Speaker 1  0:00  
Good afternoon, everyone. Welcome to TLO toolbox, hammer out successful license agreements and avoid terminal disclaimer problems presented by Autumn. My name is Holly Linton Grinnell, I'm one of autumns online professional development managers and I'll be your staff host for today. All lines have been muted to ensure high quality audio and today's session is being recorded. If you have a question, you can enter it at any time using the q&a feature. I would like to take just a moment to acknowledge and thank autumns 2020, online professional development sponsors. We appreciate your ongoing support. And now I'll introduce our speakers. Andy Curtin serves as the Director of intellectual property at Northeastern University, and he has 20 years of intellectual property experience covering technologies, such as automatic speech recognition, natural language processing, networking and telecommunications, computer vision and machine learning. Prior to joining Northeastern, Andy served as senior IP counsel for the enterprise and imaging divisions of Nuance Communications. He also held positions as senior patent counsel at three km Corporation, as well as patent counsel at Mitsubishi Electric electric research labs. Due to Sanders has 20 years of experience in strategic biotechnology, patent prosecution, counseling and an intellectual property litigation and enforcement. She assists clients with the preparation and prosecution of US and foreign patent applications, as well as European supplementary supplementary protection certificates for pharmaceuticals, drafts legal opinions regarding infringement, validity and freedom to operate and conducts intellectual property due diligence studies. Dierdre demonstrates expertise and the intersection of science law and business. In addition to her patent and litigation practice, Deirdre drafts and prosecutes trademark applications and drafts, interprets and enforces intellectual property license agreements back Becky Simmons prepares and prosecutes patents in the areas of pharmaceuticals, chemistry, biotechnology and mechanical. She assists in strategic intellectual property counseling, due diligence and preparation of opinions of counsel. Becky has assisted extensively in patent litigation and in the preparation of freedom to operate, invalidity and due diligence opinions. Additionally, Becky has coordinated ongoing prosecution for the patent portfolio of a mature life sciences company related to a co pending litigation and sharing coherence between litigation and prosecution strategies and compliance with duty of disclosure of court filings and decisions. She has also worked with inventors at several large research universities to patent their inventions. Now, I'll go ahead and turn it over to our distinguished panel. Welcome Becky Deirdre and Andy.

Unknown Speaker  3:02  
Thank you, Holly

Speaker 2  3:09  
are the keyboard Oh, thank you. Thank you, Holly. I'm Deirdre Sanders and I am very happy and honored to be able to present to you today on our topic of TLO toolbox. I wanted to happily update this slide to announce that Becky Simmons is now a principal at our firm and no longer and associate so congratulations to Becky. Without further ado, we're going to start our presentation with comments from Andy Curtin.

Unknown Speaker  3:44  
Thank you very much Deirdre. And, oh, are we going to talk about Hamilton brick Smith and Reynolds first,

Speaker 2  3:49  
Hamilton Brook Smith and Reynolds is the law firm that we're part of. And we have two offices in Boston and Concord, and we handle a broad range of technical specialties. And now, Andy, on with the show.

Unknown Speaker  4:03  
All right, thank you very much, Deirdre. Welcome all and thank you for attending today. If we could move to the next slide, please Deirdre

