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LICENSING EXECUTIVES SOCIETYBritain and IrelandNEWS EXCHANGE
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Diagnostics industry beware: New EU regulations hit the UK, with criminal sanctions for those that get it wrongThe diagnostics sector in the UK is struggling to get to grips with new EU legislation which came into effect in December last year. Many appear to have been caught unawares by the new requirements, which are backed up by criminal sanctions, while others are finding that compliance is none too easy with the legislation full of ambiguity and scope for varying interpretation.
Who does this affect?
The directive itself has been in place since 1998, but the relevant UK regulations (included within the Medical Devices Regulations 2002) only took effect in December 2003.
The requirement for CE marking Under the new law, devices such as tests for diagnosing disease, determining blood grouping, measuring levels of blood sugar, to name but a few, will in many cases need to go through conformity assessment procedures and be marked with a CE mark to demonstrate that the device meets the "essential requirements" of the legislation as to manufacture, quality, safety and labelling. The CE mark on a product is the manufacturer's assurance that, when used in accordance with the device's intended purpose and instructions on the labelling, the device will meet the stated performance characteristics and the required levels of safety. CE marking can be fairly straightforward for some devices. However, the legislation lists a considerable number of diagnostic devices which are considered to have greater health and safety implications. Manufacturers cannot self-certify for these devices as meeting the requirements but must, instead, go through assessment and approval processes with independent authorised organisations. This process is both time-consuming and expensive. For an organisation embarking on the CE marking process for the first time, this process might take many months or even years.
Criminal sanctions The directive contains a transitional period for devices which are "put into service", that is, made available to a final user, which expires in December 2005. After this date, the requirements of the directive will also apply to devices which are manufactured and used by health institutions without being marketed. Although there are some exceptions, there is sufficient ambiguity in the legislation that companies involved in any aspect of the diagnostics sector must give careful thought to whether they will be affected or not.
roblems with compliance There is also a geographical dimension: devices which are being clinically evaluated themselves for their performance characteristics are also subject to control where they are being evaluated outside the premises of their manufacture. Other areas of difficulty include:
Issues to consider It is advisable that companies and institutions review their positions now, to:
sandra.king@mills-reeve.com Top President's Diary
It's spring, and this means that LES Council are putting the last arrangements in place for this year's annual conference and AGM. This year, the meetings will be held at the University of Bristol on June 24th and 25th. Please book these dates in your diary now for what looks to be a very different and enticing programme of events.
We will start the conference with an educational seminar "LES Licensing Master Class"; this will be held on the Thursday morning prior to the opening of the main conference. The master class provides an excellent opportunity for those involved in licensing and technology transfer to fine tune their skills in line with world wide licensing practice, and to benefit from the educational input of key licensing practitioners. For the first time, the Annual conference will host a Techfair and commercial exhibition that will include presentations from inventors, start up companies and university spin-out companies. If you would like to take part in this event, please contact me. In line with LESI events, we have decided that we will now accept sponsorship for LES conferences and new guidelines have been drawn up to cover sponsorship; again, if any of our members are interested in sponsoring an event at the Bristol Annual conference, please contact me. Wonderful news! Adam Hart Davis, who was sadly unable to join us for the 2003 Savoy lunch due to illness will be joining us as the guest speaker for our Annual Conference dinner on board S.S Great Britain in Bristol on June 24th. Please book your places early for this event. Further changes regarding LES membership are currently being drafted. We will, in the future, be offering discounted membership rates to long standing LES members who take retirement and no longer have an income from licensing. We will also be offering discounted membership rates to full time students who are participating in a licensing orientated degree. We also want to ensure that institutes of education who offer licensing courses are aware of LES and provide access to NewsExchange and other sources of IP data supplied by LES and LESI. Again, please contact us if you can supply contact details for relevant libraries. In February we held our ninth Annual Lunch and morning meeting at the Savoy and I am pleased to report that it was a great success. Baroness Susan Greenfield provided the lunchtime talk, keeping the audience on the edge of their seats as she talked about the thrills and spills of university spin-out companies. The morning meeting, "Juggling your IP potential", also proved a great success and I thank our speakers for their time and energy in making this event so worthwhile. Christi Mitchell,
