Starting with a search – commercialising your IP in the post-COVID era (Part 1)
Intellectual Property (IP) is commonly seen as one of the most important economic assets of any corporate entity or research organisation. It is a form of property, which, like land can be sold, rented, or mortgaged. Therefore, it has the potential to generate revenue for a business – even indirectly – and like land, its value depends on its quality. The four main types of IP are patents, trademarks, designs, and copyright. This article focuses on patents, and their commercialisation since these are of the most economic value to innovative companies.
In certain areas of technology, like the Electronics Industry, there is a focus on filing many patent applications to stake a claim to the technological area. Often these applications can be for very specific parts of a product, like Apple’s patent for “Patterned bonded glass layers in electronic devices” which covers just the textured glass and/or matte finished glass that was introduced for the back of the iPhone 11 Pro.
For other industries, patents are equally important. The pharmaceutical industry, for instance, depends on patent protection to support its investments into medical research. A new study published by the London School of Economics and Political Science in March 2020 estimated that US biopharmaceutical companies spent an average of about $1.3 billion to bring each of their new drugs to market between 2009 and 2018. As a result, pharmaceutical companies will vigorously protect their patents until they expire. It is largely recognised that pharmaceutical IP rights are essential for the continued innovation of new medicines and, therefore, exist in the interests of patients and society at large. The patent system is designed to promote innovation and, at the same time, offer a mechanism ensuring that the fruits of that innovation are accessible to society. In the contexts of public health, the challenge for policy makers is to find an optimal balance between the rights of patent owners, who provide technological innovations to improve health conditions, and the needs of the public.
The costs to apply for patents, pay renewal fees and maintain a company’s patent portfolio get expensive fast, so it is important for patent owners to get a return on this investment. A strong, valid, and enforceable patent is of no value if no effort is employed in commercialising the product or if it is an unwanted product. A successful return on IP depends on a business’ needs. For some, a good return would be a new stream of revenue coming from utilising or exchanging IP for money. For others, a good return can also be a new partnership with a reputable organisation or company which could lead to a bigger scope for future research and collaboration.
There are several options for commercialising patents – patent owners can commercialise independently, through assignments or business partnerships. A good starting point for any commercialisation strategy is using a reliable patent database, like PatBase, to get a better understanding of the technology landscape, identify other companies working in the same field and estimate the value of your IP.
How has COVID-19 affected IP commercialisation?
In reaction to the pandemic, many companies began working in the medical equipment technology area for the first time, to “do their bit”. For example, car manufacturers who dedicated their facilities to manufacturing ventilators and similar devices, and others who developed novel technologies such as COVID-19 diagnostics tests or 3D printed PPE. Many of the products manufactured in substantial quantities to meet the demand were already protected by existing IP which was infringed by companies who do not traditionally operate in the sector.
Labrador Diagnostics faced a media storm for launching a patent lawsuit against US start-up BioFire, which was developing diagnostic tests to detect COVID-19. After a few days, Labrador Diagnostics backtracked and announced it would offer royalty-free licences for its patent-protected technology. Similarly, Gilead Sciences, the Biopharmaceuticals company, made a U-turn on its attempt to secure a financially advantageous “orphan drug” status for remdesivir, another potential treatment for COVID-19.
To avoid similar situations occurring, academic institutions, organisations and governments set up innovative, collaborative solutions. The Costa Rican government and World Health Organization (WHO) launched the COVID-19 Technology Access Pool (C-TAP) to facilitate faster equitable and affordable access to COVID-19 health products for people in all countries. The group is currently endorsed by 45 WHO member states and is similar to the Medicines Patent Pool, a UN-backed health organisation to help provide treatments for HIV/Aids, Hepatitis C and Tuberculosis in lower-income countries. While University College London’s commercialisation business, UCLB, set up a rapid licensing website. Initially this was to help distribute the blueprints for the UCL-Ventura breathing aid developed by UCL and carmaker Mercedes, but it is now open to all inventors of COVID-19 treatments.
For pharmaceutical companies that rely on the monopoly that a patent provides, this must be a bitter pill to swallow. In normal circumstances, these IP owners would either demand the infringer take a royalty-based licence, seek an injunction, or sue for infringement and damages. However, on an ethical and reputational basis, none of these options were feasible in the current crisis.
Collaborating with relevant IP owners at this stage through partnerships or by licensing existing patents could be a way to avoid potential conflict in the post-COVID era and identify strategic and commercial opportunities that are beneficial for all parties. For many companies, particularly those who chose to stay in the market after the pandemic, entering into a formal collaboration agreement with a current IP owner is crucial to provide both a solution to the current challenge and exciting opportunities in the sector for the future. This collective approach to research and development would fit into the increasingly popular open innovation model. Find out more in part 2, published next week!