Patent Process

The patent process can take time but is rewarding for those involved. The TTO works alongside inventors, venture partners, lawyers, and companies to ensure South Dakota State innovation reaches maximum potential ultimately progressing South Dakota economic development. The following is a description of the patent process that the Technology Transfer Office follows.

STAGE 1: Report an Invention

1. Description
   When a researcher believes he or she has an invention that might be patentable, the researcher fills out an invention disclosure form, preferably before public disclosure. An invention disclosure is a document notifying the technology transfer office (TTO) that a researcher has made some useful apparatus, process, or composition of matter that is distinct from anything previously known. An invention disclosure that fully describes the invention is completed, signed, and submitted to the technology transfer office.
   
   An invention disclosure form is not only important for conveying information but also becomes a piece of evidence documenting the date of the invention. This becomes especially important in the United States which gives priority to the first inventor whereas other patent laws outside the United States give priority to the first party to file a patent. In order to keep foreign patent rights, start the invention process prior to publicly disclosing the invention.


2. Tasks and Activities
   TTO personnel review the document. Any sponsored research agreements, sponsored service agreements, or material transfer agreements that helped produce the invention is gathered and included with the invention disclosure document.


3. Possible Outcomes
   The TTO reviews the invention disclosure to determine which action follows.
   
   
   • Action is moved to stage 2 - The invention disclosure meets the guidelines required to further pursue the technology. A meeting will be set up between the TTO, the researcher, and if applicable a commercial or investment-party venture group. The meeting will be performed in order to better understand the technology, analyze patentability, and explore market interest.
   • Further action is given to stage 1 - The invention disclosure is incomplete and/or unsigned, and the researcher is asked to submit any necessary documents or information needed to complete the stage.

STAGE 2: Gate 1 Meeting

1. Description
   All invention disclosures are evaluated for commercial potential and patentability. TTO personnel will have some familiarity in the field of invention but will not have the in-depth knowledge often needed to understand what makes the invention novel. Therefore, a meeting is completed between the TTO, the researcher, and if applicable a commercial or investment-venture group. The technology is analyzed to determine if all patentability, technological, and commercialization requirements are sufficiently met.
   
   
2. Tasks and Activities
   The TTO will arrange a meeting with the researcher. Prior to the meeting, a nondisclosure agreement is completed in order to preserve confidentiality. Discussion is performed in preparation for the primary assessment. The following tasks below are among the addressed during the meeting.


• Determine if or when a public disclosure has been made. Public disclosure includes publication, presentation, word of mouth, or disclosure through other medium displayed to the public domain. Patentability is determinant on if or when the disclosure was made.
• Ensure the TTO develops an understanding of the technology.
• Identify all industries that could benefit from the technology. Keep in mind, once a patent has been approved, related applications are not patentable.
• Determine how the technology is applicable to unmet market needs.
• Identify the researchers involved in the invention process. Failure to include an inventor or including an inventor who didn’t contribute to the conception or application of the idea results in an unenforceable patent.
• Establish knowledge of the next stage of development and what must be completed before the technology is commercial ready.
• Discuss the market landscape and potential competitors.
• Compile any applicable data, graphs, and diagrams.
• Educate the researcher on patent procedure.


3. Outcome
   The TTO will gain sufficient understanding required to complete the primary assessment form. The process is automatically moved to decision 1 where the IP commercial potential is evaluated.
   

DECISION 1: Evaluate Commercial Potential

1. Description
   The TTO completes the primary assessment form and evaluates the invention’s commercial potential. Patentability, commercialization, and technical merit are evaluated.


2. Tasks and Activities
   If additional information is needed for the evaluation, a prior art database search is performed, or the researcher is contacted. The primary assessment is completed and a decision for action is determined. The TTO will supply the researcher with a copy of the completed primary assessment form, and he or she can determine if all information contained within the assessment is accurate. The following list is evaluated to determine commercialization potential.
   
   
   • Confirm South Dakota State University owns the IP
   • Determine if 3rd parties have rights to the IP
   • Determine if US and/or foreign patent rights are available
   • Identify industry interest
   • Analyze market and business potential
   
   
3. Possible Outcomes
   • IP action is placed in the fast track - The idea has high commercialization potential, creates barriers to entry if patented, and has an interested licensee. The researcher, TTO personnel, venture groups, and business partners work jointly. The researcher is involved in the patent process, and a provisional patent is filed. Marketing to interested licensees is started. If applicable, plans for a start-up company are completed. The TTO and researcher develop a plan to further develop the IP into a product with high profitability.
   • Action is moved to stage 3 - The invention disclosure appears to meet guidelines required to further pursue the technology. The idea has high commercialization potential but needs more development. A meeting will be set up between the TTO and a commercial or investment-partner venture group to discuss market and financial assessments.
   • IP action is placed in wait for action (TTO) - The TTO will halt further action until a complete assessment is possible.
   • IP action is placed in wait for action (researcher) - The technology is determined not commercially ready but the idea has development potential. Further action is determined from either technology advancement from the researcher or further funding sources.
   • IP action is closed - SDSU determines that the invention disclosure fails to meet all the requirements. A letter is sent to the researcher explaining the decision to turn down the invention proposal, and rights to personally pursue intellectual property protection are granted to the researcher.

STAGE 3: Gate 2 Meeting

1. Description
   The TTO, a commercial or investment-partner venture group, and if applicable the researcher(s) meet to discuss and evaluate the invention’s market and technology development. All information necessary to complete a secondary assessment is performed.


2. Tasks and ActivitiesThe TTO evaluates market potential and understands potential challenges for commercialization. Ultimately, the original invention disclosure is transformed into investment-ready opportunities. The TTO and venture group work jointly to accomplish the following.
   
