IP for life sciences startups: Protecting your most valuable assets

Mark Wilke: Welcome. My name is Mark Wilke. I am a partner at Gowling WLG and a Canadian Patent and Trademark Agent. This presentation is intended to provide you with an introductory understanding of the various intellectual property assets for the life sciences companies. We will cover each of the following IP assets: patents; industrial designs; trademarks; copyrights; and trade secrets. I will discuss each of these in turn and compare and contrast these assets as we proceed through the list.

Let's get started with patents. Patents protect inventions. A patent gives the patentee a legal monopoly for a limited time, typically 20 years, to exclude others from making, using and selling products and services related to your invention. In exchange for this monopoly, you must teach the public how to practice your invention. This so called patent bargain is intended to encourage rapid innovations through the timely sharing of knowledge. As you can imagine, the patent monopoly is valuable. This is because it gives you a window of time to exclude others from commercially benefitting from your invention so that you can recover research and development costs, which in the life sciences industry can be very significant. Because R&D costs can be so high, you will need investors, and in many cases potential investors will want to know that a patent application has been filed. Licencing and cross-licencing is another reason to patent. Your business may involve licencing your patented technology to others, whom have experience with bringing a product to market, or to bring a product to market yourself you may need to obtain licences to use another party's patented technology, and your own patents can then act as a bargaining chip in cross-licencing negotiations. Lastly, having patents covering various aspects of a technology can act as a significant deterrent to competitors.

What exactly can you patent? As we said, patents protect an invention, which in broad terms can be defined as a technical solution to a technical problem in the art. In more practical terms, you can patent such things as devices or machines, compositions of matter, for example a chemical compound or biological product such as an antibody or vaccine, or a method or process. For example, a method of making a product or diagnostic or research assay. Related to methods are new uses for existing products. For example, the new use of an existing drug for treating a disease that was previously not known to be treated with the drug. All of these are what is known in the patent world as patent eligible subject matter. In addition to being patent eligible, the invention must also be both new and non-obvious given what was previously known to the public. Finally, the invention must be useful. These three conditions are frequently known as novelty, non-obviousness or inventive step and industrial applicability. We will talk more about these in the next slide.

Another way of looking at patent eligibility is to consider what cannot be patented. As we mentioned, the invention must be novel. This condition excludes anything that has already been disclosed to the public, whether that disclosure was oral, written or something sold. Beyond merely being new, the invention must also not be obvious. This is somewhat subjective, but generally, the invention should not have been suggested in the prior art and should be more than a minor improvement that would be the result of routine trials or optimization. An invention must also be useful. That is, have utility or industrial applicability. It cannot be something that is merely esthetic and it must actually work. So for example, you cannot patent a drug when you have no evidence that it would actually be effective. Returning to subject matter eligibility, various things cannot be patented. For example, you cannot patent a mere idea or scientific principle. You can, of course, patent devices or methods that make use of a scientific theorem. Not all countries have the same rules of patent eligibility. Certain countries prohibit patenting a method of surgery or treating a patient. The United States allows this. Other countries do not. In Canada and Europe, it is possible to patent the use of a drug for treating a patient, which provides similar protection to a method of treatment. Products of nature, for example, an unmodified gene or naturally occurring antibody, are not patentable in the United States. Although they are patentable in both Canada and Europe. Diagnostic methods can be challenging to patent in the United States as well as in Canada. But in many cases aspects of these inventions can still be patented with good legal advice. You cannot patent higher life forms in Canada, such as a transgenic mouse, although again, there are ways of drafting and prosecuting an application to protect these types of inventions.

We mentioned that a patent grants a 20 year monopoly. In Canada this term may be extended by up to 2 years for new small molecule and biologic drugs that have passed regulatory approval. To be eligible the patented drug must contain a medicinal ingredient that was not previously approved in Canada. This term extension is intended to partly compensate innovators for the time invested and research in obtaining regulatory approval in Canada. A similar patent term extension system is also available in the United States.

Let's move onto industrial designs, alternatively called design patents in the United States. In contrast to patents, which can protect how a product functions, industrial designs protect the appearance of the product. Namely the shape, configuration, pattern or ornamentation of a product. The protection can be for the entire product's appearance or can apply to just a distinctive portion of the product. For example, industrial designs can be used to protect the shape of a Coca-Cola bottle, a distinctive pattern of colours on clothing or the appearance of a graphical user interface of an app. In the life sciences two examples are the shape and markings of a pharmaceutical tablet or the design of a blister pack. The monopoly granted for industrial designs is less than that of patents. Generally 10 to 15 years. Like patents, this monopoly can be used as a weapon to exclude competitors from using the designs in their own products. To be eligible for protection the design must be a new design that is not previously disclosed to the public. Compared to patents the scope of protection for industrial designs is much more narrow. Meaning that even a minor change in the appearance of the product can result in non-infringement. On the other hand, industrial designs are much quicker and less expensive to obtain than patents.

