This document discusses successful intellectual property (IP) licensing in the United States. It provides tips for companies looking to license their IP, including conducting freedom-to-operate analyses to avoid infringement issues, properly documenting inventorship and ownership to ensure valid and enforceable patents, and preparing for an extensive IP due diligence process conducted by potential licensing partners. The document emphasizes establishing a strong patent portfolio and regularly evaluating IP assets as important aspects of an effective licensing strategy.

1. Successful IP Licensing in U.S.

2. KOREA U.S.
라이센싱 = Licensing (?)
Licensing in U.S.
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1. Language 2. Culture 3. Law

3. • Illustration source: BrandMagazine.com
Leading Brands have the Most Valuable IP
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4. 4
Value of IP

5. 5
Success Story – PDL BioPharma
• Source: http://pdl.com

6. 6
• PDL BioPharma: Pioneer of humanized monoclonal antibodies
Humanized Antibody
• Source: http://pdl.com

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. 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
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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
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10. Three Stages of Patent Acquisition:
A. Invention and Prior Art Search
B. Patent Preparation
C. Patent Prosecution
Acquisition of Strong Patent
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• Two possible approaches:
vs.

11. Source: MIDAS©, 2005–2012, IMS Health Incorporated or its affiliates.
Where to File & License?
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• Drug Sales

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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

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Odds are…?
• Only a few licensing candidates survive at the end
Source: http://www.sharevault.com, Building a better partnering presentation

14. • Due Diligence = checking various (critical) points
• No high price for a product having defects
Licensing = Used Car ?
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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
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16. • Investigation to determine if you infringe patents of others
• Expensive process but necessary for commercialization
1. Freedom To Operate (FTO)
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17. • Patent procurement v. Patent infringement
• Samsung: Top 2 patent filer in U.S.
1. Freedom To Operate (FTO)
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vs.

18. • Source: Lex Machina ‐ Patent Litigation Year in Review (2013).
1. FTO - Patent Damages in U.S.
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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
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• Assess potential litigation risks in U.S.

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
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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
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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
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Source: http://www.uclb.com, Invention Disclosure Form

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
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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
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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!
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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
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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
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28. • Expiration date: Determine the expiration of patents
• Patent Term Adjustment/Extension: PTA v. PTE
4. Other Issues - Patent Term
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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. • Provide NCE/NBE info and related documents
• IND and NDA filing dates and estimated NDA approval
date
4. Other Issues – FDA Exclusivity
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NBE
Reference
Product
Approval
Biosimilar
Application
Biosimilar
Approval
0 12 Years4 Years
NCE
Expiration
5 Years
30‐month
stay
NCE
0

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
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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
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32. IP Diligence Checklist
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Source: http://media.lockelord.com/files/uploads/Documents/Folios/US‐IP‐DueDiligenceChecklist.pdf
• Due diligence check list

33. Virtual Data Room
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• 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.  Set up good IP policy
 Build strong IP portfolio
 Evaluate IP portfolio regularly
 Look for licensing opportunities
 Prepare for due diligence
Take Home Message
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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
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