1. Commercialization of Intellectual Property by Bob Reader Vice President, Licensing National Institute for Strategic Technology Acquisition and Commercialization Patent Law Professor, Washburn Law School June 2007 Idea-to-Market Worship Kazakhstan

2. Commercialization of Intellectual Property Bob Reader: joined NISTAC in 2000 to manage the nation’s leading patent donation program, acquiring 1,100 patents from 16 corporations. Bob received his law and MBA degrees from University of Illinois at Urbana. NISTAC is a nonprofit technology transfer entity affiliated with Kansas State University and the State of Kansas.

3. Commercialization of Intellectual Property OVERVIEW: Protecting Your Invention Protecting Your Invention Licensing Your Intellectual Property Licensing Your Intellectual Property Doing a University Startup Company Doing a University Startup Company

4. Protecting Your Invention Forms of Intellectual Property: Patents* Patents* Copyrights Copyrights Trademarks Trademarks Trade Secrets Trade Secrets *The best protection for Inventions.

5. Protecting Your Invention U.S. Universities and Nonprofit Research: $42 billion in Research & Development $42 billion in Research & Development 4,932 licenses per year 4,932 licenses per year 28,349 current licenses 28,349 current licenses 628 startup companies per year 628 startup companies per year 5,171 startups since 1980 5,171 startups since 1980 1,695 licensing professionals 1,695 licensing professionals Data taken from 2005 AUTM Annual Survey.

6. Protecting Your Invention U.S. Universities and Nonprofit Research: 17,282 Inventions Disclosed 17,282 Inventions Disclosed 14,757 U.S. Patent Applications 14,757 U.S. Patent Applications 3,278 U.S. Patents Issued 3,278 U.S. Patents Issued $ 1.3 billion Licensing Revenues $ 1.3 billion Licensing Revenues $213 million Patent Expenses $213 million Patent Expenses $ 92 million Reimbursements $ 92 million Reimbursements Data taken from 2005 AUTM Annual Survey, Revenues extrapolated from 2003 Annual Survey.

7. Protecting Your Invention Kazakh Equivalent: $42 million in R&D: (if R&D costs are 40%: $16m in R&D) (if R&D costs are 40%: $16m in R&D) 5 licenses per year 5 licenses per year 28 current licenses 28 current licenses 0.6 startup companies per year 0.6 startup companies per year 5 startups since 1980 5 startups since 1980 2 licensing professionals 2 licensing professionals

8. Protecting Your Invention Kazakh $42 million in R&D (or $16 million): 17 Inventions Disclosed 17 Inventions Disclosed 15 U.S. Patent Applications 15 U.S. Patent Applications 3 U.S. Patents Issued 3 U.S. Patents Issued $1.3 million Licensing Revenues $1.3 million Licensing Revenues $ 213,000 Patent Expenses $ 213,000 Patent Expenses $ 92,000 Reimbursements $ 92,000 Reimbursements

9. Licensing Your Intellectual Property Standardizing Negotiations: Step One - Define Scope: Exclusivity, IP, Geography, Fields of Use and Duration Step Two – Set Terms: Signing Fee, Patent Reimbursement, Annual Minimums, Royalty Payments Step Three – Use a Friendly Template

10. Licensing Your Intellectual Property Preamble Preamble Grant Grant Payment Payment Warranties Warranties Indemnification Indemnification Sublicensing Sublicensing Enforcement Enforcement MFN MFN Best Efforts Best Efforts Royalty Reporting Royalty Reporting Breach Provisions Breach Provisions Termination Termination Assignability Assignability ADR ADR Standard Clauses in a License Agreement

11. Licensing Your Intellectual Property Examples of Licensing Deals at NISTAC: Stem Cells to a Venture Capitalist Stem Cells to a Venture Capitalist Infringement by Automotive Company Infringement by Automotive Company Sale to a Patent Investment Group Sale to a Patent Investment Group Ceramics to Japan, nonexclusively Ceramics to Japan, nonexclusively Feed Encapsulation to South Africa Feed Encapsulation to South Africa Lasers to Austria Lasers to Austria

12. Doing a University Startup Company Highlights: $67 million in annual R&D justifies one startup company per year $67 million in annual R&D justifies one startup company per year 36% of licenses to existing companies are nonexclusive or field of use 36% of licenses to existing companies are nonexclusive or field of use 92% of licenses to startups are exclusive! 92% of licenses to startups are exclusive! Data taken from 2005 AUTM Annual Survey.

13. Doing a University Startup Company Examples of Startups Created by NISTAC: Nanoscale Materials Inc. Nanoscale Materials Inc. Nutrijoy Inc. Nutrijoy Inc. Global Lipidomics LLC Global Lipidomics LLC The Company Engine Co. The Company Engine Co.

14. Commercialization of Intellectual Property Contact Information: Bob Reader NISTAC 2005 Research Park Circle Manhattan, KS 66502 785.532.3903 ph rreader@ksu.edu