What is disruptive technology? - a definition from Whatis.com - see also: sustaining technology

What is disruptive technology? - a definition from Whatis.com - see also: sustaining technology: "

disruptive technology

Disruptive technology is a term coined by Harvard Business School professor Clayton M. Christensen to describe a new technology that unexpectedly displaces an established technology. In his 1997 best-selling book, "The Innovator's Dilemma," Christensen separates new technology into two categories: sustaining and disruptive. Sustaining technology relies on incremental improvements to an already established technology. Disruptive technology lacks refinement, often has performance problems because it is new, appeals to a limited audience, and may not yet have a proven practical application. (Such was the case with Alexander Graham Bell's "electrical speech machine," which we now call the telephone.) In his book, Christensen points out that large corporations are designed to work with sustaining technologies. They excel at knowing their market, staying close to their customers, and having a mechanism in place to develop existing technology. Conversely, they have trouble capitalizing on the potential efficiencies, cost-savings, or new marketing opportunities created by low-margin disruptive technologies. Using real-world examples to illustrate his point, Christensen demonstrates how it is not unusual for a big corporation to dismiss the value of a disruptive technology because it does not reinforce current company goals, only to be blindsided as the technology matures, gains a larger audience and marketshare, and threatens the status quo."

Disruptive technology - Wikipedia, the free encyclopedia

Disruptive technology - Wikipedia, the free encyclopedia: "

Disruptive technology

From Wikipedia, the free encyclopedia

• Ten things you didn't know about Wikipedia •

Jump to: navigation, search

A disruptive technology or disruptive innovation is a technological innovation, product, or service that eventually overturns the dominance of existing technology or status quo products in the market. Disruptive innovations can be broadly classified into lower-end and new-market disruptive innovations. A new-market disruptive innovation is often aimed at non-consumption, whereas a lower-end disruptive innovation is aimed at mainstream customers who were ignored by established companies. Sometimes, a disruptive technology comes to dominate an existing market by either filling a role in a new market that the older technology could not fill (as more expensive, lower capacity but smaller-sized hard disks did for newly developed notebook computers in the 1980s) or by successively moving up-market through performance improvements until finally displacing the market incumbents (as digital photography has begun to replace film photography).

The concept shares many similarities with biological evolution.

By contrast, "sustaining technology or innovation" improves product performance of established products. Sustaining technologies are often incremental; however, they can also be radical or discontinuous.

Contents [hide] 1 History and usage of the term 2 The theory 3 Examples of disruptive innovations 4 Business implications 5 See also 6 References 7 Additional Readings 8 External links

[edit] History and usage of the term

The term disruptive technology was coined by Clayton M. Christensen and introduced in his 1995 article Disruptive Technologies: Catching the Wave, which he coauthored with Joseph Bower. He describes the term further in his 1997 book The Innovator's Dilemma. In his sequel, The Innovator's Solution, Christensen replaced disruptive technology with the term disruptive innovation because he recognized that few technologies are intrinsically disruptive or sustaining in character. It is the strategy or business model that the technology enables that creates the disruptive impact. The concept of disruptive technology continues a long tradition of the identification of radical technical change in the study of innovation by economists, and the development of tools for its management at a firm or policy level.

[edit] The theory

Christensen distinguishes between "low-end disruption" which targets customers who do not need the full performance valued by customers at the high-end of the market and "new-market disruption" which targets customers who could previously not be served profitably by the incumbent.

"Low-end disruption" occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of certain customer segments. At this point, a disruptive technology may enter the market and provide a product which has lower performance than the incumbent but which exceeds the requirements of certain segments, thereby gaining a foothold in the market.

How low-end disruption occurs over time.

In low-end disruption, the disruptor is focused initially on serving the least profitable customer, who is happy with a good enough product. This type of customer is not willing to pay premium for enhancements in product functionality. Once the disruptor has gained foot hold in this customer segment, it seeks to improve its profit margin. To get higher profit margins, the disruptor needs to enter the segment where the customer is willing to pay a little more for higher quality. To ensure this quality in its product, the disruptor needs to innovate. The incumbent will not do much to retain its share in a not so profitable segment, and will move up-market and focus on its more attractive customers. After a number of such encounters, the incumbent is squeezed into smaller markets than it was previously serving. And then finally the disruptive technology meets the demands of the most profitable segment and drives the established company out of the market.

"New market disruption" occurs when a product that is inferior by most measures of performance fits a new or emerging market segment. The Linux operating system (OS) when introduced was inferior in performance to other server operating systems like Unix and Windows NT. But the Linux OS distributed through Red Hat is supposed to be inexpensive compared to other server operating systems. After years of improvements in this easily available operating system, the functionality has improved so much that it threatens to displace the leading commercial UNIX distributions.

Not all disruptive technologies are of lower performance. There are several examples where the disruptive technology outperforms the existing technology but is not adopted by existing majors in the market. This situation occurs in industries with a high investment into the older technology. To move to the new technology, an existing player not only must invest in it but also must replace (and perhaps dispose of at high cost) the older infrastructure. It may simply be the most cost effective for the existing player to "milk" the current investment during its decline - mostly by insufficient maintenance and lack of progressive improvement to maintain the long term utility of the existing facilities. A new player is not faced with such a balancing act.

Some examples of high-performance disruption:

• The rise of containerization and the success of the Port of Oakland, California, while the port of San Francisco neglected modernization - perhaps wisely due to its inconvenient location at the end of a peninsula not oriented with the prevailing freight traffic. Rather than attempt to compete in the oceanic freight terminal business, the city's resources were directed elsewhere, primarily toward becoming the leading financial center on the west coast through the encouragement of the construction of high rise buildings for office space.
• VoIP phone technology is a disruptive innovation. At its best, the quality of voice that is available over this phone system is at least as good as that has been offered by traditional players.

[edit] Examples of disruptive innovations

Disruptive Innovation	Displaced or Marginalized technology	Notes
steam engines and internal-combustion engines	horses and humans (for powering machines)	The new engines took centuries to establish themselves, but eventually rendered animal/people power obsolete on their ability to scale up to much higher power outputs and offer greater reliability.
Automobiles	Horses (for transport)	Early roads were designed for horses, not cars. Nevertheless, the potential for greater convenience, reliability and speed offered by the motor car meant that the road system was eventually redesigned in its favor, after overcoming many obstacles, both technical and political (such as the Red Flag Act).
Hydraulic excavators	Cable-operated excavators	Hydraulic excavators were clearly innovative at the time of introduction but they gain widespread use only decades after. However, cable-operated excavators are still used in some cases, mainly for large excavations.
Mini steel mills	vertically integrated Steel mills	By using mostly locally available scrap and power sources these mills can be cost effective even though not large
Container ships and containerization	"Break cargo" ships and stevedores	In addition to efficiency these also provide a great reduction in opportunities for pilferage and integrate well with both rail and truck transport.
Desktop publishing	Traditional publishing	Early desktop-publishing systems could not match high-end professional systems in either features or quality. Nevertheless, they lowered the cost of entry to the publishing business, and economies of scale eventually enabled them to match, and then surpass, the functionality of the older dedicated publishing systems.
Digital photography	originally, instant photography, now increasingly all chemical photography	Early digital cameras suffered from low picture quality and resolution and long shutter lag. Quality and resolution are no longer major issues and shutter lag is much less than what it used to be. The convenience of small memory cards and portable hard drives that hold hundreds or thousands of pictures, as well as the lack of the need to develop these pictures, also helped. Digital cameras have a high power consumption (but several lightweight battery packs can provide enough power for thousands of pictures). Cameras for classic photography are stand-alone devices.
Semiconductors	vacuum tubes	Electronic systems built up with semiconductors require less energy, are smaller and more reliable than such with tubes. However for high power device semiconductor solutions are not always available (or from more complicated design)
"Bug logic'"	Discrete components	Medium Scale Integration (MSI) - electronic circuits (such as a flip-flop) built upon a single substrate require less energy, are smaller and more reliable than such built upon circuit boards.
Large Scale Integration (LSI)	"Bug logic"	Complete electronic systems upon a single substrate require less energy, are smaller and more reliable than such built by mounting simpler Integrated circuits ("bug logic") upon complex circuit boards, extending to the current implementations of entire central processing units, memory, and supporting logic on a single chip.
Minicomputers	Mainframes	Though mainframes survive in a niche market which persists to this day, minicomputers have themselves been disrupted into extinction.
Personal computers	Minicomputers, Workstations	Workstations still exist, but are increasingly assembled from high-end personal computer parts, to the point that the distinction is fading
High speed CMOS video sensors	Photographic film	When first introduced, high speed CMOS sensors were less sensitive, had lower resolution, and cameras based on them had less duration (record time). The advantage of rapid setup time, editing in the camera, and nearly-instantaneous review quickly eliminated 16 mm high speed film systems. CMOS-based cameras also require less power (single phase 110 V AC and a few amperes of current vs. 208 V single, double and even triple phase cameras requiring 20-50 A for film cameras. Continuing advances have overtaken 35 mm film and are challenging 70 mm film applications.
Cassette Tape	Eight Track	Cassette tapes gave longer play times, a smaller size of player and media, and more functionality.
Compact Disc	Phonograph record, and later Cassette Tape	Compact Discs give higher quality, smaller size, eventual portability, and cheaper production costs.
Digital audio player	Compact Disc	From 15-20 songs per CD to 100's and 1000's of songs in a smaller form factor, with content that can be transferred effortlessly through the internet.
Muskets	Crossbows, longbows and the Knight military unit
Steamships	Sailing ships	The first steamships were deployed on inland waters where sailing ships were less effective, instead of on the higher profit margin seagoing routes. Hence steamships originally only competed in traditional shipping lines' "worst" markets.
Telephones	Telegraphy	When Western Union infamously declined to purchase Alexander Graham Bell's telephone patents for $100,000, their highest-profit market was long-distance telegraphy. Telephones were only useful for very local calls. Short-distance telegraphy barely existed as a market segment, if at all. So Western Union's decision was quite understandable at the time.

Not all technologies promoted as disruptive innovations have actually prospered as well as their proponents had hoped. However, some of these technologies have only been around for a few years, and their ultimate fate has not yet been determined.

Unresolved examples of technologies promoted as 'disruptive innovations'

• Music downloads and file sharing vs. compact discs
• ebooks vs. paper books
• VoIP (and VoIP over 802.11) vs. traditional telephone and mobile phone service.
• Reconfigurable Computing as part of a dual paradigm approach to High Performance Computing vs. traditional computing exclusively based on the von Neumann machine paradigm.

[edit] Business implications

Disruptive technologies are not always disruptive to customers, and often take a long time before they are significantly disruptive to established companies. They are often difficult to recognize. Indeed, as Christensen points out and studies have shown, it is often entirely rational for incumbent companies to ignore disruptive innovations, since they compare so badly with existing technologies or products, and the deceptively small market available for a disruptive innovation is often very small compared to the market for the established technology.

Even if a disruptive innovation is recognized, existing businesses are often reluctant to take advantage of it, since it would involve competing with their existing (and more profitable) technological approach. Christensen recommends that existing firms watch for these innovations, invest in small firms that might adopt these innovations, and continue to push technological demands in their core market so that performance stays above what disruptive technologies can achieve.

Disruptive technologies, too, can be subtly disruptive, rather than prominently so. Examples include digital photography (the sharp decline in consumer demand for common 35mm print film has had a deleterious effect on free-riders such as slide and infrared film stocks, which are now more expensive to produce) and IP/Internet telephony, where the replacement technology does not, and sometimes cannot practically replace all of the non-obvious attributes of the older system (sustained operation through municipal power outages, national security priority access, the higher degree of obviousness that the service may be life-safety critical or deserving of higher restoration priority in catastrophes, etc).

[edit] See also

This article has been illustrated as part of WikiProject WikiWorld.

(Click image for full size version.)

• Paradigm shift
• Technology strategy
• Disruptive Technology Office
• Category killer
• Obsolescence

[edit] References

• Bower, Joseph L. & Christensen, Clayton M. (1995). "Disruptive Technologies: Catching the Wave" Harvard Business Review, January-February 1995.
• How to Identify and Build Disruptive New Businesses, MIT Sloan Management Review Spring 2002
• Christensen, Clayton M. (1997). The Innovator's Dilemma. Harvard Business School Press. ISBN 0-87584-585-1.
• Christensen, Clayton M.;Raynor, Michael E. (2003). The Innovator's Solution. Harvard Business School Press. ISBN 1-57851-852-0.
• Christensen, Clayton M., Anthony, Scott D., & Roth, Erik A. (2004). Seeing What's Next. Harvard Business School Press. ISBN 1-59139-185-7.
• Christensen, Clayton M. & Overdorf, Michael. (2000). "Meeting the Challenge of Disruptive Change" Harvard Business Review, March-April 2000.
• Christensen, Clayton M., Bohmer, Richard, & Kenagy, John. (2000). "Will Disruptive Innovations Cure Health Care?" Harvard Business Review, September 2000.
• Christensen, Clayton M., Baumann, Heiner, Ruggles, Rudy, & Sadtler, Thomas M. (2006). "Disruptive Innovation for Social Change" Harvard Business Review, December 2006.
• Mountain, Darryl R., Could New Technologies Cause Great Law Firms to Fail?
• Mountain, Darryl R. (2006). Disrupting conventional law firm business models using document assembly, International Journal of Law and Information Technology 2006; doi: 10.1093/ijlit/eal019
• Tushman, M.L. & Anderson, P. (1986). Technological Discontinuities and Organizational Environments. Administrative Science Quarterly 31: 439-465.

[edit] Additional Readings

• Danneels, Erwin (2006), “From the Guest Editor: Dialogue on The Effects of Disruptive Technology on Firms and Industries,” Journal of Product Innovation Management, 23 (1): 2-4
• Danneels, Erwin (2004), “Disruptive Technology Reconsidered: A Critique and Research Agenda,” Journal of Product Innovation Management, 21 (4): 246-258

[edit] External links

• "The Disruptive Potential of Game Technologies: Lessons Learned from its Impact on the Military Simulation Industry", by Roger Smith in Research Technology Management (Sept/Oct 2006)
• Disruptive Technology at c2.com
• Disruptive Innovation Theory
• Disruptive Technology at The Economist: The blood of incumbents
• RSS: Disruptive Technology Hiding in Plain Sight
• The Myth of Disruptive Technologies. Note that Dvorák's definition of disruptive technology does not necessarily match the standard one described above. He complains about the overuse of the term and goes as far as claiming there are no disruptive technologies.
• On Disruption Disruption: The best way for companies to create new growth. Blog of ideas on disruption and interviews with Thought Leaders on disrupting markets to create growth.
• The Disruption Group Set of tools for managing disruption and *Financial Post Columns On Disruptionarticles on the benefits of disruption for organizations.
• Bibliography of Christensen’s "Theory of Disruptive Innovation" as it relates to higher education
• Disruptive Technology Portfolio by InformationWeek and Credit Suisse

Retrieved from "http://en.wikipedia.org/wiki/Disruptive_technology"

Categories: Marketing | Product management | Types of technology

"

Disruptive technology - Wikipedia, the free encyclopedia

Disruptive technology - Wikipedia, the free encyclopedia: "Disruptive technology From Wikipedia, the free encyclopedia • Ten things you didn't know about Wikipedia • Jump to: navigation, search A disruptive technology or disruptive innovation is a technological innovation, product, or service that eventually overturns the dominance of existing technology or status quo products in the market. Disruptive innovations can be broadly classified into lower-end and new-market disruptive innovations. A new-market disruptive innovation is often aimed at non-consumption, whereas a lower-end disruptive innovation is aimed at mainstream customers who were ignored by established companies. Sometimes, a disruptive technology comes to dominate an existing market by either filling a role in a new market that the older technology could not fill (as more expensive, lower capacity but smaller-sized hard disks did for newly developed notebook computers in the 1980s) or by successively moving up-market through performance improvements until finally displacing the market incumbents (as digital photography has begun to replace film photography). The concept shares many similarities with biological evolution. By contrast, 'sustaining technology or innovation' improves product performance of established products. Sustaining technologies are often incremental; however, they can also be radical or discontinuous."

Neurodegenerative disease | Trashing the brain | Economist.com

Neurodegenerative disease | Trashing the brain | Economist.com: "Biologists are learning how prions kill brain cells

SEEMINGLY different diseases can sometimes share a common cause. Tumours of all sorts, for example, are clusters of cells run out of control, dividing incessantly. Over the past decade, another unifying medical principle has emerged. It holds that many diseases of the central nervous system—including Alzheimer's, Huntington's and Parkinson's diseases—also share a mechanism. Instead of non-stop proliferation, the theme in this case is rubbish-disposal gone wrong.

The garbage in question is abnormally folded proteins. These are usually collected by dustmen (molecules called “ubiquitins” that pick up proteinaceous litter) before being taken to the cell's waste-processing centre (a structure known to biologists as the “proteasome”). Healthy cells create plenty of junk that keeps the system busy. The hundreds of steps of folding that create a complex protein can take a cell many minutes to complete. And with so many steps, mistakes often occur, or toxins push a perfectly configured protein out of place. Such wrongly wrought proteins need to be binned before they cause substantial damage.

In the current issue of the New England Journal of Medicine, Alfred Goldberg of Harvard Medical School, who helped discover the proteasome 20 years ago, discusses what happens to this waste-disposal system when the brain is infected by a particularly nasty protein called a prion. Prions cause Creutzfeldt-Jakob disease (or “mad cow disease” in cattle) by rearranging the structure of normal proteins in their own image. Recently scientists have started to think that prions might also disrupt the rubbish-disposal system, and that such interference might explain how they destroy nerve cells in the brain. Dr Goldberg proposes that globules of prions plug the waste-processing proteasome. That would cause all cellular garbage disposal to cease. Trash would thus remain in the brain until the accumulating filth killed the nerve cells.

Deadly origami

Sarah Tabrizi of University College London, and her colleagues, have also examined the question of how prions kill nerve cells, transforming the brain into a spongy organ riddled with holes. They used a Petri dish of mouse nerve cells and a fluorescent lamp. The cells they studied had been modified to produce a waste protein that glows green under fluorescent light.

First Dr Tabrizi infected the nerve cells with disease-causing prions. Doing so made them grow more luminous as their waste proteins accumulated. Then she added an antibody that cleared the cells of prions but left the ubiquitins, the proteasome and the waste proteins in place. As expected, this made the nerve cells dim because they had regained the ability to dispose of their fluorescent rubbish.

A similar experiment using living mice gave corresponding results. When the mice were infected with prions, ubiquitins collected in their brains. Those ubiquitins were pinned to proteins destined for destruction but, after prions had entered the brains, the junk somehow survived.

Although these tests show that prions can force the waste disposal system to malfunction, they did not identify which part of the process went wrong. So, to work out whether the dustmen were on strike or whether the rubbish-crunching centre had been closed down, Dr Tabrizi purified some proteasomes and took a closer look. By carefully measuring the rate at which proteasomes laboured, she found a clear correlation: as the clumps of prions in the sample got bigger, the proteasomes slowed down. Thus it is the rubbish dump that ceases to work rather than the dustmen neglecting their duties.

That infectious prions cause rubbish to accumulate in brain cells may not be the only way in which they cause damage. Alex Greenwood of the Technical University of Munich, in Germany, and his colleagues, have another idea. They believe that infectious prions might wake viruses that lie dormant in the DNA of an uninfected cell.

Dr Greenwood also works with cells taken from mice. These cells contain disabled viruses because murine ancestors, just like human ones, accumulated them in their genomes whenever infections entered their sex cells. Those historical viruses have been largely disabled by evolution over many millions of years, but they remain, they are numerous, and their genomes constitute about 10% of the DNA of most mammals.

Like Dr Tabrizi, Dr Greenwood infected several types of mouse nerve cells with prions. Next, he examined those cells to see whether they started making the previously disabled viruses. He found some in which this was happening. When he added an anti-prion drug to the mix, though, the virus production halted. The research is reported in Biochemical and Biophysical Research Communications.

Dr Greenwood's data support the theory that prions stimulate brain cells to make viruses that natural selection long put to bed. He thinks that these viruses might even transport prions between nerve cells, spreading the infection to other parts of the brain. If that idea proves correct, prions would be more than flying pickets that closed municipal dumps. They would be muck-spreaders too.

"

Cashing in on innovation

Cashing in on innovation: "

By Kirk Ladendorf
AMERICAN-STATESMAN STAFF
Thursday, September 20, 2007

The University of Texas at Austin is getting better at commercializing the inventions that its scientists and engineers develop, according to a state study to be released today.

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UT-Austin took in a record $8.4 million in technology licensing income in fiscal 2006, up 26 percent from 2005. Statewide, all publicly funded colleges and research organizations generated $40.5 million in licensing income, up 1.5 percent.

All state schools in Texas are under pressure to commercialize more faculty research to help Texas create homegrown companies in fields such as nanotechnology, the cutting-edge industries that are expected to become big job generators.

Texas has a long way to go to catch up to research powerhouses such as the University of California campuses, which collect tens of millions a year in patent royalties and have spawned high-profile companies.

But the report shows steady progress.

It may be used as a partial measure of the potential impact of the state's $200 million Emerging Technology Fund, which the Texas Legislature created in 2005 to accelerate the growth of research-based companies in Texas.

Much of that money will go to university researchers and to small companies based on that research.

According to the study released by the Texas Higher Education Coordinating Board, the leaders in generating licensing income in Texas were: the UT Southwestern Medical Center, $12.3 million; UT-Austin, $8.4 million; the UT M.D. Anderson Cancer Research Center, $6.3 million; the Texas A&M University System, $6.5 million; the UT Health Science Center in Houston, $3 million; and the UT Health Science Center in San Antonio, $2 million.

However, the revenue was offset by the costs of commercialization offices and legal expenses, especially patent law- suits. Overall, the universities spent $16.6 million on those costs, including $1.5 million at UT-Austin.

UT-Austin also helped create seven startup companies that licensed its research in the year, bringing its total to 19. That compared with 18 for M.D. Anderson, 11 for the Texas A&M System; nine for the Health Science Center in San Antonio and six for the Southwestern Medical Center.

"UT-Austin has been creating six or seven new companies a year, outpacing all public universities in the state," said Juan Sanchez, vice president for research at UT-Austin. "That is not only encouraging, but also clear evidence of the emergence of a strong entrepreneurial culture among our faculty and students."

UT's commercialization growth has been rapid and recent. In the past, the school was regarded as a national underperformer in commercialization for a major research school, according to Neil Iscoe, director of the school's Office of Technology Commercialization since 2003.

The school has cultivated closer ties with investment companies and worked as a kind of marriage broker between researchers and investors. It has sponsored commercialization conferences in Austin and created a searchable online database of its patent holdings.

"We are becoming a place that people are coming to to find technology, and we are actively promoting that," Iscoe said. "We are building a diverse portfolio of promising companies, and we have been willing to collaborate with investors to do deals that make sense."

And recently, UT changed its policies to streamline its process and address complaints by some faculty members and entrepreneurs about bureaucratic hurdles.

At least a few investors say UT's proactive approach is working.

Austin-based Emergent Technologies Inc., which invests in biotech startups, says one reason it created a fund devoted to technology licensed from UT System schools was the collaborative attitude it found at UT-Austin and UT-Arlington.

Bruce Thornton, a UT alumnus and an investor in a new UT-related startup, Advanced Laser Materials LLC, said the collaborative attitude of Iscoe's office was a key to getting the deal done.

Advanced Laser develops materials that can be turned into rapid prototypes and precision tools through a process known as laser sintering.

UT was willing to take its licensing fee in company stock rather than cash, Thornton said. That saved the startup money early on and could earn the school a handsome profit now that the Belton company is approaching profitability and pursuing larger deals.

"UT brought a flexibility and creativity to the licensing process," said Thornton, a veteran entrepreneur who believes that outsiders underestimate how much work it takes to turn good research into a successful business. "Building a new company is much harder than most people realize. It is a grind. It is not a snap of the fingers. Not enough people realize that yet."

Some UT companies have landed grants from the Emerging Technology Fund.

One recipient is Austin-based Molecular Imprints Inc., which has 80 workers and expects this year to have $20 million in sales of its equipment that helps make advanced computer chips and other products.

CEO Mark Melliar-Smith says the company is close to becoming profitable and is paying back UT with royalty payments and about $200,000 a year in research grants.

"The large universities of the United States, including UT, are becoming critical assets to the country," Melliar-Smith said. "They have become the wellspring of multidisciplinary research and innovation as some of the large corporate labs have begun to be shrunk back."

Some UT researchers are saying they like what they see in the commercialization process.

Chemical engineering pro- fessor Nicholas Peppas said he liked the way UT worked with Emergent Technologies to create a startup called Mimetic Solutions LLC based in part on his research in intelligent drug delivery.

"The process is working magnificently at UT," Peppas said.

The system works far more smoothly, he said, than it did at Purdue University, which he left four years ago.

kladendorf@statesman.com; 445-3622

From labs to market, UT delivers

A sampling of tech startups with research ties to the University of Texas at Austin.

Molecular Imprints Inc.

Founded: 2000

Employs: 80

Headquarters: Austin

Investors: Several, including Draper Fisher Jurvetson and Alloy Ventures.

