Exclusive Q&A On Biotechnology & Pharmaceuticals

1) What systems can be put into place to minimise the risk of litigation?

In order to minimise the risk of litigation it is necessary to be aware of your competitors, what they are doing and where- they will only sue if you are doing something that competes and they have grounds. Those grounds are most likely to be patent infringement or breach of contract.  To reduce the risk from patent infringement, patent searches and analyses should be part of the routine business activity- knowledge is key. Having identified a threat in the form of a patent containing relevant claims, granted or likely  to be granted, in a territory where you are active or pose a threat to them, consider the  possibility to work around, challenge, licence or acquire those assets thus turning a threat into an opportunity by potentially enhancing your own patent portfolio.

2) How has big pharma diversified strategies in order to combat the effects of the patent cliff?

There are a variety of ways of tackling product per se patent expiry.  The  key starts with planning the protection strategy from the start, in terms of product selection based on quality and length of patent cover, term adjustment (USA)  term  extension availability ( up to 5 years) and  reliance on alternative  forms of protection such as data exclusivity. Filing  follow-on patents covering  new uses, doses, formulations, high yielding processes of manufacture etc to reduce the appeal of the primary market alone, can hugely extend the monopoly on the product: development of second and third generation products which enhance the primary offering can be critical: building a solid brand in the form of the trade mark can be incredibly effective  to maintain  brand loyalty.

3) Are there any positives to be taken from the widespread patent expiration?

The effect of global patent expiry on a product, simply opens the market to the generics  for that one product. The greatest effect is when a platform technology for example “humanised” antibodies or cell-based expression systems became, and in the future become, available. All astute biotech companies will plan carefully to assess the point at which they can enter the market with an offering, or to utilise the technology without the need for licence, and therefore the cost of paying  royalties. Constructing contracts to ensure payments do not extend beyond patent expiry unless there is significant and valuable know-how as part of the licence is critical and often not well negotiated.

4) How can companies build and monetise a patent portfolio to replicate the success of intellectual property in the technologies sector?

The same process of creating and commercialising a patent portfolio will apply regardless of sector. The planning  and management is key. It is necessary to consider the nature of the product or process, where it will be sold and manufactured,  and where the  competition will be active. Plan to build layers of protection in core territories thinner layers in territories of lower risk. With an existing portfolio analyse it;  consider its strengths and weaknesses, determine what constitutes value in the portfolio. Avoid costly filings where they cannot succeed or filing in territories where they is no or limited threat. Consider whether you can exploit the portfolio in all application if not seek partners for full exploitation.  As importantly consider  if you can be blocked, as investment in patents is costly and if someone  else can block you, the investment will be wasted.

5) What role can mergers & acquisition play in opening access to new markets?

A merger or acquisition seeks to unite the resources, assets and  knowledge of two parties for the purpose of creating something of greater value than the two parts. This will only be achieved if there is clear complementarity between those assets leading to potential synergy. Intellectual property in the form of patents, designs, trademarks, copyright, know-how and materials are often key assets contributing to that complementarity. The use of a combined portfolio of Intellectual Property can, directly through the acquisition remove competitors from a market. The combined portfolio may deter new entrants or mean existing competitors do not get financed, but in many cases it may enable the leveraging of the existing IP in new fields and by providing an effective monopoly it should open up new markets.  

6) What key trends do you expect to see over the coming year and in an ideal world what would you like to see implemented or changed?

An evident key trend in patenting  is reduced scope of  geographical coverage based on cost, in particular of translation. Most companies need to be thinking about reducing the size of the patent specification through more careful drafting as this will mean protection can be afforded in more territories and for more inventions- one large expensive patent family does not provide the matrix of cover that is more robust.  Planning the patent families that warrant global coverage based on where the products will be sold/ processes run, where competitors may be active, where inventors may be based and where deals based on the patents may need to be made, will help focus. Other changes it would good to see would be clearer protection for digital health products;  a huge and emerging market that is hard to protect using current forms of IP, and tax savings earlier in the process ( through R&D tax credits for IP) not just for the larger companies through Patent Box which is a tax reduction applied to profit.
 
Nicola Baker-Munton is the Chief Executive Officer of Stratagem Intellectual Property Management Limited which she founded in 1999.  At Stratagem, Nicola has pioneered strategic management of IP through her strong commercial experience and belief that IP clients require expert advice as part of an overall defined plan for maximising the value of IP assets. Nicola is also an accredited mediator providing dispute resolution in the IP and general corporate arenas. Nicola has a joint degree in Biology and Biochemistry and qualified as a UK and European Patent Attorney at the Wellcome Foundation Ltd in 1991.

Nicola can be contacted on +44 (0) 1223 550 740 or by email at munton@stratagemipm.co.uk