Tag Archives: technology transfer

USTR warns of increasing attacks by China on US intellectual property, including cyber-attacks

A report released in late November the Office of the United States Trade Representative (USTR) states that China appears to be stepping up its attacks on U.S. intellectual property.

“China fundamentally has not altered its acts, policies, and practices related to technology transfer, intellectual property, and innovation, and indeed appears to have taken further unreasonable actions in recent months.”

Raymond Zhong in The New York Times reported that “something is unfolding right now that carries higher stakes than any other tech story on the planet.”

Zhong was referring to China having detained the third Canadian citizen in apparent retaliation for the arrest of Meng Wangzhou, a top executive at Huawei, the world’s leading maker of telecom networking equipment. Since, CFO Wangzho’s arrest, Canadian officials have reported that a total of 13 people have been arrested in China. Eight have been released.

It has been long speculated that Huawei’s products can be used for spying by the Chinese government.

The USTR report, released on November 20th, is called UPDATE CONCERNING CHINA’S ACTS, POLICIES AND PRACTICES RELATED TO TECHNOLOGY TRANSFER, INTELLECTUAL PROPERTY, AND INNOVATION.

“In the USTR report the U.S. accused China of continuing a state-backed campaign of cyber-attacks on American companies that were both intensifying and growing in sophistication,” Bloomberg News reported.

Chinese Claims

In response to questions about the report, a spokesman for China’s foreign ministry on Wednesday said U.S. officials should read a white paper published by the government in September that claims China ‘firmly protects’ intellectual property rights.

On August 18, 2017, the Office of the U.S. Trade Representative (USTR) initiated a Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. 3

On the date of initiation, USTR requested consultations with the Government of China concerning the issues under investigation.4 Instead of accepting the request, China’s Ministry of Commerce expressed “strong dissatisfaction” with the United States and decried the investigation as “irresponsible” and “not objective.”5

The primary four points of the report (IPCU’s boldface):

1. China uses foreign ownership restrictions, such as joint venture (JV) requirements and foreign equity limitations, and various administrative review and licensing processes, to require or pressure technology transfer from U.S. companies.

2. China’s regime of technology regulations forces U.S. companies seeking to license technologies to Chinese entities to do so on non-market based terms that favor Chinese recipients.

3. China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and generate the transfer of technology to Chinese companies.

4. China conducts and supports unauthorized intrusions into, and theft from, the computer networks of U.S. companies to access their sensitive commercial information and trade secrets.7

“Further Unreasonable Actions”

The USTR report concluded: “China fundamentally has not altered its acts, policies, and practices related to technology transfer, intellectual property, and innovation, and indeed appears to have taken further unreasonable actions in recent months.

“USTR intends to continue its efforts to monitor any new developments and actions in this area.”

The full report can be found here.

Since 2014 Chinese venture capital investment in the U.S. totals $31 billion. The report cites analyst that estimate “Chinese investors participated in 10-16% of all venture deals in the United States between 2015 and 2017.”

Image source: USTR Update

 

Gene-editing break-through: can a collision of science, ethics and (patent) ownership be avoided?

The USPTO decided in February that the rightful intellectual property owner of CRISPR in eukaryotes, a time-saving tool that makes it cheaper and easier to edit gene sequences, should be Feng Zhang, Ph.D., and The Broad Institute of MIT and Harvard, not Jennifer Doudna, Ph.D., and the University of California, Berkley, who had conducted the earlier research.

However, Doudna and her team, which included Emmanuelle Charpentier, now with Max Planck Institute in Berlin, are on track to obtain a European patent for CRISPR. They recently filed an appeal against the USPTO’s decision, setting the stage for a showdown.

CRISPR will allow an organism’s DNA to become “almost as editable as a simple piece of text.” Using CRISPR, scientists will have the capacity to alter, insert and delete genes in plants, animals and, even in humans.

The implications are very big indeed, both in terms of science and profits, and, especially, ethics. Universities and businesses stand to generate potentially billions of dollars. Medical research will never be the same.

[For a good description of how CRISPR-Cas9 works, go here. ]

The battle lines are being drawn to determine the rightful owner of aspects of the development: Berkeley and Dr. Charpentier vs. Broad Institute/MIT and Harvard. It could mean an eventual pay-out of billions of dollars.

World-Changing

In 2012, Cal biochemistry and molecular biology professor Jennifer Doudna and microbiologist Emmanuelle Charpentier, now of the Max Planck Institute, changed the world. They invented CRISPR-Cas9 (as opposed to eukaryotes, which is any organism with a nucleus enclosed in membranes), a gene editing tool that uses a protein found in Streptococcus bacteria to chop up and rearrange viral DNA with precision.

“The implications of the technology were immediately apparent, astonishing, and perhaps just a wee bit scary.” 

“The implications of the technology were immediately apparent, astonishing, and perhaps just a wee bit scary,” reports California Magazine. “Ultimately, CRISPR applications might be developed to wipe out genetic diseases, produce bespoke bacteria that could pump out everything from hormones to biofuels, and engineer exotic animal chimeras.”

It is one thing to use an editor to eliminate genetic mutations, such as those found in sickle-cell anemia, writes the Wall Street Journal, however, “it is quite another thing to edit the germ line—that is, to make changes that would be passed on to future offspring.

“Would it be permissible, Ms. Doudna asks, to lower an unborn child’s risk of Alzheimer’s disease? If so, would it also be permissible to edit for greater intelligence or athleticism or even, say, for a particular hair color? While all such uses would ultimately require regulatory and institutional review, it is the notion of building a social consensus that is particularly fraught.”