Unknown Speaker  4:10  
I am here we go. Oh, okay. This

Unknown Speaker  4:13  
is me. Alright, so, again, my name is Andy Curtin. I, I've been practicing. I'm a registered patent practitioner, my patent attorney. I've been practicing IP law, mostly in house for about 20 years, the last almost six years now I've been with Northeastern University as director of intellectual property and I must say, coming from sort of high tech, where you know, the patent asset is is is an important asset that is sort of high visibility to executives in in, you know, in these industries. The transition to preparing maintain meaning and, you know, and keeping a patent portfolio for for higher education higher educational institution has been an eye opener and the least the the factors tend to be very different. If we could move to the next slide, I don't think I have portable. Next. Okay, so my biggest client, so I work out of the Office of the General Counsel at Northeastern University. And by far, I think, my my largest client that the client that takes the most of my time is the Center for Research and Innovation, which is the technology licensing arm of the university. The CRI team is composed of technology licensing officers of marketing folks of operations, folks, finance, and legal and paralegal professionals who maintain the portfolio market negotiate. It's a, it's a very common setup that that folks in the audience will be familiar with. Just to give you an idea of how the topic for today's discussion arose, I'll give you a little bit of background specific to Northeastern University's portfolio. So the, the harvesting efforts of the center for research innovation are directed to the results of grant funded and industry funded sponsored research that takes place at the university. It's the it's somewhere between 180 and $200 million of research funding. And the resultant patent portfolio consists of usually between 404 100 patent families. And we keep it that way by annual calling and ongoing calling in you know, in order to sort of maintain the budget and keep keep fresh, fresh ideas at the forefront. So we receive proximately 100, to 120 disclosures I'd say in a year across a broad spectrum of engineering and scientific disciplines. And sort of interesting to note, I think that in 2017, the then director of the Center for Research innovation moved on, and the Provost Office and the General Counsel asked me to act as interim co director with the director of operations at the center for research innovation for two years. The original ask was, of course, six months, but the search went on for a while. And last fall, I think earlier last fall, a new director took the helm at the center for research innovation. So some of my information may be a little bit dated. But I am now back in my role as a full time attorney and director of intellectual property out of the office of General Counsel. So I talked about the size of the portfolio. And I guess what I'll talk about right now are some of the factors to consider generally, in shaping a patent portfolio for licensing out of a higher education. institution. So of course, you know, the, I think the first thing to think about is the number of disclosures coming in and generally, again, as I said, we we have between 100 and 120 disclosures that, that sort of, you know, meet the thresholds of enabled and, and, you know, Folsom enough to, to identify a discrete invention and craft a claim said, so the number of disclosures, obviously, the overall patent procurement budget, you know, what the available dollars are for, you know, drafting, prosecution and maintenance of a portfolio of that size. There are of course, they're not just limited to the United States, there are foreign counterparts and so for, you know, a number of the assets. Another thing to consider, of course, is the size of the commercialization team, its characteristics, you know, how many are dedicated to what functions what levels of sort of scientific or engineering expertise and business expertise do the team members have? So what are the resources available to identify protect, market and sort of advanced the technology only in the commercial space? And the of course, another consideration is the range of the technologies and sort of, you know, are some more? Is there higher volume in certain in certain technology spaces than others? We're pretty evenly spread out at Northeastern across life sciences and material sciences, mechanical and the rest. Now, the next thing I'll go to so that's sort of the background of the CRI of an instance of a technology licensing office, one of the one of the things that I took into consideration upon joining Northeastern was the characteristics, the characteristics, generally of the patent asset, that the CRI will manage market, and, you know, and license. And this obviously has to do with volume and budget as well. So, the, you know, you can just set a firm budget, a low budget, and say, you know, a firm budget a low, low middle or high budget, and basically say, we're going to file X number of applications every year, practically all of them will have, you know, a specific budget for, for drafting, you know, and we'll, we'll take it along. And prosecution is you know, as long as we can, they, the considerations can be very derivative budget, however. So, in that, you know, in that space, what, what we decided, was that the assets themselves generally will include a reasonably robust specification supporting a the claims that are the claims as they are written and providing support for sort of additional detail that may be necessary for patentability during the course of the prosecution. So good strong specification with, you know, brought as broad claims as possible. Additionally, in the instance, where there's sort of a, maybe a lead invention, and a an invention that may be subordinate to the, to the to the principal invention, we may combine those specifications, support the subordinate invention, see how the prosecution goes for the dominant invention. And then at a later time elect to, you know, through continuation practice, most likely file claims for the for what would be the subordinate invention, or division or division or continuation practice. So potentially, and or potentially could support several inventions. And this is sort of a tactical approach where you may have an omnibus or a, you know, a large specification that incorporates multiple distinct inventions in the same specification. And the decision to file goes across a range that I think Becky is going to talk about a little later, where basically, you can sort of test the waters with a single claim set and then filed through continuation or divisional practice, depending on depending on the scope of claims you put in the application. You can you can file multiple apps, multiple distinct patent applications off of a single specification that supports the multiple inventions. Again, this is let's say, of course, the university budget isn't the only consideration in the you know, in the characteristics of the asset, you're going to be offering the status of the expected licensee, whether it's a startup or whether it's sort of a capitalized going concern. You know, an early stage startup is going to have better budget considerations.

Unknown Speaker  13:55  
Okay. Oh, yeah, the, we should actually be on next slide. If somebody could have answered just once, there we go. Thanks. So the status of the licensee whether it's a startup or whether it's a going concern, the you know, a startup may wish to spread out its reimbursement obligations in any license that it may enter into with the with the institution, so you know, filing so if you know, if you are aware of those characteristics are those factors you beforehand, you may file, you may follow the omnibus specification and then allow the patent the patent or patents the patent family of inventions to sort of proceed along a more manageable financial rate for the for the potential licensee and of course, if it's a if it's a well funded, you know, established industry participant then they may have less concern about the reimbursement obligations. Some practical considerations for licensing out of the office is, you know, my preference. My first preference is an exclusive license in all fields of use by a single owner license or to a discreet licensee. Where do jointly on comes up, I suppose this would be the next, my next favorite would still be to a single exclusive licensee, and the joint owner, you know, the joint jointly own relationship would be governed by an inter institutional agreement. You can also have a, you can also have a, you know, a single and a joint component where you license to multiple licensees exclusive to fields of use or applications, however you decide to frame it. And that's where instances like that where you have sort of multiple players in the game. Will questions arise, because, you know, from the office will try and be, you know, innovative in solving problems and enabling as much access to the technology as, as is appropriate. However, some sort of interesting situations have come up and one, I think, spurred the interest in the topic today. The university Northeastern was faced with a patent filing, that they are just I'm sorry, a disclosure where we knew the intent of the PII is an entrepreneur entrepreneurial pie, and the other inventor was, was an advisee. He's a, he's an entrepreneurial pi, and we knew that he had an interest in licensing, you know, any patent that that resulted from the from the disclosure of the technology. So we went ahead, and we, you know, we found a patent application. And at a later time, I won't go into too much detail, but effectively, two valid candidates were competing for access to the patent rights. And after sort of much back and forth to determine how to how and to whom we were going to license the technology, we decided, with the you know, with the consent of both the interested parties, to enter into an option agreement. For what I got the I actually got the language from a colleague at another institution, who I will not name in case you don't like this. But they ended up calling it we ended up calling it an auction to a co exclusive license, which is effectively two non exclusive licenses limited contractually to the to the to interested party. So Northeastern said, and there's of course, a right of survivorship. And they're basically Northeastern said, we will license to party a and to party B. So we gave the option to both parties to license they had a few performance milestones to meet before they could exercise the option. And that was the milestones were generally directed to funds raising funds, in order to show that they would have the sort of ability to further develop the technology. And, you know, actually, I think, right around now, I think those I think those those options, which were longer term, two years have been exercised, and both parties are interested in negotiating. They're co exclude each of their CO exclusive licenses. So and if one party failed to meet its obligations under the under its option agreement, then the result of license to the other party would have been sort of it would have been an exclusive license in all fields of use. We actually went through a, we went through a lot of factors and considering how to do it and the the, the field of use option was really just not available. It couldn't be done in a meaningful way. So as it was probably about a year ago, but as I was, as I was sort of thinking about this situation that were resolved, and I was, you know, trying to think of how to Bill and how to how to manage the prosecution, how to manage continuation practice and how to manage all of these different things. Actually, Mark Solomon and Deirdre Sanders. Were visiting the university because Hamilton Brooke Smith Reynolds does represent Northeastern for patent matters and have four For a number of years, as long as I've been there, and they, the university and the firm have have a very close, very strong relationship. And I'll actually touch on the importance of that relationship, but later on in the discussion, but basically, I, it occurred to me, and I think I looked at mark, and it was either marketed or I can't remember, it doesn't matter, but I said, What happens if we if you know, licensee a would like to, you know, let basically likes and is satisfied with an allowed and issued claim set and licensee B would, you know, prefer has a strong reason to prefer, you know, a slightly different claims to that may more appropriately cover the products and or services that it is putting out into the marketplace. And a terminal disclaimer for sort of obviousness type double patenting, or you know, just a same invention rejection from the office comes in, and patent term adjustment, or extension, probably patent term adjustment in this case, would come into play whereby the term of the, you know, the the term of either the granted patent or the or the, you know, this the second application may be affected basically, by the by the term of the of the disclaimed patents so that, you know, any patent term adjustment would be lost, because effectively, the patent office indicates that the term of any patent, the enforceability of any patent is going to be 20 years from the date of filing. And that 20 years can be adjusted up for a variety of reasons that I believe the Becky and ordinator will talk about bid, and it's generally based on delay at the patent office. So you may have anywhere from a day to, you know, I've seen up to four or five years added to the term of a pattern, however, you can lose that patent, you can lose that extra term through the filing of a terminal disclaimer. I talked about it, I effectively I asked the question just sort of looking for looking for input. And we ended up here today, you know, we do have, we do have a strategy for dealing with it. But I think I think we can move on to I believe Deirdre, in sort of seeking our answers. But I was actually going to say, the last thing I was gonna say I was actually going to refer to the slide, when, when faced with either the potential to file a terminal disclaimer, or, you know, or after the fact, there are a number of agreements that we see every day in the operational tech licensing office, that can be implicated, including, of course, the exclusive patent license, the non exclusive license, joint research agreements, where I think Becky has some more particular insight interinstitutional younguns, which we which was jointly owned IP we enter into all the time and, you know, effectively, you, you may, you may somehow implicate either the licensee or, you know, or the lead or the non lead institution and answer institutional agreements, depending on how you manage the terminal disclaimer, practice. And, of course, patent assignments,

