattels. 

It is literally movable, and can be lost, stolen, or physically destroyed.  It has universal scope and is exhaustible.  It physically defines its own boundaries.  It is ultimately controlled through possession or sometimes legal registries.

Intangible personal property is Obligations or IP. 

At common law most intangibles were choses/things/rights in action and not treated as property, merely as rights to legally compel or prevent some action or recover damages.  Now nearly all obligations are assignable property in our system.  (The major exception is some claims for personal torts.)

Obligations are rights to demand a performance or payment from some definite person or finite group of persons, thus they are not universal. They are not literally movable.  All obligations are exhaustible.

Obligations are of two kinds:  Wholly Intangible or Chattelized.

Wholly intangible obligations (e.g. contract rights, uncertificated stock, licenses) cannnot be lost, stolen, or physically destroyed, are defined by proof of the legal obligation, and are ultimately controlled by notice to or coercion of the obligor (assignment, garnishment).

Chattelized Obligations (e.g. negotiable instruments, bills of lading, certificated investment securities and their modern electronic analogues) can be lost, stolen, or physically destroyed.  They are defined by the words of the document/record and the law, and are controlled by transfer of the document by endorsement and delivery or encrypted transfer of the unique record.  Loss of the document or record does not necessarily destroy the underlying obligation-- if the document can properly be accounted for, the obligation can be enforced.

Intellectual Property

IP, as intangible property, cannot be lost, stolen, or physically destroyed.  The "boundaries" are defined by grant or usage and the relevant law.  It is ultimately controlled by assignment and, for some types, registries.  Uniquely, it is inexhaustible -- a potentially infinite number of persons can use it simultaneously or successively.  Its oddity comes from combining one characteristic of tangible property-- universality--  with inexhaustibility.

Hybrids

There are, of course, some boundary problems and hybrids: e.g. fixtures, products of the soil, software embodied in goods.  In a sense chattelized documents are hybrids.  The paper form supplies the convenience of physical goods, and the electronic form (ignoring the physicality of the server) preserves that convenience (unique record) in intangible form.

Trade secrets are also a hybrid.  They grow out of a combination of the law of tangibles (trespass to land, trespass to chattels-- the safe, files, or computer) and obligations (confidentiality agreements).  Trade secrets look universal, but are essentially finite obligations-- anyone breaching the contract/tort security web is a wrongdoer, but one who learns the secret without culpability is not bound to defer to the original owner.   

As India Mulls Bill Modeled on Bayh-Dole, Critics Claim It May Stifle Innovation By Ben Butkus in the Biotech Transfer Week Mag points out to the "The Bayh-Dole Act and Promoting the Transfer of Technology of Publicly Funded-Research" a UAEM White Paper on the Proposed Indian Bayh-Dole Analogue. To read the Universities Allied For Essential Medicines white paper click here.

The Biotech Transfer Week's pierce says "UAEM echoed these concerns and introduced several more of its own in a white paper that analyzes various provisions of the Indian bill and raises questions about how the Bayh-Dole Act impacts university patenting in the US.

For instance, the UAEM suggests that both the Bayh-Dole Act and the proposed Indian IP Act focus too narrowly on patenting and licensing at the expense of other forms of "knowledge production" such as scientific publishing; and that the proposed act would "encourage research institutions to obtain patents on publicly funded research to the exclusion of other methods that could in many situations be more beneficial to access and encouraging future innovation," such as peer-reviewed publication.

UAEM also claims that the Indian IP Act contains only weak safeguards for ensuring access to life-saving medicines for developing nations such as India. "Critics of the original Bayh-Dole Act point out that the safeguards the act contained to allow for public access in case a publicly funded innovation was not made available on reasonable terms have never been successfully used," the paper states, referring to Bayh-Dole's government "march-in rights" provision."

"Instead of fixing this problem, the Indian IP Act currently has fewer safeguards aimed at preserving public access," the paper adds. "Under the Indian IP Act, the government [loses] its opportunity to preserve access to publicly funded research just 90 days after learning of the new technology."

The white paper concludes that the Indian IP Bill "has serious flaws which need to be addressed in an open and public setting to determine whether any legislation should be enacted and if so what kind."

