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The Patent Approach of Stanford's OTL

The Patent Approach of Stanford's OTL

If no licensee is reimbursing patent costs: 

I. Background:

  • Patent protection is expensive. The initial application costs about $7 - 12K; over its lifetime, one U.S. patent costs about $30 - 45K.
  • In the U.S., a patent application can be filed up to one year after the first public disclosure of the invention.
  • Two of the biggest income producing inventions managed by Stanford's OTL (the Cohen-Boyer DNA Cloning invention and Google) did not have any foreign patents.
  • Many great scientific breakthroughs cannot be commercialized through patenting. OTL's patenting decision does not affect the scientific merit of the invention.
  • If the inventor(s) disagrees with OTL's decision whether to file a patent application, arrangements can be made for the inventor(s) to assume patenting and marketing responsibilities for the invention.

II. First Filing Decision

What is a provisional application?
If the OTL Associate determines that an invention has sufficient commercial potential, s/he will probably choose to file a patent application on an invention. Usually, the first application is a U.S. provisional application. The provisional application holds a priority date for one year, but is not examined by the Patent Office. During this year, OTL will contact companies to find a commercialization partner for the technology.

Article:  Why Provisionals Need Claims by Todd Juneau

What are characteristics of an invention with commercial potential?
Unfortunately, we don't have a crystal ball to know which technologies will be successful or not. Some of the indications things we look for as indicators of an invention's potential are:

  • OTL Associate's assessment of a strong, defined market opportunity for a well-developed invention that is patentable and enforceable.
  • Company(ies) who express serious interest in licensing the invention.
  • Another expert's advice to OTL that the invention is commercially viable. This expert may be: a company expert, a consultant, a venture capitalist, or a Stanford faculty.
  • An inventor with past commercial success who thinks the docket will be commercially viable.

Why wait?
Often the OTL Associate does not immediately have sufficient information to fully evaluate an invention, and s/he will delay the decision to file a provisional application. By waiting, OTL can gather input from other sources and make a more fully informed patent decision. Some benefits of delaying a filing decision are:

  • The inventor has more time to obtain data, which will likely result in a stronger, more commercially interesting patent application if it is filed.
  • The later the filing date on an application, the later the expiration date. If there is a commercial product covered by a patent, a later expiration date will almost always mean greater return to the inventor and to the University.
  • Industry feedback gives us more information on the commercial potential and applications, this could provide some guidance for drafting a patent application.

III. Filing a Regular US Patent Application

What happens after the Provisional year?
One year after the provisional application is filed, OTL must decide whether or not to file:

A. a non-provisional application claiming priority to the provisional application, and/or B. a Patent Cooperation Treaty (PCT) application (which preserves foreign rights).

Unlike a provisional application, the non-provisional application is reviewed by a patent examiner and therefore incurs ongoing expenses after the initial filing. Typically, the OTL Associate has used the year following the provisional filing to assess the market more thoroughly and to try and identify a licensee. If these efforts have been unsuccessful, the commercial interest in the invention is usually unlikely to change. Under most circumstances, the OTL Associate will choose to file a non-provisional application based on a provisional application only if there is a licensee or if a company has expressed overwhelming interest in an invention.

Are there other decisions made after a regular U.S. Patent Application is filed?
About two years or more after a regular U.S. patent application is filed, the Patent Office will issue an Office Action. This correspondence either accepts the patent or rejects it for reasons of novelty, usefulness, and/or obviousness. Most applications are rejected, and patent attorneys must respond to the Office Action. If a patent application for a Stanford invention enters U.S. prosecution without a licensee, the licensing associate will probably reevaluate the commercial potential when deciding whether or not to respond to an Office Action from the Patent Office.

IV. Foreign Applications

What about patents under the Patent Cooperation Treaty (PCT)?
Most of time, the United States has the majority of the market for commercial products covered by Stanford patents. Also, there are additional costs for filing a PCT application (which preserves foreign rights at the time a regular U.S. application is filed). Because of this, OTL would need significant commercial interest to justify pursuing a PCT without a licensee.

Do you ever file National Phase without a licensee?
If a PCT is filed, 18 months later OTL must decide whether or not to file National Phase (i.e., a patent in specific countries) applications directly in foreign countries. All told, foreign patent protection can cost $200K or more. One reason is that Stanford pays both the US attorney and the foreign associate when prosecuting foreign patents. In addition, there are translation costs and multiple maintenance fees. Usually at the time of National Phase filing, OTL has been trying to find a licensee for the invention for over two years. After this time, it is highly unlikely that commercial interest will change. Therefore, under normal circumstances, Stanford's OTL does not file foreign National Phase patent applications unless a licensee is reimbursing patent costs.

V. Alternatives to an Attorney Filing a Patent Application

If an inventor wishes to file a patent application himself/herself, OTL can provide information on how to write, file and prosecute patent applications. The OTL Associate responsible for the invention can provide more information.