Patent Licensing Agreements (PLAs) Mr. Paul Fritz ORTA, Naval Air Warfare Center Aircraft Division...

Patent Licensing Agreements (PLAs)

Mr. Paul Fritz

ORTA,

Naval Air Warfare Center Aircraft Division Patuxent River (NAWCADPAX), MD

NAWCADPAX Mission

NAWCADPAX Background

NAWCAD Technology Transfer Team• Commander, NAWCADPAX• Vice Commander, NAWCADPAX• Executive Director, NAWCADPAX• Business Office Director/ORTA Lakehurst, NJ – Hans Kohler• Business Office Manager – Ella Tennyson• ORTA PAX – Paul Fritz• ORTA PAX Assistant – Michelle Miedzinski• Patent Counsel – Ron Billi• Security Team – Joyce Foca, Barbara Fenwick• Contracts – Vicki Fuhrmann• Technical Review Lead – Fred Kuster• CSA Lead – Rick Tarr• CSA Assistant – Tina Guy• SBIR – Carol Van Wyk• IP/T2 Class Scheduler – Robin Joy• Marketing Team

– Geo-Centers – Tim Wittig, Dick Stern– TechLink– NAWCAD Reserve Unit 0193

Patent License Agreement (PLA)

What is Technology Transfer?

Technology Transfer

What company filed the first patent for a microwave oven that cooked food?

• DuPont

• IBM

• General Electric

• Raytheon

What company filed the first patent for a microwave oven that cooked food?

• Raytheon

When was the first GPS satellite launched?

• 1966

• 1978

• 1981

• 1983

When was the first GPS satellite launched?

• 1978

How many GPS satellites are currently in operation?

• 16

• 8

• 24

• 32

How many GPS satellites are currently in operation?

• 24

• 15 inches

• 22 inches

• 31 inches

• 38 inches

What is the maximum wall-height that a HUMMER® can scale?

What is the maximum wall-height that a HUMMER® can scale?

• 22 inches

Night Vision Goggles

What is a US Patent?

What is a License?

Authorities

Types of Licenses

Non-Exclusive License

Exclusive or

Partially Exclusive License

License Policy

Application for License to Practice Invention

Business Plan Policy

Time Line

Patent License Agreement

License OutlineIntroduction Page

Preamble

Article I Definitions

Article II LICENSE Grant

Article III LICENSEE’s Performance

Article IV Royalties

Article V Patent Marking and Non-endorsement

Article VI Representation and Warranties

Article VII Reports

Article VIII Modification and Termination

Article IX Notice

Article X Sublicensing

Article XI Reservations of Rights

Article XII Litigation

Signature page

Licensing Terminology

• Preamble

Preamble Example 1

• WHEREAS LICENSOR has an assignment of title to the invention disclosed and claimed in:

• PCT Application Number: PCT/US 01/45434 for “Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” in China, Japan and contracting states of the European Patent Convention, and

• PCT Application Number: PCT/US 02/35599 for “Post-Treatment for Anodized Aluminum” in China, Japan and contracting states of the European Patent Convention, and

• PCT Application Number: PCT/US 02/35490 for “Post-Treatment for Coated Substrates” in China, Japan and contracting states of the European Patent Convention; and

Preamble Example 2

• WHEREAS LICENSOR has an assignment of title to the invention disclosed and claimed in:

• U.S. Patent Number 6,375,726 in the United States issued on 23 April 2002, for “Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” (PCT Application Number: PCT/US 01/45434 in Canada), and

• U.S. Patent Number 6,511,532 in the United States issued on 28 January 2003, for “Post-Treatment for Anodized Aluminum” (PCT Application Number: PCT/US 02/35599 in Canada and Mexico), and

• U.S. Patent Number 6,521,029 in the United States issued on 18 February 2003, for “Pretreatment for Aluminum and Aluminum Alloys”, and

• U.S. Patent Number 6,527,841 in the United States issued on 4 March 2003, for “Post-Treatment for Metal Coated Substrates” (PCT Application Number: PCT/US 02/35490 in Canada and Mexico); and


• Recitals (“whereas” clause)


• Article I– Definitions

Definitions Example 1• The following definitions shall apply to the defined words where such words

are used in this LICENSE:

a. The “Licensed Patents means– PCT Application Number: PCT/US 01/45434 for “Corrosion Resistant Coatings for

Aluminum and Aluminum Alloys” in China, Japan and contracting states of the European Patent Convention, and

– PCT Application Number: PCT/US 02/35599 for “Post-Treatment for Anodized Aluminum” in China, Japan and contracting states of the European Patent Convention, and

