Just days before the United Nations Climate Change Conference in Copenhagen, Denmark, the U.S. Patent and Trademark Office (USPTO) initiated the Green Technology Pilot Program on December 8, 2009 to expedite the examination of "green technology" patent applications. By offering the program, the USPTO hopes to accelerate the development and deployment of green technologies, help create green jobs, and promote U.S. competitiveness in the clean technology sector. In the press release announcing the Pilot Program, the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, David Kappos explained "Every day an important green tech innovation is hindered from coming to market is another day we harm our planet and another day lost in creating green businesses and green jobs."

According to its own statistics, the USPTO takes on average 30 months to issue an initial office action for green technology patent applications and approximately 40 months to make a final determination on the patentability of such applications. In the normal process, applications are taken up for examination based on their filing date. Recognizing that over a three and half year wait is too long in the green technology sector, the Pilot Program provides a mechanism for green technology patent applications to be advanced, out of turn, to examination without having to pay any additional fees or provide any additional examination support documentation. The USPTO estimates that this Pilot Program will reduce the examination time of these applications on average by one year.

The Pilot Program broadly defines the term "green technologies" as technologies that pertain to environmental quality, energy conservation, development of renewable energy resources, or greenhouse gas emission reduction. Despite this broad definition, the USPTO currently requires that a patent application be classified in one of 79 specific U.S. patent classifications outlined in the Pilot Program to be eligible.

The Pilot Program only applies to non-provisional utility applications filed prior to December 8, 2009 that have yet to be examined. Applications that are either filed after December 8, 2009 or already being examined are not eligible for the Pilot Program. The Pilot Program is set to expire on December 8, 2010 and the USPTO only guarantees that it will accept the first 3,000 petitions to make an application special under the Pilot Program. Thereafter, the USPTO will evaluate whether the Pilot Program should be extended based on the USPTO's workload and available resources. Thus, time is of the essence for those wanting to take advantage of the Pilot Program.

While there are limitations on the number and type of claims that can be included in the application and a requirement that an applicant waive its right to object to a restriction requirement, the Pilot Program does provide an inexpensive mechanism to expedite the examination of a green tech patent application. Such an expedited examination can prove beneficial to those looking to enforce their patent rights as quickly as possible and/or those looking for funding options.

The Official Notice of the Pilot Program can be found at 74 Fed. Reg. 64666 (Dec. 8, 2009) (See http://www.uspto.gov/patents/law/notices/74fr64666.pdf ) and the USPTO Press Release for the Pilot program can be found at www.uspto.gov/news/pr/2009/09_33.jsp.

If you have questions about the Green Technology Pilot Program, you can contact Alex Forman or Bill Lyon, members of Ice Miller's Intellectual Property Group.

Day 3 - September 9, 2009 – Traveling to Hangzhou

I was really looking forward to traveling by train to Hangzhou and I was not disappointed.  It was a great opportunity for me to learn more about the Chinese culture and see more of China's beautiful landscape.

Hangzhou is in the Zhejiang Province located about 112 miles southwest of Shanghai.    Hangzhou has a population of over 6 million people, which is small by Chinese standards, and has a beautiful fresh water lake called West Lake.  West Lake is surrounded by mountains on three sides and is very well known in China.

Many Chinese homes, especially in farm villages, have temples on top of them to pay homage to their ancestors.  Ancestry and history play a large part of the Chinese culture and the temples are another example of these influences.

I also thought it was interesting, that unlike the U.S., Chinese grooms and their families pay for about 80 percent of the cost of their weddings.

It is early in the day of September 9, 2009 – 9/9/09 – and 9 is a very lucky number in the Chinese culture.  If fact, the Chinese celebrate the ninth second, of the ninth minute, of the ninth hour, of the ninth day, of the ninth month of the ninth year.  The luck of nine did not rub off on the number four in this culture.  Four is considered very unlucky, similar to the U.S. perception of the number 13.

I look forward to reporting more about this day's events in tomorrow's blog.

September 8, 2009 - Day 2

We spent the first part of our day with the American Chamber of Commerce for a discussion on "green collar" jobs.  Chinese carbon emissions are escalating and China has seven of the 10 most polluted cities in the world.  As a result, environmental protection has become more important to the Chinese.

Later in the day we traveled to Eli Lilly's facility at the Pudong Science Park.  Lilly has over 2,000 employees in China, which means China has the second largest Lilly operation in the world.  Pudong is one of Shanghai's newest districts with a focus on three main industries: life sciences, software and integrated circuits.

