What Does UK Biotech Need?

The UK is a different place from the US in terms of its business culture and how easy it is to obtain money to fund companies. The US is much more dynamic and clearly much more successful in biotech. That can be seen by the existence of large independent biotech companies in the US and the constant willingness to look for and adopt appropriate models to solve the problems encountered in the different parts of the biotech sector.

The list below is based on personal observations of how the UK biotech sector could be improved.

1.    More ambition in attracting money into biotech, including consideration of non-traditional sources of funding. That means thinking about how to present the technology to investors who are not able to easily understand it.  Investors know that investing in biotech is very risky.  However VC’s do operate in this area and they are well placed to develop ways of quantifying and mitigating risk.

2.    Being up to speed on trends and fashions that will affect the sector, and trying to position oneself to take advantage. For example knowing how big pharma is investing in biotech and becoming capable of working with them.

3.    Leaving IP to the experts. Patents are very important in giving value to a company. Patent attorney advice is expensive, but needs to be sought at an early stage.  It is good to place oneself in the position of knowing what one needs to know about IP and having some awareness of what future filings look like.

4.    Participating passionately in the biotech and finance community.  Being open to all the different activities that will assist one’s commercial goals, including government lobbying,and forming alliances.

5.    Knowing about the different research models to adopt, and what will and will not work.  Do not assume any part of the organisation has considered all options before investigating that fact.

6.    The UK seems to need an effective way of publicising biotech inventions which are available to commercialise.  Perhaps a central database of some sort.

7.    Identifying and taking advantage of all the available information.  Most things have been done before, and if so someone, usually in the US, will have written about them on the internet.  US experiences are not necessarily directly relevant, but they will provide a starting point for what needs to be thought about.

8.    Develop a very positive culture about solving the many problems that will be encountered.

You may also wish to see related articles Top 10 Tips from ICC's report on IP SME's and Top 10 Points from Banking on IP

Top 10 Biotech Patent Claims That Can Be Difficult To Get At The European Patent Office (EPO)

This list is very much based on my personal experience.  The purpose is to provide examples of the sorts of problems that can occur on biotech cases.  This allows development of pre-empting strategies, such as making sure the application contains the appropriate fallback positions.

1. Claiming Gene and Protein Sequences Which Are Homologues Of Prior Art Sequences

Examiners are increasingly strict in allowing claims to sequences which are homologues of prior art sequences, probably due to the perception that is technically easy to obtain such sequences. Thought should be given as to why the skilled person might have thought the claimed sequence did not exist, what technical difficulties were overcome during cloning and what advantages the new sequence gives.

2. Claims That Cover Homologues Of New Gene And Protein Sequences

It has generally been the case that Examiners would allow applicants to claim sequences which had homology of 65-70% to a new gene/protein sequence as long as a functional limitation was also recited, such as ‘retaining kinase activity’.  However increasingly Examiners are likely to ask for further structural descriptions of the functional sequences.  Thought should therefore be given to fallbacks which specify which sequence positions need to be the same as the cloned sequence to retain activity.  In addition experimental work describing the properties of homologues should be included in the application if it is available.

3. Claims To Antibodies

Examiners seem to be getting stricter on all aspects of antibody patenting, both in terms of defining the antibody and showing that it has inventive step. If possible the specific epitope sequence bound by the antibody should be given and fallbacks should be introduced which define what the antibody does not bind.  In addition it would be very helpful to have data showing surprising properties of the antibody, such as high levels of affinity or specificity.  If the prior art is close then bear in mind that the onus is on the applicant to show novelty and appropriate fallbacks will need to be present to define the antibody so that it is clearly novel.

4. Claims Referring To Conditions That Are Defined Functionally

Sometimes the invention is relevant to more than one disease condition in which case a functional definition is appropriate for defining the condition in the claims (e.g. a condition in which TNF-α levels are elevated).  In this situation Examiners can be very strict on making sure that the specific conditions which are covered can be identified by the skilled person.  In my experience limitation to specific defined conditions is often required and it is rare for Examiners to allow claims that only define a condition functionally.

5. Claims To Mutant Proteins With Specific Activities

If the invention concerns finding a mutant enzyme with a new or improved activity, then it can be difficult to claim all mutants that would have that activity.  One must consider how to define equivalent mutations at the same or other positions, as well as how best to cover homologous proteins with the same mutation.  Clearly having data showing activity in a range of mutants would be helpful.

