Introduction

What is technology transfer?

Technology transfer is the transfer of knowledge and discoveries to the public. It can occur through publications, educated students entering the workforce, exchanges at conferences, and relationships with industry, among other things. U-M Tech Transfer focuses on the formal licensing of technology to third parties under the guidance of professionals employed by universities, research foundations, and businesses.

Who is U-M Tech Transfer?

U-M Tech Transfer is a University service unit composed of specialists in licensing, business development, and legal matters who are experienced in transferring technologies from the physical sciences, life sciences, and information and computer sciences. We are responsible for managing invention reports from all schools and colleges on the Ann Arbor campus, as well as U-M’s Dearborn and Flint campuses.

How do I work with U-M Tech Transfer?

We encourage you to contact U-M Tech Transfer during your early research activities to be aware of the options that will best leverage the commercial potential of your research. Tech Transfer staff are trained to assist you with questions related to marketability, funding sources, commercial partners, patenting and other protection methods, new business startup considerations, University policies and procedures, and much more. Our team approach provides you with an assigned licensing specialist supported by internal legal assistance, and, if a new business startup is being considered, a new business development specialist as well.

How is technology transferred?

Technology is typically transferred through a license agreement in which U-M grants its rights in the defined technology to a third party for a period of years, often limited to a particular field of use and/or region of the world. The licensee (the third party licensing the technology) may be an established company or a new business startup. Licenses include terms that require the licensee to meet certain performance requirements and to make financial payments to U-M. These payments are shared with the inventors and are also distributed to the schools/colleges, departments/units, and central administration to provide support for further research, education, and participation in the tech transfer process.

How long does the tech transfer process take?

The process of protecting the technology and finding the right licensing partner may take months—or even years—to complete. The amount of time will depend on the development stage of the technology, the market for the technology, competing technologies, the amount of work needed to bring a new concept to market-ready status, and the resources and willingness of the licensees and the inventors.

Why would a researcher want to participate in the technology transfer process?

The reasons are unique to each researcher but may include:

  • Making a positive impact on society
  • Feeling a sense of personal fulfillment
  • Achieving recognition and financial rewards
  • Generating additional lab/departmental funding
  • Meeting the obligations of a research contract
  • Attracting research sponsors
  • Creating educational opportunities for students
  • Linking students to future job opportunities

How can I help in this process?

    Call U-M Tech Transfer at 734.763.0614 or visit www.techtransfer.umich.edu when you believe you have created or discovered something unique with potential commercial or research value. Complete and submit the U-M Invention Report Form before publicly disclosing your technology or submitting a manuscript for review and publication. Please make sure to list any sponsored programs that were used in support of the invention (federal, foundation or industry) as well as any materials received from third parties used in development of the invention. Also list any potential investors from other institutions or companies.

    To avoid risking your patent rights and possibly hindering the opportunity to market your invention, contact U-M Tech Transfer before holding any discussions with people or companies outside the U-M community. On the U-M Invention Report Form, include companies and contacts you believe might be interested in your invention or who may have already contacted you about your invention. Studies have shown that over 70% of all licenses are executed with commercial entities known by the inventor, so your contacts can be extremely useful.

    Respond to U-M Tech Transfer and outside patent counsel requests. While some aspects of the patent and licensing process may require significant participation on your part, we will strive to make efficient use of your valuable time. Keep U-M Tech Transfer informed of upcoming publications or interactions with companies related to your intellectual property.

What are the typical steps in the process?

    Research

      Observations and experiments during research activities often lead to discoveries and inventions. An invention is any useful process, machine, composition of matter, or any new or useful improvement of the same. Inventions also may include software, website content and other educational or research content. Often, multiple researchers may have contributed to the invention.

    Pre-Disclosure

      An early contact with U-M Tech Transfer licensing professionals to discuss your invention and to provide guidance with respect to the disclosure, evaluation, and protection processes described below.

    Invention Report

      The written notice of invention to U-M Tech Transfer that begins the formal technology transfer process. An invention report remains a confidential document and should fully document your invention so that the options for commercialization can be evaluated and pursued.

    Assessment

      The period in which you and your U-M Tech Transfer representative review the invention report, conduct prior art searches (if applicable), and analyze the market and competitive technologies to determine the invention’s commercialization potential. U-M Tech Transfer will produce a “Fellows Report” for most inventions. This report will be provided to you and will include general market research, identification of potential licensees, a preliminary prior art search, and a marketing abstract which we may post on our website of available technologies and use in marketing to potential licensees.
      This evaluation process, which may lead to a broadening or refinement of the invention, will guide our strategy for protection, marketing to potential licensees and on whether to focus on licensing to an existing company or creating a new business startup. For more information on the fellows report process, see here.

    Protection

      The process in which protection for an invention is pursued. Patent protection, a common legal protection method, begins with the filing of a patent application with the U.S. Patent Office and, when appropriate, foreign patent offices. Once a patent application has been filed, it typically will require several years and tens of thousands of dollars to obtain issued U.S. and foreign patents. Other protection methods include copyright, trademark, trade secrets, and contractual use restrictions (e.g., for databases and materials).

    Marketing

      With your active involvement, U-M Tech Transfer staff identify candidate companies that have the expertise, resources, and business networks to bring the technology to market. This may involve partnering with an existing company or forming a startup. Your active involvement can dramatically shorten this process.

    Selecting a licensee

      If creation of a new business startup has been chosen as the optimal commercialization path, U-M Tech Transfer business development specialists will work as business formation consultants to assist the founders in planning, forming, and funding the startup. If an appropriate and interested existing company, or companies, are selected as a potential licensee, U-M Tech Transfer licensing specialists work with those potential licensees to develop the appropriate financial and diligence terms in an eventual license agreement to fully commercialize the technology.

    Licensing

      A license agreement is a contract between U-M and a third party in which U-M’s rights to a technology are licensed, without relinquishing ownership, for financial and other benefits. A license agreement is used with both a new startup business or with an established company. An option agreement is sometimes used to enable a third party to evaluate the technology for a limited time (usually 6 months to a year) prior to making a decision about licensing.

    Commercialization

      The licensee continues the advancement of the technology and makes other business investments to develop the product or service. This step may entail further development, sponsored research at U-M, consulting agreements with the inventors, regulatory approvals, sales and marketing support, training, and other activities.