"Given the track record of Bayh-Dole in the United States, policy makers need to seriously consider what they hope to accomplish by enacting similar legislation, its suitability for a different country context, and whether the measures adopted will accomplish the stated goals of the legislation while protecting the public interest," the paper added.

To read the entire article by Ben Butkus in the Biotech Transfer Week Mag click here.

Managing IP Magazine reports in its piece titled "Patent granted in 17 days in Japan" that Keio University in Tokyo, Japan filed a request using the new scheme for examination of a patent entitled "Electrochemical Analysis Method Using Boron Doped Electroconductive Diamond Electrode". This was granted in a record 17 days as the University had asked for a super accelerated examination because the patent was going to be transferred to a company.

The piece points out that "On October 1 the JPO launched a pilot version of its super accelerated scheme to process patents more quickly than under the existing accelerated system." And "there was no need to pay an extra fee above that required for the accelerated examination, but that the application has to fulfil the same conditions as for accelerated examination."

The Managing IP piece also refers to:

"The JPO introduced the accelerated examination system in 1986. An applicant or licensee has to be exploiting the invention or has to do so within six months and to have filed corresponding applications in another jurisdiction. They also need to submit a prior art report and comparative description."

To read the article from Managing IP click here.

This piece comes from one of my earlier contributions to the "Law in Perspective Blog" earlier this year. This entry looks into the Trade Secrets in a University set up and the effects on the concept of open campuses, faculty student interaction and academic freedom. To read the entry from Law in Perspective click here.

The Traditional University norms and practices includes Dissemination of Knowledge (public purpose) and Faculty-student publishing requirement. Apart from this the purpose of a University in Traditional setup is Training of students and having Open campuses. As a result of this there is the much needed student interaction, collaborations with peers and academic freedom.

Now the Modern University setup which invents on Government and private funding (eg. MIT, University of Chicago and new addition is India's very own IITs) generally protects the inventions via Patents eventually put the same in public domain and license or assign the same as per the pre existing contracts with funding agency or as per the university policy. But the case for Trade Secrets can in no circumstance be the same.

Trade Secrets in a University are largely derived from Research and Computer Code Development. The use of Trade Secrets in a University setup is for :

1. Licensed alone for commercial use (often called "Know-how" licenses)

2. Licensed as part of software source code licensing

The essential elements required for a trade secret are Information of the employer, not generally known to the public, of commercial value and the released only with protection against further disclosure

Thus the Trade Secrets in a University set up not only put limitations to the concept of open campuses and faculty student interaction but also to a large extent curb the academic freedom which the universities have enjoyed over the years.

The big question is that in this capital driven world can the Trade Secrets and Universities co- exist?

This post comes from Prof Karen Hersey's Building Networks: The National and International Experiences of AUTM In Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices.

Prof Karen Hersey is Professor of Law at the Pierce Law and a past President of the Association of University Technology Managers (AUTM). She is a former Senior Counsel for intellectual property at Massachusetts Institute of Technology. In 1992, she served as the academic community's representative to a congressionally mandated Department of Defense Government-Industry Advisory Committee on Rights in Technical Data and Computer Software to study and recommend changes in the Department of Defense Procurement Regulations in the areas of technical data and computer software.

She publishes widely in the area of intellectual property law as it impacts institutions of higher education. In addition to offering courses dealing with technology transfer for nonprofit organizations and intellectual property management in universities, she is also the co founder of the International Technology Transfer Institute at Pierce Law.

The following is an abstract of  "Building Networks: The National and International Experiences of AUTM"

Developing and implementing best practices in intellectual property (IP) management requires several critical inputs, and building networks is among the most important. The experience of the Association of University Technology Managers (AUTM) serves as an excellent example of how to build and maintain such networks. The important lessons learned as AUTM grew and expanded its networks are broadly applicable to building dynamic, productive, and sustainable networks anywhere in the world. Furthermore, since AUTM is an association of individual, rather than institutional or organizational members, it functions all the more as a catalyst for networking. Networking provides two important benefits. First, it facilitates relationships between individuals with varied experience, expertise, and skill sets, encouraging individuals to contribute to each other's professional expertise. Second, the network itself contributes to the overall quality of group performance. Working through networks, practitioners exchange ideas and experiences to form best practices that become performance standards for individuals and their institutions. Networks thereby contribute to building IP management capacity at both the individual and institutional levels, and this capacity building then feeds back to further support and expand the network. This chapter considers the networking practices established by AUTM. It charts the organization's growth over a period of 30 years from a small group of U.S. and Canadian patent managers to an association of more than 3,400 members from countries on every continent. As the story of AUTM demonstrates, networks can begin locally and gradually expand to operate on a national, regional, and even international scale. However, as AUTM has shown, the organization itself must begin with--and steadfastly maintain--a clear and focused central mission.

