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The research which goes to the market place

Fapesp creates Nuplitec to support inventions and licensing

FAPESP is bringing into operation the Núcleo de Patenteamento e Licenciamento de Tecnologia (Nuplitec) [Center for the Patenting and Licensing of Technology] for the protection of intellectual ownership of the inventions which result from the projects which it is financing, and, above all, for their respective licensing. “The patent is the most definite form of protection of intellectual ownership, but, in itself, it is an expense. What is important is the licensing and the right of usage.” emphasizes José Fernando Perez, Scientific Director of the Foundation.

The Nuplitec will give licensing a business character, actively looking for the market for the invention. “The patent and the licensing will be simultaneous processes”, explains Perez. The Center will be brought into play as soon as the researcher and the advisor from the Foundation, responsible for following the project, consider that the invention is original and has a market potential. FAPESP will distribute to the researchers guidelines for the project evaluation, with the objective of supporting a decision of those interested in patenting an invention. The questionnaire will include questions relative to technical viability, the project maturity, market potential, the necessity for prototypes, costs and control of the use of the patent.

To confirm the originality of a project, the researchers may consult with Derwent, the Institute for Scientific Information, ( one of the largest patent banks in the world, available since December for the São Paulo Research Universities and Institutes. This data bank will also be accessible to the companies which are participating in the programs PIPE -Small Business Innovation Technology and Parceria para Inovação Tecnológica (PITE) [Partners for Innovative Technology]. The information about patents which are already registered may also be obtained through the data banks of the USPTO , the United States Patents and Trademarks Office, through IBM or in the archives of INPI National Institute of Industrial Property, which keeps on record more than 20 million documents concerning patents granted since 1920, though as yet not available via electronic means.

The originality and market potential of the queries will be confirmed by the Coordination of Technology, responsible for the management of Nuplitec and ad hoc advisors. “If the opinions are favorable, the Center will help the inventors to write a report and will make a claim for the patent in Brazil by way of INPI and/or a temporary patent abroad, in order to assure the registration”, says Edgar Dutra Zanotto, Assistant Coordinator to the Scientific Director of the Foundation. FAPESP is formalizing an agreement with the INPI in order to facilitate the registration of patents.

When there is the need for a prototype construction of the invention, Nuplitec may look for help from the research centers who specialize in the area, Zanotto explains. This technical partnership will be responsible for the product manufacturing, looking into the possibility of large scale production, costs and availability of the material to be used and the real possibility of the control of the patent use.

The next step is to look for, along with the researcher, the companies interested in purchasing or licensing of the invention. If in a period of twelve months the new technology is successfully negotiated, Nuplitec will hire a specialized office to give final form to the patent and to register it definitely in Brazil and/or in the countries in which there may be a potential market. In this case, FAPESP will remain as the patent holder, proportionally sharing in the earning of the invention with the researcher and the research university or institute, in the form laid down by the Law of Patents. “FAPESP takes the risk and the shares the benefits”, sums up Perez “We have scale to justify the cost of the operation.”

At the end of the period of one year, if the invention does not awaken the interest of the market, the Nuplitec Center will withdraw from the negotiation for licensing and the inventors must continue the process of patenting at their own expense. FAPESP will remain at the forefront of a project only in exceptional cases, of very innovative and promising technologies. “We are only going to bear the costs if there is a market”, stresses Zanotto.

Nuplitec will have a lean structure. Besides the Coordinator of Technology, also as part of the Center, there will be a professional with experience in marketing and the commercialization of technology, a patents analyst, responsible for the drafting of the initial licensing proposal, and two trainees, law students who will specialize in industrial ownership and contracts of licensing.

The center will grow together with demand, estimated at more than one hundred patents per year in the State of São Paulo. “The success of the project will be measured by two indicators: the culture of the protection of intellectual ownership and the financial return from licensing”, says Perez. He is betting on the capacity of FAPESP to mobilize researchers and in their potential to evaluate projects. “We have already begun to evaluate the proposal for the patenting and licensing of a project and we were surprised by the quality of the analysis carried out by the Foundation advisors. There are details, both technical and of the consistency of the invention, which demonstrates our capacity to evaluate”, he adds.

