Setting a Patent Stategy

"To add the most value, [biotechnology] companies need to do more than file applications early and often...Patents provide potential leverage for obtaining cash, technology, and desired collaborations through licensing. They are also attractive assets to potential investors, collaborators, and acquiring companies. And they can help remove roadblocks set by third-party patents through cross-licensing...

Consider the case of a startup biotechnology company. Frequently, the company begins by obtaining a license for its initial core technology from a university and then develops and enhances that technology through its own research and development efforts. Eventually, the company seeks to partner with a large pharmaceutical company for further research, development, regulatory approvals, and marketing...

The first step in the patent strategy comes when the company begins negotiations to license its core technology from the university. It starts with a strategic analysis of the patent rights supporting that technology, typically through a due diligence process...The patent rights need to be examined to assess their realistic scope and significance... Patent counsel should conduct a "freedom to operate" assessment of the technology. Any third-party patent rights that might be infringed by the use of the technology must be identified and analyzed...

Beyond the initial results of the due diligence, a strategic plan represents an ongoing process that evolves as the company's business plan evolves.

One basic issue is what to patent... The plan should also set decision-making criteria for each point in the process of obtaining a patent... In addition, the plan should provide a long-term approach for identifying and neutralizing third-party patent rights that may block research, development, or marketing of the biotech's products...

If a biotech company has developed and implemented an intelligent patent strategy and has successfully done the many other tasks necessary to develop its products, then the company is ready for its collaboration with big pharma."

Read more in this Cooley Godward LLP article from Mondaq.