Baroness Susan Greenfield Highlights the Under-Funding of Innovation in the UKThe guest speaker at the Licensing Executive Society lunch on 12th April 2004 was Baroness Susan Greenfield, who talked about her personal experiences of spinning-out biotechnology companies from a university.Baroness Greenfield began by giving an overview of the biotechnology industry. She sees investment by business in university spin-out companies as an opportunity for crossing boundaries. Political and economic differences in the two sectors can be married and such investment provides a forum for thought, encompassing both trade and industry. With regards to biotechnology this, at the moment, is extremely relevant, as there is a crisis within the industry. Innovation in the UK is acutely under-funded and under-supported. The commercial difficulties with biotechnology projects are manifold; they require substantial investment before any return is seen, and the risks are high and hard to evaluate. As a result, biotechnology spin-out companies are not achieving the success that they could, due to the discrepancy in the agenda of scientists and investors, in particular a tendency to 'hype' the science beyond reasonable expectations, as well as a misunderstanding of patent law and the need of investors to have a secure and impressive management structure. Baroness Greenfield described her experience as, perhaps, typical of that of an academic who became involved with commercial research. Her scientific career developed within a university environment, primarily within the Department of Pharmacology in Oxford. During the mid 1980s, Baroness Greenfield's work was supported by the pharmaceutical company, Bristol-Myers Squibb. This was a prototype for academic research, constituting substantial investment by industry in a university department. In the mid 1990s, there came a change in the culture, as the advantages of commercial research were recognized. Researchers were becoming disillusioned with the lengthy and over cautious peer-review process of work submitted for publication, which stultified drive and enthusiasm. Simultaneously, universities began to realize the potential of academic projects which had commercial applicability. Developing such projects within the university had the potential to generate income and allowed any intellectual property to be retained by the institution, as well as providing an opportunity to instill and promote trust between academics and the institution in the development of business ideas. Consequently, universities began to set up technology-transfer offices and encourage commercially applicable innovation from within their own labs. It was during this time that Baroness Greenfield established, in conjunction with Dr David Vaux, Synaptica Ltd. The basis of the company was identification of a peptide, which was implicated in neurodegeneration. The focus of the research was to identify and prevent the damaging effects of this protein. The risks associated with such research made it difficult not only to secure funding, but also to spin the company out from the university. Baroness Greenfield described universities as suffering from the disadvantage of having no expertise in product discovery, and being over-cautious in their approach to investment in high-risk (but potentially high-return) research. Baroness Greenfield anecdotally told of a meeting with a UK university tech transfer office where she was proudly told that they had yet to have a company fail. This she saw as the wrong approach - they were simply not investing in enough companies. In comparison, an American tech-transfer office quoted that 33% of their start-up biotech companies fail. Synaptica, nevertheless, gained second round funding, and was able to re-locate off site. However, despite promising data, the company, like many others, suffered from the post 9/11 paucity of funds and was re-housed within the university in 2003, illustrating the fragility of funding for biotechnology spin-outs. Baroness Greenfield proposed several solutions to address the lack of support for innovation in the UK: developing help for early-stage spin-outs when they are still housed within universities, thus helping to establish them before the demands of a fully-fledged company are made; the possibility of offering low-cost 'entry-tickets' to investors, to encourage investment and reducing risk; and provision of an 'agency' which pairs struggling biotech companies with potential investors, thus widening the portfolio of