Does: Makes advanced lithography equipment used in producing advanced computer chips and other products.

Based on research done at UT by: Chemical engineering professor Grant Willson and mechanical engineering professor S.V. Sreenivasan.

Milestones: Received $3 million Emerging Technology Fund grant in 2006. Anticipates $20 million in revenue in 2007.

Advanced Laser Materials LLC

Founded: 2003

Employs: Four

Headquarters: Belton

Investors: A small group of angel investors has raised about $500,000.

Does: Develops materials for rapid prototyping and manufacturing using lasers.

License based on research by: UT mechanical engineering professors Joseph Beaman and David Bourell.

Milestones: Agreed to venture with major aerospace company in 2006. Achieved its first break-even quarter in 2007.

Cambrios Technologies Corp.

Founded: 2002

Headquarters: Mountain View, Calif.

Does: Develops advanced materials for touch-screen computers.

Investors: Several, including Arch Venture Partners, Alloy Ventures and Oxford Bioscience Partners.

Based on research by: Former UT biology professor Angela Belcher, now working at the Massachusetts Institute of Technology.

Milestone: Expects first design wins in 2007.

Mimetic Solutions LLC

Founded: 2006

Employs: Five

Headquarters: Austin, with laboratory operations in Lexington, Ky.

Does: Intelligent drug delivery, such as pills containing drugs that are bound with special chemicals. The drugs are released only when a specific change in body chemistry occurs.

Investors: Emergent Technologies Inc.

Based on work by: UT chemical engineering professors Nicholas Peppas and Mark Byrne and Zach Hilt, a chemical engineering professor at the University of Kentucky.

Milestones: None yet. Mimetic is a new company in the formulation stage.

"

Biotech Terms - Science Terms - Biotechnology Industry Terms - Sent Using Google Toolbar

Biotech Terms - Science Terms - Biotechnology Industry Terms

6. Why Are New Drugs So Expensive?

The entire process of bringing a new drug to market involves years of laboratory research and development, animal trials, toxicity testing and, finally, clinical trials. Typically, this process plus the patent filing, takes over 10 years, so it is a long time before the pharmaceutical company can start earning any payback for its investment which can amount to hundreds of millions of dollars. Obviously the company needs to earn back some of that investment, so the costs are passed on to consumers.

Economic Indicators: Wholesale Trade Report

Economic Indicators: Wholesale Trade Report: "Economic Indicators: Wholesale Trade Report

By Ryan Barnes

Release Date:	On or around the 9th of the month
Release Time:	10am Eastern Standard Time
Coverage:	Two months prior (report released six weeks after period end)
Released By:	U.S. Census Bureau
Latest Release:	http://www.census.gov/mwts/www/currentwhl.html

Background
The Monthly Wholesale Trade Report is based on a monthly survey of about 4,500 wholesale merchants operating in the United States. The sample group is updated quarterly to reflect new businesses in the marketplace, and includes importers and exporters. While some wholesale companies do sell directly to end consumers (such as Costco), most companies surveyed here sell to retail businesses as their primary source of revenue.

The report presents three statistics to investors; monthly sales, monthly inventories and the inventory to sales ratio. The data is broken down into durables and non-durables, and from there about 8-10 industries within both. Coverage is nationwide

Data is released about six weeks after the end of the month and the report will show any revisions for the previous two reports as well. Percentage changes are shown from the prior month and year-over-year to smooth out volatility. Figures are based on current dollar values for products when estimating sales and inventory levels, which is a change from other indicators that may value product based on volume.

What It Means for Investors
The inventories-to-sales (I/S) ratio is probably the most-watched variable after the Durable Goods Report has come out for the month to shed some light on the durable sales figures. Investors in non-durable industries like beverages and apparel will be happy to see some good representation in the Monthly Wholesale Trade Report.

The I/S ratio does a good job of indicating any supply/demand imbalances that exist in the economy. For example, if retail demand is higher than current production levels support, the I/S ratio will show this by falling (in this scenario, an I/S ratio of 1 means that current inventory levels can meet one month of current demand). A rising I/S ratio should be met with higher retail demand or corporate profits could be contracting, as extra costs to maintain inventory or slow production add up. Because of this, the I/S ratio is labeled as a lagging indicator by the Conference Board and most economists. According to the Conference Board, "because inventories tend to increase when the economy slows and sales fail to meet projections, the ratio typically reaches its cyclical peak in the middle of a recession."

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It all depends on where the economy, or even a particular industry, stands in relation to earnings expectations and potential. As long as the I/S ratio does not change dramatically from month to month, the report will not elicit a strong response in the stock and bond markets; its biggest benefit is the ability to predict future GDP levels or its utility in researching specific industry trends.

Because inventory values are measured in current dollars, price changes month to month will change inventory values even if the amount of supply stays constant. This is especially important to note for industries such as chemicals and petroleum when viewing this report.

Strengths:

• There is an Annual Benchmark Report for Wholesale Trade released every spring that includes more detailed information such as annual sales estimates and gross margins for the industries that are sampled in the monthly report
• Provides a good snapshot of the "middle" of the supply chain for many industries - up the channel from manufacturing, but not yet retail.
• A good indicator of supply/demand imbalances
• Long time series (since 1946) available
• Data provided "raw" and with seasonal adjustment

Weaknesses:

• Longer time lag than most
• Industry breakdowns not too specific
• The previously-released Durable Goods report will have already shed some light on wholesale results

The Closing Line
Monthly Wholesale Trade Report is not potent enough to move the markets, but it is very useful when taken in context with other industry-specific indicators to gauge sales and demand; it is also helpful in predicting quarterly gross domestic product (GDP) figures."

Economic Indicators:Trade Balance Report

Economic Indicators:Trade Balance Report: "Economic Indicators:Trade Balance Report

By Ryan Barnes

Release Date:	International Trade - around the 19th of the month
Release Time:	International Trade - 8:30am Eastern Standard Time
Coverage:	International Trade - two months prior
Released By:	Bureau of Economic Analysis (BEA)
Latest Release:	http://www.bea.gov/international/index.htm

Background
Investors and policymakers are increasingly using trade balances and information as a way to determine the health of the U.S. economy and its relationship with the rest of the world. The indicator within the Trade Balance Report that is most well known is the nominal trade deficit, which represents the current dollar value of U.S. exports minus the current dollar value of U.S. imports. The report also covers trade balances for services, such as financial and informational management, of which the U.S. is currently a large exporter, creating a surplus in this category. In the physical goods category, the largest components of the monthly nominal value are for consumer goods and energy (petroleum).

There are several different aggregate measures of trade balance that are recorded and presented in the media, but the one that is most cited will be the current account,a measure of the net of physical goods trade, services trade, investment income and unilateral transfers. A more detailed breakdown of the financial receipts between the U.S. and abroad is available quarterly, summarizing the monthly data and reporting adjustments as needed; it is also released by the Bureau of Economic Analysis (BEA). (To learn more, read Understanding The Current Account In The Balance Of Payments and Current Account Deficits.)

What it Means for Investors
The U.S. has been running a trade deficit for more than 20 years (and a current account deficit for some time as well), set against the backdrop of a long-term U.S. economic expansion. As a nation, the U.S. imports more than it exports, which, in itself, is not a bad thing. Because the U.S. economy has been expanding for so long, most other nations have not been able to keep up, meaning that U.S. demand for things as a nation is higher than other nations' demand for U.S. goods. What causes worry among some is the long-term trend of more money flowing out than coming back in.

The consensus is that the trade deficit must be balanced out by an equal dollar amount of foreign investment in U.S. assets. For example, if the U.S. spends $1 billion dollars to purchase computers from Japan, by definition, Japan is holding $1 billion U.S. dollars or other dollar-denominated assets. In practice, most of the balance in trade is made up by foreign countries holding U.S. Treasury securities. But when interest rates are low, our debt is not as attractive on a risk-adjusted basis, creating concern that our investments will no longer attract foreign ownership, causing the value of the dollar to drop and leading to decreased world purchasing power.

The current account as a percentage of total gross domestic product (GDP) is an important metric because it shows how large the current account number is in relation to overall output in the economy.

The Trade Balances Report can move the markets upon release if the data shows a marked change from the prior period. Compared to other indicators, this report is relatively hard to estimate outside of petroleum, so some surprise factors can occur from time to time. Most investors want to see the trade balance maintain current levels or fall, as it is a sign that exports are rising, and the companies who export are increasing sales in those areas of the world.

Strengths:

• Monthly releases are concise and give results in nominal (dollar) terms.
• Highlights which countries make up the largest percentages of the balance, as well as rates of change
• Results shown against the backdrop of the past six months
• Trade represents approximately 25% of total economic activity and is a large component of GDP.

Weaknesses:

• Monthly report doesn't show a complete transaction reconciliation (quarterly release does).
• Inconclusive as to the long-term effects of the stock market and economy of a trade deficit or surplus.
• Volatile due to oil prices and seasonality

The Closing Line
The Trade Balance Report can give valuable clues to future swings in GDP not explained by internal consumption and production, so the report helps to "close the loop" on GDP estimation variables. The more investors know about trade balances and how policy makers interpret the data, the more helpful it becomes in making investment choices."

Economic Indicators: Retail Sales Report

Economic Indicators: Retail Sales Report: "Economic Indicators: Retail Sales Report

By Ryan Barnes

Release Date:	On or around the 13th of the month
Release Time:	8:30am Eastern Standard Time
Coverage:	Previous month's data
Released By:	Census Bureau and the U.S. Department of Commerce
Latest Release:	http://www.census.gov/svsd/www/advtable.html

Background
Retail Sales is very closely watched by both economists and investors. This indicator tracks the dollar value of merchandise sold within the retail trade by taking a sampling of companies engaged in the business of selling end products to consumers. Both fixed point-of-sale businesses and non-store retailers (such as mail catalogs and vending machines) are used in the data sample. Companies of all sizes are used in the survey, from Wal-Mart to independent, small-town businesses. (For related reading, see Using Consumer Spending As A Market Indicator.)

The data released will cover the prior month's sales, making it a timely indicator of not only the performance of this important industry (consumer expenditures generally make up about two-thirds of total gross domestic product), but of price level activity as a whole. Retail Sales is considered a coincident indicator, in that activity reflects the current state of the economy. It is also considered a vital pre-inflationary indicator, which creates the biggest interest from Wall Street watchers and the Conference Review Board,which tracks data for the Federal Reserve Board's directors.

The release will contain two components: a total sales figure (and related % change from the previous month), and one "ex-autos", as the large ticket price and historical seasonality of auto sales can throw off the total figure disproportionately.

What it Means for Investors
The release of the Retail Sales Report can cause above-average volatility in the stock market. Its clarity as a predictor of inflationary pressure can cause investors to rethink the likelihood of Fed rate cuts or hikes, depending on the direction of the underlying trend. For example, a sharp rise in retail sales in the middle of the business cycle may be followed by a short-term hike in interest rates by the Fed in the hope of curbing possible inflation. This would cause investors to sell bonds (causing yields to rise), and could pose problems for stocks as well, as inflation causes decreased future cash flows for companies.

If retail sales growth is stalled or slowing, this means consumers are not spending at previous levels, and could signal a recession due to the significant role personal consumption plays in the health of the economy.

One of the most important factors investors should note when viewing the indicator is how far off the reported figure is from the so-called consensus number, or "street number". In general, the stock market does not like surprises, so a figure that is higher than expected, even when the economy is humming along well, could trigger selling of stocks and bonds, as inflationary fears would be deemed higher than expected.

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Retail companies themselves can be especially volatile with the release of this widely read industry report. The release data will show the sales performance of all the component sectors within retail (such as electronics retailers and restaurants), allowing investors to peek in on relative "pockets of strength" within the overall figures. An investor holding stocks in retail can see how his or her holdings are performing relative to the sector as a whole - a valuable analysis regardless of overall market conditions.

Strengths:

• The retail sales data is extremely timely, and is released only two weeks after the month it covers.
• The data release is robust; investors can download a full breakout of component sectors, as well as spreadsheet historical data to examine trends.
• Retail sales reports get a lot of press. It's an indicator that is easy to understand and relates closely to the average consumer.
• A revised report comes out later (two to three months on average), amending any errors.
• Analysts and economists will take out volatile components to show the more underlying demand patterns. The most volatile components are autos, gas prices and food prices.
• Data is adjusted seasonally, monthly and for holiday differences month to month.

Weaknesses:

• Revisions to the report (released about two months after the advance report) can be quite large, and the sample size is relatively small compared to the number of retailers opening their doors to consumers.
• Retail sales data is often volatile from month to month, which makes trend-spotting difficult.
• The indicator is based on dollars spent and does not account for inflation. This makes it difficult for individual investors to make decisions based on the raw data.
• Does not account for retail services, only physical merchandise. The U.S. is an increasingly service-based economy, so not all retail "activity" is captured.

The Closing Line
Retail Sales is one of the big ones - a report that can shed a lot of light on the economy. It provides detailed industry information and can really move the market. Investors will best be served by waiting for the analysts to sort through the report, removing any overly volatile components, and drawing conclusions from there. For owners of individual retail stocks, look at the sector growth rates to determine the relative performance of individual stocks held in a particular sector. "

Economic Indicators: Purchasing Managers Index (PMI)

Economic Indicators: Purchasing Managers Index (PMI): "Economic Indicators: Purchasing Managers Index (PMI)

By Ryan Barnes

Release Date:	The first business day of the month
Release Time:	10am Eastern Standard Time
Coverage:	Previous month's data
Released By:	Institute for Supply Management (ISM)
Latest Release:	http://www.ism.ws/ISMReport/

Background
The Institute for Supply Management (ISM) has is responsible for maintaining the Purchasing Managers Index (PMI), which is the headline indicator in the monthly ISM Report on Business.The ISM is a non-profit group boasting more than 40,000 members engaged in the supply management and purchasing professions.

The PMI is a composite index of five "sub-indicators", which are extracted through surveys to more than 400 purchasing managers from around the country, chosen for their geographic and industry diversification benefits. The five sub-indexes are given a weighting, as follows:

• Production level (.25)
• New orders (from customers) (.30)
• Supplier deliveries - (are they coming faster or slower?) (.15)
• Inventories (.10)
• Employment level (.20)

A diffusion process is done to the survey answers, which come in only three options; managers can either respond with "better", "same", or "worse" to the questions about the industry as they see it. The resulting PMI figure (which can be from 0 to 100) is calculated by taking the percentage of respondents that reported better conditions than the previous month and adding to that total half of the percentage of respondents that reported no change in conditions. For example, a PMI reading of 50 would indicate an equal number of respondents reporting "better conditions" and "worse conditions".

What it Means for Investors
PMI is a very important sentiment reading, not only for manufacturing, but also the economy as a whole. Although U.S. manufacturing is not the huge component of total gross domestic product (GDP) that it once was, this industry is still where recessions tend to begin and end. For this reason, the PMI is very closely watched, setting the tone for the upcoming month and other indicator releases.

The magic number for the PMI is 50. A reading of 50 or higher generally indicates that the industry is expanding. If manufacturing is expanding, the general economy should be doing likewise. As such, it is considered a good indicator of future GDP levels. Many economists will adjust their GDP estimates after reading the PMI report. Another useful figure to remember is 42. An index level higher than 42%, over time, is considered the benchmark for economic (GDP) expansion. The different levels between 42 and 50 speak to the strength of that expansion. If the number falls below 42%, recession could be just around the corner. (To learn more, read Recession: What Does It Mean To Investors?)

As with many other indicators, the rate of change from month to month is vital. A reading of 51 (expanding manufacturing industry) coming after a month with a reading of 56 would not be seen favorably by the markets, especially if the economy had been showing solid growth previously.

The PMI can be considered a hybrid indicator in that is has actual data elements but also a confidence element, like the Consumer Confidence Index. Answers are subjective, and may not always relate to events as much as perceptions. Both can have value to investors looking to get a sense of actual experiences as well as see the PMI index level itself.

Bond markets may look more intently at the growth in supplier deliveries and prices paid areas of the report, as these have been historical pivot points for inflationary concerns. Bond markets will usually move in advance of an anticipated interest rate move, sending yields lower if rate cuts are expected and vice versa. (For more insight, see Get Acquainted With Bond Price/Yield Duo.)

PMI is considered a leading indicator in the eyes of the Fed, as evidenced by its mention in the FOMC minutes that are publicly released after its closed-door meetings. The supplier deliveries component itself is an official variable in calculating the Conference Board's U.S. Leading Index.

There are regional purchasing manager reports, some of which come out earlier than the PMI for a given month, but the PMI is the only national indicator.

Strengths:

• Very timely, coming out on the first day of the month following the survey month
• A good predictor of future releases, such as GDP and the Bureau of Labor Statistics (BLS) manufacturing reports
• Anecdotal remarks within the release can provide a more complete perspective from actual professionals (like in the Beige Book).
• Report displays point changes from the previous report, along with the length in months of any long-term trends shown for the "sub-indicators", such as inventories or prices.
• Commodities, such as silver, steel and copper are reported individually regarding the supply tightness and price levels noted in the previous month.

Weaknesses:

• Only covers manufacturing sector - the PMI Non-Manufacturing Business Report covers many other industries in the same manner
• Survey is very subjective in its data retrieval compared to other indicators.
• Regional reports released earlier (Philly Fed, Chicago NAPM) may have high correlations and can take some of the steam out of this release.

The Closing Line
The PMI is a uniquely constructed, timely indicator with a lot of value on Wall Street.

It is most useful when taken in context with more data-driven indicators, such as the Producer Price Index and GDP, or in conjunction with the ISM Report Non-Manufacturing Report on Business."

Ecdonomic Indicators: Productivity Report

Ecdonomic Indicators: Productivity Report: "Ecdonomic Indicators: Productivity Report

By Ryan Barnes

Release Date:	Approximately five weeks after previous quarter's end
Release Time:	8:30am Eastern Standard Time
Coverage:	Quarterly; revisions about eight weeks after quarter's end
Released By:	Bureau of Labor Statistics (BLS)
Latest Release:	http://www.bls.gov/news.release/prod2.toc.htm

Background
The Productivity and Costs Report is a quarterly release from the Bureau of Labor Statistics (BLS) that measures the level of output that is achieved by businesses per unit of labor. In this context, output is measured by using previously-released gross domestic product (GDP) figures; input is measured in hours worked and the associated costs of that labor. The unit labor costs that are provided take into account more detail than is provided in the earlier labor reports, including the effects of employee benefit plans, stock options expensing and taxes.

Percentage changes, presented in annualized rates, are the key figures released with this report. Separate productivity rates are released for the business sector, non-farm business sector and manufacturing. Manufacturing is kept separate because unlike the rest of the data, total volume output is used instead of GDP figures, and it also shows the highest volatility of any of the industry groups.

Productivity figures are provided across the economy as a whole, as well as for major industry groups and sub-sectors - it is a very thorough and detailed release, which is the main reason for the long time lag between period end and data release. The BLS will begin with total GDP figures, then remove government production and non-profit contributions to arrive at a GDP component that represents just "corporate America".

What It Means to Investors
Increased productivity is the ability of a company to achieve more output with the same workforce level. Strong productivity gains have been one of the most important reasons that the U.S. economy has expanded for the past 25 years. Productivity gains have historically led to gains in real income, lower inflation and increased corporate profitability. A company that is increasing output with the same number of hours worked will likely be more profitable, which means that it can raise wages without passing that cost on to customers, which keeps inflation pressures down, while adding to GDP growth.

The productivity report does not give investors any new data sets; its value is in the calculations and derivations the BLS computes on previously-released data.

Productivity is not labeled as a leading, lagging, or coincident indicator, as the figures are derived from the components of previous indicators, including GDP, the Consumer Price Index (CPI) and the employment cost reports.

The release will rarely be a big mover of the markets; GDP and labor reports will have already been released, and gains in GDP tend to be a fairly accurate indicator of productivity gains. The revised Productivity & Cost Report (released about one month after the initial release) will often show a marked change from the initial release, as any revisions to the GDP or labor reports will change the function used to calculate productivity.

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Productivity rates are volatile, not only quarter to quarter, but also within the various stages of the business cycle. A big challenge for economists and investors is separating out short-term changes in productivity due to cyclical factors from the independent long-term rate of productivity.

Strengths:

• Presents the results of many complex calculations that are difficult for investors to compute on their own
• Productivity gives good insight into inflationary pressures, and how much GDP can grow without causing concurrent gains in inflation.
• Jumps in productivity tend to make their way to corporate bottom lines quickly via margin expansion.
• Release shows results with and without the effects of inflation
• Detailed productivity measures at the industry and sector level allow investors to analyze the relative productivity performance of many of their holdings.
• One of very few indicators that shows results compared to other advanced economies; shows how the U.S. stacks up against the world in terms of productivity gains.
• Productivity results represent the lion's share of total GDP (about 75%); only government results and nonprofit groups are removed from calculations.

Weaknesses:

• Not a timely indicator; first report comes five weeks after the quarter, and the revised report nearly two months
• No new series of data is released, only derivations of previous data sets
• Can be very volatile quarter to quarter; long-term measurements are the most effective use of this indicator when analyzing sustainable, long-term rates of productivity growth
  

"

Economic Indicators: Producer Price Index (PPI)

Economic Indicators: Producer Price Index (PPI): "Economic Indicators: Producer Price Index (PPI)

By Ryan Barnes

Release Date:	Second or third week of the month
Release Time:	8:30am Eastern Standard Time
Coverage:	Previous month
Released By:	Bureau of Labor Statistics (BLS)
Latest Release:	http://www.bls.gov/news.release/ppi.toc.htm

Background
The Producer Price Index (PPI) is a weighted index of prices measured at the wholesale, or producer level. A monthly release from the Bureau of Labor Statistics (BLS), the PPI shows trends within the wholesale markets (the PPI was once called the Wholesale Price Index), manufacturing industries and commodities markets. All of the physical goods-producing industries that make up the U.S. economy are included, but imports are not.

The PPI release has three headline index figures, one each for crude, intermediate and finished goods on the national level:

1. PPI Commodity Index (crude): This shows the average price change from the previous month for commodities such as energy, coal, crude oil and the steel scrap. (For related reading, see Fueling Futures In The Energy Market.)
   
   
2. PPI Stage of Processing (SOP) Index (intermediate): Goods here have been manufactured at some level but will be sold to further manufacturers to create the finished good. Some examples of SOP products are lumber, steel, cotton and diesel fuel.
   
   
3. PPI Industry Index (finished): Final stage manufacturing, and the source of the core PPI.

The core PPI figure is the main attraction, which is the finished goods index minus the food and energy components, which are removed because of their volatility. The PPI percentage change from the prior period and annual projected rate will be the most printed figure of the release.

The PPI looks to capture only the prices that are being paid during the survey month itself. Many companies that do regular business with large customers have long-term contract rates, which may be known now but not paid until a future date. The PPI excludes future values or contract rates.

The PPI does not represent prices at the consumer level - this is left to the Consumer Price Index (CPI), which is released a few trading days after the PPI. Like the CPI, the PPI uses a benchmark year in which a basket of goods was measured, and every year after is compared to the base year, which has a value of 100. For the PPI, that year is 1982.

Changes in the PPI should always be presented on a percentage basis, because the nominal changes can be misleading as the base number is no longer an even 100.

What it Means for Investors
The biggest attribute of the PPI in the eyes of investors is its ability to predict the CPI. The theory is that most cost increases that are experienced by retailers will be passed on to customers, which the CPI could later validate. Because the CPI is the inflation indicator out there, investors will look to get a sneak preview by looking at the PPI figures. The Fed also knows this, so it studies the report intently to get clarity on future policy moves that might have to be made to fight inflation. (To learn more, read The Consumer Price Index: A Friend To Investors.)

Two downsides of the "basket of goods" approach are worth mentioning here. First, the PPI uses relative weightings for different industries that may not accurately represent their proportion to real gross domestic product (GDP); the weightings are adjusted every few years but small differences will still occur. Secondly, PPI calculations involve an explicit "quality adjustment method" - sometimes called hedonic adjustments - to account for changes that occur in the quality and usefulness of products over time. These adjustments may not effectively separate out quality adjustments from price level changes as intended.

PPI index data for capital equipment is used by the Department of Commerce to calculate the GDP deflator.

The removal of food and energy prices is almost implicit in most media releases today, but investors should determine on their own what the long-term rates of growth are for these two important items. We all have to purchase food and energy, so if these costs grow faster than the core PPI (or CPI) over time, consumers, and eventually GDP, are going to both feel the pinch. For investors who have holdings in these industries, there will be interest in seeing higher price levels, which should eventually lead to higher company revenues. (To learn more, read The Importance Of Inflation And GDP.)

While the PPI used to cover just the "physical goods" industries such as mining, manufacturing, and the like, many services-based industries have been brought into the index over time. Investors can now find PPI information on air and freight travel, couriers, insurers, healthcare providers, petroleum distribution and many more in the detailed release.

Strengths:

• Most accurate indicator of future CPI
• Long "operating history" of data series
• Good breakdowns for investors in the companies surveyed (mining, commodity info, some services sectors)
• Can move the markets positively
• Data is presented with and without seasonal adjustment

Weaknesses:

• Volatile elements, such as energy and food, can skew the data.
• Not all industries in the economy are covered.

