BioEntrepreneurship: IP Strategy


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Strong patent protection is essential for a start-up biotechnology company and can be a valuable company asset. However, it is also expensive, with costs ranging from tens to hundreds of thousands of dollars over time. This session will focus on how to get the most out of your patent dollars.

This session presentation is available in audio format here:

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BioEntrepreneurship: IP Strategy

  1. 1. BioEntrepreneurship Intellectual Property Strategy The Basics Linda Kurdydyk
  2. 2. Branscomb LM, Frey Lecture, Duke University Law School, February 2004
  3. 3. <ul><li>Intellectual Property is an asset used to generate R&D funding </li></ul><ul><li>Defines and sets your business apart from others </li></ul><ul><li>Can be sold or licensed to form an important revenue stream </li></ul><ul><li>Can be exploited through strategic alliances </li></ul><ul><li>Forms part of marketing and branding </li></ul><ul><li>Use to stop others using, making, selling or importing it without your permission </li></ul>Getting to the Other Shore
  4. 4. Identify Technology to Protect <ul><li>Product </li></ul><ul><li>Composition </li></ul><ul><li>Method/use (1st) </li></ul><ul><li>Process </li></ul><ul><li>New use for known product </li></ul><ul><li>Markers </li></ul><ul><li>Screening methods </li></ul><ul><li>Targets </li></ul><ul><li>Software </li></ul>
  5. 5. Types of Protection <ul><li>Patents </li></ul><ul><li>Copyrights </li></ul><ul><li>Trade secrets </li></ul><ul><li>Trademarks </li></ul>Major Forms of Protection:
  6. 6. <ul><li>Forms of protection may be used SIMULTANEOUSLY… </li></ul><ul><li>BUT DEPENDS ON TECHNOLOGY STAGE </li></ul>Selecting Type of Protection <ul><li>Patents </li></ul><ul><li>Trade secrets </li></ul><ul><li>Copyrights </li></ul>Early Stage Technology
  7. 7. <ul><li>Word, symbol, design, or slogan </li></ul><ul><li>Identifies and distinguishes the source of the goods or services </li></ul><ul><li>Prevent against likelihood of confusion </li></ul><ul><li>Potentially infinite term </li></ul><ul><li>Mark must be used in commerce </li></ul><ul><li>Symbols: TM or ® </li></ul>Trademarks
  8. 8. <ul><li>Protects confidential information with commercial value (e.g. processes) </li></ul><ul><li>No legal formalities </li></ul><ul><li>Use reasonable measures to keep secret - confidentiality provisions in employment agreements etc. </li></ul><ul><li>Provide notice on all confidential information </li></ul><ul><li>Potentially infinite term </li></ul>Trade Secrets
  9. 9. <ul><li>Protect original works of authorship </li></ul><ul><li>Restricted to expression of an idea and does not extend to the idea itself. </li></ul><ul><li>Literary and artistic material, music, films, sound recordings and broadcasts, including software and multimedia </li></ul><ul><li>Controls use of authors material such as by making copies, issuing copies to the public, performing in public, broadcasting and use on-line </li></ul>Copyrights
  10. 10. <ul><li>Not effective to stop very similar works independently created </li></ul><ul><li>Can’t be used to stop programs that execute the same function or achieve the same result </li></ul><ul><li>Register commercially important works </li></ul><ul><li>Copyright notice: Copyright © 2006 John Doe </li></ul><ul><li>Term: Life of author + 50 years (US + 70 years) </li></ul>Copyrights
  11. 11. <ul><li>Creator of the work owns the copyright </li></ul><ul><li>Work created in the course of employment belongs to employer unless agreement to the contrary </li></ul>Ownership of Copyrights
