While intellectual property (IP) is absolutely key to the success of some businesses, it can be less relevant to others. Mathys & Squire focuses on conducting meaningful and worthwhile due diligence in a manner that is proportionate to the value of the IP in the context of the current and future commercial activities and the value of the transaction in question.
Where IP is peripheral, a simple validation that the IP exists and there are no formal issues may be all that is needed. However, where IP is critical to commercial success, such as where exclusivity or freedom to operate for a new product are essential, a thorough investigation into the value of the IP a company owns and its freedom to operate in view of third parties’ IP is required. Many transactions require some level of IP due diligence in-between. There are often various hypotheticals and unknown variables in IP, and so it is important to get the right level of strategically useful but proportionate, due diligence for each case.
Moreover, what can be more helpful than a simple overview of the current state of the IP is what the future potential of the IP is, and pragmatic advice on how to ensure the IP is best used to further and support the commercial aims.
Some transactions call for formal, detailed written reports, whilst for others informal reporting in person or by telephone is preferred.
When entering into any transaction, be it a licensing deal, a business sale, or a decision to invest or to seek investment, IP may be relevant. Almost all companies have some sort of IP, whether or not in the form of registered rights, and it is important to consider at least some level of IP due diligence before taking any significant business decision.
Are you looking to sell or license-out your own IP?
IP due diligence can be used to help promote your IP and ensure you receive what it’s worth. Sometimes relatively simple adjustments to IP strategy can increase the value of the IP.
Are you looking to buy or license-in IP?
As well as checking that the IP rights you are acquiring are worth what you’re paying, you should consider what IP you already have and what effect this may have on the deal, e.g. cross-licensing opportunities that may be available.
Are you looking for investment in your company or for it to be acquired?
IP is important to investors and presented well can increase the value of your company. Investors may ask difficult questions and it’s important to be able to answer these promptly and positively.
Are you looking to acquire or invest in a company?
Use IP due diligence to check the company has freedom to operate in its key markets and how useful the IP will be in keeping competitors out. What could be the potential value of the IP and how can this best be realised once you have invested?
Many companies are unaware of the value of their IP, and in turn, how they can leverage these assets. The experts at Mathys & Squire believe in providing commercial, pragmatic and proportionate advice for our clients in order to help them raise funding, improve the marketability of their company, prepare a solid exit strategy, or strengthen their position through acquisition.
Whether our clients are licensing their IP rights to others, or are seeking investment funds, their IP rights will come under intense scrutiny. Our business-focused approach to portfolio management creates IP that will withstand that scrutiny, and we will provide the expert advice necessary to present the value of that IP to prospective licensees and investors.
From helping to identify and capture IP assets to assessing IP agreements, ownership, scope, infringement and enforcement, Mathys & Squire has assisted many organisations with due diligence on third party IP (leading to strategic acquisitions and in-licensing). We have also helped guide and defend companies through rounds of due diligence in applications for funding and prior to acquisition.
We work with our clients, from advising counsel as part of a large M&A transaction and assessing potential gaps in an IP portfolio that might hinder a future strategy, through to advising on profitable licensing deals and go-to market strategies. Our experience in developing IP portfolios, as well as litigating IP disputes, allows us to determine quickly if there are weaknesses in the portfolio. We have worked with our clients to identify IP assets that are undervalued, and ready for further development.
Due diligence projects often require a rapid response. We work quickly and efficiently to conduct a detailed examination of a portfolio and provide pragmatic advice, which takes into account the whole picture. To find out more about how we can support your due diligence project, contact us today.
A recent response from the German Federal Government to Parliament has made clear that Germany will not be ratifying the Unified Patent Court Agreement (UPCA) until the consequences of Brexit are confirmed.
In its response, the German government stated: ‘The question of the withdrawal of the United Kingdom from the European Union (so-called Brexit) and its implications for European patent reform play an important role in the further implementation process [of the] Unified Patent Court. The real and legal implications of withdrawing from the Convention must be examined and agreed at European level. This opinion is not yet completed, not least because essential factors of anticipated exit are currently unknown.’ (translated from German statement – here)
It has also been announced that Jo Johnson MP has been re-appointed as UK IP Minister. Given Mr Johnson’s support of the UK’s participation in the UPC during his time as IP Minister from July 2016 – January 2018 (i.e. immediately following the Brexit referendum decision), marking its importance to UK businesses and inventors, it is possible that he (and Prime Minister Boris Johnson) will be keen to find a way for the UK to take part in the long term.
For more information about these recent developments, or for any other general queries about the UPC, get in touch with Caroline Warren or your usual Mathys & Squire attorney.
Mathys & Squire LLP is Food & Drink Matters’ Company of the Month for August 2019. As one of Europe’s leading intellectual property law firms, Mathys & Squire has over 100 years of experience in helping clients protect their innovations and achieve their commercial goals. With 10 offices across the UK and Europe, the firm’s patent, trade mark, design, and litigation attorneys cover a vast range of technical fields, including the food and beverage sector.
Intellectual property (IP) is an important asset that has substantial value for any business and gives it a competitive edge. While the value of trade mark protection and branding is well-recognised in the food and beverage sector, seeking patent protection for a new food product or manufacturing process is not necessarily the first thing that comes to mind. Yet, obtaining a patent allows business owners to enjoy the just rewards of their R&D labour and to be the exclusive provider of the food product or process. By not exploring this option, important opportunities can be missed to seize upon a competitive advantage, which only highlights the importance of obtaining expert advice from Mathys & Squire.
There are a number of common misconceptions surrounding the patenting of food and drink products, and the experts at Mathys & Squire are actively debunking such myths. One such myth is that recipes are not patentable, when in reality they are so long as they solve a technical problem. For example, if a business develops a new process to manufacture food, which lessens the manufacturing time or improves efficiency, the process can be patented. Indeed, novel and non-obvious technical aspects of any food product, packaging and manufacturing methods/recipes can be patented.
Mathys & Squire has extensive experience working with food and beverage businesses in order to maximise the effectiveness of their IP protection. With a range of specialists having chemical, biological, and engineering backgrounds, the team can advise on every aspect of the process through to market, whatever the food or beverage product.