To continue reading the entire piece click here.

The same can be cited as:

Hersey K. 2007. Building Networks: The National and International Experiences of AUTM. In Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices (eds. A Krattiger, RT Mahoney, L Nelsen, et al.). MIHR: Oxford, U.K., and PIPRA: Davis, U.S.A. Available online at www.ipHandbook.org.

New Portuguese patent law came into force on 1st October, 2008. Among the new provisions are some which will boost the technology transfer sector in the country.

IAM Magazine issue dated 26 August 2008 cover the same where Nuno Silva, from the Instituto Pedro Nunes in Coimbra, explain the implications:

Portugal is changing its Industrial Property Law in order to facilitate worldwide access to the national system and usability at lower prices. Most noted change that affects universities is the institution of a provisional patent application similar to the one in the USA. This will allow knowledge transfer offices to quickly establish priority and acquire patent pending status when faculty pressures for publication. All that is required to obtain a valid priority date is an enabling description of the invention. As in the USA, this will not be examined and must be converted into a full application, with claims, before one year elapses. If the claims are not fully supported by the early description, the date of the provisional application will not be awarded to the full application. Contrary to the USA, there is the possibility, at the applicants' request, for the Patent Office to prepare a search report within 6 months based solely on the provisional application. Furthermore, the provisional patent application can be submitted in English, electronically, and foreign applicants are no longer required to have legal representation in Portugal in order to address the Patent Office, making the system available to universities across Europe. The provisional application will not extend the life of the patent beyond the current 20 years. The Patent Office announced in an official statement that fees for the service will be very low but the exact value is yet to be published. The new rules will enter into force October 1 this year.

To read the Piece from the IAM Blog click here.

Recently concluded Association of European Science and Technology Transfer Professionals conference "Mobilizing Partners in Technology Transfer" attracts attendees from most of the 35 nations represented by the association's 500 members.

The big names in the conference included Prof. Karen Hersey, Visiting Professor at Pierce Law, and former Counsel for Intellectual Property at MIT, and Morag McDonald, partner at Bird & Bird in the United Kingdom. Who opened the conference with the "General Principles," setting the framework for the two-day course and articulating the general principles of licensing, as well as the overall structures of a license.  They followed that session with "Moving Research to Commercialization through Industry Collaboration," "Pitfalls in Licensing," and "Good Management through Enforceable Royalty Obligations."

The details of the "Mobilizing Partners in Technology Transfer" Annual Seminar 2008 are available here.

The report prepared by an international expert group on biotechnology, innovation and IP headed by Canada which aimed to develop a novel, data-intensive and collaborative IP model in biotechnology innovation capable of responding to developing countries' needs in food, health and industry, has been keenly observed and commented on by Wagdy Sawahel in his article "New IP Model Proposed To Facilitate Technology Access in Developing Countries" for Intellectual Property Watch.

The author cites Richard Gold, professor of intellectual property at McGill University and chair of the expert group, in saying that "the main finding is that "the current way that industry and universities use IP is not working to deliver the health, agricultural and energy innovations that we are looking for. We call this way of dealing with IP 'Old IP.'"

"Our most important message is that governments, industry, universities, researchers and non-governmental organizations (NGOs) need to abandon the ways in which they have handled patents such as exclusive licensing, looking only for short-term financial returns and mutual blame between NGOs and industry," he said. Instead, what is needed is a "New IP" system that focuses on "collaborative mechanisms" in biotechnology and allows for technology dissemination in all countries where it is needed.

Co-incidentally the report was released with the launch of The Innovation Partnership (TIP), an independent non-profit consultancy with experts in developed and developing countries specializing in the use and management of intellectual property and dedicated to working across "Old IP's" former fiefdoms in order to build trust.

