Innovation Review


Are you located in New York State? Interested in the field of clean energy? You can commercialize your own technology and Nexus-NY can help you!

Nexus-NY or the New Energy Xcelerator in Upstate New York is a five-year program sponsored by NYSERDA with a $6 million dollar grant. The program’s goal is to accelerate the commercialization of clean energy technologies throughout New York State. The program is administered by High Tech Rochester and helps entrepreneurs in the field of clean energy by contributing funding, providing an immersive learning program, and connecting technology teams with experienced mentors and investors.

The funding from the program goes towards evaluating the commercial potential of the technology and is used for such things as building prototypes and conducting market research. The immersive learning program stresses customer identification, engagement and business model optimization. Nexus-NY also introduces entrepreneurs to mentors and investors. Participants are then offered the opportunity to pitch ideas to a panel of investors in Upstate New York.

There are two phases to the Nexus-NY program. The first frame is where the initial screening takes place. In that process, entrepreneurs are placed into teams and their technology is developed. In phase two, they develop the business plan and work to develop a prototype. And, in the third and final phase, entrepreneurs prepare for the launch. Nexus-NY offers several great opportunities for entrepreneurs in Upstate New York that are interested in clean energy.

Penn State Office of Technology Management Will Auction Intellectual Property Licenses

Pennsylvania State University announced that it will host what it believes to be the country’s first online auction of intellectual property licenses by a university. So far, only engineering patents will be available for auction. Future auctions will be held for biotechnology patents, chemistry patents, material patents, information technology (IT) patents, and molecular biology patents. Bidding opens on the general engineering patents on March 31st and continues until April 11th. Licenses are valued between $5,000 and $50,000. Bidding is done by creating an account on An account can also be created to receive notifications when new patents become available.

The licenses offered are exclusive, meaning that the licensee and Penn State will agree on an exclusive field of use and territory where the licensee is the sole owner of the patent rights. The agreement also includes a provision requiring the winning bidder to pay all the patent maintenance fees. However, unlike most university research licenses, Penn State does not require the payment of any ongoing royalties. In addition, Penn State retains the right to pursue third-party infringers allowing the licensee to participate in enforcement only if Penn State’s enforcement efforts are not successful after six months. The licensing agreement also contains a “marketing efforts” provision that requires the licensee to use reasonable efforts to diligently bring one of the licensed products into the commercial market. Finally, the agreement allows the licensee to sub-license the technology if the sub-licensee agrees to the same terms and pays a fee.

The goal of the auction is to get the intellectual property “off of the shelf and in the hands of companies that can use the technology, at very favorable terms and price points. The buyers get the rights to use the IP, and the University gets a financial return. It’s a win-win situation,” said Penn State Associate Vice President for Research and Technology Transfer Ron Huss. Associate Vice President Huss cites a variety of reasons why the technology has not yet been picked up by a commercial entity. Interim Vice President for Research Neil Sharkey stated that the idea for the auction did not come from a desire to get the most money possible out of the sale of the licenses, but to create knowledge of technologies that have potential for real-world impact. However, if people are not aware of the technology that has been developed, it has no value.

Previous patent auctions by companies have had limited success over the past years, noting specifically auctions by Kodak and NASA in 2012. It will be interesting to see if Penn State is successful in its auction and if so, if consumers eventually see these technologies used in the marketplace. If successful, this might be a process that university technology transfer offices in New York State should consider. In addition to bringing licensing fees that the university would not have had, the auction also draws attention to the university’s research efforts and capabilities.

Experimental Use Exception to Patent Infringement

Anyone who uses a patented invention without authorization is liable for patent infringement under patent statute 35 U.S.C. § 271(a). There is a longstanding common-law exception to this provision. The experimental use exception allows for de minimis use of a patented invention when the purpose is experimental. However, within the last twenty years, the Federal Circuit has addressed numerous experimental use issues and its decisions have made the common-law experimental use exception inoperable in most practical situations.

In Roche Products, Inc. v. Bolar Pharmaceuticals Co. (1984), Roche, a brand-name pharmaceutical company, sued Bolar, a generic drug manufacturer, for using Roche’s patented chemical. Bolar used Roche’s patented active ingredient in experiments to determine if its generic product was a bioequivalent. The Federal Circuit held that the experimental use exception did not apply because Bolar intended to sell its generic product in competition with Roche’s product after patent expiration and thus conducted experimentation solely for business interests. It also concluded that experimentation conducted in pursuit of FDA approval was an inherently commercial purpose in furtherance of a business agenda.