The firm has been working with start-up companies, SMEs, and multinationals, including household names such as Warburtons to protect their food and beverage innovations. The impressive nature of the clients that Mathys & Squire has maintained over the years is a testament to its quality of service.
In the last year alone, the firm has seen a somewhat dramatic expansion, with new offices opening in Munich, Oxford and the Midlands. The new offices have seen the introduction of multiple new members of staff, each bringing their own experience and expertise to the table.
While the firm’s expertise in the food and beverage sector has been the primary focus of this article, Mathys & Squire is not restricted to one particular sector, and serves a broad range of clients working in the fields of IT and software, life sciences, chemistry, and engineering. For example, Mathys & Squire has a proven track record in representing pharmaceutical, biotechnology, aerospace, agri-tech, clean-tech, semiconductor, sports, medical device, telecoms and media clients, which it does so in a manner that suits the clients’ unique strategies and business models.
For more information on how we can help your food business, contact food & beverage expert David Hobson or get in touch with us on 020 7830 0000.
This article was published in the August 2019 edition of Food & Drink Matters (page 19).
In order to safeguard your work, and to work profitably in the future, it is worth considering the importance of creating a formal IP strategy early on to prevent loss of investment and time.
80% of a business’ value is in its intangible assets. With this statistic in mind, it makes undeniable sense to base the strategic framework of a company around those assets and other IP issues. Trying to segway an IP strategy into your existing business plan may prove a little less than effective, as trying to protect innovation after you have already begun work could leave you vulnerable to finding out someone else was there before you.
It should not be assumed that most businesses have arrived at their current status through ruthless planning; it is far more believable that natural, organic growth has got them to where they are. Therefore, when considering IP strategy, it would make the most sense to start with an analysis of the business’ internal organisation to identify any potential assets that may have been overlooked.
When doing this, it is important to be aware of the different business frameworks you may fall within as they will present different challenges, for example:
Don’t just include the basics here, such as a schedule of registered intellectual property including patents, trade marks, design registrations and plant variety rights. Think about the things that the audit should help determine, e.g:
Making sure the right firm, or internal team, is at the heart of your IP creation is invaluable. Growing a business with poor or no IP strategy, or a weak position, may be expensive. You may find your organisation going down the route of trying to protect the wrong things or developing an unprotectable product or, worse still, launching a product that is protected by someone else’s rights, which, down the line, may have to be discontinued.
Investing in any cost-heavy marketing campaign without a clear approach to IP, both your own and other businesses, could be ruinous; think reputation and budget. If you miss out on what could have been a lucrative opportunity due to previously unidentified IP issues, you could live to regret it!
Depending on your business, there may be one or several different types of applicable IP, but what needs to be considered is which type(s) of IP will best protect your business model and aspirations. To find out more about what your options are when creating a formal strategy for your intellectual property, why not get in touch with our friendly team today at Mathys & Squire. With experts working across a wide variety of fields, we are able to help you create an ongoing protection plan to keep your IP safe and secure no matter what happens in the future.
A version of this article was published in Entrepreneur & Investor Magazine in April 2020.
Thursday 5 September 2019
1:00 – 2:30pm (EDT) | 6:00 – 7:30pm (BST)
Register here (early registration discount deadline Friday 16 August)
Join Mathys & Squire Partner Hazel Ford and a panel of patent attorneys in this live webinar with interactive Q&A which will guide patent counsel through overcoming the challenges of obviousness in biologics patent claims in the US, Europe and China. The panel will examine the similarities and differences between claim types that have the best chance of success, and discuss recent case law and critical issues that arise.
Europe
China
For more information and to register, click here.
In April 2019, the EU granted the UK government a six-month extension to the Brexit deadline (exit day is now 31 October 2019) to obtain parliamentary approval for the Withdrawal Agreement which was agreed in November 2018. The new UK government, under the leadership of Boris Johnson, has little more than two months to reach an agreement or leave the bloc without one. Johnson vowed to leave the EU on 31 October, with or without an agreement.
Any agreement will have an impact on the protection afforded to EU trade mark and design rights. The UK government has issued guidance notes (see here) and draft legislation (see here) which set out how EU trade mark and UK/EU design rights will be treated in the event of a no-deal Brexit.
This article for Managing Intellectual Property’s IP Stars – written by Mathys & Squire expert trade mark attorneys Margaret Arnott, Harry Rowe and Daniel Ramos – sets out a summary of some of the main changes proposed by the UK government in the event of a no-deal scenario (although any future agreement would no doubt seek a greater degree of reciprocity between the UK and the EU), as well as the potential impact of these changes.
All registered EU trade marks (EUTMs) and community designs (RCDs) existing as at the exit date will be protectable and enforceable because the UK IPO will create equivalent new UK rights called ‘comparable UK trade marks’ and ‘re-registered UK designs’, respectively. These equivalent rights, which will be created on the exit day, will be recorded on the UK registers and treated as if they had been applied for and registered under UK law.
No fee will be required, and the equivalent rights will benefit from the same filing, registration and priority dates as the EUTM/RCD from which they derive. These rights will be treated as fully independent UK rights and will need to be challenged, assigned, licensed and renewed separately from (or in addition to) the original EUTM/RCD. After the exit date, any EUTM/RCD proprietor may opt out of holding an equivalent UK right (subject to certain conditions).
Pending EU applications
IP owners with pending EUTM/RCD applications as at the exit date will have a nine-month window within which to file an application for an equivalent UK right. So long as the application is made within this period, applicants will be able to claim the earlier filing date or any priority date of the corresponding EUTM/RCD. In contrast to comparable UK trade marks or re-registered UK designs, these applications will be treated as new UK trade mark or design applications, which will require the applicant to pay a fee and will be examined under UK law.
RCDs for which publication has been deferred as at the exit date (it is possible to defer the publication of an RCD at the EUIPO for up to 30 months) will also be treated as if they were pending RCD applications (although there will be no examination by the UKIPO, because the RCD will have already been examined by the EUIPO).
