Patent Attorney leans in on the five urgent issues the new Department of Science, Innovation and Technology should address
Sara Holland is a Patent Attorney at Potter Clarkson, who specialises in the biotechnology field with extensive experience in prosecuting and drafting patent specifications across a range of technologies including synthetic biology, antibody technology, PCR-based diagnostics, biomarkers and medical devices.
Tell me about the open letter. As a Patent Attorney, why was it important for you to back the five priorities shared along with fellow signatories?
My background is in academic scientific research. All of the clients I work with now as a patent attorney are very deeply focused on science and my role is to try and help innovative companies turn their scientific research into real world products and services that we can all benefit from. In particular, the companies I work with are in the biotech/engineering biology field and many of their products and services are ultimately aimed at addressing the key issues we are facing globally – probably directly impacting at least 10 of the UN’s Sustainable Development goals. But there are many challenges for science-based companies and a Government department having “Science” and “Innovation” as part of its name needs to get up to speed with these issues, quickly. We care about the companies and the founders we work with, and throwing our voice behind the “five priorities” is the least that we can try to do for them. Failing to address these issues could mean the UK misses out on opportunities to capitalise on the excellent world-renowned research we have in the UK; and the world misses out on the societal benefits from these innovations.
How do you think the Department of Science, Innovation and Technology (DSIT) can work to build a robust intellectual property (IP) strategy across territories to protect companies from overseas competition and drive revenue?
When discussing the future economic growth in Britain, we need to ask ourselves where our strength lies and what we make at scale. UK manufacturing shrank 4% last year and the trend will continue through lower spending. There are opportunities within biomanufacturing and biotech for this to change, as the world is forced (albeit too slowly) to turn from a fossil fuel-based economy, the bioeconomy, where the products we need are made in theoretically more sustainable, greener ways, using biology rather than energy intensive and polluting chemistry and taking account of end-of-life and circularity will become very important. This presents an incredible opportunity for distributed, high-skilled high-paid jobs across the whole of the UK – almost echoing the distributed nature of the former collieries across the north of the country that drove the industrial revolution. Alongside that we need to pursue a long-term IP and support strategy.
Doing this will future-proof our homegrown tech and life sciences businesses so they aren’t vulnerable for overseas takeovers, or simply flee the country for more helpful and supportive places. As patent attorneys, we have frequently seen companies underestimate the importance of maintaining their IP portfolio. Licensing agreements, which the UK can leverage as a strategy to drive revenue while retaining control of their innovations domestically, are predicated on robust intellectual property. The DSIT is in the unique position to work closely with the country’s most promising science and tech companies and help them connect with the right experts that can help them build a solid IP strategy and executable business plan here, in the UK. I believe there is lots of potential for the DSIT to act as an intermediary that makes valuable connections between businesses and advisers, to help the UK become a self-sufficient innovation ecosystem that can compete on a global scale.
What are some of the key legal considerations that businesses should keep in mind when developing new products or technologies, and how can they protect their intellectual property in the process?
This is a big question, but in terms of IP, the two main points every innovative business should know are: a) keep details of your innovation confidential until you have filed a patent application (should you choose to do so – going for patent protection may not be best for your company, perhaps a trade secret is best? Speak to your patent attorney and get a good IP strategy down!); and b) sort out ownership of any IP early on – preferably even before it arises.
There are obviously going to be times when you need to discuss your business – with potential investors or collaborators. But it is important to know that to be able to get a patent granted to your innovation, it has to be “new” (amongst other things). A patent examiner will not find your innovation to be new if you have already made a public disclosure – which is literally any disclosure, anywhere in the world – academic conference talks, posters, journal articles, and discussing your innovation with a third party where there is not an NDA in place. This does not mean you cannot talk about your work. I have helped academics to prepare talks for conferences that are still interesting and useful, but which do not give away the key details that we would need for patentability. Similarly, getting an NDA in place before discussions, where possible, is a must. Some parties, such as VCs don’t typically sign NDAs – if you are going to sign something you should read it carefully before committing, and since VCs are pitched so many ideas it is probably not feasible for them to sign many different NDAs (though they could have their own standard NDA that they routinely sign) – so a pragmatic approach is needed. Disclose only what you need to. You don’t need to give your secret sauce until you are deep into discussions.
IP ownership can be the utmost nightmare to sort out, and is a key reason an investor might walk away from a deal. If they are handing over the cash, they need to know that you own what you say you own, and that some third party from the dim and distant past isn’t going to rise up and claim rights to your technology. Check your employment contracts, collaboration agreements, service provider contracts, material transfer agreements – and speak to your IP advisors!
