Insight journal - Dealtalk

Recent developments in biotech patents

Posted on 25 November 2007

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By Gareth Williams, Marks & Clark

Marks & Clerk’s annual biotechnology reports have traditionally taken a sector focus, in order to provide an in-depth view of how biotech is developing technologically. This year, the report took a more strategic look at patenting activity in the biotechnology arena, and discovered a maturing approach to commercialising and protecting intellectual property. 

It was not, however, particularly good news from a European perspective, nor for the corporate sector. Meanwhile, international patenting activity is also shifting dramatically.

A key finding of the report is that international patent filing (via the PCT route) has fallen significantly in recent years. That might sound like bad news for R&D, not least as international filing has tended to increase across industries as a result of globalisation and the recognition of important new markets. However, whilst international patent filing may have fallen by an astonishing 55 per cent for biotechs between the years 2002 and 2006, the overall number of patents granted rose in that period by 18 per cent.

The proportion of successful patent applications has therefore greatly increased, with the research concluding that filing is becoming much more targeted for biotechnology. It points to inventors becoming far savvier and filing applications with a better chance of being granted.

Lessons have been learnt as to what is patentable, and opportunistic research is shifting in favour of more focused filing programmes for key technologies such as peptides, antigens, antibodies, gene therapy and stem cells. Better informed business decisions are being made, which should translate into more commercially viable, biomedicinal products coming to market in the future.

The Role of the Patent Offices

This increase in patents granted has also been partly helped by greater transparency provided by the individual Patent Offices. In particular, we believe that a number of recent clarifying decisions by the European Patent Office Boards of Appeal have contributed to this rise.

Meanwhile, there has been a fall in ‘gold rush’ patenting, as Patent Offices have been much firmer in addressing more opportunistic patenting activity. Where a flurry of patenting was previously seen in more speculative areas, such as sequence inventions (particularly SNPs, ESTs and haplotype mapping), the US Patent Office has been particularly good at stemming the tide. Many other offices have followed its lead.

This has had a clear impact on the industry. The research finds that in 2002, patenting activity spread across a variety of patent classes, and included a high level of speculative, sequence-based inventions relating to genetic engineering. By 2006, this figure had fallen by 78 per cent, and the focus of research had become much more concentrated.

Almost half of those patents included in the study which were published in 2006 relate to the A61K class (peptides, antigens, antibodies and gene therapy).

This more focused approach by the biotechnology industry has resulted in a smaller number of patents being filed but across a greater number of individual countries. This implies that the industry has become much more strategic in its approach as to which technologies are worth developing. It is displaying greater commitment to more widely protecting more commercially sound R&D. In short, the industry is maturing.

Academia Outstrips the Corporate Sector

Whilst biotech research and development has evidently become more focused in its commercialisation, the report revealed that, perhaps a little surprisingly, academia and the public sector are leading the way. The commercial sector has only one representative in the top five patent filers in biotechnology, the US-based Genentech. More alarmingly for the private sector, in a comparison of the top 20 filers worldwide, academic filing outpaced corporate filing by 51 per cent between 2002 and 2006. It is academia and the public sector that are driving advances in biotechnology.

However, the European academic sector is suffering in comparison to the United States and the Far East. The research finds that most academic patent filing is heavily monopolised by US-based institutions, with the exception of the Japan Science and Technology Agency and the University of Tokyo. By contrast, none of Europe’s leading universities makes it into a list of the top 20 academic patent filers, in spite of the EU having the highest per capita number of science and engineering graduates in the world.

The University of Oxford is the nearest European entrant to the top 20. Yet Oxford’s spinoff company, Isis Innovations Ltd, still only has 65 patent families compared to the 75 of Harvard, the 20th biggest filer.

It would appear that whilst Europe is making strong advances in IP (through the development of spin-out companies and increased patent licensing), more needs to be done to move it from a position of growth to being a challenger on the international stage.

This is important, not least as academic patents are very valuable and are frequently cited, as they cover fundamental technologies. Unsurprisingly, considering their academic dominance, it is the US academic institutions that lead in patent citations.

On the corporate side, Europe’s performance is far better, with Novozymes and GlaxoSmithKline (UK/US) both listed in the top 20 corporate filers. Novozymes was in fact the fifth largest filer in 2006, with an impressive 162 patents filed. Yet the European corporate showing is not particularly vast either. Considering the levels of expenditure, and the number of science graduates in Europe, one would expect European companies and academic institutions to be more in competition with their transatlantic rivals.

Growth from Asia

It is not just traditional American dominance that threatens biotechnology in Europe. The 2007 report demonstrates the growing power of East Asian countries in developing commercially viable and patentable biotechnology.

Whilst the research shows that Europe’s filing is strong, there has been very little growth aside from Denmark, which has made a concerted effort to acquire the best biotechnology talent available. Consequently, Denmark has seen its filings treble between 2002 and 2006.

Where Europe is showing a degree of stagnation, Eastern Asia is showing impressive growth. Japan is now the single largest filer outside the United States, having seen its filings rise by 250 per cent between 2002 and 2006. This astonishing level of growth is indicative of Japan’s commitment to putting serious investment into the biotechnology industry to broaden its technological expertise. The research also found that the Japan Science and Technology Agency is the only organisation to challenge the United States in terms of the fastest growing patentees at present.

China also appears to be coupling its vast industrial activity with growth in scientific R&D, growing its patent filings from almost zero in 2002 to around 50 in 2005 and beginning to win its fight against talent migration. Whereas Denmark’s growth is attributable to a great deal of non-Danish researchers working within its laboratories, the research concludes that China is starting to attract its talent back home (where its inventors had migrated abroad).

If Europe wants to compete, both with the United States and its emerging rivals, it must safely harbour its own talent, as well as ensure that its universities develop targeted filing strategies to make the most of their impressive research.

 

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