complementary expertise. Baroness Greenfield also sees opportunities for the Government to offer more support to British biotech, by, for example, provision of tax incentives for start-up companies, and better information for academics who develop commercially-exploitable ideas. In conclusion, the implementation of strategies to help spin-out biotech companies is crucial; the UK cannot afford not to invest in its research. Unless something is done, the well acknowledged 'brain-drain' from universities to industry, or to the better financed and resourced countries such as the USA, will continue. The consequence will be a stifling of cutting-edge research in this country into genomics, neurotechnology and pollution. Baroness Greenfield proposed that old, low-risk strategies must be abandoned, and business and academia must work together and use their imagination to develop, and support, new ideas. Kathryn Whyte Kathryn Whyte gained her D.Phil under Baroness Greenfield, and has recently completed the Certificate in Intellectual Property Law at Manchester University School of Law. Kathryn is currently seeking a training contract to pursue a career in intellectual property law. She is contactable at whyteka@hotmail.com |
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Symbol Technologies v. Lemelson, Prosecution Laches, and the Still-Unmet Challenges of Junking "Junk Patents"sIn January 2002, in Symbol Technologies, Inc. v. Lemelson Medical, Education and Research Foundation,1 a divided three-judge panel of the U.S. Court of Appeals for the Federal Circuit, which has jurisdiction of all appeals from patent-related trials in the United States, held that a defense of prosecution laches - a doctrine invoked only sporadically by the courts over the years - "may be applied to bar enforcement of patent claims that issued after an unreasonable and unexplained delay in prosecution even though the applicant complied with the pertinent statutes and rules."2The decision concerned part of the extensive patent portfolio of the infamous late 'inventor' Jerome H. Lemelson, with its claims of priority famously stretching back to the 1950s. In rendering its Symbol Technologies decision and remanding to the trial court for further deliberation, though, the Federal Circuit did not determine the issue of whether laches did, in fact, bar application of the claims in issue between Lemelson and Symbol, and did not provide much specific guidance for the district court as to the factors that should be relied upon to determine if the defense should succeed. Still, the revival of the prosecution laches doctrine was viewed by many as a potential boon in combating so-called "junk patents" - patents of dubious value aggressively asserted against entire industries by professional litigators such as Lemelson. The Federal Circuit's ratification of the prosecution laches defense, although lacking much in the way of a specific legal standard for gauging whether the defense barred enforcement of a particular patent, has "open[ed] . . . a new source of satellite litigation of unforeseen scope, for the continuation practice is ubiquitous in patent prosecution."3 Indeed, since the Federal Circuit issued its opinion re-endorsing laches as a potential defense in patent cases, both the district court adjudicating the Symbol Technologies dispute on remand, and an increasing number of other district courts, have been called upon to address and give form to the prosecution laches defense. Most recently, the district court for the District of Nevada has finally issued its decision upon remand from the Federal Circuit of the Symbol Technologies case itself, ruling that the prosecution laches doctrine did indeed bar assertion of certain patents by Lemelson.4 While the remand decision is interesting in its own right as a significant setback for one of history's most prolific asserters of patents alleged to be of dubious provenance, the court's analysis, and the broader debates surrounding the prosecution laches doctrine in general, are also of considerable interest on a number of policy grounds. There seems little doubt that the application of the prosecution laches defense in the Symbol Technologies case, against Lemelson, reflects in part a judicial, and perhaps popular, concern with so-called "junk patents," and an attempt to rein in the wholesale assertion of strategically-procured patents (especially by entities whose chief or only business is patent acquisition, assertion, and litigation). Parties worldwide are confronted with assertions of infringement or demands for licenses from holders of U.S. patents based upon their operations in, or affecting, the U.S. Some of the parties asserting such patents are among the class of patentees generally regarded as patent bandits or junk patentholders. Accordingly, defendants and potential defendants on a global basis have watched carefully the development of the prosecution laches case law over recent years, as one of the more promising (from their viewpoint) developments in their battle against what they perceive as junk patents. I. The Federal Circuit's Revival Of Prosecution