Property rights for research institutions

Property rights for research institutions

Zain Adnan
Jakarta

Global sales of pharmaceutical products in 2004 reached US$550
billion, of which the share of developing countries was just $4
billion.

This is not surprising since major pharmaceutical companies
from developed countries spend large sums of money in research
and development. They also protect their investment by patenting
their inventions.

One of the reasons these companies are so successful is that
they collaborate extensively with research institutions in
universities and with smaller biotech companies.

The pioneer of such cooperation at university level is
Stanford University. In 1970, the university founded the Office
of Technology Licensing (OTL) similarly known within other
Universities as a Technology Transfer and Licensing Office
(TTLO).

TTLO's which are common nowadays were a rarity back then. It
started with the gene splicing research of Cohen (from Stanford
University) and Boyer (University of California). Niels Reimers
of the OTL persuaded the two to let Stanford secure the patent.

By the time the Cohen/Boyer DNA patent expired, it had earned
a license fee of $250 million. As a result, the concept of taking
intellectual property from the laboratory to the market is now
institutionalized to the point that the Association of University
Technology Managers (AUTM) in the U.S. can regularly attract
world leading companies, venture capitalists and lawyers to its
annual conference.

Participants include Stanford, Columbia, MIT and the
University of Wisconsin. Stanford's successes include Cisco,
Yahoo! and Sun Microsystems.

Furthermore, the U.S. government enacted the Bayh Dole Act on
Dec. 12, 1980. This act helped spur research in state funded
organizations. It created a uniform policy in patents among the
federal agencies that provides funding research.

The main incentive is that non-profit organizations
(universities) and small businesses were able to keep hold of
titles to inventions made utilizing federally financed research
programs.

The impetus was the realization that thousands of valuable
patents were not used and collecting dust. The U.S. government,
which had financed the research, lacked the resources and
contacts with the relevant industries required to market and
develop the invention. Universities are pushed to take part in
technology transfer activities.

This is also the reason the Indonesian government enacted Law
No. 18/2002 on National Research, Assessment and Application of
Science and Technology.

However, speaking to a member of one of the TLO's on campus at
the University of Indonesia (UI); many university researchers
still do not trust the system to allow the UI to patent their
innovation. They would rather finance the patent application
themselves by hiring out university patent agents.

Before doing any research, a researcher should first map out
what types of technologies have already been patented. They can
use software such as Matheo software to help them navigate the
United State Patent and Trademark Office or the European Patent
Office. After the research is finished, they should use their
university TLO's to patent their invention. An agreement on the
profit sharing scheme on commercialization of the patent is
needed at this stage.

It is important not to publish their findings in a journal or
newspaper. According to the World Intellectual Property
Organization, for a patent to be valid, it must meet the
following criteria: The invention must have a practical use and
it must show an element of novelty.

This means a patented invention must possess some new
characteristic that is not known in the body of existing
knowledge in its technical field; it must show an inventive step
that could not be deduced by an individual knowledgeable in the
field.

Publication of research would fall into the "prior art" -- the
processes, devices and modes of achieving the end of an alleged
invention that were known or were knowable by due diligence
before and at the date of the invention.

Another example is Texas Instruments' (TI) turnaround which
was on the verge of bankruptcy in the mid 1980s. It found in its
patent portfolio many technologies that were the basis for the
products being used by its competitors in its own industry as
well as other fields the TI was not in direct competition with.

In a drive to save the company it went into an all out patent
licensing and litigation effort. As a result by 1992 it has
earned $391 million from patent licenses, which was 43 percent
more that it's $274 million in operating income in the same year.

In Indonesia, Pertamina, the state oil company paid Rp 5
billion for a license to use a patent.

The simple patent was for an innovative oil can opener which
is now used in the market. This proves that research and
development can be beneficial for both the end user and
researcher.

University and research institutions need to work more closely
with venture capitalists and businesses to patent their
inventions.

The writer is Deputy Head of External Affairs of the
Indonesian Intellectual Property Society. He also works at
Suryomurcito & Co, an IP consultancy. The views expressed are his
own and are based on publicly accessible material. He can be
reached at zain_adnan@yahoo.com.