– PCT Application Number: PCT/US 02/35490 for “Post-Treatment for Coated Substrates” in China, Japan and contracting states of the European Patent Convention

b. A “Licensed Invention” means an invention claimed in PCT Application Number:– PCT Application Number: PCT/US 01/45434, PCT Application Number: PCT/US

02/35599, and PCT Application Number: PCT/US 02/35490;

Definitions Example 2• The following definitions shall apply to the defined words where such words

are used in this LICENSE:

a. The “Licensed Patents” means– U.S. Patent Number 6,375,726 in the United States issued on 23 April 2002, for

“Corrosion Resistant Coatings for Aluminum and Aluminum Alloys” (PCT Application Number: PCT/US 01/45434 in Canada), and

– U.S. Patent Number 6,511,532 in the United States issued on 28 January 2003, for “Post-Treatment for Anodized Aluminum” (PCT Application Number: PCT/US 02/35599 in Canada and Mexico), and

– U.S. Patent Number 6,521,029 in the United States issued on 18 February 2003, for “Pretreatment for Aluminum and Aluminum Alloys”, and

– U.S. Patent Number 6,527,841 in the United States issued on 4 March 2003, for “Post-Treatment for Metal Coated Substrates” (PCT Application Number: PCT/US 02/35490 in Canada and Mexico)

Net Selling Price Example 1

• The “Net Selling Price” shall mean the invoice price of the Royalty-Bearing Product sold and not returned f.o.b. factory, before deduction of trade or quantity discounts or any other items, including, but not limited to, freight allowances, cash discounts or commissions. A Royalty-Bearing Product will be considered to be sold when shipped to a customer

Cost of Patent Protection Example 1

• “Cost of Patent Protection” means all costs incurred by LICENSOR on or after January 1, 2006 for maintaining patent protection for granted patents in the Licensed Territory from the PCT applications noted within the definition of Licensed Patents;

Territory Definitions Example 1

• “North America” means the United States of America including its territories and possessions, the Dominion of Canada and the United Mexican States.

• “United States” means the United States of America, its territories and possessions, the District of Columbia, and the Commonwealth of Puerto Rico;

• “Canada” means the Dominion of Canada

• “Mexico” means the United Mexican States

• “North America” means collectively the United States, Canada and Mexico;

Territory Definitions Example 2

• “Licensed Territory” means People’s Republic of China (CH), Japan (JA) and contracting states of the European Patent Convention which are the Republic of Austria (AT), Kingdom of Belgium (BE), Republic of Bulgaria (BG), Swiss Confederation (CH), Republic of Cyprus (CY), Czech Republic (CZ), Federal Republic of Germany (DE), Kingdom of Denmark (DK), Republic of Estonia (EE), Kingdom of Spain (ES), Republic of Finland (FI), French Republic (FR), United Kingdom of Great Britain and Northern Ireland (GB), Hellenic Republic (GR), Republic of Hungary (HU), Ireland (IE), Italian Republic (IT), Principality of Liechtenstein (LI), Grand Duchy of Luxembourg (LU), Principality of Monaco (MC), Kingdom of the Netherlands (NL), Republic of Poland (PL), Portuguese Republic (SO), and the Republic of Turkey (TR), to the extend that patent protection is achieved, LICENSEE elects such countries and pay the Cost of Patent Protection in accordance with Articles III and IV for such countries;


• Article III– Licensee’s Performance

Licensing Terminology Example 1

• The LICNESEE shall pay to the LICENSOR a nonrefundable licensing fee in the amount of fifty thousand dollars ($50,000), which shall accrue upon the execution of the LICENSE by LICENSEE and shall be due and payable as follows:

• Ten thousand dollars ($10,000) immediately upon the execution of this LICENSE by LICNESEE;

• Fifteen thousand dollars ($15,000) no later than three (3) months after execution of this LICENSE by LICENSEE; and

• The balance of twenty five thousand dollars ($25,000) no later than six (6) months after execution of this LICENSE by LICENSEE.

Licensing Terminology Example 2

• LICENSEE shall pay to the LICENSOR a non-refundable licensing fee in the amount of fifty thousand dollars ($50,000), which shall accrue upon the execution of the LICENSE by LICENSEE and shall be due and payable as follows:

• Twenty five thousand dollars ($25,000) immediately upon execution of this LICENSE by LICNESEE; and

• Twenty five thousand dollars ($25,000) no later than one (1) year after execution of this LICENSE by LICENSEE; and

• LICENSEE agrees to pay to LICENSOR one half of any licensing fee collected from any sublicensee.