Some of us were also able to visit ShangPharma.  ShangPharma provides research services to pharmaceutical and biotech companies.  They currently have over 1,600 scientists.  An interesting question was raised about how intellectual property is protected for the company and its clients.  The uncertainty of intellectual property protection is not isolated to just ShangPharma.  It is an issue that China is addressing as a country.

Following these visits we had a traditional Chinese lunch that was again served on a lazy Susan.  There were six different courses that included duck, shrimp, squid, scallops, fresh vegetables, jellyfish and fried rice.  Beer and wine were again offered.  Chinese meals are traditionally very  large.  I was curious how the society remains so thin.  Meal preparation seems to hold the answer.  They use vegetable oils and other "waist friendly" and heart healthy preparation methods.

The day concluded with a Friends of Indiana reception.  Guests included companies that have a business connection to Indiana or have an interest in doing business in Indiana.  Eli Lilly, Cummins and Alison Transmission all attended.

I'm really looking forward to traveling by train to Hangzhou tomorrow.  It will be a great opportunity for me to see some of the rural parts of China and its landscape.

Once a business decides to raise money, management is left to figure out how to make it happen.  Strong advisors help, but there are some steps that any business can take to make it easier to raise funds.  Collecting information to give to investors is a good place to start. 

Regardless of who invests, the information that investors will want to see will be pretty much the same, and the business can get this ready ahead of time.  The information should be readily available to the business.

Managers can be surprised at the amount of information they need to provide.  When a business takes money from an investor, it gives something back – an interest in the business.  What the business gives back – whether it's called "stock," "partnership interests," "LLC interests," "notes," or some other name – is often a security.  When the business gives a security to the investor for their money, the investor is protected by securities laws.  One of the protections provided by securities laws is that, before the investor decides to invest, the business has to tell its investors everything material about itself – that is, it has to make a "full disclosure." 

Many managers see full disclosure as the opposite of marketing.  Sure, full disclosure includes the good parts about the business.  But investors will need to know all of the bad things too, as well as all of the indifferent but important things about the business.  To some managers, it seems that after convincing the investor that buying into the business is a great idea, the manager then needs to tell the investor all of the reasons that they should not invest.  Although this can be contrary to a sales mentality, investors should be left with a complete picture of the business – the good, the bad and the material.

The way you end up raising the money will impact how the information about the business is presented.  But the basic content that a business must provide will largely stay the same.  Time invested collecting this information early is well spent, and will save time later.  At minimum, any business looking to raise money should be sure to have the following available:

Financial Statements:  These are the basic financial statements for the business.  Investors will typically want to look back up to five years (if the business has been around that long).  If the financial statements are audited, investors will want to see the audit reports as well. 

Organizational documents:  These are the official documents that govern how the business exists and will vary depending on what kind of business it is.  For example, if the business is a corporation, they would be the articles of incorporation, bylaws, amendments, board minutes and resolutions, shareholder minutes and resolutions, etc.  If the business is a limited liability company, they would be the articles of organization, operating agreement, amendments, minutes and resolutions, etc.  These are often compiled in a "minute book" for the business.  Many businesses operate with multiple companies – subsidiaries, holding companies, etc.  If this is the case, you should keep one set of organizational documents for each subsidiary.  Investors will want to review these documents, as they are important to the kinds of investments that can be made.

Tax information:  This includes tax returns, tax registrations, tax ID numbers, listings of taxes for which the business has registered, etc.  Many businesses have tax advisors; if yours does, the advisor should be able to help compile and present them.  Investors will probably want to look back three to seven years.

Information about legal proceedings:  Investors will want to see if the business is in the middle of any lawsuits or if it has been threatened with a suit.  Lawsuits involving major owners and managers could be important as well.  The lawyer representing the business can help prepare the information that most investors would seek.  Working with the lawyer to put it together is usually advisable to protect against losing attorney-client privilege or disclosing things against the business's interests.

Information about real estate:  Investors will want to see a listing of all of the properties where the business has an interest.  Does it own the land?  Is it leased?  This will include all leases, deeds, mortgages, etc. on the properties.

Material contracts:  Investors will want to understand the business's important contracts.  Examples can include employee contracts, contracts with key customers and suppliers, leases, licenses, and other arrangements that are important for the business.  You probably do not need to include the office copier lease.