The process of the implantation of the Center is only in its infancy. The application forms sent by the Foundation to the researchers and advisors are being altered to include questions which intend to lead those interested to observe the originality and the market potential of their invention. “We are alert to carry out the prospecting of inventions”, says the Scientific Director of FAPESP. Perez hopes that, besides the culture of the protection of inventions, Nuplitec will stimulate the development of competency in the area of intellectual ownership, generating, for example, the implementation of post graduate law courses in this area.

He also adds that FAPESP does not intend to restrict the influence of the Center to the projects developed by the research universities and institutes. Also, innovative technological projects by small companies and the projects elaborated in partnership with companies, research universities and research institutes, will be able to draw the support of the Center. “In this case, the ownership of the invention will be divided between the company and FAPESP”, explains Perez.

The idea to stimulate patenting and licensing of inventions came out of the workshop Intellectual Property and Patents promoted by FAPESP in December of last year. During the meeting, five experts from Brazil, the United States and Israel talked about the strategies of different research institutions, analyzed the difficulties of protecting intellectual ownership in Brazil and indicated the best methods so that the institutions could take on a position of defending the rights of their researchers. It was concluded that, without a clear and efficient policy of the protection of intellectual ownership, it would be practically impossible for the institutions to make any advance in licensing agreements with companies. From this debate came the Nuplitec project which was approved by the Senior Board of the Foundation on the 10th of May of this year.

In defense of national technology
The registration of patents is an indirect form of evaluating the potential of  technological innovation in a country. In Brazil more than one hundred law firms are specializing in the registration of patents. This is without mentioning the departments especially maintained by the large universities such as USP and Unicamp, by the Research and Development Institutes such as the IPT, (Institute of Technological Research) and the CNPq, (National Council for Scientific and Technological Development), or by foundations and companies such as the Fiocruz ,Oswaldo Cruz Foundation Institute and Petrobras. Even so, the annual number of patents registered at INPI varied between 11,00 and 17,000 over the last decade.

The number of patents issued, during the same period, oscillated between 2,500 and 4,000, 80% of them with foreign ownership. The situation is more serious  when one takes into account that Brazilian participation is 0.05% of the total number of patents conceded by the USPTO in the United States between 1980 and 1998. This percentage was similar to that of countries like Ireland and Mexico, and inferior to South Africa, Israel and Korea which have a state of scientific development comparable to Brazil. “We are behind”, confirms . Perez  “FAPESP, through Nuplitec, wants to create a culture which values the protection of intellectual ownership and invests in the return which will come from its licensing.”

It is very true that, in the developed countries, companies are the main group responsible for patent generation. For example, in the United States close to 3% of the patents are registered by universities or research institutions. In Brazil this proportion is a great deal smaller. And worse: researchers and institutions on numerous occasions lose the opportunity to look for a potential market for inventions with industrial application, giving up  rights which could result in a considerable economic return.

The difficulty of the Brazilian researchers is due, in a large part, to operational problems, such as the lack of information, carelessness, the non-existence or unpreparedness of the offices specializing in patents at universities and research institutes and of the high cost of registering patents internationally.

To overcome this difficulty a few institutions have adopted measures for the protection of their inventions generated during research activities. The Fiocruz of Rio de Janeiro was one of the first to adopt, in the decade of the 80s, an internal protection regulation of the intellectual ownership of the inventors. “The researchers published all and the institute didn’t have any control over intellectual ownership. Novelty is the basic requisition of any invention”, says Maria Celeste Emerick, the Coordinator of the Technological Administration of Fiocruz.