The court further narrowed the exception in 2000 in Embrex v. Service Engineering Corp. Embrex had the exclusive license to a patent directed at vaccinating birds from disease while still in the egg. In an attempt to design a method around the patent, Service Engineering Corp. inadvertently crossed over into Embrex’s patent scope. Although its method had failed, the Federal Circuit still found the inadvertent use to be infringement. The court recognized early precedent for exceptions for amusement, satisfying idle curiosity or strictly philosophical inquiry. However, the court still held that Service Engineering Corp. had conducted the tests in furtherance of its business venture and that experimentation done expressly for commercial purposes cannot be immunized from infringement under the experimental use exemption.

The Federal Circuit again limited the experimental use exception two years later in Madey v. Duke University. Madey, a research professor at Stanford University, owned a patent to two free electron lasers. He then brought the lasers with him to his new position at Duke University. Duke University continued to use the equipment after Madey resigned. The Federal Circuit reversed the lower court’s grant of summary judgment of non-infringement ruling that because Duke was a major academic institution in the business of research and education, the lower court should determine if the educational purpose was in the scope of the exception. On remand, the lower court found that even though the use of the patented invention was for educational purposes, it was still at least in part in furtherance of a legitimate business purpose and therefore did not qualify for the exception.

Based on the Madey decision, it appears that the Federal Circuit precludes experimental use of patented subject matter by all non-profit research organizations including federal laboratories, research foundations, and research hospitals. Further, these cases render any use of the patented invention for testing, designing around a patent, or in pursuit of scientific knowledge too closely related to business interests to be infringement. The only remaining scenario where the experimental use exception may be used is in the case of an individual’s general interest without any intention to profit. Even in this scenario, the use must only be de minimis, small-scale tinkering.

In reaction to Roche, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Act”) that passed an amendment codified as §271(e)(1) termed the “Safe Harbor Provision.” This rule exempts from infringement use of a patented invention solely for “uses reasonably related to the development and submission of information under the Federal Law which regulates the manufacture, use, or sale of drugs or veterinary biological products.” The Safe Harbor Provision is seen as a reversal of Roche. This allows generic drug companies to experiment with patented brand name drugs to make bioequivalencies, but actual submission of the data to the FDA would constitute an act of infringement. The exception expands over everything submitted to FDA, including medical devices.

The U.S. Supreme Court determined the scope of §271(e)(1) in Merck KGaA v. Integra Lifesciences I, Ltd. (2005). The Court held that the research must be “reasonably related” to the pursuit of information that would be used in FDA applications to qualify for the §271(e)(1) exception, even if the research at issue was ultimately not submitted to the FDA. It is important to note that neither §271(e)(1) nor the common-law exception were addressed by the Leahy-Smith America Invents Act (AIA) or its legislative history. Consequently, the USPTO has not taken a stance on whether the AIA changes the applicability of these exceptions. Most experts in the field advise inventors against relying on the experimental use exception except to the extent that §271(e)(1) applies.

Facts and Figures on New York State’s Innovation Growth

The Innovation Review has reported on numerous economic development resources and programs in New York State. It can be difficult to gauge how much impact these investments have had in New York’s innovation economy. Anecdotally, the New York State Science and Technology Law Center has seen a rise in projects both requested and undertaken. While correlation does not necessarily imply causation, data from the State Science and Technology Institute (SSTI), a national nonprofit organization that seeks to lead, support and strengthen efforts to improve state and regional economies through science, technology and innovation, has shown a marked growth in New York State in the areas of venture capital and intellectual property.