International registrations
International trade mark registrations and international design registrations designating the EU, which have protected status before the exit day, will be treated in the same way as EUTMs/RCDs. In the case of an international trade mark designating the EU, a comparable trade mark (IR) will be created. In the case of an international design registration protected in the EU, a re-registered international design will be created. These new rights will be treated as if applied for and registered under UK law as national rights, and will share the filing and registration dates of the international registrations from which they originate; as a result, they will need to be renewed separately from the international rights from which they derive.
International trade mark/design registrations designating the EU that have not yet achieved protected status immediately before the exit date will be treated in the same way as pending EUTM/RCD applications (subject to some differences relating to subsequent trade mark designations). The UK IPO has published notices (here and here) on how these equivalent rights will be identified on the register.
IP agreements and ongoing litigation
Any assignment or licence agreement that has been granted in relation to an EUTM/RCD pre-Brexit will continue to have effect across all EU member states including the UK, unless the agreement states to the contrary. Similarly, any ongoing infringement proceedings in the UK courts relating to EUTMs/RCDs as at the exit date will continue as if the UK were still a member of the EU; the UK court will retain the power to grant remedies in relation to any unauthorised use of the comparable trade mark/re-registered design as if it were the original EUTM/RCD. The remedies available to the UK courts will, however, be limited in scope to the UK, and the UK courts will no longer be able to grant pan-European injunctions. Furthermore, counterclaims for invalidity will apply only in respect of the comparable trade mark/re-registered design rather than the original EUTM/RCD as a whole.
Unregistered rights
Continuing unregistered designs
Any unregistered community design (UCD) existing prior to the exit date will continue to be protected in the UK for the remainder of its three-year term as a ‘continuing unregistered design’ (CUD). As with RCDs, this right will be automatically created on exit day. Importantly, the validity of a CUD will not be impacted if the underlying UCD arose from the disclosure of the design in an EEA member state outside of the UK. As with EUTMs/RCDs, any assignment, licence or legal proceedings that involve a UCD will remain effective as if the UK were a member state of the EU, although the remedies available will be limited only to the UK.
Supplementary unregistered design
As UCD protection will no longer cover the UK post-Brexit, the UK government will create an equivalent UK unregistered design right called a ‘supplementary unregistered design’ (SUD), which will provide protection in the UK post-exit date to both 3D and 2D designs equivalent to that which they would have previously benefited from under the UCD regime. SUD protection will sit alongside existing UK unregistered design right protection, which remains unchanged. According to the UK government, the term of, and conditions for, protection for a SUD will be ‘similar’ to those in respect of a UCD; however, SUD will only provide protection within the UK and will only be created if a design is first disclosed in the UK or another qualifying country/territory. Furthermore, the invalidation of a UCD post-exit date will have no effect on the corresponding SUD in the UK. There is, however, some uncertainty over whether it will be possible for designers to obtain both UCD and SUD protection for designs. In order to benefit from UCD protection in the EU, a design must be first disclosed in the EU, whereas in the UK designers will only benefit from SUD protection if a design is first disclosed in the UK.
It is therefore not clear at present whether simultaneous disclosure in both the UK and the EU will give rise to both UCD and SUD protection, or whether designers will have to choose between either UCD or SUD protection. Either way, post-Brexit, designers will need to consider carefully when and where they first disclose their designs. That said, the UK government has suggested that the position may change if an agreement is reached with the EU on unregistered design protection in the future, e.g. first disclosure in the EU may establish SUD and vice versa.
UK unregistered design right
UK design right will function alongside CUD and SUD protection after exit day. Under the current law, a UK design right can be established by an individual who is resident in the EU, or a business formed under the laws of an EU member state, where first disclosure of the design occurs in an EU member state. However, after the exit date, disclosure in the EU will no longer create a UK design right – qualification for a UK design right will be limited to persons residing in and businesses formed under the laws of the UK or a qualifying country. Where qualification is a result of first marketing, disclosure must have taken place in the UK or a qualifying country. As with SUD protection, the UK government has suggested that this may change if a future agreement is reached with the EU.
The rights conferred by EUTMs/RCDs are exhausted after products bearing an EUTM or manufactured to the specification of an RCD are put on the market in the EEA by the owner of the EUTM/RCD or with its consent. As a result, right holders are unable to control the resale and distribution of genuine products in the EEA (although there are a number of exceptions to this rule).
After the exit date, the UK government has suggested that it will continue to recognise the EEA regional exhaustion regime. As a result, there will be no impact on those importing goods into the UK from the EEA. Businesses will, however, be unable to parallel import goods from the UK to the EEA; such action, without the right holder’s consent, would constitute an infringement of the right holder’s IP. This is likely to have considerable practical implications for those exporting in parallel to the EEA, since they will need to obtain consent from right holders to continue to do so. Read the government’s guidance notice on exhaustion here.
At the time of writing, the referendum result is yet to have an effect on the rights of UK practitioners to represent their clients before the EUIPO. In a no-deal Brexit, UK representatives will lose their right of representation before the EUIPO on exit day. With many firms considering the contingency of opening an office in the EEA from which to represent clients, the EUIPO recently clarified its position with respect to professional representatives proving their eligibility to act before the EUIPO post-Brexit.
In the instance that a UK practitioner requests the transfer of their establishment to another EEA member state, or requests an additional representative ID, the EUIPO may request evidence that the requestor is conducting ‘real and effective’ business from the new address. This is to ensure that the new address is not merely a post office box or address for service.
The EUIPO has issued guidance on the type of evidence which will be accepted as proving that real and effective business is being undertaken. Evidence should not be limited to the mere existence of premises, but should show that the practitioner(s) is/are working from the new office. Examples of evidence previously accepted include official company incorporation documents, employment contracts and official evidence of tax establishment. However, the EUIPO emphasises that each case will be considered on its own merits and that, whilst a single piece of evidence would likely be insufficient, a combination of evidence will improve the chances of the new address being accepted.
