Intellectual Property: Patent or Padlock: Patents and Trade Secrets Form the Heart of an Effective IP Strategy - A typical life sciences company probably keeps more than two-thirds of its proprietary

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Intellectual Property: Patent or Padlock: Patents and Trade Secrets Form the Heart of an Effective IP Strategy
A typical life sciences company probably keeps more than two-thirds of its proprietary information in the form of trade secrets.


BioPharm International
Volume 20, Issue 2



The intellectual property (IP) of a company is often its core asset. Acquiring, protecting, and enforcing IP involves decisions at the highest levels of the company, and IP commands a significant portion of the company's resources. For most life sciences companies, patents are usually considered to be the principle IP asset. In practice, however, these companies usually have extensive know-how, most often kept as trade secrets. If a direct comparison could be made, a typical life-sciences company probably keeps more than two-thirds of its proprietary information in the form of trade secrets. In early stage companies, particularly in relatively new technology areas such as nanotechnology, the proportion of trade secrets to patents is much higher.

This article reviews the complementary nature of patents and trade secrets, and explains how to preserve core trade secrets while acquiring enforceable patent rights. General concepts are first introduced, and specific examples of business situations are explored.

PATENTS

A patent is a grant of proprietary rights in an invention. The Constitution of the United States in Article I, section 8, provides that "Congress shall have power . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Congress established the United States Patent and Trademark Office (USPTO) to administer the law relating to the granting and maintenance of patents. Patents are granted to any person who "invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." The word "process" refers to a process, act, or method, and primarily includes industrial or technical processes. The term "manufacture" has been interpreted as referring to articles that are fabricated, and generally includes all manufactured articles. A "composition of matter" is a biological or chemical entity and may include mixtures, i.e., formulations or complex compositions. Generally, a patent has a lifespan of 20 years from the date on which the application for the patent was filed. Under certain circumstances, patent term extensions or adjustments may be available. US patent grants are effective only within the United States, US territories, and US possessions.


John M. Garvey, PhD
There are three types of patents. Utility patents are the most common, and are granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof. A provisional patent application, common in the life sciences industry, is simply a specific type of utility patent application. However, the provisional patent application plays an important role in the preservation of invention rights, both for patents and for trade secrets.

The second type of patent is a design patent, which may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture. A design patent does not cover functional aspects of the article, which is properly the scope of a utility patent. Finally, a plant patent may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant. Often a utility patent is sought for cell lines and other biologics that may be of plant origin, even though plant patents are available.

To be patentable, an invention must be "novel." It cannot be patented if it was known or used by others in this country, or patented or described in a printed publication in this or a foreign country before the invention thereof by the applicant for patent; or the invention was patented or described in a printed publication in this or a foreign country, or in public use or on sale in this country more than one year before the application for patent in the United States. Other conditions apply and the novelty requirement is a complex point at issue in the prosecution of many patent applications. Even if the subject matter sought to be patented is not entirely described in the prior art, a patent may still be refused if the differences between the prior art and the claimed invention would be obvious to a person of ordinary skill in the relevant art. This is another requirement of the patent laws that provides subject matter for debate between the USPTO and patent applicants.


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