Scaling up for Investment
Marks & Clerk supports companies in capturing, protecting and exploiting intellectual property assets, including patents, trademarks, designs and copyright.
In February, members of the industrial biotechnology community (from academia, industry and policy groups) came together at the annual IBioIC conference in Glasgow to discuss how to stimulate and support growth in this sector. Themes included the importance of government policy in driving growth, for example, in the form of tax incentives or quotas favouring companies utilising bioeconomy products and methods. In order to have such policy changes implemented, the sector needs to focus on public engagement in the upcoming years to gain public support and so apply pressure on representatives to implement policy changes.
In addition, significant amounts of funding are often required when scaling up and one concern raised during the conference was a relative scarcity of venture capitalist investors willing to take the risk in such emerging technologies, given the relatively small market size at present. A possible solution could of course be to use policy changes at a government level to create new markets and so increase the potential reward of such investments.
At the same time, young biotech companies looking to attract and secure investment should look to have in place a well-thought out intellectual property strategy.
Whilst trade marks will be important in offering brand protection, it is likely that most industrial biotechnology companies will be based on a core innovative product or process. Before committing significant investment, due diligence will be carried out to ascertain whether or not this core technology is appropriately protected. For the majority of companies working in the bioeconomy sector, it is likely that patent protection will be instrumental in securing this investment.
Patents offer the holder protection of their valuable research by way of a monopoly right. Whilst the patent term in the UK (and most other major jurisdictions) is limited to 20 years from filing, a shrewd enterprise will continue to file new applications as its core technology develops – to cover improvements and modifications. This will enable it to build up a thicket of patents, effectively lengthening the term of protection and increasing the hurdles encountered by any third party hoping to enter the market.
Some companies may also choose to rely on trade secrets. In essence, the intellectual property in question is retained in-house, and often only known to a select few within the organisation. Whilst there is no limit to the duration of a trade secret, this form of protection is generally only appropriate in certain cases, e.g. where the final product or process is difficult to reverse engineer. A key drawback is that it offers no protection against third parties who independently arrive at the same product or process. It can also be difficult to police in a rapidly growing start-up, where employee turnover may be high. If a disgruntled employee chooses to leave and publishes the proprietary “trade secret” information, it may be that the only remedy then available to the company would be to seek damages by raising a claim on the basis of a breach of contract.
In reality, it is often preferable to rely on a combination of various types of intellectual property – including trade marks, designs, patents and trade secrets. How best to formulate your intellectual property strategy should be discussed with patent and trade mark attorneys to ensure that your company is fit and ready to attract investment.