The three main researchers involved in these patent cases have developed their own companies that focus on CRISPR: Doudna developed Intellia Therapeutics, Zhang developed Editas Medicine and Charpentier, now at a Director at Max Planck’s Infection Biology, developed CRISPR Therapeutics. So, both universities and businesses stand to benefit.

These university-based cases often result in sharing through cross-licensing. Remicade, for example, a highly successful biologic for treating auto-immune responses like Crohn’s disease which has generated over a $1 billion so far, has multiple university participants, but is primarily owned by NYU.

Who Benefits?

Yet another question that is raised: Is it right for highly endowed universities like Harvard to get richer as a result of government-funded research? Almost 70% of university research is provided by the U.S. government. Harvard’s 2016 endowment was $36.4 billion.

With the potential impact on society so great, patents may play much more than a financial role. They depending who controls them, they may turn out to be the lynch-pin for ethical application of advanced gene-editing.

In the most interesting chapters of her new book, “A Crack in Creation,” Ms. Doudna wrestles with her ambivalence about the tool she has helped create. She concludes that she no longer feels comfortable operating inside her “familiar scientific bubble”: She must take on a role as a public citizen and address not just the power of gene editing but the ethics of it. At stake, she believes, is “nothing less than the future of our world.”

Image source: bloomberg.com; rsb.org.uk

EFF’s narrow position on university tech transfer is “wildly misguided”

The Electronic Frontier Foundation (EFF) is attempting to paint a scarlet letter on universities with public funding who benefit from sharing discoveries with those best-equipped to monetize them.

The organization’s suggested sanctions for those schools that out-license research has been described as “preposterous,” and its condemnation of licensing specialists “wildly misguided.”

This is according to Richard Epstein, a highly respected professor of Law at NYU, senior fellow at the Hoover Institution, and senior lecturer at the University of Chicago Law School, in a recent Forbes piece.

Epstein say that the EFF equates all non-practicing entities (NPEs) with so-called patent “trolls” looking to game the system. In fact, a relatively small percentage of NPE suits are filed by those “black hat” businesses with a18063d135cfa169c2f96cce4d167ccdquestionable patents seeking a nuisance settlement.

Recently, the Electronic Frontier Foundation published an extraordinary request to research universities as part of its “Reclaim Invention” campaign: please stop putting your patents into the hands of insidious patent trolls.

EFF, writes Epstein, seeks to put teeth in its proposals by asking state legislatures to enact statutes “to bar state-funded universities from transferring patents to patent-assertion entities, broadly defined and branded as trolls”.  It proposes that these transfers be null and void if they do not meet statutory criteria, and suggest that the universities in question be punished by a forfeiture of research funding and student financial assistance.

In the eyes of the EFF, universities should exercise a higher sense of social responsibility and only sell or license their patents to those companies that “will actually do something with them.”  In its view, universities should resist the temptation to license their patents to the highest bidder. Really?

Its manifesto linking patents and NPEs with important research that is less likely to be shared for the logo_fullbenefit of the community can be found here. EFF sees patents and those who choose to share them through licensing as roadblocks, not bridges.

Blunt Condemnation

Epstein is blunt in his condemnation of the EFF’s proposal: “The first error lies in EFF’s over broad claim that equates NPEs with patent trolls; the second error is to assume that universities have some particular expertise in licensing these patents to potential end users; and the third in its wholesale condemnation of patent enforcement through litigation.”

The Forbes piece can be found here; the EFF “reclaim invention” proposal here. Both are worth reading.

The path of innovation is complex. A short-sighted position regarding who should benefit most from public research funding is self-deafting.

Image source: forbes.com; eff.org

USC/Shoah’s $7m Patent License

Greater Good

IP Insider has been following the $7 million 11-patent license covering digital search algorithms discovered by the USC/Shoah Foundation.

University of Southern California licensing executive John Sweet,along with broker-adviser ICAP Ocean Tomo, were keys in facilitating the exclusive license.

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Not everyone shares my usual cynicism about tech transfer. Universities are a diverse community consisting of many audiences. Typically, they have many different constituents to answer to, including trustees, donors, alumni, government, students and faculty. This makes it difficult for most institutions of higher learning to move swiftly and decisively when it comes to monetizing IP assets.

IP is a full-contact support in which many universities are not prepared to participate. As non-profits, universities sometimes hold back from fully monetizing their patents and other IP for fear that doing so may alienate others or may not be part of their intended educational mission. I would argue the opposite is true. Holding back or tip-toeing around the issues of infringement distorts the market and impedes innovation and education. Unfortunately, patent licenses more often than not are “stick” relationships, not “carrot” collaborations.

University technology transfer departments are encouraged to get over their shyness about competing for return on innovation and participate in the IP marketplace (licensing, sales, purchases, securitizations), or be relegated to the status of a reserve player. Many are leaving potential funding on the table.

Innovation is a costly and sometimes nasty business and universities, certainly the less well-endowed ones, should not feel awkward about profiting from it. Universities and their constituents have an investment in time, capital and risk that they deserve a return on.

*     *     *

Inspired by his experience making Schindler’s List, Steven Spielberg established the Survivors of the Shoah Visual History Foundation in 1994 to gather video testimonies from survivors and other witnesses of the Holocaust.

The Foundation’s Visual History Archive held nearly 52,000 video testimonies in 32 languages, representing 56 countries; it is the largest archive of its kind in the world.

USC/Shoah deserves credit both for its innovation and for knowing how to capitalize on it. Notable in this effort was the vision of patent attorney, Gary Hecker of the Hecker Law Group, who saw the importance of capturing the unique search algorithms and taking the time to file the patents.

Shoah CTO Sam Gustman, too, should be commended for his inventions.

The USC/Shoah license is a big win for innovation, tech transfer and IP management.

Illustration: USC


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