  12. 12. <ul><li>Does a researcher infringe copyright by quoting works by other authors in articles and books? </li></ul><ul><ul><li>Canadian Copyright Act provides that any &quot;fair dealing&quot; with a work for purposes of private study or research, or for criticism, review or news reporting is not infringement </li></ul></ul><ul><ul><li>BUT user must give the source and the author's name, if known </li></ul></ul><ul><ul><li>Educational institutions can use copyrighted works if done on premises of educational institution for educational or training purposes, provided no suitable substitutes available in the commercial marketplace </li></ul></ul>Fair Dealing
  13. 13. <ul><li>New and improved products, processes, etc. that are capable of industrial application </li></ul><ul><li>Prevent others from performing certain acts </li></ul><ul><ul><li>Make, Use, Sell or Import </li></ul></ul><ul><li>Fixed term </li></ul><ul><ul><li>20 years from filing or 17 years from issue </li></ul></ul><ul><li>Independent creation is not a defense </li></ul>Patents
  14. 14. <ul><li>Why are you filing? (Academic versus Commercial Reasons) </li></ul><ul><ul><li>Defensive filing </li></ul></ul><ul><ul><li>Offensive filing </li></ul></ul><ul><ul><li>Building up assets - improvements and modification </li></ul></ul><ul><li>Why Not? </li></ul><ul><ul><li>Costs money </li></ul></ul><ul><ul><li>Can take a long time to apply for - technology will be obsolete before patent is granted (e.g., software) </li></ul></ul><ul><ul><li>Protection isn't automatic </li></ul></ul>Do You Really Need/Want a Patent
  15. 15. <ul><li>What type of invention? </li></ul><ul><li>Utility </li></ul><ul><ul><li>Is the invention useful? </li></ul></ul><ul><li>Enabled </li></ul><ul><ul><li>Is the invention disclosed and described by the inventor in such a way as to enable others to make and use it </li></ul></ul>Is It Patentable?
  16. 16. &quot;Anything Under the Sun that is Made by Man&quot; (U.S. Supreme Court, 1980) US05971829Motorized ice cream cone ...for imparting rotation upon the cup and rotationally feeding its contents against a person's outstretched tongue.
  17. 17. US05934226Bird diaper ...featuring an enclosed pouch... and apertures to accommodate both the wings and the tail of the bird.
  18. 18. <ul><li>Methods of medical treatment (Canada, Europe) </li></ul><ul><li>Use of human embryos for industrial or commercial purposes (EP, Canada) </li></ul><ul><li>Transgenic animals (Canada) </li></ul><ul><li>Scientific facts or principles -Upstream discoveries that amount to the mere identification of a functional biological relationship </li></ul>Non-Patentable Subject Matter
  19. 19. <ul><ul><li>LabCorp vs Metabolite - high homocysteine levels and the deficiency in the vitamins cobalamin or folate </li></ul></ul><ul><ul><li>Ariad v. Eli Lilly - U.S. Patent No. 6,410,516 claimed a functional relationship between a biochemical pathway (NF-kB) and gene expression and anything that acts to affect that relationship; Lilly's drug products were developed several years before the patent </li></ul></ul> Basic Scientific Principles, Laws of Nature and Natural Phenomena
  20. 20. <ul><li>What’s Hot </li></ul><ul><ul><li>Therapeutics, devices, diagnostics, vaccines </li></ul></ul><ul><li>What’s Not </li></ul><ul><ul><li>Screening methods and non-validated hits </li></ul></ul><ul><ul><li>Drug targets </li></ul></ul><ul><ul><li>Transgenic animals (trade secret - material transfer agreements) </li></ul></ul>What You Should/Shouldn’t Patent
  21. 21. <ul><li>VACCINES AND THERAPEUTICS </li></ul><ul><ul><li>Monoclonal Antibody for Treatment of RSV </li></ul></ul><ul><ul><li>AIDS Drug </li></ul></ul><ul><ul><li>Paclitaxel as a Cancer Treatment </li></ul></ul><ul><ul><li>Synthetic Thyrotropin as Adjuvant in Thyroid Cancer </li></ul></ul><ul><ul><li>Hepatitis A Vaccine (Strain HM-175) </li></ul></ul><ul><ul><li>Nutritional Supplement to Treat Macular Degeneration Radioimmunotherapy for Non-Hodgkin’s Lymphoma </li></ul></ul><ul><ul><li>Proteosome Inhibitor for Treatment of Multiple Myeloma </li></ul></ul>NIH Top 20 Commercially Successful Inventions* * for FY 2005, based on royalty income