Wagdy Sawahel, in his article also lays out an "IP Adaptation Roadmap for Developing Countries". Here once again he quote Prof. Gold in emphasizing that developing countries need to focus on building a scientific infrastructure by partnering with high-income universities to provide doctoral and post-doctoral students the opportunity to conduct their research at home, urging developing countries to publicly support and participate in mechanisms to bring medicines to their citizens, such as UNITAID - an international drug purchase facility and patent pool to unblock patents so that needed fixed dose combination and pediatric antiretroviral medicines reach those suffering from HIV/AIDS and also, developing countries need to study and learn from the business models employed by developing country enterprises that have succeeded in developing and selling technology.

Wall Street Journal's "The Mint" responded to the news that "the R&D Bill is set to be tabled in Parliament without the official draft having been released and publicly debated"  in a very striking editorial, reiterating concerns of "secrecy" and lack of sufficient "public interest" safeguards.

The piece titled Not in Public Interest says:

"It is quite curious. Just a week ago, science and technology minister Kapil Sibal acknowledged media and experts' concerns and promised to review the flaws in a proposed new law. Yet, a cryptic official press release on Friday said the Union cabinet gave its approval to enact that very legislation --the public-funded R&D Bill, popularly known as the Indian Bayh Dole Act after its equally controversial US counterpart.

So, the Bill is set to be tabled in Parliament without the official draft having been released and publicly debated. The sad significance of this stems from two factors. First, it is all about patenting output of research financed by public money. Second, it is strictly geared to exclusive licensing for commercial use of what could be crucial innovations for public health. The scientist will have no say here. So, CSIR would not have the power to repeat past decisions such as not patenting an antimalarial compound that could make a low-priced drug available. As we've argued before, this Bill needs to encourage open source and non-exclusive licensing, too. Yes, minister?"

Going Global: Innovation without Borders

AUTM Eastern Region Meeting Call for Topics Now Open

The AUTM Eastern Region Planning Committee is pleased to request topic suggestions for our region's 2009 meeting, which will be held June 15 - 17 in San Juan, Puerto Rico.

Puerto Rico was chosen as the location for the 2009 AUTM Eastern Region Meeting to attract an international audience, which will gather to discuss topics related to the globalization of technology transfer, particularly global health.  Topics that are suited to this theme and include international speakers will be given special consideration.

Click here to download a Call for Topics application and return it to AUTM by December 15, 2008.

"Technology Commercialisation Forum 2008," sponsored by the National University of Singapore, is designed to bring academia, researchers, industry professionals, investors, and entrepreneurs together for discussion and debate. It provides a platform to examine trends and key issues involved in commercializing inventions in and beyond the emerging economies of Asia. Organizers call it "an ideal platform for intellectual property generators and early-stage companies to meet with corporations and investors to explore partnering opportunities."

Features

• Presentations by the world's leading IP and Early Stage Ventures across multiple industries and disciplines.
• Interactive forum for the tech transfer and licensing community to connect technologies with partners and needs with solutions.
• Cutting edge technology showcasing in biomedical sciences, environment and digital & interactive media.
• Networking opportunities.

Target Audience

• Companies - How can I create new market opportunities? How can I move up the value chain by adopting new technologies?
• Venture Capital community - What is there to invest in next? What do I need to know when investing in Biomedical Sciences, Environmental and Water Technologies and Interactive and Digital Media?
• Government - What are the strategic areas of R&D, new initiatives in knowledge creation in science and technology, and new areas of economic growth which will fuel further growth for my country's economy? What areas need to be encouraged and invested in?
• Technologists - What are new horizons for future technological breakthroughs and how can I collaborate with top institutions and universities?

Conference dates are November 21-22 in Singapore. For information, go to http://www.nus.edu.sg/ilo/tcf08/.

The bill is titled the Intellectual Property Rights from Publicly Financed Research Bill. It is a bill which creates a system require patenting of tax payer funded research.

The Bill is an improvement on the first draft circulated for comment during 2007. However even a cursory reading reveals a number of serious problems with the Bill.