• Article IV Royalties– Upfront payment– Running royalty– Topping payments– Sublicensing payments

Royalties and Fees

Royalties and Fees

• License Fees can include:– Upfront fees– Royalties– Combination of Upfront fees and Royalties

Royalties and Fees

• Upfront Fees

Royalties and Fees

• Royalties

Royalties and Fees

• Annual Minimum Royalties

Royalty Rates

Royalties Example 1

• LICENSEE shall pay a royalty to LICENSOR in accordance with the following:

• a. LICENSEE shall pay to LICENSOR an amount equal to five percent (5%) of the Net Selling Price of each Royalty-Bearing Product made, used, or sold by LICENSEE or its sublicensees and five percent (5%) of the net selling price of any other item(s) made, used with or sold in conjunction with a Royalty-Bearing Product made, used, or sold by LICENSEE or its sublicensees.

• b. LICENSEE shall pay to LICENSOR an amount equal to five percent (5%) of the dollar amount charged for all services, excluding Operational and Maintenance (O&M) services, provided by LICENSEE, or its sublicensees, relating to a Royalty-Bearing Product. Such services shall include services provided by LICENSEE, or its sublicensees, for the expansion, upgrade or modification of an existing fully operational system.

Royalties Example 1 (con’t)

• c. LICENSEE shall pay to LICENSOR an amount equal to two and one half percent (2.5%) of the dollar amount charged for all Operation and Maintenance (O&M) services provided by LICENSEE, or its sublicensees, relating to a Royalty-Bearing Product.

• d. For the purposes of this LICENSE, Operation and Maintenance

(O&M) services shall mean services provided by LICENSEE, or its sublicensees, following completion, installation, testing and customer acceptance of a fully operational system which relates to a Royalty-Bearing Product. Services provided by LICENSEE, or its licensees, for the expansion, upgrade or modification of an existing fully operational system are not 0&M services and shall be included as services under Article IV, paragraph b. above.

Royalties Example 1 (con’t)

• Royalties will not be paid on items sold directly to agencies of the U.S. Government.

• Notwithstanding the provisions of the preceding paragraphs in this Article IV, LICENSEE agrees to pay, at least, minimum annual royalties as follows:

For Calendar Year Minimum Royalty

2004 $0

2005 $0

2006 $62,000

2007 $447,000

2008 $626,000

2009 $795,000


• License Period

Terminating A License

Distribution of Royalties

Incentive Awards

New and Innovative Ideas

Federal Register Notices

Montana State University TechLink

Geo-Centers

Invention Evaluation Board (IEB)

Intellectual Property & Technology Transfer Course

Patent Awards Ceremony

Come support your fellow Scientists and Engineers

NAWCAD Patent Dedication & Awards Ceremony

NAWCAD Patent Dedication & Awards Ceremony

When: Thursday, 19 May 2005

Time: 0900

Where: North Engineering Center Atrium,

Bldg 2185Naval Air Station, Patuxent River, MD

attend the

Call 301-342-3353 or 301-342-5586 for additional information

Patent Awards Ceremony

Lessons Learned

NAWCADPAX Master Patent List

Patent #Navy Case # Issue Date Inventor Title

End of 6mo3 1/2 yr

Last day with surcharge

End of 6mo7 1/2 yr


End of 6mo11 1/2 yr


Data SheetY, N,

D

IEB Meeting Date Notes

6,157,505 79011 5-Dec-00 Prockup

System & a method of operation thereof for analyzing the performance of a tape recorder 5-Jun-04 5-Dec-04 7-Jul-04

Rec'd market review 05-11-04. 07-07-04 IEB voted "NO" to paying 1st Fee.

6,172,940 77406 9-Jan-01McConnell, et al

Two geophone underwater acoustic intensity probe 9-Jul-04 9-Jan-05 7-Jul-04

Rec'd market review 05/11/04. 07-07-04 IEB voted "NO" to paying 1st Fee.

6,233,740 79737 22-May-01 Meyers et alAircrew integrated recovery survival vest 22-Nov-04 22-May-05 22-Nov-07 22-May-08 7-Jul-04

07-07-04 IEB voted "YES" to paying 1st Fee. 7-7-04 1st Fee was paid

6,239,725 82248 29-May-01 Bray (LKE)

Passive visual system & mehtod of use thereof for aircraft guidance 29-Nov-04 29-May-05 29-Nov-07 29-May-08 8-Nov-04

Rec'd market review 09-08-04. 11-08-04 IEB voted "YES" to pay 1st fee.

6,240,742 79780 5-Jun-01Kaufman et al

Modular portable air-conditioning system 5-Dec-04 5-Jun-05 8-Dec-07 5-Jun-08 Y 8-Nov-04


6,241,164 82406 5-Jun-01 Wolfe (LKE)

Effervescent liquid fine mist apparatus & method 5-Dec-04 5-Jun-05 8-Dec-07 5-Jun-08 Y 8-Nov-04


6,249,241 76518 19-Jun-01Jordan et al.

