This presentation covers the essential aspects of planning and executing a freedom to operate or patent clearance exercise in the pharmaceutical sector. It deals with the search phase, the analysis phase and the follow-up phase. It is relevant for in-house IP attorneys and development managers.

1. F R E E D O M t o O P E R A T E
I n t h e P H A R M A C E U T I C A L
S E C T O R
A l e c G r i f f i t h s – P a t e n t S e e k e r s
A d r i a n B r a d l e y - C l e v e l a n d S c o t t Yo r k

2. WELCOME
KEY LEARNINGS:
• Why FTO is so important in pharma
• How an FTO search differs from a patentability search
• Core aspects of the search
• How to manage risk by using FTO
• Tactics for achieving freedom to commercialize
• Strategies to improve outcomes in obtaining commercial
goals.
• Poll 1

3. Why is FTO such
a big issue for
the pharma
sector?
• Extremely long development cycle of
products.
• Very expensive to bring an NCE or NBE to
market.
• (Relative) ease of copying of originator
product.
RESULTS IN
• Requirement for as long a monopoly as
possible to recoup investment.
• Extensive “thicket” of patents
protecting:
• Molecule
• Medical uses
• Formulations
• Polymorphs
• Processes
• Etc…

4. Complexity of
Patents
Themselves

5. Objective of IP
Freedom-to-
Operate
• Aims to answer the question “will the
proposed activity infringe valid IP of a
third party”
• Essentially a de-risking exercise.
• Amount of FTO depends on appetite
for risk
• NO FTO – big risk, no cost
• Extensive FTO – less risk, more cost
• Four stages (extra one sometimes):
• Establish data exclusivity expiry date
• Accurate definition of activity
• Specialised search
• Legal opinion
• Action plan

6. Freedom to
Operate is NOT
THE SAME as
patentability
Poll 2
FTO
•Essentially a de-risking activity.
•Ensures proposed activity does
not infringe valid 3rd Party rights.
•Does not generate rights for you.
•Specialist search.
•Legal opinion.
YOUR PATENT
•An asset-building exercise.
•Gives you a proprietary
position.
•Says nothing about ability to
work your development.
•Different kind of search.
•Patent application

7. What are the
stages of an FTO
project?
0. [Establish data exclusivity]
1. Definition of activity
2. Specialised search
3. Legal opinion
4. Action plan

8. MEET THE TEAM Scientists
Business
Searcher
Patent
Attorney

9. At What Point in
the Project do I
Initiate the FTO
Study?
• FTO should be an iterative process
• Early phase – desirable commercial
position defined.
• “We want to expand our anti-
infectives business in Germany”
• Technical solution proposed
• “Injectable formulation of
tigecycline”
• Opportunity for landscape analysis –
guide technical activities.
• Technical solution developed
• More specific search and detailed
analysis required.

10. Data and Market Exclusivity
• In Europe, originators enjoy 8 years of data exclusivity plus 2 years of market
exclusivity as of the date of approval of their medicine. Generic manufacturers
can:
• Start to apply for the approval of a generic version 8 years after the original
medicine was approved, making reference to the originator data, and
• Launch their approved generic in the European market 10 years after the
original medicine was approved;
• Possibility of obtaining an extra year if innovator company is granted a further
marketing authorisation for a new indication for the medicine during the 8-year
data exclusivity period.
• Originators still need to do patent FTO

11. •What are we searching for?
•Searching the right fields, e.g.
Claims.
•Limitations
•Strategy – keywords,
classifications, etc.
Conducting the Search

12. Searching Problems
•Chemical Structures
•Chemical Names
•Biological Sequences
•Symbols
•Synonyms

13. Overcoming the Problems
•Awareness
•Broad Keywords
•Classifications
•Research
•Databases
•Truncation

14. Examples
Problem: Multiple variations words, including spacing and symbols.
Solution: Broad keywording, clever use of truncation, awareness.

15. Examples
Problem: Chemical structure improperly represented/unsearchable in claims
Solution: Broad keywording, classifications, awareness, full text searching, specialised databases.

16. Some Cautionary
Words on Searching • Preliminary searching of free
databases usually undertaken.
• A vast range of service
providers exists.
• Does the search firm cover
the appropriate level of
insurance?
• Are they experienced in
pharma matters?
• You get what you pay for.

