The process of taking an invention or discovery to the marketplace. It involves working the idea into a business plan, consideration of protection options, and determining how to market and distribute the finished product.
due diligence (close)
Investigations undertaken to assess the ownership and scope of one or more IP rights that are being sold, licensed or used as collateral in a transaction. This is done in order to identify business and legal risks associated with the IP rights being analyzed.
intellectual property (IP) (close)
Creative ideas and expressions of the human mind that have commercial value and are entitled to the legal protection of a property right. The major legal mechanisms for protecting intellectual property are copyrights, patents, and trademarks. IP rights enable owners to select who may access and use their intellectual property and to protect it from unauthorized use.
Information that enables a person to accomplish a particular task or to operate a particular device or process. Refer to trade secret.
A grant of permission to use an IP right within a defined time, context, market line, or territory. There are important distinctions between exclusive licenses and nonexclusive licenses. An exclusive license is “exclusive” as to a defined scope, that is, the license might not be the only license granted for a particular IP asset, as there might be many possible fields and scopes of use that can also be subject to exclusive licensing. In giving an exclusive license, the licensor promises that he or she will not grant other licenses of the same rights within the same scope or field covered by the exclusive license. The owner of IP rights may also grant any number of nonexclusive licenses covering rights within a defined scope. A patent license is a transfer of rights that does not amount to an assignment of the patent. A trademark or service mark can be validly licensed only if the licensor controls the nature and quality of the goods or services sold by the licensee under the licensed mark. Under copyright law, an exclusive licensee is the owner of a particular right of copyright, and he or she may sue for infringement of the licensed right. There is never more than a single copyright in a work regardless of the owner’s exclusive license of various rights to different persons.
nonexclusive license (close)
A license under which rights are granted to the licensee but not exclusively to that licensee; the licensor reserves the right to give the same or similar rights to use the licensed materials to other parties.
patent (U.S.) (close)
A grant by the federal government to an inventor of the right to exclude others from making, using, or selling his or her invention. There are three kinds of patents in the United States: a standard utility patent on the functional aspects of products and processes; a design patent on the ornamental design of useful objects; and a plant patent on a new variety of a living plant. Patents do not protect ideas, only structures and methods that apply technological concepts. Each type of patent confers the right to exclude others from a precisely defined scope of technology, industrial design, or plant variety. In return for the right to exclude, an inventor must fully disclose the details of the invention to the public so that others can understand it and use it to further develop the technology. Once the patent expires, the public is entitled to make and use the invention and is entitled to a full and complete disclosure of how to do so.
Your source for expert commentary on IP management issues.
Brooke S. 2007. Diagnostic Tests for Cervical Cancer: PATH. In Executive Guide to Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices (Krattiger A, RT Mahoney, L Nelsen et al.). MIHR (Oxford, UK), PIPRA (Davis, USA), Oswaldo Cruz Foundation (Fiocruz, Rio de Janeiro, Brazil), and bioDevelopments-International Institute (Ithaca, USA). Available online at www.ipHandbook.org.
Editors’ Note: An earlier version of this case study was presented at the MIHR conference Using Intellectual Property for Improved Health in Developing Countries: An Evidence-Based Approach to Good Practice, Bellagio, Italy, June 14–18, 2004.
© 2007. S Brooke. Sharing the Art of IP Management: Photocopying and distribution through the Internet for noncommercial purposes is permitted and encouraged.
Diagnostic Tests for Cervical Cancer: PATH
The public sector institution PATH aims to improve global health by advancing technologies, strengthening systems, and encouraging healthy behaviors through effective collaborations with the private sector. PATH tries to reduce risks for a commercial company developing products for resource-poor countries by identifying gaps in the market that existing technology can fill, demonstrating value, and partnering in development and sustainable supply. In addition, PATH adapts products to different markets, provides training, and engages in advocacy with WHO and other public bodies. PATH is both a recipient and a provider of funding.
As a nonprofit organization that creates and manages intellectual property in house, PATH recognizes that working with private companies requires sensitivity to and awareness of commercial incentives. PATH believes that intellectual property is just one element of the economic environment of the technology. Successful collaborations with private sector companies impact positively the availability, accessibility and affordability of products in public sector health programs in developing countries.
During product development and distribution, PATH works to change behavior and to open or improve communication. It worked with India’s Ministry of Health to launch a hepatitis B vaccine on a project that involved community education and communication in preparation for the vaccination program. The program’s success has ensured national expansion of the program.
Diagnostics is a large field with a number of disparate groupings of intellectual property generated by scientists around the world; it is common for multiple parties to hold key pieces of intellectual property. PATH routinely conducts market and industry feasibility studies to determine the type of industry partner to pursue, to determine which is best positioned to take PATH into the target segments it is interested in, and to identify IP issues. The public sector needs to recognize that securing the necessary IP rights for diagnostic products is imperative before moving ahead with development and commercialization.
Procurement in diagnostics is not as centralized as other public health products, such as vaccines and drugs. This makes it more difficult to plan for the global public health sector. Marketing is generally on a country-by-country basis, unlike family planning products, for example, that have regional or global distribution agencies for the public sector markets.