Laches In Symbol Technologies II. Prosecution Laches After The Federal Circuit's Symbol Technologies Decision On the other hand, in Intuitive Surgical, Inc. v. Computer Motion, Inc.10, the court applied a two-step test requiring a consideration of "the fact that prosecution laches is an equitable tool which has been used sparingly in only the most egregious cases."11 Taking yet another track on the laches standard, two district court decisions - Cummins-Allison Corp. v. Glory. Ltd.12 and Chiron Corp. v. Genentech, Inc.13 - adopted the requirement that the alleged infringer suffer prejudice as a result of the patentee's unreasonable and unexplained delay in prosecution. Most recently, on remand of the Symbol Technologies case itself, the Nevada district court invoked elements from at least several of the above-discussed standards in its application of prosecution laches to Lemelson's "machine vision" patents.14 First, the Court explicitly adopted the "resultant prejudice" requirement of Cummins-Allison Corp. and Chiron Corp.15, also implying that this requirement could be satisfied by a showing of detrimental reliance, referring to the date of publication of Lemelson's original "machine vision" disclosure, 1963, as the date "the public was entitled to assume that what was not claimed was dedicated to the public."16 The court next analyzed several factors asserted by Symbol as warranting the application of prosecution laches, including the long pendency time of Lemelson's applications, the intervening publication of various articles and patents developing the technology Lemelson later claimed, and Lemelson's apparently-strategic delay in maintaining pendency of his applications and amending claims so as to cover new commercial products.17 The district court went on to address explicitly the "resultant prejudice" requirement advanced in Cummins-Allison Corp. and Chiron Corp., with reference to "[t]he prejudicial effect . . . suffered by the public, and privately by Symbol . . . which were denied the ability to distinguish that which is claimed by Lemelson from that which is not."18 The court then presented statistical evidence showing that Lemelson's applications were pending for seemingly exceptional periods before the PTO, evidence that is consistent with the "egregious cases" factor of Intuitive Surgical, Inc. III. Beyond Prosecution Laches Given the numerous difficulties in formulating a workable, clear, and fair version of a prosecution laches rule, the question arises whether this game is worth the candle. That is, is the chief problem perceived with Lemelson-type patents their overlong pendency time per se, or something else? Arguments can be made in favor of numerous other doctrines as candidates for attacking the supposed evils of junk patents. Of course, there is no uniform definition of junk patents - which probably has something to do with the difficulty in choosing tools with which to combat them. The use of a pejorative term such as "junk" will always be a matter of subjective opinion and interpretation, and will depend much upon whose ox is being gored. However, several general themes can be identified by looking at some of the more common circumstances that may (especially when found in combination) lead to a prevailing perception that particular patents were illegitimately procured and are being used as "holdup" devices.
Other defensive doctrines, such as a reinvigorated application of the statutory requirements of enablement, written description, and definiteness under 35 U.S.C. Section 112, for which substantial supporting case-law already exists, seem both more workable from a judicial standpoint, and better suited to the crucial equitable task of separating (a) the actual inventors who had possession of the innovative features of an advancement at an early date, but simply dawdled in perfecting these rights, from (b) the professional patent applicants and litigators who did not invent anything that they seek to cover. Existing legal and equitable defenses alone may prove insufficient to attack the problems that critics attribute to junk patents. Congress and the PTO are, perhaps, better suited to carving out new and purpose-specific limitations on patent prosecution, or on the permissible extent of patent claims applied to cover technology not originated by the alleged inventor, than are the courts. The patent system will always involve a system of checks and balances, and any overly harsh "cure" of the junk patent "crisis" would be certain to do unintended, and innovation-discouraging, harm to inventors whom all but the most anti-patent zealots would regard as net contributors to America's technological and industrial base. A considered approach to separating the wheat from the chaff among the millions of issued and pending U.S. patents will require not only a combination of positive law and common law doctrines, but a policy-based determination of which classes of "inventions" or "inventors" deserve to be rewarded, and which denied the weight of government-sanctioned monopoly and the aid and comfort of Patent Office validation and judicial enforcement.
