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Who owns what? Why life sciences companies need intellectual property policies – Patent


Why you need an IP policy

Life science companies seek to develop and bring novel drugs,
devices, diagnostics and digital health technologies to market.
Only a small percentage of promising research and development
achieves commercial release, with many falling short despite large
amounts of resources being invested. Protecting the intellectual
property (IP) for the research and development
that does make it to market is crucial to recoup research and
development investments.

Life science companies, for whom IP is their core asset, face a
number of industry-specific issues when it comes to protecting
their IP. It is common for life science companies to work
collaboratively, so that employees and research collaborators may
have additional affiliations and other external employers. Early in
your organisation’s journey, you might not even have employees,
but work exclusively with consultants and advisors who are also
contracted to other organisations. People with multiple
affiliations may be working on research for your organisation at
the same using the resources or IP of the other organisation they
are working for. Finally, researchers working with your
organisation might also have academic roles and face pressures to
publish research results which may potentially conflict with your
organisation’s aim of patenting before publication.

A built-for-purpose IP policy is an important way to ensure that
all relevant personnel understand the important IP processes and
obligations of your organisation, that questions of ownership of IP
are resolved consistently and in a timely manner and overall that
opportunities to commercialise the IP of your organisation’s
research and development are not encumbered.

IP issues for the life science sector

Who does your IP policy apply to?

Chances are your life sciences company is making use of
Australia’s great pool of bright, creative and inventive
researchers and commercial managers whilst collaborating with
overseas partners. This may involve a range of different people
with different skillsets on the Board of Directors, on your
scientific or clinic advisory boards or acting as consultants or
employees.

Sometimes these talented people will not just work with you, but
also have a number of other employers or affiliations. For
example:

  • someone may work for your company whilst also holding an
    appointment at a university or medical or public sector research
    institute. This alone has the potential to create significant
    uncertainty over who is bound by your organisation’s IP
    processes and obligations.

  • a researcher on your organisation’s advisory board may not
    be clear as to the expectations as to whether to disclose certain
    matters about pre-existing IP to your organisation. Without an IP
    policy that clearly articulates those processes, , the researcher
    may not make a timely disclosure of that pre-existing IP.

It is therefore important to ensure that your organisation
considers carefully:

  • the range and circumstances of personnel that the IP policy
    needs to cover; and

  • what obligations to impose on relevant personnel working with
    you in the creation and development of your organisation’s
    IP.

What type of IP can you assert ownership over?

Your organisation may simply want to assert ownership over all
IP that anyone working with you in any capacity creates or
develops. This may well work for full-time personnel of your
organisation with no other affiliations. However, the reality for a
large proportion of life science companies is that personnel may
have multiple employers and affiliations. Careful consideration
needs to be given, for example, reasonable expectations of a
consultant working a few hours a week for you, while working the
remainder of the time at a medical research institute.

Determining IP ownership usually will not be as simple as
claiming that any IP created during those hours that personnel work
for your organisation is yours, while any IP developed outside
those hours does not. Well drafted IP policies consider a range of
a factors including working hours, the duties of the personnel, the
use of resources and facilities, the impact of commercial or
government funding and clear processes for seeking approval to
undertake other research activities in outside roles and managing
conflicts of interest. . Litigation over IP ownership can be
prohibitively expensive so the setting of clear expectations in an
IP policy can be a worthwhile investment in managing IP ownership
risks.

Special classes of IP may or may not be relevant to particular
organisations. Where personnel in your organisation have academic
teaching roles or PhD supervisory roles in external universities,
it may be important for your IP policy to provide clear guidance
around those activities and your organisation’s expectations
around relevant IP. Finally, any IP policy addressing ownership
over IP generated by personnel with multiple affiliations should go
hand-in-hand with the organisation’s other policies such as any
conflict of interest policy. It is important to note that an IP
policy cannot stand on its own. The organisation’s IP policy,
employment contracts, standard consultancy agreements and advisory
board terms of reference need to be considered holistically to
achieve a cohesive and practicable IP approach for your
organisation.

Disclosure Policy

One important procedural matter for any IP policy is a clear
expression of the requirements for personnel to disclose inventions
and creation of other forms of IP. To be in the best position
possible to decide on how to proceed with any possible IP
protection, it is crucial that there are clear and practical
processes to ensure that your organisation is made aware of its
creation as early as possible. This will enable your company to
assess:

  • how best to seek protection over the IP,

  • whether there are risks to be managed around the invention
    relying on third parties’ IP,

  • if your organisation wants to allocate resources to develop the
    IP further or if other commercialisation options should be pursued
    such as out-licensing the IP.

Of course, timely IP disclosures also allow you to prioritise
finite resources between different research and development
activities and discontinue activities which are no longer
relevant.

The disclosure process should not just be focussed on
disclosures of new IP created but should also capture information
about third party IP owned that may be needed enable development or
commercialisation of your organisation’s newly created IP.
Being informed of the needs for such enabling IP in a timely manner
gives your organisation the best opportunity to pursue any required
in-licensing agreement in a more even negotiating position (rather
than well down the track when your organisation may have no option
but to take whatever terms a licensor demands).

Of course, whilst disclosure processes should be comprehensive,
care should be taken to avoid creating unnecessary complexity in
the disclosure process that neither the personnel (nor your
organisation) will practically be able to follow. A practical
process is more likely to ensure maximum compliance, resulting in
your organisation being in the best possible position to manage IP
disclosures.

The issue of publications

Your organisation may collaborate with researchers who have
academic roles with KPIs around regular publication . Publication
of collaborative research results may be something that your
organisation is willing to support provided that IP protection is
first obtained.

To be able to obtain a patent, the invention must be, amongst
other things, novel. Publishing the research, presenting the
research at a conference, or even discussing the research with
other researchers outside your organisation who are not under a
clear confidentiality obligation to your organisation may result in
an invention being no longer novel and may defeat your
organisation’s ability to obtain patent protection.

It is, therefore, important that an IP policy has clear
processes on:

  • disclosure of research and inventions that could result in IP
    as early as possible;

  • the procedure to determine whether or not protection over the
    intellectual property will be sought,

  • the timeframes required for publications to be deferred to
    allow IP protection to be obtained and/or particular confidential
    information removed from the publication; and

  • a clear expectation of when the scientist might be free to
    publish the research findings.

The IP policy should detail any internal structures such as IP
commercialisation committees that may be involved in such a
process. The processes should be tested with your
organisation’s patent attorneys to ensure that they provide
realistic timeframes for IP protection to be obtained.

Of course, the processes for publication need to be carefully
considered in advance rather than your organisation seeking to deal
with an impending publication deadline at the time and without a
clear process to follow.

Conclusion

For life sciences companies, their IP can be their most
important and valuable asset. A well-drafted IP policy should
create clarity around IP ownership and establish processes
maximising your organisation’s chances to promptly identify and
protect valuable IP being created.

An IP policy does not stand on its own. The IP policy should
work together with the organisation’s other policies,
employment contracts, consultancy agreements, collaboration
agreements, board charters and advisory committee terms of
reference to achieve a cohesive and practicable approach to
protecting your organisation’s IP.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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