In contrast to practitioners listed as ‘professional representatives’ before the EUIPO, there is no requirement for a ‘legal practitioner’ to be a national of an EEA member state. Therefore, any practitioner with a qualification recognised in another EEA member state may be entered onto the EUIPO’s database of legal practitioners. That said, the practitioner would still have to comply with the requirement of having a real and effective business establishment in an EEA member state to be able to represent clients before the EUIPO.
The EUIPO has taken the position that it will refuse any request for exemption from the nationality requirement prior to Brexit where the requestor is a UK national. It is clear, therefore, that the ability to continue to represent clients before the EUIPO will be very much dependent on the UK government’s ability to negotiate an agreement which preserves this right. Alternatively, UK practitioners will need to jump the various hurdles set by the EUIPO in order to obtain an address in the EEA which is considered a real and effective business address, as well as obtaining an equivalent qualification in an EEA member state.
Whilst the UK IPO/government have set out in some detail the Brexit plans for trade mark and design rights, the policy of the new UK government under Boris Johnson to leave the EU on October 31, with or without any withdrawal agreement, means that it is imperative that rights holders and UK trade mark practitioners alike formulate a strategy to address the real possibility of a no-deal Brexit. With respect to the latter, this may lead to UK firms merging with European firms in order to meet the real and effective business requirement. To learn more about rights of representation, read the note published by the Chartered Institute of Trade Mark Attorneys (CITMA) here and the EUIPO’s notice in April 2019 here.
This article was originally published on the IP Stars website in August 2019.
Amazon has been granted a patent for using delivery drones for surveillance. The company has said that this is primarily the customer’s benefit, to survey for damage or anything out of the ordinary to the property. In this article for The Robotics Law Journal, Andrew White, part of Mathys & Squire’s expert IT & software team, provides his expert commentary.
Although it is still unclear as to whether Amazon will follow through with developing this technology in the immediate future, it is likely to raise eyebrows, particularly with privacy and security concerns, but also with competitors likely to want to move in a similar area and being potentially cut off through Amazon getting this patent first. Andrew White, UK and European Patent Attorney at Mathys & Squire, and David Emm, Researcher in the global research and analysis team at Kaspersky Labs, examine the issues surrounding this patent and the evolution of delivery drone technology.
In general, Amazon’s patent (US10313638) describes how delivery drones (Unmanned Aerial Vehicles, UAVs) may be used to perform secondary tasks, once their primary task of delivering a package has been completed, and providing they still have sufficient resources left. The secondary task may be a surveillance action that may include flying over a house of a different user who has consented to surveillance and gathering surveillance data. The surveillance data may then be analysed to determine if there is a ‘surveillance event’ – which may include a garage door being left open, a broken window, a detection of graffiti or a fire. An alert may be sent to the user of a service provider if a surveillance event has been detected.
Importantly, the patent focuses on how to deal with surveillance data from users who have not consented to surveillance, and the claims (and thereby the scope of protection afforded) of the patent are directed towards how the surveillance data is processed so as not to include image data from someone who has not consented – a clipped surveillance image is created that obscures or removes image data from an unauthorised area, i.e. an area that has not consented to surveillance.
So, in some ways the patent could actually be good news for those concerned about privacy – it shows how Amazon is keen not to obtain surveillance data from those who haven’t subscribed.
Notably, Amazon had to limit the scope of protection obtained (i.e. limit the claim scope) in light of an inventive step objection raised by the US Patent Office over US 2016/373699 filed by a company called AeroVironment. Having such objections raised by a patent office is relatively common and is part of the process that most patent attorneys would go through to get a patent granted for their clients. According to its website, AeroVironment specialises in tactical unmanned aircraft systems and tactical missile systems. The AeroVironment document also relates to how to address and limit privacy abuses resulting from commercial and governmental aerial surveillance.
It is important to note that patents are negative rights – meaning that they permit the patent holder to prevent others from doing what their patent covers – but it doesn’t mean that they can automatically do what the patent covers. There may be other stakeholders in this relatively crowded UAV space that also have patents which Amazon may infringe and/or needs to negotiate a licensing deal with in order to do what their patent describes.
It is also important to note that patents can take a while to get granted – this patent was originally filed in 2015 – and in the interim business plans and the commercial realities of the situation can change and
evolve. While it can be fun to speculate on patent filings and what this might mean for future consumer technology, quite often the technology described in a patent never comes to fruition, whether that’s because the commercial strategy has changed in the interim or because it is deemed that there isn’t sufficient commercial interest for such technology to warrant the cost of taking it to market. For an example, see: https://www.wired.com/2013/03/apple-patents-realistically/.
It also appears that Amazon has only sought protection for this invention in the US, and not anywhere else. This may indicate that it doesn’t consider it as important an invention, as typically when applicants consider inventions to be very important, they would cover a number of territories, such as Europe, China, Japan and South Korea, also.
The obvious one from our perspective relates to privacy. The fact that there is this device which has lots of capability – thermal cameras, regular cameras and obviously geolocation and the rest – and is therefore potentially privy to quite a lot of information. The question is then: ‘what happens with the information?’
Clearly, Amazon is talking about ring-fencing it so that it excludes what’s in the peripheral vision of the drone, so if you’re looking at my property, you’re not necessarily gathering information on the property next door. Which is fair enough but if a company has the ability to do something there’s always the risk that they might utilise that. I’m thinking specifically of digital assistants where initially, for example with Amazon Echo or Microsoft’s Cortana, they stated that just waited for the wake up command before it would record any information but then it turns out that actually sometimes they’re more alert than that, staying alert to whether someone calls out the name. And then it goes even further than that and turns out that they’re just recording huge chunks of information that’s being analysed. They’re saying that this is just to make the things smarter, make it more effective, sharpen up its ability to hear what’s being said, but what people worry about is when you’re at home you’re very unguarded and it might be privy to lots of personal information.
If we try to translate that across to something like the drone while Amazon – or indeed any other company doing this – might say, “We’re going to be very selective about what we have,” there’s always the worry of whether people will know what’s being collected, will they be informed? Will you be open about how that information is stored and how you might use it? And also about sharing it with other third parties – maybe other companies but also law enforcement agencies. There could be a good side to that; if it’s hooked into law enforcement and they’re able to alert them that something bad is going on at the property. We’re increasingly surrounded by smart devices which are very capable of collectively building up a very detailed picture of the lives we lead, where we go, what we do how we do it, what we’re interested in, what we like buying, and this is one more area where it’s possible to collect information. So the privacy issue is probably the one that will be foremost in a lot of people’s minds.