The Closing Line
The PPI gets a lot of exposure for its inflationary foresight and, as such, can be a big market mover. As a result, the PPI is very useful for investors in the industries covered in terms of analyzing potential sales and earnings trends."

Economic Indicators: Personal Income and Outlays

Economic Indicators: Personal Income and Outlays: "Economic Indicators: Personal Income and Outlays

By By Ryan Barnes

Release Date:	4-5 weeks after month's end
Release Time:	8:30am Eastern Standard Time
Coverage:	Previous month
Released By:	Bureau of Economic Analysis (BEA)
Latest Release:	http://bea.gov/bea/newsrel/pinewsrelease.htm

Background
The Personal Income and Outlays Report (sometimes called the Personal Consumption Report) is issued by the Bureau of Economic Analysis (BEA) monthly. The report contains two sections, which together provide insight into consumer behavior and total economic consumption. The first section deals with personal income, while the other deals with personal outlays.

Personal income is a measure of income received from wages and salaries, dividends and interest, rental income, and the like. All are measured in actual dollars and usually expressed in percentage terms. Wages and salaries are the dominant contributor to the aggregate total.

Personal outlays is made up of mostly personal consumption on goods and services, but also includes interest payments made on non-mortgage debt and transfer payments to government or social services.

From these two basic variables a bit of math is done to derive:

• Real Personal Income: Personal income per capita (using population figures), and adjusted for inflation
• Disposable Personal Income (DPI): Personal income minus tax payments
• Personal Savings Rate: DPI minus personal outlays (and expressed as a percentage of DPI)

Personal consumption expenditures (PCE) deal with the other side of the consumer equation, mainly how much people are spending. PCE counts consumer spending for things such as retail items, but also how much people are spending on credit card interest payments. PCE measures also deduct the dollars spent by consumers on things like social security withholding and pension payments made by the self-employed.

PCE data is also expressed as a chain-weighted index. This means that results from each period are linked to others to produce an index level that takes into account such behavior as substitution of goods when prices rise. The PCE Index is a large component of the Conference Board's Index of Coincident Indicators,and is also used to calculate real gross domestic product (GDP).

Each release will show results for each month in the year-to-date, as well as annually for the previous three years. Personal income is broken down by general sector (manufacturing, services, government, etc), while personal consumption is divided among durables, non-durables and services.

What it Means for Investors
Personal income figures have shown to be the biggest determinant of future consumer demand. If people have more disposable income, they will generally spend more money. If this is not the case, an increase in the savings rate will occur. The U.S. has shown very low savings rates for many years now, even showing a slightly negative rate in recent years.

The Fed has also anointed the core PCE Index (with food and energy removed) as one of its favorite inflation indicators, some preferring it to even the Consumer Price Index (CPI). However, because the CPI will be released prior to this report, there is rarely much overall surprise and, therefore, little market reaction to the PCE index. (For more information, see The Consumer Price Index Controversy and The Consumer Price Index: A Friend To Investors.)

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One important thing that is excluded from the personal income figures are capital gains, as from the sale of appreciated stock. In the past decade, there has been a lot of wealth created in the stock market for many investors. While there are no official measurements of it, capital gains represent a source of disposable income for many and, as such, the personal income figures are known to be incomplete.

Strengths

• The chain-weighted PCE Index is considered a valuable longer term price indicator.
• PCE represents the largest portion of GDP.
• Savings rates highlight the potential future spending power of consumers.

Weaknesses:

• Released after many other indicators in the month, reducing its timeliness
• Not all sources of consumer income are included
• No extensive industry or demographic breakdowns

The Closing Line
The Personal Consumption Report is most useful as a predictor of overall consumer demand and the ability for people to spend more in the future through higher levels of disposable income. PCE represents the largest component of real gross domestic product."

Economic Indicators: Non-Manufacturing Report

Economic Indicators: Non-Manufacturing Report: "Economic Indicators: Non-Manufacturing Report

By By Ryan Barnes

Release Date:	The third business day of the month
Release Time:	10am Eastern Standard Time
Coverage:	Previous month's data
Released By:	Institute for Supply Management (ISM)
Latest Release:	http://www.ism.ws/ISMReport/?navItemNumber=4892

Background
The Institute for Supply Management (ISM) releases the ISM Non-Manufacturing Report on Business, also known as the Service Report, each month.The ISM, a non-profit group with more than 40,000 members engaged in the supply management and purchasing professions, saw the need to represent more than just the manufacturing industry, and especially to give attention to the notoriously absent service sector, which reflects the majority of real gross domestic product (GDP).

While the previously-released ISM Manufacturing ROB and its well-known Purchasing Managers Index (PMI) receives the most Wall Street attention, the Non-Manufacturing Report is quickly becoming a well-read and analyzed indicator since it was first released in 1998.

Currently, the report does not have a composite index - the Business Activity Index is the most summary-oriented piece of the report, as it measures respondents' views on the overall level of business activity; the Business Activity Index will usually be the headline figure presented in publications and the media.

The entire report relates to investors because it represents a much larger share of the economy and, most importantly, it covers the hard-to-measure services industries, the fastest-growing part of the U.S. economy. The survey covers many of the same categories that are found in the PMI, including employment, supplier deliveries, inventory levels, production levels and prices.

What it Means for Investors
Because it is a relatively new indicator, the Service Report has yet to gain the same attention of the PMI, but it is quickly appearing on many top analysts' radars because of its breadth of coverage and original survey format. The Service Report is also a timely indicator, coming out just days after the survey month.

For investors, the Service Report may be more useful than the PMI for examining the status of the industries in which they hold investments, and examining the trends taking place in that corner of the market. Each index (there are 10 in total) can be looked at individually, but the Business Activity Index is the most comprehensive; it asks whether the overall business conditions will be better, the same, or worse in the upcoming month.

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The magic number for expansion within the Business Activity Index is 50; levels above 50 indicate that the service-related areas of the economy are generally expanding. Rates of change are important as well as where the economy sits within the current business cycle.

Strengths:

• Consistent and timely; comes out on the third business day of every month, right after the PMI report
• Shows results for the majority of the total economy, most notably the services industries
• When used with the ISM Manufacturing Report, the two reports will capture industries making up nearly 90% of total GDP
• Anecdotal remarks within the release can provide a better perspective from actual professionals.
• Release shows percentage changes from the previous two months separately, as well as the length of any trend along with its relative velocity.

Weaknesses:

• Does not present a diffusion-weighted summary index figure (like the PMI)
• Survey is very subjective in its data retrieval compared to other indicators, using measures such as "higher", "lower" and "the same"
• As a relatively new data series, the Service Report fails to provide long-term historical data and correlations to prior business cycles can't be analyzed.

The Closing Line
The ISM Non-Manufacturing Report on Business is a new but telling indicator that is gaining more Wall Street attention with every release, providing insight into business areas not well covered in other indicators."

Economic Indicators: Mutual Fund Flows

Economic Indicators: Mutual Fund Flows: "Economic Indicators: Mutual Fund Flows

By Ryan Barnes

Release Date:	Monthly, about four weeks after month's end
Release Time:	During market hours
Coverage:	Stock, bond and money market funds
Released By:	Investment Company Institute (ICI)
Latest Release:	http://www.ici.org/stats/index.html

Background
Dollar flows into and out of mutual funds is a modern-day indicator, one based on sentiment but still useful to the wise investor. The Investment Company Institute (ICI) is the most reliable source of mutual fund trends, publishing a monthly report covering domestic and international stock funds, bond funds and even money markets. The ICI is a non-profit organization whose members are the majority of investment companies registered with the Securities and Exchange Commission (SEC). The organization has reported before Congress and presents free information for investors and economists by sampling more than 8,000 mutual funds, closed-end funds, exchange-traded funds (ETFs) and unit investment trusts (UITs).

The Federal Reserve also issues money market figures in its Money Supply Report, and TrimTabs offers daily and weekly data to investors through its website.

Most often, mutual fund flows are presented as the net of all inflows and outflows measured over the period; if total dollars going in is the same as dollars being sold out, total flows over the period will be $0. In the monthly ICI report, new sales, redemptions and exchanges are netted out to show a "net new cash flow" figure, which can be positive or negative for a given period. Average cash levels at stock funds are also shown in the report

What it Means for Investors
Stocks and bonds respond to changes in demand like any other investment, and knowing what the prevailing investing trends are can help investors to decide whether the present time is a good one to invest in one asset class or another. While mutual fund flows alone do not determine investor sentiment (institutional money and individual shareholders are excluded in the ICI report), they do represent the way most investors participate in the markets - mutual fund assets in the United States alone stood at more than $10 trillion at the end of 2006.

That said, strong flows into stock mutual funds does not guarantee good times ahead for equity investors. Some economists even see fund flows as a "false positive", or contrarian indicator, with the logic being that most people commit more money to the stock market when it has already run up, and has received a lot of positive press and mainstream coverage. A recent and powerful example can be seen in the last few months of the stock market peak back in early 2000. Stock market flows were at record levels those first few months; soon after, the stock market began a steady march downward, with major indexes dropping more than 50% in the next year.

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If the market is coming out of a recession or other weak period, seeing fund flows grow in stock funds can be a positive indicator, suggesting that investors are increasing their allocations for stocks. When mutual fund managers have more cash coming in, they have to go out and purchase stocks on the open market to keep their portfolio percentages in the right proportions.

Money market fund flows can be read in a similar way, with increasing flows being seen as a sign that stocks may be undervalued, and vice versa. (To learn more, read Money Market Mutual Funds.)

Strengths:

• Valuable source of investor sentiment
• Information available for other countries; ICI even provides a "worldwide" figure
• Valuable for seeing fund manager sentiment through average cash levels (considered a defensive asset class)

Weaknesses:

• Can be interpreted in different ways (such as a contrarian indicator)
• Does not show total market ownership - only mutual funds
• Difficult to separate secular trends in fund ownership from market timing situations month to month

The Closing Line
Fund flows may be seen as esoteric, but smart investors should consider adding this to their arsenal of indicators to know and study, understanding that stock and bond markets have supply and demand patterns that may be distinct from economic activity."

Economic Indicators: Money Supply

Economic Indicators: Money Supply: "Economic Indicators: Money Supply

By Ryan Barnes

Release Date:	Weekly, every Thursday
Release Time:	4:30pm Eastern Standard Time
Coverage:	M1 and M2 (M3 coverage discontinued as of March 2006)
Released By:	Federal Reserve Board
Latest Release:	http://www.federalreserve.gov/releases/h6/

Background
The money supply is just that: the amount of money floating around the economy and available for spending. Different numerical aggregates show different subsets of money based on their liquidity, starting with M0 (the most liquid), which is just the dollar value of physical cash and coin, and M1, which includes all of M0 as well as checking accounts, traveler's checks and demand deposits. The M2 aggregate includes the dollar value of all of M1 in addition to savings accounts, time deposits of less than $100,000 (such as certificates of deposit), and money market funds held by investors. (For related reading, see What Is Money?)

The Federal Reserve publishes data on the levels of M1 and M2 weekly, and has been collecting data on the money supply since the 1950s. In the less financially complicated world that existed then, the supply of money showed a very strong correlation to how much money was spent, and it was therefore studied fervently by economists for clues to economic growth.

Legislation passed in 1978 mandated the Federal Reserve to set annual targets for money supply growth. At the time, there was a still a high correlation between money supply growth and overall economic growth, as measured by gross domestic product (GDP). Over time, that close relationship started to break down due to changes in banking accounts, the proliferation of financing companies, and more widespread investment among consumers (stock and bond investments are not captured in M1 and M2 aggregates). When the legislation expired in 2000, the Fed announced that it would no longer set targets for growth of the money supply as a matter of policy, although it remains an important indicator for predicting inflation and spending patterns among consumers. In the words of the Fed, "…the FOMC [Federal Open Market Committee] believes that the behavior of money and credit will continue to have value for gauging economic and financial conditions."

The M2 aggregate is a large component of the Conference Board's U.S. Leading Index (which contains 10 indicators), making up more than 30% of the index.

What it Means for Investors
The Federal Reserve has a measure of control over the money supply aggregates, which differentiates this indicator from most others. Through open market operations such as buying and selling Treasuries and setting the reserve requirements, the Fed does things to alter the money supply through its daily course of business. Setting short-term interest rates to guide the economy remains the core policy directive of the FOMC, but changes to rates such as the fed funds rate do eventually manifest themselves in the money supply, albeit with a time lag. (To learn more, read Formulating Monetary Policy.)

No single release from the Fed regarding the money supply is going to shock the market; the weekly release schedule alone takes a lot of the surprise factor out mix, so this report will rarely move the markets in the short term. History has shown that the money supply tends to rise faster (accelerate faster) during periods of economic expansion that during contraction periods.

If there is one measure that is looked at more than the rest, it's the M2 figure - cash equivalents in this designation are deemed to be collectively liquid enough to be spent without any real delays or penalty costs. While growth in the money supply does not directly indicate future spending growth as it once did, it does indicate that inflation could be around the corner. This is where knowing both money supply growth and GDP growth becomes very handy - if money supply growth is rapidly outpacing economic growth, there will soon be more money chasing after the same amount of goods. This echoes the dryly famous quote: "Inflation is always and everywhere a monetary phenomenon."

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Changes in the money supply are usually quoted in the media on an annualized percentage basis, which helps to smooth out short-term statistical "blips" that can occur week to week.

Strengths:

• A timely and consistent indicator, released weekly and with a long operating history
• It is often misunderstood by investors, creating opportunities for those who who know how to use it.
• There is a lot of existing research on the relationship between money supply and GDP growth as well as inflation.

Weaknesses:

• Rarely a mover of the markets in the short term
• Limited breakdowns available in the weekly release; the quarterly Flow of Funds report provides a broader view
• Lack of economic consensus on how to best compare money supply levels to inflationary outlook and future spending patterns

The Closing Line
The evaluation of money supply figures has become a progressive story, one that savvy investors will take into consideration when contemplating future levels of economic growth as well as inflation."

Economic Indicators: Jobless Claims Report

Economic Indicators: Jobless Claims Report: "Economic Indicators: Jobless Claims Report

By Ryan Barnes

Release Date:	Weekly; Thursdays, prior to market open
Release Time:	8:30am Eastern Standard Time
Coverage	Previous week (cutoff date is previous Saturday)
Released By:	U.S. Department of Labor
Latest Release:	http://www.dol.gov/opa/media/press/eta/main.htm

Background
The Jobless Claims Report is a weekly release that shows the number of first-time (initial) filings for state jobless claims nationwide. The data is seasonally adjusted, as certain times of the year are known for above-average hiring for temporary work (harvesting, holidays).

Due to the short sample period, week-to-week results can be volatile, so reported results are most often headlined as a four-week moving average, so that each week's release is the average of the four prior jobless claims reports. The release will show which states have had the biggest changes in claims from the previous week; the revised edition shows up about a week later, at which time a full breakdown by state and U.S. territory is available.

Also released with this report are the relatively minor data points of the insured unemployment rate and the total unemployed persons. These are not seen as valuable indicators because the total unemployed figure tends to stay relatively constant week to week. (To learn more, read Surveying The Employment Report.)

What it Means for Investors
New jobless claims for the week reflect an up-to-the-minute account of who is leaving work unexpectedly, reflecting the "run rate" of the economy's health with little lag time. The Jobless Claims Report gets a lot of press due to its simplicity and the theory that the healthier the job market, the healthier the economy: more people working means more disposable income, which leads to higher personal consumption and gross domestic product (GDP).

The fact that jobless claims are released weekly is both a blessing and a curse for investors; sometimes the markets will take a mid-month jobless claims report and react strongly to it, particularly if it shows a difference from the cumulative evidence of other recent indicators. For instance, if other indicators are showing a weakening economy, a surprise drop in jobless claims could slow down equity sellers and could actually lift stocks, even if only because there isn't any other more recent data to chew on.

A favorable Jobless Claims Report can also get lost in the shuffle of a busy news day, and hardly be noticed by Wall Street at all. The biggest factor week to week is how unsure investors are about the future direction of the economy.

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Most economists agree that a sustained change (as shown in the moving averages) of 30,000 claims or more is the benchmark for real job growth or job loss in the economy. Anything less is deemed statistically insignificant by most market analysts.

Strengths:

• Weekly reporting provides for timely, almost real-time snapshots.
• As a tightly-presented release, investors can easily pick up the raw release and quickly apply the information to market decisions.
• Initial claims are provided gross and net of seasonal adjustments, and give a breakdown for every state's individual results.
• Some states' figures are shown along with a comment from that state's reporting agency regarding specific industries in which noteworthy activity is happening, such as "fewer layoffs in the industrial machinery industry".

Weaknesses:

• Summer and other seasonal employment tends to skew the results.
• Highly volatile - revisions to advance report can be very big on a percentage basis
• Jobless claims in isolation tell little about the overall state of the economy.
• No industry breakdowns are provided, just the national figure.
  

"

Economic Indicators: Industrial Production

Economic Indicators: Industrial Production: "Economic Indicators: Industrial Production

By Ryan Barnes

Release Date:	On or around the 16th of the month
Release Time:	9:15 Eastern Standard Time
Coverage:	Monthly, on prior month's data
Released By:	Board of Governors, Federal Reserve Board
Latest Release:	http://www.federalreserve.gov/releases/g17/current/default.htm

Background
There is a simultaneous release of the Industrial Production and Capacity Utilization reports.

Industrial production figures are based on the monthly raw volume of goods produced by industrial firms such as factories, mines and electric utilities in the United States. Also included in the industrial poduction figures are the businesses of newspaper, periodical and book publishing, traditionally labeled as manufacturing.

The industrial production data is used in conjunction with various industry capacity estimates to calculate capacity utilization ratios for each line of business, with a base year used as a benchmark level of 100% (currently 2002). Aggregate utilization ratios are also provided for areas such as total manufacturing and total high-tech production

The industrial production and related capacity utilization figures are considered coincident indicators, meaning that changes in the levels of these indicators usually reflect similar changes in overall economic activity, and therefore gross domestic product (GDP). The release will show percentage changes on month-to-month and year-over-year levels, shedding light on short-term rates of change and business cycle growth, respectively.

The Federal Reserve watches this figure closely because it understands that inflation shows itself first at the industrial level, when supplies of basic materials get tight - either for their manufacturers or for the corporate clients who buy them. Rises in the cost of commodities and materials will begin to get passed on down the line, ending up with individual consumers of higher-cost finished products.

Also, the industrial sector exhibits the most volatility in terms of nominal output during a business cycle peak to trough. As a result, big changes here have been a historical forecaster of business cycle inflection points.

What it Means for Investors:
Capacity utilization levels, although technically upper bound by 100%, don't approach this value. Utilization levels above 82-85% are seen as "tight" and forecast price increases or supply shortages in the near future. Levels below 80% mean there is some slack in the economy, which could lead to recession worries and employment losses. (For related reading, see Recession: What Does It Mean To Investors?)

As with many indicators, Wall Street will have a perceived "consensus number" before the release - if the difference is larger than expected, stock and bond markets will react in the short term. A higher-than-expected number during a time of economic expansion will cause inflationary fears. If the economy is lagging, an upside surprise in the release could trigger the purchase of equities on the hope of a turnaround. The reverse is also true; lower-than-expected numbers during a time when fears of economic overheating already exist could provide a short-term lift to stock and bond prices.

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This report can be used to see what specific areas of industrial production are doing better than others. This can lead investors to an analysis of supply chains and which sectors could be benefiting - or suffering - based on the trends in industrial production.

Strengths:

• Sector breakdown allows for inspection of the relative performance of many lines of business, such as electronics, chemicals and basic metals.
• Press releases will include valuable analysis, which removes overly volatile components to provide a more relevant trendline and puts current numbers into perspective.
• A timely indicator that is released only weeks after data is measured

Weaknesses:

• It only deals with physical goods-producing industries, which make up less than half of economic output. Services, as well as construction production, are not included.
• The capacity numbers are drawn from many different sources, and sometimes pure estimates are used when no information is available
• Historical comparisons are made difficult by heavy transition of component industries, as well as the changing demographics of U.S. output as a whole (manufacturing output is in a constant decline as a % of GNP).

The Closing Line
This report is declining in its level of importance as the years pass; the United States is simply not the huge industrial power it once was. The position of manufacturing in the economic food chain is the highlight of the report, and inflection points in the economy are often confirmed with big changes in this report."

Economic Indicators: Housing Starts

Economic Indicators: Housing Starts: "Economic Indicators: Housing Starts

By Ryan Barnes

Release Date:	On or around the 17th of the month
Release Time:	8:30am Eastern Standard Time
Coverage:	Previous month's data
Released By:	U.S. Census Bureau
Latest Release:	http://www.census.gov/const/www/newresconstindex.html

Background
The New Residential Construction Report, known as "housing starts" on Wall Street, is a monthly report issued by the U.S. Census Bureau jointly with the U.S. Department of Housing and Urban Development (HUD). The data is derived from surveys of homebuilders nationwide, and three metrics are provided: housing starts, building permits and housing completions. A housing start is defined as beginning the foundation of the home itself. Building permits are counted as of when they are granted.

Both building permits and housing starts will be shown as a percentage change from the prior month and year-over-year period. In addition, both data sets are divided geographically into four regions: Northeast, Midwest, South and West. This helps to reflect the vast differences in real estate markets in different areas of the country. On the national aggregates, the data will be segmented between single-family and multiple-unit housing, and all information is presented with and without seasonal adjustment.

Housing starts and building permits are both considered leading indicators, and building permit figures are used to compute the Conference Board's U.S. Leading Index. Construction growth usually picks up at the beginning of the business cycle (the Leading Indicator Index is used to identify business cycle patterns in the economy, and is used by the Federal Open Market Committee (FOMC) during policy meetings).

What it Means for Investors
This is not typically a report that shocks the markets, but some analysts will use the housing starts report to help create estimates for other consumer-based indicators; people buying new homes tend to spend money on other consumer goods such as furniture, lawn and garden supplies, and home appliances.

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The housing market may show the first signs of stalling after a recent rate hike by the Federal Reserve. This is because rising mortgage rates may be enough to convince homebuilders to slow down on new home starts. For investors looking to evaluate the real estate market, housing starts should be looked at in conjunction with existing home sales, the rental component of the Consumer Price Index and the Housing Price Index (also available from the Census Bureau). (For related reading, see Investing In Real Estate.)

According to the Census Bureau, "it may take four months to establish an underlying trend for building permit authorizations, five months for total starts and six months for total completions", so investors should look more closely at the forming patterns to see through often-volatile month to month results.

Strengths

• Very forward-looking, especially building permits; a good gauge for future real estate supply levels
• Can be used to identify business cycle pivot points
• Sample size covers approximately 95% of all residential construction in the U.S.

Weaknesses

• No differentiation between size and quality of homes being initiated, only the nominal amount
• Only focuses on one area of the economy

The Closing Line
Housing starts is best used as a business cycle indicator and a tool for investors researching the real estate markets."

Economic Indicators: Overview

Economic Indicators: Overview: "Economic Indicators: Overview

By Ryan Barnes

Every week there are dozens of economic surveys and indicators released. In the past, experienced professionals and economists have had an advantage in receiving this data in a timely fashion. Fortunately, the emergence of the internet has changed this situation by giving everyone access.

Economic indicators can have a huge impact on the market; therefore, knowing how to interpret and analyze them is important for all investors. In this tutorial, we'll cover some of the most important economic indicators. You'll learn where to find them, how to read them and what they can tell you about he health of the economy - and your investments.

Next: Economic Indicators: Beige Book

Table of Contents

1) Economic Indicators: Overview

2) Economic Indicators: Beige Book

3) Economic Indicators: Business Outlook Survey

4) Economic Indicators: Consumer Confidence Index (CCI)

5) Economic Indicators: Consumer Credit Report

6) Economic Indicators: Consumer Price Index (CPI)

7) Economic Indicators: Durable Goods Report

8) Economic Indicators: Employee Cost Index (ECI)

9) Economic Indicators: Employee Situation Report

10) Economic Indicators: Existing Home Sales

11) Economic Indicators: Factory Orders Report

12) Economic Indicators: Gross Domestic Product (GDP)

13) Economic Indicators: Housing Starts

14) Economic Indicators: Industrial Production

15) Economic Indicators: Jobless Claims Report

16) Economic Indicators: Money Supply

17) Economic Indicators: Mutual Fund Flows

18) Economic Indicators: Non-Manufacturing Report

19) Economic Indicators: Personal Income and Outlays

20) Economic Indicators: Producer Price Index (PPI)

21) Ecdonomic Indicators: Productivity Report

22) Economic Indicators: Purchasing Managers Index (PMI)

23) Economic Indicators: Retail Sales Report

24) Economic Indicators:Trade Balance Report

25) Economic Indicators: Wholesale Trade Report

"

Cancer cure 'may be available in two years' - Telegraph

Cancer cure 'may be available in two years' - Telegraph: "

Cancer cure 'may be available in two years'

By Nic Fleming Science Correspondent

Last Updated: 2:08am BST 20/09/2007

Cancer sufferers could be cured with injections of immune cells from other people within two years, scientists say.