Unknown Speaker  23:54  
patent assignments on a couple of different fronts, whether, you know, whether it be through an exclusive license, that there's a little too exclusive or whether it's just a straight assignment document that may have an unknown or undiscovered encumbrance that that hasn't been contemplated. So anyway, I guess now we can move on to dear.

Speaker 2  24:14  
Thank you. All right. I'm Georgia Sanders. As Andy said, with that lovely introduction, I will just move right along to the base of our basis of our talk. As Andy mentioned, intellectual property managers work with a number of different rights holders, everybody from the inventors, the institutions and the licensees to work together to maximize the value of IP assets. But doing so can result in the risk of impacting the rights and causing a conflict in the rights and desires of the different rights holders. So for example, in the example you're looking at right here, there could be an inventor on the left scenario REO which is an inventor, a, who works for institutional a and assigns the rights to institution a, who has invented claims, a say a compound for a target inhibition, and they have a patent and they might have a licensee who is licensing that technology, then there might be another patent like the one in the middle that claims, invention, a prime, which may be some version of a. And that may have been invented by the inventor, a and an inventor be working together, maybe they're working together on a method of treatment, say or a method of detection using the same basic underlying invention, and that may have multiple owners and multiple licensees. And there may even be yet another patent on the right, which is owned by institution b That's invented by b. Now, there's a number of opportunities for conflict. But one of those of the versions that we're talking today is this obviousness type double patenting rejection scenario. So, as you know, a patent is basically an agreement between the inventor applicant and the government that says in exchange for teaching, a way of method of using and making and practicing an invention, the government confers a limited monopoly to the applicant limited and double patenting rejections help form the contours of that limitation. There are two type types, there is same type double patenting rejections, which is rooted in 35 USC 101. So it's statutory, which states that inventor maintain may obtain a patent. And there's non statutory or what's typically known as obviousness type double patenting, which is grounded in public policy that says that an applicant should not be able to inappropriately prolong the length of time of their limited monopoly by filing multiple applications with patentable indistinct claims. So there's a number of options for overcoming obviousness type double patenting rejections and other patenting rejections of the double patenting variety. The first one which is very commonly used is only appropriate for obviousness type double patenting. In this scenario and applicant files a terminal disclaimer, which is a way that an applicant can agree to terminate the end of a patent term of a later expiring patent to end at the same time as a term of an earlier expiring patent, common ownership is required, and that can lend lend itself to a number of complexities that Becky will be discussing later today. And also another option though to consider is when it's appropriate to argue that the two claims in the patents that the patent application that is subject to the rejection. And the patent, that is the reference patent that's being cited, are not patentable, only that are indistinct their patents are really distinct. There's also of course, the last three options aren't listed on these bullet points. Our means to just get rid of the overlap in patents subject matter by either amending the claims at question that are being rejected, so that they're no longer so that they are patentable ly distinct, or canceling those claims or abandoning the application. But of course, doing any of these things you could be cancelling out or or amending out the subject matter of a licensee. And that could cause a conflict, it may be the easiest thing for the patent applicant, and it may allow for a quick allowance and issuance of the claims of particular interest to to some rights holders, what it may be would risk cancelling out or abandoning the rights of licensing of the other license.

