IP Barriers to Development and Adoption of New Therapies: Freedom to Operate. October 31, Presented by Peter J. Butch III, Esq.

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1 IP Barriers to Development and Adoption of New Therapies: Freedom to Operate October 31, 2008 Presented by Peter J. Butch III, Esq.

2 The Patent System If not an absolute barrier to market entry, then licensing costs impact ability to deliver product at acceptable price point Limited exception to anti-trust laws Patent owner controls the ability to make, use, sell or import patented product Presentation Title 2008 Fox Rothschild

3 In the country in which the patent is granted FTO Must Be Assessed Country-By-Country

4 Having Patents is Not Enough Patents are routinely granted on improvements that infringe the patents on the technology that is improved upon Just because you have a patent doesn t mean you can practice the technology covered by that patent

5 Challenges in Regenerative Medicine Multi-faceted discipline merging several technologies each with their own IP issues for which FTO must be independently assessed Scaffold construction Scaffold materials Cells to be implanted Materials on scaffold to promote cell growth and differentiation Each technology may be separately owned and require several agreements to secure all the rights necessary to manufacture, use or sell a product 21 st Century R&D paradigm

6 Producers Scenario Royalties exceed 100% Stacking provision in license agreement

7 Case Study: Medtronic s INFUSE Bone Graft FDA approved titanium cage containing collagen sponge impregnated with rhbmp-2 Revenues exceed $1 Billion Substantial royalty payments to Wyeth, which bought Genetics Institute (Genetics Institute founders are very comfortable)

8 Genetics Institute IP Nucleic Acids Expressed proteins Method of Inducing bone formation with rhbmp-2 Expiring in 2017 Not a bad thing = GI core technology (recombinant genetics) not within Medtronic expertise

9 FTO is more than will we get sued if we sell this? Where is our army? Who is the enemy (competition) and where are they? How strong are we vs. the enemy? Can we out-flank the enemy? Do we have any allies? What space is unoccupied and can we or our allies get there before the enemy does?

10 That is to say What IP do we own? What IP does the competition own? How does our IP compare to the competition s IP? Can we design around the competition patents? Are there licensing opportunities (like Genetics Institute) that should be secured before the competition gets there? Are there unpatented areas where we or our licensor should get IP in place before the competition does?

11 Anatomy of an FTO Management of Medtronic predecessor read about Genetics Institute s rhbmp-2 and conceived of INFUSE product Not a case of making product and then finding out from FTO that Genetics Institute controlled use of rhbmp-2 Purpose of FTO was to determine value of Genetics Institute s IP, what other IP covered ultimate product and white space where IP could be inserted to block competition Competing product using rhbmp-7

12 FTO Nuts & Bolts Expert searching is critical General knowledge of market just a starting point Difficult to prove a negative (i.e., no problem patents exist) Need a searcher who knows databases like the back of his or her hand; one who knows where information hides in the database Mature technology easier to search than pioneering technology Well defined patent landscape Agreed-upon terminology as opposed to investigators coining their own names for things

13 Case in Point: Photodynamic Cancer Therapy Earliest PDT patents did not turn up in first FTO search Not called photodynamic therapy back then Expiring around Oldest patents uncovered in first search gave clues to existence of even earlier patents

14 Mature Technologies on the other hand All the horseless carriage and heavier than air flying machine patents have expired

15 Hubble Telescope Issues 18 month IP publication time lag Search looks at patent universe as it existed a year and a half ago It used to be worse back when it took weeks for publications to get into databases. Search must be periodically updated

16 Patents vs. Published Applications Nearly every application published with claims as filed US, PCT, EPO, Japan, etc. Typically very broad and seemingly invalid Everything infringes, so you can t get too excited But you also can t assume such claims will never be granted

17 Watchful Waiting After application publishes the file history can be accessed over the internet Can easily monitor progress of US and EPO applications PAIR and ESPACEnet Watch to see if claims get narrowed so infringement risk is reduced or eliminated

18 A Question of Semantics What the patent claims define controls over what the body of the patent explains Must be attuned and alert to how claim language can be spun to trap the unwary Cannot be so zealously wrapped up in own product to fail to recognize how a competitor s patent claim might be interpreted as being infringed by something they didn t foresee and you invented

19 Case In Point: Vaccine Litigation What appeared to be an unobtrusive patent uselessly covering isolation of causative agent Only happens once Claimed series of Koch s postulate steps including growing and isolating Patent owner asserted this covered the repeated series of growing and isolating done to attenuate virus during vaccine production Accused infringer had narrowly interpreted claims as only covering growing to isolate as this was the context of patent description Patent owner won litigation

20 FTO Results Can Trigger Non-Infringement Study Non-Infringement Study Can Trigger Validity Study Validity study can trigger solicitation of license

21 Ignoring FTO Issues Costly litigation Damage award Injunction Triple damages

22 Legal Trends Narrowing of Doctrine of Equivalents Limiting Ability to get Injunctive Relief Limiting Ability to get Triple Damages

23 Contact Information Peter J. Butch III, Esq Presentation Title 2008 Fox Rothschild

COMPETITIVE INTELLIGENCE USING INTELLECTUAL PROPERTY INFORMATION

COMPETITIVE INTELLIGENCE USING INTELLECTUAL PROPERTY INFORMATION BY P. KANDIAH 1 Developing Country Perspective 2 Patent Rights Design Rights Access to Technology Licensing Rights Freedom to Operate Competitor