Change in US Venture Capital Investment Dollars over five years (2008-2013)
NY: 88.78%
CA: -1.53%
MA: -9.91%
RI, SC, ND, ME, DC, SD only states greater growth %


Change in US Venture Capital Investment Deals over five years (2008-2013)
NY: 51.72%
CA: -5.61%
MA: -20.97%
MI, OK, RI, TN, NE, DC only states greater growth %


Change in share of Total US Venture Capital investment dollars over five years (2008-2013)
NY: 4.70%
CA: 0.48%
MA: -0.86%


Change in number of Utility Patents by State over five years (2008-2013)
CA: 88.69%
MA: 82.28%
NY: 73.78%


Number of utility patents in 2013:
CA: 36,193 utility patents
NY: 8,489 utility patents
MA: 6,409 utility patents



Top 100 Patenting Universities 2012 (NYS has 9):
Columbia: 78 patents in 2012
NYU: 61 patents in 2012
Cornell: 55 patents in 2012
SUNY: 46 patents in 2012
University of Rochester: 27 patents in 2012
Rensselaer Polytechnic Institute: 16 patents in 2012
Rockefeller University: 15 patents in 2012
Yeshiva University: 13 patents in 2012
CUNY: 6 patents in 2012

Data sets used for information:
Utility and Design Patents by State, 2008-2013
U.S. Seed and Early Stage Venture Capital Investment by State, 2008-2013


Welcome to the February edition of the Innovation Review. This edition is heavy on issues related to big data, reflecting many state, national and international conversations on the topic. It’s been a busy month in the patent legislation area. The White House held a conference to update the public on what has happened in the arena of patent policy and announce new initiatives. State Attorney Generals have continued their efforts to limit patent abuse, recently by lobbying the Senate for patent reform, specifically seeking provisions to allow state consumer protection authorities more jurisdiction over “patent trolls.”

Staff and students from the New York State Science & Technology Law Center participated this month in another Pre-Seed Workshop, this one in Binghamton. NYS STLC Director Jack Rudnick will be appearing on WCNY’s Financial Fitness March 7th at 8pm. The topic is Developing a High Growth Economy in Upstate New York and will include Nasir Ali of Upstate Venture Connect and Somak Chattopadhyay ofArmory Square Ventures as panelists.

JD students are continuing their work on shorter term projects for companies and individuals with new technologies. Any entity seeking technology commercialization assistance is encouraged to fill out the online intake form on the NYS STLC website.

As always, please feel free to contact us with any questions or comments at

What is Big Data?

Big Data has been a hot topic gaining popularity in the media. But what is it? Big Data is a term for the collection of data sets that are large, complex, structured and unstructured. In the past, it has often been unmanageable and difficult to process using traditional database management tools and data processing applications but that has changed with increased computing power. Big Data is characterized by the sheer quantity of data generated, how fast the data is being produced and processed, and the variety of new sources of data.
Businesses have been hiring specialists and financing new technology hoping to gain the ability to organize and access these previously unimaginable amounts of data with the goal understanding relationships within and between the data. Finding relationships in the data may provide the business with valuable insights that can allow for better decision-making, which has the benefits of cost reductions, reduced risk, and greater operational efficiencies. Specific applications of Big Data analysis will vary depending on the business and the industry.

Businesses are not the only beneficiaries of Big Data mining. Individuals whose information is being used can get a direct benefit. For example, Netflix and Amazon provide highly customized recommendations to consumers based on analysis of their previous selections. Communities benefit from Big Data analysis when users of a similar product or residents of the same geographical area report adverse events of product usage or services. Finally, society benefits when Big Data is analyzed for national security purposes.

Although Big Data may have multiple applications, there are many potential limitations arising from legal issues of security, privacy, and consent. There has been recent controversy about the National Security Agency (NSA) and data collection. The NSA has collected information from organizations such as Microsoft, Apple, Google, Yahoo, YouTube, Skpe, and Facebook. However, there are many private organizations that are collecting data as well. There are rumors that there has been enough momentum to get some legislation passed on data privacy, especially after the recent Target hacking incident in late 2013. Members of Congress have expressed interest in laws protecting consumers’ data from being stolen and passed quickly. There are already four proposals this year for data security and breach notification legislation. However, potential legislation will be met head-on by retail and banking industries that are worried about increased regulations and the effects on their businesses.

