Patent protection: five tips for biotech start-ups

Early-stage biotech companies are often founded based on the exciting results of pre-clinical research relating to a new product or treatment. However, due to the need for refinement/development and the extensive work required to demonstrate safety and efficacy in order to obtain regulatory approval, early-stage biotech companies are often a long way away from bringing a new drug or therapy to market. Add to this the large amount of capital required to advance a new drug or therapy from the pre-clinical stage to treating patients in the clinic, then biotech start-ups need to think carefully about how to attract investment to ensure their survival.

In the absence of a tangible product, would-be investors consider the potential future commercial revenue if the product or treatment makes it to market. The decision of whether or not to invest, and the scale of any investment, is based on how well the technologies that form the core of a company have been protected. This is where patents come in. 

Developing a patent strategy for your business will provide a strong foundation for future growth, revenue generation and investment. Read our five tips for protecting your technology:

1. Look at your patent portfolio through the eyes of a potential investor

A well thought-out patent strategy can be key to the success of a biotech start-up. The strength of the IP position can be the determining factor for a potential investor as to whether or not to invest, and the scale of investment. Potential investors ask ‘what can this company do that no other company can do without their permission?’ Any serious investor will usually undertake thorough due diligence, sifting through the entire patent portfolio of the company, looking not only at the patents they have which are granted, but also at the pending patent applications, to understand what the company can and will be seeking protection for. As the actual and potential scope of commercial exclusivity is the basis for the value proposition for the company, you can expect investors to be looking at your IP very carefully!

2. It’s not just about your own patents…

Biotech start-ups also need to be aware of patents owned by other parties.  Having a granted patent does not actually give the owner the right to do anything; rather, patents are rights that can be used to stop other parties from doing something. Companies therefore need to be thinking about patents relevant to their technology that other parties might own, because they could be used to prevent a new biotech company from bringing their product/treatment to market, to sue them for damages, or otherwise cause problems with commercialisation.

Therefore, it is important to undertake, at the appropriate time, searches to identify patents and patent applications owned by other parties that could be problematic. These so-called freedom to operate (FTO) projects are often carried out by potential investors as part of the due diligence exercise, and the results can significantly influence the decision to invest.  Increasingly potential investors are asking early-stage biotech companies to demonstrate that they have given some thought to their FTO position.

Once potential problems have been identified, strategies can be developed to address them, or to minimise the risk they present. Depending on the facts it might be possible to redesign the treatment or product, or to work with the owner of the patent/application to acquire a licence to work their patented technology.  In other cases it might be preferable to take action to try to have the patent revoked or prevent the patent from being granted in the first place, or to influence the scope of the claims that will be granted.

3. Money-makers

Patents can also be useful for generating revenue in the short-term. Patents and patent applications can be sold, or licensed to other parties that wish to use the invention. Licensing agreements can also form the basis of collaborations with other companies or research institutions, which can in turn lead to improvements to the technology. Having patent protection, or the opportunity to obtain patent protection, covering the core technology of the company, and being able to present a plan for generating future IP, can be critical to the success of a biotech start-up.

4. Think ‘patent’ before you publish

In order to obtain a granted patent for an invention it must be new and non-obvious over everything in the public domain. An all too common mistake we see is researchers presenting their research publicly before having filed an application for a patent, which can make it impossible to obtain protection for an invention. This can in turn have a significant negative impact the value of your company. Don’t disclose any details of your invention in a non-confidential setting before you have filed an application for a patent.

5. Work with IP professionals to develop a plan

Work with IP professionals to develop a plan for protecting the technology that forms the core of the company, and to consider other parties’ IP at an early stage. It pays to be proactive and to plan ahead. This will help to maximise the value of your company, looks impressive to investors, and will minimise the chances of surprises down the line. Drafting and filing a patent application can be a quick process, so it doesn’t have to delay publication, or impede your researchers.