  22. 22. <ul><ul><li>DIAGNOSTICS </li></ul></ul><ul><ul><ul><li>Serological Detection of Antibodies to HIV-1 </li></ul></ul></ul><ul><ul><ul><li>DNA Probe for Breast Cancer Diagnosis </li></ul></ul></ul><ul><ul><ul><li>Genoyping of HIV Protease Gene </li></ul></ul></ul><ul><ul><ul><li>Serological Detection of Antibodies to HTLV-1 </li></ul></ul></ul>NIH Top 20 Commercially Successful Inventions
  23. 23. <ul><li>INSTRUMENTATION/DEVICES </li></ul><ul><ul><li>Paclitaxel-Eluting Coronary Stent System </li></ul></ul><ul><ul><li>Enhanced Magnetic Resonance Imaging Through Magnetization Transfer </li></ul></ul><ul><ul><li>Laser Capture Microdissection </li></ul></ul><ul><li>RESEARCH MATERIALS </li></ul><ul><ul><li>Reconstituted Basement Membrane </li></ul></ul><ul><ul><li>Neutrophil Chemotactic Factor (Interleukin-8) </li></ul></ul><ul><ul><li>Transforming Growth Factor Beta (TGF-beta) </li></ul></ul><ul><ul><li>Chemokine Receptors </li></ul></ul>NIH Top 20 Commercially Successful Inventions
  24. 24. <ul><li>Is there public prior art (e.g. publications) which precedes the invention in identical form? </li></ul><ul><li>U.S. and Canada - 1 year from publicly disclosed, used or offered for sale </li></ul><ul><li>Most Everywhere Else - NO GRACE PERIOD </li></ul><ul><ul><li>Foreign rights are compromised the instant the invention is made publicly available </li></ul></ul><ul><li>Disclosure is OK if done correctly </li></ul><ul><li>(Confidentiality Agreements) </li></ul>Novelty
  25. 25. <ul><li>Invention must not be obvious to a person skilled in the art </li></ul><ul><li>Is the invention a nontrivial extension of what was known? </li></ul><ul><li>Are there unexpected results/ advantages? </li></ul>Inventive/Non-obvious
  26. 26. <ul><ul><li>Things to Do </li></ul></ul><ul><ul><ul><li>Search scientific literature and patent databases for relevant publications and patent documents </li></ul></ul></ul><ul><ul><ul><li>Prepare summary of background technology </li></ul></ul></ul><ul><ul><ul><li>Organize scientific data, prepare description of protocol and results, create Tables/Figures illustrating results </li></ul></ul></ul><ul><ul><ul><li>Speak to a patent agent </li></ul></ul></ul>Preparing and Filing a Patent Applications
  27. 27. <ul><li>Patentability </li></ul><ul><ul><li>Patent databases </li></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li>Scientific literature databases </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li>The CAS Search Service (SciFinder, ChemPort) http:// </li></ul></ul></ul><ul><ul><li>Right to Use/Freedom to Operate </li></ul></ul><ul><ul><ul><li>When? </li></ul></ul></ul><ul><ul><ul><li>Formal Opinion? </li></ul></ul></ul><ul><ul><ul><li>Due diligence? </li></ul></ul></ul>Searches
  28. 28. <ul><li>First/Priority Filing - </li></ul><ul><ul><li>US Provisional </li></ul></ul><ul><li>Patent Cooperation Treaty - </li></ul><ul><ul><li>procedure for filing applications to protect internationally </li></ul></ul><ul><ul><li>single filing results in single search with a written opinion (optionally a preliminary examination) </li></ul></ul><ul><ul><li>examination (if provided by national law) and grant procedures are handled by national or regional authorities </li></ul></ul><ul><ul><li>delay national or regional procedures associated filing fees and translation costs </li></ul></ul>Types of Patent Filings
  29. 29. <ul><li>File provisional applications to </li></ul><ul><ul><li>protect product, compositions, formulations, methods of treatment, uses, kits </li></ul></ul><ul><ul><li>contemplate future development - new formulations, combinations, new uses </li></ul></ul><ul><ul><li>experiments to support filings </li></ul></ul><ul><li>One year later file PCT - with experimental data or defensive </li></ul><ul><li>Simultaneous PCT and US filings </li></ul>Small Biotech Perspective