    Revenue

      Revenues received by U-M from licenses are distributed to schools, colleges, departments, units, central administration, and inventors to fund additional research and education and to encourage further participation in the tech transfer process.

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Pre-Disclosure

What is the “pre-disclosure” period of tech transfer?

This is simply the term that U-M Tech Transfer uses to refer to the stage in which we work with inventors prior to the time that they file a formal Invention Report.

What takes place during the “pre-disclosure” stage of the tech transfer process?

Your Tech Transfer licensing representative will explain our process to you and sketch out a rough outline of the various steps we’ll move through to get your invention to the marketplace. You will be given advice as to when you should formally report your invention and told what you are likely to need in terms of research findings in order to be successful. U-M Tech Transfer may also begin a preliminary market and patent assessment by looking into competing technologies and other institutions or companies working in your invention area as well as determining the current patent landscape. Any information you have concerning what other universities and companies are doing in your technology area could be very helpful to us. It would also be helpful during this first meeting if you had your lab notebooks, a rough timeline covering your discovery process, past and planned publications and additional research and experimentation, and a list of your applicable funding sources. Researchers who are considering starting up a company may also elect to meet with venture center specialists at the U-M Tech Transfer’s Venture Center.

What are the factors that I should consider prior to filing an invention report with U-M Tech Transfer?

U-M researchers are encouraged to contact the Tech Transfer office early in the discovery process. While your invention may not be at a stage appropriate for a patent filing, our licensing representatives can work with you to lay out a path for the future, letting you know what data/results you will need before the invention is ready for the next step and potentially patent protection. We can also start discussing possible paths toward commercialization including a variety of funding sources for further development of your idea. As patent protection in some countries is lost upon public disclosure of your technology, it is imperative that you talk with a representative of U-M Tech Transfer prior to publishing your research findings or sharing them with any third party by way of a public presentation (meetings, on-line abstracts, theses, dissertations, etc).

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Invention Report

What is an Invention Report?

An Invention Report is a written description of your invention or development that U-M inventors provide to U-M Tech Transfer. Invention Reports are preferably submitted electronically; further information about this process is prominently displayed on the U-M Tech Transfer website. The Invention Report should list all collaborating sources of support and include all of the information necessary to begin pursuing protection, marketing, and commercialization activities. Please attach any draft manuscripts or pending grant proposals in order to simplify the process.

Why should I submit an Invention Report and what action does it trigger?

When you submit your Invention Report to U-M Tech Transfer, it starts a process that could lead to the protection and commercialization of your technology. This may involve beginning the process of filing for patent protection and/or working to identify outside development partners. Federal grants generally require disclosure of inventions to the sponsoring agency, and U-M Tech Transfer will handle this for you; the first step to this process is your Invention Report to U-M Tech Transfer. Similar requirements may exist for other sponsored projects. U-M Tech Transfer treats submitted Invention Reports as confidential information. Based on the Invention Report, U-M Tech Transfer may generate a non-confidential description of your invention in order to assist in marketing the technology. Subsequently-filed patent applications based on the Invention Report will eventually be published by the Patent Office.

How do I know if my discovery is an invention?

U-M Tech Transfer will perform the analysis for you. You are encouraged to submit an Invention Report for all inventions and developments that you feel may solve a significant problem and/or have significant value. If you are in doubt, contact a U-M Tech Transfer licensing specialist to discuss the invention and strategies for commercialization.

When should I complete an Invention Report?

You should complete an Invention Report whenever you feel you have discovered something unique with possible commercial value. This should be done well before presenting the discovery through publications, poster sessions, conferences, press releases, or other communications. If an invention is publicly disclosed (i.e., published or presented in some form) prior to the filing of a patent application, the invention cannot be patented outside of the United States, though U.S. protection may still be available. Be sure to inform U-M Tech Transfer of any imminent or prior presentation, lecture, poster, abstract, website description, research proposal, dissertation/masters thesis, publication, or other public presentation including the invention.

Should I file an Invention Report on research tools?

Typically, research tools are materials such as antibodies, vectors, plasmids, cell lines, mice, rats and other materials used as “tools” in the research process. If your new tools would benefit other researchers and you are interested in providing them to those researchers (and/or other third parties) it is a good idea for you to report them to UM-Tech Transfer. U-M Tech Transfer will work with you to develop the appropriate protection, licensing, and distribution strategy. UM-Tech Transfer will also work with you if you want to send your research tools to third party providers such as ATCC, Jackson Lab, and Addgene. Most research tools do not necessarily need to be protected by patents in order to be licensed to commercial third parties and/or generate revenue for your laboratory.

Should I file an Invention Report on software, content, databases, apps, websites, etc.?

Yes, please file an Invention Report if you have new software, content, databases, apps, and websites that might have commercial value. U-M Tech Transfer provides a number of resources for development and commercialization of software, and mobile and digital based technologies. Click here for the Digital Discovery site.

How do I submit an Invention Report?

Invention Disclosures are primarily submitted online, and that process is described on our website. If you have any questions, or would like help submitting your Invention Report through another method, call U-M Tech Transfer at 734.763.0614 or email us at techtransfer@umich.edu.

Who is an “Inventor” under U-M policy for the purposes of tech transfer?

There are three applicable definitions depending upon the type of intellectual property. With respect to patentable subject matter, an Inventor is an employee who has made an inventive contribution as defined under U.S. patent laws, meaning that an Inventor must have contributed to the conception of ideas claimed in a patent. With respect to software and other copyrightable materials and associated trade and service marks, an Inventor is an employee who has participated (a) materially in the conception of the idea of the operation or design thereof (e.g., the operation of software) or (b) extensively in translating an idea into a fixed medium. With respect to unpatented biologic and chemical materials or laboratory animals, an Inventor is an employee who has taken part (a) in the conception of the idea of the specific material that is to be made and/or (b) significantly in making the material but only where making the material was not a routine or known practice; a person providing material to a second person that uses the material to produce a new material generally will not be considered to be an Inventor of the new material.

How should the U-M community go about identifying Inventors to be named on an Invention Report?