Trademarks are a very different kind of intellectual property. A trademark is a unique sign used to distinguish one company's goods or services from others in the marketplace. Examples include symbols, words, phrases, designs, 2-D or 3-D, holograms, moving images, sounds, scents, tastes, textures and more. The intent of a trademark is to enable a purchaser to distinguish the goods or services offered by one company from the goods or services offered by another company. Trademarks grant the trademark owner the ability to prevent others from using the trademark, not just for 10 or 20 years, but indefinitely with a caveat that the trademark owner must continue to use the trademark in commerce and must take steps to prevent others from infringing. Trademarks can be registered but some trademark rights exist even without registration. Registration does have benefits, however. Unregistered trademark rights are granted by the common law and require sufficient use, for example in marketing and product packaging, within a geographic region to establish a reputation associated with the trademark. In contrast, registration of a trademark may be granted based on use or merely proposed use. Proposed use permits a company to seek and obtain trademark rights before investing heavily in marketing materials. The scope of unregistered rights is limited to the geographic region in which the company can show it has used the mark in commerce and acquired a reputation. By contrast, registered trademark rights are extended to the entirety of the registered country. Another benefit of registering a trademark is that it provides the trademark owner with a presumption of validity. Meaning that in an enforcement proceeding against an infringer the defendant would have to prove invalidity of the trademark. In contrast, enforcing an unregistered trademark would place the burden on the trademark owner to prove, among other things, that there was sufficient reputation to identify the distinctiveness of the owner's goods or services in association with the unregistered trademark in the mind of the consumer. Lastly, registration provides the benefit of having the trademark advertised and searchable in a public database. Something not available for unregistered marks.

At this point in the presentation it may have occurred to you that 3-D shapes are protectable using both industrial designs and trademarks. This is true. Industrial designs have an advantage over trademarks in that industrial design rights do not require use of the design. On the other hand, registered trademarks have the benefit of being renewable in perpetuity. These advantages can be combined by initially registering a novel industrial design and then registering the 3-D shape as a trademark before the design term expires and once the 3-D shape has been used in commerce to distinguish the company's products or services.

Copyright grants the exclusive right to produce, copy, publish or perform original literary, dramatic, musical and artistic works. In the context of life sciences companies, things that can be copyrighted include manuals, software including source code and the object code generated from the source code, specifications, logos, drawings, etcetera. The term of monopoly granted for copyright is currently equal to the lifetime of the author plus 50 years in Canada. The term in the USA is the lifetime of the author plus 70 years. Canada will soon be adopting the lifetime plus 70 year term to meet its obligations under the United States Mexico Canada Agreement signed in 2018. Copyright is automatic, meaning no registration is necessary, although registration may be required in some countries to initiate infringement proceedings.

Our final category of IP asset is trade secrets. Trade secrets can be used to protect any kind of information so long as that information is not publicly disclosed. This includes inventions, designs, software, data, manuals, methods and more. There are two general requirements for a trade secret. It must have commercial value and the company must take reasonable efforts to maintain the information as secrecy. Reasonable efforts to maintain secrecy typically involve educating employees and having them sign confidentiality clauses, having third parties sign non-disclosure agreements before sharing trade secrets with them, limiting access, marking materials as confidential and using encryption, passwords and physical lock and key. There's no registration process for trade secrets and the protection only lasts as long as the information remains a secret. Trade secrets can therefore, theoretically, have an infinite life span but they will be lost if the secret ever becomes known to the public. If a trade secret is wrongfully obtained by a competitor the owner can sue for damages and seek an injunction to prohibit use of the information but such efforts may be futile if the result is that the secret becomes widely known. Trade secrets do not protect against someone reverse engineering the secret from public information or from independent discovery or development of the trade secret. In fact, for trade secrets that relate to patentable technology there is a risk that a third party will independently develop your secret tech and then seek to obtain patent rights. If they are successful then they may be able to exclude you from using your own technology. With that in mind, it is important to carefully consider when it would be better to patent and when it would be better to keep something secret. In most cases, the best approach is usually one that includes both patents and trade secrets. Recall that to obtain a patent a company must publicly disclose how to make and use the patented technology. This is the so-called patent bargain for which a government grants a monopoly of 20 or so years. A company therefore cannot withhold information that would prevent a competitor from actually using or reproducing their patented technology. In fact, patents have been invalidated where a court decided certain information had been withheld. With that in mind, there is still a role for trade secrets. For example, a company developing a new drug product may protect the drug and its therapeutic use with patents, and disclose a synthetic scheme to manufacture the drug to fulfill the patent bargain. However, manufacturing the drug at a commercial scale may be non-trivial and it could potentially be the subject of a further patent, or may be better protected using trade secrets. Consider the example of antibody drugs which can have very complex manufacturing processes and where even small changes in process can result in heterogeneity or decreased activity of the resulting product.