  30. 30. <ul><li>Negotiate rates with patent firms </li></ul><ul><li>Prepare a patent budget </li></ul><ul><li>Review portfolio regularly to ensure that only relevant patent applications are maintained </li></ul><ul><li>File in important jurisdictions </li></ul>Reducing Costs
  31. 31. <ul><li>Ensure your IP is relevant to your business plan </li></ul><ul><li>Be prepared for due diligence - have organized files, tracking systems, charts, outside patent counsel </li></ul><ul><li>Police competitors for infringing activities </li></ul>After You File
  32. 32. <ul><li>If someone infringes patent rights must use remedies available under the civil law e.g. seek injunctions and damages </li></ul><ul><li>Patent suits with between $1 -15 million under contention - median costs and fees about $3 million * </li></ul><ul><li>Insurance policy to cover costs of potential actions </li></ul>Enforcement of Patent Rights * American Intellectual Property Law Association, Report of the Economic Survey 2003 (Washington, DC: Fetzer-Kraus, Inc., 2003)
  33. 33. <ul><li>By the time of regulatory approval, the patent life for a product may be less than ½ the statutory 20-year patent term </li></ul><ul><li>In some jurisdictions you can extend the patent term </li></ul><ul><li>US </li></ul><ul><ul><li>Can extend for a period not exceeding 5 years, total extension must not result in an effective remaining patent life of greater than 14 years beyond the date of FDA approval </li></ul></ul><ul><ul><li>Only one patent may be extended per approved product, the patent to be extended must be unexpired, and cover the approved product </li></ul></ul>Patent Term Extension
  34. 34. <ul><li>Avoid infringement </li></ul><ul><li>Right to use searches </li></ul><ul><li>Exceptions to Infringement </li></ul><ul><ul><li>Limited statutory experimental use exception for uses of patented drugs, devices, and biologics where the use is solely for purposes reasonably related to the development and submission of information to a regulatory authority </li></ul></ul>Third Party Patents
  35. 35. <ul><li>A new chemical entity (NCE) first approved as a drug under a New Drug Application (NDA), the sponsor is entitled to a 5 year exclusivity period that bars the submission of any generic drug application for a product that contains that NCE </li></ul><ul><li>If new clinical studies are essential to approval of certain changes to an already approved drug, e.g., a new indication, a new dosing regimen, a new patient population, a switch to over-the-counter marketing status, or other labeling changes, the sponsor is awarded a 3 year exclusivity period for the approved change </li></ul>Regulatory Exclusivity
  36. 36. <ul><li>Data supporting NDA approvals is protected from public disclosure by laws, including the Federal Food, Drug, and Cosmetic Act (FDCA), the Freedom of Information Act (FOIA), and the Trade Secrets Act </li></ul><ul><li>7 year exclusivity for orphan drugs or biologics - those intended to treat rare diseases or conditions (less than 200,000 US patients) BUT does not block approval of the same drug for a different indication, approval of another version of the same drug if the new version offers clinical advantages over the prior product </li></ul>Regulatory Exclusivity
  37. 37. <ul><li>6 month pediatric exclusivity when companies conduct FDA-requested studies of a drug in pediatric populations </li></ul><ul><li>Adds a six month approval delay for competing generic products, added to the end of any unexpired patent or regulatory exclusivity </li></ul>Regulatory Exclusivity
  38. 38. <ul><li>Developing an IP portfolio and strategy are critical in crossing the Darwinian Sea BUT OTHER FACTORS SUCH AS STAGE OF PRE-CLINICAL/CLINICAL DEVELOPMENT, MARKET SIZE, ETC. NEED TO BE ADDRESSED </li></ul>Are We There Yet?
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