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Successful IP Licensing in U.S. 
KOREA U.S.
라이센싱 =    Licensing  (?)
Licensing in U.S.
2
1. Language 2. Culture 3. Law
• Illustration source: BrandMagazine.com
Leading Brands have the Most Valuable IP
3
4
Value of IP
5
Success Story – PDL BioPharma
• Source: http://pdl.com
6
• PDL BioPharma:  Pioneer of humanized monoclonal antibodies
Humanized Antibody
• Source: http://pdl.com
7
Success Story – PDL BioPharma
• PDL Queen Patent License
– Licensees:  Genentech, Roche, Novartis, Biogen, etc.  
– Sale...
Enablement
Demonstration
Development
Probability of Success
Effort/Time
Idea Invention Patent License
Invention Disclosure...
• Internal review process
• Review by in‐house counsels
• Making a patent filing 
decision based on prior art, 
scientific...
Three Stages of Patent Acquisition: 
A. Invention and Prior Art Search
B. Patent Preparation
C. Patent Prosecution
Acquisi...
Source: MIDAS©, 2005–2012, IMS Health Incorporated or its affiliates.
Where to File & License?
11
• Drug Sales 
12
Licensing Timeline
• Typical licensing procedure
Non‐
Confidential 
Presentation
Confidential 
Disclosure 
Agreement 
(...
13
Odds are…?
• Only a few licensing candidates survive at the end
Source: http://www.sharevault.com, Building a better pa...
• Due Diligence = checking various (critical) points
• No high price for a product having defects 
Licensing = Used Car ?
...
1. Freedom To Operate (FTO)
– Any potential infringement?
– Any risks to be sued? 
2. Ownership & Transferability
– Owner ...
• Investigation to determine if you infringe patents of others 
• Expensive process but necessary for commercialization 
1...
• Patent procurement v. Patent infringement 
• Samsung:  Top 2 patent filer in U.S. 
1. Freedom To Operate (FTO)
17
vs. 
• Source: Lex Machina ‐ Patent Litigation Year in Review (2013).
1. FTO - Patent Damages in U.S.
18
Source:  http://ptopatenttrials.com/2012/05/20/uspto‐post‐grant‐opposition‐costs‐a‐forum‐conveniens‐for‐
invalidity‐disput...
• Conduct FTO Search  
– Conduct patent searches regularly 
– Search competitors’ patents
• Monitor screened patents/appli...
• Wrong Inventorship 
 Unenforceable patent.  
See Stark v. Advanced Magnetics, 119 F.3d 1551 (Fed. Cir. 1997) 
• Wrong i...
Invention Disclosure
• Develop invention disclosure form
• Information to be included:
– Title of invention
– Identificati...
• Common Ownership Issues
1. The target does not hold the IP rights
2. Prior agreements limiting the target’s IP rights
3....
• Ownership Transfer ‐ Assignment
– Check chain of title
– Review assignment recordation
– Tip:  Obtain signatures as quic...
1. Patent Exploitation in U.S. 
a) Each joint owner can exploit without permission of others
b) No duty to share royalties...
• Anticipation and Obviousness
– Collect prior art info
– Cross‐check references 
– Competitor’s patents and publications
...
• Obtain description of target product 
– Specifications/product literature
– Manufacturing documents
– Product inserts
• ...
• Expiration date: Determine the expiration of patents
• Patent Term Adjustment/Extension: PTA v. PTE
4. Other Issues - Pa...
• Provide NCE/NBE info and related documents
• IND and NDA filing dates and estimated NDA approval 
date
4. Other Issues –...
• Possible Targets:  
– New use/indication, new target patient strata, new administration 
route, new formulation
• Adjunc...
 Prepare IP status reports
 Check assignments/invention disclosures 
 Perform prior art/patent searching
 Review file ...
IP Diligence Checklist
32
Source: http://media.lockelord.com/files/uploads/Documents/Folios/US‐IP‐DueDiligenceChecklist.pd...
Virtual Data Room
33
• Virtual data room:  for exchanging secret information
• Transparency is the key to success. 
• Be p...
 Set up good IP policy
 Build strong IP portfolio
 Evaluate IP portfolio regularly 
 Look for licensing opportunities
...
Questions?