6. Claims To Diagnosis By Detecting All Relevant Polymorphisms In A Gene

Where the invention concerns the finding that polymorphisms in a specific gene can be used to diagnose susceptibility to a disease condition then it can be difficult to claim all possible polymorphisms that could form the basis of the diagnostic test.  Claims to detection of specific listed polymorphisms for which data is available should be possible, but claims to polymorphisms which are in linkage disequilibrium to them might not possible, though such linked polymorphisms could be identified by routine means.

7. Claims To Use Of A Crystal Structure To Design A Molecule

Where the invention concerns the deducing of a crystal structure then it should be possible to obtain claims covering use of the specific structure to design molecules bind or modulate the molecule that has been crystallised.  However it can be difficult to obtain claims covering use of any crystal structure of the same molecule that can be obtained in the same way (i.e. Use of a crystal structure obtainable by [crystallisation, X-ray diffraction and computation steps] to design a modulator of protein X).  Clearly claims which are limited to use of a specific set of coordinates would be very narrow.

8. Claims To A Composition Defined Functionally

Where the invention relates to a large number of compositions which cannot easily be defined by specifying the amounts of each component then a functional definition can be appropriate (e.g. A composition comprising component A and component B in synergistic amounts).  Whether or not an Examiner will accept a functional definition will be decided on a case-by-case basis, and therefore the assumption should not be made that a functional definition will not be accepted.

9. Claims To A Product Which Solves More Than One Problem

Under European practice the problem solution approach is used to assess inventive step. Normally all of the claims will be analysed with reference to the same problem being solved.  However given that products, such as molecules, will have more than one property they can be solutions to different problems, some of which are obvious and some which are not.  As a simplistic example, if the invention concerns the discovery that adding a (novel) protein with a specific sequence to a composition causes stabilisation of the composition, and this property of the protein is not obvious, it might still not be possible to obtain a claim to the protein per se if it has homology to known proteins.  Finding homologues to known proteins can be deemed to be obvious by Examiners (solving the problem of providing another protein with similar properties, say), and so claims to them can be difficult to obtain even where they turn out to have surprising properties which provide an inventive solution to a problem.

10. Claims To All Functionally Equivalent Epitope Sequences

Where the invention concerns identification of a T cell epitope sequence then it should normally be possible to cover homologues of the epitope.  However it can be difficult to define a functional limitation for the homologues which is acceptable to the Examiner.  A reference to a complex test, such as ‘capable of binding the same T cell receptor’ might not be acceptable.  Thus thought needs to be given to providing several different functional limitations.

Top 10 Non-Patent Contributions Made by Patents

This is written from the perspective of a UK-based European Patent attorney.  Apologies for my ignorance of contributions in other territories.

1.       Ethics in Biotech. Patents for biotech inventions have stimulated debate on the ethics of biotechnology. Issues such as the suffering of animal models and the embryo origins of stem cells have had to be confronted.  The European Patent Office has handled this well and in a business-like way, but the European Parliament has had a more turbulent time.

2.       Purposive Construction of Laws. The UK House of Lords decision in Catnic introduced the concept of purposive construction of patent claims.  This helped to make it acceptable to interpret UK legislation with a view to the original purpose behind it.

3.       The EPO as a Model for European Cooperation.  The European Patent Convention and European Patent Office were early models for how European countries could work together to create trans-national legislation and institutions. 

4.       The Theory of the Commons.  As intellectual property, patents represent something taken from the ‘commons’, and so the regulation of this monopoly right stimulates debate as to which monopolies are fair (see http://en.wikipedia.org/wiki/Tragedy_of_the_anticommons).

5.       The Personality of the Patent Attorney.  Our profession is (generally) conservative, clean-living, attentive to the details, cautious and responsible.

6.       Translation Software.  Patents provide an incentive to reduce the costs for translating technical/scientific documents by developing software capable of doing this.

7.       How do we have ideas? The concept of inventorship has raised questions of how ideas and creativity are generated and how many individuals are involved.  Is the concept of a ‘sole inventor’ a myth?

8.       What is art? Patents and other forms of IP constantly raise questions about what can be protected and what cannot.  There is, we believe, some level of philosophical enrichment of society when the issues of whether recipes, software or the laws of nature are inventions or artistic works are debated.

9.       Economic Theory. Economics has been enriched by the analysis of how patents do and don’t contribute to the well-being and progress of society.

10.   ‘The Poor Man’s Tale of a Patent’.  Charles Dickens’ story on the frustrations of using the patent system.

10 Top Tips for Patent Drafting

1.       How Important And Valuable Is The Case?

Knowing how important a case is allows you to decide how much resource you want to commit when drafting it.  If this is going to be the main case protecting the company’s main product then careful thought will need to be given to it being in the best shape possible to undergo examination, opposition and even litigation.  That might mean providing more disclosure, for example in the form of fallback positions, and perhaps reviewing the quality of the data that is used.  However it should also be borne in mind that more disclosure will increase costs, particularly translation costs at national phasing.