Here are just some of the useful considerations when trying to decide between patents or trade secrets. First, if a product is sold without patent protection, could it be reversed engineered? Second, will it even be possible to obtain a patent that will sufficiently protect the technology from competitors for attempting to design around the claims of your patent? Thirdly, can you keep the technology secret? We've already mentioned some reasonable measures that can be taken by a company to try to keep information secret. We should also consider whether keeping the secret would cripple the company's ability to secure funding or business partners. Keep in mind that not everyone will be willing to sign an NDA. Lastly, if you obtain a patent, will you spend the money to enforce it? Keep in mind that litigation is costly and time consuming.

We've now discussed all five of the main categories of IP assets but a bonus category worth mentioning is data protection. In fact, for therapeutic innovators this category can be just as valuable as a patent. Canada and some other countries have a data protection system that is intended to compensate innovators for the long time it takes to perform clinical trials in bringing a new drug to market, which can consume much of the innovator's patent term. It works like this; regulatory approval of a generic drug will not be approved for sale before 8 years after the approval of the innovative drug. This term is extended a further 6 months for pediatric drugs. Considering that the patent term is generally 20 years, and it can take 12 or more years to bring a drug to market when accounting for clinical trials, this data protection regime provides protection against competitors rapidly piggybacking off the clinical trial data generated by the innovator company and therefore, rapidly entering the market once the innovator's patent term expires. Which may only be a few years once the drug is approved.

I hope that this presentation has impressed upon the importance of intellectual property to life sciences companies. While patents are usually the first IP asset to come to mind for technology producing businesses, patents should be combined with other categories of IP, as each has advantages that collectively will translate into increased competitiveness. Lastly, always seek out the advice of professional IP counsel. I thank you for your attention.

Sonia: Welcome to Five Intellectual Property Considerations for Start-ups. Intellectual property, or IP, is one of the most effective tools for companies to gain a competitive advantage. In particular in the life sciences, IP is the cornerstone in the long term strategy goals of a company. For life sciences start-ups the IP is often one of the most valuable assets that must be understood and protected. Therefore every bio-tech company, even a start-up, should have an IP strategy in place. When it comes to IP strategy and IP management there are a variety of aspects a company needs to consider. My name is Sonia Ziesche and together with my colleague, Edith Penty Geraets, we will talk you through some of the aspects a start-up should take into consideration when developing their patent portfolio and overall IP strategy. More specifically, we will touch on what we call IP housekeeping. We will also talk about whether a company should consider in terms of IP and the employees. While patent filing is pivotal to a start-up it is also very costly. We'll give you an overview of the costs and timeframe and the processes of putting actual patent application together, before concluding with some general information about filing strategies.

Part of an effective IP management strategy includes some actions that we refer to as IP housekeeping. An essential part of good IP housekeeping is an IP inventory. To establish an IP inventory all IP owned and used by a company should be reviewed and listed. This includes the review of all patent, trademark and copyright registrations and pending applications, and noting of applicable deadlines. The inventory should not only include IP assets but also IP related agreements, procedures and policies. Confidential business information that gives a company a competitive advantage should also be documented. You should consider every aspect of your business such as research and development, manufacturing, marketing and sales. If there's confidential technology, information or know-how involved in any part of your business operation it should be documented. It should include a description of the confidential information, a list of who has access to it and how, and a description of all measurements taken to keep it confidential. Once the IP inventory is established and the identified IP should be assessed on a regular basis. Consider whether existing patent, trademark and copyright registrations and applications should be maintained. If some are now less relevant to your business consider whether to sell, licence or abandon them. Also consider whether new applications should be filed to protect technology under development. We will come back to the idea of IP harvesting later in this presentation. Also review, and update as needed, existing IP agreements and licence agreements, joint development agreements, manufacturing supply agreements and employment agreements. For confidential information that you intend to keep as a trade secret, review and update as needed, existing protection protocols restricting access to and documenting access by need to know individuals. A company should also find out what is happening on the outside. Determine exactly what IP others are using or may be attracted to. A critical analysis of the information gathered in this process will enable a company to determine what it has, what it needs, what it doesn't need and what others may want.