Using the policy as a guide, you should attempt to identify all those individuals that might possibly be “Inventors” under the policy. Once the group of potential Inventors is identified, Tech Transfer can help identify those that are actually Inventors under U-M policies. Inventorship determinations on patent applications are made by U-M’s outside patent counsel.

Should I list visiting scientists or scientists at other institutions/companies on my Invention Report?

All contributors to the ideas leading to a discovery should be mentioned in your disclosure, even if they are not U-M employees. U-M Tech Transfer, along with U-M patent counsel, will determine the rights of such persons and institutions. It is prudent to discuss with U-M Tech Transfer all working relationships (preferably before they begin) to understand the implications for any subsequent inventions.

What if I created the invention with someone from another institution or company?

U-M Tech Transfer will work with the other institution or company to find the best solution for managing the invention. If there is a sponsored research agreement or consulting agreement with a company that relates to your invention, the Tech Transfer licensing specialist will need to review that agreement to determine ownership and other rights associated with the contract, and to determine the appropriate next steps. Should the technology be jointly owned with another academic institution, the licensing specialist will usually enter into an “inter-institutional” agreement that provides for one of the institutions to take the lead in protecting and licensing the invention, sharing of expenses associated with the patenting process, and allocating any licensing revenues. If the technology is jointly owned with another company, the licensing specialist will work with the company to determine the appropriate patenting and licensing strategy.

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Assessment

How does U-M assess Invention Reports?

Licensing Specialists at U-M Tech Transfer examine each Invention Report to consider a host of issues, including the novelty of the invention, whether it can be protected by patent or other legal protection, marketability of potential products or services, relationship to related intellectual property, size and growth potential of the relevant market, amount of time and money required for further development, pre-existing rights associated with the intellectual property, and potential competition from other products/technologies. This assessment may also include consideration of whether the intellectual property can be the basis for a new business startup.

What is the Tech Transfer Fellows Program and what is a Fellows Report?

The Tech Transfer Fellows Program is run by Tech Transfer to assist in assessment of inventions. Tech Transfer Fellows, all of whom are U-M graduate students or post-doctoral students, assist OTT in the technical and commercial evaluation of new inventions at University of Michigan in their fields of study. A Fellows Report is an initial technology and market assessment completed by one of the Fellows and reviewed by the assigned Tech Transfer Licensing Specialist. The Fellows Reports are shared with the inventors for discussion with the Licensing Specialist. Typical Fellows Reports include: scientific, market, prior art and patent research and analysis; assessment of commercial viability of new inventions; categorizing inventions into application specific or industry segments; technology marketing abstract composition; and identifying potential licensees or investors.

If the inventors believe that their invention should be licensed non-exclusively to all potential users for the public good, will U-M honor our request?

UM Tech Transfer will work with you to develop the appropriate commercialization strategy for the invention. Some technologies lend themselves to non-exclusive licensing (licensing to multiple third parties), while others will only reach the commercial marketplace, and therefore the public, if they are licensed on an exclusive basis. We will try to accommodate inventors’ commercialization wishes. However, the final decision will be determined by our assessment of which strategy will produce the most benefits for the general public, consistent with governmental or institutional policies and other obligations.

How does U-M Tech Transfer decide whether to commercialize with a traditional or an “open source” license for software?

U-M Tech Transfer supports University software developers who choose to allow third parties to use their software at no charge. Depending upon the circumstances, there are a wide variety of mechanisms for accomplishing this, such as “open source” licensing, dual licensing (distinguishing licensing terms based upon whether the use is commercial in nature), etc.

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Intellectual Property Protection

Patents

    What is a patent?

    Although rights may vary from country to country, in general, a patent gives the holder the right to exclude others from making, using, selling, offering to sell, and importing the patented invention. Because it represent a “right to exclude,” a patent does not necessarily provide the holder any affirmative right to practice a technology; that practice may fall under a broader patent(s) owned by others. A patent has two major components: (a) the “specification” (a technical discussion about the invention and how to practice it); and (b) the “claims” (the legal definition of an inventor’s protectable invention).

    What is the United States Patent and Trademark Office (PTO)?

    The PTO is the federal agency, organized under the Department of Commerce, that administers patents on behalf of the U.S. government. The PTO employs patent examiners skilled in all technical fields in order to appraise patent applications. The PTO also issues federal trademark registrations.

    What type of subject matter can be patented?

    Patentable subject matter includes processes, machines, compositions of matter, articles, some computer programs, and methods (including methods of making compositions, methods of making articles, and even methods of performing business). The type of inventions that are patentable vary from country to country.

    Can software be patented?

    Some software is patentable, and U-M Tech Transfer evaluates the possibility of filing a patent application on software disclosed in Invention Reports; but in most cases patenting is not the preferred pathway for IP protection for software. This is due to a variety of factors, including the recently heightened burden in proving that a software invention is patentable, challenges in proving infringement if a patent is obtained, and the speed at which software markets and products change. In most cases, copyright protection is sufficient to enable commercialization of software.

    What is the definition of an inventor on a patent and who determines this?

    Under U.S. law, an inventor is a person who takes part in the conception of the ideas in the patent claims of a patent application. Thus, inventorship of a patent application may change as the patent claims are changed during prosecution of the application. An employer or person who only highlights a problem or furnishes money to build or practice an invention is not an inventor. Inventorship is a legal issue and may require an intricate legal determination by the patent attorney prosecuting the application.

    What is the patenting process?

    Patent applications are drafted and filed by a patent attorney or a patent agent (a non-attorney with a science education licensed to practice by the PTO); at U-M, we retain outside patent counsel to draft patent applications. In about one year or longer (depending on PTO backlog in your technology area) the patent attorney will receive written notice from the PTO as to whether the application and its claims have been accepted in the form as filed. More often than not, the PTO rejects the application because either certain formalities need to be cleared up, or because the PTO argues that the claims are not patentable over the “prior art” (anything that workers in the field have publicly disclosed in the past). The letter sent by the PTO is referred to as an “Office Action” or “Official Action.”

    If the application is rejected, the patent attorney must file a written response, usually within three months in order to avoid government late fees. Generally the attorney may amend the claims and/or point out why the PTO’s position is incorrect. This procedure is referred to as patent prosecution. Often it will take two PTO Official Actions and two responses by the patent attorney—and sometimes more—before the application is resolved. The resolution can take the form of a PTO notice that the application is “allowable” – in other words, the PTO agrees to issue a patent. This process is referred to as “patent prosecution.”

