Patents are a top priority for biotech startups. You’ve probably received advice that you must file for patents, and that you must file those patents strategically. But how do you identify an appropriate patent strategy for your biotech startup? How can you implement that strategy effectively?
The nuts and bolts of an effective patent strategy and strategy implementation are rarely discussed. So we’ve set out to give you a broad overview of patent strategy with some specific examples of implementation, costs, timelines, and more.
Quick note before you dive in: in an effort to streamline this blog post, we’ve skipped some of the general/background discussion on patents and IP. But please click here if you would like an overview on patents and intellectual property.
Patents are a top priority for biotech startups but it's rare to find much guidance about the details. Here we will go into detail about patent strategy and specific examples of implementation, costs, timelines, and more.
Patent Strategy Primer: Timelines & Costs
Before we jump into strategy, it is important to understand timelines and associated costs. Patent law is deadline driven, and some deadlines are extendible while others are not. The chart below illustrates the non-extendible, drop-dead deadlines for various types of filings. Your patent strategy must color inside these lines, and a failure to do so could seriously hamper your patent efforts:
Assuming you file a provisional patent application on day 0, then you have 1 year from that date to file a non-provisional and/or a PCT application. That non-provisional and/or a PCT application will publish in public registers 1.5 years after the earliest filing priority date (which is a provisional application in the chart above). You must enter national phase 2.5 years after your first priority (filing) date, and prosecute your patent application to (hopefully) an allowance between years 3-5.
In this example, at day zero, you have a patentable invention. The first thing you should do is file a provisional application. As mentioned previously, this established the first priority date of the invention. The US follows the first-to-file doctrine when determining the priority of patent claims over one another. In other words, if you and your rivals are working on the same solution to a problem in the same area, having an earlier filing date means that your claim has priority over theirs.
Your provisional application term is up at year 1 and you must file a non-provisional application to gain full patent protection. This cements your ownership of the invention for 20 years from the first priority date. At this point, you can also start pursuing a PCT application to prepare for national stage filing.
Your patent application is published to the public docket by the US patent office even though it hasn’t been granted yet at the 1.5-year mark. So at this point, your invention is now out in the open for all to view.
You should begin preparing for national stage filing by the 2.5-year mark out from day 0. In this stage, you choose which countries to pursue local patent protection. This is the most expensive part of the timeline as it has additional costs for each country you pursue protection. If you submitted a PCT 1 year into the timeline, you will likely still have some time left to decide. We’ll talk more about the costs later.
You’ve likely hit the point where your patent has either been granted or you start the process of patent prosecution by 3 - 5 years out from day zero. If your patent is denied, you have an opportunity to argue about the validity of your patent to try to reverse the decision.
It’s worth noting that this timeline can also be accelerated if you are willing to pay an additional fee to the US patent office. For an additional $2000 - $4000 more, you can opt for an accelerated examination where your patent filing is prioritized over standard patent filings so you receive an answer much faster – within one year typically. Some reasons to pursue an accelerated filing might be that you have either a “slam dunk” case or a “close call” case.
A “slam dunk” case would be one where your patent is very strong and you are confident it will be granted because it's a huge differentiation from the prior art. Having a faster issuance can snuff out competitors early in their tracks.
The “close call” case is one where you are in deal negotiation with investors with a patent that is not as sure as in the slam dunk case. There might be a 50-50 chance that your patent will be granted which is perceived as a risk to investors. You’d be incentivized to establish whether the patent is valid as quickly as possible so that you can ensure investors of your marketability.
Accelerated filing can mean the difference between being able to enjoy licensing from your patented technology and instead seeing someone else reap those benefits. This was the case between UC Berkeley and Broad Institute. The two were working on the same CRISPR genetic modification technology. Broad ended up opting for an accelerated filing and received its patent quicker than UC Berkeley. Consequently, Broad won and retained its patent rights to a technology currently worth $3.84 billion.
While accelerated filing can seem like just one more cost to an already expensive chain of costs, it can be very useful in the long run. While we are on the topic of costs, let's talk about costs for that timeline from before.
