Introduction: An Overview of Intellectual Property - - BioPharm International


Introduction: An Overview of Intellectual Property

BioPharm International
Volume 1, Issue 8

Unlike copyrights, which provide protection for the products of creativity, trademarks protect the brand names and artwork used to identify a product. Trademarks can be important to biopharmaceutical companies by allowing them to identify their products and to fight counterfeiting attempts. For example, Pfizer is currently battling several counterfeit e-mail vendors of Viagra on the grounds that these vendors have illegally appropriated the Viagra mark and characteristic little blue pill in a false and misleading manner.12


As the biopharmaceutical industry continues to develop, licensing will play an ever-growing role in allowing the exchange of technology for everything from drug delivery mechanisms to developmental tools. City of Hope v Genentech demonstrates, however, that biopharmaceutical businesses should pay careful attention to the nuances of contract language, and should carefully evaluate the risks that could occur in the event that licensing transactions fall through.


Current litigation in the biopharmaceutical industry focuses on testing the boundaries of patent law as it is applied to biopharmaceutical issues. For example, the battle over the written description requirement in patent suits has begun to play a substantial role in much biopharmaceutical litigation. Similarly, the ANDA application process has spawned a new subspecialty of litigation in which generic drug makers sue to invalidate patents held by innovator companies in an attempt to get a jump-start on manufacturing generic products.

Avoiding Antitrust Issues

In stark contrast to the intellectual property laws, which provide innovators with a limited legal monopoly, federal antitrust laws are designed to encourage vigorous competition, to eliminate unfair competition, and to discourage too much market power. For example, a court recently approved a settlement in a case whereby SmithKline Beecham Corporation, without admitting any wrongdoing, agreed to pay $65 million to settle class action claims that SmithKline limited competition in the market for the drug Paxil by filing sham patent infringement suits against generic drug manufacturers.13 Biopharmaceuticals, therefore, should be particularly aware of potential antitrust concerns that may arise when attempting to enforce patent rights.

Best Practices for Biopharmaceutical Companies

Biopharmaceutical companies need to consider intellectual property issues early on, even at the start-up stage. Biopharmaceutical companies must consider what types of intellectual property protection they need, and in particular whether their research is eligible for patent protection. Biopharmaceutical companies also need to have a relevant contractual framework in place when doing everything from hiring employees (i.e., executing confidentiality agreements and invention-assignment agreements) to licensing technology from others (i.e., considering the scope of the license grant and any limitations on exclusivity or competition).

Once biopharmaceutical companies have the underlying groundwork in place, they need to be vigilant in enforcing or licensing their intellectual property. Litigation is an expensive process, and if a company's patents are in dispute, litigation can jeopardize the validity of the patents themselves. For this reason, biopharmaceuticals seeking to enforce their intellectual property rights must balance the merits of litigation against their long-term patent strategy. Is the relevant technology a crowded field in which prior art may be found that could invalidate the patent? Would it be better to license the technology rather than risk invalidation of a patent in light of potential second- and third-generation patents in the pipeline? Established companies often have the support and resources to obtain advice in enforcing their intellectual property. This does not mean, however, that start-up companies can be cavalier about enforcing intellectual property. Even if a start-up ultimately fails, its intellectual property may still be a valuable asset, and risking that IP needlessly could destroy that value.

Within the biopharmaceutical industry, it is important for executives to plan their company's strategies. As demonstrated by recent mergers among major industry players, the biopharmaceutical industry may face continued consolidation. For example, the recent merger announcement between Johnson & Johnson and Guidant has led to speculation that the combination of Guidant's stent technology and Johnson & Johnson's drug-coating technology could lead to a strong new product the two companies could not develop separately.14

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