Intellectual property (IP) is a fundamental aspect of a well-designed business plan, particularly in life sciences where it may be your principle asset. Having the right patent strategy is vital to the success of your business.
Think of patents as chess pieces. Each piece has its own value. But no matter how many pieces you have, they will not be effective unless you have a strategy for utilising them, and for sacrificing them if necessary, to help you to win. And just like in chess, to win you need to constantly assess and adjust your patent strategy in view of what you, and others around you, are doing.
- Make patents an integral part of your company’s commercial strategy. It is important to think about the relationship between your patents (and other IP) and your business plan. It is easy to think of patents in isolation – a box-ticking exercise, perhaps to keep Directors or investors happy. However, doing so greatly reduces the likelihood of generating revenue from your IP and potentially exposes your company to unnecessary risk, for example by alerting companies to what you are doing too early with weak patents that invalidate potentially stronger later filed patents.
- Implement a clear process for innovation capture. Before you can patent anything, you need to know what innovation is ongoing in your company. To do this requires an effective innovation management and an IP capture process designed to capitalise on your considerable and continuous R&D investment. Identify, record and assess the innovation that is ongoing within your company. Make someone responsible for the process. What results are being generated? Are they relevant to your or competitors’ products? By whom and where were the results generated? What type of IP may be appropriate, or not? Don’t file a patent application for the sake of it, or too early. Keep management and your IP advisor in the loop and ensure that any new IP serves to support your business strategy.
- Keep IP front of mind in all external projects and negotiations. When collaborating with others ownership of the resulting IP will be an important consideration. If you are outsourcing research, such as to a contract research organisation, you need to ensure that agreements include the necessary clauses to pass the IP back to your company. If you are collaborating and co-inventing with other organisations, it is absolutely essential to ensure IP ownership is fairly dealt with in the agreements to avoid getting stung.
- Keep an eye on your competitor’s activity and IP. What IP rights do your competitors have, what do they cover, and when do they expire? And how are you mitigating the risks associated with those rights? Patents are negative rights. Just because your innovation is patentable, does not give you the right to work it yourself. For that your company needs freedom-to-operate. Ignorance of a right does not give you a defence against infringement so you need to tackle this head on. Therefore, competitor analysis, and in particular implementing a process for monitoring competitor IP, is an important consideration.
- Include IP costs in your company budget. As your patent portfolio grows, so too will its cost. Failing to set an IP budget means that you may end up spending more than you need. Sticking to a realistic budget will ensure you get cost-efficient patent coverage for your commercial products. Don’t be afraid to question costs and set budgets with your advisors. It is important to ensure that the funds are available for the important activities. Also, consider if any insurance products, like IP litigation insurance, may be appropriate.
- Carry out regular IP audits and mini audits. You need to know what IP you have, what it covers, where and at what stage it is at, what it is costing and when it will expire. This will also help you outline a strategy for managing and monetising your patent assets, for example through licensing or selling patents. Ultimately, this will help ensure you are getting value for money from your portfolio. No matter how you intend to generate revenue from your IP, you will need to start by knowing what you have.
- Adapt your IP portfolio and strategy to keep it in line with your corporate strategy. There is little point in continuing to spend significant amounts of money on maintaining and obtaining patent rights that do not cover your active projects or those of your competitors. Don’t be afraid to cull or sell on IP rights that are not working for you. This may free up significant resources for you to concentrate on what matters.
At the end of the day, only a business plan that leverages IP to secure markets and protect investment will attract investors and open the door to business collaborations. After all, if your company is to play their game, they need to know you are not going to be knocked out in the first round.
Dr Ross Cummings
Director, UK and European Patent Attorney, Gill Jennings & Every LLP
Dr Ian Jones
Senior Associate, UK and European Patent Attorney, Gill Jennings & Every LLP
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