Here is a broad overview of the costs of each step of the timeline:
As you can see, the costs upfront are substantial but can quickly become exorbitant with each step.
Patent application costs can vary pretty significantly. While a self-prepared provisional patent application can cost between $75 - $300 depending on if you are a micro entity or large entity, this is usually not recommended. Hiring an experienced attorney to handle the filing process and a draftsperson to draw out the figures can greatly increase your chances of your patent being granted. As such, these specialized services cost a premium which reflects the range in the figure above of between $12000 - $25000. The variance in price also comes from the fact that patenting things like biologics, software or mechanical devices all have different prices for attorneys due to the differing kinds of additional work that must be done for each respectively.
To file a non-provisional application, and a PCT if you would like to do so as well, the cost is $10000-$20000 more. This is again because of the varying levels of work required for patenting different types of inventions. Half a year after your non-provisional and your PCT, you luckily don’t have to pay for the publication of the application into the public docket. This is handled by the US patent office for free.
However, where the costs begin to significantly ramp up is in the national stage filing. For filing in each country outside of the US, it is typically $10000 per country. If you want to pursue robust international protection, you could be facing as much as $100,000 or more.
Ideally, after you’ve spent all this money, your patent should be granted. If this is the case, congratulations. There aren’t any more associated costs with filing. However, in many cases, patents are not granted on the first try. As mentioned before, you will likely need to pursue patent prosecution to argue that the patent is valid. Even if the patent is granted after some attempts, now you must contend with any infringement on your patent portfolio. All of these patent prosecution cases could cost upwards of $20000 - $30000.
While these costs can seem very expensive all at once, the timeline is designed to push those costs as far into the future as possible. It is also worth noting that if your product’s main business model is through licensing, this could mean that a substantial amount of revenue can be gained in the future by just paying these costs upfront. The shining example is IBM which gets the majority of its revenue through licensing rather than sales. It was certainly worth the upfront cost for them.
Every company’s circumstances are different. Some might have a reason to utilize a different timeline, but this one is just for the broad majority of startup biotech companies. It’s up to you to decide whether this timeline fits your needs.
Patent Strategy Implementation
Below is a diagram of how you should implement your patent strategy to set your business off on the right foot.
Before thinking about anything in the future, you should evaluate and protect what you currently have. This tangibly means identifying and protecting your unique innovations. This means identifying patentable technologies and evaluating their marketability. This doesn’t just mean patenting everything you have and spreading yourself thin. A more advantageous thing to do would be to identify “choke points” in your patent portfolio.
Choke points are patentable technologies that everyone must universally adopt in order to have any possibility of creating a competitive product. Think about fundamental technologies that could be the base for branching out into other areas. By focusing your patent strategy around these choke points, you get the best value for your money by spending money on the most important patents to reap the greatest rewards.
Practically speaking, an example of a must when it comes to patenting essential technologies is therapeutics. Think compositions of matter, methods of treatments, formulations, dose amounts, and dose formulations. Medical devices are absolutely a must as well, even though they tend to be narrow improvements. These are all no-brainers.
It becomes a bit more complicated when you desire to patent diagnostics, assays, platforms, and AI. Coverage is tricky with all of these types of inventions because of the difficulty of passing the standard of patentability. For example, correlations are generally not patentable. Assays, platforms, and AI require the need to show infringement to be useful practically.
After thinking about what you currently have and establishing your portfolio, now you can focus on what you will have in the next three years. This means building leverage in the market using your patent portfolio. Examine where you will be in three years. Answer the following questions:
Who are you competing with?
What is your go-to-market strategy going to be like?
What is your development pipeline?
Answering these questions will tee you up to be able to act defensively and offensively using your patent portfolio. By knowing who you are competing with, you know what choke points to focus on that directly affect your competitors. By knowing the go-to-market strategy, you are utilizing your patentable technologies in the context of how you want to be set up in the broader market. By evaluating your development pipeline, now you have a timeline and description of how you are going to act using your patent portfolio in the future.
