A company should use both the defensive strategy of protecting its pre-existing core technology, as well as the offensive
strategy of patenting claims covering future competitors from novel ideas of products, methods, or improvements.15 An intelligent offensive patent strategy can block future competition, secure emerging standards, increase an enterprise's
valuation, collect licensing royalties, and forecast future trends of a certain product. For example, although its business
model has since changed, the genomics enterprise Incyte acquired a substantial patent portfolio from patents on mostly novel,
full-length genes and a few partial sequences obtained through its computer system. This strategy discourages competitors
from taking similar inventions to market, and it allows the enterprise to collect potential licensing fees in the future.
Blocking out competitors 100% is an ideal. It is unlikely that a biotechnology enterprise can develop a patent strategy that
can protect it from competitors over a very long period of time. However, having an understanding of the ultimate or ideal
techniques of protection can help the enterprise to identify ways to protect itself from competitors. Each link in the patent
value chain provides opportunities to block competitors (Figure 1). Any link that is blocked from competitive access might
be sufficient to protect the business. Combinations of blocking techniques over several links increase the probability of
success. The objective of a blocking strategy is to find ways to protect each link in the patent value chain so that the competitor
is denied access. Where that protection is not 100% certain, biotechnology companies want to make it difficult, time-consuming,
or expensive to overcome the blocking factors.
Patents play a critical role in driving innovation and protecting advancements in the biotechnology sectors, and the need
for strategic management of patents is greater than ever. Because the ultimate purpose of any good patent strategy is to serve
the enterprise's overall business objectives, that strategy must be developed concurrently with research, development, and
investment strategies. It certainly requires consistent business, technical, and legal collaboration. No generic system will
work for every enterprise, so companies should be careful to establish patent strategies tailored to benefit their particular
needs. A thorough and clear understanding of patent strategies may enable patentees or competitors to avoid the high stakes
and costs of attacking and defending biotechnology patents.
This research was supported by the JSPS of Japan and the National Nature Science Foundation of China, Project No. 70472060.
Wei Li is a doctoral candidate at the school of management at Huazhong University of Science and Technology, Wuhan 430074, Hubei
Province, People's Republic of China, 0086.27.629.52.233, firstname.lastname@example.org
Xiang Yu is a patent attorney and a professor of school of management at Huazhong University of Science and Technology, Wuhan 430074,
Hubei Province, People's Republic of China, 0086.27.8755.6460, Xiang_Yu_de@yahoo.com