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Building a Strategic Patent Estate
Client's Business Objective:
The client, a start-up biotech company, licensed technology related to gene therapy from a research university, with the objective of commercializing the technology worldwide.
The Challenge:
The technology was covered by a single patent containing broad generic claims and filed only in the United States. The client desired a worldwide patent estate to protect global commercialization of the technology.
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What We Did:
We strengthened the U.S. patent estate by filing additional patents directed toward specific patentably distinct commercial uses of the technology. These patents were then filed worldwide to establish patent positions protecting the technology.
Results:
Through strategic claim drafting, we were able to achieve overseas protection nearly coextensive with the original U.S. filing while strengthening the U.S. patent position.
Key Takeaways:
An aggressive and creative patent strategy can strengthen a patent estate and compensate for potential weakness in the portfolio.
Chemistry Due Diligence for Investors
Client's Business Objective:
The client, a venture capital financing firm, wanted to invest in a start-up company having a license to a patent portfolio directed toward treatment of certain diseases using a class of small, organic molecules, based on research from a university lab. The firm wanted to evaluate the strength of the portfolio, particularly the validity of a key U.S. patent claiming the class of small molecules and lead compound.
The Challenge:
Due diligence performed by our chemistry group revealed that the most active compound of the class (our client’s lead compound) had been previously disclosed in a research paper, which discussed a finding of excellent biological activity of the compound in vitro.
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What We Did:
Our team of chemists researched case law and identified a Federal Circuit decision from 2005 in which the Court found a claim to the use of a compound in human treatment to be valid, even in view of a prior art reference that discussed the biological activity of that compound in vitro. We then applied the Court’s reasoning to the patent of interest, as well as the arguments presented in the patent’s file history.
Results:
We rendered a validity opinion for our client pertaining to the claims of the patent covering the lead compound. Our assessment that the claims were valid over the research paper was based on limitations specified in the claims that were not taught by the prior art, and by the case we uncovered from our research. This analysis allowed our client to proceed forward with the investment deal.
Key Takeaways:
When considering an investment in any pharmaceutical technology, it is important to work with an experienced IP legal team to perform an analysis of the patent estate that protects that technology. A proper diligence evaluation helps identify any potential weaknesses or risks associated with the patent rights, as well as strategies for addressing them.
Identifying Hidden Risks and Remedies in Acquisitions
Client's Business Objective:
The client, a Japan-based company, sought to acquire a Philadelphia company in a $350 million deal. The client needed to identify any hidden risks and obtain a means of compensation or indemnity for such risks.
The Challenge:
The client needed to close the deal within a very tight time frame, and there were literally hundreds of contracts and intellectual property issues associated with the acquisition.
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What We Did:
Our due diligence team worked closely with our patent team for a comprehensive and efficient review. We effectively identified the real and practical risks in light of the client’s business objectives and created likely remedies for those risks while eliminating duplication of effort among lawyers.
Results:
The acquisition agreement was concluded on time, with an indemnification basket reserving proceeds of sale to cover post-closing risks for a reasonable period of time. We also ensured that certain post-closing fixes were possible, such as negotiation with third parties for additional license rights and invention around certain blocking patents. The legal team then made those remedies a reality after closing.
Key Takeaways:
It is important to have a legal team that understands business objectives and intellectual property rights. It is also critical to have experienced lawyers who can quickly identify, isolate, and remedy the problems that inevitably arise during the closing process.
International Patent Protections
Client's Business Objective:
The client, a large pharmaceutical company, sought to build out its patent portfolio protecting an antibody drug with a potential billion-dollar global market value.
The Challenge:
We had discovered patent filings by other companies that could present competing claims related to similar drugs already in use.
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What We Did:
We obtained issuance of expanded patent claims for our client’s drug and worked with our existing network of foreign associates to obtain recognition of these patent rights in more than 100 countries, including those that subscribe to critical Patent Cooperation Treaty terms.
Results:
Through use of our existing network of foreign associates, the client completed its buildout of a comprehensive and complex patent estate protecting the antibody drug throughout the world.
Key Takeaways:
Access to an extensive network of highly qualified foreign associates can expedite the process of establishing a comprehensive global patent estate.
Patent Estates and Financing
Client's Business Objective:
The client, a venture capital financing syndicate, wanted to invest in a small biotech discovery company but needed to know that the intellectual property assets of the company were sound and that the company was free to commercialize its technology.
The Challenge:
Due diligence revealed a blocking patent position in the United States and overseas containing a broad scope of patent claims for the contemplated commercial application of the technology.
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What We Did:
We researched and uncovered a prior art publication (published prior to the blocking patent) that would destroy the validity of the patent. We then expanded and amended our client’s global patent estate to secure a superior patent position for the company.
Results:
The blocking patent was licensed under favorable terms, which minimized the investment risk. This, coupled with improvements to the company’s patent estate permitted a multimillion-dollar financing round to proceed without delay.
Key Takeaways:
Emerging companies and their investors can benefit from an early review of patent estates and the securing of freedom to operate opinions that facilitate financing.
