While the following points apply generally to confidentiality agreements, they take on particular significance when the information at issue is disclosed as part of a long-term mutual exchange of information and skill.
In effect, nonemployees are given the type of information and access to information usually reserved for employees. These long-term exchanges make the confidentiality issues extremely important. Put simply, any information that gives a commercial advantage over those not possessing the information can be a trade secret.
The authors know of no meaningful distinctions between trade secret versus proprietary versus confidential information. Regardless of the label used, information that is valuable and obtained as part of a confidential relationship is in theory protectable. The ability to recreate information by combining numerous public sources does not necessarily establish that the information was readily available to those outside the confidential relationship. The standard for considering information confidential is not nearly so high as it is for nonobviousness, and analysis akin to a patent obviousness test has no place in determining whether something is confidential.
Items of commercial value, such as customer and vendor lists, price lists, and selection of certain specific combinations of steps out of a large number of known alternative ways of approaching each step, may in some cases be protected.
Typical exceptions to confidentiality include information that has been. It makes sense to put the burden on the recipient of the information for invoking one of these exceptions. The key is to avoid letting these exceptions become after-the-fact justification for improper disclosure or use. What is, or will be, the value of the lifetime of the information? Information that is about to be published will be confidential for only a short time.
On the other hand, biological materials that cannot be duplicated may retain value indefinitely. It is important to be realistic about the length of time, so as not to provide a wide-open opportunity for a dispute on this subject.
Of course, there should be no obligation to maintain confidence for information that has been published or otherwise made public. This principle is easily stated, but not easily applied, because the typical fact pattern does not involve a wholesale publication of all information on a given topic.
Instead, the information may dribble out over time in many publications, and a unified knowledge of the entire process, from start to finish, may continue to be valuable business information that is not generally available to competitors or other members of the public without a great deal of work. In fact, the client may want such obligations to protect its own information.
Often the agreement requires the disclosing party to label information as confidential, if that party wishes it to be treated as such. Because of the proof issues raised about the content of the information disclosed, information disclosed orally with no written record before or after the disclosure generally is not treated as confidential. In this situation, the one making oral disclosures of confidential information has the burden of following up with a written disclosure.
That procedure may seem unnecessarily cumbersome, but the alternative is to seek protection of orally disclosed information, which entails the burden of proving in detail the nature and full content of the information disclosed along with the confidentiality of that information.
Thus, sound business practice dictates making a record of the disclosure. Deciding who owns inventions is the hardest part of any collaboration negotiation. Without a contractual arrangement, ownership will depend on inventorship.
Inventorship decisions can be contentious, and the law can be difficult to apply to individual facts. Therefore, consider avoiding the standard solution, for which each side owns its inventions and joint inventions are jointly owned.
One option is to put ownership of all inventions in the field of the collaboration in a single party, with the other party having exclusivity in its field. Alternatively, ownership can be divided by field or geography. The inability to agree on ownership issues may reflect an inability to decide at an early stage about the relative sharing of risk and reward that is implicit in every license.
Finally, ownership of an invention at the time the invention was made can determine whether commonly owned patents or inventions are prior art under 35 U. A well-thought-out collaboration agreement should address ownership in a way that will minimize or avoid serious prior-art problems arising from inventions and patent applications that the parties bring to the collaboration.
This issue had been quite a thorn in the side of biotech-patent license drafters for many years. The existence of prior art under 35 U. New terms in the amendment, such as joint-research agreement , are certain to go through some interpretive growing pains. This change recognizes the realities of collaborative practices in the biotech industry. An exclusive license is presumed to prevent even the licensor from practicing the invention.
If the licensor intends to practice the invention, even in a narrow field, the license must explicitly reserve or grant that right. In the absence of an agreement, therefore, joint owners can compete with each other.
Indeed, a prospective licensee may force the owners to compete each other. Japan and Europe also permit each owner to practice the invention, but the countries differ from the United States when it comes to licensing.
A licensee of a European or Japanese patent position must have authorization from all owners in order to practice the invention. Academic institutions pose special licensing issues. Part of the academic mission is to make worthwhile technology available to the public, particularly medical technology.
Of course, money helps to do that, but other factors are equally, if not more, important. Another factor in achieving this goal is the relationship between the licensee and the investigator. Cooperation between the parties increases the chances that the licensee will be able to develop clinical applications of the invention. Many academic research institutions depend heavily on federal government funding. In comparison, licensing revenue is relatively minor.
