LICENSING AND TECHNOLOGY DEVELOPMENT-
BACK

Protecting Confidential Information

Let’s assume that you have just made the discovery of a lifetime. Of course, you are very interested in having your technology developed and made available for the public good as soon as possible. However, to attract a commercial partner with the ability and resources to complete such development, rights to the invention must be protected. Otherwise, the invention may not benefit anyone at all.

Once an invention is disclosed to the office of Licensing and Technology Development (LTD), LTD may initiate the patent process in order to protect Hopkins’ intellectual property rights. Marketing efforts frequently begin with providing non-confidential invention summaries to prospective licensees. If their interest is piqued, these companies may request more substantial information. However, before any confidential information is transferred to a company, a Non-Disclosure Agreement (NDA) must be fully executed. Fully executed means that the inventor has signed the NDA, authorized representatives of both Johns Hopkins and the company have signed it, and the NDA has been returned to LTD.

A fully executed NDA protects our confidential information by both requiring the potential licensee to keep the information confidential, and limiting their use of the confidential information. It also establishes that the company was unaware of the invention before Hopkins presented it to them.

In addition to protecting faculty inventions from unauthorized use, NDA’s are also important for protecting patent rights. If an invention is “publicly disclosed” before a patent application is filed, then that very disclosure could prevent Hopkins from being able to obtain a patent. (See webnotes article on “prior art rejections”). By keeping the information confidential, the disclosure is not considered public, and therefore cannot be considered prior art.

Some faculty are under the misconception that they do not need an NDA if they have already filed a provisional patent application. While the provisional application will allow you to publicly disclose the invention without creating a prior art situation, it does not prevent companies from practicing the invention internally. It is important to remember that the only enforceable patent rights are those covered by issued claims--- years away from the provisional filing. In contrast, the protection afforded by an NDA is immediate, and if the invention is not subsequently publicly disclosed by JHU, long-lasting.

There are two types of NDAs: “one-way”, or unilateral, if only one party is sharing information with another party, or they can be “two-way”, or bilateral, if both parties are sharing information with each other. Hopkins prefers unilateral NDA’s, because they make it easier to manage the flow of information and maintain confidentiality.

Most NDA’s are straightforward and can be approved by LTD. However, there are certain instances in which LTD will need to revise an NDA before approval.

The most frequent of such instances are those in which a bilateral agreement contains a definition of confidential information that is vague or open-ended. A provider may simply describe the information to be kept confidential as "any and all information disclosed by the Provider to the Recipient." Hopkins will not agree to such "open-ended" definitions because it is difficult for the parties to undertake obligations to maintain the confidentiality of "any and all information." An NDA should be limited to a particular faculty invention, and the faculty and/or the other party should not be responsible for any information not related to that invention.

Related to the definition of confidential information is the description of the purpose for the anticipated discussions. Language such as "discussions between the parties related to a potential business relationship" is unacceptable. If the NDA is to cover discussions about a potential collaboration regarding high-throughput screening, then that purpose should be stated explicitly in the agreement. The NDA is a legal document and its accurate recording of what information was exchanged and to what purpose it was exchanged may impact the enforceability of the NDA if it is ever brought to court.

Though occurring less frequently than the examples above, it is not unheard of for a company to attempt to restrict a faculty member’s ability to publish. Of course, Hopkins will not agree to any such language. At times, however, attempts on this front are quite subtle; such as by inclusion of inappropriate reference to JHU’s data or biological materials.

Other concerns relate to intellectual property rights and legal protections. JHU can not agree to language that gives the company ownership of our intellectual property rights. In regard to legal protections: LTD will not indemnify a company in an NDA, and will usually not agree to an NDA for which the term is longer than 5 (five) years.

Finally, it is important for faculty to read each NDA that they sign, as some of these agreements may contain follow-up obligations. For example, in certain instances LTD may be pressured to execute an agreement that requires the faculty member to reduce to writing any substantive conversation with the company. Failure to provide such a record results in loss of confidentiality protection for that conversation.

In conclusion, although Non-Disclosure Agreements may at first glance seem like an unnecessary burden, they truly are essential for protecting and marketing your invention. JHU does all it can to process these agreements efficiently so that there is no delay in your research.

To learn more about NDA’s, visit the LTD website www.jhu.edu/technology or contact LTD via Rachel Cassidy, Ph.D. (rcassid@jhmi.edu).

* please note that the Office of Research Administration (ORA) processes NDAs if there is anticipation of sponsored research and the Office of Policy Coordination (OPC) processes NDAs if they relate to proposed consulting activity.

Report of Invention

Many investigators’ first interaction with Licensing and Technology Development (LTD) occurs through their submission of a Report of Invention (ROI). This document provides the information LTD requires to fully evaluate the invention, such as for patentability and commercial potential. To the uninitiated, the amount of information required to complete the ROI may appear daunting. However, submission of an ROI triggers a series of work processes within LTD, and all sections of the ROI are important to LTD’s responsibilities for:

For example, the information relating to sources of sponsored research and materials used to make the invention enables LTD to determine whether another entity has an ownership interest or other legal claim to the invention. Incomplete information here can set LTD on a course that ultimately renders JHU vulnerable to litigation. The ROI section relating to sponsorship/materials also provides for LTD’s compliance with the invention-reporting obligations to NIH and other sponsors.

Clearly, LTD’s functional areas in marketing and patenting (in particular the filing of provisional patent applications--see April 2003 Research Webnotes) are dependent upon a complete ROI. Perhaps not as obvious is the ROI’s importance to LTD’s finance group, who apportion revenue generated from licenses and distribute license revenue to the University, School, Departments and individual inventors.

Because the ROI is so critical to these and other LTD operations, it periodically undergoes internal scrutiny and revision. For example, LTD has recently expanded sections of the ROI in order to enhance LTD's marketing efforts. Further, LTD has refined several of the ROI’s questions in an effort to make the form more user-friendly and reduce administrative burden to the inventors.

The next few Research Webnotes articles will take a more in-depth look at the ROI, focusing on those sections that assist LTD’s marketing efforts and those that relate to revenue distribution. Additionally, inventor contribution will be discussed. However, if you have any questions about the ROI, its contents, or would just like assistance getting started on disclosing an invention to LTD, please do not hesitate to contact Jason Paradis, Sr. Technology Licensing Asst. for LTD, at 410-516-6514 or jpparadis@jhmi.edu.

The current form of the ROI is available online at http://www.jhu.edu/technology/roi.html.