Speaker 2  29:14  
So what a patent manager or tlo, or whatever you your institution refers to this person as their job should be to provide initial helpful input to help the patent counsel maximize the value of their portfolio through careful global application strategy. So in addition to providing subject matter and ownership information to the patent counsel, it's very helpful if you can also provide some information regarding the target market market, license commitments and potential license interest to the patent counsel so that they can be perceiving their patent strategy as covering your actual business objectives and not actually operating in a potential vacuum that will help them to consider the claim types to pursue whether to file serial or parallel filings, as Andy had briefly mentioned, and whether to file in the US or PCT,

Unknown Speaker  30:09  
I was just going to jump in and say that what's the relationship between the office and outside counsel and the amount of information that the Office provides outside counsel is of critical importance for avoiding, you know, any of the any of the risks that we're talking about today, it's a it's it is a very important factor that you sort of avoid just kind of throwing asset over the fence and outside counsel. And moving on to the next screen.

Speaker 2  30:36  
A great should always be viewed, I always teach my my junior associates, you need to think about the the business objectives of the client. And this is part of that. So this is just a quick slide to show this in the United States as opposed to some other jurisdictions, we have a huge variety of types of claims that we can use. These are just a bit a few of the examples of the types of claims that you can pursue in one application or in multiple applications. If you invent to target me sorry, if you discover a target to inhibit to treat a disorder, you might be able to develop compounds, small molecules, antibodies to the target compositions, methods of treatment to inhibit the disorder, the target methods of diagnosis or detection, all types of claims. And that becomes valuable in determining your strategy. For example, in the strategy right here, this, this client has filed an omnibus application that contains all the subject matters and is pursuing parallel filings with three different sets of claims. This has a higher upfront costs and an earlier higher investment. But it allows for, for example, the potential of different ownership, like going back to the first example. Omnibus application on top may be invented by inventor A, and owned only by the first institution. Whereas the second two applications to the methods of treatment may involve the work and conception of a second to venture in a different institution, and we need to be co owned. Now doing so of course, is going to affect the ability if there's a double patenting rejection of filing a terminal disclaimer, basically, you won't be able to do so if there's different ownership. So that's a consideration. In this situation, we have, we also have parallel filings. But the applications themselves are are different, they're not the same. And the reason why this is done is you may not want to include a method of treatment, examples and information in your first case, just so that that case stays pure for that licensee that there's no method of treatment claims that come out of that case. And a method treatment claims are only in the other two cases that might also be of interest to the institution, who employs the inventor who has developed a method of treatment. Now this is something you need to think about, do you want to do this do not a it's going to make for a more expensive process of developing these applications. And B, you may want to have the information in as much information as possible to fully provide written description and enablement for all the claims and all the cases. So it's always like a little bit scary to not include information that you have and only include it in certain applications. But in some cases, it may be the most appropriate technique. Again, the ownership is different, you're gonna have a terminal disclaimer problem. In this example, here, we have a serial filing situation. Omnibus application was filed at first. And with just composition claims, and in addition to that composition claims, then you have a continuation application that is filed afterwards with treatment claims, and a later one that's filed later on with treatment claims if there's common ownership, if there's a double packing rejection, you can file the terminal disclaimer, keeping in mind that you may be affecting the rights of licensees if these are licensed differently. And advantage of this is occurs a lot in life sciences, as you sort of figure out what is the core and written description for variety of treatment modalities in a specification in your application, but only now, what is the most commercially valuable treatments once you are working with a licensee and perhaps doing further development. In this situation without common ownership, this is simply to show if you file that omnibus application with all subject matters, and you file composition claims in your first case that may have different ownership than your second continuation application. And you have these cases which treatment A and Treatment A prime claims and your other cases which may have different ownership and licensing. So you constantly have to be thinking, what am I doing to my portfolio as a whole? Am I going to be able to do a terminal disclaimer am I going to want to risk arguing patent in distinctiveness or the possibility that I'm going to have to cancel or amend the claims in a narrowing fashion. In this next situation, we have a omnibus application that's filed initially with all claims, so that you can draw the divisional application restriction requirement. Practice. This is commonly done all the time, you file with at least some claims in each of the different groups that you expect will be separated out in a restriction requirement by the US Patent Office. And then you will be able to file divisional applications to different groups in different divisional applications. So in this example, the person filed with claims independent claims to different subject matters. Originally, they received a restriction requirement, but we're the US Patent Office who said you need to choose which claims to elect to examine you have examined in this application, your composition claims or your treatment claims. And then they elected the composition claims in the first case and file the divisional application to the next case, another application and divisional application for treatment A claims and then another one for treatment B claims. This idea is known as the safe harbor rule. It's statutory 35 USC 121. And what this says is if there was a restriction requirement, in the first case, that require the applicant to elect one group of claims, and cancel the rest, you will be able to file a divisional application present the claims that were cancelled in the first case, and not risk double patenting, you'll be able to say there's a safe harbor. But to do so that you have to be very strict, you can't have filed a continuation or a continuation in part in the middle, you need to make sure that the claims in your second in your divisional application, your second application have strictly maintained this contours of your original restriction requirement in order to take advantage of this opportunity. But what if you do that, so you so that's your that's your strategy, you're going to do that? What if the group you elected has a different inventorship, then the group you're canceling in your first case, you may have canceled the inventive contribution of inventor B, who assigned his or her rights to institution b. And now you have a potential mess. If institution B has licensed different to give differently than the license of a the ownership is different, you could be creating a mess of problems. So what is the the practice tip here, make sure that when you file your original application with a number of claims that you are keeping in mind, the inventor ship of the different claims, even if you're not subject to an inventor ship dispute. That way, if you end up canceling the claims, that cancel the inventive contribution of one of the inventors who was at a different institution, you can then remedy any issues you're going to have about different inventorship different ownership of the resulting application that only continues the claims that were elected. And also, I should just mention cost wise, it's expensive to file a ton of claims. And I'm aware of that. But one option that you can do is what I sometimes do is I just file with the independent claims of the groups that I'm planning to cancel as a result of a restriction requirement. I just put them in there get the restriction requirement. And then I cancel the claims without having a whole slew of independent dependent claims of those claims. I'm not planning to pursue in that case anyway. And you can actually even include the details in the specification of the dependent claims that you will be planning to include later on as enumerated embodiments. So as we discussed, this is this slide is just your basic terminal disclaimer slide in this example, as you can see, there was a first application that was filed two years later, there was a second application that was filed. And the second application is subject to a terminal disclaimer. And this ends up reducing the term of that case by two years.