Red tape hinders cancer research, says report US researchers have been given the go-ahead to give patients transfusions of “super strength” cancer-killing cells from donors. Dr Zheng Cui, of the Wake Forest University School of Medicine, has shown in laboratory experiments that immune cells from some people can be almost 50 times more effective in fighting cancer than in others. Dr Cui, whose work is highlighted in this week’s New Scientist magazine, has previously shown cells from mice found to be immune to cancer can be used to cure ordinary mice with tumours. The work raises the prospect of using cancer-killing immune system cells called granulocytes from donors to significantly boost a cancer patient’s ability to fight their disease, and potentially cure them. The US Food and Drug Administration (FDA) last week gave Dr Cui permission to inject super-strength granulocytes into 22 patients. advertisement Dr Cui said: “Our hope is that this could be a cure. Our pre-clinical tests have been exceptionally successful. “If this is half as effective in humans as it is in mice it could be that half of patients could be cured or at least given one to two years extra of high quality life. “The technology needed to do this already exists, so if it works in humans we could save a lot of lives, and we could be doing so within two years.” Dr Cui is confident patients could benefit from the technique quickly because the technology used to extract granulocytes is the same as that already used by hospitals to obtain other blood components such as plasma or platelets. Prof Gribben, a cancer immunologist at Cancer Research UK’s experimental centre at St Bartholomew’s Hospital, London, said: “The concept of using immune system cells to kill off someone else’s cancer is very, very exciting.” Dr Cui, who presented his latest findings at an anti-ageing conference in Cambridge last week, extracted granulocytes from 100 people, including some with cancer. When the immune cells were mixed with cervical cancer cells, those from different individuals demonstrated vastly varying abilities to fight the cancer. Those of the strongest participants killed close to 97 per cent of the cancer cells in 24 hours, while those of the weakest killed only two per cent. The abilities of the cells of participants aged over 50 were lower than average, and those of cancer patients even lower. Dr Cui noticed that the strength of a person’s immune system to combat cancer can also vary according to how stressed they are and the time of year. Initial experiments suggest it may be possible to transfer granulocytes which have demonstrated strong cancer-fighting powers into cancer sufferers. In 1999 Prof Cui and colleagues discovered a male mouse that appeared to be completely resistant to virulent cancer cells of several different types. Since then more than 2000 mice in 15 generations have been bred from the original cancer-free mouse and 40 per cent of the offspring have inherited the immunity. With the immune system, some types of cells which provide “innate immunity” are constantly on patrol for foreign invaders, while others have to firstly learn to identify a specific threat before going on the attack. Scientists developing cancer vaccines have generally attempted to stimulate responses in the immune system cells that require prior exposure. Last year Dr Cui caused shockwaves in the cancer research community when he identified granulocytes as the cells responsible for the mouse cancer immunity – because they are among those which act automatically. Prof Gribben said: “This is surprising because it goes against how we thought immune system works against cancer. It makes us think again about our preconceived notions.” Prof Cui injected granulocytes from immune mice into ordinary mice, and found it was possible to give them protection from cancer. Even more excitingly he found the transfusions caused existing cancers to go into remission and to clear them completely within weeks. A single dose of the cells appeared to give many of the mice resistance to cancer for the rest of their lives. Granulocyte transfusion has previously been used to try to prevent infections in cancer patients whose immune systems have been weakened by chemotherapy. However their effectiveness has been unclear because they have mainly been given to patients in an advanced stage of disease. Prof Gribben warned the US researchers would have to be careful to avoid other immune system cells from the donor proliferating in the patient’s body. He added: “If they’re using live cells there is a theoretical risk of graft-versus-host disease, which can prove fatal.” Dr Cui said he is working on ways to minimise this risk.

"

Personalized Medicine - The Genomic Revolution in Cardiac Care

Personalized Medicine - The Genomic Revolution in Cardiac Care: "

WASHINGTON, Sept. 19 /PRNewswire-USNewswire/ --The Richard B. and Lynne
V. Cheney Cardiovascular Institute and The Catherine Birch McCormick
Genomics Center at The George Washington University host a cutting edge
Symposium to examine the issues and implications around the growing forces
of genomics and personalized medicine in cardiology. This symposium is
intended to provide a valuable state-of-the-art update on the current
status and future directions of the genomics of atherosclerotic
cardiovascular disease, heart failure and cardiac arrhythmias, and the
potential application to individualizing prevention, diagnosis and
treatment for cardiac patients.

   The practice of cardiovascular care has seen significant advances in
the past 40 years with dramatic reduction of mortality from heart disease.
Despite this major progress, cardiovascular disease remains the number one
cause of death in the United States and is on the rise in developing
countries. As we enter the 21st century there is much more we need to learn
about the individualized patient disease susceptibility, progression, and
treatment strategies. Medical molecular genetics is the next frontier with
the potential to make dramatic breakthroughs in the prediction of disease
and improvement of prevention, treatment, and quality of care.

   The symposium agenda features luminaries in the field of genomics who
will explore the state of cardiovascular genomics and how it relates to
clinical practice. Keynote speakers include Elizabeth Nabel, MD, Director,
National Heart, Lung, and Blood Institute to address: Genomics & Coronary
Artery Disease, and Andrew Plump, MD, Ph.D., Director of Clinical Molecular
Profiling, Merck & Co., to discuss: Genomics for Developing Biomarkers. The
symposium provides a unique forum in its roster of prestigious speakers
from academic, government and industry and in its ability to examine the
issues and stimulate new ideas around personalized medicine as it relates
to personalized cardiovascular care. Researchers, cardiologists, policy
makers, medical industry and anyone with an interest in personalized
medicine and genomics will want to attend.

   "By identifying the genes that can cause and cure heart disease,
researchers hold in their hands the potential for personalized medicine.
Understanding research advances in the science of the human gene and its
application to cardiovascular disease will make possible life saving
changes in cardiac care," says Dr. Timothy McCaffrey, who is the program
co-chair for the one-day symposium as well as director of the McCormick
Genomics Center at The George Washington University. The McCormick Genomics
Center is among the nation's innovative leaders in genomics research and
application and is one of the few centers in the world to focus on
cardiovascular genomic research. Dr. McCaffrey will lead a faculty of
renowned experts, in the program.

   "Leveraging the enormous resources of The George Washington University
is a key part of how the Institute is approaching its mission to accelerate
the pace of scientific discovery, reduce mortality and improve the quality
of life of Americans with cardiovascular disease," said Dr. Richard J.
Katz, who is the Director of the Cheney Cardiovascular Institute and
Director of the Division of Cardiology. "An educational program like this
one, on personalized medicine in cardiac care, holds the key to the next
major advancements in cardiovascular care, which researchers, clinicians
and policy makers must understand is one of the ways we're attacking
cardiovascular disease and working to achieve our mission."

   The symposium, titled "Personalized Medicine: The Genomic Revolution in
Cardiac Care," is designated for 6 AMA PRA Category 1 Credits and will
convene on October 25, 2007 at The George Washington University Hospital
Auditorium, in Washington, DC. For more information about the symposium or
to register, please visit http://www.cheneycardioinstitute.org.

"

Smart Polymers - Biomedical Applications for Smart Polymers - Smart Polymers in Biomedicine

Smart Polymers - Biomedical Applications for Smart Polymers - Smart Polymers in Biomedicine: "

Biomedical Applications for Smart Polymers

From Theresa Phillips,
Your Guide to Biotech / Biomedical.
Stay up to date!

Mimicking the Stimulus-Responsiveness of Natural Polymers

Scientists studying the natural polymers found in living organisms (proteins, carbohydrates and nucleic acids) have learned how they behave in biological systems as they perform their structural and physiological roles. That information is being put to use to develop similar man made polymeric substances with specific properties and the ability to respond to changes in their environment. These synthetic polymers are potentially very useful for a variety of applications including some related to biotechnology and biomedicine.

Smart polymers are becoming increasingly more prevalent as scientists learn about the chemistry and triggers that induce conformational changes in polymer structures and devise ways to take advantage of, and control them.

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New polymeric materials are being chemically formulated that sense specific environmental changes in biological systems, and adjust in a predictable manner making them useful tools for drug delivery or other metabolic control mechanisms.

The nonlinear response of smart polymers is what makes them so unique and effective. A significant change in structure and properties can be induced by a very small stimulus. Once that change occurs, there is no further change, meaning a predictable all-or-nothing response occurs, with complete uniformity throughout the polymer. Smart polymers may change conformation, adhesiveness or water retention properties, due to slight changes in pH, ionic strength, temperature or other triggers.

Another factor in the effectiveness of smart polymers lies in the inherent nature of polymers in general. The strength of each molecule’s response to changes in stimuli is the composite of changes of individual monomer units which, alone, would be weak. However, these weak responses, compounded hundreds or thousands of times, create a considerable force for driving biological processes.

Classification and Chemistry

Currently, the most prevalent use for smart polymers in biomedicine is for specifically targeted drug delivery. Since the advent of timed release pharmaceuticals, scientists have been faced with the problem of finding ways to deliver drugs to a particular site in the body without having them first degrade in the highly acidic stomach environment. Prevention of adverse effects to healthy bone and tissue is also an important consideration. Researchers have devised ways to use smart polymers to control the release of drugs until the delivery system has reached the desired target. This release is controlled by either a chemical or physiological trigger.

Linear and matrix smart polymers exist with a variety of properties depending on reactive functional groups and side chains. These groups might be responsive to pH, temperature, ionic strength, electric or magnetic fields, and light. Some polymers are reversibly cross-linked by noncovalent bonds that can break and reform depending on external conditions. Nanotechnology has been fundamental in the development of certain nanoparticle polymers such as dendrimers and fullerenes, that have been applied for drug delivery. Traditional drug encapsulation has been done using lactic acid polymers. More recent developments have seen the formation of lattice-like matrices that hold the drug of interest integrated or entrapped between the polymer strands.

Smart polymer matrices release drugs by a chemical or physiological structure-altering reaction, often a hydrolysis reaction resulting in cleavage of bonds and release of drug as the matrix breaks down into biodegradable components. The use of natural polymers has given way to artificially synthesized polymers such as polyanhydrides, polyesters, polyacrylic acids, poly(methyl methacrylates), and polyurethanes. Hydrophilic, amorphous, low-molecular-weight polymers containing heteroatoms (i.e., atoms other than carbon) have been found to degrade fastest. Scientists control the rate of drug delivery by varying these properties thus adjusting the rate of degradation.

Graft-and-block copolymers are comprised of two different polymers grafted together. A number of patents already exist for different combinations of polymers with different reactive groups. The product exhibits properties of both individual components which adds a new dimension to a smart polymer structure, and may be useful for certain applications. Cross-linking hydrophobic and hydrophilic polymers results in formation of micelle-like structures that can protectively assist drug delivery through aqueous medium until conditions at the target location cause simultaneous breakdown of both polymers.

A graft-and-block approach might be useful for solving problems encountered by the use of a common bioadhesive polymer, polyacrylic acid (PAAc). PAAc adheres to mucosal surfaces but will swell and degrade rapidly at pH 7.4, resulting in rapid release of drugs entrapped in its matrix.

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A combination of PAAc with another polymer that is less sensitive to changes at neutral pH might increase the residence time and slow the release of the drug, thus improving bioavailability and effectiveness.

Hydrogels are polymer networks that do not dissolve in water but swell or collapse in changing aqueous environments. They are useful in biotechnology for phase separation because they are reusable or recyclable. New ways to control the flow, or catch and release of target compounds, in hydrogels, are being investigated. Highly specialized hydrogels have been developed for the delivery and release of drugs into specific tissues. Hydrogels made from PAAc are especially common because of their bioadhesive properties and tremendous absorbency.

Enzyme immobilization in hydrogels is a fairly well-established process. Reversibly cross-linked polymer networks and hydrogels can be similarly applied to a biological system where the response and release of a drug is triggered by the target molecule itself. Alternatively, the response might be turned on or off by the product of an enzyme reaction. This is often done by incorporating an enzyme, receptor or antibody, that binds to the molecule of interest, into the hydrogel. Once bound, a chemical reaction takes place that triggers a reaction from the hydrogel. The trigger can be oxygen, sensed using oxidoreductase enzymes, or a pH-sensing response. An example of the latter is combined entrapment of glucose oxidase and insulin in a pH-responsive hydrogel. In the presence of glucose, the formation of gluconic acid by the enzyme triggers release of insulin from the hydrogel.

Two criteria for this technology to work effectively are enzyme stability and rapid kinetics (quick response to the trigger and recovery after removal of the trigger). Several strategies have been tested in type 1 diabetes research, involving the use of similar types of smart polymers that can detect changes in blood glucose levels and trigger production or release of insulin. Likewise, there are many possible applications of similar hydrogels as drug delivery agents for other conditions and diseases.

Smart polymers are not just for drug delivery. Their properties make them especially suited for bioseparations. The time and costs involved in purifying proteins might be reduced significantly by using smart polymers that undergo rapid reversible changes in response to a change in medium properties. Conjugated systems have been used for many years in physical and affinity separations and immunoassays. Microscopic changes in the polymer structure are manifested as precipitate formation, which may be used to aid separation of trapped proteins from solution.

These systems work when a protein or other molecule that is to be separated from a mix, forms a bioconjugate with the polymer, and precipitates with the polymer when its environment undergoes a change. The precipitate is removed from the media, thus separating the desired component of the conjugate from the rest of the mixture. Removal of this component from the conjugate depends on recovery of the polymer and a return to its original state, thus hydrogels are very useful for such processes.

Another approach to controlling biological reactions using smart polymers is to prepare recombinant proteins with built-in polymer binding sites close to ligand or cell binding sites. This technique has been used to control ligand and cell binding activity, based on a variety of triggers including temperature and light.

Future Applications

It has been suggested that polymers might be developed that can learn and self-correct behavior over time. Although this might be a far distant possibility, there are other more feasible applications that appear to be coming in the near future. One of these is the idea of smart toilettes that analyze urine and help identify health problems. In environmental biotechnology, smart irrigation systems have been also been proposed. It would be incredibly useful to have a system that turns on and off, and controls fertilizer concentrations, based on soil moisture, pH and nutrient levels. Many creative approaches to targeted drug delivery systems that self-regulate based on their unique cellular surroundings, are also under investigation.

There are obvious possible problems associated with the use of smart polymers in biomedicine. The most worrisome is the possibility of toxicity or incompatibility of artificial substances in the body, including degradation products and byproducts. However, smart polymers have enormous potential in biotechnology and biomedical applications if these obstacles can be overcome."

Gene Cloning Methods - Cloning in E. coli - Cloning Bacterial Genes

Gene Cloning Methods - Cloning in E. coli - Cloning Bacterial Genes: "

Top 5 Reasons E. coli is used for Gene Cloning

From Theresa Phillips,
Your Guide to Biotech / Biomedical.
Stay up to date!

The microorganism Escherichia coli has a long history of use in the biotechnology industry and is still the microorganism of choice for most gene cloning experiments. Although E. coli is known to the general population for the infectious nature of one particular strain (0157:H7) few people are aware of how versatile and useful E. coli is to genetic research. There are several reasons E. coli became so widely used and is still a common host for recombinant DNA.

1. Genetic Simplicity

Bacteria make useful tools for genetic research because of their relatively small genome size compared to eukaryotes. E. coli cells only have about 4,400 genes whereas humans contain approximately 100,000. Also, bacteria, including E. coli, live their entire lifetime in a haploid state, with no second allele to mask the effects of mutations during protein engineering experiments.

_source:

_{Weaver, R. and Hedrick, P. 1989. Genetics. Wm. C. Brown Publishers, Dubuque, IA, USA.}

_{Madigan, M., Martinko, J. and Parker, J. 2000. Brock Biology of Micro-organisms, 9th ed. Prentice Hall, Upper Saddle River, NJ, USA.}

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2. Growth Rate

Bacteria typically grow much faster than more complex organisms. E. coli grows rapidly at a rate of one generation per twenty minutes under typical growth conditions. This allows for preparation of log-phase cultures overnight and genetic experimental results in mere hours instead of several days, months or years.

3. Safety

E. coli is naturally found in the intestinal tracts of humans and animals where it helps provide nutrients (vitamins K and B12) to its host. There are many different strains of E. coli that may produce toxins or cause varying levels of infection if injested or allowed to invade other parts of the body. Despite the bad reputation one particularly toxic strain (O157:H7), E. coli are generally relatively inocuous if handled with reasonable hygiene.

4. Conjugation and the Genome Sequence

The E. coli genome was the first to be completely sequenced. Genetic mapping in E. coli was made possible by the discovery of conjugation. E. coli is the most highly studied microorganism and an advanced knowledge of its protein expression mechanisms make it simpler to utilize for experiments where expression of foreign proteins and selection of recombinants is essential.

_source:

_{Weaver, R. and Hedrick, P. 1989. Genetics. Wm. C. Brown Publishers, Dubuque, IA, USA.}

5. Ability to Host Foreign DNA

Most gene cloning techniques were developed using this bacterium and are still more successful or effective in E. coli than in other microorganisms. E. coli is readily transformed with plasmids and other vectors, and preparation of competent cells is not complicated. Transformations with other microorganisms are often less successful.

"

Biotechnology Information Directory - A Public Service of Cato Research

Biotechnology Information Directory - A Public Service of Cato Research: "

A public service of Cato Research

Kevin Ahern's Best of the Web

Biotechnology Information Directory Section
The World Wide Web Virtual Library

Since 1995, a public service of Cato Research

This directory contains over 3500 links to companies, research institutes, universities, sources of information and other directories specific to biotechnology, pharmaceutical development and related fields. It places emphasis on product development and the delivery of products and services.

We provide an RSS feed

Our Site Is A Very Nice Site, A Very Nice Site Indeed ...

Sources of Information Over 700 links Organizations Databases and bioinformatics Research institutes and universities Regional RSS News Feeds and Blogs Data standards and Glossaries Agriculture and food Other sources and directories	Genomics and Proteomics Over 200 links Drug discovery, high-throughput screening, software, databases, libraries ...	Publications Electronic and paper
Products Over 350 links Catalogs and resources Antibodies, peptides, reagents,etc. Laboratory instrumentation, equipment and supplies, including chemicals Biological research Other	There is no sharp line between products & services so look in both.	Services Over 400 links General DNA, RNA, oligos and Related Contract manufacturing Laboratory and testing Translation and medical writing Drug discovery and related
Product Development and Clinical Trial Support Over 300 links General clinical trial support, including IRBs Clinical trial conduct, statistical analysis, data collection CROs, SROs, physician networks, Phase I sites Laboratories (clinical, pre-clinical and other) Clinical trial support incl electronic data capture and document management Preclinical incl. toxicology		Clinical Trials and Regulatory Affairs Clinical trials information Regulatory Affairs & Part 11 compliance, including information, consulting, and software Legal and business development services Organizations and other
Software Over 250 links Chemistry/Genomics/Drug Discovery Laboratory/LIMS Informatics/Data Visualization Other sources	Pharmaceutical Companies Over 150 links. Companies in the business of producing pharmaceuticals.	Education Undergraduate and graduate programs
	Employment, Recruitment and Contract Staffing Over 150 links Jobs, search firms, bulletin boards

The Cato Research Biotechnology Directory

Agriculture and food Antibodies, peptides, reagents,etc. Biological research products Chemistry/Genomics/Drug Discovery software Clinical trial conduct, statistical analysis, data collection software Clinical trial support: IRBs Clinical trials information Clinical trials and regulatory affairs Organizations Contract manufacturing CROs, SROs, physician networks, Phase I sites Databases and bioinformatics Data standards and Glossaries DNA, RNA, oligos and Related services and products Drug discovery and related services Education Electronic data capture and document management Employment, Recruitment and Contract Staffing General services Informatics/Data Visualization software

Laboratory instrumentation, equipment and supplies, including hemicals Laboratories (clinical, pre-clinical and other) Laboratory and testing services Legal and business development services Laboratory/LIMS software Organizations Other products Other sources of information and directories Other sources of software Pharmaceutical Companies Preclinical incl. toxicology Product catalogs and resources Regional Regulatory Affairs & Part 11 compliance, including information, consulting, and software Research institutes and universities RSS News Feeds and Blogs Translation and medical writing services

	Biosciences Sections of the WWW Virtual Library
	Calendar of meetings, seminars and courses in the business of biotechnology
	RSS feed for the Biotechnology Directory

---

Biotech | WWW Virtual Library | A public service of Cato Research

Copyright© 1998-2006 Cato Research

13 Sep 07

"

Gene Cloning - Molecular Genetics Techniques - Molcular Biology Methods

Gene Cloning - Molecular Genetics Techniques - Molcular Biology Methods: "

A clone is an exact copy of an organism, organ, single cell, organelle or macromolecule. Cell lines for medical research are derived from a single cell allowed to replicate millions of times, producing masses of identical clones.

Gene cloning is the act of making copies of a single gene. Amplified genes are useful in many areas of research and for medical applications such as gene therapy. Selective amplification of genes depends on our ability to perform the following essential procedures.

1. Amplification of a Specific Gene

The discovery of thermostable DNA polymerases, such as Taq Polymerase, made it possible to manipulate DNA replication in the laboratory and was essential to the development of the polymerase chain reaction (PCR). Primers specific to a particular region of DNA, on either side of the gene of interest, are used, and replication is stopped and started repetitively, generating millions of copies of that gene. These copies can then be separated and purified using gel electrophoresis.

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2. Cutting DNA at Precise Locations

The discovery of enzymes known as restriction endonucleases has been essential to protein engineering. These enzymes cut DNA at specific locations based on the nucleotide sequence. Hundreds of different restriction enzymes, capable of cutting DNA at a distinct site, have been isolated from many different strains of bacteria. DNA cut with a restriction enzyme produces many smaller fragments, of varying sizes. These can be separated using gel electrophoresis or chromatography.

3. Join Two Pieces of DNA

In genetic research it is often necessary to link two or more individual strands of DNA, to create a longer strand, or close a circular strand that has been cut with restriction enzymes. Enzymes called DNA ligases can create covalent bonds between nucleotide chains. The enzymes DNA polymerase I and polynucleotide kinase are also important in this process, for filling in gaps, or phosphorylating the 5’ ends, respectively.

4. Selection of Small Self-Replicating DNA

Small circular pieces of DNA that are not part of a bacterial genome, but are capable of self-replication, are known as plasmids. Plasmids are often used as “vectors” to transport genes between microorganisms. In biotechnology, once the gene of interest has been amplified and both the gene and plasmid are cut by restriction enzymes, they are ligated together generating what is known as a recombinant DNA. Viral (bacteriophage) DNA can also be used as a vector, as can cosmids, recombinant plasmids containing bacteriophage genes.

5. Method to Move a Vector into a Host Cell

The process of transferring plasmids into new host cells is called transformation. This technique requires that the host cells are exposed to a heat-shock, which makes them “competent” or permeable to the plasmid DNA. The larger the plasmid, the lower the efficiency with which it is taken up by cells. Larger DNA segments are more easily cloned using bacteriophage vectors or cosmids.

6. Method to Select Hosts Expressing Recombinant DNA

Not all cells will take up DNA during transformation. It is essential that there be a method of detecting the ones that do. Generally, plasmids carry genes for antibiotic resistance and transformed cells can be selected based on expression of those genes and their ability to grow on media containing that antibiotic. Alternative methods of selection depend on the presence of other reporter proteins such as the x-gal/ lacZ system, or green fluorescence protein, which allow selection based on color and fluorescence, respectively.

"

Biotech Terms - Science Terms - Biotechnology Industry Terms

Biotech Terms - Science Terms - Biotechnology Industry Terms: "4. How do Buffers Work? Buffers are solutions that have the capacity withstand the addition of small amounts of protons and/or hydroxide ions, or undergo dilution, without a dramatic change in pH. They are comprised of a mixture of a weak acid and its conjugate base, or a weak base and its conjugate acid. The buffering action is a result of the equilibrium between the acid-base pair. Optimum buffering capacity occurs when the components of the acid-base pair are present at nearly the same concentrations. When they are present in equal amounts, the buffer will resist pH changes in the range of its pKa (acid dissociation constant)."

Biotech Terms - Science Terms - Biotechnology Industry Terms

Biotech Terms - Science Terms - Biotechnology Industry Terms: "5. How Long Does it Take to Get a Patent? Getting a patent is the best way to protect your IP. The length of time from filing at patent to getting approval varies depending on where the application is filed. In the US, the process generally takes about 2 1/2 years. The processing time depends on whether or not the examiner rejects the claim based on prior patents, and whether the new patent application has to undergo amendments. Of course, the overall time required to get a patent also depends upon the time required for research and development, prior to filing, and, in the case of new drugs, clinical studies, all of which can take 10+ years."

Biotech Terms - Science Terms - Biotechnology Industry Terms

Biotech Terms - Science Terms - Biotechnology Industry Terms: "6. Why Are New Drugs So Expensive? The entire process of bringing a new drug to market involves years of laboratory research and development, animal trials, toxicity testing and, finally, clinical trials. Typically, this process plus the patent filing, takes over 10 years, so it is a long time before the pharmaceutical company can start earning any payback for its investment which can amount to hundreds of millions of dollars. Obviously the company needs to earn back some of that investment, so the costs are passed on to consumers."