17. Step 3
Analysis
• Three types of property will be
identified:
• Pending Applications
• Granted Patents
• Dead patents/applications
• Require different treatment.
• Infringement a matter of local law
Article 64
Rights conferred by a European patent
(3)Any infringement of a European patent
shall be dealt with by national law.
• Opinion may need validation on points
of claim interpretation.
• Bear in mind unpublished applications

18. Report
should
be clear
and
useful
• The FTO report is a
document to enable
business decisions to
be made.
• Backed up by legal
analysis.
• Useful analysis seeks to
categorise disclosed patents
and applications into
• Those presenting no obstacle
• Those requiring monitoring
• Those requiring action.

19. Granted Patents
• Rights that can be asserted against you
now.
• Check actually in force!
• Not unheard of for attorneys to spend
hours in detailed claims analysis of
dead patents.
• Establish independent claims.
• If independent claim not infringed, don’t
need to consider dependent claims.
• For European Patents, remember:
• Authentic text is that approved by the
Applicant
• Not published (B) specification
• Search for divisionals and equivalents
• Sometimes not found in search.
• Supplementary protection certificates.

20. Granted Patents
• Doctrine of equivalents
• Exists in UK
• Element of device or process does not fall within the literal scope of a patent
claim, but nevertheless is equivalent to a claimed element.
• “Contributory” infringement
• By the supply, or offer to supply, in the United Kingdom, a person not entitled to
work the invention, with any of the means, relating to an essential element of
the invention, for putting the invention into effect, when it is known (or it is
reasonable to expect such knowledge) that those means are suitable for putting,
and are intended to put, the invention into effect in the United Kingdom.
• Direct product infringement
• Article 64(2) EPC If the subject-matter of the European patent is a process, the
protection conferred by the patent shall extend to the products directly
obtained by such process.

21. Initial Conclusions
• Green – no further action
required.
• Yellow – possible concern:
• Claim open to different
interpretations
• Certain activities may infringe,
others not
• Infringed under a doctrine of
equivalents
• “Red” – show-stopper
• Competitor dominates space

22. ACTION
Step 4 •Reduce uncertainty/risk.
•Seek second opinion.
–UK – would seek barrister’s opinion
–Different legal training
•Tweak product
–“Work around”
•Invalidation options
–Opposition (EP)
–National invalidation
•Declaration of non-infringement
–Section 71 UK Patents Act

23. Dealing with
problem IP
• Advise management to discontinue
project
• Watch for patent expiry
• Reengineer product or process
• Patent busting
• Invalidation options
• Opposition (EP)
• National invalidation
• Declaration of non-infringement
• Section 71 UK Patents Act
• Seek commercial terms with
proprietor
• May be win-win situation
• Freedom to operate and
proprietary position

24. Pending Applications
•More difficult to give certainty.
•Scope of claims subject to change.
•Need to give an educated guess as to likely scope of allowable
claims.
–ISR/ESR available.
•Build watchlist.
–Monitor scope of claims during prosecution
–Consider active intervention.

25. Patents are
territorial
• Consider “top-up” search of national
patents
• Courts have sometimes reached
different conclusions regarding
infringement based on the same
facts.
• Cost-benefit decision.
–May have difficulty finding someone in
some jurisdictions.
• Your own opinion is only valid in your
home jurisdiction.
• Common law vs. civil law.
• US practice very different.

26. In-licensing to
Achieve FTO
•Desirable, and sometimes an
option.
•FTO and a proprietary position.
•Greatly assisted if you have your
own portfolio of patents.
–Cross-licensing
•Rigorous validity analysis
–Patentee may not be aware of
weaknesses.
•Compulsory licences
•Advice of competition lawyer
required.

27. Strategic Tips
• Begin FTO process early in
project lifecycle.
• Revisit regularly.
• Build portfolio of defensive and
aggressive IP.
• Assists in negotiations and
builds assets.
• Build an IP aware culture within
the business.
• Scientists, management.
• Decide on appetite for risk
within the organization.
Poll 3

28. csy-ip.com
Patentseekers.com
QUESTIONS?
a.Bradley@csy-ip.com
alecgriffiths@patentseekers.com