Under the terms of most government research grants, the licensing of inventions made with grant funding is controlled to some degree by the government. The key tool for control is legislation known as the Bayh-Dole Act. These conditions include a requirement that the academic institution or its licensee make reasonable progress toward commercialization of inventions resulting from funded research. Also, the government must have advance notice of the abandonment of patent applications in time to take over ownership and prosecution of those applications.
In either case failure to make progress or abandonment of the application , the government may take over. The government also has a royalty free, paid-up license to practice the invention—for example, to use such medical inventions as vaccines for military personnel.
First and foremost, the inventors must retain the right to publish, although the licensee often is given the right to review manuscripts to identify potential inventions prior to submission or publication of the manuscript.
There should, however, be flexibility in the insurance requirements depending on local regulations and customary business practices in the territory. Many academic inventions are early stage and based on work that will be or has been published. Thus, confidential information generally is not a long-term asset. In an academic context, the value of the license to the licensee lies in the patents, and the value of the patents depends on:. Patent misuse is a defense to patent infringement.
In asserting this defense, the accused infringer takes the position that the patent owner has misused its government-granted monopoly, thereby forfeiting the right to enforce that monopoly in a patent infringement action C.
Bard, Inc. M3 Systems, Inc. A body of case law has evolved to address the application of this doctrine to patent licensing practices, and in , the Patent Misuse Reform Act 9 was enacted to amend 35 U. It is distinguished from a defense of invalidity, which would require proof that the U. Patent and Trademark Office PTO was not empowered to grant the patent because the invention application did not meet the statutory requirements for patentability. Most often, resolution of misuse issues involves a balancing of the inherent tension between patent law and antitrust law.
To establish a claim of patent misuse, it must be shown that the patent owner misused its government-granted right, or in other words, used the patent to improperly extend its power in the marketplace. Historically, certain activities were considered per se patent misuse. Other activities, such as those governed by 35 U. Virginia Panel Corp. MacPanel Co. It is now abundantly clear that the mere existence of a patent right does not establish market power in the antitrust sense and that certain licensing provisions that were once thought to unfairly extend the patent monopoly do not constitute patent misuse, per se.
Rather, the courts require a factual analysis a rule of reason of whether the patent owner possessed market power, and the patent is simply one factor in that analysis.
The Supreme Court dealt with an allegation that a patentee misused its patent by tying sales of a patented printhead and ink container to sales of unpatented ink in Illinois Tool Works, Inc. Independent Ink, Inc. The plaintiff seeking a finding of illegal tying and monopolization in violation of the Sherman Act must prove that the patentee has market power in the tying product.
Scruggs et al. The facts in that case involved a complex marketing scheme that included flexibility to react to FDA approval of competitive products. CSU brought an antitrust action charging that Xerox had engaged in anticompetitive behavior when it tried to monopolize markets for sales and service of Xerox high-volume copiers and printers.
Xerox counter-claimed for patent infringement, and CSU raised a misuse defense. Antitrust Litig. Xerox A per se rule on whether refusal to license always or never amounts to misuse seems unlikely. Such a rule would eviscerate the patent system and exceed judicial authority to compel patent owners to license in all situations.
The practitioner is left to exercise judgment in the vast middle ground. The Kansas District Court also refused to adopt a per se rule on the ground that refusal to license violates the Sherman Act.
This trend away from per se rules has been going on for a long time Eastman Kodak Co. Another example of potential patent misuse is a license requiring royalty payments after expiration of the patent of the licensed technology.
Case law that has not been explicitly overruled holds that such license agreements are illegal and unenforceable and are per se misuse Brulotte v. Thys Co. Dolby Laboratories, Inc. Conditioning a license grant upon the payment of royalties on unpatented products has also been found to be a per se wrong Zenith Radio Corp.
Hazeltine Research, Inc. Another example is charging royalties twice PSC v. Symbol Tech. This example was analyzed under a rule-of-reason analysis. It is open to question whether any such license arrangement will be misuse, per se that is, without an analysis of market power. A federal district court addressed the issue of whether a license requiring reach through royalties to products for example, drugs , discovered using patented screening tools, constitutes patent misuse in Bayer A.
Housey Pharmaceuticals, Inc. Bayer next alleged that misuse arose because the agreement imposed a requirement of royalty payments beyond the term of the patent, which was a per se misuse under Brulotte.
The district court, also finding no misuse by Housey on this issue, held that collection of royalties after expiration of a patent was not per se misuse. The district court reasoned that a patentee can charge a royalty for practicing an invention prior to the expiration of the patent covering the invention and that payment for such can be postponed beyond the expiration date of that patent.
