The Business of Science
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The Business of Science
www.BusinessOfScience.com |
Corporate & Technology Development |
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A periodic newsletter provided by MVS Solutions, Inc.
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Free Subscription |
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Intellectual Property
By Dr. Louis M. Scarmoutzos
Intellectual Property (IP) is a valuable asset that is included in a company's "balance sheet" and provides additional valuation to a company. For early stage and small companies, IP may be the company's sole or primary asset base.
Intellectual Property includes patents, trademarks, service marks, copyrights, and trade secrets. This value-added asset can be sold, bought and traded as a part of everyday commerce.
It is important for a company to know what IP it has and how to enhance the company's IP position which, in turn, enhances the company's valuation.
Patents are often the most valuable IP asset for most companies. Strictly speaking there are three types of U.S. patents:
(1) Design Patents (for example, an ornamental design for an article of manufacture)
(2) Plant Patents (for example, an asexually produced flower or plant)
(3) Utility Patents
The most common patent for technology-based companies are utility patents. Utility patents are granted to inventors according to the Patent Act, which can be found at Title 35 of the United States Code (U.S.C.) and states as follows:
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title." (35 U.S.C., §101)
Equally as important as what is patentable is what is not patentable. What are not patentable are:
(1) Laws of nature
(2) Physical phenomena
(3) Abstract ideas
(4) Products of nature
However, what constitutes patentable subject matter has come under broad interpretation as a result of the U.S. Supreme Court decision in Diamond vs. Chakraborty (1980), which established that companies or individuals could receive utility patents for newly created organisms. Since then, the biotechnology industry has argued that patents should issue on genes, proteins and other natural materials which have commercial value.
Primarily as an effort to boost U.S. eminence and competitiveness to the then fledgling but growing biotech industry, shortly after the Diamond vs. Chakraborty decision the U.S. Patent Office (USPTO) began issuing patents on products of nature including genes (human or otherwise), gene fragments, cell lines, proteins and other naturally occurring substances.
As a result of increasingly growing criticism, the USPTO has recently issued utility patent guidelines and rules regarding a stricter definition of what is invented or patentable. These new guidelines and rules call for utility patents to have "specific and substantial utility that is credible."
No longer will it be sufficient to claim that a particular biological or molecular probe (DNA, protein, etc.) to be a useful probe, the new utility test calls for specific utility regarding that particular molecular probe (i.e., a probe for a particular gene, a probe for a specific disease state or a probe for a defined location on a chromosome).
In addition, it is no longer acceptable to make general claims regarding utility and usefulness. For example, it will not be acceptable to claim that a protein is a source of amino acids or a feed supplement or a dietary supplement, but real-world utility must be specified and demonstrated.
The new utility patent guidelines and rules will have a profound effect on the biotech and related industries.
Louis M. Scarmoutzos, Ph.D., or "Dr. Lou" as his colleagues and friends fondly call him, is President and Founder of MVS Solutions, Inc.- a corporate and technology development company focused on the biotech, chemistry, drug, medical technology and related industries.
Dr. Scarmoutzos was educated at Boston College, The Pennsylvania State University and Harvard University and received his Ph.D. summa cum laude in Physical Organic Chemistry. His background encompasses many areas including Research and Development, Marketing, Business Development and New Entity Formation. He is experienced in developing new businesses and new and proprietary products & processes, technology transfer, joint technology ventures, strategic planning and in developing intellectual property portfolios. He has mentored dozens of companies in preparing them for a "funding event" or partnering opportunity. He is an author of numerous peer-reviewed technical articles and holds several U.S. Patents. He can be reached at lscarmoutzos@mvssolutions.com or at (617) 283-2182.
Equity Funding
According to a recent PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree (tm) Survey, Venture Capitalists invested a total of $16.3 billion for the first three quarters of 2005.
Biotech Sector investments accounted for $2.75 billion (17%) of the amount invested and reflected investments in 265 companies; the Medical Devices and Equipment Sector accounted for $1.46 billion (9%) in 179 companies; and, Healthcare Services accounted for $338.6 million (2%) in 52 companies.
The combined venture investing of 26% in the Life Sciences Sector (Biotechnology and Medical Devices) has been consistent over the past two years.
Startup and Early Stage funding accounted for 6% and 26%, respectively, of the amounts invested, while Expansion and Later Stage funding accounted for 37% and 31%, respectively.
Geographically, California received the most VC dollars followed by the New York Tri-State Area and then New England.
Separately, a recent VentureOne/Ernst & Young LLP Quarterly Venture Capital Report indicates first or early round seed stage funding for entrepreneurs from institutional venture capital investors continues to drift downward, reinforcing the importance of angel investors as a key source of capital for startup firms.
Inaugural Issue
We would like to take this opportunity to welcome you to our Inaugural Issue of The Business of Science, an exciting new periodical from MVS Solutions. We intend to publish and distribute "The Biz" on a quarterly basis.
