With the JP Morgan Healthcare Conference taking place this week in San Francisco, we thought it would be worth looking at the issues that biotech companies need to remember about intellectual property (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 startups competitions. Based on these experiences, we provide below a list of IP issues that start-ups should keep at the top of their mind when making an investor pitch.
First, know your own IP. Make sure you are familiar with your patent portfolio and know exactly which patent applications you have filed, where they stand in prosecution, and who owns them. If you are licensing 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 you think you do not need an exclusive license. Moreover, know the scope of your patents. Be prepared to talk about at least your main claims and how they cover the product that you are trying to develop and eventually market. If your claims do not cover the product, be prepared to discuss why and what you can do to improve them. This may include strategies for filing continuation applications or follow on applications to yield the desired claim scope.
Second, know 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. Practitioners such as us do not always appreciate this fact since we deal with patents and patent applications on a daily basis, but we cannot emphasize enough the importance of accurately 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 or give the impression that the start-up is not really ready for investment. 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 actually have in your IP portfolio and what you need to focus on in your presentation.
Third, know your competitor IP. Unless you discovered some groundbreaking technology, chances are you have competitors. Every company looking for investors has IP competition. Be prepared to discuss your competitors, their IP (i.e. the patent landscape for your market), and what your company’s strategy is for steering around any IP landmines. This may include plans for licensing certain competitor IP or designing around it.
Fourth, know your company IP strategy. Have an IP strategic plan. 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 what you already have and avoiding known patent threats in your target market. Further, any strategic plan should include cost estimates and ballparks for patent applications you plan to file in the future and where you plan to file them and why. Other key components include fleshing out whether your company will be filing on a platform technology, improvements on established technology, or new embodiments of technology. Your company may also need to license or acquire certain IP already existing in your field to bring your product to market. Be prepared to discuss how and when you plan on accomplishing that goal.
Finally, know the current patent and regulatory environment and how it may impact your strategic IP plan. Depending on your specific technology, the current patent climate may have significant implications on your ability to get the claims you want. Top of the list of issues today include 35 U.S.C. Section 101 subject matter issues and 35 U.S.C. Section 112 written description 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 climates, be prepared to discuss how you plan on mitigating that risk and what backup positions you might pursue.
Good luck to everyone participating in JP Morgan this week!
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.