Kisuk Lee
이기석
Patent Attorney (U.S./KR), Partner
Harness, Dickey & Pierce
+1‐314‐446‐7670 – work
+1‐324‐775‐877...
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U.S. IP licensing - Bio Korea 2016

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IP licensing and due diligence

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U.S. IP licensing - Bio Korea 2016

  1. 1. Successful IP Licensing in U.S. 
  2. 2. KOREA U.S. 라이센싱 =    Licensing  (?) Licensing in U.S. 2 1. Language 2. Culture 3. Law
  3. 3. • Illustration source: BrandMagazine.com Leading Brands have the Most Valuable IP 3
  4. 4. 4 Value of IP
  5. 5. 5 Success Story – PDL BioPharma • Source: http://pdl.com
  6. 6. 6 • PDL BioPharma:  Pioneer of humanized monoclonal antibodies Humanized Antibody • Source: http://pdl.com
  7. 7. 7 Success Story – PDL BioPharma • PDL Queen Patent License – Licensees:  Genentech, Roche, Novartis, Biogen, etc.   – Sales of licensed products:  >$20 billions – Paying royalty v. patent invalidation  • PDL Success Formula  – Strong patent portfolio  – Successful patent litigation defense
  8. 8. Enablement Demonstration Development Probability of Success Effort/Time Idea Invention Patent License Invention Disclosure Commercialization Stage Commercialization Steps Source: Michigan Technological University (http://www.mtu.edu/research/references/training/docs-new/Intellectual%20Issues%20in%20Research%20Presentation.ppt.) Technology Commercialization Process 8
  9. 9. • Internal review process • Review by in‐house counsels • Making a patent filing  decision based on prior art,  scientific maturity,  commercial value,  market conditions, etc. • Patent v. Trade Secret Invention Evaluation 9
  10. 10. Three Stages of Patent Acquisition:  A. Invention and Prior Art Search B. Patent Preparation C. Patent Prosecution Acquisition of Strong Patent 10 • Two possible approaches:  vs.
  11. 11. Source: MIDAS©, 2005–2012, IMS Health Incorporated or its affiliates. Where to File & License? 11 • Drug Sales 
  12. 12. 12 Licensing Timeline • Typical licensing procedure Non‐ Confidential  Presentation Confidential  Disclosure  Agreement  (CDA) Due  Diligence Term  Sheets Final  Agreement • Assessment of intellectual property assets  owned by (or licensed to) a company • Critical part of licensing • Complex legal review process
  13. 13. 13 Odds are…? • Only a few licensing candidates survive at the end Source: http://www.sharevault.com, Building a better partnering presentation 
  14. 14. • Due Diligence = checking various (critical) points • No high price for a product having defects  Licensing = Used Car ? 14
  15. 15. 1. Freedom To Operate (FTO) – Any potential infringement? – Any risks to be sued?  2. Ownership & Transferability – Owner of your IP?  3. Validity & Enforceability – Protect target product? – Strong patents?  IP Due Diligence – Main Points 15
  16. 16. • Investigation to determine if you infringe patents of others  • Expensive process but necessary for commercialization  1. Freedom To Operate (FTO) 16
  17. 17. • Patent procurement v. Patent infringement  • Samsung:  Top 2 patent filer in U.S.  1. Freedom To Operate (FTO) 17 vs. 
  18. 18. • Source: Lex Machina ‐ Patent Litigation Year in Review (2013). 1. FTO - Patent Damages in U.S. 18
  19. 19. Source:  http://ptopatenttrials.com/2012/05/20/uspto‐post‐grant‐opposition‐costs‐a‐forum‐conveniens‐for‐ invalidity‐disputes/ 1. FTO - U.S. Litigation Costs 19 • Assess potential litigation risks in U.S. 
