IP strategies for the future

By Iain Scott
Thursday, 08 August, 2002


When Dr Graeme Woodrow joined Biotech Australia as a bench scientist in 1983, a colleague told him: 'It would be a scandal for anyone to make a profit from a malaria vaccine."

At that time, he said, the dominant paradigm within Australian research institutes was still flavoured by penicillin pioneer Howard Florey: "We'll give it to the world". But just one year later the World Health Organisation (WHO) relaxed its guidelines on intellectual property ownership, and now, almost 20 years on, the notion of IP was axiomatic, Woodrow told a symposium in Sydney yesterday.

Attendees at the IP symposium, hosted by the Australian Graduate School of Management and organised by law firm Baldwin Shelston Waters, heard personal stories about patenting strategies from the biotechnology coalface, Woodrow's among them.

Woodrow, chair of the NSW branch of industry association AusBiotech, told the symposium that the WHO's changed attitude towards IP ownership was a reflection of the view that protecting IP was a means of bringing benefits to society as well as creating wealth.

But awareness of IP issues in Australia was still lacking, he said: "Culturally, Australians are very enthusiastic about property, but not about intellectual property."

Woodrow stressed that IP was a company's most valuable asset, and its value should be maximised. He said that while managing an IP portfolio was expensive for start-ups, eating up to 10 per cent of an annual budget, it built the basis for a company's future. "At the end of the day, when you're selling your wares, what else have you got but your patents?" he said.

Thorough IP management was important, Woodrow observed, because simply obtaining a patent was no guarantee of commercial success.

"It's just a launching pad," he said. "A patent is a negative right to prevent people from operating in your space, so you've got to commercialise your space. If you don't defend those boundaries you're going to lose them.

"It's vital that IP is tied into your commercial strategy. IP is patents plus brains - you need both. And a strong IP position is patents plus brains plus big bucks."

Baldwin Shelston Waters partner Ivan Rajkovic said managing a patent portfolio had to be linked in to a business plan. "Otherwise, you're not managing it, you're paying for it," he said.

And it was important to be aggressive when managing a patent portfolio, Woodrow said. "The major question here is, will your IP position block all the competition? People talk about technology having a life-span of five years. That's not because the technology isn't any good after then, but because of competition."

Another speaker at the symposium, Stephen Parker, director of IP Solutions, pointed out that a dilemma of biotech R&D was that the 10-year commercialisation process was matched by the fact that the "next big thing" could appear less than 10 years after the product was on the market. "Fashion and fear always beat science," he said.

But rather than be intimidated by competition, Woodrow said, companies needed to establish a commercial position that diminished its impact. "Patents are only as strong as they are enforceable, and if you can't enforce them you shouldn't write them in the first place," he said.

Woodrow said companies should stake out their fields through active patenting. "It's a signal to competition that you mean business and you're active in that area," he said. "Your IP strategy should direct your R&D, rather than the other way round.

"And maximise the value of your IP. Slice your salami thinly, and try to get the maximum value from the smallest piece."

Fear of rejection

A knock-back from the patent office was not something to be afraid of, the symposium heard - in fact, according to Baldwin Shelston Waters partner Ivan Rajkovic, "If you don't get a rejection, change your patent attorney."

Graeme Woodrow said that while there was a technical component to every patent, there was also a political aspect that could not be ignored. When an application by Biotech Australia to patent its PAI-2 compound was rejected by the US patent office, Woodrow flew to Washington to argue its merits in person. The result was that the patent was granted.

"I was told that examiners only have 14 hours to evaluate an application, so they're under a lot of pressure," he said. "But the examiner told me that reports are really a fishing expedition. It really depends on your response."

Prof Peter Gray, director of the UNSW Bioengineering Centre and a founder of spin-off company Acyte, said that a personal meeting with the US patent office had achieved a similar result in his company's case. "They admitted that their case wasn't strong enough," he said. "That was a very salutary experience."

It's academic

While good IP management was "a given" in big pharma, there was still a question mark over who should manage IP in Australian universities, according to Prof Peter Gray, director of the University of NSW's Bioengineering Centre.

Gray told the IP symposium that while the National Health and Medical Research Council was going to make IP information part of the grant process, the critical question was who would be picking up the cost of IP management."

"[UNSW] has an IP policy on its web site, and we're lucky in that we have a commercialisation company, Unisearch," he said. "But in any university, the problem is: who makes the decision whether to patent or not? I think that question is a key one. The more expertise that can be brought into play, the better.

"In Australia, we need to be ensuring that [public sector IP] is protected," he said.

Baldwin Shelston Waters partner Ivan Rajkovic said IP had to be linked to a business plan, generally a rarity in academic research institutions, which meant that the research and commercialisation arms of universities needed to be trained in IP management.

"You do need the gatekeepers," he said. "Decisions have to be made at the coalface, therefore you need to train the people - it's as simple as that."

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