Speaker 2  39:29  
That's fine. But then what happens if there is now a question about the patentable distinctiveness of the claims in the earlier issued patent? Are those earlier issued claims also patently indistinct from your later issued claims? If so, the earlier issued patent isn't valid until a terminal disclaimer is filed if one is needed, and that would mean that that earlier case would end at the same time as the later case with the same ending term gate. That's the discussion in the famous Gilead case. So what if you've licensed your first case to one happy licensee who has this wonderful issued patent with a long term? And now you have licensed the second patent to a different licensee who was like, yes, let's file that terminal disclaimer, let's get rid of this obviousness type double panting rejection, boom, that's fine with me. Now, you may have potentially cut down the term of your first patent. Well, there hasn't been a black and white case ruling regarding that effect on potential PTA of the first fattened. Some dicta suggests that it's very likely that even if both patents had the same effective filing date, for example, if they're continuations of each other, that PTA may be reduced in the earlier file patent. And as you can see, this could cause a big problem. And finally, I was

Unknown Speaker  41:04  
pleased, I was just gonna say it just in one in one quick instance, another another thought that some of the folks in the audience may have is, if any of their faculty are participating in alliances directed to the development of interoperability standards, like the just for an example, the one we're probably most familiar with right now is the Wi Fi standard 802 dot 11 A through N. But you know, obviously think 5g For current days. If if you if if patentable subject matter results, and the office is intent on entering, for example, in licensing pool, and the office, the licensing office is sort of diligently tracking the standard and, you know, maintaining continuation filings to you know, amend the claims to sort of more clearly read on the standard specification. If, if you, you know, come across the potential to have to file a terminal disclaimer, in order to get an allowance, you may want to consider the patent term adjustment for each of the patents that you believe are, are, are necessary for the practice of the standard in order to live in the licensing pool, and generate revenue for the university. Because you could, of course, you could shorten the term of a patent that may very well be, you know, sufficient to cover the standard specification. So you can, you can lose out on some pretty significant revenue on the back end. But I think this is, I think this is probably more appropriate for the life sciences, but that that is a non life science example of terminal disclaimers. costing money.

Speaker 2  42:51  
That is an excellent point. That is excellent point. And then the last point I just want to make and Andy and I have discussed this, too, is under the Marvel case, terminal. Under the Marvel case, a license for a patent rights cannot have a provision that requires the licensee to pay patent lawyer royalties beyond the term of the patent. There's other things you can do, you can request a larger upfront fee, you can you know, there's a number of means to get money from the licensee and an appropriate monetizing situation through a number of ways or you can license know how or a number of things you can do. But the bottom line is if you filed a terminal a disclaimer in your second later issued case, and you need to then file a terminal disclaimer in your earlier issued case, because you have a gilliat situation where the earlier case is deemed patentable and distinct from the later case, you may have just cut off your royalty stream and ended the term of your earlier case and because of this situation, and now you've lost your royalty stream, that might be a very unintended consequence of filing that terminal disclaimer in your second case. So in that situation, you really may want to think about whether terminal disclaimer is your best bet. or abandon. Right? Exactly. Yeah, exactly. And then finally, as you can see, I just wanted to lend go back to this slide to say therefore, it's important to have open communication throughout the history of your patent application with with the patent institution and the owner to make sure that you're you're being strategic in your agreements and your filings to reduce the risk of impacting and conflicting rights. So with that, thank you very much. And I now pass the wand on to Becky Simmons. Thank you

