LS@W IP, STRATEGY, PROCEDURE, FTO 25-05-2018 Peter ten Haaft (PhD, Dutch and European Patent Attorney) tenhaaft@nlo.eu
Content 1. Introduction 2. IP overview 3. IP strategy 4. IP procedure
Introduction - Our firm (I) NLO is one of the largest patent and trademark firms in the EU Headquartered in The Hague (close to Dutch Patent Office and European Patent Office) Branch offices in Amsterdam, Ede, Eindhoven, Gent 180 people, including over 60 attorneys Consistently ranked as a Tier I firm for patent prosecution (IAM survey)
Introduction - Our firm (II) NLO currently employs ~25 patent attorneys in the field of life sciences, of which ~10 are highly specialized in (medical) biotechnology. We frequently represent leading biotech companies in Opposition and Appeal Proceedings before the European Patent Office and in nationaland pan-european litigation. We advise biotech companies in relation to IP transactions, mergers & acquisitions, due diligence and IPO s.
Content 1. Introduction 2. IP overview 3. IP strategy 4. IP procedure
Intellectual Property - an intangible asset Company resources Tangible assets Intangible assets Financial resources Buildings Machines Products Intellectual property Patents Trade Secrets Trademarks Copyright Industrial Designs Domain names
Intellectual Property (IP) 1. Industrial Property Patents (Inventions) Trademarks Designs (vehicle, watch, jewelry) Trade secrets Know how 2. Copyright Literary and artistic works (novels, films, music, drawings, paintings)
Why would one want a patent = Competition law forbids monopolies Patent right gives you the possibility to create a temporary legal monopoly Patents can prevent third parties from entering your market Patents can facilitate your entry into a market
Stimulation of Technological Development Inventor discloses invention (publication of patent application) Government grants exclusive national rights
What is a Patent? A patent is an exclusive right granted by an authority to prohibit third parties from commercially applying the subject-matter claimed, within the territory governed by that authority, for a period of 20 years, which exclusive right is granted in exchange for disclosing the invention.
Nature of Patent Rights Exclusive right to forbid anyone else to use the invention, but... patent can be dominated by other patent(s) NOT a license to operate Finite right (usually 20 years) Territorial right After expiration, the invention becomes available to commercial exploitation by others
Not a license to operate Bicycle Bicycle with brakes Bicycle with steering
What is not patentable? Computer programs Scientific theories, discoveries, mathematical methods Aesthetic creations Methods of treatment of the human or animal body
Patent Application: claims use 1 process 1 product use 2 process 2 use 3 Producer Market
Rights conferred by a granted patent (NL) Always a matter of national law Product claim selling, using, offering, etc. of claimed product Method claim applying claimed method product directly obtained by claimed method Use claim claimed use offering/selling product for claimed use
Infringement; possible infringement (Possible) infringement is a legal issue Conclusion on infringement: Taken by a Judge The inventor/r&d director/business manager: can NOT decide on infringement, thus should NOT communicate on infringement
Freedom to operate (FTO) Can we perform a certain process or sell a certain compound without infringing valid patent rights of others? Consequence of infringement: Damages (triple damages US, can be very high) Costs of law suit (1mln $/yr) Infringing activities are stopped Bad publicity for stockholder company Uncertainty is bad for business
Freedom to operate (FTO) What to do if you want to know if you have FTO? 1. Literature search 2. Are patents in force? Country pattern? Publication/grant? 3. Determine scope of patent claims - literal/equivalent infringement? - US, then US-attorney opinion 4. Determine strength of patents - based on prior art search - patentability requirements and interpretation
Freedom to operate (FTO) Possible actions stemming from FTO-opinion: 1. Negotiate a license - Always: collection of invalidity arguments to negotiate a good price (possibly threaten with law-suit or after having started a law-suit) 2. Investigate patent-free countries 3. Wait until the patent expires/lapses - Beware of Supplementary Protection Certificates (SPCs), US-situation - Investigate patent-free countries for earlier start of production 4. Ignore the patent - Only an option when claims are considered to be invalid; NB expert opinion needed 5. Design around 6. Battle (oppose/nullify)
Patent (application) in Examination and Litigation In litigation, the first response of an alleged infringer will be: - The patent is not valid!! The judge that decides on infringement will assess the validity of the patent (or will have it assessed in a separate procedure). Your patent (application) will have to be fit to survive: - during examination by highly skilled and less highly skilled Examiners in different jurisdictions! - Post-grant examination by a court in different jurisdictions!
