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[LSE]
Interview
Special issue of the
[LSE] Newsletter
[LSE] Interview
with Mark Bloomfield
CEO of
Polyplus-transfection S.A.
»It's
your IP, but we don't care«
A discussion of the policies of large companies in the life science
space with regard to the IP of smaller firms
by Marcus Lippold
[iito] Business Intelligence
Editor-in-Chief
Life-Sciences-Europe.com
with Neil Hunter from Image Box PR in the background
This interview is divided into three parts:
Part 1 describes the general problem of large companies ignoring the IP
of smaller ones.
Part 2 presents the particular case of Mark Bloomfield and
Polyplus-transfection S.A., a company with an IP portfolio in chemical
transfection technology to bring DNA into cells. The IP originates from
the University of Strasbourg, French research organisation CNRS and the
company itself.
Part 3 finally discusses general factors relevant to the problem and
points to possible actions to improve the situation.
This special issue of the [LSE] Newsletter includes part 1 of the
interview, the other
two parts will follow in forthcoming issues.
PART 1
„What's
going on?“ or: Might is right
Marcus
Lippold [ML]
»You
sent me an e-mail offering an interview about the behaviour of big
companies with regard to IP and smaller companies. Could you describe
the reason for this?«
Mark Bloomfield [MB]
»Let me start with a very general statement: Innovation is
the life blood of our industry and also of the patenting system. But a
patent usually is basic science and only a starting point. You have to
have additional investments in R&D and marketing to turn the
basic patent into an innovative product that hits the market and
benefits – in the biotech or life sciences industry
– ultimately the patient, and thereby improves human health.
This may be indirect via enabling research tools – as they
are provided by our company, Polyplus-transfection – or more
direct via diagnostic and therapeutic products.«
ML
»Okay,
taken this for granted. Where do most of these starting points, i.e.
patents, originate?«
MB
»Start-up companies usually go for patents coming from
University and other federally funded institutes. In my experience,
there are two main drivers for this; first, the start-ups are close to,
and often spun-out from, a University, so the science and culture is
often a good fit. Secondly, the cost of up-front fees and royalties for
IP coming from Universities are often much lower than those coming from
commercial R&D operations. Today nearly all university and
other government funded researchers’ prioritise a mix that
includes peer-reviewed publishing as well as patenting. Definitely, in
the US the academic institutions have a longer history of
commercialising their research and creating IP portfolios, but nowadays
nearly all western countries see such a mix of policies. Usually, the
respective IP transfer organisations work on this. Actually, our
company also has inlicensed a large part of its patent portfolio from
the University of Strasbourg and the French research organisation CNRS.
ML
»Which
observations in the industry led you to the belief that something is
going wrong, in the sense that the ultimate potential of the benefits
of these patents and innovations for the patients is not fully realised
at the moment?«
MB
»In their day-to-day business the large companies all show a
very aggressive policy of dealing with IP assets of smaller firms. This
policy is not too easily detected by concrete actions that become
public, because in essence the action that is taken is mostly no action
at all. The big companies basically try to ignore the IP of smaller
firms and seem very averse to responding to any related enquiries by
the small firms.«
ML
»Okay,
this may be bad for the small company, but why is it bad for the
patient and public health? When the big ones simply ignore patents and
nonetheless bring products to the market, in the end the patient should
save the license fee to the small company because it is used without
any compensation!?!«
MB
»Mmm, that’s a real “smart”
view of it... no, but let’s put things into perspective. The
problem starts with the point I have made at the start of this
interview. When innovation is the life blood for improving solutions
for human health in our industry, the disrespect for IP, i.e.,
innovation that has been formally transferred into property rights,
discourages further innovation; simply, because the small firms do not
reap what they have sowed.«
ML:
»Let’s
put it this way: by robbing or ignoring IP of smaller firms, and
thereby deleting incentives for the creation of such small, innovative
firms, the large players obviously hinder the formation of future
creators and transformers of original and innovative research,
right?«
MB:
»I would agree. That’s the way it works and this
way innovation is discouraged by the big players.«
ML:
»Now,
let us turn to how this disregard for the IP positions of smaller firms
actually happens in the real world. What’s going
on?«
MB:
»Let us start with a small company that becomes aware of a
larger firm using its patented technologies without any compensation
and acknowledgement of the respective IP. When the small company now
contacts the big player, the first thing that will happen is nothing.