   
   • Refine the business strategy
   • Conduct market research (market size, growth rate, dynamics, etc.)
   • Determine risk and potential
   • Develop detailed financial justification with an estimated revenue potential
   • Define a commercialization strategy
   • Determine the model of technology development that best fits the type of IP
   
   
3. Outcome
   The TTO will gain sufficient understanding required to complete the secondary assessment form. The process is automatically moved to decision 2 where the IP market potential and financial strategy are evaluated.

DECISION 2: Market and Financial Strategies

1. Description
   The TTO completes the secondary assessment form and evaluates the invention’s commercial potential. Financial assessment, marketing assessment, and business opportunity are evaluated.


2. Tasks and Activities
   If additional information is needed for the evaluation, further research may be performed by the TTO or venture group. The secondary assessment is completed and a decision for action is determined. The TTO will supply the researcher with a copy of the completed secondary assessment form, and he or she can determine if any information should be added to the document. The following list is evaluated to determine Market potential.
   
   
   • Identify funding sources
   • Perform a risk-benefit analysis
   • Perform a market forecast
   • Determine if the IP is best marketed using a platform or product model
   • Evaluate competition and unmet market demand


3. Possible Outcomes
   
   • A provisional patent application is filed and action is moved to stage 4 – The idea has high commercialization potential, creates barriers to entry if patented, and has an interested licensee. The researcher, TTO personnel, venture groups, and business partners work jointly. The researcher is involved in the patent process, and a provisional patent is filed. Marketing to interested licensees is started. If applicable, plans for a start-up company are completed. The TTO and researcher develop a plan to further develop the IP into a product with high profitability.
   • Action is moved to stage 4 - The IP seems to meet market and financial requirements but an experienced review would provide helpful insight for further action.
   • IP action is placed in wait for action (TTO) - The TTO will halt further action until future market demand requirements are met or a complete assessment is possible.
   • IP action is placed in wait for action (researcher) - The technology is determined not commercially ready but the idea has development potential. Further action is determined from either technology advancement from the researcher, or further funding sources.
   • IP action is closed - SDSU determines that the invention disclosure fails to meet all the requirements. A letter is sent to the researcher explaining the decision to turn down the invention proposal, and rights to personally pursue intellectual property protection are granted to the researcher.

STAGE 4: Independent Experienced Review

1. Definition
   The primary and secondary assessments are discussed with an independent source within the industry of the forecasted market. All discussion is performed under confidentiality. The proposed strategies are evaluated, and the experienced review gives suggestions on methods of improvement. A knowledgeable outside review can determine how the technology or market strategies can be adjusted to maximize potential.
   
   
2. Tasks and Activities
   The TTO and/or venture group suggest contacts that could effectively evaluate the IP and determine strengths and weaknesses in the proposed strategies. All parties work together to create a plan to either create a start-up company or propose the IP to businesses in the form of a license.



3. Possible Outcomes
   • A provisional patent application is filed and action is moved to stage 5 - The idea has high commercialization potential, creates barriers to entry if patented, and has an interested licensee. The researcher, TTO personnel, venture groups, and business partners work jointly. The researcher is involved in the patent process, and a provisional patent is filed. Marketing to interested licensees is started. If applicable, plans for a start-up company are completed. The TTO and researcher develop a plan to further develop the IP into a product with high profitability.
   • Action is moved to stage 5 - The IP has potential for profitability without a patent.
   • IP action is placed in wait for action (TTO) - The TTO will halt further action until future market demand requirements are met or a complete analysis is possible.
   • IP action is placed in wait for action (researcher) - The technology is determined not commercially ready but the idea has development potential. Further action is determined from either technology advancement from the researcher, or further funding sources.
   • IP action is closed - SDSU determines that the invention disclosure fails to meet all the requirements. A letter is sent to the researcher explaining the decision to turn down the invention proposal, and rights to personally pursue intellectual property protection are granted to the researcher.

STAGE 5: Contact Prospective License

1. Description
   The TTO examines patentability and assesses commercial interest to determine whether licensing to an existing company or creating a start-up company makes the most sense. In the case of licensing, target companies are contacted to start negotiation. With a platform technology, a start-up company will be created.



2. Tasks and Activities
   Licensing occurs when an invention is a stand-alone technology. Companies purchase rights to use the invention/process in their current product designs. Target companies defined in previous stages are contacted, and the invention is presented. Negotiation will ensue.
   
   Start-ups have the potential to produce significant opportunities for the researcher(s), the university, and the surrounding community. However, they involve more initial investment. Once a decision has been reached in favor of a start-up company, the right entrepreneurs and venture groups must be identified. Typically, this involves consulting with the local business community and contacts in the venture capital industry. Once company management has been identified, the process to secure the IP is finalized, necessary personnel are hired, starting capital is raised, and the business plan is completed.

STAGE 6: Negotiate Contracts

1. Description
   The TTO, commercial or investment-partner venture groups, and the purchasing party come to contract terms. Negotiation goes back and forth until the contracts are finalized or the parties fail to agree.



2. Possible Outcomes
   • Agree to terms and move to stage 7
   • Return to previous stage to seek other businesses with interest in the IP
   • Stop commercialization efforts

STAGE 7: Finalize Contracts

1. Description
   All parties come to terms under the contract and sign the documents. All contracts are delivered to appropriate parties, and the initial researcher is notified. Any further action is consistent with what is included in the contract. Any necessary compliance is monitored and handled. If any deviations from the original contract occur, parties partake in either legal repercussions or re-structure the initial contract.