How to Develop Partner-Ready Patent Estates

Morgan Lewis - As Prescribed

Morgan Lewis - As Prescribed

For our third and final Biotech Week Boston post, partner Stephen Altieri—one of the many within our 250-member-strong comprehensive cross-practice life sciences team with an advanced scientific degree—discusses efficient patent protection for emerging biotech companies with patent agent Emily Coury.

Emerging biotech companies and large pharma companies seek partnerships with each other for a variety reasons, with each side having something to offer the other. The emerging biotech company often provides discovery and R&D firepower and preclinical development for novel platforms and molecules. Indeed, the smaller footprint of the emerging biotech company offers flexibility in its capacity to specialize in and research new therapeutic targets.

On the other side, a large pharma company can provide resources and infrastructure for ushering a drug into its clinical stages of development. Large pharma companies can also assist with downstream production and distribution expenses and navigation of the regulatory (e.g., FDA) approval and post-approval marketing processes, thus effectively expanding a technology’s reach.

Given the efficiencies and value created by partnerships between emerging biotech and large pharma companies, it is therefore no surprise that over the past three decades, about one-fifth of drugs in development have been acquired by another pharmaceutical company. For those emerging biotech companies seeking to partner, even if a distant proposition, it is crucial to develop a robust and thoughtful patent strategy early in order to be most attractive to a partner when the time comes.

Several key considerations related to the emerging biotech’s patent estate can set up a smooth baseline for discussions with potential large pharma partners.

1. Understand the competitiveness of the field when deciding when to file a patent application.

With the United States transitioning to a first-to-file patent system under the 2011 America Invents Act (compared to the prior system that awarded the individual who first invented), the repeated mantra one hears is to file a patent application as soon as possible. Certainly, US patent law requires filing a patent application within one year of the first availability of the invention to the public (e.g., public disclosure, sale/offer to sell, public use). Many ex-US jurisdictions do not even provide this one-year buffer.

However, absent such constraints, an additional factor to consider is “enablement,” the requirement for disclosure of the invention in sufficient detail so that a person skilled in the technological field could create the invention “without undue experimentation.” A version of this requirement is generally applicable in most ex-US jurisdictions and can be even stricter than the US requirement. Thus, without proper support—for example, in the form of experimental data—patent applicants may face a tough path to obtaining desired claim scope, let alone claim scope that would entice or be sufficient for a large pharma partner. Consequently, an assessment of the patent landscape and competitiveness of the invention’s particular technological or therapeutic field may provide invaluable insight for determining the timing of filing the patent application.

Further, it is imperative to plan experimental designs well in advance of filing a priority patent application (i.e., provisional application) and to plan to have all relevant data obtained by the filing of the nonprovisional application (12 months after the filing of the priority application). Said another way, an emerging biotech needs to balance the risk of getting scooped by a competitor, which is higher in a competitive field, versus having sufficient scientific support for an invention, which makes procurement of a patent easier.

2. Be forward thinking when evaluating national stage entry.

When a patent application is filed as an international patent application under the Patent Cooperation Treaty (PCT), it can be entered into a number of country jurisdictions to be prosecuted in those national or regional patent offices, beginning at the date 30 months after filing of the priority patent application.4 An expansive national stage entry may be accompanied by a high price tag, considering translations and filing fees, especially for life sciences patent applications having specifications with high page counts.

While a knee-jerk reaction to expensive up-front patent costs is understandable, the decision of where to file a patent application has permanent ramifications for future patent protection, and consequently, can impact discussions with potential large pharma partners. It is, therefore, worthwhile to balance the needs of these partners against costs.

Oftentimes, such an analysis will involve partner-specific considerations, as well as evaluations of the specific therapeutic market. For example, abstaining from entry into Asian countries, such as China and Japan, can save quite a lot on costs in the short term. However, large pharma partners headquartered, or with active programs, in the Asian market will likely expect patent protection there. Engaging with patent counsel with experience with these forward-looking decisions, especially regarding the expectations of potential partners, can be essential to procuring later deals.

3. During prosecution, be wary of obviousness-type double patenting and whether patent term adjustment has accrued.

Patent term adjustment (PTA) is a statutorily created system that adds additional time to patent terms to remedy certain delays caused by the US Patent and Trademark Office (USPTO) in issuing a patent.5 Because even several days of additional patent term can result in high revenue for emerging biotech and large pharma companies, this issue can be one of immense importance. At the same time, US patent law precludes an applicant from obtaining more than one patent on the same invention.6

Obviousness-type double patenting (ODP) is a judicially-created doctrine intended to prevent (1) an improper time-wise extension of a patent right by prohibiting the issuance to a single inventor of claims in a second patent which are not “patentably distinct” from the claims of a first patent and (2) harassment of an infringer by multiple assignees asserting essentially the same patented invention where there was no common ownership.7,8 A terminal disclaimer is a type of filing that an applicant can use to address these two concerns and overcome an ODP rejection in prosecution.

The recent precedential Federal Circuit decision In Re: Cellect LLC held that “ODP for a patent that has received PTA, regardless whether or not a terminal disclaimer is required or has been filed, must be based on the expiration date of the patent after PTA has been added.”9 A potential consequence of the Cellect decision is that PTA may be susceptible to challenge and loss under a claim of ODP, regardless of whether a terminal disclaimer was filed. Thus, an applicant should strive to craft a patent family filing strategy with the potential for loss of PTA in mind, such as by putting forth claims in a manner that may elicit a restriction requirement in order to use the safe harbor doctrine under 35 USC § 121, which offsets ODP allegations.

While the practical implications of ODP rejection practice at the USPTO is in flux, it is vital that the applicant keep an eye on any potential accrual of PTA during prosecution and to first respond to ODP rejections via argument of patentable distinction of the claims.

Thank you for following this week’s posts from our Boston life sciences lawyers! Stay subscribed to As Prescribed to keep up with our latest thought leadership on all things life sciences, including global biotech developments with legal implications.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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