Patent Application in Examination and Litigation Ethnocentrism The tendency to look at the world primarily from the perspective of one's own culture
Patent Application in Examination and Litigation The cost of drafting a patent application is a small percentage of the lifetime family costs but getting the drafting wrong can have a huge effect Prosecution and enforceability Value of the patent Prepare a single application optimized for both the EPO and USPTO; fully consistent with both European and US practice This is NOT what the USPTO and EPO necessarily prefer!
Content 1. Introduction 2. IP overview 3. IP strategy 4. IP procedure
Financial and strategic uses of IP assets Cost reductions Financial returns Expand IP profits Reduce/offset royalties Cross-licenses Defense IP Offense Litigation avoidance Product differentiation Legal protection Strategic returns Commercial competitiveness
IP strategy (integrated within your business strategy) Who has the right to the invention and patent? Invention is from a single entity or from multiple entities? Public entities, private entities, consortium? If multiple: is an agreement in place? IP paragraph? Background technology? Foreground technology? Future technology (after expiry of agreement)? IP paragraph: publication? IP paragraph: License?
IP strategy (integrated within your business strategy) What are your competitors up to? Prepare a patent landscape of the area of interest. Obtain information about your competitors business model (for a certain product). Continue with monitoring what they are doing. Define the areas where you need FTO and/or a patent in order to reach your business goals. React in an early stage to threats: file defensive applications / third party observations / oppositions / ask for a license.
IP strategy (integrated within your business strategy) What does the patent landscape look like for your product/proces, an example? Upfront search / landscaping. Subsequently, in depth analysis formulate/fine tune IP and Business strategy! File applications, license in, file third party observations, oppositions, neglect.
Landscaping (I): Answer the following key questions for preparing IP strategy Who are my competitors? New players? What is their IP strategy? Are they still active? IP still alive? Where do they file? How often? Are they active towards third party IP? How dense is the patent landscape?
Landscaping (II): Coming to an IP strategy: interactive process Knowing the patent landscape and knowing your business plan, define your IP strategy: Own innovation / outside world via landscaping Relative position / IP other players Decide on filing strategy Third party IP: Oppose/Nullify In-license Neglect
IP due diligence (1) Formalities are key: Correct identification of the applicant Assignment of priority Correct designation of inventors Duty to disclose in US/IL Strength of each application (formal/substantive) Ownership of applications FTO IP strategy
IP due diligence (2) IPO (Initial Public Offer) Private company transformed into a public company Advantages: raise capital. Drawback: requirement to disclose IP sensitive information helpful to competitors! Details of the offering are disclosed to the public in a prospectus. IPO with the assistance of an investment banking firm (acting as underwriter: assess value of share) a specialised lawyer IP is the key asset of most biotech start ups Advise of client -- Liable as an IP attorney towards the investment banking firm
Summarizing IP strategy Develop IP strategy in time. Early alignment of the IP strategy with the business strategy (and R&D projects) is essential, as well keeping the IP strategy aligned when business strategy shifts (portfolio management is key). IP strategy may influence the business strategy (mutual dependency). FTO and Due Diligence are equally important as proprietary IP.
Content 1. Introduction 2. IP overview 3. IP strategy 4. IP procedure
The patent granting procedure Most common routes 6-8 months 12 months 18 months 3-5 years 30 months 4-6 years 21 years NATIONAL ROUTE JAPAN USA EU JP USA EU First filing Patent granted PCT ROUTE PCT JAPAN USA EU JP USA EU Priority date Search report End of priority year Publication of application Conversion PCT-application Patent granted Expiry patents
Procedure: Foreign filing via PCT (WO) Patent Cooperation Treaty (152 countries) Procedure for centralised international filing National filings postponed to 30 m after first filing Advantages: - more market information - postponement of costs A granted world patent does not exist
PCT countries PCT Contracting States (148 in June 2015)
Procedure: Filing and grant via EPC European Patent Convention Procedure for centralised filing and centralised grant After grant the EP patent becomes a collection of national patents Possibility to oppose against the grant Infringement and revocation actions (except opposition before EPO) are dealt with by national courts
EPC: 38 states and 2 extension states
UNITARY PATENT (to be.) Costs Patent validation in 25 countries EU 30 000? Renewals payments years 10 through 20 EU 125000? Single Unitary patent translation and registration EU 2000 Central renewal fee years 10 through 20 EU 30 000 Not to mention name changes, assignments, late and missed renewals
CONTACT Anna van Buerenplein 21A 2595 DA Den Haag Postbus 29720 2502 LS Den Haag Bennekomseweg 43 6717 LL Ede T: +31 70 3312500 E: info@nlo.eu Kennedyplein 236 5611 ZT Eindhoven www.nlo.eu Nachtwachtlaan 20 (gebouw Ringpark) 1058 EA Amsterdam Technologiepark 19 9052 Gent Zwijnaarde België