There are both rewards and risks associated with IP. IP risk can arise when competing with others, when collaborating with others or within the business itself. Mitigating risk associated with IP is about management and control. This requires an understanding of IP so potential risks can be identified early, evaluated and proactively mitigated. The most obvious IP related risk stems from a failure to know the existing IP landscape in a field. This can lead to two problems. One, a company may infringe the IP rights of a third party, and two, crucial information that covers aspects of the invention is already in the public domain. In the patent layer or jargon this is referred to as prior art. It's not uncommon for someone to file a patent application and then later find older patent reference that covers something similar. It is therefore important to do prior art searches before launching an entire IP strategy. Risk may also arise in ongoing collaboration with other companies or universities that could result in IP development. Commercial agreements that do not address IP issues appropriately, or at all, might result in that the company has given too much away, loses control or has taken on too much liability. Within the business a lack of IP strategy, and internal IP procedures, may put a company at risk by not filing for patent protection or not registering a trademark, by disclosing an invention too early or by not keeping good records of how a product is developed. The risk of missing out, or giving away a company's IP, can be mitigated by having proper internal procedures in place for invention harvesting to ensure your company obtains the most ideas and best innovation from employees. Regardless of your company size consider the following tips for developing your own formal IP harvesting procedures.

One, dedicate someone to be the designated IP officer or a designated IP team as a central point of contact. Two, educate your R&D team to recognize potential patentable innovations and understand implications of publicly disclosing such innovations before securing IP protection. We, or other members of the Gowling WLG team, would be happy to pitch in and give a seminar covering basic patent law concepts to your team. Three, incentivize your R&D team to identify and internally disclose innovations. Four, engage your R&D team before and after an invention disclosure. You shouldn't just start and end your innovation harvesting process with an invention disclosure meeting. Instead, engage your R&D team regularly to be aware of possible new innovations and additional improvements to already disclosed inventions. A question that often comes up once an invention has been identified is inventorship and ownership. Inventorship is important because it determines ownership of the eventual path. The criteria for deciding who should be considered an inventor are quite different from those normally applied to determining authorship of a scientific research paper. An inventor must be, in some way, responsible for the inventive concept or provides an inventive contribution. Even minor contributions to the inventive concept can be sufficient to qualify the person as an inventor. As long as the work includes some inventive ingenuity, however, merely sponsoring or supervising work may not provide an inventive concept. The complete set of inventors may not be known until the patent is allowed. In Canada it is generally presumed that the employee will have ownership of the invention and any resulting patent for discovery made during the course of employment. There are, however, two main exceptions to this presumption. One, there's an expressed agreement to the contrary, and two, the employee was hired for the express purpose of inventing or innovating. In both these cases ownership rests with the employer. For grant contractors it is presumed that the contractor owns all the rights to an invention they have made unless there's an agreement, expressed or implied, to the contrary. To avoid uncertainty the ownership of all intellectual property should be clearly documented in writing with both employees and independent contractors.

Edith: Obtaining passive protection for invention can be a costly process and can be daunting for any new start-up, particularly where budgets are constrained. Managing these costs, and forecasting when they will arise, is an important part ensuring successful IP protection and avoiding surprises. In general, patent protection is the most expensive form of IP protection. On this slide we've presented a summary of the key costs involved in the patent process. The process can be broken down into four different cost phases. Cost phase one; drafting and filing. Cost phase two; prosecution. Cost phase three; allowance and grant. Cost phase four; renewal fees. Some general ballpark figures for a Canadian patent application are also shown as an example. In the first cost phase, the costs for the drafting and filing stage are relatively easy to predict. The cost required to draft a patent application is an initial hurdle that start-ups will need to grapple with. Since having a patent pending status will often be a key part in negotiating further investment, which may be necessary to fund the subsequent stages of prosecution. The costs for phase three, the allowance and grant stage, and for phase four, renewal fees, are also easy to forecast as the majority of costs relate to official fees that are set by the patent office. However, the cost of these phases can vary quite significantly from country to country. For example, some countries only require renewal fees after a patent has been granted, whereas others require renewal fees while the application is still pending. So cost phase four may, in fact, overlap with cost phases two and three. In cost phase two, prosecution, this is the cost phase with the most uncertainty because it's hard to predict how many objections will be raised by the patent office, and how many official actions will be issued. Since each official action that is issued by the patent office will require a response and possibly amendment to the patent application. Costs can vary significantly depending on the nature of these objections.

In general, for complex technical inventions or for technical fields where there's a lot of innovation in a crowded technical space, the costs for the prosecution phase will be much higher since it's likely that there'll be more relevant prior art, and therefore more objections raised by the patent office. Costs are also usually much higher when prosecuting patent applications in countries where translations are required. However, there are usually ways to slow down prosecution, if this is desired. For example, by applying for extensions of time for responding to official actions, where available. On the other hand, it's also possible to speed up prosecution, if a faster grant is required. For example, to secure investment. Where cash is tight it might be strategic to prioritize certain key patent applications in your portfolio by accelerating that prosecution, while slowing down prosecution and the related costs on others.