Whether it’s Alexa, or whether it’s a drone or any other technology, my own feeling on this is that companies that use these sorts of devices ought to be explicit about how it’s operating and what information it’s collecting and also giving people the opportunity to opt out of that. I might want a digital assistant or a delivery drone but actually I might want to say to them, “Please don’t collect any information from me”. The fact that you may have to prod and poke or that you find out further down the line that they’ve been collecting it and you didn’t know it is quite alarming.
It’s an all-or-nothing thing. If you want it, you accept the conditions, even if you don’t want all the conditions. It becomes a bit of a blunt instrument. People don’t read Ts&Cs or end user licence agreements and we know, even on mobile devices where it’s perhaps more straightforward when an app has permissions listed on there, we still tend to not check that out. We want the functionality that it brings and we just click through. That therefore gives people scope to hide between the cracks. We wouldn’t do it if we were buying a house. We wouldn’t necessarily read the information ourselves but we pay someone else to go through it carefully for us.
I see no reason why companies shouldn’t be open about what they’re doing with data. It’s interesting because if we look at some services online, such as Google, where you get a browser or an email address and you don’t pay for it. There’s a sense in which you can argue that maybe the data that they gather is the price that you’re paying for the free use of that service but in the case of something like a digital assistant or in the case of a service you would be paying for with Amazon to monitor your home’s safety, you would be paying extra for that service or for the product, so there’s less scope there to argue that you can’t complain about the data gathering because you’re getting a free service, because you’re paying in cold hard cash.
This article was published in the July/August edition of The Robotics Law Journal and the online version can be read here.
Gene therapy, i.e. the delivery of DNA or RNA into cells to treat disease, is at the cutting edge of medical research, and often makes the headlines. More importantly, recent developments have demonstrated the potential clinical impact that gene therapy can have in treating rare inherited diseases, as well as potentially some of the world’s most prevalent conditions. In this article for IBI (International Biopharmaceutical Industry) Journal, Mathys & Squire partner Anna Gregson explains more.
In April 2019, gene therapy made global news when the results of a Phase I/II safety and efficacy trial using gene therapy to treat infants diagnosed with X-linked severe combined immunodeficiency (SCID-X1) were published in The New England Journal of Medicine. The study provides the latest evidence of the potential for using gene therapy in modern medicine.
SCID-X1 is an inherited disorder of the immune system which results in major abnormalities in white blood cell production and function, including devastatingly low levels of T cells and natural killer (NK) cells, together with non-functional B cells. The condition was brought to the attention of the world in the 1970s with photos of David Vetter, who, in the absence of a suitable bone marrow donor (the only effective treatment at the time), had to be kept in a sterile isolation chamber and later became known as the ‘Bubble Boy’.
SCID-X1 is caused by mutations in the IL2RG gene, which encodes the common gamma chain, an essential component of a number of cytokine receptors which control the development and function of T cells, B cells and NK cells. In the present study, self-inactivating, HIV-1 derived viral vectors, containing IL2RG cDNA under the control of an EF1α promoter, were used to transduce blood stem cells (CD34+ cells derived from patient harvested bone marrow). The transduced cells were then infused into each of the patients following treatment to facilitate reconstitution.
The resulting effects on the patients’ immune systems were striking. Seven of the eight patients on the trial displayed normal levels of the various T cell populations within two to four months following infusion. NK cell populations were also normalised in many of these patients. Furthermore, protective antibody responses against various infectious diseases were shown in a sub-cohort of patients who received vaccination following gene therapy, indicating the presence of functional B cells.
This is a significant success, especially compared to the earlier attempts at treating SCID-X1 patients with gene therapy, which were reported to be associated with the development of leukaemia in some patients, or which failed to restore certain populations of immune cells in others (meaning a lifetime of immunoglobulin injections).
Although the authors of this study are careful to remind us that long-term follow-up will be needed in order to assess the durability and long-term safety of this treatment regime, the study gives an indication of how far things have progressed in the gene therapy sector.
Indeed, whilst gene therapy is generally considered to have been a very recent development, fundamental research in this sector goes back over half a century, with early proof of concept experiments demonstrating the replacement of defective DNA in cells using viruses. Some of the earliest gene therapy trials date back to the 1990s, and interestingly, these too were aimed at the treatment of a form of SCID (albeit ADA-deficient SCID which results from a mutation in the gene encoding adenosine deaminase). ADA-deficient SCID and SCID-X1 are, of course, exemplary targets for gene therapy, given they result from mutations in a single gene.
The present study comes at a time of significant activity in the gene therapy world. Research into gene therapies continues apace. In early May 2019, a new gene editing company, Verve Therapeutics, co-founded by Harvard academic Sekar Kathiresan, was launched. The aim was to develop a treatment to significantly reduce the risk of heart attacks, the world’s leading cause of death, with a single injection. The therapy uses nanolipids to target the enzyme PCSK9 (proprotein convertase subtilisin kexin 9), which is involved in the production of so-called ‘bad cholesterol’, (also known as low-density lipoprotein).
The therapy was designed to shut down one of the two copies of the PCSK9 gene in a patient, mimicking a mutation which occurs in a subset of the population who have naturally low cholesterol and a reduced risk of heart attacks. The initial trial will be conducted in patients with homozygous familial hypercholesterolaemia (HoFH), who have statin-resistant high cholesterol levels. If successful, the treatment could be used more widely to significantly reduce the occurrence of heart attacks and associated fatalities.
Such advances are not restricted to the laboratory, with increasing numbers of potential gene therapies entering clinical trials and then into the clinic. In a recent statement, the FDA announced that it expects to approve between 10 and 20 new cell and gene therapy products per year from 2025 onwards, resulting from an anticipated 200 investigational new drug (IND) applications per year from 2020 onwards.
