Another year of the 43North start-up competition in Buffalo, NY has begun, and we thought it would be worth looking at 10 things that technology companies should remember about their IP when pitching to investors.
At BioPharma Law Group, we help our clients prepare and finetune their presentations to investors, and we also act as judges in start-up competitions. Based on these experiences, we created a list of things that will make your pitch more successful. Below are 10 things related to IP to keep in mind when pitching your technology.
First, know your patents. Make sure you are familiar with your patent portfolio and know exactly what patent applications are filed and where they stand in prosecution. This includes knowing if you own the patents outright or if you are licensing them. If you are licensing the IP from somewhere else, whether it be a university or other company, be prepared to discuss whether your license is exclusive or not. If the technology involves core IP, and your license is not exclusive, you may have to explain why this is not a competitive disadvantage to your company.
Second, know the scope of your patents. Are your patents directed to platform technology or do they only give you rights for a specific indication? Be prepared to talk about your claims and how they carve out your company’s footprint in the market.
Third, make sure your patents cover the product that you are trying to pitch. This may seem obvious but I have seen many instances where the pitched technology was not covered by the patent claims. If the claims do not cover the product, be prepared to discuss why and what you can do to improve them. Strategies to address this include filing continuation applications or follow on applications to yield the desired claim scope.
Fourth, know the proper IP terminology. Do not say that you have a patent when in fact you only have a patent application on file. Patent terminology can be difficult for the lay person. I may sometimes not appreciate how complex patent terminology is since I deal with it on a daily basis, but I cannot emphasize enough the importance of adequately and properly discussing your IP. Investors know IP terminology and using improper terminology will not only confuse the investors, but it could also reduce the value of your technology in their eyes. Saying that you have an international patent in many countries can mean a variety of things, or it can mean nothing at all. Work with your company’s IP counsel to make sure you understand what you need to focus on.
Fifth, know your competitor IP. This can be discovered in a landscape analysis. Unless you discovered a groundbreaking technology, chances are you have competitors. Be prepared to discuss your competitors, their IP, and what you are doing to stay ahead of them. This may include licensing certain competitor IP or designing around it. Landscape analyses do not have to be complicated or expensive but they will provide you with valuable information.
Sixth, know whether any third-party patents block your product’s path to market. This is important information to have because the existence of a blocking third party patent can present significant hurdles to ultimately being able to enter the market. These patents can be uncovered in a freedom-to-operate study. Just like with landscape analyses, freedom-to-operate studies can be obtained cost-effectively and can uncover crucial information.
Seventh, do not neglect other intellectual property rights, such as design patents, trademarks, and trade secrets. If you named either your company or your product but have not protected that name as a registered trademark, you may find yourself having to later change names if someone else has already claimed those names. Likewise, do not overlook the importance of trade secrets. Depending on the particular technology, keeping certain technology secret can often be as valuable, or even more valuable, than patenting it.
Eighth, make sure all the legal paperwork is signed. In particular, make sure all assignments are properly executed and recorded with the USPTO. This includes making sure that all inventors sign their assignment documents and any transfers from one party to another are also properly documented. Also make sure that employment agreements and consulting agreements include language that assigns any newly developed IP to the company. While a review of the paperwork may not happen during a pitch, uncovering any holes during diligence could raise questions surrounding ownership.
Ninth, know your company IP strategy. Investors do not expect you to have dozens of patent applications already filed but they do expect you to be able to tell them how you plan on building on the patents, patent applications, trade secrets, and other IP rights you already have. Be ready to discuss the need to license or acquire certain IP, if any, to bring your product to market. Be prepared to discuss how and when you plan on accomplishing that.
Finally, know the current patent and regulatory environment and how it may affect your IP. Depending on your specific technology, the current patent climate may have significant implications on your ability to get the claims you want. Think about Section 101 patentable subject matter issues. If you are developing biologics, the current climate favoring biosimilars and generic drugs may be problematic for you. If your technology falls within the types that may be affected by today’s uncertain patent and regulatory climate, be prepared to discuss how you plan on mitigating that uncertainty and what backup positions you may have.
Good luck to everyone participating in start-up competitions!
BioPharma Law Blog posts updates and analyses on IP topics, FDA regulatory issues, emerging legal developments, and other news in the constantly evolving world of biotech, pharma, and medical devices.