There are clearly other key considerations, such as does your product even have a market? Much innovation coming from academic research is bottom up – a discovery is made which could be commercialised, and often there is then a push to try and find a need for it, which may not be the best approach. On the other hand, there are a lot of innovations in biotech which have a climate-tech/sustainability angle for which there currently isn’t a market because the bio solutions cannot compete on the economics with the current petrochemical based products and services we currently have. But, we will get there – and we will need these solutions. Luckily there are some focused VCs that know this and are in it for the long-game!
Following the decision to end funding to Tech Nation, how do you think DSIT can ensure that the global talent visa is retained and improved in the coming years?
First of all, I would say that it is absolutely essential that the Tech Nation global talent visa is retained. To give you an example of its value, we have been working on some exciting projects with materials science specialist, Professor Jason Laing, CEO and co-founder of Promake, and Professor of Innovation & Optoelectronics at the University of South Wales. He is a Tech Nation Visa ambassador and alumnus. Promake specialises in the design, development and manufacturing of medical innovations and devices using nanomaterials such as Graphene. He and his team developed Bio-Pod, which is a digital palm-sized advanced viral testing device, during the first Covid-19 outbreak. Jason was also the creator of the world’s first inner ear transplant and other innovations that are potentially life-enhancing, life-restoring or even life-saving. We are hugely fortunate to have Promake co-headquartered in the UK and, as a nation, have seen a steady stream of global talent choosing the UK to further our scientific and innovation ambitions. DSIT needs to clarify the status of the scheme, first and foremost, before it considers how it might be further improved.
What specific policies and initiatives can DSIT implement to ensure that technology developed at universities can be effectively commercialised and scaled into successful businesses?
Where do you start? For me, it begins with a fundamental question – what is the role of universities in this context? If we consider first the role of government funding to industry via Innovate UK. Innovate UK distributes funding from the government to businesses in the form of grants. There are typically no strings attached. The aim is that the company gets the money, does the R&D, is autonomous in its IP, employs people, everyone pays taxes, the company is hopefully successful and the public benefits from whatever the company is doing. The government makes no claim on any IP funded by the grant system so that by the time a company needs to approach a VC, for example, they are starting negotiations from a relatively clean slate in terms of IP ownership and equity etc.
Now we can look at the university system – typically the academic research that leads to an innovation is publicly funded, for example through the research councils, or can be funded directly from charities such as the British Heart Foundation. Generally, there are no IP claims from these funders.
When an academic has an innovation, they go to the university tech transfer office (TTO) who will decide whether they think it has legs and is worth trying to protect with a patent, or not. If yes, they will cover the costs and normally try to licence out the IP to a third party. Less frequently, one of the academics decides that they might like to found their own company around the technology. Most of the time, due to employment, the university will own the IP (it is quite often a nightmare for the TTOs to sort out given the number of inventors and inter-institutional collaborations going on!). This is where things get messy and complicated.
With focus on IP, what other priorities should DSIT have, and how do you think the department can better plan to work with businesses and other stakeholders to achieve them?
The DSIT should work on encouraging all stakeholders of the tech ecosystem to focus on IP due diligence, an area that is often overlooked by founders and investors alike. IP is THE key value asset of many companies and misplaced faith can lead to large losses.
Currently, there appears to be a misconception that IP due diligence is a time-consuming and costly process, so the DSIT should play a key role in communicating the importance of carrying out the equivalent of an IP ‘health check’ ahead of an investment, which will protect all stakeholders as well as the future interests of our economy. Due diligence, when done correctly, should be a collaborative process between a company and its investors, providing opportunities to identify issues that might arise later on, such as gaps in an IP strategy. It is also likely to ensure higher valuations if and when companies do decide to exit. This is critical now, because as we’re seeing in the pharma industry, patents expire after about 13 years for their high-revenue drugs, in which time they aim to recoup the vast R&D investment while making significant profit too. Once a drug patent expires, other companies can make generic versions of the drugs and sell them for cheaper which can wipe off billions of the pharma company’s revenue. There is a growing trend for Big Pharma and other large companies, such as those in the chemical space, to look to innovative smaller companies to acquire in order to buy in innovation.
Having gaps in your IP strategy could have a major bearing on a company’s ability to sell for the highest price, or attract the highest licensing revenues. The UK has the talent and funding to grow leading life science and technology companies that are key drivers for our economy, but in order to ensure they are able to generate revenue, they cannot overlook IP. After all, we estimate that up to 90% of a company’s valuation is in its intangible assets.