This increase in activity is said to reflect ‘a turning point in the development of these technologies and their application to human health’, which has been driven, in part, through the adoption of adeno-associated viral (AAV) vectors for the delivery of gene therapy agents. The FDA has likened this increase in activity to that seen in the late 1990s with antibody therapies, following the development of platforms for producing fully human monoclonal antibodies.
At the end of 2017, the Alliance for Regenerative Medicine reported that there were 946 clinical trials underway investigating gene and cell therapy products, with new trials constantly being announced. In February 2019, for example, Gyroscope Therapeutics successfully administered the first dose in a clinical trial which investigated the safety and efficacy of their gene therapy candidate for the treatment of dry age-related macular degeneration (AMD), one of the leading causes of blindness in the world. Although traditionally gene therapy has been seen solely as a potential modality for the treatment of monogenic disorders, should this investigation be successful, it could widen our view of the applicability of gene therapies (given that dry-AMD is a multifactorial disease).
As shown by the data generated from the SCID-X1 patient trials discussed above, these advanced therapeutic modalities are showing success in the clinic. Novartis’ Luxturna, an AAV vector delivering a functional copy of the RPE65 gene to cells of the retina, has now been approved for the treatment of inherited retinal dystrophy in both the US and Europe, and follows in the footsteps of Strimvelis (an approved gene therapy for the treatment of ADA deficient-SCID).
With this flurry of successes has come (renewed) interest in gene therapy, highlighted by recent multi-billion dollar acquisitions by big pharma companies. For example, AveXis Inc. (who developed Zolgensma, a spinal muscular atrophy treatment candidate) was acquired by Novartis in 2018 for $8.7 billion. More recently, Roche paid $4.8 billion for Spark Therapeutics and its haemophilia treatment candidates.
This is good news for SMEs too, of which there are many who are building on the foundational research of the last few years to develop new and exciting gene and cell therapy products. The United Kingdom in particular is evolving into one of the leading places for the development of gene- and cell-based therapies. A world-leading combination of academics, large pharma, manufacturing facilities, contract research organisations, innovation agencies and pool of active investors, together with dedicated and co-ordinated advanced therapeutics research centres has provided the perfect ecosystem for these emerging companies to flourish.
Whilst the hive of activity should encourage researchers and innovators working in the gene therapy sector, the challenges facing this sector should be kept in mind. Even positive clinical trial results and regulatory approval will not ensure success, as exemplified by the withdrawal of Glybera, which became the first gene therapy product to be approved in Europe in 2012. Eye-watering price tags (Glybera reportedly cost €1 million per treatment), small patient populations, and complex regulatory exercises are just a few of the challenges facing the industry.
There appears to be consensus in the industry that innovation in commercial-scale manufacturing methods will be key in order to bring costs down and facilitate availability of these often life-changing therapeutics to patients. The production of AAVs has, to date, been one of the key hurdles to overcome. Unlike other viruses, AAV requires an additional ‘helper’ virus in order to allow them to replicate in cells. Whilst methods have been developed to eliminate the need for these helper viruses, through the generation of producer cell lines expressing key helper virus genes, empty vectors (i.e. AAV particles not containing the gene therapy construct) is still a major issue requiring expensive and time-consuming purification methods in order to produce the required titres. Importantly, SMEs developing and trialling gene therapy products should always look to the future to ensure that their methods/processes are scalable when necessary.
As well as the complex manufacturing methods and state-of-the-art facilities required to produce gene therapies (in particular, the viral vectors used to deliver nucleic acid), the costs of these agents also reflect the lengthy and expensive journey of a gene therapy from the bench to bedside. Companies in this sector should carefully consider and protect their innovations to ensure their efforts are not only safeguarded, but also recompensed.
Whilst patent protection of the gene therapy products themselves (i.e. vectors, nucleic acids, formulations, etc.) is apparent, companies should also bear in mind innovations in their manufacturing processes and the like. As indicated above, manufacturing innovations are likely to be key to the success of gene therapy; protection of these aspects can be a useful strategy to maintain exclusivity (even beyond the patent life of the product) and generate additional income through licensing. Of course, in order to obtain a patent, one must adequately disclose the innovation in the patent application, and as such, timing is likely to be crucial.
The gene therapy sector faces numerous challenges, not least from a regulatory, safety and, indeed, ethical perspective. Despite this, as the SCID-X1 study has shown, gene therapy represents one of the most powerful treatment modalities available to date, which, in many cases, can provide life-changing results. A concerted effort from those in academia, industry and policy will be required to continue this success, making safe and effective gene therapies available to wider patient populations. The current excitement around this technology is likely to attract a flurry of new players to the market and, as such, intellectual property will be a vital foothold for those wishing to establish their position in this field.
Indeed, the recent UK ATMP Investor Day (co-sponsored by Mathys & Squire) gave 11 such companies the opportunity to pitch to life sciences investors. Mathys & Squire Partner, Anna Gregson, who spoke at the event and has extensive expertise in this technical field, noted: “The UK has an incredible ecosystem for cell and gene therapy research – with supporting organisations such as the Cell and Gene Therapy Catapult, an active investment community and a thriving research community. All these factors together enable the UK to produce world-class cell and gene therapies; as evidenced by the calibre of the SMEs who pitched at the UK ATMP Investor Day. It is a really exciting time to be involved in cell and gene therapy research, and I am thrilled to play a part in supporting SMEs in this space!”
This article was originally published in the Summer 2019 edition of IBI Journal.
The European Patent Office (EPO) has issued updates for two cases being considered by the Enlarged Board of Appeal (EBA); G 2/19 and G 1/18.
In the Autumn of 2017, the EPO’s Boards of Appeal moved from their location in central Munich to Haar, a suburb near to Munich but which is a separate municipality. In G 2/19, the EBA was, in essence, asked to decide whether holding oral proceedings in Haar was compliant with the EPC. The board has now said yes, it is compliant.
