In the high-stakes world of pharmaceuticals, intellectual property (IP) rights are crucial for protecting innovation and ensuring returns on investment. Diana Andrade, a data protection lawyer specializing in clinical research and a contributing columnist, interviews Joana Piriquito Santos, a pharmacist and IP lawyer, Partner at NLP Law Firm, who shares her expertise on the importance of IP protection in clinical research, particularly within the European context. In this discussion, Joana addresses patent strategies, confidentiality challenges during clinical trials, and the impact of regulatory changes on the industry.

Diana: How do patents work in pharma, and why are they crucial?

Joana: In the pharmaceutical industry, intellectual property, especially patents, is vital. Bringing a new medicine from concept to market can take 10 to 15 years and billions in investment. Even when a drug reaches clinical trials, fewer than 12% are approved, and only some generate enough revenue to recover the significant investments made. Patents can provide up to 20 years of exclusivity in the territories wherein it is registered, protecting the patent holder from direct competition. This exclusivity is then essential for ensuring a return on investment in a high-risk sector like pharmaceuticals. Without patent protection, there would be little incentive for companies to invest in innovative products.

Diana: Why is IP critical for clinical trials in Europe?

Joana: For a medicinal product to reach the market, it must  show efficacy and safety. Therefore, the regulatory framework requires that clinical trials are conducted. On a different perspective, securing a patent involves several challenges. To obtain a patent, you must file an application disclosing your invention, which undergoes a thorough examination process. Patent examiners evaluate several requirements, such as novelty, meaning the invention cannot have been disclosed before the filing date. They also assess whether the invention is non-obvious in light of the existing state-of-the-art. This creates a challenge: your invention must remain undisclosed before filing to meet patentability requirements.

In Europe, the regulatory framework emphasizes transparency and data sharing. However, this transparency can conflict with the need to protect intellectual property. In fact, clinical trials often involve publications and disclosures, such as press releases or protocol details, throughout the trial phases. These disclosures can undermine patent protection if not managed carefully. So, companies must carefully navigate the legal framework applicable to patents while complying with regulatory demands.

Diana: Can trial revelations jeopardize your patent?

Joana: Yes, that’s correct. An examiner might rely on a specific disclosure in one of those publications containing, for example, a dosage of the drug used, and consider it novelty-destroying for the patent. But it’s not just publications, like press releases or protocols that could be used against the grant of a patent. Take-home medicines given to patients enrolled in a clinical trial, in certain specific situations, can also be considered prior use and could be used against the grant of a patent. So, the risk of jeopardizing a patent extends beyond formal publications.

This highlights the importance of managing all aspects of a clinical trial, including how medicines are distributed and what information is shared, to ensure that patent rights are not inadvertently compromised. Companies must be vigilant about what information is disclosed and work closely with IP legal teams to identify what can be shared and what should remain confidential.

Diana: When is the best time to file for a patent?

Joana: In the pharmaceutical industry, a comprehensive patent strategy is essential. It’s not just about a single patent. First, you usually have a patent on the compound that emerges during drug development. Then, you might have a formulation patent, which could cover a specific pharmaceutical form designed, for instance, to improve patient compliance. You can also have patents directed to a specific population of patients or a particular disease. A solid patent strategy requires multiple patents, and they will not all be filed at the same time. A good patent strategy can help a company extend exclusivity for several additional years, ensuring that the pharmaceutical company secures a return on the investment made for each distinct invention.

Regarding timing, itā€™s not possible to give a general answer. Itā€™s a very challenging topic because, on one hand, you need to file for a patent as soon as possible due to the “first-to-file” principle. You need to be the first to file a patent for your invention. Additionally, filing before the clinical trial stages helps avoid having the disclosures made during clinical trials used against the grant of your patent. But, on the other hand, you need to include some data in the patent. In recent years, patent offices and courts have become more demanding regarding the data required to ensure that the invention is adequately disclosed. In some circumstances, in vitro data may be sufficient to obtain a patent. However, in other cases, animal data or even patient data might be necessary. So, this balance itā€™s not always easy to guarantee.

Diana: How do you balance data submission and confidentiality?

Joana: The primary purpose of clinical trial regulations is to ensure transparencyā€”making sure that information is shared with patients, professionals, and the scientific community. However, as mentioned before, this transparency can sometimes jeopardize the proper protection of intellectual property. You need to have a well-thought-out strategy. The research team/IP team cannot work in complete isolation from those responsible for selecting the data to be submitted and published during clinical trials. Itā€™s crucial to assess the impact on patents and coordinate efforts with the different teams involved. This collaboration ensures that patents are filed at the right time and that the mechanisms provided by the law are effectively used.

For instance, the law allows certain information to be redacted, including commercially confidential information. So, it isnā€™t just about protecting patientsā€™ personal information but also about ensuring that pharmaceutical companies maintain the incentive to invest in research. Sharing data should not compromise the ability to secure intellectual property rights. If the teams responsible for the data sharing keep this in mind, they can work with patent attorneys to determine what can be safely published and what should be treated as commercially confidential information. It should consider, for instance, whether a specific dosage of the drug being used needs to be disclosed, or even the characteristics of certain patients. Consider whether this information could be classified as commercially confidential information and, if so, whether it could be redacted.

Diana: Should companies prioritize national or global patents?