Biotech Terms - Science Terms - Biotechnology Industry Terms

Biotech Terms - Science Terms - Biotechnology Industry Terms: "7. How Are Biochemical Solutions Sterilized? In the mid-1800's, the process of pasteurization was described by Louis Pasteur, who discovered that heating solutions to moderate temperatures would reduce the numbers of contaminating live microorganisms. This research laid the groundwork for the development of today's autoclaves: Instruments in which solutions and dry materials are heated under pressure, for sterilization. Materials are heated rapidly, typically to about 121 degrees Celsius, under a pressure of about 15 psi. The high pressure prevents liquids from boiling over, thus allowing such high temperatures to virtually eliminate most live microorganisms."

Biotech Terms - Science Terms - Biotechnology Industry Terms

Biotech Terms - Science Terms - Biotechnology Industry Terms: "8. What is Bioremediation? Remediation is the restoration of contaminated land, air or water from a contaminated state. Bioremediation is the process of utilizing live organisms (typically bacteria, but sometimes plants) to accumulate, transform or (usually) degrade chemical contaminants. When plants are used, the process is referred to as phytoremediation. Phytoextraction is a technique whereby plants are used to bioaccumulate non-degradable materials, typically metals, which are thus removed from soil, and then removed from the environment during harvesting."

Biotech Terms - Science Terms - Biotechnology Industry Terms

Biotech Terms - Science Terms - Biotechnology Industry Terms: "9. Where do Stem Cells Come From? The most widely known source of stem cells is human/animal embryos, prompting controversy over stem cell research based on bioethics and the view that life begins at conception. It is now known that stem cells can also be obtained from placenta and amniotic fluids, and pluripotent cells can be derived from adult cells of the skin, blood and other tissues. Research on the use of stem cells from non-embryonic sources has received more attention in recent years as scientists in some countries, particularly the US, are forced to search for publicly accepted, ethical alternatives."

Intro to Biotechnology

Intro to Biotechnology: "Intro to Biotechnology A description and history of biotechnology including the scientific achievements that lead to establishment of the industry. Bioethics (6) What is Biotechnology? (3) History (2) Sponsored Links Biotechnology News & DataIndustry News; Analysis; Reports; Company Profiles. Free Trials Now!www.BioWorld.com Biotechnology3 Biotech Companies to Watch. Get The Motley Fool's Latest Reportwww.Fool.com Biotechnology careerInsider Guide to industry jobs and salaries. Get the facts. Get hired.www.WetFeet.com Biotechnology Clusters in North America A list of the top biotechnology hubs in North America. Each cluster is an active site of R&D, job and investment opportunities in the life sciences or agricultural biotech. The Biotechnology Industry Organization (BIO) The latest biotech news, facts, and commentary on national (USA) issues surrounding the industry. Biotechnology Information Directory An online directory of products, services, clinical trials, company information, schools and more. BIOTECanada Facts pertaining to the biotechnology industry in Canada. Why Biotech? The Council for Biotechnology Information website with articles, links, and news in english, french and spanish."

OECD Report Blames Biofuel Subsidies for Rising Food Prices: "

OECD Report Blames Biofuel Subsidies for Rising Food Prices

The Organisation for Economic Co-operation and Development (OECD) round table on economic development was held this week, September 11 and 12, 2007, in Paris. Among the topics for discussion were the financial and environmental impacts of government subsidies that support biofuels. A report prepared by the OECD has predicted rising food prices, environmental damage in the form of lost natural ecosystems, and tensions between markets, all for relatively new developments in biotechnology that haven’t been proven and might only reduce greenhouse gas emissions by a predicted 3%, "at most". According to the report, second generation technologies show greater, albeit still limited, potential.

Recommendations by the OECD will be heard by scientists, business representatives and non-governmental organisations in addition to representatives from several governments including the US. The full report in pdf format, and a short news video, can be found on the OECD website.

_Sources:

"

Beyond Borders: Ernst & Young’s Global Biotechnology Report 2007 Article Highlights

Beyond Borders: Ernst & Young’s Global Biotechnology Report 2007 Article Highlights: "Although there was no 'mega deal' in 2006, the biotechnology industry broke revenue and investment records around the world. In the US, there was unprecedented deal activity. In Europe and Canada, we saw double-digit revenue growth. In the Asia-Pacific region, companies moved aggressively and with confidence, using deals and creative business models to reinvent themselves. 'Beyond Borders: Ernst & Young's Global Biotechnology Report 2007' is our latest look at the global industry and presents geographic reporting for the Americas, Europe, and Asia-Pacific. Articles cover emerging challenges and risks and include perspectives from global biotechnology and pharmaceuticals industry leaders. The following articles introduce each geographic focus. * Global Biotech: The End of the Innocence (pdf, 547kb) Thirty years ago biotechnology companies were often founded by idealistic scientists and run more on vision than corporate experience. Now Big Pharma takes inspiration from the nimbler research and development (R&D) operations of its biotech neighbors, and the demand for alternative fuels and higher yield agriculture, as well as increasing regulation, has brought the maturing biotech industry firmly into adulthood. * Approaching Profitability: The Americas Pers"

Beyond Borders: Ernst & Young’s Global Biotechnology Report 2007

Beyond Borders: Ernst & Young’s Global Biotechnology Report 2007: "Beyond Borders: Ernst & Young's Global Biotechnology Report 2007 From the Ernst & Young Global Biotechnology Center Success and Growth Bring Their Own Challenges At 31-years old, biotechnology has reached a point where it has 'come of age' and now it's on to the maturing years. We've seen evidence of strengthening pipelines, revenue growth, and progress towards profitability. This is often when challenges emerge that are the result of success. Challenges born from the convergence in time of innovative new products, newly profitable companies, and escalating regulatory challenges. Reflecting on 2006, Looking Ahead for 2007. In this year’s 'Beyond Borders' report, biotech and pharmaceuticals executives and global financial experts analyze the economic motivation, political environment, and cultural diversity that shaped record-breaking revenue and investment numbers around the world in 2006. Regional Reporting. See articles available now for a taste of the in-depth reporting and opinions that can help executives, analysts, and investors better understand an industry that’s becoming a regulation minefield while at the same time offering spectacular rewards to those who can successfully navigate the field. Commercialization Trends, Deal Making, and CEO Survey Results. Highlights from "

Biotechnology Industry Growth Forecast for 2007

Biotechnology Industry Growth Forecast for 2007: "The Ernst & Young 2007 Global Biotechnology Report has been released and paints a very favorable picture of unprecedented financing totals and deal activity that indicates a continuation of the strong growth trend that appeared in the 2006 report. According to a press release by E & Y, nearly all performance indicators used indicated “robust growth in 2006”, in many parts of the world. These criteria included deal values, capital raised, public company revenues, reduced net loses, and more product approvals than in 2005. Among the stats, the global increase in capital raised was reported to be 42% and double-digit increases in revenues were reported in Canada, the USA and Europe. According to the report, the outlook for the biotechnology industry in 2007 is exceptionally good. This also translates into excellent prospects for jobs in biotechnology, in the near future, with a huge majority of the 400 biotechnology companies surveyed reporting that they plan to hire within the next two years. Sources:"

Financing Biotech Startups - Biotechnology Business Financing - Biotech Funding

Financing Biotech Startups - Biotechnology Business Financing - Biotech Funding: "Every new business needs some startup capital, for research, product development and production, permits and licensing and other overhead costs, in addition to what is needed to pay your staff, if you have any. Once you establish your needs based on the size of your company and what stage of development it is at, you have several options for obtaining funding to choose from. These options are listed below. 1. Grants Academics still in the research stages, might qualify for government grants for equipment and staff (graduate students and technicians) salaries. There are grants available for academic collaborations with industry to facilitate invention commercialization (eg. in Canada, IRAP funds a large number of collaborative biotech projects). Universities that have recognized the potential of their research programs have organizations to help commercialize the discoveries of their scientists (eg. Emtech Bio, a collaborative organization formed by Emory and Georgia Tech Universities, mentioned in my case study on GeoVax). Sponsored Links Business Loans for WomenWe Co-Guarantee to Provide Money New Programs-All Credit Typeswww.investorsbuildingandloan.com Need Quick & Easy Cash?Need $ for your business We can get you $ in 48 hourswww.MoneyForMerchants.com Business FinancingFinance your Business or Startup - Poor Credit and No Cre"

Biotech Business Models

Biotech Business Models: "Biotech Business Models Thinking of converting an academically funded discovery into a biotech startup? Several business models exist, such as the Platform, Product and Vertical models. How you structure your business likely depends on the type and availability of funding, venture capital being the most common for early-stage biotech companies. In all cases, patents and IP are at the core of the matter, whether your business plan is to generate revenue at all levels of product development, from early concept to the marketing stage (Vertical model), develop a technology platform and licence it out (Platform model) or focus on developing a product and either selling it yourself of licensing the rights (fully integrated pharmaceutical company (FIPCO) or Product model). Since the biotech “bust” of 2001, the Platform business model has persevered, combined with contract research and services for the generation of revenue. However, the FIPCO model is making a comeback. This years Biotech Industry Growth Forcast by Ernst and Young (2007) seems to have largely restored investor confidence, allowing for greater expense to be taken in the development of drug candidates and enabling companies to expand their outlook when preparing a business plan to include the full spectrum of ownership, development and marketing. Wednesday September 19, 2007"

Health Business Blog » Blog Archive » AstraZeneca to outsource manufacturing: not such a no-brainer

Health Business Blog » Blog Archive » AstraZeneca to outsource manufacturing: not such a no-brainer: "

It sounds like an obvious idea. Companies making low-tech items like shoes and high-tech items like computers and consumer electronics routinely outsource. Nike doesn’t make shoes, Apple doesn’t make iPods, and so on. They concentrate on their core competencies of R&D, design, distribution and marketing while leveraging outsourced manufacturing to achieve lower costs, higher quality, and greater flexibility.

Now that pharmaceutical companies are facing cost pressures they are finally catching up with the times. Right? Actually, no.

Manufacturing isn’t well understood within pharmaceutical companies. Top management and board members typically have little background in manufacturing and the head of manufacturing usually reports to someone in the commercial organization rather than directly to the CEO. It’s unusual for the head of manufacturing to sit on the executive committee at big pharma companies. When top management does examine manufacturing –usually at the behest of the CFO– they are surprised to find how much capital is invested and how low capacity utilization is. “Why don’t we jettison is?,” they ask.

There are a number of good reasons not to go down the AstraZeneca path. For example:

• It’s hard to dispose of the existing assets. Unlike in consumer electronics there are few companies capable of buying and running the facilities. Exceptions –like Cardinal and Patheon –are subject to acquisition by private equity funds or to screwing up their operations and getting into trouble with the FDA.
• Owning manufacturing plants can yield tremendous tax advantages, which are difficult to replicate in a purely outsourced model (though there are ways to achieve some of the benefits through tolling)
• There are increasing opportunities for tight integration between pharmaceutical development and manufacturing, and the interfaces between the two can be much more robust in an in-sourced model. Truly new drugs are rare within pharmaceutical company pipelines. New combination products and modified release formulations require advanced manufacturing knowhow
• Manufacturing costs are a very low percentage of revenue for pharmaceutical companies. Even in these tighter times it makes good sense to keep spare capacity and go overboard on spending on quality and support services. However contract manufacturers look at the world differently. What represents a mere 5 to 20% cost of goods sold for the pharma company is 100% of the contractor’s revenue. They are more prone to squeeze out spare capacity and take shortcuts elsewhere simply because they have a greater economic incentive to do so. That can lead to trouble.

However, I don’t advocate a purely insourced model either. In general, pharmaceutical companies should make greater use of third-party manufacturers. Left to their own devices, manufacturing divisions will look to keep everything in house. And with top management not understanding the fundamentals of the business, it’s easy for the manufacturing folks to exaggerate the dangers of third parties and present unfair cost comparisons. (A favorite approach is to compare the marginal costs of in-house production with fully loaded third-party costs.)

AstraZeneca says it will take 10 years to complete its transition to full outsourcing. My guess is they will pull back before they get there. If they do things right they’ll end up in a good place.

"

Health Business Blog » Blog Archive » AstraZeneca to outsource manufacturing: not such a no-brainer

Health Business Blog » Blog Archive » AstraZeneca to outsource manufacturing: not such a no-brainer: "

It sounds like an obvious idea. Companies making low-tech items like shoes and high-tech items like computers and consumer electronics routinely outsource. Nike doesn’t make shoes, Apple doesn’t make iPods, and so on. They concentrate on their core competencies of R&D, design, distribution and marketing while leveraging outsourced manufacturing to achieve lower costs, higher quality, and greater flexibility.

Now that pharmaceutical companies are facing cost pressures they are finally catching up with the times. Right? Actually, no.

Manufacturing isn’t well understood within pharmaceutical companies. Top management and board members typically have little background in manufacturing and the head of manufacturing usually reports to someone in the commercial organization rather than directly to the CEO. It’s unusual for the head of manufacturing to sit on the executive committee at big pharma companies. When top management does examine manufacturing –usually at the behest of the CFO– they are surprised to find how much capital is invested and how low capacity utilization is. “Why don’t we jettison is?,” they ask.

There are a number of good reasons not to go down the AstraZeneca path. For example:

• It’s hard to dispose of the existing assets. Unlike in consumer electronics there are few companies capable of buying and running the facilities. Exceptions –like Cardinal and Patheon –are subject to acquisition by private equity funds or to screwing up their operations and getting into trouble with the FDA.
• Owning manufacturing plants can yield tremendous tax advantages, which are difficult to replicate in a purely outsourced model (though there are ways to achieve some of the benefits through tolling)
• There are increasing opportunities for tight integration between pharmaceutical development and manufacturing, and the interfaces between the two can be much more robust in an in-sourced model. Truly new drugs are rare within pharmaceutical company pipelines. New combination products and modified release formulations require advanced manufacturing knowhow
• Manufacturing costs are a very low percentage of revenue for pharmaceutical companies. Even in these tighter times it makes good sense to keep spare capacity and go overboard on spending on quality and support services. However contract manufacturers look at the world differently. What represents a mere 5 to 20% cost of goods sold for the pharma company is 100% of the contractor’s revenue. They are more prone to squeeze out spare capacity and take shortcuts elsewhere simply because they have a greater economic incentive to do so. That can lead to trouble.

However, I don’t advocate a purely insourced model either. In general, pharmaceutical companies should make greater use of third-party manufacturers. Left to their own devices, manufacturing divisions will look to keep everything in house. And with top management not understanding the fundamentals of the business, it’s easy for the manufacturing folks to exaggerate the dangers of third parties and present unfair cost comparisons. (A favorite approach is to compare the marginal costs of in-house production with fully loaded third-party costs.)

AstraZeneca says it will take 10 years to complete its transition to full outsourcing. My guess is they will pull back before they get there. If they do things right they’ll end up in a good place.

"

Discount rate - Wikipedia, the free encyclopedia

Discount rate - Wikipedia, the free encyclopedia: "From Wikipedia, the free encyclopedia • Learn more about citing Wikipedia • Jump to: navigation, search For the interest rate charged to banks for borrowing short term funds directly from a central bank, see discount window. The discount rate is a financial concept based on the future cash flow in lieu of the present value of the cash flow. The divisor in the discount rate formula is the resultant future value, including income. The concept of a discount rate differs from that of an interest rate, most notably in that the divisor in the interest rate formula is the original investment."

Discount rate - Wikipedia, the free encyclopedia

Discount rate - Wikipedia, the free encyclopedia: "

Discount rate

From Wikipedia, the free encyclopedia

• Learn more about citing Wikipedia •

Jump to: navigation, search

For the interest rate charged to banks for borrowing short term funds directly from a central bank, see discount window.

The discount rate is a financial concept based on the future cash flow in lieu of the present value of the cash flow. The divisor in the discount rate formula is the resultant future value, including income.

The concept of a discount rate differs from that of an interest rate, most notably in that the divisor in the interest rate formula is the original investment.

Contents [hide] 1 Example 2 Economic Policy 3 See also 4 External links

[edit] Example

Suppose there is a government bond that sells for $80 and pays $100 in a year's time. The discount rate represents the discount on the future cash flow:

The interest rate on the cash flow is calculated using 80 as its base:

For every interest rate, there is a corresponding discount rate, given by the following formula:

An alternative method of understanding a discount rate is to consider that the discount rate tells how much future value is interest and how much is principal. For example, if $100 is deposited into an account that pays 50% interest, the amount that is subsequently withdrawn will be $150. The discount rate is 0.5/(1+0.5) = 1/3 or 33.3%. Based on this, 33.3% of the $150 is interest and the other 66.7% is principal.

The interest rate that is used to calculate the Internal rate of return or Net present value of investments is NOT the discount rate as defined here. Similarly Discounted cash flow uses the normal calculation of interest, not the discount rate defined here.

[edit] Economic Policy

One of the major issues in economics is what is an appropriate discount rate to use under various circumstances. For example, in assessing the impact of very long-term phenomena such as climate-change, use of any discount rate much more than 1% per annum renders long-term damage (occurring in, say, 200 years time) of negligible importance now, and therefore entails that there is no need to take preventative action. However, discount rates for climate change are uncertain and debatable in today's economic and scientific community.

Conversely, governments often take a short-term view of things, effectively applying discount rates of perhaps 20% p.a. or higher, on the grounds that anything they do or fail to do which has detrimental effects in (say) 10 or more years' time won't prevent their re-election sooner than that.

In practice, discount rates such as 2%, 3%, 5% and 10% are widely used in economics. However there is little consensus on what value is appropriate in any given circumstance, and it often makes a significant difference.

"

Arsenic, Patents, and the World. In the Pipeline:

Arsenic, Patents, and the World. In the Pipeline:: "The US researcher who formed PolaRx and filed the patent, Raymond Warrell (now chairman of Genta), stands up for it in the Nature Medicine article, and like it or not, he has a point, too, saying that the patent stimulated interest in the compound: 'Without the patent, it would have remained a curious Chinese drug, not available to anyone else.' I should note that there may well be room to argue about the validity of the patent, from prior-art concerns, but no one (as far as I know) has seen fit to challenge it. But I can say for sure that without intellectual property protection in the US and Europe, no drug company would have touched the compound. Without industrial input, the drug would have either never reached the market at all (arsenic trials were a hard sell at the FDA), or would have likely come on more slowly. (That ticking patent clock does keep an organization moving, I can tell you). And now its success in the market has other companies working on improved versions of the therapy. This is how our world works, and (for better or worse) there's no requirement that it be aesthetically appealing."

Arsenic, Patents, and the World. In the Pipeline:

Arsenic, Patents, and the World. In the Pipeline:: "It’s tempting to blame the patent system for this whole situation – after all, the only reason the company can charge these prices is that they’re the only ones who can sell it, right? But perversely, this might actually show the need for more use of patents rather than less. As another piece in Nature has helpfully reminded people, patents not only grant a period of exclusivity. In return for that, you have to tell people how to replicate your invention. The alternative, in countries that don’t follow this system, is usually secrecy, and I can’t help but think that this is why the original Chinese work didn’t disclose all the details. A strong patent system eliminates a lot of trade-secret grey areas: someone owns a discovery (for a predetermined period of time), no one owns it, or everyone owns it. There’s none of this “someone owns it until someone else finds out about it” stuff."

Arsenic, Patents, and the World. In the Pipeline:

Arsenic, Patents, and the World. In the Pipeline:: "So what does set the price? What sets the price is what sets most prices in this world: what the market will bear. A drug that only treats a small number of patients every year is going to cost a lot of money, no matter what it’s made out of. A company will not market a compound unless they can use its profits to help defray the costs of all the things that don’t make it to market at all. Cephalon is charging what their market will bear, which is their right, but their market is the health insurance organizations of the industrialized world. That’s another thing to remember – drug companies aren’t selling direct to patients most of the time. They’re selling to insurance companies, and first-world health insurance will put up with a lot of things that no one else can or will. There’s a lot of room to talk (and to complain) about this (I think it distorts pricing signals something fierce), but all the complaints have to start with the realization that this is how things are now set up. Cephalon, for its part, says that it’s open to compassionate use of its drug – that is, providing it to people in need who absolutely cannot afford it. With any luck articles like the Nature Medicine one will help to get the word out about that, an"

Free price system - Wikipedia, the free encyclopedia

Free price system - Wikipedia, the free encyclopedia: "Mechanics of a free price system A diagram presenting the argument for free prices A diagram presenting the argument for free prices Rather than prices being set by the state, as in a command economy with a fixed price system, prices are determined in a decentralized fashion by trades that occur as a result of sellers' asking prices matching buyers' bid prices as a result of subjective value judgement in a market economy. Since resources of consumers are limited at any given time, consumers are relegated to satisfying wants in a descending hierarchy and bidding prices relative to the urgency of a variety of wants. This information on relative values is communicated, through price signals, to producers whose resources are also limited. In turn, relative prices for the productive services are established. The interchange of these two sets of prices establish market value, and serve to guide the rationing of resources, distributing income, and allocating resources. Those goods which command the highest prices (when summed among all individuals) provide an incentive for businesses to provide these goods in a corresponding descending hierarchy of priority. However, the ordering of this hierarchy of wants is not constant. Consumer preferences change. When consumer preferences for a good change, then bidding pressure raises the price for a particular good as "

Economics A-Z | Economist.com

Economics A-Z | Economist.com: "Featured entry: Patents In 1899 the commissioner of the American Office of Patents recommended that his office be abolished because “everything that can be invented has been invented”. The fact that there has been so much INNOVATION during the subsequent 100 years may owe something to the existence of patents. Economists reckon that if people are going to spend the time and MONEY needed to think up and develop new products, they need to be fairly confident that if the idea works they will earn a decent PROFIT. Patents help achieve this by granting the inventor a temporary MONOPOLY over the idea, to stop it being stolen by imitators who have not borne any of the development RISK and costs. Like any monopoly, patents create inefficiency because of the lack of COMPETITION to produce and sell the product. So economists debate how long patent protection should last. There is also debate about which sorts of innovation require the encouragement of a potential monopoly to make them happen. Furthermore, the pace of innovation in some industries has sharply reduced the number of years during which a patent is valuable. Some economists say that this shows that patents do not play a large part in the process of innovation."

Publius Pundit: Best way to learn a language? Archive

Publius Pundit: Best way to learn a language? Archive: "Given that Publius has a very international and internationally-minded audience, I'm sure many of you have learned a second language. What I'd like to know is, first, how did you do it? Second, if you used any kind of software, CDs, online courses, anything, what was it and how well did it work for you?"

Non-profit organization - Wikipedia, the free encyclopedia

Non-profit organization - Wikipedia, the free encyclopedia: "A non-profit organization (abbreviated 'NPO', or 'non-profit' or 'not-for-profit') is an organization whose primary objective is to support an issue or matter of private interest or public concern for non-commercial purposes, without concern for monetary profit. NPOs are active in a wide range of areas, including the environment, the arts, social issues, charities, early childhood education, health care, politics, religion, research, sports or other endeavors."

The Teaching Company - Wikipedia, the free encyclopedia

The Teaching Company - Wikipedia, the free encyclopedia: "The Teaching Company is an American company that produces recordings of lectures by nationally top-ranked university professors. The professors create courses for the company in a special studio located outside of Washington DC; they are then offered for sale in audiotape, CD, DVD, MPEG-4, and MP3 formats. The company was founded in 1990 by Thomas M. Rollins, former Chief Counsel of the United States Senate Committee on Labor and Human Resources and a graduate of Harvard Law School, who noticed the effectiveness of videotapes in learning during his study. He initially tried to create a government program to produce tapes for the public, but due to Constitutional constraints was not able to. After leaving office the idea stayed with him and he started seeking out top professors to create courses for sale to the public. As of 2007 the company offers more than 260 courses, which span more than 3,000 hours of content across nine subject categories: Business and Economics, Fine Arts and Music, Ancient and Medieval History, Modern History, Literature and English Language, Philosophy and Intellectual History, Religion, Science and Mathematics, and Social Sciences. Course offerings are targeted to adult education and life-learners, typical of what would be seen in a University or College undergraduate program for non-majors; there is also "

Amazon.com: The Long Tail: Why the Future of Business is Selling Less of More: Books: Chris Anderson

Amazon.com: The Long Tail: Why the Future of Business is Selling Less of More: Books: Chris Anderson: "From Publishers Weekly Wired editor Anderson declares the death of 'common culture'—and insists that it's for the best. Why don't we all watch the same TV shows, like we used to? Because not long ago, 'we had fewer alternatives to compete for our screen attention,' he writes. Smash hits have existed largely because of scarcity: with a finite number of bookstore shelves and theaters and Wal-Mart CD racks, 'it's only sensible to fill them with the titles that will sell best.' Today, Web sites and online retailers offer seemingly infinite inventory, and the result is the 'shattering of the mainstream into a zillion different cultural shards.' These 'countless niches' are market opportunities for those who cast a wide net and de-emphasize the search for blockbusters. It's a provocative analysis and almost certainly on target—though Anderson's assurances that these principles are equally applicable outside the media and entertainment industries are not entirely convincing. The book overuses its examples from Google, Rhapsody, iTunes, Amazon, Netflix and eBay, and it doesn't help that most of the charts of 'Long Tail' curves look the same. But Anderson manages to explain a murky trend in clear language, giving entrepreneurs and the rest of us plenty to think about."