Sonia: As mentioned earlier by Edith, the first big investment for obtaining patent protection is the drafting of the actual patent application. There are several considerations that should be kept in mind for this process. The first is public disclosure. The patent must satisfy certain time limits related to how long the invention was disclosed to the public, if at all, prior to the filing of the patent application. Generally, patents will be denied if the invention has been made public prior to the filing of the application. Some countries have a grace period during which the application can still be filed, however, in most countries a public disclosure of the invention before the application is filed is typically enough to cause the patent application to be denied. Therefore a patent application must be filed before publicly disclosing any important research results that may lead to a value of a product or technology. This caution is especially applied to … institutions. As discussed earlier, prior art refers to scientific or technical information that exists before the effective date of a given patent application. Prior art may be found in any public document, such as patents technical publications, conference papers, marketing brochures, web page product, services, equipment, processes and materials. The inventor is not required to do a prior art search, however, there may be advantages to performing a prior art search. A search may be conducted before the filing of the patent application to coach the prospect of obtaining broad claim coverage. Prior art searches are also a good way to get information on development in the field of the invention. Prior art searches may sometimes reveal what competitors consider worth protecting. Search results may be a critical factor in deciding whether to file a patent application.

Having decided to pursue a patent, the next step is to work with an agent to prepare the application. A good way to work with an agent is to collect all of the information together in a document called an invention disclosure form. The patent application has different parts and is useful to understand the parts and what is required for each part in order to obtain a strong and useful patent. The background section sets the stage for what's to come. The background section should describe the prior art at a very high level. You may also include some brief statements about the shortcomings of the prior art. The background may further describe the specific problems you faced and the specific objectives you sought to achieve. The detailed description section provides a sufficient explanation of the invention for an ordinary person, in your field, to make and understand the invention. For inventions in the prior technology, generally the results, material and method, similar to a scientific paper, should be included. Specific disclosure requirements exist for certain inventions in bio-technology. In order for the description of a bio-technology invention to be considered to be sufficient it may be necessary for a sequence listing of a nucleotide or amino acid sequence to be included with the description, or for a deposit of biological materials, such for example, bacteria to be made within an international depository authority. The claims mark the boundaries of the protection provided by a patent. The claims are a written approximation of the abstract inventive concept.

Edith: So, once a patent application has been drafted the next important decision is your filing strategy, which involves deciding where to file your patent application. Questions that should be answered to inform this decision are, one, where are my target markets or maybe more relevant for a start-up, where would I like my target markets to be? And, two, where are my competitors operating? IP rights are territorial in scope. So a patent that is granted in Canada will only be enforceable against commercial activities taking place in Canada, such as making, using or importing the product, or carrying out the process of the invention. A typical filing strategy for a patent application is shown in this slide. Usually the first place an applicant will file their patent application is as a US provisional patent application. US provisionals are generally preferred by start-ups and small businesses as a first place to file, since the official filing fees are low and the official requirements are not as strict as other countries. Meaning that a filing date can be quickly obtained. While a quick filing date can be an advantage, it can also bear some risks and disadvantages later in prosecution, if the first application does not contain enough information to fully support the invention that is being claimed. Once the first patent application has been filed, the clock starts ticking and the applicant has 1 year to decide where in the world they want to file their patent portfolio, claiming priority from the first patent application. Claiming priority means that the later patent application will hold the same filing date as the first patent application, and this date is important for determining which prior art is relevant to the invention. If at the 1 year time point it's still unknown which jurisdiction's protection is required in, it's possible to file an international application. The official fees for this international application are much higher than the provisional but it effectively buys extra time to make the decision and delays the associated filing costs. The international application provides a placeholder for the applicant to file in most countries in the world, except for a few select countries such as Taiwan, Argentina and Pakistan.

So after a maximum of about 2.5 years, or 30 months from the initial provisional filing, the decision must be made for which countries the applicant wishes to file in. Each patent application that is filed will be examined separately by the patent office of each country. So the cost phases one to four, discussed in the earlier slide, will apply in each country. If protection is sought for European countries, a regional European application can be filed, which similarly to the international application designates a number of European countries. It's not necessary to choose which individual countries are desired until the grant phase, where the European application is then split into a bundle of patents, by paying appropriate fees. We, or other members of the Gowling WLG team, will be happy to discuss filing strategies suited to your commercial aims.

That concludes our overview of Five IP Considerations for Start-ups. Thank you for joining us.