Unknown Speaker  45:00  
Thank you Deirdre. As Deirdre said, I, my name is Becky Simmons, I am very pleased to be with you, at least virtually today. So without further ado, I would just like to situate what I'm about to talk about in the context of the rest of the talk. So we've been talking, we've been talking about terminal disclaimers in the context of a variety of agreements. So it's clear that there are multiple parties, each with its own interests implicated in these agreements. But it's not always clear in the context of terminal disclaimers how how different ownership rights can become implicated. And something that Andy and Deirdre alluded to earlier is this exclusive patent license, which I think is as Andy said, it's his preferred type of deal to do at the university level. And but it's also a very common one. And so it's kind of a subtle way that in which an exclusive patent license can actually operate to fragment ownership within a patent family. And so I want to talk about that today. I call it subtle, because the case law around the way in which ownership can be fragmented actually occurs not in the obviousness type double patenting realm, but actually in in a series of cases related to standing. And in those cases, courts have found that an exclusive patent license can confer independent standing to sue under patent. And when an exclusive patent license confers independent standing to sue, the court actually treats the exclusive license as a de facto assignment of the patent. In other words, it treats it as a transfer of ownership from the license store to the exclusive licensee. And so just to put this graphically, and give you a little bit more of a concrete example, let's look at this graphic on this slide. So, in this scenario, an owner files and is granted issue patent a. Subsequently, the owner files application B, which matures into issued patent B. And issued patent B is predicated on a terminal disclaimer, over issued patent a. Somewhere along the lines, let's say the owner exclusively licenses issued patent A but not B to an exclusive licensee. The question then arises, does the owner still own both patents a and b? Or does the exclusive license rise to the level of a de facto assignment, therefore creating a problem with the terminal disclaimer? Since patents A and B would no longer be co owned in that situation? The standard that courts use to analyze the situation is the all substantial rights standard. And the way that the the analysis goes, is that an exclusive patent license that transfers all substantial rights in a patent. Is it a defacto assignment of the patent? So what are all substantial rights? Well, once you reach reach the threshold of determining whether the license is exclusive, which and the standard for that is typically the exclusive right to make use and sell. Once you've determined that that right has been relinquished, and you are dealing with an exclusive license, the next most important right that courts consider is the right to control litigation decisions and really once relinquished the Right to Control litigation decisions is very, very strong evidence in favor of assignment of the patent. Other Other fact patterns, other things that courts take into account in determining whether all substantial rights have been relinquished, include the right to sublicense a reversionary interest in the patent rights, the right to exclude in all fields of use, and the right to assign. So you probably want me to just tell you right away what's what's the magic language I need to use to prevent transferring all substantial rights when I don't mean to? And I'm gonna get to that, but first I want to take a little detour to tell you about some rights that parties have tried to retain and courts have deemed them insufficient. So even though you retain these In substantial rights, the rights are insubstantial, because even though they are retained, they are insufficient to foreclose, determination that ownership has transferred. So number one on this list is financial interests, courts really do not treat financial interests, either royalty stream or damages sharing, as in litigation, they do not treat them as substantial. And so they don't retaining financial interest does not foreclose a finding of assignment. In addition, merely having notification rights from the licensee is not a substantial right to retain. Similarly, limited control over sub licensing, having Termination provisions that are so are predicated on license breach, for example, are considered to be too nebulous to be substantial, even dividing up the patent into us and X us, for example, where you retain the US rights, and you exclusively license X us rights. Having even the US territory is not considered by courts to be a substantial right for closing assignment. And then finally, just retaining the right to make selling use, especially if you're a non practicing entity is is insufficient. So the right that the courts have found over and over again to be substantial, right, that when retained for closes, a finding of assignment is the right to sue. And when I'm talking about the right to sue today, I mean, mean it broadly, and it can take on a number of embodiments. So it can be sort of as substantial as the right to to bring suit outright to prosecute infringers. And it can be even less substantial than that it can be even just the right to veto the licensees decision to do. So. In this case, I thought it might be helpful to look at some actual license exclusive license language. To show you what kind of clauses you might look for what kind of clauses you might want to insert into your own agreements, to make sure that you retain substantial rights to foreclose transferring ownership and what you think you're licensing. So, as I mentioned earlier, the right to bring suit is one of the rights that when retained, is considered to be substantial. And this is so even when the right is secondary to the licensees right to to prosecute an infringer. So here we have some language in the event that licensee is unsuccessful in persuading an alleged infringer to desist or fails to initiate an infringement action, licensor shall have the right to prosecute infringement. Another embodiment of the Right to Sue is the right to join a lawsuit alleging infringement of the license Pattern Language as straightforward as licensor shall have the right to participate in any action can accomplish this purpose. In addition, consultation rights, and then a veto right or the right to consent, which I sort of think are flip sides of the same coin, are sufficiently substantial to foreclose a finding of assignment, under the case law on standing. So this is sort of a subtle way that fragmented ownership rights can sneak in, if you're not being aware of how the asset is being handled. But oftentimes, we know from the very beginning of these, of these agreements, that there are going to be multiple parties there are either already multiple owners from the beginning. Or there's the the prospect of most multiple licensees as in the example that Andy started us off with. So here, I think that

Unknown Speaker  54:29  
in order to sort of align or perhaps organize these multiple parties interests, into a coherent patent prosecution strategy, the model inter institutional agreement developed by Autumn is a useful resource. So if you're not familiar with autumns M Ay ay ay, as I'll call it. It divides rights amongst a lead institution and then what it calls other institutions. And then it assigns nearly all of the patent prosecution and licensing authority to the lead institution, while the other two other institutions retain very limited rights. And so I think that the main lessons that we can take from autumns Mia is that there's a substantial gain in simply assigning roles, not only in clarity, but also in setting expectations. And having something on paper that parties can consult when they have a problem. And hopefully, it can provide answers to the vast majority of things, issues that might arise. The second major lesson that I think we can take from autumns Mia is that it's good to be the lead when possible, you're coming at it from the position of control in this situation. And from that position, you're best equipped to protect your own rights as the agreement moves forward. And as patent prosecution moves forward. And I think something that in preparing for the talk Andy told us over and over is that the flexibility is, is so underrated, and it needs to be used when you're dealing with the lifetime of these assets. And so I think even as the agreement matures, and things may need to change, approaching in the negotiation for change from the position of control, provides you a really optimal starting point. Andy, did you want to add something?

Unknown Speaker  56:45  
Oh, no, I was I was, I just kind of clicked on the button and decided to stick with it.

