News & Publications

Overview

The protection of a research institution's intellectual property (IP) is paramount to its continued economic viability. Many hospitals and other medical and academic institutions that are actively involved in the process of creating technology, consider such IP, their lifeblood - both for obtaining outside funding and fostering public policy purposes. As used in this chapter, IP includes all technologies, inventions, discoveries, developments, creative ideas, know-how, trade secrets, trademarks, software, and other proprietary information, whether or not patentable or copyrightable.

Transfer of IP in this setting is generally accomplished through two types of major agreements (in addition to other types of agreements of less general application): research agreements (in which IP may not be developed sufficiently for commercialization) and license agreements (m which IP may be at or near a stage for commercialization). Most of the issues/practice tips discussed below relate primarily to one or the other type of major agreement, or are common to both. Also, the typical transaction in my practice involves the transfer of technology from institutions to pharmaceutical, biotechnology, and medical device companies (although initial funding may have been provided by grants from the National Institutes of Health (NIH) or other government agencies). I have also included in this chapter two interesting technology transfer experiences from my practice as outside general counsel to biotechnology companies.

The mission statements of most institutions require that patient care, education, and research be strictly preserved. Accordingly, lawyers representing such institutions must protect the institution's retention of rights in its out licensed technology for such public policy uses. Counsel representing companies frequently challenge these retained rights. However, as long as such retained rights are limited to internal, non-commercial uses, I have not found that companies have a significant problem with this issue.

Many institutions rely both on their in-house legal staff and their outside counsel, working in concert, to implement a policy that keeps proprietary technologies safe from unauthorized commercialization. However, the dynamics of many institutions, which have professional staff members who may seek to subsidize their incomes from outside sources, create problems that are not always easy to predict or spot. For example, a staff member at a large institution could disclose - even inadvertently - such institution's proprietary technology to a pharmaceutical company as part of a consulting arrangement between the staff member and the company. If proper IP policy protections were not in place, the institution could potentially lose out on millions of dollars in lost revenues from the commercialization of its proprietary technology. In such a hypothetical situation (based on fact), the institution likely would need to litigate its rights with the pharmaceutical company - a process to which many institutions are averse.

A similar issue, frequently confronted by lawyers representing institutions, involves companies seeking to suppress the publication of funded research until patent applications are filed (or other IP - protection is obtained). Generally, the motivation to suppress the publication of such research (or otherwise edit the content thereof) is financial, as competition in the marketplace may be fierce. Accordingly, staff members at institutions that are engaged in the development of technology, must work with both in-house professionals and outside legal counsel to ensure that the institution's freedom to publish is protected. (In many cases, in-house services are provided by a technology transfer office that is comprised primarily of scientific professionals.) Of course, in certain instances, some company restrictions on publication of research are appropriate. For example, the rights of publication rarely extend to inclusion of another party's confidential information. Also, if the research is being conducted at multiple institutions, it may be appropriate for the sponsoring company to delay individual institution publications until one multi-center study is published. However, these issues are usually resolved through negotiation. Because they arise in advance of any transfer of technology, if no resolution is acceptable to the institution, then the institution can always seek to transfer its technology to another entity. Lawyers must be especially aware of the institution's policies in this area.

For more information on this topic, or a copy of the booklet, please contact James A. Wachta, Esq. at jwachta@rackemann.com