    How are inventors involved in the patenting process?

    The patent attorney generally will ask you to review an application before it is filed and will also ask you questions in order to determine inventorship of the application’s claims. At the time an application is filed, the patent attorney or U-M Tech Transfer will ask the inventor(s) to sign a “Declaration” (which basically says that the inventor made the invention himself and agrees to tell the truth during patent prosecution) and an “Assignment” (which evidences the inventor’s duty to assign the patent to U-M). In addition, Inventors have an obligation to provide to our patent attorney any relevant publications or information that may be relevant to the invention; failure to disclose such information may render any issued patent unenforceable or invalid. During the patent prosecution process, input from the inventor(s) is often needed to confirm the patent attorney’s understanding of the technical aspects of the invention and/or the prior art cited against the application.

    What does it cost to file for and obtain a patent?

    Obtaining a patent is expensive. Filing a regular U.S. patent application typically costs between $10,000 and $15,000. To obtain an issued patent may require an additional $10,000 to $20,000 for patent prosecution. Filing and obtaining issued patents in other countries may cost $20,000 or more per country. Also, once a patent is issued in the U.S or in foreign countries, certain government fees are required to keep the patent alive (referred to as “maintenance fees” in the U.S. and “annuities” in other countries).

    What does “first-to-file” patent system mean?

    The U.S. changed to a “first-to-file” patent law in 2013. First-to-file is a shorthanded way of referring to how one defines “prior art.” If two inventors independently seek patent protection for the same invention, the inventor that first filed her/his application will be awarded the patent on that invention (assuming that the application fully describes and enables the invention). Under our old system, in many such cases, a process would be used to determine which inventor made the invention first. While there is a lot of literature on the subject, the reality is that in practice our new law will not affect a lot of competing inventors.

    What is the effect on patenting if I publish the results of my research?

    Publishing or presenting can prevent us from obtaining patent protection, so U-M Tech Transfer would like to know about your invention before you publish on it. There are significant differences between the U.S. and other countries as to how early publication affects a potential patent. Once publicly disclosed (published or presented in some form), an invention may have a restricted or minimal potential for patent protection outside of the United States. Since patent rights are affected by publishing or presenting, it is best to submit an Invention Report or call your licensing specialist well before communicating or disclosing your invention to people outside the U-M community. Even after you submit an Invention Report, be sure to inform the Tech Transfer licensing specialist assigned to you of any imminent or prior presentation, lecture, poster, abstract, website description, research proposal submission, dissertation/masters thesis, publication, or other public presentation describing any part of the invention. Submitting a manuscript to your licensing specialist at the same time you submit to a journal for publication can be extremely helpful for both the marketing and licensing process as well as for the patent attorney assigned to the case.

    Is there any effect or implication from the order of inventors named in a patent application or patent?

    Not at all. It is absolutely different than for publications.

    Are patent applications kept secret?

    The PTO holds patent applications confidential until published by the PTO, 18 months after initial filing. After that time, both the application and the PTO’s prosecution materials related to the application are publicly available.

    What is a provisional patent application?

    In the U.S., we have two types of patent applications, one called “provisional” and the other called “nonprovisional”. The main difference between the two is that the PTO will not perform an examination of a provisional application. The provisional must be filed as a nonprovisional within one year of the nonprovisional filing, but the provisional provides a effective filing date for a nonprovisional application that claims inventions described in the provisional application. In short, filing a patent application as a provisional is a procedural designation and does not necessarily make the filing much less expensive or require less work on our part. It is common for U-M to file provisional applications with a full set of claims.

    Why file a provisional patent application as opposed to a regular (“nonprovisional” or “utility”) patent application?

    In certain circumstances, U.S. provisional patent applications can provide a tool for preserving patent rights while postponing the cost of negotiating the patent application with the PTO. This occurs because a provisional application is not examined during the year in which it is pending and claims are not required. A regular U.S. application and related foreign applications must be filed within one year of filing the provisional application in order to receive its early filing date. However, an applicant only receives the benefit of the earlier filing date for material that is adequately described and enabled in the provisional application. As a result, the patent attorney likely will need your assistance when an application is filed as a provisional.

    What’s different about foreign patent protection?

    Foreign patent protection is subject to the laws of each individual country, although in a general sense the process works much the same as it does in the United States. In foreign countries, however, an inventor will lose any patent rights if he or she publicly discloses the invention prior to filing the patent application. In contrast, the United States has a one-year grace period for public disclosures by an inventor.

    What about Europe?

    Europe is working toward a unified patent system that will treat patents obtained there much as if Europe were a single country.

    Who is responsible for patenting?

    U-M Tech Transfer contracts with outside patent counsel for IP protection, thus assuring access to patent specialists in diverse technology areas. Inventors work with the patent counsel in drafting the patent applications and responses to worldwide patent offices. U-M licensing specialists and in-house attorneys will help with the selection and oversight of the outside patent counsel.

    Is there such a thing as an international patent?

    Although an international patent does not exist, an international agreement known as the Patent Cooperation Treaty (PCT) provides a streamlined filing procedure for most industrialized nations. The best way to think about it is that while there are international patent applications, there is no such thing as an international patent. For U.S. applicants, a PCT application is generally filed one year after the corresponding U.S. application (either provisional or regular) has been submitted. The PCT application must later be filed in the national patent office of any country in which the applicant wishes to seek patent protection, generally within 30 months of the earliest claimed filing date. The PCT provides two advantages. First, it delays the need to file costly foreign applications until the 30-month date, often after an applicant has the opportunity to further develop, evaluate and/or market the invention for licensing. Second, the international preliminary examination often allows an applicant to simplify the patent prosecution process by having a single examiner speak to the patentability of the claims, which can save significant costs in prosecuting foreign patent applications. An important international treaty called the Paris Convention permits a patent application filed in a second country (or a PCT application) to claim the benefit of the filing date of an application filed in a first country. However, pursuant to this treaty, these so-called “convention applications” must be filed in foreign countries (or as a PCT) within one year of the first filing date of the U.S. application.

    What is the timeline of the patenting process and resulting protection?

