Engage Attorneys Early on When Seeking Biosciences Patents

Publication: Front Range Tech Biz Date: 2002

When technology transfer is ready to happen — after a biosciences concept has passed enough testing to reach development stage — it’s time to see a patent attorney.

Speed is important. Both business law attorneys and patent attorneys resonated one theme: Talk to a patent attorney early in the process. They said many companies delay this step, and it can mean the loss of a monopoly on an idea.

“Obtaining a patent, which assures protection of an idea, can be a very long process,” said Ellen Stewart, a business attorney with Gorsuch Kirgis LLP in Denver. “Seeing a patent attorney should be done at a fairly early stage.” Patents, which are for products, devices or ideas for them that have a tangible, practical application, go through the U.S. Patent and Trademark Office in Washington, D.C. They are governed by federal law. Because they are product specific and sometimes very technical, it’s crucial to hire an attorney who specializes in this area of the law early. “After that, a lawyer assisting biotech clients with technology issues from the corporate side needs to understand what the business needs of the company are,” Stewart said.

Such issues include:

• Choice of entity, such as a corporation, limited liability company or other entity. State law and taxes influence the choice of entity.
• Funding sources, e.g. venture capital, stock issuance and debt financing.
• Technology agreements, e.g. for license and marketing.
• Regulatory issues.

“The business law issues are very similar to those faced by non-biotech companies,” Stewart said. It’s not necessary, she believes, for an attorney to be a scientist nor “that the scientist needs to have a legal background. Just good business sense. It is, of course, helpful if the attorney has a basic science background in order to address any special legal questions related to the biotech product, but it is not a requirement.”

Of course, the Patent Office requires patent attorneys to have such knowledge. But many attorneys have gone beyond that, obtaining doctorate degrees in biosciences fields. It’s a two-way street. Brad Brockbank is seeing an increase in the number of people with doctorate degrees who then go on to law school. He’s manager of intellectual property commercial and technology at National Jewish Medical and Research Center in Denver, an academic research institution whose faculty members have the status of professors.

“Their scientific background is very important to helping them become good patent attorneys,” and he said the Ph.D./attorney is becoming a “common model.” Patent lawyer Jennifer McCallum of Blakely Sokoloff Taylor & Zafman in Denver holds a doctorate in reproductive physiology, and said that enables her to “bring more to the table” because she understands what a client is doing. A patent application prepared by an attorney with an appropriate background, she said, could stave off questions about procedures from the Patent Office. Patent attorney David Lee of Lathrop & Gage in Boulder said those in his field specialize in three areas.

• Those who write patent applications, he said, “use their technical backgrounds day in and day out, and are very up to speed.”
• Transactional attorneys oversee licensing and use their technical backgrounds “much less so” than those who write patent applications.
• Litigators, who fight alleged patent infringements.

Patentable ideas

Brockbank’s office endeavors to identify things that may be patentable as well as alert research scientists to worthwhile ideas. And he understands why some entities wait too long to work with a patent attorney, saying that scientists usually are reluctant to conclude that something works until they can prove it. But it’s necessary to show the Patent Office only that something may work to obtain a patent. A patent isn’t required for someone to license an idea to a company that wants to invest in a product and develop it. But, McCallum said, individuals or companies “should see a patent attorney before they put a lot of money into developing an idea. Once enough labor has been done,” to show “that the developer thinks something is going to work, a patent, which is a monopoly, should be obtained. “A patent requires disclosure of everything necessary to make something. It’s a ‘recipe.’ Once obtained, a patent is one of the biggest assets a company can have.”

Investment factors

Taking an idea from embryonic stage to patentability requires a significant investment of time and money. Brock-bank estimates the time as “three to four years for a U.S. biotech patent, and longer for foreign protection.” The costs range from lows of $10,000-$30,000 for domestic patents to hundreds of thousands of dollars for foreign ones. “Essentially, an investor or pharmaceutical company is placing a bunch of bets,” he said. “The ones that pay off have to do so for the ones that don’t.” Investors have “value propositions” for products in which they are interested that include the probability that an idea will be commercially successful. Because the odds of “hitting a home run,” as he puts it, are small for most startups, such successes have to include the cost of all the failed ventures. McCallum agreed. “But all you need to do is hit it once,” she said. “Look at Viagra. Look at Prozac. It’s a roll of the dice.”