Biotech 101

Biotech 101: "Last summer, Burlington high-school student Matt Au enjoyed a lazy break from classes - he slept in most days. But this summer, the rising senior at Greensboro Day School was up bright and early each weekday in June, ready for the challenges of N.C. State's Summer College in Biotechnology and Life Sciences."

Biotech 101

Biotech 101: "BioHouston’s highly successful “Biotech 101” course is being offered every quarter, providing an overview of the science of biotechnology and its applications, the regulatory and business issues associated with commercializing novel biotechnologies, and the international, domestic, and regional biotech industry. Five broad biotechnology-related topics will be covered in this one-day workshop: * Biotechnology defined, with an introduction to the basic science and terminology associated with the discipline * Applications of biotechnology, with an emphasis on healthcare * Developing a new biotechnology product, from laboratory to market * Business issues associated with commercializing biotechnologies * The Houston-region biotechnology industry Those who will benefit from this course include: * Employees at life science companies who are new to biotechnology * Economic development professionals * Regional government officials * Consular officials responsible for the life sciences * Media professionals who cover the life sciences * Investors or potential investors in biotechnology companies * Consultants, sales professionals, and service providers who interact with the industry, or who wish to do so * Graduate and undergraduate students interested in biotech"

The Biodesign Institute: Biotech 101 - History

The Biodesign Institute: Biotech 101 - History: "21st Century and the Era of Convergence: Nanotech, Biotech, Cognitive and Information Sciences The dawn of a new millennium began with an announcement that will provide a fulcrum for 21st century science. In 2000, a rough draft of the human genome, or the map of human life, is completed by Celera Genomics and the Human Genome Project. In 2001, the sequence of the human genome is published. With the publication, a future era of genomics, proteomics, bioinformatics and personalized medicines is made possible. In addition to advances in biomedicine, a new scientific renaissance is now emerging. It is clear that 21 st century scientific progress will depend on the convergence of so-called NBIC (nanotechnology, biotechnology, information and cognitive) technologies. These technologies combine the immense knowledge generated from the past 30 years of biotechnology with our new found ability to manipulate matter at the scale of atoms, or nanotechnology, and fifty years of computing advances (information technology) and the science of understanding the human brain (cognitive sciences). The revolution that began in biotechnology with the discovery of the structure of DNA fifty years ago has roughly paralleled advances in computing no less dramatic, with the generation of the first integrated circuit by Jack Kilby in 1958 to modern computers packed with over a bil"

The Biodesign Institute: Biotech 101 - History

The Biodesign Institute: Biotech 101 - History: "The DNA Gold Rush With the structure of DNA solved, the key mechanisms behind this chemical blueprint for life begin to be unraveled. The 1950s and 1960s witnessed a further understanding of cellular processes and delved into the biochemistry of metabolic disorders and disease.In 1961, the genetic code, or how the information in DNA is used to make proteins, became understood for the first time. In the late 1960s and early 1970s, researchers discovered molecular scissors, or DNA restriction enzymes, that can cut segments of DNA, ushering in an era of genetic engineering and cloning. In 1973 Paul Berg, Herbert Boyer and Stanley Cohen performed the first successful recombinant DNA experiment, stitching together different bacterial genes from the common human gut bacterium, E. coli. With the success of this experiment, other researchers continued to make progress in genetic engineering and the 970’s also witnessed the birth of the biotechnology industry. In addition, new lab methods such as DNA sequencing and protein analysis, and later the polymerase chain reaction (PCR), which makes unlimited copies of genes, led to a future revolution in forensics and biomedicine. In the 1980s, the maturation and growth of the biotech industry continued unabated, as the first genetically engineered products are approved by the FDA. Genentech’s Humulin, "

The Biodesign Institute: Biotech 101 - History

The Biodesign Institute: Biotech 101 - History: "Unraveling the Genetic Code In the early 20 th century, the seeds of prosperity in the modern biotechnology movement began. New sciences continued to emerge, particularly immunology and genetics. Thomas Hunt Morgan, and his group of fruit fly researchers, made significant contributions to genetics by showing that the basic units of Mendel’s heredity, genes, were physically located on chromosomes. The first cancer causing virus was discovered by Peyton Rous and the first bioremediation project that utilized bacteria to treat raw sewage began in England. In 1928, Alexander Fleming discovered the mold penicillin which inhibited the growth of a human skin disease-causing bacterium called Staphylococcus aureus, leading to the purification of the first antibiotic, penicillin. In 1943, Oswald Avery and others purified provided definitive evidence that DNA is the material which makes up genes. In 1949, Linus Pauling demonstrated that sickle cell anemia is a disease that can result from a single mutation in a protein. The race to solve the structure for DNA was solved in 1953, when James Watson, Francis Crick, Maurice Wilkins and Rosalind Franklin revealed the three-dimensional structure DNA."

The Biodesign Institute: Biotech 101 - History

The Biodesign Institute: Biotech 101 - History: "Pre-20th Century The pace of scientific discovery accelerated with renewed interest in the sciences during the Renaissance. Renaissance leaders such as Leonardo DaVinci and Galileo Galilei were true artists whose knowledge spanned across several disciplines of art, science and medicine. Glass and lens technology not only allowed Galileo and later Copernicus to peer at the heavens and turn the Ptolemic earth-centric view of the solar system on its head, but also were a preview of later inventions, such as Zacharias Janssen’s invention of the first microscope (a tube with lenses on each end) in 1590. Later, while Newton was exploring his laws of motion, a contempory mathematician, Robert Hooke, was describing the first cells of cork plant tissue in his Micrographia (1665). A decade later, Anton van Leewenhoek, the best microscope maker of his era, made discoveries of the first microscopic forms of life, observing protozoa from pond water and bacteria from his own teeth scrapings. As the 18th century closed, one of the most dramatic experiments in all of medicine occurred, as Edward Jenner developed the first vaccine when he injected a healthy boy with cow pox in order to build immunity to prevent the deadly scourge of smallpox (the word vaccine is derived from the latin word ‘vacca’ meaning cow). The 19 th century began with the coin"

The Biodesign Institute: Biotech 101 - History

The Biodesign Institute: Biotech 101 - History: "Ancient Biotech Biotechnology, or the use of living organisms and their products for human benefit, has been around longer than you may think. The exact origins of humans first attempts to utilize the power of nature are not known, but our transition from hunter gatherers into an era of communities and cities led to innovations and early accounts among the ancient cultures of the Chinese, Greeks, Egyptians, Romans, and Sumerians, and others beginning perhaps as early as 5000 B.C. The necessities of survival of these large communities depended on domesticating animals for livestock, using microorganisms during fermentation to produce breads, yogurts, cheeses, and alcohol in the form of beer and wine. Plant balms and herbal remedies were developed to treat ailments and wounds. As understanding increased, selective breeding began to improve the production of crops and livestock and plant balms were used to treat infections."

Biotech 101: The Road to FDA Approval

Biotech 101: The Road to FDA Approval: "Biotech 101: The Road to FDA Approval
By Adam Feuerstein
TheStreet.com Senior Writer
7/5/2004 8:09 AM EDT
URL: http://www.thestreet.com/tech/adamfeuerstein/10169168.html

This is a bonus story from Adam Feuerstein, whose biotech coverage usually runs only on RealMoney. We're offering it today to TheStreet.com readers. To read Adam's commentary every day, click here for information on a free trial to RealMoney. There are two things that really get biotech stocks moving -- results from phase III clinical studies and approval decisions issued by the Food and Drug Administration. Genentech (DNA:NYSE) , for example, has been red-hot over the last year because the firm has had unprecedented success on both fronts, leading to FDA marketing approvals for three new products: the psoriasis drug Raptiva, the allergy drug Xolair, and most important of all, the cancer drug Avastin. The FDA's huge influence on biotech stocks is undeniable, but understanding the drug approval process isn't so easy. It shouldn't shock anyone to hear that FDA rules and procedures, like most governmental bureaucracies, aren't necessarily designed to be easily understood. But a solid understanding of the FDA approval process is essential to smart biotech investing. So, this "Biotech 101" column is for investors who are interested in learning the ins and outs of the FDA. (A previous "Biotech 101" column covering the three phases of clinical trials was published in April.)

Posting Positive

When a drug posts positive results from one or more of the pivotal phase III clinical studies, drug and biotech companies seeking to get the drug approved in the U.S. and the right to market and sell it to doctors, file the drug with the FDA. ImClone Systems (IMCL:Nasdaq) , for example, has had success since the FDA approved its cancer drug Erbitux. On the flip side, Genta (GNTA:Nasdaq) shares have tumbled because the company was forced to withdraw its cancer drug Genasense from the FDA after the agency's advisory committee voted overwhelmingly to recommend against approval. Filing a drug with the FDA is literally a big job. Genentech's Avastin filing, for instance, was approximately 11 gigabytes in size, which equals 17 CD-ROM discs, or more than 60,000 printed pages. Avastin is a biologic drug, which means that it's manufactured by genetically altering living cells and growing them in large vats so that they produce the drug (a protein), like miniature living drug factories. In accordance with regulatory policy, when Genentech filed Avastin with the FDA, it submitted a Biologic License Application, or BLA. Traditional pharmaceutical products -- i.e., pills -- are made from relatively simply chemical ingredients. Approval filings for these drugs are known as New Drug Applications, or NDAs. But while products covered under BLAs and NDAs differ, the steps taken by the FDA to review the two kinds of approval applications largely do not.

Priority Treatment

The time it takes the FDA to review a drug is mandated by the Prescription Drug User Fee Act, or PDUFA, a law first passed in 1992 that allows the FDA to charge drug companies a fee for reviewing their NDA or BLA. In turn, the FDA uses this money to hire drug reviewers and, in general, speed up the drug review process. (The FDA has never found an acronym it didn't love -- and use frequently.) The FDA often grants "priority review" status on drugs that address unmet medical needs or life-threatening diseases such as cancer or HIV. Once a company submits a drug under priority review, the FDA has 45 days in which to accept or reject the application for review. (Recall, ImClone got into big trouble, and Sam Waksal ended up in jail for his actions after the FDA refused to accept the company's original Erbitux application, sending ImClone a so-called refuse to file letter.) Once the FDA accepts a drug application for priority review, the agency has up to six months -- and generally takes it -- to issue an approval decision. The "PDUFA clock" starts on the day the drug application is filed with the FDA. Drug and biotech firms typically issue press releases when drugs are filed, so it's relatively easy for investors to count forward six months from that day to find the date by which the FDA must issue its decision, often referred to as the "PDUFA date." Last week, the FDA said it granted "priority review" status to Antegren, the multiple sclerosis drug being developed by Biogen Idec (BIIB:Nasdaq) and Elan Pharmaceuticals (ELN:NYSE) . The companies submitted Antegren to the FDA on May 25; thus the drug's PDUFA date falls on or around Nov. 25. The FDA typically uses a "standard review" to handle drugs for non-life-threatening diseases. Here, the FDA will accept or reject a drug application within 60 days from the filing date, and an approval decision is issued in 10 months. The FDA can request additional time to make a decision, if necessary.

Nay or Yea

When the FDA needs help in determining whether a drug should be approved, it may ask for guidance and recommendations from 21 standing drug advisory committees. These advisory panels consist of experts in their respective fields -- practicing doctors, scientists, statisticians, and industry and patient representatives. The FDA's Oncologic Drugs Advisory Committee (also called ODAC), for example, is stocked with cancer authorities and reviews experimental cancer drugs. The setup of an FDA advisory committee meeting is similar to that of a legal trial, but instead of deciding guilt or innocence, panel members are asked to decide whether a drug is effective and safe enough for approval. During the meeting, the FDA and the drug company both present their respective analyses of the drug's clinical data, which are then discussed and voted on by panel members. The FDA makes public its internal analyses of a drug's clinical data -- and often its opinion on whether a drug is approvable or not -- one day before the start of an FDA advisory panel meeting. These closely read FDA "briefing documents," which almost always move stocks, can be found here. The debate among advisory panel members can often be contentious, with opinions swinging wildly from positive to negative and back again. So to lessen stock volatility, shares of all but the largest drug and biotech firms are halted while advisory panels are in session. Though the FDA is not required by law to follow the recommendation of its advisory panels, historically it has, albeit with some exceptions. That's why drug stocks react strongly, up or down, based on the recommendations that come out of advisory panel meetings.

Stamps of Approval

After the BLA or NDA is filed and an advisory committee, if required, convenes to vote, the final approval decision is left up to the FDA. You'd think this final step would be straightforward, but it's actually pretty labyrinthine. The FDA can rule in a variety of ways. The simplest FDA action is the approval letter, issued by the FDA when the agency deems a drug safe, effective and ready to be marketed. Conversely, the FDA can issue a non-approvable letter when the agency concludes that a drug's clinical data or safety data do not warrant approval. This rejection letter of sorts is, of course, bad news and usually precipitates the drug company's plunging stock price. Investor confusion can be highest, however, when the FDA issues a complete response letter, or likewise, an approvable letter. Simply put, these actions are akin to conditional approvals, meaning that the FDA requires additional information before it can issue a final ruling. The trick for drug companies -- and investors -- is figuring out how much additional information is required and how long it will take to compile and resubmit. Unfortunately, the FDA doesn't make complete response or approvable letters public, so investors have to rely on a company's explanation and interpretation of these letters to determine whether a final drug approval is imminent or significantly delayed. Lest you think drug companies always play straight-up and honest with investors, look at what Biopure (BPUR:Nasdaq) did in July 2003. The company received a complete response letter from the FDA regarding its human blood substitute Hemopure. But instead of telling investors that the FDA was asking for new animal and human clinical studies, Biopure management suggested to investors that the FDA had no substantial issues with Hemopure and that approval was right around the corner. The truth eventually came out, leading to a decimation of Biopure's stock price, the resignation of most of the company's management, including the CEO, and an ongoing Securities and Exchange Commission investigation. Hemopure is nowhere close to being approved. Sometimes, a complete response letter can be a benign event, especially when drug companies prepare investors for their arrival. MedImmune (MEDI:Nasdaq) received such a letter in January 2003 for its nasal flu vaccine FluMist. The company responded to the five remaining questions posed by the FDA one month later, as it had told investors it would do, and the vaccine was approved in June. Likewise, Bristol-Myers Squibb (BMY:NYSE) received an approvable letter from the FDA for its schizophrenia drug Abilify in September 2002. The drugmaker quickly resolved the outstanding issues, and the FDA approved the drug in November 2002. When the FDA's approvable letter comes attached to a request for new clinical trials, the delay can be quite lengthy. The FDA made just such a request for Symlin, a diabetes drug from Amylin Pharmaceuticals (AMLN:Nasdaq) in October 2001. It took almost two years -- until June 2003 -- before Amylin could conduct another clinical trial and resubmit Symlin for approval. In December 2003, the FDA sent Amylin another approvable letter, requesting even more information. To date, Amylin has yet to tell investors when it thinks Symlin will be approved, if ever.

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Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to adam.feuerstein@thestreet.com.

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(updated test??) Amazon.com: Open Business Models: How to Thrive in the New Innovation Landscape: Books: Henry Chesbrough

(update update) / Amazon.com: Open Business Models: How to Thrive in the New Innovation Landscape: Books: Henry Chesbrough: "The Wall Street Journal, December 21, 2006 'Chesbrough is not the first academic to grasp the superior economic value of intellectual over tangible property in today's economy. But he may be the one who has thought most deeply about its consequences for business.' Book Description In his landmark book Open Innovation, Henry Chesbrough demonstrated that because useful knowledge is no longer concentrated in a few large organizations, business leaders must adopt a new, “open” model of innovation. Using this model, companies look outside their boundaries for ideas and intellectual property (IP) they can bring in, as well as license their unutilized home-grown IP to other organizations. In Open Business Models, Chesbrough takes readers to the next step—explaining how to make money in an open innovation landscape. He provides a diagnostic instrument enabling you to assess your company’s current business model, and explains how to overcome common barriers to creating a more open model. He also offers compelling examples of companies that have developed such models—including Procter & Gamble, IBM, and Air Products. In addition, Chesbrough introduces a new set of players—“inn"

BIOTECH trains laymen in tissue culture | University of the Philippines Los Baños

BIOTECH trains laymen in tissue culture | University of the Philippines Los Baños: "If you are interested in investing money by propagating plants all-year round, especially those that are hard to grow using cuttings or by grafting, or have disease-free planting stocks, then try learning the science and business of tissue culture. Take the case of Mr. Francisco Lopez, a 92-year-old retiree from Quezon City. He was interested in putting up a simple tissue culture laboratory in order to produce orchids in flasks for export to Hawaii. Mr. Lopez, along with three other enthusiasts from Palawan, Leyte, and Laguna, participated in the training course on tissue culture of orchids and banana, which was held at the National Institute of Molecular Biology and Biotechnology (BIOTECH) on May 22-26. The training, implemented by Dr. Severina B. Exconde and Ms. Claire S. Ramos as resource persons and Ms. Lerma Moran as coordinator, provided them with information and hands-on experience in the micropropagation of plants and on establishing their own tissue culture laboratory."

Making it in the biotech business : Nature

Making it in the biotech business : Nature: "

Making it in the biotech business

Virginia Gewin¹

1. Virginia Gewin is a freelance science writer based in Portland, Oregon.

For comments, or story ideas, please contact Naturejobs at naturejobseditor@naturedc.com

Top of page

Abstract

Being good at research isn't enough for success in the biotech business. Virgina Gewin finds out where to get the other skills you need.

Biotech is big business these days, and record numbers of PhDs are trading the ivory tower for industry. The 1,500 biotech companies in the United States alone have combined revenues exceeding $40 billion, according to the Biotechnology Industry Organization — and they need skilled management to keep growing.

But a science education and experience in an academic lab don't provide many chances to learn about business. You may be an expert in recombinant DNA, but the business world is about making a return on investment. Although the thought of more study is less than appealing to most new PhDs, understanding business jargon and a businessperson's view of the world are critical in making the transition.

Top of page

Ivory Tower to Office Tower

"Scientists often underestimate the importance of business skills," says Hamid Bouchikhi, chairman of the Entrepreneurship Innovation and Small Business Network at the ESSEC Business School in Paris, France. Unfortunately, good ideas don't necessarily translate into good business. "There are plenty of stories about scientists going on to lead successful companies, but nobody talks about the many companies that failed because scientists didn't make good managers," says Shreefal Mehta, research assistant professor of biotechnology management at the Rensselaer Polytechnic Institute in Troy, New York.

Indeed, leaders of this nascent industry bemoan the lack of basic skills for leadership, competitive analysis and budgeting. Not surprisingly, industry grumblings have been answered by business-school programmes located near biotech hubs such as Cambridge, Massachusetts, and San Diego, California.

"Over 95% of new PhDs stay in the life-sciences industry," says Gail Naughton, dean of San Diego State University's College of Business Administration. With funding from companies such as Invitrogen, the university started the first joint life-sciences PhD/MBA. The business models aren't as good as the scientific ideas flowing from the community, says Greg Lucier, chief executive of Invitrogen. One of the biggest problems? Scientists in industry don't understand what customers want to buy. To gain practical business experience, Invitrogen is providing programme participants with internships.

The short course is another route. The Extension Servce at the University of California, San Diego offers a six-month leadership and management programme. Employees no longer interested in a pure technology role come one day a week to learn the skills necessary to become team leaders or managers.

Even if a scientist has no wish to be an entrepreneur, understanding business will be valuable. "I can guarantee with 100% certainty that today's scientist will be involved at some level with a venture-backed company," says David Anthony, a partner in the venture-capital firm 21 Ventures in New York. Anthony has established a short course — taught at the University of Alabama in Birmingham and at the New York Academy of Sciences — and a one-year accelerated MBA programme for graduates in the life sciences, which will begin at the University of Alabama later this year. The core of the course is traditional business, replete with financing and marketing, but Anthony admits that teaching business vision is difficult. "I've found it most effective to bring in outside people — entrepreneurs — to relay their own experience," he says.

These programmes serve postdocs, but others help industry scientists switch gear to management relatively early in their careers. The Massachusetts Institute of Technology (MIT) offers the Biomedical Enterprise Program — a joint collaboration between its Sloan School of Management and the Harvard−MIT division of health sciences and technology. The programme only accepts those with substantial work experience and is attracting a wide range of people — including undergraduates seeking advice on how to set themselves up for later.

Input and support from the local business community is a hallmark of biotech-focused programmes at Simon Frasier University in Vancouver, Canada, as well as Rutgers University in Newark, New Jersey. In addition to basic business skills, including business development and good manufacturing practices, Simon Frasier offers courses, such as one on bioethics, that reflect the current needs of industry.

"Our programme is a delicate balancing act between what you need to know tomorrow and 20 years from now," says Michael Parent, the university's academic director of MBA programmes. The philosophy is that management cannot be taught from scratch, so the courses only take people with work experience.

Why get an MBA if you are already working in industry? "The MBA is an objective signifier of a person's ability to work hard and get along with others," says Parent. Mehta agrees, adding that following the technical track up the ladder from project management to group management is also a viable option. Although biotech-focused MBAs are not yet available in Europe, some of the finest business schools in the world — including ESSEC, the London Business School and IMD International in Lausanne, Switzerland — are options for those seeking core business skills that will be transferable to any industry.

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Beating the Competition

For those ready to unleash the inner entrepreneur, Britain's Biotechnology Young Entrepreneur scheme, organized jointly by the University of Nottingham and the Biotechnology and Biological Sciences Research Council, has trained about 1,000 postgraduates in its ten-year history. Participants in the three-day competition develop business plans for imaginary biotech companies, which are judged by a panel of experts. "It's a quick hit experiential learning for postgraduates and postdocs in the biological sciences," says Simon Mosey, lecturer in enterprise and innovation at the University of Nottingham. For some 25 people, it was the beginning of their business. British researchers can also test the industrial waters through one-year Medici fellowships offered to scientists from the 15 participating universities.

Lack of leadership skills is holding back biotech in mainland Europe too. Carl Johan Sundberg, co-founder of the Karolinska Investment Fund and acting president of the Stockholm School of Entrepreneurship, fills the void with short courses on topics ranging from creating a business idea to starting a venture. "At Stockholm, we're mostly focused on earlier-stage people, but want to train those people with good ideas, such as ideas to patent, but don't know how to proceed," he says. He hopes to turn the short courses into a MBA degree in the near future.

KAROLINSKA INSTITUTE

Networking is essential says Carl Johan Sundberg (top). Evening classes at the Karolinska provide the opportunity.

Large drug companies remain the biggest life-sciences employers in Europe and offer an alternative route to biotech. "Big pharma is a good training ground and way into biotech industry," says Michael Saunders, chief operating officer at 4 AZA Bioscience in Leuven, Belgium. Saunders' time spent working in pharma inspired him to get an MBA.

Top of page

Get Networking

Bouchikhi describes a vicious circle of a management vacuum discouraging venture capitalists. "Venture capitalists complain that projects are not mature in terms of marketing or financial planning, which keeps them from investing," he says. The Paris Biotech Incubator, in which ESSEC is involved, is one of a number of start-up support schemes existing in Europe's biotech hubs. These are most suited to people with ideas at an advanced state who need to network for the few available start-up dollars. And by offering internships as entry into the business world, start-ups can attract students who believe in the company's products and will continue with it in the hope of cashing in on its future success.

Networking is a prime motive behind US industry organizations such as the Massachusetts Biotechnology Council or San Diego's Biocom. These have a vested interest in maintaining links with potential employees. A predicted 64% increase in demand for biotech workers in Massachusetts alone over the next decade will require researchers and clinicians as well as manufacturers. MassBioEd, the Massachusetts Biotechnology Council's non-profit foundation, is actively educating scientists in the relevant business areas through three-day short courses.

There are many paths from lab bench towards the boardroom. All offer an individual their own way to combine scientific sense with business acumen.

"

National Business Review (NBR) - Business, News, Arts, Media, Share Market & More

National Business Review (NBR) - Business, News, Arts, Media, Share Market & More: "The former chief executive and managing director of ICP Biotechnology Dr Earl Stevens has been cleared of insider trading by the Securities Commission. On 1 June 2007, the print edition of the NBR reported that a disgruntled shareholder in the company had requested a stock exchange enquiry into Dr Stevens. At issue was whether Dr Stevens sold a large parcel of shares before the company downgraded its forecast from an expected profit of $8 million to an expected loss of $6 million, and whether he did so knowing the true forecasts. On April 19, Dr Stevens and Tracey Joy Stevens declared their direct shareholding in ICP Bio had been reduced to 23.04 per cent from 39.79 per cent. In a disclosure notice filed to the NZX, Dr Stevens said the change in shareholding resulted from the sale of shares to Queenstown Unlimited."

