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Finding better ways to negotiate biotech intellectual property

Rita Baron-Faust on November 6, 2013

Healthcare entrepreneurs who have hit the intellectual property speed bump can relate to the appropriately named session,"Reducing Drag: New Approaches to IP Negotiation and Technology Licensing," at the Partnering for Cures conference earlier this week in New York City.

The panel of biotech experts from industry, government and academia shared a common perspective on the benefits of collaboration, but had unique approaches to making it work. Here's a compilation of their ideas.

  • Justin McCarthy, Senior Vice President and General Counsel, Worldwide Research and Development for Pfizer:
"At Pfizer, we are working to collaborate with new models that involve more open approaches with a variety of institutions, whether they are academic institutions, government agencies, private foundations, patient groups, not the typical type of industry-academic relationship of the past. What we called collaborations were really fee-for-service relationships, where we paid institutions to research. We are now sitting down with academic scientists side by side in the lab to develop novel drugs and novel agreements, trying to innovate in both areas. We want to negotiate novel exit agreements that are fair and take a new approach to ownership of intellectual property, license rights. So it's more of a networked R&D."
  • Josh Sommer, Executive Director, Chordoma Foundation:

"Typically when companies want to develop an oncology drug, they want to test it in pre-clinical models, either a cell line or a patient tumor model, to test its effectiveness. The problem is those lines reside in academic medical centers, and very frequently companies find that academic medical centers expect large licensing fees and reach for even more. Companies find those terms to be unacceptable and untenable. This is not beneficial for science."

"Why is the academic medical center which is just providing tumor tissue taken from a patient asking for a fee? It's questionable from a moral standpoint. It's not intellectual property, but tangible property simply maintained in the lab. Patients don't expect royalties if we test a drug on cells from their tumor. So why do academic medical centers expect royalties for simply providing the tumor tissue? If academic institutions want to do the right thing, they should treat patient-derived pre-clinical models as a public resource. This should be the model."

  • Lita Nelsen, Director of the Technology Licensing Office at the Massachusetts Institute of Technology:

"All of our mouse models are available non-exclusively at the cost of production to non-profits and single companies. In our experience we can't go to the pharmaceutical companies. Our experiments are too early; they don't want them. In the biotech industry we are forced to go the startup route. Or we talk to foundations. The problem is, foundations often have ‘marching rights' in their research agreements that say after three years if a drug is not reaching the market…they can take the license back. Who is going to do that? As a result, we can't get started. FasterCures has been open to see if the academic side and the foundations can get together and offer investors reasonable reassurances."

"R&D is going to move to a consortia model. I favor the idea of a trust that can be managed. A trust could look at issues such as: What's a fair deal? How can we collaborate and generate new knowledge about the IP products we do own? If we want to partner for cures, we have to think about what we are trying to accomplish.  Share knowledge. Royalty-free mouse models are a significant way to do that. If you learn something, return it to the pool."

[Photo by - Senate Democrats]

Category:  Creation  Execution  Tags:  Entrepreneur, Startup, Intellectual Property, Biotech, Patent

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