By Jeffrey D. Sullivan and David Loretto
Baker Botts L.L.P. Refs: Top News from the RegionsScotland Region"Make the Earth Move with Dynamic Burns"The Annual Burns Supper "with a difference" of the LES (Scottish Branch) is rarely a quiet and conventional affair, and this year "Make the Earth Move with Dynamic Burns" proved no exception. In the impressive surroundings of Dynamic Earth in Edinburgh, we were treated to drinks in the tropical rainforest then piped in style, by Alan Graham of Scotbottle, through various biospheres. Once we were ensconced, Richard Halpin of Halpin Innovation (in full highland dress) said the Selkirk Grace. After traditional Scotch broth, we were entertained by Dr Mike Cox, Technology Transfer Manager, Heriot-Watt University, to his experiences of managing expectations in the commercialisation and licensing of IP and technology in (appropriately) Earth Sciences. Alan Graham piped in and addressed the Haggis and we were grateful to Glengoyne Distillery for the complimentary miniatures of fine malt to toast appropriately, before traditional "haggis, neeps and tatties" were served. Dr Stuart Munro, Scientific Adviser of Dynamic Earth, on secondment from the British Geological Survey, then gave an inspiring account of the function and goals of Dynamic Earth, and the challenges of combining science, education and commercialisation. The earth then really did move as Stuart showed us, with the aid of computer graphics, where Scotland has been, in geological terms, and where it is likely to go over the next 500 million years! We were honoured to have Norman Trotter OBE of Norman Trotter Consultants close the evening. Norman was described as the "daddy" of the LES (Scottish Branch), and our President Dr Caroline Sincock presented him with a token of our appreciation for years of long service to LES and technology transfer in Scotland. Hilarity immediately returned when, after an introduction to negotiation from Norman of "If you can't get lunch get a sandwich", half the guests were then invited to hand over an item of personal value to their (often then unknown) neighbour and negotiate it back. While some were successful, wails of missing engagement rings and taxi fares were heard into the night. Abbe Brown Irish SectionSpring ConferenceLES Irish Section in association with Forfás have organised a Spring Conference for members and all those interested in reconciling the interests of researchers, funders and business to get results - which must be most of you! The Conference, "The Academy in Business", will take place on 20 April 2004 at The Chester Beatty Library, Dublin from 13:30 - 18:00 followed by a drinks reception. The Government has dedicated significant resources to building scientific excellence in Ireland to generate a knowledge-based economy. Among the many issues that have to be considered by those involved in this national enterprise are the following:
email: ymn@mccannfitzgerald.ie telephone: + 353 (0)1-6119133 North East RegionThe next meeting for LES NE Region, entitled "Financing Technology Businesses", will take place on 20th April 2004 at the Leeds Club. Our speakers will be Professor Tony Robards and Giles Barton.Professor Tony Robards is Pro-Vice-Chancellor for External Relations and HSBC Professor of Innovation at the University of York. After first and higher degrees in Biology at University College London, he came to York in 1966. He has published over 120 scientific papers and books in pure and applied biological research. Tony is involved in a wide range of external business activities. These include being past-President of the York and North Yorkshire Chamber of Commerce as well as directorships of about a dozen different companies. Tony is currently heavily involved in the Science City York initiative in which relevant local organisations are working together to provide a strong national and international focus for the development of technology-based companies. Within Science City York, Tony acts as the 'Champion' for the Bioscience York Cluster Group. HSBC now sponsors his Chair as the 'Professor of Innovation at the University of York' and this involves appraising around 50 life-science business plans each year. Tony was awarded an OBE in the Queen's Birthday Honours List, 2002 for "Services to Higher Education" arising from his work to link the University to the local business community. In November 2003 he received the first ever 'Lifetime Achievement Award" at the Yorkshire Evening Press Business Awards ceremony. Giles Barton is Technology Banking Manager Yorkshire & the North East and was appointed to the role in November 2003. Giles has worked for HSBC since 1984 and has undertaken various credit, sales and relationship management roles in northern division during this period. The talk will cover the challenge faced by banks in the technology sector, the various funding stages: pre revenue/post revenue and HSBC's innovation and technology proposition. Contact Sarah Linley for further information.
