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If you invent something and want to sell it and make a profit there is no way around one major topic: protecting your intellectual property, short IP. Without protection, anyone who is not you can use and sell your invention, too. As a scientist researching molecules, IP protection is a different field. You might know it’s important but do you know where to start?

In this episode of the Basel Area Business & Innovation podcast, we have an expert on the topic with us: Philipp Marchand is a scientist. He studied chemistry and graduated in biophysics before he decided to become a patent attorney. Now he works with the law firm Vossius & Partner and advises companies on their IP strategy. He is currently also pursuing a doctorate in law at the University of Basel. Philipp has merged science and law. He is also a partner of BaseLaunch and coaches biotech startups with their IP strategy.

First things first: how do you define intellectual property?

Philipp Marchand: Intellectual property is anything you conceive with your mind and then it is decided whether it’s technical, then patent right would be the appropriate intellectual property right to pursue. It can also be a design, it can also be a trademark or copyright. In the end it’s anything that’s conceived by the mind of a human intellect.

We are specifically talking about IP and biotechnology today. Which kinds of intellectual property are we covering?

For biotech startups typically the first and most important kind of IP protection would be the filing of patent application because 99% of biotech startups will have technical innovation in the terms of molecules they find our new methods, essays that they discover. For all of these types of innovation patent right is what would be pursued. Nevertheless it should not be underestimated that trademarks, designs and or copyright know-how can also be protected and they should also be protected.

What makes IP so special in biotechnology, why is it important to talk about this?

In contrast to other technical fields in biotech we have less assembled products. So for example if you look at your smartphone you can see that there are many components that assembled together form your smartphone. As you can imagine each of these components is protected by patents. Not one patent but probably thousands of patents. Then the smartphone interacts with other smartphones, so this technology how these interaction works – all this is patent protected. And so in the end there are hundreds of thousands or even millions of patterns that provide one part or the other part of your smartphone.

In contrast in biotech we see products like drugs for example that have one active ingredient. So it’s basically one active ingredient being formulated to pharmaceutical composition that is then used for a specific purpose. In most cases there would be one main patent that covers the molecule that is the active ingredient of your drug and this main patent then covers the entire pharmaceutical that’s on the market.

There are also add-ons so there are also patents on the formulation and on the purpose limited products or medical indication. But there are fewer patents for the product, meaning that the value of the individual patent is or can be a lot higher compared to other technical fields, meaning that for example an application that we draft in biotech is usually a lot longer just content wise compared to engineering or other technical fields. What does that mean for you as a startup? The value of each individual patent application is higher. You should also be more diligent and more careful about what to include, what to draft, when to include it, when to file it, where to file it.

That seems important but do people know about it in your experience or startups in particular?

The problem that startups have is the lack of funds at the time when they would need them to build up an IP portfolio and then of course the decision whether to spend the available funds on an IP portfolio or to rather spend them on research or spend your time with marketing or finding investors. I think the startups are in a struggle of how to spend their time and resources wisely and IP is obviously – and we are fully aware of that – only one part of the whole picture.

Assuming I have an invention and I’m quite excited about it: how do I determine what to protect, which components of the invention?

As a startup you first of all should have a business idea where you see market potential. Usually this research idea comes from universities or from company position and then from this you would develop an idea of what should be protected. So for example if you are interested in discovering new molecules then obviously when you have these new molecules you would want to protect them whereas if you are interested in developing an essay for a particular purpose, a diagnostic assay for example then once that assay is developed you would want to protect it. The IP strategy is basically driven by the research interests and business interests of your company, so IP follows the business and the research. At least as a startup company it would not be wise to come up with an IP strategy first and then do the research. The research has to be first.

How do you find out what the strength in your pattern portfolio is?

Once you have created a patent portfolio and you have your business and your potential product so that is in development where you see market potential, then ideally the IP portfolio should cover that product. What we are trying and what startup companies should be trying in order to protect their market in order to be interesting for investors is to create an IP portfolio which not only covers the specific product but some reasonable scope around it. So covering the product itself, let’s say with molecules that you’re developing and around this molecule various derivatives, various alternatives that potentially have the same technical effects, potentially do the same thing but are not necessarily also developed for the market. If the IP is granted, the IP could be used to prevent your competitors entering the same market and then ultimately taking away market shares from your company. So the ideal of protection is broader than your specific product.

