LICENSING AND TECHNOLOGY DEVELOPMENT-
BACK
Licensing Office Annual Results Fiscal
Year 2003
Consistent with the slowdown in the US
economy and the continuing hints of recession, the office of
Licensing and Technology Development reports that total licensing
revenues for School of Medicine technologies for the fiscal
year ended June 30, 2003 were 5% less than that reported for
FY '02, $6,851,086 vs. $7,224,061 respectively (Revenue
table 1). The principle cause of this decline was a reduction
in royalties received on the sale of licensed goods and services.
Patent expenses for the year were $3,616,399 of which $2,527,516
(70%) were for licensed technologies and reimbursed by the licensee
relative to patent expenses for the previous year of $3,676,000
with 56% reimbursed (Patent Expense table 2).
This increase in patent reimbursements resulted from the licensing
office's on-gong efforts to collect past due patent costs from
licensees of Hopkins technologies.
School of Medicine faculty filed 174 Reports
of Invention during FY '03 relative to 187 for the previous
year (Report of Invention table 3). LTD processed
a total of 1,526 Material Transfer and Non-Disclosure agreements
for the year, an 11% decrease from the 1719 processed for FY
'02 (MTA & NDA table 4). A total of 288
patent applications were filed in FY '03 of which 148 were provisional
patents, 33 were new US applications, and remainder were divisional,
continuation in part, international, etc. (Patent
Applications table 5). Total patent applications decreased
23% from the 378 filed the previous year reflecting the licensing
office's increased focus on commercially relevant patent activities.
For FY '03, OTL executed 7 exclusive and
18 non-exclusive license agreements encompassing 47 SOM inventions
relative to 16 exclusive and 17 non-exclusive licensee agreements
for the previous year. The School's portfolio of pending applications
and issued patents grew to 2697 by the end of the year (Patent
Portfolio table 6) and the total active agreements (license,
inter-institutional, options) increased 7% to 626 (Active
Agreements table 7).
Since the passage of the Bayh-Dole
Act in 1980, giving our nations Universities the right to take
title to inventions arising from federally funded research,
there can be little debate as to the success of technology licensing.
AUTM reports that since 1989 there have been 1,507 new products
arising from university technology licensing activities. In
addition, academic institutions executed more than 32,000 licenses
or options between 1991 and 2001, of which 71% are still active.
According to AUTM statistics for 2001
(most recent compilation), the 198 reporting institutions received
$1.07 billion in adjusted license income. There were 13,569
invention disclosures, 6,812 new US patent applications filed,
and 3,721 US patents were issued. Collectively the reporting
institutions executed 4, 058 new license and option agreements
and 494 new companies were formed around university discoveries.
In spite of the impressive increases
in licensing activities over the past two decades, few university
discoveries survive the rigors of development and find their
way to the market place. In 2001, over 80% of all reported university
license income was derived from less than 20% of all license
agreements with 80% of that income coming from royalties and
less that 3% from equity sales. Less than 0.6% (131) of the
22,806 license agreements active in 2001 generated over $1 million
in annual revenue.
Tables (click on the table to
view larger image)
Prior Art Patent Office Rejections
"Prior Art" refers to public
knowledge existing before the date an invention was made. In
the case of Biotech patents, prior art includes published journal
articles and abstracts, previously filed patents, and in some
cases, non-written knowledge made public, such as material presented
at a scientific conference. Prior Art is a common obstacle to
patentability for Biotech patent applications during their prosecution
in the United States Patent & Trademark Office (USPTO).
This article will describe in brief detail the basis for such
Prior Art Rejections and typical strategies for overcoming them.
The USPTO is charged with the review of patent applications
in order to ensure the issuance of valid patents. To this end,
patent applications are reviewed for conformance with the U.S.
patent statutes found in Title 35 of the United States Code
(35 USC). The sections of 35 USC that deal with prior art rejections
are 35 USC 102 and 35 USC 103.
35 U.S.C. 102 stipulates that an invention
must be novel. The USPTO's patent examiner will search the prior
art related to the invention to determine if it is indeed new.
If all the aspects of an invention can be found in a single
piece of prior art, then the invention is said to be "anticipated",
and thus cannot be patented. Generally, the broader in scope
a proposed patent claim is, the more likely it is to be anticipated
by the prior art.
Strategies for overcoming novelty rejections
are relatively straightforward. The best strategy, if appropriate,
is to argue that not all limitations of each claim rejected
under 35 USC 102 have been met by, or are inherent in, the cited
prior art. If such an argument is not possible, then it may
be necessary for the patent attorney to respond with an "amendment"
that makes changes to the original claims so that they satisfy
the examiner's criticism, remove claims, or replace old claims
with new claims. The patent attorney will craft the amendment
in such a way so as to narrow the claims as little as possible,
yet still satisfy the USPTO.
In addition to an invention being novel,
it must be legally "non-obvious". This complex issue
is dealt with in section 35 USC 103 which provides guidelines
for determining whether a hypothetical person of ordinary skill
in the field of the invention would consider the invention obvious,
based on what was known from the prior art. Not only must all
elements of the claimed invention be found in the prior art,
the patent examiner must also establish that the person of ordinary
skill would (a) be motivated to design the same invention, and
(b) would have a reasonable expectation that the invention would
function as claimed.
Because the obviousness rejection is more
subjective than the anticipation rejection, strategies for overcoming
obviousness rejections are relatively diverse. As with anticipation
rejections, the patent attorney can always amend the claims.
However, a common means of arguing the validity of the examiner's
obviousness rejection is to demonstrate unexpected results (for
example, the prior art may include information that suggested
the invention would not work).
Although the patent process, including
response to rejections issued by the USPTO, may seem extremely
complex, it is important to remember that these types of rejections
are commonplace. It is a process of give and take between the
USPTO and the patent applicant, often resulting in a fair compromise
and the issuance of a patent.
To learn more about the patent process,
visit the USPTO's "General Information Concerning Patents
" website at: http://www.uspto.gov/web/offices/pac/doc/general/index.html,
or contact LTD via Rachel Cassidy, Ph.D. (rcassid@jhmi.edu),
to request a patenting guidebook designed for scientists and
other non-legal professionals.