Unknown Speaker  56:51  
It's perfect. So multiple parties interests can also rear their head in patent litigation. And in the context of patent litigation, autumns, Mia is not best equipped to address the roles of parties, and the relative rights and duties of parties. It's I think it's upfront about that limitation. It sort of says in in a couple of sentences, the parties will agree in good faith to talk about potential infringement and arrive at a course of action when it occurs. We have actually already seen in a slightly different context of one way to organize different parties rights in litigation. And that occurs in the context of an exclusive patent license. Just the act of retaining the substantial rights necessary to retain ownership often requires that the parties delegate different rights and duties related to patent litigation. For example, the licensee has the primary right to right to sue if they are unsuccessful, or they failed to do so in a reasonable time, then the licensor can step in. That's one way of sort of organizing multiple parties interests in in a patent litigation. Again, it establishes clarity upfront, and sort of sets expectations for for everyone involved. There. Another interesting context, though, to look to think about multiple parties interested in patent litigation, is in the context of joint research agreements. Just put us all on the same playing field with respect to what a joint research agreement is and what it does. I would just say briefly, that joint research agreements are a statutorily defined term. And they are written agreements between between two parties for experimental developmental, or research work in the field of a claimed invention. And they allow parties to do two things during patent prosecution, both of which then have repercussions for patent litigation should that transpire further down the road. The first thing a gra allows parties to the gra to do is to disqualify one another's patents and patent applications as prior art. The second thing that a joint research agreement allows parties to the agreement to do is to file terminal disclaimers based on one another's patents and patent applications. And so Dierdre touched on some of the public policy around terminal disclaimers and obviousness type double patenting rejections before one of the policy considerations is to prevent harassment of a potential infringer by multiple parties. So in order to allow for multiple parties to a Gra, to file terminal disclaimers based on one another's applications, which are patents which do not have to be co owned. The the the the scheme the statute such as scheme in which inventions subject to a gra are deemed to be commonly owned. And so when you file a terminal Disclaimer Under this scheme, you have to waive in writing the right to separately enforce the patents referenced in the terminal disclaimer. And, as in the case of of, you know, breaching your promise to co own patents subjected to terminal disclaimers for the life of the patents, in the typical case that Dierdre went through separate enforcement here results in resulted in unenforceable patent. So, so the the outcome of breaching your promise in the terminal disclaimer is is to render your patent unenforceable. So this just sort of sets up once again, the scheme that the the gra is trying to accomplish. Typically, when you have two owners implicated in a single patent, they would have to file suit on that patent and jointly enforce it together. In the case of patents, subject to a J RA. You can have a one patent owned by owner a and issued patent be owned by owner B. And if they obtained their patents, because they were directed to patent simply indistinct subject matter. By filing terminal disclaimers predicated on a Gra, they could each separately bring suit in the absence of this waiver against a single potential infringer. So again, the waiver serves to maintain the status quo up here and to require joint enforcement. Now, because there's this possibility that you're going to have to enforce your patent jointly with the you know, party across the table to the Gra, you should address the the enforcement issues up front. And so the next slide, sort of is, is a provides a few clauses, a few talking points that you should start to think about when you're when you're negotiating, and drafting and executing and JRI. And there aren't a bunch of there aren't a lot of answers here, as we saw in in the exclusive license slides, where I gave you some some very prescriptive license language. Here, these are more points for negotiation and sort of you need to think about what is best for the for the institution, who you're working on behalf of. So just to situate us one more time, let's take the position of owner a, who is interested in relying on a gra to obtain issuance of its patent A. Now if your owner, a you first of all, want to make sure that you have the right to file a terminal disclaimer in reliance on the gra if you want to. In addition, you want to make sure that you have right to notice and hopefully also consent to terminal to owner B's terminal disclaimer, you at least need notice because you need to know whether you're going to be in the realm of joint enforcement or, or not. And you you need you'd like to have consent because then you can then you can prevent from happening. A number of the issues that Deirdre started to allude to in as she wound down in her talk related to Gilead and Marvel. So, so once you know whether you're in the realm of J IRA, and therefore, joint enforcement, you need to consider how you want that enforcement to go what you want it to look like. So again, if we take the perspective of owner a, you want to hash out whether you have the right to sue or the right to indulge infringement. You also would like to have, again notice and consent to owner B's enforcement actions. Because you need to know if you need to join in or not, in order to enforce your your patent. As I said, failure to jointly enforce can can can mean that you're sitting on an unenforceable patent. And then you'd also like to know, to have clarity on how owner B is expected to operate, especially with respect to owner B's obligation to sue or owner B's right to indulge infringement. And then all of these enforcement considerations have to be thought through in the context of the rules of Joinder, which which are going to take precedence over over the contractual provisions between the two parties. And so with that, I am going to turn it over to Andy, one more time to close this out.