The decision in G 2/19 was good news for G 1/18, which was heard in Haar. This case relates to a point of law referred to the EBA by the President of the EPO, namely whether an appeal filed outside the two-month time limit of Article 108 EPC is to be deemed as ‘not filed’ or as ‘inadmissible’ – this determines whether or not the appeal fee (currently €2,255) can be reimbursed. The EBA has now issued an opinion that a failure to meet the two-month deadline of Article 108 EPC means that the appeal is deemed not to have been filed, and that an appeal fee paid under those circumstances should be reimbursed by the EPO.
For further information about these recent cases, or for any other general queries about EPO prosecution, opposition and appeal work, please get in touch with the Mathys & Squire team.
Amid changing technology trends, more rare earth metals are required to meet our needs – and patent protection may be one solution. In this article for Managing Intellectual Property, Mathys & Squire Partner Chris Hamer and Managing Associate Laura Clews, explain more.
Technology is a fundamental part of our everyday life, including how we communicate, travel, entertain ourselves and even how we power our gadgets, but very few of us ever question how sustainable our ever-increasing dependence on technology actually is.
Until recently, most people were unaware of the central role that rare earth metals play in modern day life. While this little group of metals may not be present in significant volumes within current technology, they are responsible for making technology smaller, lighter and more powerful than before. Rare earth metals are used in everything from optical fibres to mobile phones; catalytic converters to green technology; and are even responsible for providing the sharper and more vivid colours in our flat screen televisions and tablets. These metals have even been identified as essential for modern day defence applications, for example in guidance systems, lasers, and radar and sonar systems.
Given our increasing dependence on technology, our desire to own the latest gadgets and ever-expanding research into green technology, how can we ensure that there is a sufficient supply (both actual and economic) of these rare earth metals to meet our needs?
Fortunately, rare earth metals, such as cerium (Ce), dysprosium (Dy), lanthanum (La), neodymium (Nd), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb) and yttrium (Y), are not as rare per se as the name suggests; in fact, they are relatively abundant in nature. The main barrier to supplying these metals is that they are only found in low concentrations in remote parts of the world and are hazardous and costly to mine and process.
One important area of developing technology is renewable energy. At the 2015 Paris Climate Conference, it was agreed to increase efforts to limit climate change, including increasing the use of electric vehicles. Several countries have set ambitious sales and/or stock targets regarding vehicle electrification as guidance for creating national roadmaps and for gathering support from policymakers. Among various uptake scenarios, the International Energy Agency and the Electric Vehicles Initiative, a multi-government policy forum, presented an aggregated global deployment target of 7.2 million in annual sales of electric vehicles and 24 million in vehicles stock by 2020.
Most electric vehicles (with the exception of Teslas) use neodymium iron boron permanent magnets (NdFeB), which are essential for the production of high-performance electric motors. Such magnets contain neodymium (Nd), praseodymium (Pr), and dysprosium (Dy) rare earth elements.
Based on current technology, a permanent magnet synchronous-traction motor for an electric vehicle needs between 1 and 2 kg NdFeB (Neodymium Iron Boron) depending on the motor power, car size, model, etc. Therefore, based on the current technology, to meet the global deployment target of 7.2 million electric vehicle sales in 2020, between 7,200 and 14,400 tonnes of NdFeB magnets would need to be manufactured. This would inevitably require a significant increase in the annual demand for NdFeB magnets in electric vehicles by up to 14 times in just five years.
In addition, many wind turbines also rely on NdFeB magnets to function. In 2015, the global demand in rare earth metals for permanent magnets for use in wind turbines was around 2,500 tonnes. Due to the increasing demand for renewable energy, this value has been predicted to increase to 7,000 tonnes in 2020.
The two examples presented above simply highlight the dramatic increase in demand for rare earth metals in the coming years and does not even take into consideration the reported 1.5 billion smartphones sold in 2017 or the estimated 16 million smartwatches sold by Apple in 2017.
While global resources of rare earth metals have been estimated at around 110 million tonnes, the global supply of these metals is limited due to the cost, complexity and environmentally hazardous process of extracting and separating them, as well as the producers themselves.
At present, China accounts for around 90 to 95% of the global market for rare earth metals. As the environmental regulations in China are not as strict as those in Europe or the US, it has been possible for China to produce these metals at a much lower cost compared to other countries and, therefore, out-compete mines like Mountain Pass in the US. However, recent global economic issues mean there is significant risk in there only being a single large supplier.
Profile 1: Seren Technologies
One UK company tackling this issue head on is Seren Technologies. This business has developed a revolutionary extraction method for recycling rare earth methods using ionic liquids. An ionic liquid is a salt in which the ions are poorly coordinated, resulting in these solvents being liquid below 100°C, or even at room temperature. One benefit of using ionic liquids in recycling methods is that they have lower levels of volatility and flammability compared to the organic solvents (such as those used in previously-known recycling methods), providing a safer and more environmentally-friendly method. In fact, this new recycling process has been reported to have an environmental footprint that is one hundred times smaller than other known recycling methods.
Seren Technologies’ research is based on the use of hydrophobic ionic liquids comprising a nitrogen donor and additional electron donating groups which act as a molecular recognition ligand to improve the selectivity and levels of recovery of rare earth metals. It has been reported that this new patented process (WO 2018/109483) can separate mixtures of dysprosium and neodymium with a selectivity of over 1000:1 in a single processing step, meaning that this research can not only lead to increased levels of recycled rare earth metals but that this can be achieved in a less time-consuming, more cost-efficient and a more environmentally-friendly way.
Seren Technologies opened its pre-commercial permanent magnet recycling plant at the Wilton Centre in the north of England on December 3 2018, illustrating 98% selectivity of rare earth metals in a single separation step, taking only two hours, marking a significant reduction in the time required to select these rare earth metals.
With the aim to bring this technology to market on an industrial scale, it could represent a significant leap forward in the viability of recycling rare earth metals in a safer and more economically-viable way.
The process of extracting and purifying rare earth metals typically requires the following steps:
Previously, recycling methods for rare earth materials have often been based on a multiple-stage solvent extraction, such as the one discussed above, requiring large amounts of chemicals and energy input. While several alternative methods have been proposed over the years, very few have been scaled up and tested at the required production volumes.