2.       What Is The Purpose Of The Case?

A patent case has a commercial purpose which might be distinct from protecting the immediate implications of the experimental finding.  The claims will need to reflect that.  For example if the experimental work was done on disease X, but only related condition Y is of importance, then treatment of disease X might not even be mentioned in the claims.  Such considerations will also determine how the rest of the application is written and how the contribution is described.

3.       The Prior Art Effect  On Your Subsequent Cases

Any application you file will be prior art against your subsequent cases.  It is therefore important to consider during the drafting process what future patent applications are likely to be filed and whether are perceived to be more important.  Consideration should then be given to how this might affect drafting of the present case.  For example you may decide to avoid mentioning certain embodiments, e.g. combinations with other drugs, to minimise the prior art effect.

4.       Consider The Prior Art Effect On Competitor Cases

If you are in the situation where competitors are filing on similar subject matter, then it might be worthwhile to think about how to your application could be used to make it more difficult for them to gain patent protection in the area with subsequently filed cases.  One way of doing this is to draft the application so that it will make it more difficult for competitors to gain claims directed to a selection invention, for example by providing appropriate point disclosures within specified ranges. In the case of inventions relating to therapy it might be helpful to introduce disclosure relating to different patient groups, ranges of dosages and to describe all the relevant disease types.

5.       The Invention Is Only Defined In Examination

The problem being solved can change substantially depending on the prior art that is being cited.  The application needs to be drafted in a way that takes account of this.  All contributions and subconcepts need to be listed and there needs to be disclosure which gives flexibility to the way the invention is defined.

6.       Write The Summary Of The Invention Carefully

The summary of the invention needs to give a succinct description of what has been found and what the claimed invention essentially is.  This should be done in a way that does not limit the arguments that can be used in examination.  Often it is helpful to use very general terms, such as ‘The invention concerns treatment of condition A.  The inventors have investigated the binding between X and Y, which has allowed regulators of the binding to be identified which can be used to treat A’. This phrasing allows flexibility in the arguments that can be used to defend the claims.  Inventive step could be argued on the choice of focusing on X and Y, the finding of unexpected binding properties, the identification of regulators able to affect binding or the realisation that such regulators can be used to treat condition A.

7.       Consider All Layers Of The Invention

Biotech inventions can sometimes be seen at different levels.  Where this is possible consideration should be given to how best to view and present the invention.  For example if a polymorphism in the insulin gene is found to affect calcium levels, then the invention can be seen as:

(i)                  finding a link between the polymorphism and calcium levels

(ii)                finding a link between insulin and calcium levels

(iii)               finding a link between factors that affect insulin expression or activity and activities affected by calcium ions

Clearly the prior art and considerations of support/sufficiency will affect how best to view and present the invention and thus how broadly to draft the claims.

8.       Consider All Product Claims And Novelty Over Nature

Where a product is found in nature there should be basis for claiming it in isolated form, preferably with defined levels of purity.  It might also be worthwhile to consider claiming it in the different forms it occurs in the invention, for example as part of a viral capsid or in combination with substance X.

9.       Are There Claimable Data/Computer Aspects

In cases where data is the product of a method of the invention consideration should be given to whether analysis of the data on a computer would be patentable.  For example if presence of gene polymorphisms is being used as the basis of diagnosis then it may be possible to claim comparing the results of the diagnostic test with a database of polymorphisms to determine the disease condition.  Further claims to choosing or manufacturing the appropriate medication based on the data might also be possible.

10.   Think About In Vivo Generation Of Substances. 

Consider whether you need to cover administration of a pro-drug or other substance that only gives rise to the active compound in vivo. 

 

Top 10 Debateable Biotech and Patent Topics In The UK

1. How Do We Better Commercialise UK University Research?
UK universities produce high quality biotech research.  However so little of it seems to get successfully commercialised.  One reason for this might be that nature of the research cannot form the basis of high quality broad patents.  How do we make UK research more ground-breaking so that it results in more patenting opportunities?

2. What Is Wrong With The Structure Of UK Biotech?
Perhaps lots of small one product biotechs with the founder scientist as CEO need to be replaced with much larger companies having 10-plus projects that are reviewed, developed and axed (where necessary) by teams which are dispassionate and which include business expertise.

3. Why Can’t Big Pharma Do Innovative Research?
Small biotechs seem capable of innovation which big pharma cannot do. Being risk-averse and having committees rather than individuals make decisions could be part of the answer. There is clearly no easy solution.