Unknown Speaker  1:05:51  
Right. Thank you. I think we have to advance one more slide. Gladly, thank you. And as you can see, now all the tools are in the toolbox. One last thing, so So effectively, the the prosecution of the patent assets in you know, in the PTO can have an effect on, you know, each of the each of the agreements that we've that we've talked about below the terminal disclaimers, you know, effect on exclusive non exclusive joint research agreements, IAS, you know, assignments or, or, you know, potentially create an effective assignment in the license. One, actually, there's a, there's a question up on the on the board that says, you know, the patentee doesn't realize the pitfalls of terminal disclaimers. If one is in place, how might this be discovered? And and I think I go further by saying I, you know, how might this be avoided, I talked earlier about the importance of a of a close relationship with a close relationship with outside counsel with an informed outside counsel. And, in order for that, to remain in place during the term of a license in the license document. And, you know, I don't know how any of my, any of our sort of peer institutions here, manage this, but But consider very closely when a potential licensee wants to negotiate control over the prosecution of an application, maybe, you know, maybe have their counsel have power of attorney and be able to communicate directly with the office. What Northeastern does is our counsel and the good folks at Hamilton Brooks Smith and Reynolds are very familiar with this. Our Northeastern University's Council retains power of attorney, every communication with the Office has to pass through Hamilton, Brook Smith and Reynolds, you know, if if it's the appropriate case, and, you know, that's important for a number of reasons, if you have some licenses counsel, during the prosecution of a patent, you may not have the right information to report to you know, I Edison, so, you may not meet your reporting obligations, but importantly, importantly, the your your outside counsel is if if they are informed they are going to, you know, if a if a terminal disclaimer, you know, or a request or or you know, communication, you know, a rejection for obviousness, obviousness type double patenting comes in that may be that may be remedied with a terminal disclaimer that, you know, a licensees counsel may say, oh, okay, great, you know, we'll we'll go ahead and file that and be done with it. Were in the in the in the setup that Northeastern uses if an exclusive licensee or if a licensee has its own console, and has the ability to, you know, has its own console with the ability to sort of manage the asset for the, for the benefit of the, for the benefit of the licensee. What Northeastern allows is, you know, if the, if the patent family is licensed at the provisional stage, we've gone so far as to sort of allow licensees outside counsel to draft a specification according to you know, their vision. However, we always have our outside counsel review it response to any communications, we communicate the way we communicate the rejection or whatever the communication is to the licensee, and, you know, the licensees outside counsel if necessary, they can prepare a response but that response has to go back to the office. You know, back to Hamilton Brooke Smith and rounds that may have that may have been broader knowledge of the situation in the portfolio and may be able to more readily identify the risks associated with filing what the licensee wants to file. And that, that maintenance of control of the asset in the portfolio by the licensing institution is, is just a, it's very important. I generally I tell licensees in negotiations that look, you know, we have to really maintain control of this, you know, in the, in the first instance, I talked about the reporting obligations, and how, you know, we can't let that get out of control with anything subject to by DOL, I'll also mention that the university prefers that, if other university patents or prior art are used, as you know, are applied as priority against the the incident invention. That, you know, if, if, you know, we prefer not to disparage some other asset in favor, you know, in favor of the asset at hand. And the other equally important factor to consider, you know, are instances like the terminal disclaimer and the effects that could sort of ripple through the portfolio could, you know, could create problems for the university for the licensee or for some other licensing of the technology. So, anyway, that that was sort of the, that was sort of the, what spawned this this talk and Deirdre and Deidre and Becky have, you know, for years been, you know, and Hamilton Brooker, a large have been really effective partners in sort of in managing the portfolio that were tasked with maintaining at Northeastern. So I guess from there I can, I can say thank you, everyone for coming. We, we certainly appreciate your interest. And if you have any questions, I think we can sort of go to the next slide. Okay, because I'm not running this, but our contact information is available on the next slide if it does come up, and I guess, I guess I'll open the there it is ice. Yeah. So. So I can be reached at Northeastern and obviously, Deirdre and Becky can be reached at Hamilton, Brook Smith and Reynolds. And I think, Holly, I'll pass it to you to see if there are any outstanding questions or any any sort of further discussion. I suppose pass to Holly.

Speaker 2  1:12:48  
Oh, you did just right. You did? I do see, I do see a question that has popped up. Should we encourage an applicant to argue against the double patenting rejection despite the delay and dispense of doing so? And in your experience, what is the likelihood that a US PTO examiner would concede to such arguments? I do have some thoughts about that. First of all, as as someone who's done litigation, and especially particularly in the earlier parts of my career, I'm very leery about putting too much characterization of my claims on the record that could be used in an astonishing fashion to cause me problems later on. So if we argue that the claims in the current case are patent doubly distinct from the claims in the earlier case in a fashion that unduly narrows the scope of the claims, then when we go to assert the patent against a defendant, we may find that these comments that we've made come back to bite us where the defending counsel may say, look, you've put on the record that the claims are narrow in this fashion and my clients and you know, actions are therefore narrow, you've now narrowed the scope scope of the interpretation of the claim. So, be careful about what you say on the record about patentable distinctiveness if you can avoid it. Do examiner's find such questions? Such matters? Easy that they will overcome the rejection through the statement. Obviously this can be one of the most difficult parts of patent law because although it is an objective standard examiner's are subjective, and it's very easy to have hindsight as well. So it can be a challenge to overcome an obviousness type of double patenting based on distinctiveness, but it is possible and again, it's it's like everything else it's on a case by case basis.

Unknown Speaker  1:14:56  
Thank you see, do we have other questions?

Unknown Speaker  1:15:07  
One question that I am seeing is our collaborative research agreements or sponsored research agreements, joint research agreements under the statute, and I can take that one. I think the answer is that they may be the statute is very broad and doesn't provide a lot of detail around what the agreement has to look like who the parties to the agreement need to be. And in addition, it's important to remember that that these agreements when used as JRS, can actually be invoked unilaterally. So although there are two parties to the agreement, one party can unilaterally invoke the agreement as a gra during prosecution. So one suggestion that I have been made aware of Thank you, Andy, is to include a disclaimer in the actual agreement, if you don't mean for it to be a JRI if you don't want it to be used as a JRI. And then you won't run into any problems with enforcement later on. You don't have to really worry about about negotiating those terms. So if you put a disclaimer in you may see an old disclaimers, a disclaimer that this this is not a joint research agreement under the Create act. Today, under the current law, you'd have to reference the appropriate portions of the AIA.

Speaker 1  1:16:50  
Thanks for answering that. Um, let's see. Looking for more questions. Are you seeing any more questions panel? Let's

Unknown Speaker  1:17:00  
I think I touched on the question that was directed to me with the sort of the maintenance of prosecution response. Perfect control of prosecution. Okay. Okay,

Speaker 1  1:17:14  
um, I think with that, we'll go ahead and close out Do any of you have any parting words of wisdom or anything?

Unknown Speaker  1:17:23  
I just to say thank you very much for attending. And, you know, feel free to reach out to me if you have any further questions arising from the presentation today.

Unknown Speaker  1:17:34  
Yes, thank you.

Unknown Speaker  1:17:35  
Thank you.

Speaker 1  1:17:37  
Okay, on behalf of autumn, I want to thank all three of you for your this informative discussion. We really appreciate you sharing your time and expertise. I also want to thank all of you for attending today. We hope you found this informational. Um, a recording of this webinar will be available for viewing within just a few days of today's event. Visit the autumn website to view that recording or purchase a past webinar you might have missed. As soon as you close out of this today, a evaluation will pop up we'd really appreciate it if you could fill that out. That helps us plan future events. And with that, we'll close out this concludes our program for today. Thanks for joining us and have a great afternoon.

Transcribed by https://otter.ai