What is a Bond

What is a Bond: "A. 'A Bond is simply an 'IOU' in which an investor agrees to loan money to a company or government in exchange for a predetermined interest rate.' If a business wants to expand, one of its options is to borrow money from individual investors. The company issues bonds at various interest rates and sells them to the public. Investors purchase them with the understanding that the company will pay back their original principal plus any interest that is due by a set date [this is called the 'maturity']. A bondholder is mailed a check from the company at set intervals [for example, every month] until the 'loan' is paid off. The interest a bondholder earns depends on the strength of the corporation. For example, a blue chip is more stable and has a lower risk of defaulting on its debt. When companies such as Exxon Mobile, General Electric, etc., issue bonds, they may only pay 7% interest, while a much less stable start-up pays 10%. A general rule of thumb when investing in bonds is 'the higher the interest rate, the riskier the bond.' Who can issue bonds? Governments, municipalities, a variety of institutions, and corporations. 'Commercial Paper' is simply referring to bonds issued by companies.

There are many types of bonds, each having different features and characteristics. A few of the most notable are zero coupon and convertible.

You can find more information in Bonds 101: What They Are and How They Work.

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UL Lafayette: Intellectual Property: Types of Intellectual Property

UL Lafayette: Intellectual Property: Types of Intellectual Property: "

Types of Intellectual Property
PATENT LAW YOU CAN USE™ By Howard M. Eisenberg © 1998
Download a PDF version of this document.
Abstract - The four types of intellectual property: copyrights, trademarks, patents, and trade secrets, protect different types of creations of the human mind. This article provides an overview of each type of intellectual property and discusses when and how they are used. Intellectual property is often the key asset of a biotechnology or pharmacology company. Therefore, it is essential to understand what intellectual property is, to know what the various types of intellectual property are, and to be able to determine the type intellectual property that is appropriate for specific needs. Intellectual property is intangible property, that is property created by the mind. Like tangible real or personal property, the law recognizes the right to own and to control intellectual property. There are four well recognized types of intellectual property rights: copyrights, trademarks, patents, and trade secrets. These forms of intellectual property differ significantly in the rights they confer, how they are obtained, and how they are maintained. Copyrights Copyrights protect the original expression of an idea fixed in a tangible medium of expression. Examples of copyrightable works include novels, songs, sculptures, software codes, instruction manuals, paintings, and dramatic works. The owner of a copyright can exclude others from reproducing, adapting, publicly distributing, publicly displaying, or performing the copyrighted work. The key concept concerning copyrights is "expression." A copyright does not protect an idea itself, but rather the way that an author expresses the idea. For example, the idea for a story of a young woman who rebuilds her world after it is destroyed during a war and who loves a man she can never have while rejecting a man who loves her is not protectable by copyright. However, the novel Gone With the Wind, which is a particular expression of this idea, is copyrightable. Copyrights protect only against copying. They do not protect against someone else independently authoring the same or similar work. Therefore, it is not infringement of a copyright for an artist to create a painting which is identical to a copyrighted painting as long as the artist did not copy from the original painting. However, in many situations, such as with a complicated computer source code, the similarity of a competitor’s work to a copyrighted work provides a very strong inference of copying which will tend to convince a court that the copyright has been infringed. Copyright protection lasts for a very long time. For works created after 1977, the copyright extends until 70 years after the death of the author. For a work for hire or for an anonymous or pseudonymous work, the copyright lasts until either 95 years after publication or 120 years after creation, whichever occurs first. Many people do not know that it is not necessary to apply or even to register for a copyright. The copyright exists from the moment that a work is fixed in a tangible medium of expression, such as on paper, a computer disk, or a videotape. It is advisable, although not mandatory, to place a copyright notice, usually a "C" in a circle - © - with the date of first publication and the name of the copyright holder, and to register the copyright with the Copyright Office. Notice and registration are inexpensive and provide additional valuable legal rights to the copyright holder. Most countries are signatories to one or more international conventions which recognize the copyrights of other countries. Therefore, it is not necessary to apply for copyright protection in individual countries. However, copyrighted works in a foreign country are protected only to the extent that a work created in that country is protected. Therefore, the rights of a copyright owner may vary somewhat from country to country. Trademarks A trademark identifies a product and distinguishes it from other products so as to identify the source of the product. For example, the familiar swoosh on an article of clothing or footwear distinguishes the article and identifies Nike as the source of the article. One way to think of trademarks is as a property right belonging to the trademark owner which serves to protect the public so that a consumer is not confused as to the maker or provider of a good or service. Trademarks provide varying degrees of protection depending on the "strength" of the trademark. Strength is determined by how likely the use of the trademark by another is likely to cause confusion in the marketplace. The Nike swoosh or McDonald’s golden arches are very strong marks that would likely be found to be infringed if used without permission on virtually any consumer item. That is because a consumer is likely to expect that the product, even though not of a type typically associated with these companies, is indeed made by Nike or McDonald’s. For weaker trademarks, such as one that is descriptive of a product, use of the trademark by another may not infringe unless the mark was used in conjunction with goods that directly compete with goods for which the trademark owner uses the mark. A trademark can endure indefinitely, provided that the trademark owner continues to use it, and provided that the trademark does not lose its distinctiveness and become generic. There are many instances of trademarks becoming generic and becoming dedicated to the public such as the well known former trademarks "Aspirin" and "Zipper". In the United States, it is not necessary to apply for a trademark in order to obtain trademark rights. The trademark rights come into being when a trademark is first publicly used in continuous commercial use, even without federal trademark registration. An unregistered trademark may be identified as a trademark, usually with the ™ symbol. Registration, however, has many advantages, including exclusive national rights to use the mark in connection with specified goods or services, incontestability after five years, the right to sue in federal court, and the ability to bar importation into the United States of goods bearing infringing trademarks. A registered trademark is identified by a phrase stating that it is a registered trademark or by the letter R enclosed in a circle - ®. Registration of a trademark is obtained by submitting an application that is examined to ensure that the trademark meets the criteria for registration. Unlike copyrights, trademark rights are national, not international. Therefore, registration in one country does not confer rights in other countries. Often, however, a trademark may be entitled to registration in another country based on a previous United States registration. Patents There are three different types of patents. Design patents protect novel, non-functional design elements. Plant patents protect asexually reproducible plants. Utility patents, the most common type of patent, are often referred to simply as patents. Utility patents provide protection for useful inventions, which may be processes, machines, articles of manufacture, or compositions of matter. A patent permits a patentee to exclude others from making, selling, or using the patented invention and from importing the patented invention or an article made by a patented process into the United States. Unlike copyrights, others may be excluded from practicing a patented invention whether or not they copied the invention from the patentee. Independent invention is no defense to patent infringement. It is important to realize that a patent by itself does not permit the patentee to do anything with the invention. Patent rights are, for the most part, exclusionary and not permissive rights. This is similar to the rights enjoyed by the owner of other types of property, such as personal property. The owner of a car has the right to exclude others from using the car. However, the car owner does not have the right to use the car in ways that infringe upon the rights of others. For example, the car owner is not permitted to drive over a neighbor’s rose bushes or to drive too fast so as to endanger others. Likewise, a patentee may not practice a patented invention if, by doing so, the patent rights of another would be infringed. This may occur, for instance, in the situation where there is a patent for a specific chemical compound but another patent exists that covers the generic class of compounds to which the specific compound belongs. Patent protection is acquired by filing a patent application in the United States Patent and Trademark Office. The application is examined to determine whether the invention for which a patent is sought meets the statutory requirements of usefulness, novelty, and unobviousness, and whether the application teaches how to make and use the invention. If these criteria are met, the applicant is entitled to a patent. Additionally, a patent application must disclose the applicant’s "best mode" for practicing the invention. Because the best mode is subjective to the mind of the applicant, the Patent Office usually cannot reject an application for failure to provide the best mode. However, patents are frequently challenged in court for best mode violations and it is strongly recommended to comply fully with this requirement. Generally, a patent is in force from the date that the application issues until twenty years after the filing date of the application, provided that the patentee pays the required periodic maintenance fees. If the application is based on an earlier patent application, the twenty-year term is calculated from the filing date of the earlier application. For patent applications filed before June 8, 1995, different rules apply for determining how long the patent term lasts. Like trademarks, patents that are in force in one country, like the United States, are not enforceable in other countries. An application must be filed in each country where patent protection is desired. Trade Secrets A trade secret is virtually anything that is not generally known and that gives the owner of a trade secret a competitive business advantage. A trade secret may be a patentable invention or may be other intangibles such as manufacturing techniques, business methods, sources of supply, customer lists, and other industrial or commercial ideas. In order to qualify as a trade secret, the owner must take precautions to ensure that it remains secret. The owner of a trade secret has the right to prevent use or dissemination of the trade secret by anyone who learned or derived the trade secret from the owner. The owner has no trade secret rights against anyone who independently discovers the trade secret. For example, the Coca-Cola company may prevent an ex-employee from using or disclosing the formula for Coke® if the ex-employee learned of the formula due to being a Coca-Cola employee. However, the Coca-Cola company would have no right under trade secret law to prevent a person from making a Coke® knock-off if that person independently developed or learned the formula. Each of the forms of intellectual property has its place within an organization. Copyrights protect the form of expression of ideas, trademarks protect the identification of the source of ideas, and patents and trade secrets protect the application of ideas. Because a trade secret may be a patentable invention, tension may exist between the options of keeping an invention a trade secret or filing a patent application. Using a trade secret may eliminate the possibility of patenting an invention. On the other hand, the publication of a patent destroys any trade secrets which it discloses. I will discuss this issue in my next column.
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Reprinted by permission from the author. Howard M. Eisenberg is a biotechnology and life sciences patent attorney who represents a number of university clients. His particular area of concentration is in patents involving human or veterinary medicine.

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UL Lafayette: Intellectual Property: Rule 56 – Duty of Candor and Good Faith

UL Lafayette: Intellectual Property: Rule 56 – Duty of Candor and Good Faith: "

Rule 56 – Duty of Candor and Good Faith
PATENT LAW YOU CAN USE™ By Howard M. Eisenberg © 2000
Download a PDF version of this document.
Abstract - An applicant for patent, as well as the applicant's attorney and others associated with the patent application, are required by law to disclose to the Patent Office any information known to them that may be material to the issue of patentability. Failure to do so may result in severe penalties, including unenforceability of the patent. The Code of Federal Regulations, at 37 C.F.R. §1.56, known as "Rule 56", imposes "a duty of candor and good faith" in dealing with the Patent Office during the period of examination of a patent application. This duty requires certain individuals to disclose to the Patent Office any information they are aware of that is material to the issue of patentability. Failure to do so can result in severe consequences, including unenforceability of any patent that might issue from the application. Therefore, it is important to be aware of who is included within the duty of candor and good faith and what information is required to be disclosed in order to comply. There are also a very good positive reason to disclose information to the PTO. Legally, a presumption exists that a patent is valid with respect to any information or prior art considered by the PTO during examination of a patent application. A defendant accused of infringing a patent faces a very difficult burden in trying to prove that an issued patent is invalid based on prior art or other information that had been considered by the PTO during examination. The burden to prove patent invalidity is much lower if based upon information that had not been considered by the PTO. The Regulations state that any individual who is associated with the filing or prosecution of a patent application is included in the duty. This includes each of the named inventors, their attorney or agents involved in the patent preparation or prosecution, and anyone else who is substantively involved in the preparation of the application and who is associated with the inventor, the assignee, or with anyone to whom there is a duty to assign the application. This does not mean that everyone associated with the assignee is included. Only those individuals who are involved in the patenting process must comply with Rule 56. In the university technology office setting, this would probably include at least the technology manager handling the patent prosecution of a particular application. Because penalties are severe for failure to comply, it is best to err on the safe side and disclose to the PTO any information that is thought to be possibly relevant to the issue of whether or not a patent should be granted. Only information that is "material to patentability" must be disclosed. Information that is cumulative, if it repeats information already disclosed to the PTO, does not have to be disclosed. There are several issues that arise regarding Rule 56. The first is, how can I know if information is considered to be "material to patentability" so that it must be disclosed? Unfortunately, there is no easy answer to this question. Most courts follow an expansive test in which information is considered to be material if it is arguably relevant to the issue of patentability and therefore might have affected the decision of the PTO(1). But, other courts follow a more lenient "but for" test in which information is considered to be material if the invention would not have been found to be patentable if the information had been supplied to the Patent Office. Another issue involving Rule 56 is under what circumstances does the duty of candor apply? The first circumstance occurs when filing a patent application. Each inventor signs a statutory oath of inventorship attesting that they are the first and original inventors of the claimed invention and acknowledging that they have a duty under Rule 56 to disclose information material to patentability. This includes information such as a prior sale or public use of the invention one year or more before the filing date of the application. Rule 56 also requires the submission of known relevant prior art to the PTO. The applicant is under no obligation to search for relevant prior art. However, any material prior art that is known, including U.S. or foreign patents or published patent applications, scientific and other journal articles, brochures, and web sites, must be submitted. This Information is submitted to the PTO in the form of an "Information Disclosure Statement" ("IDS"). It is best to be overly inclusive when filing an IDS because the submission of a prior art document in an IDS does not constitute an admission that the information is indeed relevant to the invention claimed in the application. Rather, it is understood that an applicant strives to comply with Rule 56 and that, therefore, an applicant will often submit publications that are distant from the claimed invention. The duty with respect to prior art extends to more than merely submitting the art to the PTO. If the Examiner mistakenly interprets a prior art reference in the applicant's favor, the applicant must correct the Examiner. Also, the applicant must explain the relevance of any publication submitted in a foreign language or of any particularly relevant prior art document if it is being submitted as part of a long list of documents. Rule 56 also applies to the submission of affidavits or declarations to the PTO concerning the date of invention or concerning factual evidence, such as test data to establish patentability. Providing false or misleading information is an obvious violation of the duty of candor. It is important to realize that omitting information can also result in the finding of a violation of Rule 56. For example, failure to disclose that an individual signing a declaration has an interest in the invention has been found to violate Rule 56. Violations have also been found when successful test data is submitted as evidence of patentability, but the fact that there had been several unsuccessful tests is not disclosed. In this situation, it is best to disclose that there had been unsuccessful tests and explain why the failures occurred and why they should not negatively affect the decision on patentability. Failure to disclose to the PTO material information, or providing misleading or false material information, referred to as "inequitable conduct," is usually only discovered after a patent issues, typically in the context of a litigation. If inequitable conduct is found during patent application prosecution, a patent examiner may strike the application. In a litigation, a court may hold a patent to be invalid or unenforceable due to the applicant's inequitable conduct in the prosecution of the application. A finding of inequitable conduct may also provide the basis for awarding attorney's fees to the defendant in an infringement suit. The Supreme Court has also found that fraudulent procurement of a patent due to inequitable conduct of a patent applicant can form the basis of an antitrust suit(2). But don't despair. There is good news. A punishable violation of Rule 56 requires more than a good faith or honest mistake by the applicant. It requires a finding that the omission or submission of false information was done with an intent to deceive the Examiner. The duty only extends to information that is known to the applicant or the other listed individuals. There is no duty to make a search of the prior art. In order to invalidate a patent for inequitable conduct, a defendant must prove to the court that the patentee knew of material information and failed to disclose the information with the intention to deceive the Examiner so that a patent would be granted. So, what should you, as an applicant for a patent, do to make sure that the you comply with the duty of candor and good faith? I suggest that you provide your patent attorney with any publications that, either by themselves or in combination with one or more other publications, might possibly suggest the invention. Err on the safe side. It's always best to submit more information to the PTO rather than less. Inform your patent attorney of any prior use or sale of the invention or of the use or sale of anything that might include the invention. Let your attorney make the decisions about what to disclose to the PTO. Also, be complete in the information that is submitted to the PTO in the form of affidavits or declarations, including any affiliation with the inventors or interest in the subject matter of the invention, and make sure that any statements regarding successful tests are accurate and complete, especially regarding any test failures. Although Rule 56 might at first appear to be frightening, it really is not difficult to comply with. What is required is a positive determination to share with the PTO any information that you have concerning your invention. There really is no downside to submitting information to the PTO. So, if you are unsure whether or not to submit a particular piece of information, err on the side of providing more information than necessary. If you act with the intent to fully disclose, the chances are small that you will ever be found to be in violation of the duty of candor and good faith. 1 True Temper Corp. v. CF & I Steel Corp., 202 U.S.P.Q. 412 (10th Cir. 1979). 2 Walker Process Equip. Inc. v. Food Mach & Chem. Corp., 382, U.S. 172, 147 U.S.P.Q. 404 (1965).
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Reprinted by permission from the author. Howard M. Eisenberg is a biotechnology and life sciences patent attorney who represents a number of university clients. His particular area of concentration is in patents involving human or veterinary medicine.

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UL Lafayette: Intellectual Property: Recent Changes in U.S. Patent Law

UL Lafayette: Intellectual Property: Recent Changes in U.S. Patent Law: "

Recent Changes in U.S. Patent Law
PATENT LAW YOU CAN USE™ By Howard M. Eisenberg © 2000
Download a PDF version of this document
Abstract - On November 29, 1999, several changes were made to the U.S. Patent laws. The changes most relevant to companies and to university technology offices include provisions for prior user rights for business methods, publication of U.S. patent applications, guarantee of a 17-year patent term, and a new optional reexamination procedure that allows for increased involvement of third parties. On November 29, 1999, President Clinton signed into law the American Inventors Protection Act. This law contains several provisions, including the First Inventor Defense Act which provides a prior use defense for business method inventions, the Domestic Publication of Foreign Filed Patent Applications Act which provides for publication of U.S. patent applications that are also filed in foreign countries, the Patent Term Guarantee Act which guarantees a patent term of at least 17 years if certain requirements are met, and the Optional Inter Partes Reexamination Act which provides for third party reexamination requesters to participate throughout a reexamination proceeding. I. First Inventor Defense Act Following a recent decision by the Court of Appeals for the Federal Circuit(1), business methods are now considered to be patentable. This decision caused some distress in the business community because of the fear that a patentee could force a competitor to stop using a business method that the competitor had been secretly using for some time. Another concern was that the only way that companies could prevent the possibility that a competitor could patent the way that they did business was to publicly disclose their methods. This would destroy the trade secret status of the methods. The First Inventor Defense Act addresses these concerns. The new law provides a "prior use" defense against infringement for those who have previously commercialized a business method. This law permits companies to keep their business methods secret with less risk that a later patentee of their business method will be able to enjoin them from using the method or be able to sue for patent infringement. The prior use defense is only available against business methods, not other types of patents, and requires the following conditions. First, the business method must have been reduced to practice at least one year before the patent application for the business method was filed. Second, the method must have been used commercially at least one day before the application was filed. These two facts must be established by clear and convincing evidence. The defense has several significant limitations. The prior use defense will be unsuccessful if the party using the business method derived the method from the patentee. The defense may only be asserted by a party that performed the acts required to establish the defense. What this means is that the prior use defense may not be licensed, assigned, or otherwise transferred to a third party except when the method is part of a transfer or assignment of the business in which the method is used. In order to invoke the defense, the prior use must be in the United States. Also, a non-profit entity may employ the prior use defense only for continued use by the non-profit entity and may not use it in regards to any later commercialization or use outside the non-profit entity. The provisions of the First Inventor Defense Act took effect on November 29, 1999. II. Domestic Publication of Foreign Filed Patent Applications Act Under previous U.S. patent law, patent applications were maintained in secret until they issued as patents(2). This differed from the situation with patent applications that were filed in foreign countries that publish patent applications 18 months after filing. Under the new law, U.S. patent applications will be published 18 months after filing. The publication will occur unless the application has been abandoned before publication, is subject to a secrecy order by the government, or the applicant requests that the application not be published. Also, provisional patent applications and design patent applications are not to be published. In order for an applicant to prevent publication of a patent application, the applicant must accompany a request with a certification that the application has not been filed, and will not be filed, in an international jurisdiction that requires publication of patent applications. If the applicant later files in such an international jurisdiction, the applicant must notify the U.S. Patent Office within 45 days of the foreign filing. The U.S. Patent Office will then publish the application at the 18 month date. Failure to timely notify the U.S. Patent Office of the foreign filing may result in abandonment of the U.S. patent application. Often, the corresponding foreign filed patent application is less extensive than that which is filed in the United States. In this case, the applicant may, within 16 months of the U.S. filing, redact portions of the U.S. patent application that are not contained in the foreign application. In this way, only the portions of the U.S. application that are foreign filed are published. Publication of U.S. patents is an important issue because trade secrets that are disclosed in a patent application will be published, even if the application never issues as a patent. However, the impact of this is minimized somewhat because only the portions of an application that are foreign filed will be published in the United States, and these portions would have been published anyway by the foreign jurisdiction. The new law also contains a provision that benefits the applicant. Under the new law, once a patent application is published, the applicant has a provisional right to a reasonable royalty during the time between the publication date of the application and the issue date of the patent. The right is provisional because it can be asserted only if the application does eventually mature into a patent. The new provisional right to a royalty has several limitations. First, it only applies when the invention claimed in the patent is "substantially identical" to the invention that was claimed in the published application. This can be a very significant limitation because claims are often changed dramatically during prosecution of an application. Also, the applicant must provide an accused infringer with actual notice of the published application and explain how the claims are being infringed in order to be entitled to royalties under this law. Another aspect of the new publication law is that published U.S. patent applications are now prior art against other patent applications as of the date they are filed, whether or not the application ever issues as a patent. Previously, U.S. patent applications were not prior art unless they issued as a patent. The new law regarding publication of patent applications goes into effect for all patent applications filed on or after November 29, 2000. III. Patent Term Guarantee Act In 1995, the patent laws were changed so that a patent would be effective from its date of issuance until a date 20 years from its filing date. Before then, a patent expired 17 years from its date of issue. Under the new Patent Term Guarantee Act, the term of a patent will be extended to be at least 17 years if the prosecution of the patent lasted more than three years. In these cases, the patent will be accorded an additional day of pendency for each day in excess of 14 months that the Patent Office failed to issue a first Office Action and for each day in excess of 4 months that the Patent Office fails to respond to other submissions by the applicant. In addition, the patent term will be prolonged by one day for delays due to interference proceedings, secrecy orders, and appellate review if the review results in a reversal of a previous determination of lack of patentability. The adjustments in patent term will be reduced by any period of time in which the applicant failed to exercise reasonable efforts to conclude patent prosecution. For example, each day in excess of three months for an applicant to respond to an Office Action will result in a one day decrease in the patent term adjustment. Therefore, it is important to be diligent in prosecuting patent applications and to avoid extensions of time in responding to the Patent Office whenever possible. The Patent Term Guarantee Act applies to all patents resulting from patent applications filed on or after May 29, 2000. IV. Optional Inter Partes Reexamination Act Any party may request that the Patent Office reexamine an issued patent by submitting to the Patent Office prior art that is pertinent to the issue of patentability(3). Under present law, following the request, the party requesting reexamination plays no further part in the reexamination procedure. Under the new Optional Inter Partes Reexamination Act, the requesting party may now elect to participate throughout the reexamination procedure. The requesting party may provide one response for each of the patentee’s responses within thirty days of the filing of the patentee’s responses. The new law permits the third party requestor to appeal an adverse decision in the reexamination procedure to the Board of Patent Appeals and Interferences. However, the third party may not appeal to the federal courts. In contrast, the patentee may appeal an adverse reexamination decision to the Board or to the courts. There are several limitations to the new reexamination law that make it unlikely that many third parties will elect to use it. A third party may not request a reexamination on the same basis that could have been raised in a previous civil action in which the third party failed to prove invalidity of the patent. Also, a third party may not request more than one reexamination on the same issues. Most importantly, a third party may not later litigate any issue that was raised, or that could have been raised, during the reexamination proceeding. Because a third party requestor gives up important rights to later litigation if active participation in reexamination is elected, most requestors will probably prefer to conduct reexamination in the old way, that is by submitting the request for reexamination and then allowing the procedure to take place solely between the Patent Office and the patentee. The law regarding the new optional reexamination procedures took effect on November 29, 1999. There are several other minor changes to the new patent laws. For a more detailed analysis of the new patent laws or to determine if they apply to your situation, please contact your patent counsel. 1 State Street Bank and Trust Co. v. Signature Financial Group, 149 F.3d 1368, 47 U.S.P.Q.2d 1596 (Fed. Cir. 1998). 2 I mentioned the secrecy of pending U.S. patent applications in my article in BioPharm in May 1999. 3 37 C.F.R. §1.501 to §1.570
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Reprinted by permission from the author. Howard M. Eisenberg is a biotechnology and life sciences patent attorney who represents a number of university clients. His particular area of concentration is in patents involving human or veterinary medicine.