The Cervical Cancer Diagnostic Test Project
PATH is engaged in ongoing work with industry partners to develop rapid diagnostic tests for cervical cancer for use in developing countries. In addition, two major institutes, in India and China, are screening 30,000 women for cervical cancer and will then conduct the clinical trials to validate the efficacy of these these simple and inexpensive tests. In addition, this work will generate useful information on viruses that have not yet been examined in detail in these countries.
Under the terms of the R&D agreements between PATH and the industry parnters, PATH’s obligations include funding a portion of the industry partner’s direct R&D costs, conducting market and industry assessments, developing an evaluation framework for public-health use of the new test, and conducting multicountry clinical evaluation of the new tests’ performance for registration purposes. The industry partner is responsible for development of the products, management of the intellectual property (patenting costs and prosecuting infringement), manufacture and supply for clinical evaluations, and finalizing the product for registration and commercial supply.
PATH retains ownership of specimens, but data are either jointly or individually owned. A product-development committee was formed, and PATH only provides funding sufficient to reach the next agreed-upon milestone. During the R&D phase PATH can terminate, without cost, at key milestones, although industry partners terminate at a cost.
The commercialization period of the agreement runs for ten years from the first sale of a registered product. Both industry partners are required to provide preferential public sector pricing. If these specific products are sold in developed countries, PATH will earn a royalty, however PATH has forgone all royalties on developing country sales. Termination clauses covering one industry partner involve repayment of PATH’s direct funding and the transfer of distribution and/or manufacturing to a third party; the other industry partner is only required to grant PATH a nonexclusive license to the product and underlying reagent.
Both companies are working on products that are different from those they will launch in the United States and Europe. Developing a product with PATH could potentially jeopardize products in other developed countries; it is therefore critical for participating industry partners to be able to segment markets.
PATH’s success in being able to attract industry partners to collaborate in its effort to develop a diagnostic test for cervical cancer is an example of creating an overarching cervical cancer prevention initiative that made collaboration attractive and worthwhile— in this case, a program of cervical cancer screening including clinical work, advocacy, and policy issues. PATH does not expect to be providing the product in the future; its industry partners have the intellectual property, are developing it, and are responsible for its management.
This case study illustrates that intellectual property and technology transfer are not enough to create a broad and lasting health impact. PATH believes it is possible to attract top-tier industry partners, especially if there is a comprehensive public health initiative and not just a technology development project. Issues to consider in developing a public health initiative include determining the value of know-how, deciding whether to grant an exclusive or a nonexclusive license, dealing with key reagent IP holders, and influencing the final product price.
Types of Agreements
Over the years of diagnostic-test development and commercialization, PATH has:
IP Rights Decisions and IP Management
PATH has faced key areas of IP rights decision making and strategic IP management issues including:
On an overall policy basis PATH works under its Guiding Principles for Private Sector Collaboration, endorsed by the board of directors, which is most often relevant to PATH’s intellectual property and licensing activities with diagnostics. To conform to key elements of these guiding principles, a license (and overall collaboration) between PATH and a commercial diagnostics producer must:
The IP elements, working relationships, and technology economics of every project or program can vary from one extreme to the other. Because of this, PATH has found it counterproductive, for the most part, to make broad institutional policies about specific individual elements of complex intellectual property and collaborative development agreements. For example, there is no PATH-wide policy that states “all licensed manufacturers must sell to public sector at cost plus 10%.” In some cases that structure might be appropriate, in others it might prevent the technology from ever coming to market. In cases where PATH has developed significant technology that may have value in developed country markets, PATH maintains the flexibility to negotiate for a royalty on developed country market sales. PATH forgoes royalties on sales of licensed technologies for developing country public sector use.
External Factors That Affected Decision Making
The diagnostics arena has a number of characteristics that have historically influenced PATH’s strategies and decision making. These include:
Key Lessons Learned and Health Access Issues
The proprietary control of a single key diagnostic test reagent can give some parties control and power seemingly disproportionate to their contributions to an overall diagnostic test development project. It is critical to have either IP access and/or reagent supply agreements in place early in the product-development cycle, so that access uncertainty is reduced and cost of access is fully understood. The private sector understands this well, while we (at PATH and in the broader public sector) have not always done our homework in this area.
Noncommercial development and/or stewardship of diagnostic platform intellectual property or key component intellectual property can create a positive impact. For example, PATH enhanced the local production of key rapid-test raw materials (nitrocellulose filters and colloidal gold signal reagents) in India, which created an impact beyond the transfer of technology for individual tests to specific companies. Materials suppliers are now serving additional emerging diagnostic producers.
Intellectual property and technology transfer alone are rarely enough to create a lasting impact on public health. We are all working on solutions to health problems that have fundamentally less promise as a “business opportunity,” from a commercial manufacturer’s standpoint, than do other health problems. To make a new diagnostic test that will deliver profit to the manufacturer and be beneficial and accessible to patients, there needs to be policy change, advocacy work, and extensive evaluations. The diagnostic manufacturer will rarely fund these types of activities, especially for price-sensitive public health markets, so it is critical to involve others who will undertake this work. Intellectual property and technology transfer are certainly important. However, for maximum lasting health impact they should be managed as components of a comprehensive public health initiative rather than as independent activities.