The following are pointed out on aliquid novi blog by Andrew Rens, Intellectual Property Fellow at the Shuttle worth Foundation in Cape Town. (The blog can be reached at http://aliquidnovi.org/)

1. The Bill is based on a flawed premise; that the fundamental purpose of university research is to generate revenue through licence fees. As a result its procedure is flawed, since it creates a structure which will tend to prevent sharing of knowledge, regardless of whether there is any probability that the research will result in a commercial product. Instead of creating structures to identify research likely to yield successful commercial products and obtaining registered rights for that specific research the Bill creates a structure which regards a decision not to obtain registered rights as the exception rather than the rule.
2. Despite representation the Bill still fails to make any provision for membership by research institutions in international research consortia. The requirement that research results must be subject to attempts to commercially exploit it in the manner required by the Bill is directly contrary to the conditions of participating in international research consortia. The consequence will be that South African research institutions will no longer be able to engage in multi-country research.
3. The Bill also fails to make any provision for research for which funds are received from philanthropic donors who make funding available on condition that research will be freely available. For example the Gate Foundation, the wealthiest foundation in the world, which is focused on addressing diseases which affect the developing world requires that research which if funded by the Foundation should be published on open access terms, as a result of the Bill no South African university will be able to agree to those terms, and therefore cannot be a site for funding on research into HIV/AIDS and Malaria.
4. The Bill requires that software be commercially exploited, by means of proprietary licences. This is directly contrary to the governments open source policy.
5.  If something can be the subject to intellectual property protection anywhere in the world then such protection must be obtained. This requires Universities and Research Councils to obtain software patents which are available in a few other jurisdictions, such as Australia, however South African patent law does not permit software patents, and the Minister of Public Administration has condemned opportunistic software patents as abusive. In addition given the variety and range of intellectual property schemes over the globe the Bill imposes a legal duty which no-one can comply with, which is to have a comprehensive knowledge of all the intellectual property laws on the planet.
6. The Bill forecloses on the policy options available for the Department of Trade and Industry in reforming the patent system. For example universities could provide expertise for patent examination to supplement the capacity of the Patent Office, however universities which must patent all their research will have conflict of interests which prevent them from providing expert copyright review.

To read the post from the aliquid novi blog click here.

The Creamer Media's Engineering News  has a very interesting article on the widely debated Technology Innovation Agency Bill "SA's new R500m agency seeks to bridge the innovation chasm".

For the Technology Innovation Agency Bill click here.

A small extract from the article is reproduced bellow:

In South Africa it is called the 'Innovation Chasm'. It's not unique to this country, but that does not make it any less of a problem. It is the gap between innovative ideas or new research, on the one hand, and new products and industries which will help grow and develop the economy, on the other. Or, if you prefer the words of the Department of Science and Technology (DST), it is "the gap between the local knowledge base and the productive economy".

This has been a matter of concern for some time, with the idea of creating an institution to help bridge this gap being first proposed during the development of the Science and Technology White Paper in 1996. This proposal was reaffirmed in the 2002 National Research and Development Strategy. In July last year, Cabinet approved a process to create such an institution, officially dubbed the Technology Innovation Agency (TIA).

The draft TIA Bill was published in August 2007, revised in October 2007, and republished in revised form and with invitations for written submissions in December 2007. Public hearings took place in mid- and late-January 2008, and the Bill was adopted by the National Assembly early this month.

To read the entire article click here.

Indian national daily "The Hindu" dated Friday, October 31, 2008 reports "Bill giving scientists share in IPRs gets Cabinet nod".

The news piece says "Scientists conducting research using public funds may soon get a share in the intellectual property rights for their discoveries and inventions.

The Union Cabinet tonight approved the Public Funded Research and Development (Protection, Utilisation and Regulation of Intellectual Property) Bill which may facilitate scientists getting a share in the IPRs of their inventions and discoveries, sources said.

The Bill is based on the lines of the Bayh-Dole Act in the US which spurred applied research in American universities."

The most noteworthy aspect of the Indian Public Funded Research and Development Bill is that, unlike its US counterpart, it ensures that individual 'inventors' are paid at least 30 per cent of any royalties stemming from licensing. But despite a share in the profits, inventors are left with little option of determining how their invention can be used, rather, the bill puts this discretionary power in the university's TTO.