This initiative was the first step in the creation of a new culture of protection amongst their researchers. “We began to have lectures, to speak about patents and their advantages and we put at the disposition of our technicians the Patents Bank of INPI.” Today, the search for information is routine for our researchers. “We learned how to make patents. Even if the institution hires a specialized office for its registration, it is necessary that the researcher be attentive and informed and know how to draw up the patent documents, ” says  Maria Celeste. Ten years ago Fiocruz created an office for the registration of patents, at the same time as it discovered the importance of being alert to the behavior and the organization of the market in order to correctly evaluate the commercial potential of its inventions.

Today, Fiocruz has 15 patents granted abroad in three different countries but none of them so far licensed. In Brazil, of the 12 patents awarded, already licensed is ZIGZAIDS, an educational game about Aids, aimed at adolescents; a candle based on plants which keeps away the mosquito Aedes aegypti; a kit with the antigen against the disease of Chagas; and a bioinsecticide whose development by the company cost US$ 1 million and which is already being readied for the market.

However, it was while checking out the marketplace for a nasalpharynx probe that Fiocruz ran into another problem; the difficulty of building prototypes. “We had various parties interested in the probe, but the rubber used in the prototype was expensive as it’s only produced in Malaysia. We recognized that we were only half way there and that it would be necessary to invest as well in the development of the product, thinking on large scale production.”

The solution was to look for assistance from the Cefet, the Federal Center for Technological Education to develop a prototype of commercial viability. The first project to be developed by our new partner will be the prototype of an anti-reflux chair. Cefet will be responsible for the study of the economic viability of the project and an analysis of the costs of materials and other aspects in the market. Only after these results will it be possible to move towards the identification of the companies eventually interested in the product. “The investments in the development of the product are almost the same as, or higher than, the investments in research.” emphasizes Maria Celeste. “And today, this is our greatest bottleneck.”

On the side of the large companies the situation is different. For example, Petrobras, with an annual budget of US$ 20 billions, is the champion in the registration of patents. The company has collected a  total of 643 patents awarded in Brazil and 1,498 abroad in roughly ten countries. Petrobras has the ownership of the patents. “We are the largest generator of technology in the country,” assures Marta Metello Jacob, Technical Consultant of the Commercial Sector of Technology and Industrial Ownership.

The Sector of Technological Commercialization has been in operation for thirty years and the company already has a well developed culture for the protection of its efforts in innovative technology. The development of  research may be accompanied by the Sector through the Intranet. “We have standardized procedures for the reports that details what the invention represent in cost or working time reduction”, details the consultant. These reports serve as a basis for the foundation of the document when applying for a patent which is drawn up by the Commercialization Sector, also responsible for the confirmation of the originality of the project. “We work with 80% certainty, ” she explains.

There have been lodged patents of innovative technology which are already in operation in diverse centers of operation within the company. “We do this to avoid other companies using our technology without paying for it or developing similar projects and impede us from continuing to use ours”, explains Marta Metello Jacob.
More than this, the lodging of patents abroad has the objective of publicizing the image of Petrobras and of Brazil abroad. “It creates a greater effect than paying a whole  advertising page in The New York Time”, she says. “It works as a type of marketing of the company and of Brazil in the exterior.”



Center for Patenting and  Licensing of Technology

When to patent an invention
Many inventions are never patented. Others are kept until they are completed or until the market is ready to receive them. Only a few are rapidly processed. However, various questions must have to be answered before  a technology is patented. Here they are:

Originality and technical viability
Is the invention original at the international level?
Has search for a similar patent been carried out?
Is there a prototype for demonstration?

The state of development of the invention
Is the technology premature, given the actual market?
Will those possibly interested perceive its usefulness?
Is the invention ready for mass production or it still has to be developed for licensing?
Who should invest more in order to make it capable of being manufacturable?

Potential market
Does someone need this invention?
Are there similar products on the market?
In a positive situation, is this invention cheaper, better than those which are similar or does it have advantages over them?
Who are the possible clients for the invention?
What are the different markets for the invention?
Are there estimates of the current and future markets?