Profile 2: Worcester Polytechnic Institute
Across the pond, the US government has been funding research into methods of effectively recycling rare earth metals. One project, by the Worcester Polytechnic Institute, has focussed on extracting rare earth metals from machinery without the requirement of first dismantling the machine to be recycled. Typically, rare earth materials are contained within the inner most parts of the machine and are, therefore, not readily accessible. Accordingly, previously known methods have required substantial time and cost in order to access the relevant machinery part for recycling.
In response to these issues, Worcester Polytechnic Institute has produced a low-temperature method of extracting rare earth metals from fragmented end-of-life machinery. The patented method (US 2016/208364) requires the steps of first demagnetisation of the metal through heating, for example, the end-of-life machinery can be heated in a furnace at a temperature of at least 400°C for 60 minutes in order to demagnetise metals contained therein. The material is then shredded to break the present magnets. Finally, the rare earth metals are extracted through the use of a leaching solution via hydrochloric acid to produce a solution of the dissolved magnet material, followed by precipitating the rare earth metals using oxalic acid.
It has been reported that the method provides recovery efficiencies of up to 82% with rare earth metals having a purity of over 99%.
The vast majority of the global market for rare earth metals is dependent on the production in China. However, does this considerable reliance on one source of rare earth metals make technology, renewable energy and defence markets vulnerable?
In 2010, China announced that the amount of rare earth metals to be exported would be reduced due to domestic requirements and concerns over the environmental effects of mining. The amount of rare earth metals exported from China was dramatically reduced from 50,145 tonnes in 2009 to 31,130 tonnes in 2012, causing a sharp increase in the cost of exported rare earth metals. In 2012, Japan, the US and the EU complained to the World Trade Organization (WTO) about these restrictions. Although China cited environmental reasons for the reduction of export quotas, the WTO ruled on 26 March 2014 that China’s export limits violated the WTO rules. However, the amount of rare earth metal ores mined in China in 2016-2017 only amounted to around 105,000 tonnes.
Therefore, the current supply of rare earth metals is failing to meet the ever-increasing demand in the modern world.
To add further concerns, it would seem that politics can also play a significant role in the supply of rare earth metals from China and, therefore, the possibility of manufacturing technology and defence applications.
In 2010, China reportedly blocked exports of rare earth metals to Japan for a period of time following a dispute regarding the detention of a Chinese fishing trawler captain, however the dispute between these two countries was ultimately resolved and exportation of the metals resumed.
Worryingly, it seems that history may be repeating itself following a statement made in May by US Trade Representative Robert Lighthizer regarding a proposition to increase tariffs on imports from China:
“Earlier today, at the direction of the president, the United States increased the level of tariffs from 10% to 25% on approximately $200 billion worth of Chinese imports. The president also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion.”
Clearly, China does not consider the enforcement of these new US tariffs to be reasonable and there is concern that China may use its considerable dominance in the supply of rare earth metals as leverage in this trade dispute. Reporting comments by Wang Shouwen, a vice commerce minister for China, the newspaper News of the Communist Party of China said that:
“Even after China overcame difficulties to find pragmatic solutions to many issues raised by the US, it still wanted a yard after China offered an inch,” said Wang, who is part of the Chinese negotiating team, noting that the US insisted on ‘unreasonable’ demands, including terms that violate China’s sovereignty.”
In view of this ongoing dispute, there is growing concern that China will consider restricting the export of rare earth metals to the US in retaliation if the tariff increase on the importation of Chinese goods is not lifted (not surprisingly, rare earth metals were excluded from US tariff increases).
Profile 3: Iowa State University Research Foundation
Further research funded by the US government includes the work by the Iowa State University Research Foundation (US 2018/312941). The disclosed method recycles rare earth metal-containing materials from end-of-life products such as permanent magnets from computer hard disk drives, electric motors and batteries. The patented process comprises the steps of contacting the rare earth metal-containing material with an aqueous solution of a copper (II) salt to dissolve the material in the solution. The dissolved rare earth metal is then precipitated from the aqueous solution as rare earth metal oxalate, sulphate or phosphate. The precipitate is then calcined to produce a rare earth metal oxide.
It has been reported that the above method can provide over 99% purity of the rare earth metals in the form of oxides, sulphates or phosphates.
As fears grow that the availability of rare earth metals may soon be restricted, many companies outside of China are looking at ways to limit their dependency on China for the supply of rare earth metals, and are now turning to possible alternative components or funding research into methods of recycling these precious metals. The ability to provide an environmentally-friendly, cost-effective method of recycling rare earth metals providing higher levels of purity and selectivity could meet a significant percentage of the demand in, for example, EU countries, the US and Japan, but does such a process exist?
While recycling rare earth metals (often referred to as ‘urban mining’) would be a fitting solution to the current crisis, previously used methods of recycling rare earth metals still require the use of toxic/hazardous chemicals; a large number of processing steps (therefore requiring high process times, which increase the costs of the recovered metals); and have poor selectivity, meaning that lower amounts of rare earth metals are actually recovered from the recycling process. All of these issues are leaving many countries wondering how they can possibly keep up with the growing demand for these versatile metals.
Fortunately, many companies have undertaken significant research to resolve these problems. Given that the global rare earth metal market was reported to be worth $8.10 billion in 2018 and has been estimated to be worth $14.43 billion by 2025, the companies researching cost-effective and highly selective recycling methods are, of course, carefully protecting these innovative methods from third party use. For example, obtaining patent protection, with particular emphasis on protecting these methods in many of the countries in which such a recycling process may be performed, plays a significant role in the essential IP protection (see profiles 1, 2 and 3).
As some companies, such as Seren Technologies (see profile 1), seem to be close to making their recycling methods available to the public, it would seem a real possibility that the amount of rare earth metal that can be efficiently recycled can be significantly increased in the near future, thereby reducing our dependence on external providers. However, whether this can be achieved before the cost of these metals increases as an effect of ever-growing demand or further political turmoil remains to be seen.
For more information about patent protection, please visit our patents page.
This article was first published by Managing Intellectual Property – available here (login required).