Whether the payment is for pre- versus post-patent expiration use appeared to be determinative to the district court. In sum, it remains risky for a patentee that has external nonpatent market power to engage in the above licensing practices, but it is likely that the rule-of-reason analysis will be required to find misuse. Sponsored research, for example, at an academic institution, should not be viewed as a typical collaboration but as a special case.
The sponsor will nearly always want exclusivity over the fruits of the research, regardless of inventorship. Also, disputes about confidential information may arise should the sponsor want to establish a competitive advantage by maintaining confidence, at least until a patent application is filed, and maybe for some time thereafter.
The researcher will want freedom to obtain future funding from others, given that current funding will be limited in amount and duration. If the researcher is an academic, he or she will want the freedom to publish without interference, though he or she may be willing to delay publication for a short period to give the sponsor an opportunity to prepare and file a patent application.
In a highly competitive field, however, even a month can give another laboratory a chance to scoop the researcher in print. The researcher is unlikely to cede any control over the content of his or her publication, with the exception of information that originated with the sponsor.
The extent to which the issues discussed above will present serious problems for any given sponsored research arrangement depends on specific circumstances, particularly the extent and duration of the funding. A researcher whose entire operation is funded to a substantial extent by a single sponsor obviously will have fewer problems with such issues as the right to collaborate with other companies.
Ideally, a sponsor desires a representation and warrant from the researcher that no confidential information of a third party or proprietary material or process of a third party is utilized in the sponsored research. In reality, particularly with the multiple funding scenarios from both institutional and government sources, such representation and warrants cannot be made. Some institutions may not allow some of their researchers to be a party to confidentiality agreements.
In such instances, it is necessary to identify the specific researchers in addition to the principal investigator and what their exposure to confidential information will likely be. Mechanisms for protecting information should be carefully considered. Representations and warrants that the materials will not be used other than as agreed and that the materials will specifically not be analyzed or reverse engineered, may also be appropriate.
Typically, a principal investigator has the freedom to move his or her operation, funding and all, to another institution. If the sponsor wants to remain with a particular investigator should the investigator move from one institution to another, the agreement must be clear on this point. Otherwise, if the principal investigator moves, the sponsor could be left in the position of being obligated to fund other researchers at the original institution.
The sponsor then has the freedom to decide whether to continue funding the project elsewhere. Another problem arises from the culture of authorship and even ownership of technology as discretionary privileges to be controlled by the principal investigator. It is common for a principal investigator to assume that he or she has the right to determine the inventorship and content of a patent application, just as he or she has the power to control content and authorship of journal publications.
Obviously, these decisions must instead be controlled by inventorship law, patent prosecution strategy, and the sponsored research contract.
For these reasons, the sponsor may want to control the prosecution of patent applications arising from the research. A similar problem arises from multiple grants for a single laboratory.
Investigators are used to deciding to some degree how grant funds will be allocated among a number of projects. Even biotech discoveries that are too fundamental to support a patent claiming a clinical therapeutic or diagnostic use may support a patent on screening. Driven by the rapid increase in knowledge about molecular including DNA bases for diseases, coupled with automated equipment for synthesis, screening, and analysis, the interest in rational drug design and screening has exploded.
Indeed, licensing inventions featuring drug screening and development are all the rage. No matter what form s of protection are selected, the license agreement will include several elements that are unique to the software environment.
For example, various limitations upon the use of the software, and the availability of the software in source code or object code form need be addressed. Further, will the licensee, if he or she is able to obtain source code, be permitted to modify and improve the software, and if so, which of the improvements, if any, will flow back to the licensor?
If the license is for object code only, will the licensee insist, as well he or she might, that the source code be placed in escrow in case computer software bugs develop that are not corrected by the licensor? The nature of the escrow agreement, and who shall hold the escrow, is typically the subject of yet another agreement. If software is provided, will it be subject to a maintenance agreement, that is, an agreement by which the licensor submits to providing improvements, fixing problems if they develop in the software code, and in return receiving an annual maintenance fee?
Robert Gallagher, senior principal and head of Strategic Clinical at QuintilesIMS said that to be able to articulate to investors, you will need to conduct a technical and commercial assessment and come up with a target product profile TPP.
This will help you determine what data you need to formulate a clinical development plan. Ask yourself: What is the probability of success and the risk of failure? What are competitors in the market doing? What are the implications for trial recruitment?