Can the prototype be used to facilitate the licensing?
Is the inventor interested in demonstrating the invention to potential licensees?

Will it be necessary to have an international patent?
Will the forecast income cover the costs of the licensing?

Possible problems
Will it be possible to impose and control the use of the patent?
Is it necessary to obtain governmental approval or certification?


INPI: in search of the lost time

José Graça Aranha,  who, for less than a year, has been occupying the position of President of the National Institute of Industrial Ownership (INPI in the Portuguese acronym), has ahead of him a gigantic challenge: to recover the Institute’s credibility and to reorganize the service of attending to the users of the organ. The INPI was in the police pages, without direction, without a mission or defined policies”, he says.

When he took over the position last July 40,000 processes for the registration of patents and 240,000 requests for the registration of trademarks had accumulated on its shelves. “The loss of motivation of the public officials contributed towards the delay”, he said. However, he attributed the sluggishness of the Institute to management and administration problems and to the “manner in which  the question of patents was viewed.” For example, he says that certain processes which were considered “sensitive” were forgotten about. Some others depended upon the opinion of the SNI  the National Information Service (The Brazilian security agency and secret service) , already extinct. “We dug out processes from 1985 which had no solution.”

Inspired by organizational models adopted by more than thirty institutes of intellectual ownership from various countries, which he knew of from the time that he worked in the World Organization for Industrial Ownership, in Geneva in Switzerland, Graça Aranha reviewed practices, methods and systems of classification of the Brazilian INPI in such a way as to make it compatible to those adopted abroad. “And the processes began to move.” Today the number of patent processes under delay has fallen to less than 30,000 and those of asking for a registration of a trademarks are somewhere in the region of 170,000. The goal is to speed up the examination of the processes, reducing the red tape time from the present and endless ten years to four years, following the standard of the vast majority of foreign institutes.

In the meantime, there are other problems to be solved, as for example, the lack of personnel. Since 1995 more or less 30% of the workforce of the organization has retired and the Institute implanted, as from 1997, an outsourcing policy, through which INPI hires out 295 people. The fixed workforce today totals 560. The third party employment is being contested by the Justice. “We have to find a definite solution to this problem.” The model which he would like to adopt would be to transform the INPI into an executive agency with financial independence and with its own plan of positions and salaries as is provided for under Article 239 of Law No 9279 concerning Industrial Ownership.

He credits a part of the responsibility for the historical inefficiency of the INPI to the lack of a culture of protection of intellectual ownership in the country. “The researchers would rather publish their inventions than to gauge productivity by  patenting them”, he confirms. This same negligence can be observed in the disinterest  of companies in registering trademarks. “Of the total of companies registered in the Commercial Assemblies only 15% seek registration with the INPI.”

One also should take into consideration that the Institute’s data bank which gather nearly 20 million documents on patents since 1920, has a very low level of consultation, something in the vicinity of one thousand per year. The data is not available by electronic means but is spread throughout an area of 5,000 m2, which certainly does not stimulate consultation. “The INPI of Cuba, a country which does not have any capacity for investment, has also accumulated 20 million documents on patents which are not on computer and they receive double the consultations”, he compares. He further commented that the Cuban Institute is leaner and organized than the Brazilian: the files with documents occupy a much smaller  area, of 600 m2.

In spite of the difficulties for the researchers, Graça Aranha is betting on the immense capacity for innovative technology in the country and gives an example: in 1997, the  developing countries registered 6,000 requests for patents, half of that being  technology generated in Brazil. He admits that the position in relation to the developed countries of the world is different. In the ranking of the patents granted in the United States in 1996, Brazil is the leader of the fourth division, alongside Porto Rico, Ghana and Zimbabwe. “And since it is not a football competition, the leader of the fourth division is not automatically promoted to the third, ” he states sarcastically. The INPI, he said, has to collaborate to change this picture. “We need to recover the lost time.”