[PPT] - 1 Finding Value in the Most Finding Value in the Most Overlooked PowerPoint Presentation

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Finding Value in the Most Finding Value in the Most Overlooked Elements of the Due Overlooked Elements of the Due Diligence Process Diligence Process

James Ewing, Senior Counsel, Biotechnology & Pharmaceutical

Practice, Foley (Moderator)

Jana Diesner, Jana Diesner, Carnegie Mellon University, CASOS, on

behalf of Doris Spielthenner

John Gutkoski, Partner, IP Litigation Practice, Foley
Antoinette Konski, Partner, Biotechnology & Pharmaceutical

Practice, Foley

Dr. Roxanne Spencer, Ph.D., Patent Manager, Antisoma, Inc.
Christopher Verni, Patent Counsel, Genzyme Corporation

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IP Due Diligence Goals IP Due Diligence Goals

Define and confirm scope and strength

f protection

Determine freedom to operate Assess and calculate risks

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Define and confirm scope and Define and confirm scope and strength of protection strength of protection

Does the IP cover the (intended) commercial product?

– How is the product covered?

Broad generic vs. narrow species claims Type of claim: composition of matter, use, process, etc.

– Identify the patents and claims that form the foundation for patent based exclusivity

Determine their relative strength: develop patent validity

pinion

Jurisdictions covered May need to coordinate with Manufacturing lead

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Define and confirm scope and Define and confirm scope and strength of protection (cont strength of protection (cont’ ’d) d)

What is driving the Loss of Exclusivity?

– Patent based exclusivity vs. Regulatory based exclusivity – Orange Book considerations – Country by country basis – Coordinate with Regulatory group

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Determine Freedom to Operate Determine Freedom to Operate

Search and analyze patents and applications for potentially blocking claims

– Remember, a patent is a right to exclude and is not an affirmative right to practice the invention – Coordinate with BD to learn competitive landscape

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Assess and Calculate Risks Assess and Calculate Risks

The likelihood of encountering a “perfect” patent is slim

– Identify the “warts” and consider what patent law based solutions, if any, should be taken to fix the problems if the deal Closes. – Develop an integration plan

Resist the temptation to allow the IP to be a deal breaker

– Can money fix the problem?

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Typical Process for Achieving the Typical Process for Achieving the Goals of IP Diligence Goals of IP Diligence

Staged diligence is preferable

– Minimizes risks to licensor

“Overexposure” Waiver of Attorney-Client Privilege

– Minimizes risks to licensee

Internal contamination Third party contamination

Consider use of a data room

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Licensor: Preparing for IP Licensor: Preparing for IP Diligence Diligence

Anticipate and gather required documents

– Global schedule of IP – Granted patents and pending applications – Official prosecution histories including documents cited during prosecution – Search results – Related company publications – Assignments and title records – Annuity receipts – Relevant grants

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Licensor: Control Disclosure Licensor: Control Disclosure

Stage-gate process to gauge interest and minimize information leak

– “Selling” = non-confidential information and list of publicly available IP, discuss benefits and what it does without specifics – “Interested” = confidential dossiers with high level summary – “Committed” = in depth access to all applications (public and non-public)

Instruct employees to control extent of discussions/know the scope of the CDA in place

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Licensor: Control Disclosure Licensor: Control Disclosure (cont (cont’ ’d) d)

Do not freely provide opinions of counsel, even when pressured!

– Potential loss of not only your privilege but also that of the licensee – Consider a Community of Interest Agreement

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Licensee: Preparing for IP Licensee: Preparing for IP Diligence Diligence

Know what information you want and why Be careful what you ask for Before engaging licensor’s counsel do your homework with public information

– Patent Office websites – Delphion – Thompson Pharma – FDA website

Allows you to focus on non-public information

nce the gates are open

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Licensee: During Due Diligence Licensee: During Due Diligence

Listen to the concerns of the licensor as they arise

– Can happen as early as CDA negotiation stage

Be mindful of what paper trail you are creating

– Would you want someone writing that about your patents?

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Patent Landscape Patent Landscape Analysis Analysis

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Data Analysis Data Analysis

Delphion Database

The INPADOC collection —provides over 30 million patent family documents from 71 patent

ffices worldwide, and 45 million legal status

actions from 42 worldwide patent offices. INPADOC is the most comprehensive database in which to perform patent family searches on a worldwide basis, and is estimated to cover 95% of all patents published since 1973.

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Social Network Analysis – It’s how you look at the data

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Network Analysis Tools allow Network Analysis Tools allow to: to:

Supplement traditional approaches to evaluate and manage IP/IC Identify strategic IP and strategic Intellectual Capital (IC) within a company or field Monetize and identify non-strategic IP in a company (orphaned technologies) Evaluate a company’s IP and IC (social fabric) portfolio in a compelling new way.

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Analysis Methodology Analysis Methodology

Network Analysis – Identifies direct and indirect relationships between authors, assignees and patents Patent “Importance” or “Dominance”

– One measure is the number of later filed patents/applications that reference the patent or application,

see Bergman & Graff (2007) The global stem cell patent landscape: implications for efficient technology transfer and commercial development, Nature Biotechnology, Vol. 25(4):419

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Search Query Search Query

Search Query: “stem cells” in the claims Approximately 8,000 patents identified 288 patents identified as “important” based on cross-referencing and network analysis indices.

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Clusters Clusters

Issue/publication dates

– 1980s to 1999 – 2000 to 2005 – 2005 to 2008

Subject Matter

– Adult or somatic stem cells – Embryonic stem cells: Human and non- human

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Stem Cell Citation Tree Stem Cell Citation Tree

70ies‐90ies 2000 till 2004 2005 2006‐2008

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