After seeing what you have currently and what you will have in the next three years, now you can focus on what you want to have in the far future. This means ensuring the freedom to operate. At the end of the day, patent protection is about ensuring your freedom to operate in the broader market without being inhibited by competitors. In order to ensure this freedom to operate you now not only need to identify your competitors but also those you are likely to be in legal battles with. It is smart to prepare counter-assertion positions with any other company that is working on similar things as you so that you are ready to act quickly when faced with an infringement suit.
Additionally, at this point in your timeline, you might consider having joint ventures with other companies to work on technologies together. This seems mutually beneficial at the beginning but if you do not have robust joint venture agreements it can put you in a vulnerable legal position. Having great contracts in place can establish what IP is yours and what is the other company’s.
You might also hope that your company will have generated some buzz in the industry you are involved in and this would prompt you to think about scouting for potential acquirers and prepping for investors. Who will likely want to buy your company and acquire your patent portfolio? How will you represent your patent portfolio to prospective investors to make you look as attractive as possible? These are questions you need to prep for at this stage.
When should you start filing your “currently haves”?
The hardest stage of the patent strategy timeline is the “currently haves”. This is a goldilocks situation of not filing too early or too late. Think about the following when considering the best time to file:
What is your platform/target? Does your filing provide a competitive advantage? If establishing a filing date is crucial because competitors are at your heels, then it would be best to file as soon as possible. In other situations, waiting might be more advantageous to flesh out your claims more.
What is the status of your funding? As mentioned before, filing is a costly process. Are you prepared to pay the costs associated with filing in the US and perhaps other international jurisdictions?
For composition of matter utility patents, you might consider using a patenting strategy known as staggering which is making multiple separate claims that become more narrow with each claim. For composition of matter patents, you would likely file Markush or genus claims first to establish a broad net to cover your inventions initially and give you more time to narrow the scope. The second or third filing should be more narrow to provide more robust protection once you have some breathing room.
For method of use utility patents, staggering is also useful. The first filing should be a broad class such as cancer. The second or third filing should be a specific indication such as breast cancer. The same reasons for doing this apply here as it does with compositions of matter.
Following this timeline and these tips can give you the best possible chance of having a strong entrance into the market using your patent portfolio. While no case is ever like another, this general outline of what you should do at each stage will put you on the right track.
Background Concepts & Terms
What is intellectual property?
IP is a blanket term that covers patents, trademarks, copyrights, and trade secrets.
Patents protect mechanical devices and software
Trademarks protect brand names, slogans, logos, and other phrases, symbols, or designs that identify a product.
Copyrights protect artistic works fixed upon tangible media such as books and plays.
Trade secrets protect confidential information related to special processes, layouts, or formulae.
Requirements for a Valid Utility Patent
In order to be patent eligibility, your invention must:
Be a part of patent-eligible subject matter (compositions, formulations, kits, devices, software, etc.)
Not be part of patent-ineligible subject matter (discoveries, abstract ideas, laws of nature, natural phenomena, etc.)
Be novel (not been done before)
Be nonobvious (not an obvious modification of something that already exists)
Patents and Patent Application Types
Patents offer the inventor the right to exclude others from making, using, offering for sale, selling, or importing their invention. From the first date of filing, also referred to as the first priority date, the patent claim is in effect for 20 years. Below are the types of patent applications available:
Placeholder patent (not examined by the patent office)
Establishes initial filing date of invention for 12 months
Must file a nonprovisional application after 12 month period (no extensions or exceptions)
Full patent (examined by the patent office)
Effective for 20 years from first priority date if granted
Continuations & Divisionals
Amendment to the body of patented material from your non-provisional application that covers additional but separate inventions
Serve to increase the scope of protection, add claims, or change existing claims.
Continuation in Part
“Child” application (CIP) to the “parent application” (nonprovisional)
Add new material to existing patented material from previous nonprovisional application
A new priority date is made for additional material separate from the original material
Same 20-year duration of protection but handled separately (20 years from the original priority date and a separate 20 years for the material of the second priority date)
Serves as a provisional application internationally
Applications are enforced in countries that signed patent cooperation treaty (excluding Taiwan and Argentina)
Same application as in US but submitted to the World International Patent Office
Gives an 18-30 month grace period to file in whatever national jurisdiction you want to pursue protection in.