Top Book Review by Hayley French: Managing Technology and Intellectual Assets, by Kieran ComerfordThe management of technology and intellectual property is key to the success of a modern technology-based business. The importance of this approach is clearly laid out in a recently published book by Kieran Comerford, former Chairman of the Irish Section of LES Britain & Ireland. In it he explains that technology management includes the tasks of creation of the resource, acquisition of additions to, and protection of, the resource and, finally, exploitation.The book is divided into units and each unit includes well-researched examples and theories. Each unit has a review section, self-assessment questions and a suggested further reading list. The first unit explains the concept of innovation, the innovation process, product development, the history of innovation theory and provides some interesting innovation studies on success and failure. Intellectual asset management covers technical, commercial and financial issues. In addition, the practical application of it requires knowledge of subjects with a technical and legal dimension, such as, management of intellectual property, management of research contracts and technology transfer. These subjects form a major part of the book, which is intended to give the reader a broad-based ability to handle major strategic issues in technology management spanning technical, commercial and legal issues. The book is intended for post-graduate studies leading to an M.Sc. in Technology Management but it is equally useful to the technology manager in industry, research, or information technology. It could also be a welcome addition to any library for lawyers or patent agents because it provides an insight into the broader strategic management and practical issues faced by their clients. Contents include Innovation Theory, Business and Technology Strategy, Technology Acquisition (including useful technical information sources and tips on technology search techniques), Idea Generation, Technology Assessment, Intellectual Property (British, Irish and International), Valuation of Technology Assets, Legal and Contractual Issues, Licensing, Technology Transfer and Commercialisation. This book was an enjoyable read, unusually well researched, full of interesting background information and well worth a place on any IP professional's bookshelf.
The book is A4 wire-bound, published by CTM Books, price £24.00 or €34.00 (including post and packing). The book is only available from CTM Books, Abercorn House, 57 Charleston Road, Ranelagh, Dublin 6, Ireland
Top LESI Expanded Board Meeting - RomeThe above meeting held over the weekend of 30 January to 1 February gave an opportunity for the LESI Board of Directors to explore various themes with the chairs of the international committees and the national presidents. LES Britain and Ireland was well represented by Christi Mitchell, Chris Goodman, Nigel Jones, Jeremy Brown and Stephen Powell. The following four themes were discussed, first in separate working groups and then in plenary sessions.
Working Group 1
Working Group 2
Working Group 3
Working Group 4 One concrete proposal which emerged from the meeting was that the duration of the International Delegates' meetings, which accompany the annual International meeting and the LES US and Canada meeting, should be reduced from two days to a single day. Working group 3 recommended a more proactive approach by LESI to identify areas of the world ready for the setting up of a new LES Society. Somewhat in the opposite vein, working Group 4 felt that LESI should reduce the number of outside organisations with which it holds regular consultations and concentrate on those with which significant progress could be made, such as WIPO and the European Commission. The European Committee of LESI had made constructive comments regarding the proposed Block Exemption changes and these had been taken into account. The new LESI web site editor was appointed at the beginning of February and visitors to the site www.les.org should soon begin to notice the effects. It is planned to make this a useful source of information and up-to-date news for all LES members. Stephen Powell
Top Election to LES CouncilEach year at the LES B&I AGM, held at the Annual Conference, an election is held to fill vacant places on the LES B&I Council.If you would like to stand for Council at this year's AGM please send a brief résumé, including a statement of about 150 words of why you would like to be a Member of Council and what contribution you would like to make, to: John Roe, LES B&I Secretary Mundipharma International Ltd Cambridge Science Park, Milton Road Cambridge CB4 4GW Email: john.roe@mundipharma.co.uk The closing date for nominations is 9th June 2004 Top New MembersCouncil has been please to welcome the following new members to the Society:
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