Intellectual property is pivotal to the life sciences industry. In order to succeed, life sciences companies must distinguish themselves from their competitors through their intellectual property portfolios. A successful patent portfolio represents a well reasoned business strategy and reflects present and future business objectives. To this end, IP can be managed as a tangible business asset. Today we've covered five key areas that we believe start-ups should consider in their IP strategy, which include good IP housekeeping, employee education, cost forecasting, preparation for filing a patent application and patent filing strategies. As always, we're hear to answer all questions you might have on all aspects of your IP needs. Our contact details are on the screen and we look forward to hearing from you.

Lisa: Good day and welcome to our discussion on Strategies for Building an IP Portfolio in the Life Sciences Sector. My name is Lisa Thorne and I am a partner in Gowling WLG's Vancouver office and my practice focuses on patent prosecution and patent portfolio management. Presenting with me today is Jayde Wood.

Jayde: Thank you, Lisa, and thank you everyone for tuning in. My name's Jayde Wood. I am an IP lawyer, a patent agent and a trademark agent based in our Vancouver office. My practice focuses on the strategic creation, development and commercialization of IP assets. One thing perhaps is interesting about me is that prior to becoming a lawyer I was trained as a microbiologist and because of my science training I enjoy collaborating with life sciences companies to create business value by leveraging their innovative creation.

Lisa: So today Jayde and I are going to discuss five practical tips for building an IP portfolio for growth. Let's discuss our first tip. What this tip is, is to implement an information management system to protect the valuable confidential information, know-how and trade secrets and to address ownership issues, particularly early on. So, Jayde, what do you have to recommend to companies in the life sciences sector, relating to this tip?

Jayde: Oh 100%. I think we are 2 and half years into the COVID-19 pandemic. The value and importance of life sciences and bio-tech sector has been highlighted tremendously. Really this sector has been the center of research and development efforts in responding to the pandemic. The value of IP is more apparent today compared to ever before. So when we think about IP protection, and how we go ahead and obtain IP protection, it really goes to the bottom of it. IP, intellectual property, is essentially the creation of the mind and the core of IP protection starts with the creation, management and protection of valuable information. Before a company is able to turn valuable information into IP assets, it is really important to protect the confidentiality of such information. So here it is important to have proper non-disclosure obligations in place. Lisa's going to talk about this later on, patent is quite important when it comes to life sciences innovation, and in many countries the patent system has a first to file system. Many countries may have, what we say, absolute novelty requirements. So if someone, the inventor, goes ahead and disclose his or her creation, in some jurisdictions patent protection may no longer be valid. So NDA, I'm sure all of you have heard of it and used it in the past, NDAs a valuable tool to protect the valuable information that your company owns. The second issue is, if possible, it would be really great to address IP ownership issues early on. The basic premise is that the inventors are the first owners of the inventions. Similarly in the context of copyright. Authors are the first owners of copyrighted works. Obviously there are exceptions. So in the context of copyright protection, an employee's copyrighted works are usually owned by the employers. Now when it comes to IP ownerships, if we don't address those issues early on we may run into a situation where many collaborators come together and create something, jointly, and joint IP ownership can be very tricky. Usually it really gives rise to complex legal and strategic issues. Also, between different countries when it comes to jointly created IP, the laws can be very different. For example, in Canada, subject to contrary written agreements between the joint owners, one owner cannot dilute the other owner's IP interest. This may mean you can assign your IP rights to a third party without consent from your co-owners but you cannot grant any licence agreement to a third party without first obtaining consent from your co-owners. In the United States, the laws can be different, so it's really important, if possible, at the beginning of a collaboration project all the parties come together and address IP issues early on. There are so many different types of IP protections, and Lisa already talked about this earlier, and now let's just go back to really the key of today's topic, IP protection. Lisa what are some of the IP protection, types of IP protection, that life sciences companies should be aware of and deploy when applicable?

Lisa: There's a wide variety. We have various forms of IP protection listed here. So patents, trade secrets, trademarks, copyright, plant breeders' rights, for those working in agriculture industries. A lot of this can also tie into your brand and protection of your brand as you move forward. But one of the initial decisions that growing life sciences companies come to us with first is, do I need to file a patent application? A robust patent portfolio can really set the foundation for a trajectory of growth. However, as with anything, it's not necessarily a slam dunk for when a company is looking at where they're at and where their finances are. It's a very common question. Someone will pick up the phone and call us and ask, "Do I need to go through the process of patenting our technology or can we keep this as a trade secret or as confidential information within the company?" The answer here is to weigh the pros and cons of each, and you have to decide how each fits into your overall business plan, and that's a theme that we're going to circle back to a few times today is about your business plan. The advantages of patents are that they are an asset, that is very attractive to potential investors, potential collaborators and potential licencing partners. For a company looking to grow, entering into relationships with these potential partners is key for growth. We certainly saw that during the COVID-19 pandemic, and the development of vaccines, how important cross-licencing agreements were between various companies to deliver vaccines as quickly as we did. A further advantage of patenting is enforcement. What scares people off about filing a patent application? The initial cost can be of concern. Another issue is that filing a patent application requires a full and frank disclosure of the invention. This can be an intimidating proposition for a company that has spent significant time and resources, and put a tremendous effort into protecting their confidential information, and then having to disclose it all can be difficult. We don't have to disclose everything but you have to disclose enough information, in a patent application, to ensure that somebody who else works in the field can make and use the invention. With these concerns about patenting, many companies will perhaps want to keep their technology as a trade secret, within the company.