4. Can IP Exchanges Work For Biotech?
A lot of revenue is being lost due to failure to sell or licence patented technology.  There does not seem to be an easy way for buyers and sellers to find each other in biotech. Perhaps IP exchanges will evolve to fill this gap.

5. Is The Patenting Process Too Uncertain?
Whilst biotech financing and research seem perilously risky, does the patenting process also have to be so uncertain?  ‘What claim scope will be granted?’ seems to be a difficult question to answer most of the time.  Are applicants or patent offices to blame?

6. How Does One Make It Easier For Investors To Do Due Diligence In The Biotech Sector?
Even big pharma finds it difficult to know which biotech companies to buy, and so there seems little hope for others to know where to invest in biotech.  Unfortunately that probably means biotech is losing out on a lot of potential sources of funding, such as the Middle East.

7. Should One Be Able To Negotiate Patent Term With Examiners?
Should patent term be negotiable depending on the value of the contribution made? This would make the patent system more flexible and perhaps fairer.  However given the increase in complexity and uncertainty for third parties it will probably never happen.

8. Does Academic Research Suffer When It Is Forced To Commercialise?
As the pressure on scientists to think more commercially intensifies, is academic research being harmed?  Will a culture of secrecy and competitiveness develop?  Will certain areas of research be neglected?

9. Do We Need A System To Protect Research Which Is Not Patentable?
A lot of biotech research is not novel and inventive, for example confirming in vitro predictions in clinical settings. Is there a way of protecting all research which results in something useful, irrespective of whether the outcomes are patentable?

10. Is Patent Quality In Decline? Does It Matter?
There is a feeling that patent quality is in decline.  Too many applications are being filed based on poor quality research where the contribution over the prior art is not clear.  For the many years these remain unexamined they cause third parties uncertainty.  However perhaps this is a valid strategy for small biotechs which are short of resources.

10 Observations on Clients by a European Biotech Patent Attorney

This is a set of observations about clients that may be helpful in providing the most helpful assistance to them.

1.       Clients who always have an optimistic and ambitious approach to claim breadth.  There is nothing wrong in this as long as they recognise the possibility of having to narrow claims at some stage.  An attorney must be careful to ensure that the breadth of the claims does not become detrimental to the case.  It is possible to have a situation where the logic that supported the broader claims undermines the patentability of narrower claims.

2.       Clients who have the expectation that the granted claims will be of similar scope to the claims which are originally drafted.  The client must understand that it is difficult to predict the claim scope that will be allowed and the attorney must be able to gauge the claim scope that the client will be comfortable with.  Attorneys should recognise though that in some business situations a changing claim scope is an unhelpful distraction, and there are not going to be any advantages to being too ambitious.

3.       Clients who are too pessimistic and have a tendency to claim too narrowly.  Whilst respecting their wishes, all options should be pointed out to them.  Sometimes this happens with clients (and attorneys) when they have bad experiences in the past with difficult cases.  There can also be a perception that narrower claims are less likely to be opposed or litigated, which may be true in certain areas.  In addition clients from a chemical or mechanical background sometimes find it difficult to judge a fair claim scope in biotech cases.

4.       Clients who get involved in all aspects of patent strategy.  Such clients can be more demanding, but their full participation often provides a very fruitful approach.  In the process the client becomes more educated about the patent system leading to a better quality of decision-making.

5.       Clients who keep a distance.  Some clients don’t get involved as much as they should.  However they still need to be told about all options at every stage and they need to be aware of all assumptions that an attorney makes about their patent needs.

6.       Clients with no money.  For some clients keeping costs to a minimum is very important.  Clearly the attorney has to adopt appropriate strategies, such as avoiding complex examination and the filing of divisionals.  Minimising the number of territories in which patent protection is pursued is clearly going to have to be considered.

7.       Clients who are too scientific.  Scientists can sometimes be too critical when reviewing patent applications, thinking of them in the same way as peer-reviewed scientific journals.  However patent applications are looked at in a different way by Examiners.  There will be a less critical approach to the science, and more emphasis on the contribution made.

8.       Clients who have too many ideas.  It can be very interesting to work with a creative client but they must always be made aware of the implications, costs and future costs of every decision.  They need to be aware of the type of supporting data that is needed for the claims they would like to pursue.  In addition, complex strategies should be avoided where possible.  These can sometimes confuse the business people and might not be implemented in the correct manner a few years down the line when the details have been forgotten and the people working on the case might have changed.

