1 Finding Value in the Most Finding Value in the Most Overlooked - PowerPoint PPT 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 � 2

IP Due Diligence Goals IP Due Diligence Goals � Define and confirm scope and strength of protection � Determine freedom to operate � Assess and calculate risks 3

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 opinion � Jurisdictions covered � May need to coordinate with Manufacturing lead 4

Define and confirm scope and Define and confirm scope and strength of protection (cont’ ’d) d) strength of protection (cont � 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 5

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 6

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? 7

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 8

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 9

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 10

Licensor: Control Disclosure Licensor: Control Disclosure (cont’ ’d) d) (cont � 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 11

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 once the gates are open 12

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? 13

Patent Landscape Patent Landscape Analysis Analysis 14

Data Analysis Data Analysis � Delphion Database The INPADOC collection —provides over 30 million patent family documents from 71 patent offices 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. 15

Social Network Analysis – It’s how you look at the data 16

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. 17

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 18

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. 19

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 20

Stem Cell Citation Tree Stem Cell Citation Tree 70ies ‐ 90ies 2000 till 2004 2005 2006 ‐ 2008 21

Research Clusters Research Clusters A1 B1 Manipulating stem cells/protein markers embryonic C1 Non-human stem cell research 70ies ‐ 90ies B2 2000 till 2004 Culturing hematopoietic stem cells Culturing neural stem cells 2005 A2 2006 ‐ 2008 22

Cluster A1 Cluster A1 Manipulating stem cells/protein markers 23

Cluster A2 Cluster A2 Culturing hematopoietic stem cells 24

Cluster B2 Cluster B2 Culturing neural stem cells 25

Cluster C1 Cluster C1 Non-human stem cell research 26

Center: Embryonic Cluster Center: Embryonic Cluster 27

Top 25 Patents - Top 25 Patents - “ “Bridging Bridging” ” patents patents - - Patents linking the Patents linking the most various fields of stem cell research most various fields of stem cell research 28

No. 1 No. 1 29

No. 2 No. 2 30

Conclusions Conclusions � No significant shift from US patents to non- US patents after 2005 – May be too early to see trends � From 2000 – 2008, adult stem cell research remained strong based on early 80’s/90’s patent filings � Few embryonic stem cell patents prior to 2005 � Embryonic stem cell patents appear to bridge non-human embryonic stem cell and adult stem cell patents 31

Contact Information Contact Information � Jana Diesner, Jana Diesner, Carnegie Mellon University, CASOS, on behalf of Doris Spielthenner - janadiesner@gmx.net � John Gutkoski, Partner, IP Litigation Practice, Foley – jgutkoski@foley.com � Antoinette Konski, Partner, Biotechnology & Pharmaceutical Practice, Foley - akonski@foley.com � Dr. Roxanne Spencer, Ph.D., Patent Manager, Antisoma, Inc. - roxanne.spencer@antisoma.com � Christopher Verni , Patent Counsel, Genzyme Corporation - Christopher.Verni@genzyme.com 32