Patent Estates and Revenue Streams
Client's Business Objective:
The client, a major Massachusetts medical school, sought to protect its right to future income streams from commercial development of several seminal RNAi discoveries made by its professors.
The Challenge:
RNAi technology, with its potential for beneficial inhibition of gene expression, had rapidly blossomed from the discovery stage to the unfolding of hundreds of potentially patentable commercial uses. The technology could soon be used in the development of anti-viral drugs that will attack many stubborn diseases and cancers.
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What We Did:
We participated with a team of lawyers in a comprehensive assessment of multiple legal strategies for protecting as many RNAi technology opportunities as possible. The team not only provided advice pertinent to the legal actions that would yield optimal return on investment, it also executed the client’s chosen strategies through multiple patent filings and license agreements that matched commercial objectives with patentable claims arising from RNAi discoveries.
Results:
In a very short time, the client succeeded in generating a significant and rapidly expanding revenue stream that is already valued at more than $1 billion.
Key Takeaways:
In order to commercialize an academic discovery quickly and effectively, an institution needs the support of a seasoned legal team that knows how to work collaboratively with groups of scientists, academics, business executives, and other lawyers.
Patent Licenses and Financing
Client's Business Objective:
The client, a group of venture capital investors, sought to invest in a small biotech discovery company that planned to commercialize a potentially profitable patent estate licensed from a prominent university
The Challenge:
Due diligence revealed a parallel patent filing by another university for a similar technology, raising the specter of a potentially expensive patent interference proceeding and creating uncertainty as to which patent filer was first to invent and who owned the patent rights.
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What We Did:
We investigated the facts of inventorship, assessed the scope of potentially competing claims, and recommended another patent application to bolster the claims of our client’s licensor. We then recommended consideration of a second license to mitigate the risk of interference proceedings between the two licensors.
Results:
The company was able to broker an inexpensive and commercially feasible license agreement with the parallel inventor, and the financing was promptly concluded on satisfactory terms.
Key Takeaways:
Proper review and assessment of an intellectual property estate can facilitate achievement of business objectives and development of alternate pathways around any obstacles along the way.
Patents and Company Acquisitions
Client's Business Objective:
The client, a privately held biotech discovery company, sought to be acquired by a major pharmaceutical company.
The Challenge:
Due diligence in preparation for sale revealed that the client’s patent estate did not fully protect its commercial technology as practiced. A key license agreement was too vague as to scope and terms, and a manufacturing agreement contained terms inconsistent with the license agreement.
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What We Did:
We updated the client’s patent claims to make them consistent with its commercial practices, created patent claims applicable to a new use for an old compound, and negotiated amendments to the key license and manufacturing agreements.
Results:
The client successfully sold its business to the large pharmaceutical company within a few weeks after repositioning its patent estate and related agreements.
Key Takeaways:
Periodic review and harmonization of patent portfolios with commercial objectives will enhance the value and marketability of business assets.
Patents and Company Acquisitions
Client's Business Objective:
The client, a small biotech company, wanted to expand its patent estate in order to be an attractive acquisition candidate.
The Challenge:
The client’s window of opportunity for a sale was limited, and there had been a lack of time, budget, and priority for maintenance of the patent estate to keep it current with company’s commercial objectives.
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What We Did:
We conducted an extensive IP audit to identify any necessary and desirable additional protection. The client’s existing patents were strengthened with improved and expanded claims. Acceptance of these claims by the Patent and Trademark Office was facilitated by effective advocacy with the support of a team of our attorneys and key scientists during several in-person interviews with patent examiners in Washington.
Results:
In less than one year, the patent estate was strengthened and the company was acquired at a premium valuation of several hundred million dollars.
Key Takeaways:
A periodic IP audit can maximize the value and marketability of a company and its patents. Hiring counsel with the right experience is essential for companies seeking to strengthen and position their patent estates promptly and effectively for acquisition at optimal valuation.
Pharmaceutical In-licensing
Client's Business Objective:
The client, a midsized pharmaceutical company, wanted an in-license to work with a compound that has potential therapeutic applications for treatment of hepatitis C.
The Challenge:
The licensor was a U.S. subsidiary of a foreign company and derived its patent rights from a parent that was relatively unsophisticated and unused to negotiating licenses. The parent also had an in-license from a foreign university. Some of the underlying research had been funded with government support, necessitating some clearance with the foreign government through the university. Furthermore, the prospective licensor was a small company with a limited asset base to support the licensor’s warranties.
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What We Did:
Our legal team structured a deal so that any damages resulting from challengers blocking development work or raising freedom to operate issues could be paid out of royalties or milestone payments as they became due to the licensor. We also facilitated trust between the parties by persuading the attorneys for the foreign parent and the foreign university that the deal was commercially reasonable and fair in light of other comparable deals.
Results:
Within a few months, our client obtained an in-license for use of the compound, enabling drug development work to start on time. Furthermore, because of our due diligence, there were no material adverse affects resulting from use of the in-license.
Key Takeaways:
When dealing with multiple parties, look for lawyers who have the flexibility, creativity, and credibility to bring those parties together, despite differences in their cultures, their relative sophistication, and their expectations.