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UL Lafayette: Intellectual Property: Reading a Patent Part II: The Description and the Claims

UL Lafayette: Intellectual Property: Reading a Patent Part II: The Description and the Claims: "

Reading a Patent, Part II The Description and the Claims
PATENT LAW YOU CAN USE™ By Howard M. Eisenberg © 2000
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Abstract - In my last article in the May 2000 issue, I described the information that is printed on the cover page of a patent. This month’s article describes the heart of the patent, that is the description of the invention and the claims. The description includes a specification and drawings, and discloses how an invention is made and how it is used. The claims are based upon the description and set out the legal limits of what is protected by the patent. A patent is a complex document made up of several parts, including a description that includes the drawings and the specification and a series of claims after the specification. The specification describes the invention and how to make and use it. Drawings are included if necessary to understand the invention. The claims specify what the actual invention is, that is what is protected by the patent. When reviewing a patent for any reason, non-patent professionals tend to jump immediately to the claims. The claims are thought to be the most important part of the patent. In certain circumstances, this is true. However, in many if not most cases, it is the description of the invention that is of paramount importance. When an inventor reviews a draft patent application the description, not the claims, should be the focal point of the review. The description cannot be amended to include new matter after an application is filed. The claims can be amended after filing, but only to the extent that they claim what is described in the specification or shown in the drawings. The description is also the most important part of a patent when trying to determine if your invention is patentable in view of an existing patent, that is in studying a patent for its prior art disclosure. If an invention is described in a printed publication, such as a patent, more than one year before a patent application is filed for the invention, the invention will not be patentable. In reviewing a patent for its prior art effect, the specification and drawings should be the primary focus of study, not the claims. The claims are analyzed to determine the scope of protection of a patent. This is important when deciding if your product infringes a competitor’s product or if the competitor’s product infringes your patent. The claims are also useful in figuring out how to "design around" a patent so that you do not infringe an existing patent. In the infringement analysis, the specification may also be reviewed, but it is primarily used to define any terms in the claims that may be unclear. 1. The Description A. Drawings The description contains two parts, a specification that describes the invention and drawings. Because the drawings are part of the description, claims may be based on what is shown in the drawings, even if not described in the specification. Drawings are not always included as a part of the application. They are only used if necessary to understand the invention. In patents claiming a mechanical apparatus, drawings are almost always present. The drawings show the various parts of the invention, each of which is assigned a reference number that is defined in the specification. In biotechnology or pharmaceutical patents, drawings are not always present. For example, in a patent that claims a combination of ingredients used to make a pharmaceutical preparation and a method of making and using the combination of ingredients, a drawing would not be included because it is not necessary to understand the patent. Drawings that may be encountered in biotechnology and pharmaceutical patents include gene or amino acid sequences, schematics of plasmids or recombination schemes, electrophoresis gels, and chemical formulas. Unlike mechanical drawings, the elements of these types of figures may lack identifying numerals. B. Specification The specification is the heart of the patent. It is the part of a patent that describes what the invention is, how to make it, and how to use it. The specification also discusses the prior art and how the invention overcomes the problems that were unsolved before the invention. The specification contains the following parts. 1. Title The title in the specification is the same as that which is on the patent cover page. 2. Statement of Patent History The first line of the patent discloses the existence of any prior applications that the present patent is based upon, and the fate of those applications, whether they were abandoned or eventually issued as patents. 3. Statement that the U.S. government has rights in the invention, if applicable. This occurs typically when the patented invention is a result of federally sponsored research. 4. Statement that a Microfiche Appendix is included as part of the specification, if applicable. This occurs when a computer program that is longer than 10 pages is part of the patent. Programs of this length are not printed with the patent but are available on microfiche. 5. Field of the Invention This is a brief paragraph, typically one to two sentences long, describing the field to which the invention pertains. 6. Background of the Invention In this section, the patent describes the problems that have not been solved by the prior art and that are solved by the patented invention. Prior art documents, such as patents or scientific articles, are discussed to show how previous efforts have failed to provide an answer to problems that are addressed in this patent. 7. Summary of the Invention This section briefly summarizes the invention. It describes the invention in broad terms and how it overcomes the disadvantages of the prior art. 8. Brief Description of the Drawings The figures are briefly described in broad terms, typically in one sentence, such as "Figure 1 shows a side view of the apparatus of the invention" or "Figure 2 shows the nucleotide sequence of gene X". The figures are described in greater detail in the next section of the patent. 9. Detailed Description of the Invention This longest section of the patent describes the invention in detail. It describes each of the features of the invention and how to practice the invention, that is how to make the invention, and how to use it. It also discloses what is known as the "best mode", which is the best way conceived by the inventor to practice the invention. The detailed description of most patent applications in the biology and chemistry fields contains several examples. The examples describe in great detail how a biological or chemical invention is made. In a patent claiming a recombinant protein, there may be examples describing the growing of suitable microorganisms to be transformed, plasmid construction, isolation of DNA, transfection of the microorganisms, expression of the protein, and isolation of the expressed protein. Examples typically describe what an inventor has actually done in making and using the invention. Additionally, examples known as "prophetic examples" may be included that describe what has been conceived in the mind of the inventor as being a part of the invention but which has not yet been performed. The last paragraph of the specification typically is a statement that the invention is not limited to what is described, but also includes undescribed equivalents of the invention that is recited in the claims. C. The Claims Because the claims define the invention that is protected by the patent, they are in some ways the most important feature of the patent. They provide guidance to competitors in steering clear of the patent. They indicate the scope and bounds of the patent so that a court can determine if the patent is infringed. The claims follow a set format with an unusual grammatical style that is sometimes difficult for non-patent professionals to understand. The first part of the claim is the "preamble", which states in general terms what the invention relates to. Examples of preambles are "A bicycle", "A nucleic acid", "A pharmaceutical composition", "A method for treating arthritis", and "A device for accelerating wound healing". Generally, the wording of the preamble does not affect the scope of the patent protection. Following the preamble is a "connector", which is usually either "comprising", "consisting of", or "consisting essentially of". The choice of connector is very important and has a tremendous impact on the breadth of the patent. The term "comprising" in a claim means that the patent will be infringed by an article, device, or a process that contains all of the features of the claimed device as described in the claim, even if the potential infringer contains additional features. As an example, if a claim recites a table comprising four legs and a top, the patent will be infringed by a table having five legs, or having four legs, a top, and a shelf below the tabletop. The term "consisting of" in a claim means that the patent will be infringed by anything that contains all of the features of the claimed invention, but will not be infringed if it contains additional features. A table consisting of four legs and a table top would not be infringed by a table having five legs or having a shelf below the tabletop. Because the term "consisting of" significantly narrows a patent claim, it is generally avoided by patent attorneys unless it is felt to be necessary in order to avoid very close prior art. The term "consisting essentially of" is seen occasionally in patent claims in the biological and chemical fields. It means that a patent claim will be infringed if a potential infringer contains all the features of the claimed invention plus additional features that do not substantially change the nature of the invention. In the case of a pharmaceutical composition, the presence of an additive that enhances the effect of the patented composition, such as by increasing its shelf life or its potency, will infringe the patent. On the other hand, the presence of an additional ingredient that changes the nature of the composition, for example that makes it unsuitable for use as an acne medication but makes it suitable for increasing cardiac output, would not infringe the patent. Following the connector is the body of the patent, describing the elements of the invention and how they are interrelated. These may be a series of mechanical parts and how they are put together. They may be a series of steps in a process to make or to use something. In order to infringe the patent, a device, composition of matter, or process must contain every one of the listed elements, or their equivalents. Claims come in two types: independent and dependent. Independent claims are those that can exist by themselves and typically begin with the word "A", for example, "A nucleotide sequence, comprising…" Dependent claims refer to a previous claim, which can be an independent claim or another dependent claim. They contain all the features of the claim or claims that they depend from, plus one or more additional features. An example of a dependent claim is "The nucleotide sequence of claim 1, which further comprises…" Generally, when determining whether a patent might be infringed, the first step is to determine if the potentially infringing article or process literally includes each of the features recited in the independent claims. Initially, there is often little reason to examine the dependent claims because, if the independent claims are not infringed (assuming that they contain the connector "comprising"), the dependent claims also will not be infringed. If there is no literal infringement of the claims, it will usually be necessary to obtain and review the prosecution history of the patent as it was examined in the Patent Office, referred to as the "file wrapper", to determine if there is infringement based on equivalents of the elements of the claims.
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Reprinted by permission from the author. Howard M. Eisenberg is a biotechnology and life sciences patent attorney who represents a number of university clients. His particular area of concentration is in patents involving human or veterinary medicine.

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UL Lafayette: Intellectual Property: Reading a Patent, Part I: The Cover Page

UL Lafayette: Intellectual Property: Reading a Patent, Part I: The Cover Page: "

Reading a Patent, Part I The Cover Page
PATENT LAW YOU CAN USE™ By Howard M. Eisenberg © 2000
Cover Page Figure (PDF)
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Abstract - A patent is a legal document that provides certain rights to the owner of a patent. It contains information of interest to many different individuals, including patentees, competitors, potential licensees, and judges. In this and the next article, I discuss how to read a patent. This article describes the information that is found on the patent cover page. This article should be read together with Figure 1, which is the cover page of U.S. Patent No. 5,478,814. My next article discusses the substance of the patent itself, including the specification and the claims. A patent is a complex document made up of several parts, including a specification that describes the invention and how to make and use it, claims that specify what is protected by the patent, and drawings if needed to understand the invention. Each patent has a cover sheet that contains important information about the patent. Information on the cover sheet is of interest to many different individuals, including the patentee, potential licensees, competitors, and attorneys and judges. For those unfamiliar with patents, the cover sheet may seem difficult to understand or even incomprehensible. Even for those who have worked with patents, the significance of some of the items on the cover sheet is not always fully understood. A patent cover sheet is shown in Figure 1. You will notice that each item on the cover sheet has next to it a number inside a bracket, for example [22] next to the filing date. By international agreement, these numbers are used by all countries on their patent cover sheets to inform the reader what the individual items of information signify. For example, a person who cannot read Japanese would have a very difficult time determining which of the several dates found on a Japanese patent cover page refers to the filing date of the application. The bracketed number [22] next to a date indicates that this date is the filing date. This system assures that certain information about the patent will be available to everyone, even without the ability to read the language of the patent. Some items, such as the Title, Inventor, and Patent Number, are found on the cover sheet of all U.S. patents. Other items, such as Assignee, Foreign Application Priority Data, or Attorney, may be absent if they are not pertinent to the particular patent. The most prominent portion of the cover sheet is the section at the top of the page containing information found on all U.S. patents. The first line on the left side are the words "United States Patent" followed by [19]. Under this is the last name of the first named inventor of the patented invention. In the upper right corner, there is a bar code that contains information about the patent number. Below the bar code is [11] Patent Number. The number for a utility patent has seven digits, for example 5,478,814. A design patent number has 6 digits preceded by a capital "D", such as D123,456. A reissue patent (a patent that has been corrected by the issuance of a new patent) has a five digit number with the letters "RE.", such as RE.12,345. A reexamination certificate (a patent that had been reexamined because of newly discovered prior art) has a seven digit number preceded by "B1" (or "B2" or "B3", to designate if this was the first, second, or third reexamination), for example B1 5,123,456. Below the Patent Number is [45] Date of Patent. This is the date that the patent issued and the date from which the patent is in force until it expires. Before June 8, 1995, all patents expired 17 years from the issue date, assuming that periodic patent maintenance fees were paid. Since then, determining the expiration date of a patent has become more complex. The filing date of the application and the existence of any parent applications now must be considered in order to determine when a patent will expire. In addition, an asterisk (*) sometimes appears before the issue date. This indicates that the term of the patent has been shortened and that the patent will expire on a date that cannot be determined solely by information found on the cover sheet of this patent(1). Below the thin black line that separates the above information from the rest of the cover sheet, the information is arranged in two columns, which are arranged as newspaper type columns. The first item is [54] TITLE OF THE INVENTION, a name selected by the patentee to describe the invention. Following this is [75] Inventors. The names and hometowns of all inventors of the patented invention are listed. In the United States, patent applications are filed in the name of the inventors. In other countries, the owner of an invention may file a patent application in his or her own name, even if he or she is not the inventor. Next is [73] Assignee. This is the name of the person or entity to which the ownership of the invention has been assigned, most commonly the company that the inventor works for. In order to have an assignee listed on a patent cover page, the assignment from the inventor to the assignee must be recorded with the Patent Office. If the patent has not been assigned or if the assignment has not been recorded, the Assignee field will be absent. Occasionally, there will next be a [*] Notice. If an asterisk appears before the Date of Patent, this indicates that the patent will expire before its natural expiration date. The patent in Figure 1 will expire no later than the date on which Patent No. 4,945,084 expires. The next item is [21] Appl. No. This is the serial number assigned by the Patent Office to the application that eventually issued as this patent. Patent application numbers are 8 digit numbers beginning with 08 or 09, followed by a slash, and then 6 numbers, for example 08/034,151. On the patent cover sheet, the two digits to the left of the slash are omitted. If the first digits to the right of the slash are zero, they are also omitted. Therefore, the application number 08/034,151 appears on the cover sheet as 34,151. Following this is [22] Filed. This is the date that the application was filed in the U.S. Patent Office. This date is used to determine the expiration and priority dates of the patent, unless the patent is related to a previously filed parent application. Generally, for applications filed after June 8, 1995, the patent will expire 20 years from the filing date. For applications filed before June 8, 1995 and still pending on that date, the patent expires either 17 years from the issue date or 20 years from the filing date, whichever is later. Therefore, assuming that the patent shown in Figure 1 has no parent application, the expiration date would be March 22, 2013. The next section on the cover page is Related U.S. Application Data. There is [63] a short paragraph that lists the parent applications of the patent and the outcomes of those applications. The patent in Figure 1 has a first parent application that was filed on July 8, 1987 and that eventually issued as U.S. Pat. No. 4,945,084. A second parent application was filed based on the first parent application on February 27, 1990, eventually issuing as U.S. Pat. No. 5,196,405. The present patent was filed as a continuation application of the second parent application on March 22, 1993, eventually issuing as the patent of Figure 1. In this instance, the priority date of the patent is July 8, 1987. Therefore, any publications having a date less than one year before this date, on or after July 8, 1986, cannot be used to invalidate the patent. The patent is calculated to expire on December 26, 2012, which is 17 years from the issue date of Dec. 26, 1995, because this is later than July 8, 2007, which is 20 years from the filing date of the earliest parent application, July 8, 1987. Actually, the issue of expiration date of the patent in Figure 1 is a bit more complex because there was a terminal disclaimer filed, as indicated by the [*] next to the [65] Date of the Patent. In this case, the patent term has been disclaimed beyond the expiration of U.S. Patent No. 4,945,084. I’ve found this patent and determined that it will expire on July 31, 2007. Therefore, the actual expiration date of the patent in Figure 1 is July 31, 2007. As an alternative to filing a patent directly in the U.S. Patent Office, an applicant may file an international patent application in accordance with the Patent Cooperation Treaty, known as PCT. The PCT will be described in greater detail in a future column. After a processing period in the PCT receiving office that may last for up to 30 months, the patent application then enters into the national phase in the U.S. Patent Office, hopefully to issue eventually as a U.S. patent. The patent cover page, in this case, will not list the U.S. Filing date and Related U.S. Application Data. In their place will be data concerning the PCT application. The cover sheet will list the filing date of the PCT application [22], the PCT application number [86], the date the PCT application was entered into the U.S. Patent Office and became a prior art reference that could be applied against other U.S. patent applications, the date the PCT application was published, and the publication number [87]. If the application was filed in a foreign country before the filing date in the U. S. Patent Office or in the PCT, the cover page will list [30] Foreign Application Priority Data, showing the date filed, the country in which it was filed, and the application number in that country. The next three items are [51] Int. Cl., [52] U.S. Cl., and [58] Field of Search. These are the International and U.S. classifications that are related to the field of the invention and the fields that the Examiner searched in examining the patent application. Information regarding the classification system can be found in the Manual of Classification, a publication of the U.S. Patent Office. The classification information is useful when searching for relevant prior art, such as to try to invalidate a patent or to help in drafting a patent application in a field similar to this patent. The next item is [56] References Cited. This is a listing of all of the publications that were considered by the Examiner in deciding whether to grant the patent. First are U.S. Patents, for which the patent number, issue date, inventor, and U.S. classification are listed. Next are Foreign Patent Documents, which may include patents and published patent applications. Finally, Other Publications, typically scientific articles, are listed. The listing of cited references is very important because there is a strong legal presumption that the patent cannot be invalidated based upon what is disclosed in the cited references. Next, the Patent Examiners are listed, followed by the name of the patent attorney and/or the patent law firm that prosecuted the application. The next item is [57] Abstract. This is a short description of the invention and is similar to the abstract of a scientific article. It permits searching of the subject matter of the patent. Following the Abstract is a single line that indicates the number of claims in the patent and how many Drawing Sheets it contains. The final item on the cover page is a Figure of the patent as representative of the invention. This Figure is also published in the Official Gazette (OG), a weekly government publication that provides information concerning patents and the U.S. Patent Office. In the next installment, I will discuss how to read the substance of a patent, including the specification, claims, and drawings. These sections are important to understand an invention and what is covered by a patent. They are also important in determining the extent to which a patent may be a prior art reference against another patent application and whether a patented invention is infringed. 1 An asterisk by the date of issuance can mean that a terminal disclaimer has been filed, but also may mean the patent term has been extended. A patent extension law has been enacted since this article was first published.
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Reprinted by permission from the author. Howard M. Eisenberg is a biotechnology and life sciences patent attorney who represents a number of university clients. His particular area of concentration is in patents involving human or veterinary medicine.

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UL Lafayette: Intellectual Property: Provisional Patent Applications

UL Lafayette: Intellectual Property: Provisional Patent Applications: "

Provisional Patent Applications
PATENT LAW YOU CAN USE™ By Howard M. Eisenberg © 1999
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Abstract - A provisional patent application is a unique type of patent application because it is not examined and can never issue as a patent. Instead, the provisional serves as a parent patent application to a non-provisional continuation patent application that is filed within one year after the filing date of the provisional application. My last issue discussed the concepts of "original" and "continuation" patent applications. An original patent application has its own filing date as its priority date. A continuation application benefits from the filing date of a "parent" application, which may be an original application or may be another continuation application claiming priority from the original application. A particular type of original patent application is the "provisional" patent application. A provisional application may only be an original patent application because it cannot be a continuation or continuation-in-part application based on a previously filed application. Its use is limited solely to being a parent application to a later-filed continuation application. In addition to this, provisional patent applications differ from non-provisional patent applications (often referred to as "regular" patent applications) in several ways. A provisional application can never issue as a patent and, in fact, is never even examined by the Patent Office. Provisional applications are not published. The disclosure of a provisional application does not have to be in any particular format as is required for non-provisional applications, and the application does not have to contain any claims. Its filing does not start the 20 year clock that is used to determine the length of the effective term of a patent. And most importantly, provisional applications expire irrevocably one year after they are filed. So, if provisional applications expire one year after filing and can never mature into a patent, what good are they and how are they used? Provisional applications came into existence in 1995 in order to correct a perceived inequality in the U.S. patenting system. In June of that year, the patent laws were changed so that the term of a patent no longer expired 17 years from the date of issuance of the patent. Under the new law, a patent is in effect from its date of issuance until 20 years after the patent's priority date, which is either its filing date or the filing date of its earliest parent application. Unfortunately, this change in determination of the length of the patent term placed inventors in the United States at a disadvantage compared to foreign applicants for U.S. patents. Foreign applicants are permitted to file a patent application in their home country and then, within one year, file a patent application in the United States claiming priority from their foreign filed patent application. The 20 year patent term for their U.S. patent only commences upon the date of filing the application in the U.S. An inventor in the U.S. must initially file a patent application in the U.S., which would automatically start the 20-year patent clock. Therefore, a foreign applicant could conceivably obtain an additional year of patent term which would be unavailable to a U.S. patent applicant. The provisional application remedies this inequality by allowing a U.S. inventor to do what a foreign inventor can do. The provisional application permits a U.S. inventor to obtain a priority date up to one year before the 20-year U.S. patent term clock starts. They allow an applicant to obtain what is, in effect, a 21-year patent term, calculated from the date of filing the provisional application until the date the patent expires. This extra year of patent term may not be important in certain fields like electronics or software, where most inventions are obsolete within a few years. But, it can be extremely valuable in fields like medicine, pharmacology, and biotechnology, or in the physical sciences. In these fields, often the most valuable portion of a patent is towards the end of the life of the patent, after the product covered by the patent has been accepted by the public and now generates a steady revenue stream for a company. This is especially true in the case of pharmaceutical patents. An extra year of patent term provides an extra year during which time a pharmaceutical company will be able to market its drug free from competition from generic drug manufacturers. Just think how important this can be with a blockbuster drug bringing in billions of dollars of revenue per year. A provisional application is filed by submitting a disclosure specification of an invention, with any drawings if necessary, a cover sheet that names the inventors and identifies the application as a provisional, and the required fees, which are less than for a regular patent application. Within one year after filing the provisional application, a regular, non-provisional patent application is filed if it is desired to further prosecute the application. The provisional application expires at the end of the year and the non-provisional application lives on as a continuation application claiming priority from the filing date of the provisional application. Provisional applications are often used as a relatively inexpensive way to get an application into the Patent Office and to delay or avoid the relatively expensive costs associated with prosecuting an application. Once the provisional application is filed, a product may be marked as patent pending. Patent pending status does not permit an applicant to enforce any patent rights. However, it does serve to put potential competitors on notice that a patent application covering a product has been filed and may issue at some time in the future. Many universities and small businesses use the year-long term of a provisional application to try to obtain a licensee or other funding source before deciding to expend further moneys on patent prosecution. In many situations, if a licensee or funding source is not found during that year, the application is allowed to expire with no regular application ever being filed. In this way, the applicant has a relatively lowcost way to find out if there is outside financial interest in the invention before having to incur all the costs of patent prosecution. Because a provisional patent application does not have to have any particular form, some of the costs in drafting the application can be avoided. There is no need in a provisional application to have a Background section of the application describing the prior art. Also, the provisional application does not have to have any claims, so legal fees associated with drafting claims can be avoided. Some patent attorneys suggest, however, that the provisional application contain at least one claim. One reason for this is because the decision to file a continuation regular application is often made at the last moment, very close to the one year anniversary of the provisional application filing date. There is always the possibility that the applicant may neglect to add claims for the regular application. If the regular application is filed without any claims, it will not be entitled to a filing date. On the other hand, if the provisional application contains at least one claim, even if it is not a very good claim, the regular application will be entitled to its filing date. A set of new claims may always be added at some time in the future before the application is examined. Other patent attorneys believe that it is best to avoid having any claims in the provisional application. The reason for this is that usually any claim that exists in the provisional patent application will be changed when the application is filed as a regular, non-provisional application. There is concern that this changing of the claims when filing the regular application might be construed by a court as an amendment of the claims which, according to the recent ruling in Festo Corp. v. Shoketsu Kinzoku, 187 F.3d 1381, 56 U.S.P.Q.2d 1865 (2000), would severely limit the extent to which the claims could be broadened under the doctrine of equivalents. Because the issue has not yet been litigated in a court, it is not at all certain that changing the claims during the filing of a regular from a provisional application would indeed be considered an amendment that would limit the scope of the doctrine of equivalents. However, until the issue has been cleared up, I concur that provisional applications are best filed without claims. What I consider to be the most important thing to know about provisional applications is that they are frequently misused and this can have dire consequences for the applicant. This occurs when an applicant conceives of provisional applications as merely an inexpensive way to file a patent application and doesn't consider that a provisional application is truly a parent application that is no different from any other parent patent application. Remember, with any continuation application, including an application based upon a provisional application, the claims are entitled to the benefit of the parent application only if they are fully supported in the parent application. If not supported in the parent application, the claims will be entitled only to the filing date of the regular, not the provisional, application. This potentially disastrous situation often arises when a manuscript or a scientific article is submitted to provide the entire disclosure of the invention in a provisional application. Typically, scientific articles describe an invention in very narrow terms, with very specific experimental conditions and results. In this case, the provisional application will not be able to support claims that describe the invention in broad generic terms. Rather, only the narrow embodiments described in the article will be patentable. This becomes extremely important if there had been a public disclosure of the invention before the filing date of the provisional application, even if the disclosure was limited to the precise narrow embodiment described in the provisional application. This disclosure can be used as a basis for rejection of all claims not explicitly supported in the provisional application. The broader claims, which might be necessary for adequate protection of the invention from competitors, will be unpatentable. Even if the only public disclosure of the invention was after the filing of the provisional application, a narrow description in the provisional application can still have undesirable consequences. Most foreign jurisdictions do not have a one-year "grace period" like the United States does for filing a patent application following a public disclosure. Therefore, such a public disclosure before the filing of a regular application will render a broad invention unpatentable in countries other than the United States, if only a narrow embodiment of the invention was disclosed in a provisional application. In order to avoid these problems, the description of an invention in a provisional patent application should be written just like it would be in any other patent application. Do not try to save money by skimping on the description of the invention. Just as with any other patent application, the invention should be described in both narrow and broad terms, with alternatives provided for the various elements of the invention. Also, sufficient examples of the invention, including prophetic examples if necessary, should be provided. Provisional patent applications can be a valuable tool to provide an additional year of patent protection and to obtain a relatively inexpensive entry into the patent system. They can also be a trap for the unwary because of the potential problem of inadequate disclosure if they do not fully disclose an invention. By drafting provisional applications with the same care that is used with "regular" patent applications, these problems are easily avoided.
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Reprinted by permission from the author. Howard M. Eisenberg is a biotechnology and life sciences patent attorney who represents a number of university clients. His particular area of concentration is in patents involving human or veterinary medicine.

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