No comment, no response at all.«
ML:
»Is
this due to an explicit policy, an implicit policy or just because it
is not so easy to find the right person to address this problem in a
very large company?«
MB:
»For obvious reasons you will most likely not find an
explicit (at least not in written form) policy in big industry, this is
definitely something going on implicitly, something like
“it’s understood”. With regard to finding
the right person to contact in the first place, this indeed is a
serious problem, but it can be overcome with some effort and
experience, and I would recommend to go directly to the
“C” level management, if you don’t know
where to start.«
ML:
»This
taken for granted, let us assume that you have identified the big
company using your technology without license and you have informed the
CEO or COO about this fact. What’s next?«
MB:
»As stressed before, the first thing would be to hear
nothing. But if you continue to enquire and don’t give up,
the CEO/COO will give your complaint the IP, legal or Business
Development department. These guys then will give you answers to
questions that you have never asked.«
ML:
»So
far, so good. What then?«
MB:
»Oh, you know, time is relative and this process may actually
sometimes last for two to four years. So you really have to keep
pushing all the time. If you do and the big company thinks that it
can’t ignore you any longer, they will usually set up a phone
conference.«
ML:
»Who
will be part of this telephone conference?«
MB:
»On part of the small company this will be three to four
people, the CEO and CBO/COO with probably two – internal or
external – experts for the technology and legal/IP issues.
From the big company often 5 or 6 people will join, mostly from the
IP/legal department and Business Development.«
ML:
»What
will be the topics and arguments?«
MB:
»Not surprisingly, the topics and the arguments will nearly
always be the same. The legal people from the big company will tell
you, that they think that your IP position is not so strong, that there
are many other ways to do this, that you may have IP, but that it does
not really apply to what they are doing, that your claims are not
really valid and that they surely will be hard to enforce. Finally, in
light of this, they will tell you that they definitely see no reason to
make a license agreement or to enter into a product supply
agreement.«
ML:
»What
will the response of the small firm?«
MB:
»Surely, the small firm wouldn’t be in this phone
conference without thinking totally otherwise, claiming it’s
IP position is strong, relevant to what the big firm is doing and that
an IP agreement is needed.«
ML:
»So
ultimately this is everybody doing what she or he is paid
for?! The legal guys rejecting all claims, the small firm insisting on
its rights. But afterwards, when some of the technical and business
details have finally been touched and it becomes obvious that the IP in
question is at least partially relevant, will the big company move
forward and propose to discuss a license agreement?«
MB:
»Yes, surely, in about 1 out of 50 or 70 cases!«
ML:
»Oh,
that’s very kind and generous. What happens in all other
cases?«
MB:
»In all other cases the legal department of the big firm will
tell you, that they continue to disagree with your position, but that
it is surely your right to go to court.«
ML:
»To
put this in plain words, they tell you that it will cost you a lot of
money to try to push them to sign a license agreement. Maybe too much
money and risk for a very small company?«
MB:
»Indeed, for many small start-ups, the cost and risk of
having a multi-million Euro law suit is prohibitive. So the small firm
just walks away from the table and keeps silent. Actually, this is what
the big firms expect.«
ML:
»One
question with regard to strategies from larger companies from different
regions, i.e., North America, Europe or Asia. Are
there differences in their behaviour?«
MB:
»For the really large, global companies, the answer is
definitely no. They appear to have global policies, they all have
in-house lawyers and they all are very aggressive. With regard to
slightly less big companies there are differences. US firms tend to be
much more risk-taking than Europeans. In Asia it is very difficult to
break into the local structures and IP is very, very hard to enforce.
In China, IP is hardly respected at all. In Japan, as a small foreign
company, it is nearly impossible to get through to the company
leadership. In Europe it is easier to get into discussions to resolve
the issues, but nonetheless the companies are financially very
aggressive and it is hard to get any realistic financial compensation.
Some even propose to give you a one-time payment of €5,000 in
full and final settlement.«
ML:
»Oh,
a €5,000 one-time payment would not even cover part of the
cost you had to get into the negotiations, I suppose?«
MB:
»Absolutely!«
ML:
»One
last question, before we turn to part 2 of this interview, which will
deal with the particular experience Polyplus-transfection has made in
the past pursuing to enforce its IP:
How
many publications and journalists replied to your offer for doing this
interview?«
MB:
»Well, we received a lot of interest from the mailing, with
people saying this is quite an interesting and important topic. But in
the end many other journalists and editors came to the conclusion that
it would not be without risk to put this out. But you said let's do
it!«
------------
Part 2 will be published in the next issue.
The interview took place on Tuesday, 13 January 2015, via phone.
© 2015 by [iito] Business Intelligence
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I hope you enjoy reading these lines as much as I have enjoyed writing
them!
Thank you.
Marcus Lippold
Dipl.-Oek. (Economist)
[iito] Business Intelligence
Süderstr. 4
28199 Bremen
Germany
Phone
+49(0)-421-9889173
E-mail mlippold@iito.de
Web www.gene-sensor.com
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