Beyond Patents: Effective Intellectual Property Strategy in Biotechnology

Article excerpt

ABSTRACT

Dispelling the linear view of intellectual property protection in biotechnology, intellectual property (IP) and patents are almost synonymous in the biotechnology industry. In this innovation-intensive industry, it is unsurprising that patents are the foremost means of protection, since they provide (at least) 20 years exclusivity. However, a recent seven-year international study challenged the preconception that patenting leads to heightened innovation (International Expert Group on Biotechnology 2008). The following analysis uses case studies to demonstrate that leading companies take a holistic approach to IP management.

Keywords: intellectual property; IP strategy; value extraction; patents; open innovation; Athlomics

MODELLING EFFECTIVE IP STRATEGY

Commercialisation of scientifi c innovations requires careful IP management. Each company, enterprise and innovation is unique; from early-stage commercial ideas arising from academic research to blockbuster drug development within the realms of the pharmaceutical giants. Obviously, the degree and form of IP management will vary enormously between these settings and an effective IP strategy must be shaped to serve the purpose, positioning and magnitude of an enterprise.

Despite these differences, analysis of successful IP strategies across the biotechnology industry reveals a common framework for managing IP. In particular, three dimensions of IP strategy must be carefully considered:

(i) Protection optimisation - taking a broad view of what constitutes 'protection' to harness legal rights and protective activities to procure IP, defend ownership and deter competing technology;

(ii) Maximal value extraction - involves thorough examination of an IP portfolio for potential licensing, litigation and novel utilisation opportunities; and

(iii) Alignment with the commercial strategy - the IP must match the objectives, resources and competencies of the enterprise within the context of the competitive landscape.

The model illustrated in Figure 1 attempts to redress the industry tunnel vision, particularly with regard to patenting and encourages a holistic approach that can facilitate effective IP management.

OPTIMAL PROTECTION

Since the introduction of the Bayh-Dole Act in 1980 in the United States, allowing universities to patent publicly-funded research, science has extensively utilised patent protection (Howard 2004). Patenting is often an indispensable part of protecting biotechnology innovations, and can be effective in deterring competitors; for example, DNA microarray specialist Affymetrix holds over 200 patents on its GeneChip platform (Affymetrix Inc. 2009).

Whilst sheer volume patenting can be effective, only large companies possess the resources to fund this approach. Even then, it is not a strategy uniformly employed by large industry players. Amgen, for instance, sustains its control over the anaemic drug market through its Epogen portfolio consisting of fi ve patents and a patent extension strategy (Li & Xiang 2007). Similarly, Genentech recently won its bid for a 29-year stranglehold over monoclonal antibody manufacture, based on just two patents (Waltz 2009). Strategic IP management is equally important for smaller companies. Australian start up, ImpediMed acquired cornerstone bioimpedance spectroscopy IP to complement the company's existing patent families and provide freedom to operate within the lymphedema monitoring space (Matthie 2008). Furthermore, ImpediMed's claim on this IP obstructs the use of the technology by competitors in other applications. This type of blocking patent strategy is increasingly common and creates signifi cant barriers to entry for a range of potential competitors (Zhang 2010). Such examples highlight the emerging focus on a targeted approach to IP management which aims to secure the right amount of intellectual property required for a given innovation (International Expert Group on Biotechnology 2008). …