9.       Clients who are cynical about the patent system.  Some clients can be very negative, especially when cases become difficult. However a positive attitude is always best together with an appreciation of the Examiner’s position.  In biotech one must accustom oneself to remaining enthusiastic when cases become difficult, remembering there are always many options that can be pursued.

10.   The real client is not the person instructing you, but the company they work for.  Whilst it is important to impress and carry out the instructions of the specific person instructing you, one must always keep an eye on the best interests of the client company.  That might mean preserving other options as best as possible in case in case the circumstances of the company do change.

You may also wish to see related articles Top 10 Problematic Things for Patent Attorneys to Advise On and Top 10 Pieces of Advice to Applicants.
 

What Do You Need to Know About Biotech?

This article aims to provide a brief introduction to the commercial aspects of biotech in the field of healthcare for those working within it or for investors.  In the course of providing patent services in the biotech and pharma sectors we have interacted with tech transfer organisations, research companies and investors, and participated in discussions concerning strategy. The contents of the article are based on that experience, and we hope will be of assistance in formulating a commercial strategy, as well as in formulating patent strategy.  Our experience mostly comes from working with European organisations and so the specific information given in the article reflects the present picture in Europe, and to some extent the US.

The Characteristics of the Biotech Sector

Biotech has many sectors each with their own commercial characteristics.  This article only relates to the healthcare aspects of biotech, and therefore does not, for example, discuss agricultural or industrial biotech.  The healthcare sector can be broadly divided into therapy and diagnostics, both of which overlap with medical devices.  Commercial strategy will differ in these two sectors and investors will need to be aware of the different risk profiles and the different time frames for product development and regulatory approval.  The most lucrative area of biotech is drug development.  However this is associated with very high risk.  Figures of 85% failure rates for research companies in this area are quoted, and it is clear that even seasoned industry experts are unable to predict which companies will succeed.  Further it can take 10 to 15 years to develop a drug which is a timeframe that is unacceptable for many investors.

In the eyes of many people biotech is a sector which has failed to deliver on its promises, with the development of new products being much more complicated than envisaged.   However the world’s top-selling drug, humira, is now a biologic and there are still many unmet clinical needs waiting for biotech solutions. 

Key Organisations

The key players in the biotech ecosystem are academic researchers, biotech research companies and large pharmaceutical companies (big pharma), with venture capitalists being an important source of funding for early stage biotech companies.  Essentially many biotech companies have the strategy of getting product development to the point where big pharma will either acquire them or at least fund them.  Therefore the expectations and behaviour of big pharma is a key consideration when formulating strategy in the sector.

Trends

It is important to know what the trends are in biotech and the present thinking of the different players.  Big pharma is presently looking to externalise its research and it sees biotech companies as a source of innovative research that it can tap into.  However big pharma is now much more cautious and will want to minimise risk in the way they interact with biotech companies.  That means they are more likely to be sceptical, and if they are interested they will proceed by collaborating rather than acquiring.  Biotech companies cannot now expect easy or quick exits, and will need to ensure that they can ‘go long’ if needed.

Venture capital funding is presently also difficult to get, and in the UK that is particularly the case.  This means that at the moment the environment is pretty challenging for early stage biotech companies.  However there seems to be a new optimism emerging in the US biotech sector which could also spread to Europe. 

Different Models of Investing

It must be appreciated that there are many ways of investing in biotech. At the moment experiments with crowdfunding seem to be having some success, but this is probably not an appropriate way of investing in something as complex and risky as biotech.  Venture capital investment is usually at an early stage, often investing in small biotech companies.  However it can also be at pre-startup, where an academic may be funded to carry out initial experiments and file patent application.

The Sums and the Hard Reality

Whilst investing in the biotech sector is risky and there are many unknowns, investors should still be aware of the available statistics.  In the US where the company is successful one can expect an investment of $20-30 million to give a return of around $140-150 million.  Unfortunately the returns in Europe seem to be lower.  What seems clear is that investing more than $20-30 million in the company will often not give a higher return. It is also clear from recent performance in the sector that few companies will give astronomical returns, and it is close to impossible to predict which ones those might be.

Past Examples

Whilst the biotech sector is littered with examples of companies which failed, there have also been success stories.  The small UK biotech company Circassia has been able to raise tens of millions of pounds in several funding rounds in recent years.  Thus investors are prepared to put large amounts of money into small European biotech companies.

Patents

Patents are of course a key aspect of commercialising biotech research, and often represent a substantial part of the value of a biotech company.  Companies need to ensure that their patent strategy is in alignment with their commercial strategy.  Thus all the relevant parts of the company need to contribute to the decision-making on the patent portfolio, and not just the patent attorneys.