  20. 20. • Conduct FTO Search   – Conduct patent searches regularly  – Search competitors’ patents • Monitor screened patents/applications • Keep search/review record  – Patent search/review assessment • Consult patent counsel  1. FTO - ID Infringement Risks 20
  21. 21. • Wrong Inventorship   Unenforceable patent.   See Stark v. Advanced Magnetics, 119 F.3d 1551 (Fed. Cir. 1997)  • Wrong inventorship  a) Nonjoinder:  Non‐inclusion of a true inventor b) Misjoinder:  Inclusion of a non‐inventor  • Record keeping  – Invention disclosure  2. Inventorship 21
  22. 22. Invention Disclosure • Develop invention disclosure form • Information to be included: – Title of invention – Identification of prior art  (patents and publications)  – Detailed description of invention:  • Differences, improvements, and  advantages of the invention • Specific experimental examples  – Date of invention, inventor names  2. Inventorship 22 Source: http://www.uclb.com, Invention Disclosure Form
  23. 23. • Common Ownership Issues 1. The target does not hold the IP rights 2. Prior agreements limiting the target’s IP rights 3. IP rights encumbered by liens 2. Ownership 23
  24. 24. • Ownership Transfer ‐ Assignment – Check chain of title – Review assignment recordation – Tip:  Obtain signatures as quickly as possible • Potential ownership leaks   – Collaboration, Government support, etc. • Review agreements with third parties 2. Ownership 24
  25. 25. 1. Patent Exploitation in U.S.  a) Each joint owner can exploit without permission of others b) No duty to share royalties 2. Patent Enforcement in U.S. a) All joint owners must join suit b) Other owners can grant license (circumvention) 2. Avoid Joint Ownership! 25
  26. 26. • Anticipation and Obviousness – Collect prior art info – Cross‐check references  – Competitor’s patents and publications • Section 101 Patent Eligibility – Mayo & Myriad cases • Inequitable Conduct (Duty of Candor) – Cross‐check related applications – Review inventor publication files • Enablement and Written Description 3. Patent Validity 26
  27. 27. • Obtain description of target product  – Specifications/product literature – Manufacturing documents – Product inserts • Identify critical terms in claims – Specification, file history, normal usage – Review file histories • Categorize claims – Covers target product?  How?  – Covers competitor’s products? 3. Claim Scope 27
  28. 28. • Expiration date: Determine the expiration of patents • Patent Term Adjustment/Extension: PTA v. PTE 4. Other Issues - Patent Term 28 Patent Term Adjustment (PTA)  under 35 USC §154 Patent Term Extension (PTE)  under 35 USC §156 Eligibility Any Issued Patents  Drug & Device Patents Delay Patent Office Examination FDA Regulatory Review Calculation 14 + 4 + 4 + 4 Rule ½ Clinical Trial + FDA Review   Terminal  Disclaimer Reduces PTA No Reduction Maximum  Term PTO Delay (A+B+C periods) Five Years
  29. 29. • Provide NCE/NBE info and related documents • IND and NDA filing dates and estimated NDA approval  date 4. Other Issues – FDA Exclusivity 29 NBE Reference  Product  Approval Biosimilar  Application Biosimilar  Approval 0 12 Years4 Years NCE  Expiration 5 Years 30‐month  stay NCE 0
  30. 30. • Possible Targets:   – New use/indication, new target patient strata, new administration  route, new formulation • Adjunct Benefit for Existing Drug:   – Reduced side‐effect, improved therapeutic index, diagnostic  application • New “Article‐type” invention:   – Racemate‐to‐chiral switch – New salt, ester, amide, hydrolysate – New crystal form or polymorph, Metabolite or pro‐drug  – Combination therapy  – Formulation with improved bioavailability 4. Other issues - Life Cycle Management 30
  31. 31.  Prepare IP status reports  Check assignments/invention disclosures   Perform prior art/patent searching  Review file histories  Prepare strategy for patents having potential issues Preparation of IP Diligence 31
  32. 32. IP Diligence Checklist 32 Source: http://media.lockelord.com/files/uploads/Documents/Folios/US‐IP‐DueDiligenceChecklist.pdf • Due diligence check list
  33. 33. Virtual Data Room 33 • Virtual data room:  for exchanging secret information • Transparency is the key to success.  • Be prepared for data/document disclosure! Source:  http://www.ethosdata.com/advanced_functionality/
  34. 34.  Set up good IP policy  Build strong IP portfolio  Evaluate IP portfolio regularly   Look for licensing opportunities  Prepare for due diligence  Take Home Message 34
  35. 35. Questions? Kisuk Lee 이기석 Patent Attorney (U.S./KR), Partner Harness, Dickey & Pierce +1‐314‐446‐7670 – work +1‐324‐775‐8771 – cell klee@hdp.com www.facebook.com/ksluspat – IP blog 35

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