The advantages here are an immediate cost savings, and we'll touch on what some of the long-term costs can be, and simplicity in terms of we just have to have confidentiality agreements and non-disclosure agreements. However, there are a number of difficulties that can arise, particularly as a life sciences company is growing, they will need to enter into relationships with contractors and subcontractors and various partners, and ensuring that all of those entities sign a confidentiality agreement, to your liking, can be very difficult and with a lot of change and a lot of growth happening, it's easy to miss a confidentiality agreement. It's not unheard of. Another issue is if your competitors are watching what you are doing, if they get a hold of your product, can they reverse engineer it easily? If a competitor can easily reverse engineer your product then maintaining it confidentially within the company and not filing a patent application, that competitor can just go ahead with what you have put significant resources into. What happens even if you have all the confidentiality agreements and non-disclosure agreements, what if there's a breach? What if somebody says something by mistake or something happens, your remedy available is breach of contract, and that process of going through the claim of breach of contract is not nearly as advantageous for the technology owner as being a patent owner. Being a patent owner, should there be an infringement by a competitor, it's a very different remedy system and quite often will result in a settlement or a licencing agreement, or what have you. So you're still receiving benefit from your patent filing.

Jayde: For sure. I think the key message is there are so many different types of IP protection and when it comes to building your empire, when it comes to building your IP portfolio, I think it's important to go back to the drawing board in the sense really take a look at your technology platform. I think have a strategic discussion internally and think, which types of IP protection are applicable? Often they can overlap. Like Lisa said, for certain aspects of your technology, if reverse engineering is quite simple then patent protection would make more sense versus the other side. If something no one will ever be able to solve as to your secret sauce, like KFCs secret recipe, and if you have the infrastructure internally to protect your valuable IP information in that case, then trade secrets protection can be really valuable since it can last forever, as long as you can keep your secret sauce a secret. Lisa, I know we talked a lot about patent protection, and I think for the life sciences sector patent protection is really important. So here are two questions for you. When, and how, should a life sciences company pursue patent protection?

Lisa: There's a great saying in the patent field, and we have it up there, that it's never too early to file a patent application until it's too late, such that your competitor has filed their application first. There's so many considerations that go into the determination of when to file. As you had mentioned earlier, most patent systems around the world operate on a first to file system. So what that means is that the patent rights will go to the company that files their application for the technology first. So what that essentially sets up is a race to the patent office. However, and especially important in the life sciences sector, and we're seeing this in policy decisions as well as court decisions, is that the patent application needs to contain enough data to show how the invention works. I know I mentioned this previously but it's a very important point that we see lots of patent examiners saying that your patent doesn't have sufficient support. A common question I get on this is, does the data need to be in vivo? The answer there is, no. You don't need to have in vivo data but you need to have some data that allows someone who works in the field, and has the common amount of knowledge as they would have in that field, to make and use the invention. Another common strategy that I think a lot of our audience will have seen is you'll see companies, they'll file a first application that is extremely broad that covers a huge amount of terrain in the field, and you'll see subsequent filings where the application itself is much narrower, and it may be directed to certain elements of formulation or preparation. That's a common strategy that we'll see. A first filing that's very broad and then narrowing down to specific technologies. So knowing the success of this strategy, when you're drafting an application, it's extremely tempting to throw in every alternative and variation that you can think of and this is well founded, but be considerate when doing this. Just in case some of those elements that you're putting in, are you going to be conducting specific research to that area? Do you have projects ongoing or in the next year? Are you going to be generating data directed to that element of the invention? Because you may not want that disclosed quite yet. You may want to flush out the data on that point a little bit more, and have your first filing, and then follow up with the second filing when you've got a bit more data. It's a lot of dialogue between various stakeholders in the company and keeping an eye on what your competitors are doing as well. During the COVID-19 pandemic it was a race to the patent office. You have a lot of companies working extremely hard and they will file applications as soon as they can. In other areas, the growth is slower, so you don't see as quick as a number of patent filings. Keeping an eye on your competitors, knowing what they're doing, is important and that ties into our tip number four, which relates to some more specifics about what your competitors are up to. Jayde, I think you have a few comments on that.