In parallel, evaluate the commercial strategy and position, including market potential and potential revenue. Do a competitive pipeline analysis. Are there lots of products in development or should you be looking at other areas?
They highlight the need to accept negative results, which is difficult for a biotech that is likely a one-product company.
Small companies have more to lose, and early failures will have a bigger impact on the company; survival may depend on having your drug in the clinic.
Clinuvel Pharmaceuticals is developing drugs to treat severe skin disorders. It is beginning to see sales take off for its lead product Scenesse for treating erythrpoietic protoporphria, a metabolic disorder that causes painful burning reactions under the skin after brief exposure to sunlight.
The treatment uses melanocortins for systemic internal photo protection, which involves injecting patients to protect them from light exposure. We felt they would give us early feedback on feasibility" , he said, "and at the same time they would also provide validation if we were on the right track". We did that twice. And then sometimes, you see clinical effectiveness, but you decide commercially that its not viable, and you still have to kill it.
You can prove anything you want to, and that is often the blind alley that scientists go down because they become enraptured in their own wisdom. Do the studies that are likely to show you are not right. Founded in , Quartet sought to address pain via tetrahydrobiopterin BH4 synthesis as a key modulator of both neuropathic and inflammatory pain.
Truth-seeking behaviors aim to reduce false positives e. Investors said that besides addressing a significant unmet need, companies they want to invest in have novel science against a novel target and a well-conceived strategy. They want to see well-executed IP and a management team with the skills to advance to significant milestones. Bruce Booth said in his blog to look for VC s that fund early-stage companies. He says that companies should not expect to gloss over the scientific substance.
However, some global investors only invest in the team. This is a team sport. Removing people is painful, and one wrong person might be the end, so make sure you have the right ingredients and make the hard decisions early, he suggests. Consider bringing on people with different key capabilities in commercial , international reach, as well as the needed scientific disciplines. You will need strong leadership to pull the team together to get through the rough spots and near-death experiences that all biotechs face at some point in their history.
Alacrita Consulting Co-founder, Anthony Walker , said his motivation for establishing the consultancy was based on his experience running a biotech company and the gaps he saw there. For example, if you have IP, what do you do with patents? You need an in-house patents manager, but that might not be a full-time job, so it would be great to have access to a very experienced IP manager.
Biotechs need strategy, analysis and operational support, he said, and that could mean that you need a part time CMO or a part time regulatory person ; Alacrita Consulting is a senior management team that any biotech could access on an as-needed basis.
Then, as you build up, you can bring people in house as you need them. The general principal is that for anything core and strategic you will want in house expertise. This is also a position that can be filled, or supplemented, by external consultants who often have their own established industry networks that can be tapped.
That passion often comes from being involved with a therapy that can change the world, not something that will just increase life expectancy by a few months. And, most scientists have fun. What is Intellectual Property? Intellectual Property IP primarily refers to patents, copyrights or trademarks which is granted for a creation that is novel, useful and non-obvious. In the pharmaceutical industry, IP can refer to a patented technology such as the structure and synthesis of a drug, a biological discovery e.
It is valid for a limited period of time; generally, for 20 years from the date of filing the patent application.
A patent is a territorial right, limited to the boundary of the relevant country or region and can be a good source of recognition for the inventor s as incentives to develop a commercial product. This could involve either licensing the IP to an existing company i. What does a Technology Transfer Office do? TTO s are often the facilitators for bringing technologies from the University into the market and act as the middle ground between academia and industry.
TTO s also manage the IP and licensing within each University and can provide support to academics in all areas of the commercialisation process; including identifying funding sources and launching biotech companies from University research spin-out companies. Either your web browser doesn't support Javascript or it is currently turned off. In the latter case, please turn on Javascript support in your web browser and reload this page.
Read article at publisher's site DOI : Science, Nat Biotechnol, 9 J Mol Diagn, 1 Matthijs G , Halley D. Eur J Hum Genet, 12 Murray F. N Engl J Med, 23 Stem Cell Rev Rep , 10 4 , 01 Aug J Law Med Ethics , 40 1 , 01 Jan Cited by: 2 articles PMID: Curr Pharmacogenomics Person Med , 9 4 , 01 Dec Free to read.
Nat Biotechnol , 29 11 , 08 Nov Cited by: 0 articles PMID: Butte AJ , Ito S. Clin Pharmacol Ther , 91 6 , 01 Jun Cited by: 14 articles PMID: To arrive at the top five similar articles we use a word-weighted algorithm to compare words from the Title and Abstract of each citation.
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