Marine vessel traffic system (Surtrac) 19-Dec-04 19-Jun-05 19-Dec-07 19-Jun-08 ? 8-Nov-04

Fact sheet in works 12-09-03. Rec'd market review 09-22-04. 11-08-04 IEB voted "YES" to pay 1st fee.

6,263,294 17-Jul-02Frederickson

Impedance spectrocopy measurement system 17-Jan-06 17-Jul-06

08-08-05 sent email for market review.

6,300,778 82254 9-Oct-01Frederickson et al

Solder paste and residue 9-Apr-05 9-Oct-05 9-Apr-08 9-Oct-08

8-Nov-04 9-Mar-05 1-Aug-05

11-08-04 IEB voted to "HOLD" ONR licensed they should pay fee. 03-09-05 IEB voted to "HOLD" renegotiating license. 08-01-05 Per email from Rosedale Approval to pay 1st fee.

6,375,123 77442 23-Apr-02Greenhalgh et al Air refueling drogue 23-Oct-05 23-Apr-06

08-08-05 sent email for market review. 08-29-05 rec'd market review.

6,375,726 82512 23-Apr-02Matzddorf et al

Corrosion resistant coatings for aluminum & aluminum alloys 23-Oct-05 23-Apr-06

08-08-05 sent email for market review.

1st Maintenance Fee 2nd Maintenance Fee 3rd Maintenance Fee

Preparing for the Future

Questions To Think About

• Do we want/need to file a PCT?• Do we need to file on National Stage?• Who will monitor the Office Actions if any when

filing PCT’s?• Where will the money come from to pay PCT,

National Stage Filing, and or Maintenance fees?

Foreign Patent

Summary

• Examples of successful technologies

• History

• Process and procedures utilized in our success

• Issues to think about for your program

Back Up Slides

Estimated Costs for Patent Applications• US Filing

– Contract Attorney: $4,000– General Filing Fees

• Basic Filing Fee $1,000• Excess Claims $200• Assignment Fee $40

– Prosecution Fees:• Contract Attorney to write Amendment $1,000• Submit Information Disclosure Statement $180• Extensions of Time $300• Petition $200

– Issue Fee $1400– Maintenance Fees:

• 1st Maintenance Fee $900• 2nd Maintenance Fee $2,300• 3rd Maintenance Fee $3,800

• Total Estimate for filing US Application $15,320

Estimated Costs for Patent Applications

• PCT Applications:– Contract Attorney (submit us file application) $5,000– International Stage Fees:

• Transmittal Fee $300

• PCT Search $300

• International Filing Fee $1,100

– Contracted Attorney (misc: correction etc.) $1,000

• Total Estimate for filing PCT application $7,700– (prior US Filed)


• National Stage Filing EU Canada Japan China Mexico– Official Filing Fees

• Filing $5,000 $500 $190 $135 $500• Examination $1,600 $460 $750 $320 $675• Grant $800 $425 $890 $35 $1,100• Other $0 $215 $0 $195 $0

• Total Est. Filing Fees $7,400 $1,600 $1830 $685 $2,275– Contracted Attorney Fees

• Foreign Associate $5,000 $3,000 $6,000 $6,000 $3,500• Translation $1,500 $0 $3,000 $3,000 $3,000• Domestic Counsel $2,500 $1,000 $2,500 $2,500 $2,000

• Total Est. Attorney Fees $10,000 $4,000 $11,500 $11,500 $9,500


• Maintenance Fees EU Canada Japan China Mexico– Total Est. Maint. Fees $175,000 $3,800 $17,800 $10,600 $3,600

• TOTAL National Estimate: $192,00 $9,400 $31,130 $22,785 $14,375

(Maintenance Fees based on 20 years and in EU based on 15 countries. In EU, can estimate $600 for each individual country per year. For 20 years (fees start at approximately $350 and go up to $1,200 towards the last years.


• Total Summary of Estimates from US filing to PCT through National Stage– US Application $15,320– PCT Application $7,700– Total for National Stage $23,020

• National Stages Estimate by Country– Europe $192,400– Canada $9,400– Japan $31,130– China $22,785– Mexico $14,375

Patent Licensing Agreements (PLAs) Mr. Paul Fritz ORTA, Naval Air Warfare Center Aircraft Division...

Documents

Transcript of Patent Licensing Agreements (PLAs) Mr. Paul Fritz ORTA, Naval Air Warfare Center Aircraft Division...