Jayde: Yeah, for sure. I think here the key message is be strategic. Don't be reactionary. Tip three and tip four, they're somewhat related in the sense searches can be very useful. It is a useful tool for you to sort of decide on a pathway to your IP strategy. Here one type of searches is prior art search. It's really important to know what's out there already before you invest money, effort and time into a project. It's always frustrating, and it's really not that uncommon for someone to engage in R&D efforts and then decide to seek patent protection, only to find that there is an older patent which covers something very similar, or even identical in some situations. So it's important to do prior art searches which will help you to shape your IP and patent strategy. When it comes to commercialization, and I'd love to hear Lisa's perspective on this point as well, having a granted patent doesn't provide you with a legal right to go ahead and commercialize your patent to the invention without ignoring other people's patent rights. So often we say patent rights are negative rights. So I'm not entirely sure whether it's a shield or a sword at this point, but the gist of it is you can rely on your patent to stop another person from commercially exploiting your invention, but it is not a shield to say, oh look, I have a patent therefore I'm able to practice my invention. An effective IP strategy, in my mind to have in terms of appropriate searches, to have those searches done so that you know what other people have done in the past and you will also know what your competitors are doing. So you see it's important to gain competitor intelligence so that you can analyse the results and the results will provide some reassurance around freedom to operate. Another search is called IP landscape search. So again that's sort of the competitor intelligence you're trying to gain. So Lisa talked about COVID-19 and it's just such a relevant example. Many players are in that space right now. So the COVID-19 space is likely to be quite crowded, so it's important from a business perspective to understand and to navigate what IP rights other people may have because their IP rights, they impact on your commercialization plans. Lisa, going back to you, do you think patent rights are a shield or a sword?

Lisa: Yeah, well to tie in what you were saying about searches, it's important to do your own independent search. Of course when you're going through the patenting process various patent offices will also conduct their search, but they're not necessarily perfect, and having your own understanding is very important in the sense that if you have a granted patent, and you know want to search your patent against a competitor who you believe is infringing, you don't want them to be able to turn around and say, "I don't think your patent's valid and in fact I have this piece of prior art to show it." Understanding your competitor's patent landscape, what they are doing, what direction they seem to be headed in, that can help you develop your IP strategy as well, in terms of whether to file or whether to maintain your technology as a trade secret. I think what this all ties into is our fifth tip which is matching your IP strategy with your business goals. Making sure that what you're protecting via patents, what you have consciously decided to keep as trade secrets, how is that aligning with your business goals in the direction that your business is headed in in terms of product pipeline? Are you going to go out looking to sell your own products or are you going out to look for potential licencing partners and collaborators? The life sciences sector is extremely investment intensive. Many companies, in order to grow, do need to reach out and establish these collaborative relationships and having a robust patent portfolio is very important for that. Or, for certain aspects of technology, keeping it all in-house you're able to manage that and you have sufficient capital to move forward. In terms of matching IP strategy and business goals, what do you think of that tip, Jayde?

Jayde: I agree with you 100%. One of my favourite books is the '7 Habits of Highly Effective People' and I think for our audience who are involved in life sciences, in this sector I think many of you will echo, probably have read the book and you will recall that habit number two is to begin with the end in mind. I use that mantra, not only in my professional life, my personal life, but I also think that makes so much sense when it comes to the development of an IP strategy. I think we mentioned many times the development of an IP portfolio is time intensive. It costs money so often the reward from IP protection may not be obvious at the beginning, at least. It becomes obvious the day where a potential investor walks into your lab who may be interested in investing, where a competitor files for practical protection which may eventually interfere with your business operations. So I think really when we think about IP strategy we do want to begin with the end in mind. So it's important to plan ahead. Once you know where you want to be in 5 years, or even 2 years, and then it's easier to come up with an IP strategy which match your business identity and to help you achieve your business goals. So Lisa talked about different examples, perhaps I can add another example, so here if a company's brand is to foster innovation and to engage in collaboration with different entities, perhaps for that company their IP strategy would have a major component involving patent protection. Perhaps this is because at the end of the day patent protection, it aims to encourage disclosure of everyone's innovation, so everyone else can come in and collaborate and create more knowledge and ensure that knowledge through licencing, cross-licencing and other means of collaboration. Begin with the end in mind. Think about your corporate identity and then your IP strategy will follow.

Lisa: Yeah, I think that's a great way to end our discussion today of our five tips. So thank you, everybody, for tuning in. If you have any questions about what we talked about today, or any other questions relating to IP, please feel free to reach out and thank you very much.