LSPN 19: choose your IP strategy wisely, warn IP experts

Choosing the right IP strategy is crucial for companies, but constrained budgets and picking the wrong partners are all factors that can steer companies off the correct path.

Last week at Life Sciences Patent Network Fall in San Francisco, a panel of IP experts discussed how to avoid strategy pitfalls, during the “Innovative IP Strategies for Life Sciences: Best Practice in Managing Pharma and Biotech IP in the Age of Big Data and Precision Medicine” panel session.

Sarah Wang, CEO and founder of AppoG, first stated that when companies move to register IP, they can have two different reasons in mind.

“Do you want to own the patent and have a portfolio that can increase the company valuation or are you [trying] to secure the invention, protect the company and obtain a monopoly position in the market which prevents rivals from sharing a profit? These are two different questions,” said Sarah Wang, CEO and founder, AppoG.

Wang added that startups, which are likely to have constrained budgets, may want to combine as many inventions as possible in one patent filing, but that doesn’t mean it is the best strategy.

Danielle Pasqualone, vice president of IP at biotech Alector, added that as young companies need to consider whether they are looking to protect a valuable asset or whether it’s to show investors and the industry what you’re doing and how active you are.

“At a later stage, you’re able to be more focused and be more willing to cull the applications that aren’t bringing in value anymore. Small companies are very reluctant to do that,” said Pasqualone.

Registering patents is particularly for those companies in financial distress, although it may seem counterintuitive to be shelling out large sums at the time.

“When a company is in financial distress, the board may think we need to control the budget and can’t waste money on patents. But that is a critical point where you should get patents issued and you should get as many as possible because that will increase [the company’s] intangible assets,” said Wang.

She added: “When the total assets are increased, it decreases your cost of debt. You have a much better chance to get out of [debt].”

Partnerships and patients

It’s also critical for companies to consider their IP strategies in relation to various relationships.

“There could be some very valuable IP that’s gestated in a partnership between therapeutics and diagnostics companies. But how do you allocate between partners, especially when these partners may have different incentives?” asked John Sninsky, an independent consultant in translational sciences.

Sninsky added that the companies need to put in place strategies that “allow them to step forward sharing the risk”.

Pasqualone has seen agreements between the parties become a drawn-out process. She added: “You have to step into the other party’s shoes and understand where they’re not going to move and where they’re going to be able to compromise.”

But it’s also important not to forget the third player in this partnership—the patients—according to Sninsky.

“One of the reasons we’re sitting here with a powerful technique to measure HIV is because of the HIV advocacy community,” he explained. “Those groups can accelerate approval.”

Recent and upcoming decisions, such as Hikma Pharmaceuticals v Vanda Pharmaceuticals, which is currently before the US Supreme Court, will also affect companies’ strategies.

In Hikma, the US Supreme Court will hear an appeal in a dispute over whether a medical treatment is directed towards a natural law.

Sninsky concluded: “More now than any time before, we’re living in such a dynamic era for both technology development and changes in patent law.

“It is critical that we be vigilant in terms of following what decisions are being made and what implications they have on the things that each of us are doing.”

Peter Scott, group publisher and editor-in-chief of World IP Review and Life Sciences IP Review, moderated the session.

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