BIO 2020: Building your first patent portfolio
For a start-up looking to build a patent portfolio, where should you start—‘home-grown’ patents, or licensing others’ IP?
This was the focus of a panel discussion at the interactive panel at BIO Digital on “Why Patents Still Matter: Building Your Patent Portfolio for Global Collaborations”.
Despite the obvious advantages of having patents of your own, ‘in-licensing’ others’ IP can be a smart move for newer or smaller companies, the panel agreed.
Danielle Pasqualone, vice president of IP at biotechnology company Alector, said that while “home-grown IP will play a really important role in establishing the company and establishing investors,” in-licensing can give companies an advantage in terms of freedom-to-operate.
“It can put you in a better position compared to competitors, and you can license IP that can give your technology a bit of a head-start,” Pasqualone said.
Christopher Walsh, vice-president of legal at Denali Therapeutics, agreed that “in-licensing is a great way to avoid early roadblocks” for new companies.
Early-stage companies are at a higher litigation risk, Walsh said, because of employees joining from other firms and the risk of misappropriation claims.
The key, he said, was to “look at third-party IP and understand the landscape” in whatever sector you’re in, adding: “You’ll either understand roadblocks or potential partnering opportunities.”
Always though, companies with a limited budget need to prioritise, Lily Rin-Laures, managing partner at Rin-Laures, explained.
Rin-Laures divided IP into three categories: “Claims that cover your products, claims that cover competitors’ product, claims that cover other aspects of your competitors’ business to use as a bargaining chip.”
Small companies need to balance their budget against the “enormous cost of IP,” she added, and claims that cover your own products are the “most critical”.
After all, you need to be able to “defend against people that want to copy your product,” Rin-Laures said.
Another difficult choice facing start-ups is when to file their patents. Pasqualone argued that, “if you are in a competitive space, you may want to consider filing early in order to ensure you have rights you need”.
“Investors like to see a very aggressive, active, ongoing filing strategy to prove that the company is continually innovating,” she said.
Of course, this strategy is not without risk. If you file “too early”, Pasqualone said, you might not yet be at a stage where you’ve “perfected” your invention. You could, in fact, “be creating your own prior art against subsequent innovation”.
Filing early can provide small businesses with “early certainty with respect to freedom-to-operate,” a valuable asset for early-stage companies, Walsh said.
But is protecting your IP using the patent system always the right choice? Tony Chen, partner at Jones Day in Shanghai, who chaired the session, asked whether smaller companies might be better off sometimes protecting their IP in the form of trade secrets.
“The trade-off with patent protection is that you have to tell people how to make and use what it is you’re patenting,” Rin-Laures said.
“You’ve provided a roadmap to your competitors as how to use your technology,” she added.
For parts of your technology that aren’t easy to discover publicly, such as manufacturing processes, trade secrets could be a valuable option for small companies, Rin-Laures argued.
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