    Currently, the average U.S. utility patent application is pending for about two years, though inventors in the biotech and computer fields should plan on a longer waiting period. Once a patent is issued, it is generally enforceable for 20 years from the initial filing of the application that resulted in the patent, assuming that PTO-mandated maintenance fees are paid. The actual life of the patent may vary based on its lineage and whether the PTO grants any additional time extensions.

    Why does U-M protect some intellectual property through patenting?

    Patent protection is often a requirement of a potential commercialization partner (licensee) because it can protect the commercial partner’s often sizable investment required to bring the technology to market. Due to their expense and the length of time required to obtain a patent, patent applications are not possible or appropriate for all U-M intellectual property. We carefully review the commercial potential for an invention before investing in the patent process. However, because the need for commencing a patent filing usually precedes finding a licensee, we look for creative and cost-effective ways to seek early protections for as many promising inventions as possible.

    Who decides what gets protected?

    U-M Tech Transfer and the inventor(s) consider relevant factors in making recommendations about filing patent applications. Based on a recommendation from the licensing specialist, the Associate Vice President of Research for Tech Transfer and Managing Director of Licensing at Tech Transfer ultimately make the final decision as to whether to file a patent application or seek another form of protection.

    Will U-M initiate or continue patenting activity without an identified licensee?

    Often U-M accepts the risk of filing a patent application before a licensee has been identified. After U-M’s patent rights have been licensed to a licensee, the licensee generally pays the patenting expenses, especially where the license is exclusive. At times U-M Tech Transfer must decline further patent prosecution after a reasonable period (often a year or two) of attempting to identify a licensee, or if it is determined that we cannot obtain reasonable claims from the PTO.

Copyright and Trademark

    What is a copyright and how is it useful?

    Copyright is a form of protection provided by the laws of the United States to the authors of “original works of authorship.” This includes literary, dramatic, musical, artistic, and certain other intellectual works as well as computer software. This protection is available to both published and unpublished works. The Copyright Act generally gives the owner of copyright the exclusive right to conduct and authorize various acts, including reproduction, public performance and making derivative works.

    Does U-M Tech Transfer file copyright registrations with the Copyright Office?

    Rarely. Copyright protection is automatically secured when a work is fixed into a tangible medium such as a book, software code, video, mobile app, etc. In some instances, U-M registers copyrights, but generally not until a commercial product is ready for manufacture.

    How can I learn more about University copyright policies?

    We recommend that you begin by reviewing material on U-M’s copyright website. If you have additional questions about a potentially copyrightable invention, please contact U-M Tech Transfer.

    Who at U-M handles commercialization of copyrightable materials?

    The Office of Technology Transfer is always available to answer questions, though SPG 601.28 (“Who holds copyright at or in affiliation with the University of Michigan”) speaks to responsibility for licensing copyrightable materials: “Ordinarily, the University units most closely associated with the creation of specific University held works may authorize uses of those works (e.g., they may authorize a third-party to copy, adapt, or distribute a University held work). The disposition of the following University held works, however, shall be managed by the Office of Technology Transfer: software intended to be revenue generating; software funded under a sponsored activity agreement; and any Deliverables funded under a sponsored activity agreement.”

    What is a derivative work?

    A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represents an original work of authorship, is a “derivative work.” The owner of a copyright generally has the exclusive right to create derivative works.

    How do I represent a proper University copyright notice?

    Although copyrightable works do not require a copyright notice, we recommend that you use one. For works owned by U-M, use the following template: [Year of first publication] © The Regents of the University of Michigan. (e.g., 2016 © The Regents of the University of Michigan).

    What is a trademark or service mark and how is it useful?

    A trademark includes any word, name, symbol, device, or combination, that is used in commerce to identify and distinguish the goods of one manufacturer or seller from those manufactured or sold by others, and also to indicate the source of the goods. In short, a trademark is a brand name. A service mark is any word, name, symbol, device, or combination that is used, or intended to be used, in commerce to identify and distinguish the services of one provider from those of others, and to indicate the source of the services.

    What is trademark registration?

    Trademark registration is a procedure in which the United States Patent and Trademark Office (PTO) provides a determination of rights based upon legitimate use of the mark. However, it is not necessary to register a trademark or service mark to prevent others from infringing upon the trademark. Trademarks generally become protected as soon as they are adopted by an organization and used in commerce, even before registration. With a federal trademark registration, the registrant is presumed to be entitled to use the trademark throughout the United States for the goods or services for which the trademark is registered.

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Marketing an Invention to Identify Potential Licensees

How does U-M Tech Transfer market my inventions?

Licensing specialists use many sources and strategies to identify potential licensees and market inventions. Most often, existing relationships of the inventors, the Tech Transfer staff, and other researchers are useful in marketing an invention. Market research can assist in identifying prospective licensees. We also examine other complementary technologies and agreements to assist our efforts. We use our website to post inventions, leverage conferences and industry events, and make direct contacts. Faculty publications and presentations are often excellent marketing tools as well.

How are most licensees found?

Nationwide studies of university licensing have shown that 70% of licenses result from contacts already known by the inventors. Thus research, consulting relationships, alumni, and even former students and postdocs, are often a valuable source for identifying licensees. Licensees are also identified through existing relationships of the Tech Transfer staff. Our licensees often license more than one technology from U-M. We attempt to broaden these relationships through contacts obtained from website posting inquiries, market research, industry events and the cultivation of existing licensing relationships.

How long does it take to find a potential licensee?

It can take months and sometimes years to locate a potential licensee, depending on the attractiveness of the invention, its stage of development, competing technologies, and the size and intensity of the market. Most university inventions tend to be in the early stage in the development cycle and thus require substantial commercialization investment, making it difficult to immediately attract a licensee.

How can I assist in marketing my invention?

Your active involvement can dramatically improve the chances of matching an invention to an outside company. Your research and consulting relationships are often helpful in both identifying potential licensees and technology champions within companies. Once interested companies are identified, the inventor is the best person to describe the details of the invention and its technical advantages. The most successful tech transfer results are obtained when the inventor and the licensing professional work together as a team to market and sell the technology.

Can there be more than one licensee?

Yes, an invention can be licensed to multiple licensees, either non-exclusively to several companies or exclusively to several companies, each for a unique field-of-use (application) or geography.

