MEMORANDUM

Kevin G. Rivette

Author, Rembrandts in the Attic

March 14, 2002

RE: Testimony to the Judiciary Subcommittee on Courts, the Internet and Intellectual Property Hearing on Patent Law and Non-profit Research Collaboration

Mr. Chairman, thank you for the opportunity to testify before your Subcommittee on the important topic of “patent law and non-profit research collaboration.”

Before I make my remarks, I would like to take care of some disclosure issues. I am making these remarks at this hearing as a private citizen and not as part of or on behalf of any organization. I have not received and funds, grants, contract or subcontract from any Federal agency or program of any kind that would have any relevancy to these hearings or my testimony.

My name is Kevin G. Rivette. I am the author of Rembrandts in the Attic, Unlocking the Hidden Value of Patents, co-founder of Aurigin Systems Inc. and a patent attorney. I have been involved with patents for most of my career. As a patent attorney I have written, licensed and litigated patents. As an inventor I have applied for and received them. As a business person I have raised money based on approximately 15 patents. I wrote Rembrandts in the Attic to help businesses develop effective strategies using patent information. I founded Aurigin Systems to develop the tools necessary to implement the ideas discussed in Rembrandts. Aurigin’s products provide a way for patent and non-patent professionals to visualize and mine the rich research resources of the world’s patent databases. It is my belief that the Non-profit / Private collaboration that has been enhanced by our patent laws is a critical driver in a vibrant economy. As I will discuss later in my remarks, Aurigin, its customers and its employees all benefited as a result of this special research collaboration between Non-profits and the private sector that we are discussing here today. Therefore, I am firmly in favor of legislation that enhances this Non-profit/Private industry research relationship.

I. Collaborative Research - the Backbone of an Innovative Society

We live in one of the most innovative moments in history. Advances are coming faster today than ever before in all industries, such as medicine, aviation, computers, telecommunications. These advances and products come from two major sources, private industry labs and Non-profit organizations. In many cases the original research which might be too speculative for industry, is done at universities and research institutes. This original research needs to be further developed and productized to be beneficial to all of us. To do this additional development, industry and the Non-profit research organizations have developed an excellent feedback loop that provides industry with the needed research and the Non-profits with the needed funds to continue with further discovery. At the base of this feedback loop are patents. Patents are the mechanism that makes this collaboration work. It is the non-profit’s ability to license these protected research results to industry for royalties, which permits free flow of discoveries to the public as new products. I suggest that this mechanism is one of the cornerstones of our economy today.

The importance of this protection is recognized worldwide. In a speech before the Intellectual Property Owners (IPO) annual meeting on November 16, 1998, then Japanese Patent Office Commissioner Takeshi Isayama attributed the “…cooperation among industry, government and academia” as a key element in why the US leads in most of the important world’s important technologies and the strength of our economy. Commissioner Isayama went on to discuss how Japan was changing its patent laws to emulate this type of research collaboration between its Non-profit and private organizations.

In Europe, this special research collaboration is currently working to further fundamental research and productization also. An example is the independent non-profit Max Planck Society for the Advancement of the Sciences. The Max Planck Society specifically looks to fund promising research that is not easily or readily undertaken by universities. This research is then patented and licensed to private industry. In the case of the Max Planck Society this research has enhanced the fields of chemistry, biotechnology, pharmacology, medical technology, solid-state physics and the manufacture of new materials. The royalties from products that industry has developed using these patents have, according to the Society, generated over DM 179m from 1979 to 1998. The Society then uses these royalties to continue funding other promising research. This type of symbiotic relationship benefits everyone with new products, medical cures, jobs and increased economic activity.

II. Collaborative research – Jobs, wealth, and more

Here in the United States the examples of the benefits of this type of collaboration are well documented and highly visible. Companies such as Lycos®, Google®, Amati Semiconductor and others have used this type of research to create jobs and billions of dollars of wealth. A 1/13/99 MIT article even states that, “University research is increasing and generates approximately $29 billion of economic activity and 246,000 jobs through the commercialization of discoveries, the Association of University Technology Managers (AUTM) estimates in its seventh annual Licensing Survey.”

In addition, that article lists a small sample of successful products and life saving drugs that have resulted from this Non-profit research collaboration. These products include:

Artificial lung surfactant for use with newborns, University of California;
Cisplatin and carboplatin cancer therapeutics, Michigan State University;
Citracal® calcium supplement, University of Texas Southwestern Medical Center;
Creatine-kinase antibody used in diagnosing heart disease, Washington University;
Haemophilus B conjugate vaccine, University of Rochester;
Hepatitis B vaccine, University of California and University of Washington;
Human growth hormone (genetically engineered), City of Hope Medical Center;
Leustatin® chemotherapy for hairy cell leukemia, Brigham Young University;
Metal alkoxide process for taxol production, Florida State University;
Neupogen® used in conjunction with chemotherapy, Memorial Sloan Kettering Cancer Institute;
Osteomark® osteoporosis diagnostic, University of Washington;
Prostate-specific antigen test, HRI/Roswell Park Cancer Institute;
DNA technology, central to biotechnology industry, Stanford and the University of California;
Recombinant engineering co-transformation process, Columbia;
Retin-A, University of Pennsylvania;
Synthetic penicillin, MIT;
TRUSOPT® (dorzolamide) ophthalmic drop used for glaucoma, University of Florida; and
Vitamin D, University of Wisconsin.

My experience is similar. Aurigin Systems Inc. was also a beneficiary of this collaboration. At Aurigin we created patent tools for business. These tools needed to visually represent huge amounts of unstructured patent and non-patent text in a way that could be easily understood by patent and non- patent professionals. In addition, this representation needed the ability to be further deconstructed to give the user perspective of the “landscape” they were interested in understanding. Aurigin needed something new, something that really improved the way people used large text results.

Aurigin found a 3D topographical mapping product that was based on original research done by the Battelle Memorial Institute, a Non-profit institute for the development of basic research. Aurigin acquired the product and today companies such as GE, Dow, Dupont, Pfizer and others are using this technology to direct R&D projects, decide on Mergers and Acquisitions candidates and understand how their companies fit into the technology landscape. This was made possible in large part by basic research done by a Non-profit institute.

III. Conclusion

I applaud this subcommittee for looking at the issues before it today. I believe that legislation that furthers this special Non-profit research collaboration with private industry is in the best interest of our country and all people as we create new companies, jobs, and wealth, as well as helping to cure sickness and improve people’s lives with products they want and need.

If there are any questions, I will be pleased to try to answer them.