Intellectual Property:
What Investors Want to See
Juliet Scullion
European Patent Attorney
October 2012
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Types of intellectual property
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Reasons for protecting IP
© Attract investment
© Prevent copying of innovative products
© Prevent competitors from accessing new markets
© Guarding / surrounding a base technology
© Confuse / delay competitors
© Retaliation / bargaining power
© Break into new markets / disruptive technology
© Technology transfer / licensing revenue
© Strategic alliances / cross-licensing
© Marketing tool
© Tax purposes (Patent Box!)
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What are investors looking for?
© Financial return on investment
© Clever, unique technology
© Large target market and good marketing story
© Barriers to competition
© A credible team
A question investors might ask…
“What is your IP strategy for the business?”
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What is IP strategy?
Identifying current assets, managing a portfolio and planning for the future
1.
IP identification
2.
Management of IP
3.
Developing and using IP
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IP Due Diligence
(including Freedom to Operate)
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IP Due Diligence
© Starting Point - IP Audit - patents, designs, trade marks, copyright, know-how (depends on type of business)
© What is IP Due Diligence?
The process of obtaining and presenting information relating to IP to investors in a form that will help them decide whether or not they should invest.
© Can we prepare in advance to make IP Due Diligence a less stressful and successful experience?
© Determine what IP exists and how it is /can be protected
© Confirm ownership
© Confirm status and validity
© Define commercial importance of IP
© Freedom to operate (Examine 3 rd Party Rights)
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Do your competitors hold IP that restricts the proposed activities of your business?
© Patent, trade mark and design searching
© Distinction between patentability “prior art” search and freedom to operate search
© Do you know what your competitors are doing?
Freedom to Operate
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Medivate – A due diligence case study
© Medivate is a new university spin out company that has identified and produced a new medical device useful in diagnosing TB
© Currently only a prototype device is up and running, the company needs to obtaining further external funding to bring their product to market
© Medivate have been advised that the first step in obtaining further funding is to identify and secure its IP position
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Case study
A new small TB diagnosis product for use in GP surgeries
The “NuVu” scanner
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Is patent protection appropriate?
© The NuVu scanner utilises a piezoelectric crystal containing wand to detect a low level frequency vibration emitted from a metal plate positioned under a patient
© where a patient is infected by TB causing bacteria the low level vibrations are absorbed by the tubercule lesions in the lungs
© the piezoelectric crystal does not produce electrons the presence of TB is detected by the negative response
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Is ownership clear?
© The 2 founding members of staff were researching the utility of naturally occurring quartz piezoelectric crystals as post-doc researchers at their University, where the crystal used in the NuVu scanner was identified
© A senior member of the university lecturer staff is involved as a consultant and sounding board
© An MSc student designed the computer software involved in transferring the electronic energy received into a simple image displayed on a PC
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© Medivate intends to copy the external design of a well known ultrasound product
© Most cost effective to have the finished product manufactured in China
© Planning to demonstrate a finished product an international medical device fair in November 2012
Any other considerations?
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Any other considerations?
© Medivate intend to commission a design company to devise an operating manual to accompany each NuVu device sold
© provide a service whereby they install the NuVu device in a surgery and train staff how to use the device and interpret data results
© The regions where TB is most prevalent include Africa and South East Asia and the Asia Pacific Ring
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Trade mark issues
© The company staff don’t know of any other medical products with the name
NuVu, however
© The “Nu-Vu” baking machine exists and is owned by a US commercial catering company
© The “nuvu” projection screen also exists, the company which marketed the product has now ceased trading
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Developing a company IP strategy/policy
Developing a patent strategy
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Good Practice for IP Management
In-house processes/policies – linked to business strategy
© IP generation, evaluation and selection
© Contracts - clear chain of title - employee derived IP, bought, licensed or commissioned IP
© Key markets – sales and manufacture, spend vs revenue
© Pending applications - investors may want to see search/exam reports or patentability opinions
© Keep grant/registration certificates in central depository
© Renewal fees – regular review
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12 Months
File any corresponding foreign applications
18 Months
2 yrs 6 mths to 4 yrs
UK Patent Application Procedure
File UK
Application
12 Months
Continuation of UK
Application
4 Months
Receive Search
Report from
Patent Office
2 Months
Application published by
Patent Office
6 Months
Request
Substantive
Examination
10 Months
First Official
Action
Issued
Further Official
Actions
Issued
Action Required by Agents
Draft description of the invention and file at the
Patent Office
Add Abstracts, Claims and Formal
Drawings to the Application (or file a new complete application claiming priority from original application).
Pay the search fee and complete other formalities.
Advise on the significance of any
Prior Art cited in the Search Report
Pay Substantive
Examination Fee
Analyse Examination Report and attempt to overcome any objections by argument and/or amendment of the application.
Deal with any further official objections.
Grant Formalities
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International patent application proced ure
File UK
Application
12 Months
File Individual
Overseas Applications
File International
PCT Application
File Individual
Overseas Application
File European
Application
12 Months
File European
Application
Granted
European
Patent
Granted National Applications
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Typical Patent Filing Strategy
© File BASE (priority)
© File PCT (“international”) (incl. claims)
GB to PCT
0 months
12
16
18
© Published
© Examined
© NATIONAL Phase
30
EU US
© More examination
© Grant
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File Early and Delay Costs
Eg universities
© Protect research efforts, potential spin outs and revenue generation.
© Academics want to publish
© HEIF rankings
© Lot of early first filings, review process – firm up and/or streamline at 12 months.
© Not all first filings go PCT
© Strict budget, delay the costs
Patent Strategy Example
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Speedy Grant
Accelerated processing
UK grant within 1 year
Costs come earlier
GB GB to PCT
0 months
12
16
18
EU
30
US
Requires reason:
Eg investment process
“Green Channel”,
“Patent Prosecution
Highway”
Patent Strategy Example
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Use, licence or assign?
Example strategic uses of IP
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How can IP be used to generate revenue?
© Sell the product/service yourself
© Assign – sale of all rights (usually in return for a lump sum)
© Licence – you retain ownership
Licensing considerations
© Rights
© Term
© Territory
© Field
© Royalty rate!
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Surround Core Products
Biogums eg gellan gum, xanthan gum
Patent incremental improvements
Go for the low-hanging fruit – and file divisionals
Focus only on key markets
Regular review and abandon
Patent Strategy Example
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Trolls, Thickets and Pools
Some Patent Strategies
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Take Home Points
© Consider which forms of IP appropriate
© KEEP CONFIDENTIAL if patent required
© Conflicting rights – infringement risks
© Ownership – collaborations, commissions, employees
© Reasons for protecting IP
© Key markets / potential markets
© Ongoing improvements
Apple iPad Samsung Galaxy Tab
Don’t overlook registered designs
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Juliet Scullion
European Patent Attorney juliet.scullion@murgitroyd.com
Murgitroyd & Company
Collingwood House
3 Collingwood Street
Newcastle
NE1 1JW
Tel: 0191 211 3550
Fax: 0191 211 3551
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