How do I achieve that?

There we are in the struggle between data and filing strategy, let’s say the question when to file the IP portfolio. In order to obtain broad protection it’s usually not sufficient to have one isolated example. Sticking with the example that we started with: let’s say you found in your research one specific molecule that inhibits your target. Having this one example would usually not be sufficient to obtain a very broad claim for various other molecules doing the same job. So you would usually need more than one example and this is where we make the link to what I said at the very beginning: how to invest your resources? Because theoretically you may not be interested – from a mere research perspective – in developing further products and obtaining data for alternative molecules because you already found your lead compound. But in order to obtain broader IP protection it may be necessary to also get access to alternatives to get functional data for those and then to file IP. Because with various examples the claimed scope can in most cases be broader. Getting back to your question how to obtain broad protection. My answer would be to get sufficient data to support or make plausible technical effect over a certain scope with various examples being within that scope.

Are there also cases when you would say go and file your pattern very early with little data on the platform? Or is that always the case that you first have to have lots of data?

That’s a very good question. It depends on the competitive landscape. In a very competitive field it may make sense to file early with only preliminary data simply to set a date in the calendar if you will by filing this what we call a provisional or priority establishing application that provides you with the filing date which is for the subject matter that you filed the earliest date. In general, as a startup if you can keep your technology as a secret and you don’t think that it’s a very competitive field – so you’re investigating a new target for example – my suggestion would be to rather wait for more data and then to file a broad application. So as a startup company with limited funds it’s usually better to wait a bit.

You were talking about being secretive about your invention. We have a little conflict of interest here because researchers talk about their work quite often. They write papers and need to publish. When is it time to shut up and protect the intellectual property?

This is indeed a conflict we see on a daily basis between wishing to publish and also talk to investors and talk at conferences, raising interest for your topic, for your idea, for your business which can be in conflict with the IP filing strategy. As you may know, any publication may be novelty destroying or may become prior art in most jurisdictions to a later filed patent application. So it is important to very carefully look at what you disclose before you file a patent application. We are aware of limitations of IP strategy when it comes to publication requirements. For example, if you work at a university then you may be forced to publish at some point and then the IP finding cannot wait. Nevertheless the IP filing has to come first before the publication.

How long does it take roundabout to file for patent application?

The honest answer is it should take a couple of weeks. It can take a couple of days if it has to take a couple of days. There have been cases where we have been contacted by researchers that were on their way to a conference to present their research and then had the idea, well let’s file a patent first. Then we had to file something within a day or two. This can happen. It’s definitely not ideal, it’s definitely not what should be done. Ideally you have at least a couple of weeks or months to prepare draft texts and to discuss them and have a couple of iterations between the parties.

It sounds like you need a lawyer to help you with that. What can I do to get the most of my attorneys?

So first of all if you approach us with new ideas or questions, you don’t have to be afraid that you would immediately be sent an invoice after the first meeting. That doesn’t happen. The first meetings are always free. We always enjoy discussing new ideas with our clients. Then at some point, we also have to survive, so we will have to bill our time. In order to get the most out of our time it is always better to be prepared. To prepare all the documents or the data that you’ve collected, your potential business, what you think is maybe a product, kind of a business plan. All these documents that you probably have anyway should also be provided to us. In that respect talking to us and providing documents to us as attorneys falls under certain privilege so you don’t have to be afraid that sharing data or documents with us will lead to any sort of publication. We will keep those confidential and we will also destroy these documents in case your project is not further pursued or in case you need to collect further data before pursuing it further.

There are numerous possibilities for protection: national, European, international… How do you know what kind of protection to pursue?

