Exclusive Licenses Do Not Discourage Follow On Research

Posted under Blog, Companies, Diagnostics, Funding, licensing, Medical Devices, Medical Supply, patent, Patent and Trademark Office, Patently BIOtech, Pharmaceuticals, Public Policy, Startups, U.S. Patent and Trademark Office, United States Patent and Trademark Office, Universities, USPTO, Videos by biotechnow@bio.org (Biotechnology Industry Organization)

A recent study presented at the Patent Statistics for Decision Makers Conference organized at the United States Patent Office questions the logic behind a nonexclusive license preference often found in U.S. government technology transfer policy.

In “The Role of Exclusive Licensing in Follow-on Research of Academic Patented Inventions” presentation the authors demonstrate that, contrary to the belief by some, exclusive licensing does not impede future research.

The authors ask two questions.  First, does exclusive licensing affect licensee follow-on research?  Second, does exclusive licensing affect non-licensee follow-on research?  The first question addresses the concern that a company will take a license of a university invention and not develop it.  The second question addresses the concern that follow-on research will not occur without the license thereby limiting the amount of knowledge available.  And the results…

With respect to the first question, the researchers find that exclusive licensee patent citations increase significantly after exclusive licensing.  In other words, the company or entity that receives the exclusive license continues to research and invent as evidenced by the numerous patents that follow based on the licensed technology.

With respect to the second question, the authors find that non-licensee citations increase significantly after exclusive licensing.  In other words, even the people/companies that have no license to the technology continue to research and invent as evidenced by their numerous patents that follow based on the licensed technology.

Maybe it is time to rethink the rationale behind a government lab preference for non-exclusive licenses.

The Critical Importance of International Patent Protection for Small Businesses

Posted under Blog, Companies, Diagnostics, Emerging Companies, Funding, Intellectual Property, Medical Devices, Medical Supply, patent, patent protection, Patently BIOtech, Pharmaceuticals, Public Policy, small business, Startups, U.S. Patent and Trademark Office, Universities, Videos by biotechnow@bio.org (Biotechnology Industry Organization)

As part of the implementation of the Leahy-Smith America Invents Act, the U.S. Patent and Trademark Office (PTO) recently held two public hearing on international patent protection.  Stanley C. Erck, President and CEO of Novavax, Inc., testified on behalf of BIO in support of an initiative to reduce filing and prosecution costs for international patent protection of biotech inventions.

In his testimony, Mr. Erck explained the important role patents play in the biotechnology industry. The vast majority of BIO members do not yet have a product on the market and must raise the funds necessary to finance the long and expensive process to bring a new vaccine or therapy to market (an average of $1.2 billion over ten years, according to the Tufts Center for the Study of Drug Development).   Intellectual property, in the form of U.S. and international patents, is often the main assets of these small biotech companies.

The importance of international intellectual property protection has increased as biotech companies seek to expand the markets for their products.   Small biotechnology companies face unique challenges in securing international IP protection as biotechnology patent prosecution in foreign jurisdictions can be more expensive and complicated and subject to greater non-uniformity of the law than many other technologies.  The scope of patent claims and what is allowed can differ significantly from country to country, which further complicates and increases the cost of international patent filing for biotech inventions.  Without procedural or substantive harmonization, these problems are likely to increase costs for small biotechnology companies.

“For our small biotechnology businesses, securing IP protection can be as important as obtaining laboratory equipment, leasing space, or hiring creative, dedicated employees.  There is no reason, therefore, to exclude efforts to secure patent rights from publicly funded small business assistance programs that are available for more tangible assets such as capital equipment, hiring, or leasing space,” Mr. Erck testified.  “Securing international patent rights, a necessary protection for even the smallest biotech companies, can be an expensive proposition, so permitting public assistance programs to defray such expenses would give these companies greater flexibility to focus resources on important development efforts.”

BIO has urged the U.S. PTO to consider ways it can help small biotechnology companies file and prosecute patents internationally more efficiently, so that these companies can dedicate more resources to research, job creation, and product commercialization for the benefit of patients, farmers and other consumers.

A webcast of the hearing is available on the PTO website.