Overview

Introduction

Creativity is the base of innovation and leads to economic value and competitive advantage. This maxim holds true equally in life sciences as for other areas or industries. Such value may come from a new product/technology, edging out competitors in a market, creating a revenue stream in new territories, or increasing market reputation. This book provides an introduction to intellectual property (IP), assessing its financial value and valorization as applied to life-sciences-related industries, such as biotechnology, food, feed, medicine, and pharmacy. This area of law provides the legal framework for bridging creativity and the value that may come from it. Through the proper use of IP, one has a significantly better chance of converting creativity into economic value.

Intellectual property law recognizes a creator’s rights in ideas, creations, innovations, and goodwill. Being intangible, IP differs from real property (land) or personal property (your possessions) that is secured, controlled, and protected using physical means such as fences, alarms, and security staff. Because intellectual property is a product of the mind, there is often no easy way to build a “fence” around it. Protecting IP is very subtle.

Many scientists are good at doing science, but in some (unfortunately rare) cases they also have a good business sense. A nice example is Leo Baekeland (Figure 1.1).

Leo Hendrik Baekeland was born in Sint-Martens-Latem, Belgium, on 14 November 1863. He obtained a PhD in chemistry at Ghent University in 1884, then raised significant funds from various investors and started a company in 1893. The logo of his company, Nepera Chemical, is based on the von Liebig type of kali equipment, often used in chemistry labs (Figure 1.2). Baekeland had a broad range of interests in the use of chemistry for various applications, and in 1893 filed a first patent on the use of fluoride containing salts for the preservation of meat and fish (Figure 1.3).

He also worked on improving the production and quality of photographic paper. His improved paper with the brand name “Velox” could be developed using artificial light, which was a significant advantage over the old photographic paper that needed to be developed using sunlight, which of course depended on the weather conditions (Figure 1.4).

Baekeland sold his company in 1899 to Eastman Kodak for US$750,000 and, inspired by Benjamin Franklin, moved to the United States. He reinvested his money, bought a large estate in Yonkers, New York, and formed a research team of 40 chemists to study the chemical reaction of phenols and formaldehyde (Figure 1.5).

On 7 December 1909 his famous patent was issued for the production of the first true “plastic” ever (Figure 1.6), which was later given the brand name “Bakelite” (Figure 1.7).

Baekeland subsequently filed several other patents on the use of Bakelite®, such as the production of “sound records” using Bakelite (patent dated 30 December 1913, Figure 1.8). He also designed a lot of lab equipment using Bakelite for his friends at Ghent University.

In 1910 Baekeland established the General Bakelite Company, which in 1939 was sold to and merged with the Union Carbide Carbon Corporation to form the Union Carbide Plastics Company. For this transaction, Baekeland received US$51.5 million. By the time he died in 1944 the production of Bakelite and/or analogues had reached 175,000 tons, which was used by over 35 other large companies to produce more than 15,000 different objects in Bakelite material (Figure 1.9).

In this story of Baekeland, we come across several types of IP.

■ Patent. Patents may be granted for the invention of any new, economically relevant, and useful product, process, or machine, or any new, useful improvement thereof. A patent is a property right that grants the inventor or owner the right to exclude others from producing, using, selling, or advertising the invention as defined by the patent’s claims in a specific country or territory for a period of 20 years.

■ Trade secret. Generally, a trade secret is any formula, manufacturing process, method of business, technical know-how, etc. that gives its holder a competitive advantage and is secret. The legal definition of a trade secret and the protection afforded to its owner vary from country to country, and generally the owner needs to demonstrate established protocols to maintain secrecy. The most famous examples are the ingredients and production of Coca-Cola®.

■ Trademark. A trademark is a word, phrase, design, or combination thereof which identifies and distinguishes the source of the products or services of one party in comparison to others – Coca-Cola is again an example. Trademarks can build brands, corporate identity, and competitive advantage. Domain names for websites are related to trademarks.

■ Copyright. Copyrights protect original works of authorship fixed in a tangible, reproducible form. Copyrighted works include literary, dramatic, and musical compositions, movies, photos, artwork, computer programs, cooking recipes, etc. Copyright protects the expression of an idea, but not the idea itself. Software and databases are specific cases related to copyright.

■ Designs and models. These are protected in the United States as design patents and in the European Union as registered Community designs.

Depending on the industry, there are sometimes additional types of IP rights available.

■ Recognition of traditional foods. To improve recognition of traditional food products relating to a specific region, the European Union has created protected geographical status (PGS), which has three types of label – protected designation of origin (PDO), protected geographical indication (PGI), and traditional specialty guaranteed.

■ Breeders’ rights. In agriculture there are specific rights for people who generate new plant varieties. Also known as plant variety rights in the European Union, these are rights granted to the breeder of a new variety of plant that give her/him exclusive control over the propagating material (including seed, tissue culture, etc.) and harvested material (cut flowers, fruit, foliage) of the new variety for a number of years. In the United States these are plant patents, and in the European Union plant varieties are protected by Community plant variety rights (CPVRs) issued by the Community Plant Variety Office (CPVO, discussed below).

■ Supplementary protection certificate. In some life-science-related cases it is possible to extend the lifetime of a patent. In Europe a supplementary protection certificate (SPC) is a sui generis extension of a patent under a specific, different, set of rights. This type of right is available for medicinal products, such as drugs, and plant protection products, such as insecticides and herbicides.

Some intellectual property rights are granted after a registration procedure and come with a “certificate” (Figure 1.10). Other types of IP do not require registration, do not come with a certificate, and are covered by law (Figure 1.11). There are some differences between countries related to registered or non-registered IP (discussed below).