How does U-M Tech Transfer market software and mobile apps?

Software and mobile apps may be commercialized in different ways than patented inventions. While U-M Tech Transfer typically seeks a partner licensee to develop and make new products based on patented U-M inventions, sometimes U-M software and mobile apps are in a form more ready to be used by the public. Consequently, U-M Tech Transfer may market software and mobile apps to end users a bit more directly, for example (a) via the U-M Tech Transfer site or (b) via third party technology aggregators such a iBridge, Nouvant and AUTM Global Technology portal; via direct outreach to the trade; newsletters; conferences; open source communities; and various technology platforms including the Apple App Store, Google Play, Apervita, Algorithmia and others.

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Startups

What is a startup company and why choose to create one?

A startup is a new business entity formed to commercialize one or more related inventions. Forming a startup company is an alternative to licensing the IP to an established business. A few key factors when considering a startup company are:

  • development risk (often companies in established industries are unwilling to take the risk)
  • development costs versus investment return (can the investors obtain their needed rates of return)
  • potential for multiple products or services from the same technology (few companies survive on one product alone)
  • sufficiently large competitive advantage and target market
  • potential revenues sufficient to sustain and grow a company

U-M Tech Transfer can help evaluate these and other factors. For additional information and available resources, see here.

Who decides whether to form a startup?

The choice whether to license to a startup for commercializing IP is a joint decision made by U-M Tech Transfer and the inventors. The startup is actually formed by those outside of U-M, but if a new business startup is chosen as the preferred commercialization path, U-M Tech Transfer new business development specialists will assist you in planning and executing the process. These staff members act as business formation consultants, providing hands-on assistance and access to University and outside resources.

What resources are available to the inventor interested in taking part in a startup effort?

Resources include mentors-in-residence (MIRs) new business formation specialists. These individuals serve as coaches, advisors, resource locators and project planners to help fill the gap between the technology and the formation of a startup. Their activities may include locating prospective management talent, developing a funding strategy, making introductions to probable investors, reviewing business plans, and engaging experts to work on key gating issues. New business development professionals can also draw upon an extensive network of resources and experience to assist you. For more information on the Mentors-in-Residence Program, see here.

What role does an inventor usually play in a company?

U-M faculty typically serve as technology consultants, advisers or in some other technical developmental capacity. Rarely do faculty choose to leave U-M and join the startup although some choose to work at the startup company during a planned sabbatical or choose to take a reduced appointment for a defined period of time. In many cases, the faculty role is suggested by the startup investors and management team who identify the best role based on the inventor’s expertise and interests. As the company matures, and additional investment is required, the inventor’s role may change. Faculty involvement of any kind in a startup is also reviewed by a U-M Conflict of Interest Committee. Student inventors and post-docs may choose to join the startup upon graduation but rarely have the experience or business skills to serve as the company’s sole management.

How much of my time and effort will it take?

Starting a company requires a considerable amount of time and effort. Until the startup team is identified and engaged, the faculty member will need to champion the formation effort. After the team is in place, effort is required for investor discussions, formal responsibilities in or with the company, and University processes such as conflict of interest reviews.

What assistance and resources are available to the inventor?

The new business formation specialists serve as coaches, advisors, resource locators and project planners to help fill the gap between the technology and the formation of a startup. Their activities may include locating prospective management talent, developing a funding strategy, determining the appropriate regulatory path, making introductions to probable investors, reviewing business plans, and engaging experts to work on key gating issues. New business development professionals can also draw upon an extensive network of resources and experience to assist you.

Will U-M pay for or lead the incorporation of a startup company?

No. As a separate entity, the startup should pay for its own legal matters, including all business incorporation matters and patent and licensing expenses.

What legal assistance is needed in creating a startup company?

In addition to corporate counsel, the startup may have its own intellectual property counsel to assist with corporate patent strategy, especially if the company will be involved in a patent-rich area. The startup’s counsel must be separate from U-M counsel, though it is advisable and recommended that the corporate IP Counsel and the U-M Patent Counsel coordinate activities. Also, it is wise for inventors to have agreements regarding their roles with the startup reviewed by their own counsel to ensure that all personal ramifications—including taxation and liabilities—are clearly understood. For additional information and available resources, see here.

Can U-M accept equity in the company?

U-M can accept equity as part of the financial terms of a license. Equity may be substituted for other cash considerations that are often difficult for startups. It is also a way for U-M to share some of the risk associated with startups. A decision to take equity must make sense for both U-M and the company.

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Licensing and Commercialization

Into what types of agreements does U-M Tech Transfer enter?

  • License Agreements grant third parties the rights under U-M patents or copyrights. University license agreements typically stipulate that the licensee should diligently seek to bring the intellectual property into commercial use for the public good, provide a reasonable return for U-M, and specify limitations to U-M’s liability.
  • Non-Disclosure Agreements (NDAs) (also referred to as Confidential Disclosure Agreements (CDAs)) are often used to protect the confidentiality of an invention during evaluation by potential licensees. NDAs also protect proprietary information of third parties that University researchers need to review in order to conduct research or to evaluate research opportunities. U-M Tech Transfer enters into NDAs for University proprietary information shared with someone outside of U-M. ORSP manages incoming NDAs related to research contracts, more information can be found here.
  • Material Transfer Agreements (MTAs), used for incoming and outgoing materials at U-M, are administered by U-M Tech Transfer. These agreements describe the terms under which University researchers and outside researchers may share materials, typically for research or evaluation purposes. Intellectual property rights can be endangered if materials are used without a proper MTA. More information about MTAs can be obtained here.
  • Inter-Institutional Agreements describe the terms under which two or more institutions (generally universities) will collaborate to assess, protect, market, license, and share in the revenues received from licensing jointly owned intellectual property.
  • Option Agreements, or Option Clauses within research agreements, describe the conditions under which U-M preserves the opportunity for a third party to negotiate a license for intellectual property. Option clauses are often provided in a Sponsored Research Agreement to corporate research sponsors or Option Agreements are entered into with third parties wishing to evaluate the technology prior to entering into a license agreement.
  • Research Agreements describe the terms under which sponsors provide research support to U-M. These are negotiated by ORSP, although Tech Transfer assists in negotiation of non-standard clauses relating to intellectual property – most often with companies or foundations. More information about ORSP can be obtained here.