It’s inherent to the patent system that a granted patent only has a territorial effect, meaning that a European patent validated in Switzerland only has effect in Switzerland and not in any other country. This leads to the problem that at some point you will have to decide where to file your patent application, where to file this request for grant. In most cases you would at some point file a PCT application. As I mentioned before that covers most relevant countries except Argentina and some smaller countries and from this application you can decide where to file your patent. The problem for many startup companies is that this has to be done within 30 months from the earliest priority date and this date cannot be further extended. So at that stage you will have to decide where to file. The obvious decision is of course to cover the markets that you’re interested in. In most cases that would be the United States, Europe and then potentially a number of Asian countries like China, Japan, Korea. So there are various factors that could drive a decision where to obtain protection. In any event, the decision should be driven if not by costs then by where you see potential market opportunities, so where do you see business? Then where are your competitors? Because you may want to create leverage in negotiations with your competitors, so you would want to cover the markets of your competitors in order to maybe provide them with a license or use that application or granted patent as leverage in licensing negotiations for their patent applications or their parents.

When I have limited funds, which countries should I exclude first?

With limited funds you have of course to be careful which countries to select. Patent applications are in 99% of the cases drafted in English, from our office at least. Meaning that covering English speaking countries is inherently cheap because you don’t need translations. The official language of the European Patent Office is also English meaning that based on an English application text you can cover Europe. In the future it will also be possible to cover all EU member states with only one patent which is currently not yet the case. Then the US, Canada, Australia, New Zealand – they are all relatively cheap – which in my opinion would be the minimal set of countries. In addition you could think of Japan, China, Korea.

Can you give me a number if you say relatively cheap?

Relatively cheap means for an average application you should plan for let’s say 4000 or 5000 Francs for national phase entry in any of these countries.

Are there any really big differences between patent processes in different countries?

There are, indeed. In some countries, for example Europe and US, with national phase entry you have to request examination. So examination starts right away whereas in other countries like in Canada for example or Australia, you have time to request examination after entering national phase. So as part of a IP strategy for example to lower costs, you may not want to request examination right away in these countries but wait for examination results from the US or from Europe and use these results to advance the proceedings in the other countries.

What can biotech startups learn from big pharmaceutical companies in terms of IP protection, patent families, patent extension?

From the startup perspective, big pharmaceutical companies have unlimited funds to create their IP portfolio. They just keep filing patent applications on a continuous basis. This strategy is very difficult to pursue as a startup company but what can be learned from pharmaceutical companies is that they have a very good pipeline from research to IP being filed. There’s a continuous exchange of information between researchers and their patent departments or outside counsel depending on the company. Meaning that the IP department is aware of ongoing research activities and there’s a continuous discussion between these departments. As a startup you don’t have an IP department but you have outside counsel and the decision whether IP is being filed or whether IP is not filed and you decide to wait for further data – that decision should be made on a continuous discussion between researchers and your outside counsel, your patent law firm.

When startups approach pharma to advance their science, do they need to be cautious about that?

Based on my experience, big pharmaceutical companies cannot allow just taking knowledge from you and file it as their own patent application or using that in their own research without obtaining the know-how or the IP from you. I’m not aware of a case where they would just have stolen ideas from startups without getting some kind of collaboration with them. Because ultimately if a patent is being filed based on innovation from smaller companies – you have a meeting with them, you talk to them about your idea and they just file a patent in their name with their inventors – that patent application or granted patent could be invalidated because the idea didn’t come from them but from you. They cannot risk this. They have to invest too much money into research and development that they wouldn’t risk investing that much money without obtaining the rights which is much cheaper than ending up in a big lawsuit.

Philip you can tell biotechnology startups one thing about intellectual property. What is it?

One thing I can say: as a biotech startup IP is the only real asset that you can create. Because developing a product to be market ready, in particular a pharmaceutical drug, is very expensive and is a process that takes many years. And during these years there are financing rounds, in most cases there will be an exit, a buyout to another company.  The IP is the true asset that you have created, which means that you should never underestimate the true value of IP. And you should have a continuous discussion with your IP attorney to create a valuable IP portfolio.

Interview by: Annett Altvater

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