Federal Trade Commission Spring Seminars on Emerging Consumer Privacy Issues

This spring, the Federal Trade Commission (FTC) is hosting a series of seminars examining the privacy implications of three new areas of technology that offer potential benefits as well as possible privacy concerns for consumers. Tools geared toward these three areas, mobile device tracking, alternative scoring products and consumer-generated and controlled health data, have become increasingly popular with businesses and as products for technology companies to invent and sell. Businesses see opportunities to increase efficiency and effectiveness in meeting consumers demands with the aid of these tools allowing them to track and analyze potential customers.Consumers, however, are becoming increasingly concerned about the lack of transparency that surrounds these efforts to collect and analyze personal data. The series is intended to bring together stakeholders on both sides to discuss the implications of each new area. Academic, business and industry representatives, and consumer advocates will participate in these two-hour discussion sessions, which will be held in Washington, D.C. and are open to the public. The FTC is inviting public comments and will issue staff reports after the sessions.

Mobile Device Tracking (February 19th)
The seminar on mobile device tracking was held Wednesday, February 19th at the FTC Conference Center in Washington D.C. Speakers discussed the tracking of consumers’ movements throughout and around retail stores and other attractions by retailers and other businesses. There are several technologies for this process and while they may differ, generally the tracking is invisible to consumers and occurs with no interaction. The seminar looked to answer some of the questions associated with these technologies and address consumer and business concerns in this area.

An archived webcast, list of speakers and rough transcript are available here.

Alternative Scoring Products (March 19th)

In efforts to minimize risk or maximize return on investment, many data brokers combine consumer data with specific algorithms or mining techniques to produce predictive scores based on trends and behaviors of customers. These predictive scores can be used for a wide range of purposes, from identity verification and fraud prevention to marketing and advertising. Consumers have little to no access to the underlying data that comprises these scores and are largely unaware of this behind the scenes process. The March 19, 2014 seminar on alternative scoring products will discuss the various questions and concerns that surround the production of these predictive scores.

Consumer Generated and Controlled Health Data (May 7th)

The abundance of information available online and the new computing capabilities and portability of smart devices has allowed consumers to become more active in managing and generating their own health data. The information consumers collect from connecting health and fitness devices can be transmitted to other entities. While the abundance of personal health information may be beneficial for consumers, this data is outside the traditional medical provider context where much of the privacy legislation, like HIPAA, is geared. The May 7, 2014 seminar on consumer generated and controlled health data will raise these examine these potential privacy concerns as well as the benefits provided.

For more information on any of the seminars or to leave public comments visit the Spring Privacy Series webpage.

Careers in the Area of Technology Commercialization

Technology commercialization is a unique interdisciplinary field with many potential career opportunities. A major misconception is that attorneys trained in this field can only pursue careers in intellectual property law, specifically patent law at law firms or as in-house counsel to private companies. Although many attorneys do choose this traditional route, there is an array of non-traditional career options.

Working for the government is one option. Traditional careers might be in the U.S. Patent and Trademark Office or the Copyright Office. However, attorneys have found careers in other departments as well, such as: the Federal Trade Commission, the Securities and Exchange Commission, the Department of Commerce, military departments, and the Department of Health and Human Services, specifically National Institutes of Health. Many state governments also seek applicants with knowledge of technology and commercialization law. New York offers careers in its Division of Science, Technology and Innovation as well as in the Office of Information Technology Services. Similarly, California has a Department of Technology that offers careers in its Information Technology and Statewide Technology Procurement divisions.

A second area for non-traditional employment that is growing in popularity is at consulting firms. Consulting firms traditionally looked for M.B.A. candidates, but have recently been considering J.D. and J.D./M.B.A. candidates. With a background in technology and commercialization law, attorneys can provide a technology analysis, intellectual property landscape, regulatory guidance, a competitive landscape, market analysis, and recommendations. These are all skills developed during the study of technology and commercialization law and they map well onto a career in consulting.

Finally, university technology transfer offices require many of the skills that attorneys in the field of technology commercialization have acquired. Technology transfer offices conduct technology assessments and research businesses that might want to purchase or license technologies made by university faculty, researchers, students, and staff. Employees not only negotiate intellectual property licenses, but often interact with inventors in order to secure intellectual property protection. Attorneys at technology transfer offices also conduct patent searches and guide inventors through the patenting process with outside counsel. In addition, attorneys in these offices help businesses that license technologies from university with commercialization grant applications. These are just a few of non-traditional careers for attorneys trained in technology and commercialization law.