Joana: Pharmaceutical patent strategies are typically global. Itā€™s common for pharmaceutical companies to have patents in multiple territories. When working with a limited budget, companies must make strategic decisions, and the intellectual property system offers mechanisms to address this. Typically, companies begin with the national route. This could mean starting in the US or Portugal, for instance. From there, they have a set periodā€”12 monthsā€”to decide whether they want to expand internationally. This is often done through the Patent Cooperation Treaty (PCT), which allows them to seek protection in more than 150 countries. There is also the European route, which grants the opportunity to obtain exclusive rights in 39 countries. Recently, the introduction of the Unitary Patent allows companies to secure protection with just one simplified filing across 18 European Union countries.

What you must not forget in this process is to avoid trying to cut costs when drafting the patent. Itā€™s crucial to understand that the first filing is pivotalā€”it will set the foundation for everything. Invest wisely in fully understanding your invention. Engage the research team with patent attorneys to ensure youā€™ve identified all aspects of the product, making sure that what you intend to sell is fully protected by the patent. Additionally, keep a close follow-up on your research and development. Itā€™s not just about one patent, but a patent portfolio. Even during clinical trials, remain vigilant and attentive. In the end, when a big pharmaceutical company shows interest, itā€™s important that they see you have a solid strategy and have been thorough in your approach. Additionally, you cannot forget that you might disclose information that could be used against you.

Diana: How do data and market exclusivity complement IP?

Joana: Sometimes, I say that this is a chess game. Regulatory data protection plays a role here, and you need to consider it when developing your business plan. Youā€™ll need to assess, “How many years will I be alone in the market without direct competition from generics or biosimilars?” At that point, you must consider that you not only have IP rights but also data protection and market exclusivity. For example, during the first eight years, generic companies will not be able to use clinical trial data from the reference innovator medicine to apply for a marketing authorization. After that, they can use the data to file for a marketing authorization application, but market exclusivity will still last for an additional year (plus one year extension). Patents become even more important at the end of the regulatory exclusivity period.

Itā€™s also important for biotech and pharma companies to be aware that Europe is undergoing one of the biggest regulatory reforms in the last 20 years. Although not finalized, much is still under discussion, seems the intention is to lower the number of standard years for regulatory data protection from 8 to 6. In this context, I question if this change will be beneficial for the competitiveness of the European Union and whether IP will become even more important. We know that clinical trials are increasingly being conducted in places like China and the US, but we need to ensure that they continue to be done in Europe as well, so we can have innovative products and a competitive European market. So, we need to aim for a legal framework that allows companies and the European market to prosper.

Diana: Can improper patent filing affect acquisitions?

Joana: Absolutely. IP due diligence is very complex. Itā€™s not just about checking whether the product you’re bringing to market is protected by a patent. When conducting a due diligence, you also need to verify if the patent is valid, since a patent can be granted but later revoked on a national level. With the new Unitary Patent system, a patent can be revoked simultaneously in 18 countries, which poses a significant risk for the pharmaceutical industry. Therefore, if you have a patent that could be litigated, it’s crucial to ensure there is no prior art ā€” meaning no documents made publicly available before the patent filing ā€” that could be used by a third party against you in court proceedings. You also need to ensure that there are no third-party rights that could be infringed if the product is brought to market, ensuring freedom to operate.

During mergers and acquisitions, IP due diligence is a critical component. A patent that is not properly filed or is vulnerable to litigation can significantly impact a company’s valuation and attractiveness to potential buyers. As mentioned, the Unitary Patent system, which allows for simultaneous revocation across multiple countries, adds another layer of complexity. Companies must ensure that their patents are robust, free from prior art challenges, and do not infringe on third-party rights. This comprehensive approach to IP management is essential for securing successful acquisitions and partnerships.

Diana: Can startups afford to cut costs on their IP strategy, or is it too risky?

Joana: I think that companies should not try to save money on something that will be crucial in the end. You could have the best product in the world, but if you infringe third-party rights or fail to secure proper patent protection, it could be very damaging for the company. If you havenā€™t protected your invention properly, it will be very difficult to be acquired, secure additional funding, or get your product on the market. Ultimately, you need that exclusive period of time when you are alone on the market to achieve a return on investment.

For startups, investing in a robust IP strategy is crucial for long-term success. Cutting corners on patent protection can lead to significant challenges, such as litigation risks or difficulties in securing funding. A well-protected invention enhances a company’s market position and attractiveness to investors or acquirers. The exclusive market period provided by patents is essential for recouping investments and achieving profitability. Therefore, I believe biotech/pharma startups should prioritize IP protection as a key component of their business strategy.

Diana: What are your top 3 recommendations for IP protection?

Joana: The first point I already mentioned: first, have a solid patent strategy. Second, during clinical trials, be aware of the information that is becoming publicly available. Know the legal mechanisms so you can use them correctly. We know that you cannot redact everythingā€”doing so would undermine the purpose of the clinical trial regulations. However, there are certain things you can do, when properly grounded, to help protect your patent. Third, you need to take a holistic approach, considering the complex legal framework for pharmaceutical companies. Itā€™s all about teamwork. Everyone needs to understand the business model and the market, and there must be cooperation between those working on the business side, on research, on data protection matters, clinical trials, and IP. Only then can you ensure that you are prepared for this complex and challenging legal environment.

Diana Andrade
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Diana is the Founder & Managing Director at RD Privacy and a contributing columnist, specializing in privacy for the pharmaceuticals and life science sectors, particularly small biopharma companies, with extensive experience as a European qualified privacy attorney and Data Protection Officer (DPO).