How is a company chosen to be a licensee?

U-M Tech Transfer chooses a licensee based on a company’s ability to commercialize the technology for the benefit of the general public. Sometimes an established company with experience in similar technologies and markets is the best choice. In other cases, the focus and intensity of a startup company is a better option. It is rare for U-M to have multiple potential licensees bidding on an invention.

What can I expect to gain if my IP is licensed?

Per U-M policy, a share of any financial return from a license is provided to the inventor(s). Most inventors enjoy the satisfaction of knowing their inventions are being deployed for the benefit of the general public. New and enhanced relationships with businesses are another outcome that can augment one’s teaching, research and consulting. In some cases, additional sponsored research may be funded by the licensee.

What is the relationship between an inventor and a licensee, and how much of my time will it require?

Many licensees require the active assistance of the inventor to facilitate their commercialization efforts, at least at the early stages of product development. This can range from infrequent, informal contacts to a more formal consulting relationship to additional sponsored research in the inventor’s laboratory. Working with a new business startup can require substantially more time, depending on your role in or with the company and your continuing role within U-M. Your participation with a startup or any consulting arrangement with a licensee is governed by U-M conflict of interest policies. More information about U-M conflict of interest policies can be found here.

What activities occur during commercialization?

Most licensees continue to develop an invention to enhance the technology, reduce risk, prove reliability, and satisfy the market requirements for adoption by customers. This can involve additional testing, prototyping for manufacturability, durability and integrity, and further development to improve performance and other characteristics. Documentation for training, installation and marketing is often created during this phase. Benchmarking tests are often required to demonstrate the product/service advantages and to position the product in the market. Medical products (therapeutics, diagnostics and devices) require extensive animal and clinical trials in humans to achieve regulatory approval. Software used in medical applications may also require regulatory approval.

What is my role during commercialization?

Your role can vary depending on your interest and involvement, in the interest of the licensee in utilizing your services for various assignments, and any contractual obligations related to the license or any personal agreements.

What will happen to my invention if the startup company or licensee is unsuccessful in commercializing the technology? Can the invention be licensed to another entity?

Licenses typically include financial payments and performance milestones that, if unmet, can result in termination of the license. This termination allows for subsequent licensing to another business. While licensees usually can terminate at will, generally, the University is only able to terminate if the licensee is not performing under the agreement.

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Revenue

What revenues are generated for U-M if commercialization is successful?

Most licenses have licensing fees that can be very modest (for startups or situations in which the value of the license is deemed to warrant a modest license fee) or can reach hundreds of thousands of dollars. Additional revenues from annual minimums and payments upon achievement of certain milestones may also result prior to actual sales of the licensed product. Royalties on the eventual sales of the licensed products can generate revenues, although this can take years to occur and depends upon the type of technology. Equity, if included in a license, can yield returns, but only if a successful equity liquidation event occurs. Most licenses do not yield substantial revenues. In the most recent AUTM annual survey of U.S. Universities (2014), less than 1% of all licenses yield over $1 million annually. However, the rewards of an invention reaching the market are often more significant than the financial considerations alone.

How are license revenues distributed?

Per U-M Policy, revenues from license fees, royalties and equity—minus any unreimbursed patenting and file expenses—are shared with Inventors, colleges, departments, and central administration. For more information on revenue distribution, see here.

How are inventor revenues distributed if there are multiple inventors and/or multiple inventions in a license?

While there may be some variation in the procedure, typically when a license or option agreement is completed, a Revenue Distribution Plan (RDP) is created to document the formula used to distribute any subsequent revenues. The initial RDP includes a draft formula based on the contributions listed in the Invention Report(s) relating to the license. U-M Tech Transfer asks one inventor within the group to serve as coordinator and to report the percentages determined by the inventors collectively. All inventors must sign the RDP, signifying their approval. Should the inventors be unable to agree on a revenue distribution plan, U-M Tech Transfer will make the final revenue allocation decision.

How is equity from a license distributed?

When U-M Tech Transfer equity is liquidated by U-M’s office, the resulting funds are distributed in accordance with the RDP and the Tech Transfer Policy for revenue distribution.

What are the tax implications of any revenues I receive from U-M?

License revenues are typically taxed as Form 1099 income, as described here. You should consult a tax advisor for specific advice.

What happens to my share of licensing revenue if I waive rights to it?

Revenues waived by inventors are distributed to the associated school/college and department/unit. To avoid potential tax liability, revenues waived by you to your department/unit must not be under your control. See U-M Tech Transfer for additional information.

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Ownership of Intellectual Property

Who owns the intellectual property I create?

Ownership depends upon the employment status of the creators of the invention and their use of University facilities and other resources. Considerations include:

  • What is the source of the funds or resources used to produce the invention?
  • What was the employment status of the creators at the time the intellectual property was made?
  • What are the terms of any agreement related to the creation of the intellectual property?

As a general rule, U-M owns inventions made by its employees while acting within the scope of their employment or using University resources. U-M’s copyright policy describes the applicable rules for copyrightable works. In some cases, the terms of a Sponsored Research Agreement or Materials Transfer Agreement may impact ownership. When in doubt, it is best to call the U-M Tech Transfer office for advice.

Should I list visiting scientists or scientists at other institutions on my Invention Report?

All contributors to the ideas leading to a discovery should be mentioned in your report, even if they are not U-M employees. U-M Tech Transfer, along with legal counsel, will determine the rights of such persons and institutions. It is prudent to discuss with U-M Tech Transfer all working relationships (preferably before they begin) to understand the implications for any subsequent inventions.

Who owns rights to discoveries made while on sabbatical?

Generally, if you are on a sabbatical paid by U-M, the U-M still retains rights to any discoveries connected to your scope of employment. Contact U-M Tech Transfer or ORSP before your sabbatical to ensure that ownership considerations are documented.

What is U-M’s policy on ownership of inventions?

The policy is stated in Regents’ Bylaw 3.10 and the U-M Technology Transfer Policy, see here.

Who owns rights to discoveries made while I am consulting?

