European IP Helpdesk

Bulletin No. 1 Licensing

14

The aim of the investment is an “exit scenario”, i.e. the generation of a larger return in case of the sale of the company. Except for strategically relevant cases, it is not planned to hold the investment permanently.

The IP commercialisation strategy of Saarland University

The university has opted for a “blockbuster strategy” and therefore generally prefers long-term revenue opportunities over short-term one-off revenues, meaning e.g. licensing over complete sale. This means that even in contract research, it is requested that the transfer fee for the resulting IP is at least accompanied by a so-called appropriateness clause. It guarantees the right to renegotiation in case of an exceptionally valuable invention. In case the IP is licensed to a start-up, the upfront payment can be replaced by taking shares in the company (see above). Instead of a minimum license, there is a licensing obligation which, in case of insufficient sales, turns the exclusive right into a simple user right or allows for a termination of the agreement. The transfer of IP is possible for start-ups and IP developed in collaboration, otherwise the IP will generally be only licensed.

Axel Koch is the Head of the Department of Research Management and Technology Transfer at Saarland University, a Board Member of the German Association for Knowledge and Technology Transfer (TransferAllianz e.V.) and part of the Review Panel for Registered Technology Transfer Professionals (RTTP). He has vast experience in the field of start-up consultancy and IP valorisation and has been supporting the European IP Helpdesk as an external expert for many years.

Written by Dr Sebastian Tegethoff, 24IP Law Group

A licence grants access to a technology in return for the payment of a licence fee to mention just one possibility of compensation for a licence. Anything different in or for the field of life sciences? Absolutely! The following article tries to shed light on the specifics of licensing in life sciences.

The protection of innovations relating to life sciences by intellectual property rights (IPR) is extremely important. Like in no other technological field “patent off” can be considered as a deal breaker in life science licensing. The reason is that life science innovations themselves are usually the reason for negotiating a licence and not the mere capability of manufacturing a product.

Compulsory approval procedures

Moreover, life science products independent from whether they are related to pharmaceuticals or med tech will have to clear compulsory approval procedures (clinical trials, Food and Drug Administration/FDA or European Medicines Agency/EMA approval, etc.) before they can be brought into the markets. Such restrictive procedures are simply not present in other technological fields. Life science technologies may be amended or improved during such trials or approvals so that the question comes up whether the IPRs still

cover amended or improved technologies after clearing all necessary procedures. No one will pay a licence fee for a “patent off” technology.

In consequence, adjustments or improvements of life science technologies during trials and approval must still be covered by IPRs like patents, which means that such modifications will have to be comprised in a patent application that has been filed usually a long time prior to clinical trials or EMA/FDA approvals. You don’t need a crystal ball to ensure this, but a good team of patent professionals and technical developers. They will have to work hand-in-hand to assess the probability of possible improvements of an innovation when preparing patent applications simply to be able to mention such modifications of the respective technology. Such descriptions may provide a basis for directing patent protection in the direction of the approved product.

Monitoring the scope of protection

Keeping the relevance of IPRs and possible improvements of life science technologies during approval procedures in mind, the scope of protection of IPRs in life science will have to be monitored constantly on the side of a possible licensor prior to entering any licence negotiations otherwise the potential licensee will do. Thus, entering licensing negotiations requires a profound evaluation of IPRs on both sides of the table

Dr Sebastian Tegethoff is a Managing Partner of the 24IP Law Group and a speaker for the European Patent Academy of the European Patent Office. He is an experienced legal adviser in developing and defending integrated IP portfolios including patents, trademarks and designs and the corresponding contractual framework. In this context, he develops strategies for research institutes as well as for all kinds of businesses to help them leverage their developments in international markets. He has been lecturing on patents and employee invention rights at the Beuth University for Applied Sciences in Berlin and on strategic IP management at the University of Hamm-Lippstadt.

regarding the protection of a respective life science technology, and in particular whether the subject-matter of a license agreement is protected.

A clear and well documented ownership of IPRs sounds so easy but will usually be discussed during the first round of negotiating a life science licence. A lot of questions regarding the ownership of an IPR, like a patent, may come up which had a minor priority during every day’s work in a licensor’s company. Therefore, the first step prior to approaching possible licensees or even entering into licensing negotiations has to be the clarification of the IPR’s ownership status, and to have documents at hand demonstrating that solely the licensor owns an IPR and is thus the right person to negotiate a licence with.

In a nutshell, a) cover the subject-matter of a life science licence by an IPR, and b) own it! These are the two simple rules for any potential life science licensor to keep in mind. However, meeting these simple rules is often far more complicated.

Spotlight: On the Specifics of Licensing in Life Sciences