Regulatory issues:  Investors want to confirm that the business has the right authority to do its business.  It is helpful to prepare a listing of all of its applications, licenses and permits that the business has.  This can cover anything from investment advisor registrations to elevator permits.

Intellectual property (IP):  As IP continues to be critical in the economy, investors are sensitive to it.  It is helpful to have a list of any patents, trademarks, copyrights, licenses and any other registrations and applications that the business keeps.  It is also important to include any contracts that let the business use someone else's IP.

Insurance:  Prepare a listing of all insurance policies the business has of any kind.  It is also helpful to get a current insurance certificate for each of the business's policies as well.

Employee benefits: Prepare a list of the business's employee benefit plans, including health plans, retirement plans, 401(k)s, employee discounts, etc. and get copies of all of the plan documents (contracts, summaries, etc.). 

These are general rules that can help any kind of business get ready to work with its investors.  Every business is different, so not all businesses will have all of the information discussed above.  Others will need much more detail about some or all of these categories.  So the listing above is not a checklist but rather a guide to start reviewing your own business.  By preparing and collecting these materials ahead of time, businesses can better balance the burdens of raising funds, save time later in the process and reduce professional fees to collect these items.

Blog written by Harry Gonso and Jennifer Rhodes.

In the fifth in a series of life science distinguished speakers luncheons we were honored to have Jim Pearson who is the president and CEO of NICO Corporation, a medical device company providing patented technology for minimally invasive neuro, skull base and spinal surgeries.

Pearson, who is the former president and CEO of Suros Surgical Systems, discussed the successful internally-focused model he has used to grow two thriving life sciences companies.

One of his key discussion points was that to have a successful life sciences company you need a relevant innovation which can lead to intellectual property clearances which in turn can lead to sustainability and new markets.  He later mentioned that one of the pitfalls that companies or individuals may face is not truly understanding the reality of their ideas; a realistic evaluation to determine if the idea is a product, a company or is still in the idea stage.

Pearson's presentation also focused on the key ingredients that led to success at both Suros and NICO.  Companies, and in particular life science companies, need to have a several components in place in order to achieve and sustain growth – some key factors he mentioned were communicating and measuring progress, establishing cultural norms, and making sure every team member has "a win" (ownership, cash, and personal and professional growth).  NICO is run with a deep-rooted belief in the company's top 5 principals: execution, team work, unity, rewards system and balance.  The same philosophy was employed at Suros.

Potential business traps that entrepreneurial companies can fall prey to were also outlined.  Of particular focus was not assembling a strong management and board that can appropriately guide a company through its many phases.  Some of the other key pitfalls he discussed were related to staff.  One of which was not understanding the true power (or potential) of human capital and the other was not staying in touch with what is happening in the field on a weekly basis.

It was an interesting and informative luncheon.  We look forward to watching the progress of NICO and the impact it will have on Indiana's growing life sciences industry.

Blog written by Harry Gonso and Jennifer Rhodes.

In the fifth in a series of life science distinguished speakers luncheons we were honored to have Jim Pearson who is the president and CEO of NICO Corporation, a medical device company providing patented technology for minimally invasive neuro, skull base and spinal surgeries.

Pearson, who is the former president and CEO of Suros Surgical Systems, discussed the successful internally-focused model he has used to grow two thriving life sciences companies.

One of his key discussion points was that to have a successful life sciences company you need a relevant innovation which can lead to intellectual property clearances which in turn can lead to sustainability and new markets.  He later mentioned that one of the pitfalls that companies or individuals may face is not truly understanding the reality of their ideas; a realistic evaluation to determine if the idea is a product, a company or is still in the idea stage.

Pearson's presentation also focused on the key ingredients that led to success at both Suros and NICO.  Companies, and in particular life science companies, need to have a several components in place in order to achieve and sustain growth – some key factors he mentioned were communicating and measuring progress, establishing cultural norms, and making sure every team member has "a win" (ownership, cash, and personal and professional growth).  NICO is run with a deep-rooted belief in the company's top 5 principals: execution, team work, unity, rewards system and balance.  The same philosophy was employed at Suros.

Potential business traps that entrepreneurial companies can fall prey to were also outlined.  Of particular focus was not assembling a strong management and board that can appropriately guide a company through its many phases.  Some of the other key pitfalls he discussed were related to staff.  One of which was not understanding the true power (or potential) of human capital and the other was not staying in touch with what is happening in the field on a weekly basis.

It was an interesting and informative luncheon.  We look forward to watching the progress of NICO and the impact it will have on Indiana's growing life sciences industry.