The ownership of inventions made while consulting for an outside company depends on the terms of your consulting contract. It is important to clearly define the scope of work within consulting contracts to minimize any issues or conflict with ownership of inventions created from University research. If you have questions, U-M Tech Transfer is available for informal advice.

Can a student contribute to an invention?

Yes, many students work on inventions at U-M under a wide variety of circumstances. U-M promotes student entrepreneurism, and students can be named as Inventors under U-M Technology Transfer Policy. Typically, a student will own his or her rights to an invention unless the invention was created by a student in a capacity as a U-M employee. Regents’ Bylaws 3.10 and the U-M Technology Transfer Policy provide more details.

What is the Bayh-Dole Act and how does it impact ownership of inventions?

The U.S. Bayh-Dole Act of 1980 allows universities and other non-profit institutions to have ownership rights to discoveries resulting from federally funded research, provided certain obligations are met. These obligations include making efforts to protect (when appropriate) and commercialize the discoveries, submitting progress reports to the funding agency, giving preference to small businesses that demonstrate sufficient capability, substantial manufacture in the US, and sharing any resulting revenues with the inventors. The Bayh-Dole Act is credited with stimulating interest in tech transfer activities and generating increased research, commercialization, educational opportunities, and economic development in the United States.

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Conflict of Interest (COI)

What kinds of issues concern conflict of interest reviewers?

Examples include the appropriate and objective use of research, the treatment and roles of students, clinical use of patients, supervision of individuals working at both U-M and a licensee company, treatment of patients during clinical trials, and conflict of commitment (i.e., your ability to meet your University obligations).

What are examples of a conflict of commitment?

A conflict of commitment may exist if duties, assignments or responsibilities associated with a technology license or outside business arrangement have a negative impact on your ability to meet commitments associated with your University employment or exceed the amount of time available to you for these activities. The best approach is to fully disclose your situation to your supervisor and discuss the implications for your job responsibilities.

How does U-M define a conflict of interest (COI)?

A conflict of interest can occur when a University employee, through a relationship with an outside organization, is in a position to: 1) influence U-M’s business, research or other areas that may lead to direct or indirect financial gain; 2) adversely impact or influence one’s research or teaching responsibilities; or 3) provide improper advantage to others to the disadvantage of U-M.

How does U-M manage potential conflicts associated with research and tech transfer transactions?

U-M Tech Transfer representatives can advise you on conflict of interest issues or direct you to the appropriate COI Committee administrator. It is the responsibility of the researcher or faculty member to disclose and document any outside arrangements that constitute disclosable situations or interests as described in University conflict of interest policies. A conflict of interest disclosure can be made to one of the two Conflict of Interest (COI) committees (Med School or UMOR) that review and help to draft a conflict management plan. COI approval, and sometimes approval by the U-M Board of Regents, is required before any associated agreements can be approved. For more information, see here.

When should I seek guidance on conflict of interest?

Whenever a question or uncertainty arises, you should seek guidance from your ORSP project representative for research-related issues and/or your U-M Tech Transfer licensing specialist for license-related issues. There are two times in particular when guidance is required: when research proposals are submitted to external sponsors (ORSP) and when a license, option or MTA is being considered with a company in which the faculty member, or any university employee, has an equity or management interest (U-M Tech Transfer).

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Research, Material Transfer, and Consulting Agreements

What rights does a research sponsor have to any discoveries associated with my research?

The Sponsored Research Agreement will specify the intellectual property (IP) rights of the sponsor. U-M generally retains ownership of patent rights and other intellectual property resulting from sponsored research. However, the sponsor may have rights to negotiate a license to the IP resulting from the research (an “option”). The sponsor generally will not have contractual rights to discoveries that are outside of the scope of the research or that were invented prior to the research term (“Background IP”). Therefore, it is important to define the scope of work within a research agreement and to review the IP provisions in the research contract.

Who at U-M handles research agreements?

Sponsored research projects are handled by ORSP. If you have questions about sponsored research, please contact the ORSP project representative responsible for the sponsor at: 734.764.5500 or follow this link for a listing here. ORSP project representatives work closely with U-M Tech Transfer on IP issues in sponsored research agreements.

May I use materials from others in my research?

Yes, but in order for us to determine if the use of materials from others may affect the ownership and license rights of your subsequent research results, it is important to carefully document any conditions of use of such materials that the provider requires. If you obtain materials from another U-M lab, a memo or email will suffice. If you wish to obtain materials from outside collaborators, an incoming Material Transfer Agreement (MTA) should be completed in many instances.

How do I share materials or research tools with others to further their research?

It is important to document items that are to be shared with others and the conditions of use that you or your collaborators wish to require. If you wish to send materials to an outside collaborator, an outgoing Material Transfer Agreement (MTA) should be completed for this purpose, see here for more information. It also may be necessary to have a Confidentiality Agreement completed to protect your research results or intellectual property.

Who handles material transfer agreements?

U-M Tech Transfer is responsible for all material transfer agreements, whether the material is incoming or outgoing. Contact U-M’s MTA Coordinator at: michiganmta@umich.edu to assist you in completing MTAs or Confidentiality Agreements or find out more information here.

How are agreements at U-M handled if they do not involve funding?

Agreements that do not involve funding are sometimes internally referred to as “unfunded agreements” or “UFAs.” UFAs are integrated into the eResearch Proposal Management system (eRPM) to create a record of the agreement in U-M’s system and to allow the research community to more easily link corresponding agreements, monitor the status of UFAs, and communicate with administrative home and central offices. More information is available here.

How are consulting agreements handled?

When researchers enter into consulting agreements (often termed “outside employment” in UM Conflict of Interest policies), they are deemed to be acting outside of the scope of their employment. Therefore, consulting arrangements are not negotiated by U-M nor formally reviewed by either U-M Tech Transfer or ORSP (Office of Research and Sponsored Programs). Researchers who enter into consulting agreements should familiarize themselves with the policies of their school or college relevant to consulting activities. The researcher is expected to ensure that the terms of the consulting arrangement are consistent with University policies, including those related to IP ownership, employment responsibilities and use of Intellectual Property. U-M Tech Transfer is available to provide informal advice on how your consulting agreement relates to your U-M Intellectual Property, but often it is best for you to retain your own attorney. A discussion regarding consulting and conflict of interest can be found here.

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