As its name implies, our new periodic newsletter will focus on business and commercial aspects of science-based and technology-based companies. Although initially focusing on the biotech, medical and related industries, we hope to grow our newsletter to include a much broader industry base and related technical disciplines.
In this and future issues, we will provide you with business and technical information, news, opportunities and resources associated with the biotechnology, medical technology and related industries.
We encourage reader participation and feedback. We invite you to submit articles, editorials and news items of interest. It is our hope that the newsletter will provide a forum for a more in-depth look at industry related issues.
We also invite you to visit MVS Solutions' web site at www.mvssolutions.com where you will find more resources and additional information about our services.
Please feel free to forward your copy of "The Biz" to fellow colleagues and friends. We have a very strict privacy policy and value and respect your privacy.
We look forward to hearing from you.
Technology Licensing Opportunity
Recombinant mussel adhesive protein (rMAP) technology available for licensing.
A protein expression system for rMAP in E. Coli has been developed through genetic engineering. This technology produces rMAP and related MAP proteins in high yields. The technology further allows for the large scale production and purification of MAPs through improvements in the separation and purification process.
The recombinant protein shows significant improvements in adhesive strength compared to existing mussel adhesive proteins. Market applications include the medical, dental, pharmaceutical and specialty coatings areas.
The patent package includes PCT patent appplications claiming sequence, vector and transformant information as well as methods and applications. Licensing arrangements available based on markets and geography.
Related publications include: (1) Biotechnology and Applied Biochemistry. 2003, 37(2): 103-107; (2) Enzyme and Microbial Technology. 2003, 33(4), 460-465; and, (3) Applied and Environmental Microbiology. 2004, 3352-3359.
Interested parties call 1.617.283.2182 or email mvs@mvssolutions.com
For additional technology licensing opportunities, visit MVS Solutions' Technology Licensing Marketplace.
Business Development Opportunity
Peptide & Peptidomimetic Therapeutics - R&D company is seeking a commercialization partner to continue the development of peptide and peptide mimetic drugs. Existing drug candidates show promising applications as a vaccine or cancer adjuvant; antimicrobial agent for antibiotic resistant microorganisms; angiogenesis promotion for wound healing; and, in the treatment of Alzheimer's Disease (AD). Therapeutic agents have a strong intellectual property position. Required assistance includes preclinical and early Phase I/II clinical studies. Distribution and manufacturing arrangements also considered. Interested parties call 1.617.283.2182 or email mvs@mvssolutions.com
For additional commercialization & partnering opportunities, visit MVS Solutions' Strategic Alliances & Partnering website.
Q&A - Questions from Subscribers
Q: I am the CEO and Founder of a drug development startup company and I am trying to raise venture capital to commercialize some promising new drug candidates. I haven't had much luck. Our lead candidates, from R&D studies funded through an NIH SBIR grant, show a great deal of promise in several therapeutic areas. But I am finding that the private equity community (Angels and VCs) is not interested in providing any funding. Can you help or suggest something?
A: To paraphrase that familiar saying, you are "caught between a rock and a hard place". The current investment climate almost exclusively favors companies with drug candidates with completed preclinical testing and, arguably, early stage Phase I/II testing. And, Catch 22, clinical testing requires a great deal of funding.
The current investment climate may change in a few years as larger companies and private equity investors exhaust the supply of companies with early stage clinical test results. But that doesn't do you any good right now.
One thing you can do is contact the institute at NIH where you received the SBIR and apply for an SBIR Phase II competing continuation application (also known as T2CC). This could potentially provide you with an additional $3 million over a three-year time period to obtain some preclinical data.
Alternatively, you could try to forge relationships with other labs (companies, academia, etc.) to generate as much preclinical and Phase I/II data as possible before approaching the private equity community again.
It's a tough uphill battle, I know- so keep persevering. And there are several familiar sayings regarding persistence and success.
The Business of Science will include "Ask Dr. Lou" as a regular feature in our newsletter. If you have a business or technical issue which you would like addressed in a future issue, feel free to submit them directly to Dr. Lou at DrLou@mvssolutions.com
Notable Venture Capital (VC) & Equity Deals
Notable Merger & Acquisition (M&A) Deals
Notable Initial Public Offering (IPO) & Secondary Offering Deals
On the Lighter Side
Notable Quote
"They say money talks, but the only thing it ever said to me was good-bye." -- Joe Louis |
Stock Market Performance
BTK: Amex Biotech Index
Useful ResourcesMVS Solutions, Inc. - The Technology Realization Company Since 1999, MVS Solutions has provided corporate and technology development to a growing list of clients. Visit our testimonials web page for testimonials from past and present clients. Visit our MVSSolutions.com website for info about our technology development services. Visit our MVSSolutions.biz website for info about our corporate development and business services. MVS Solutions, Inc. 36 Dartmouth St., Ste. 304 Malden, MA 02148 USA Tel 1.617.283.2182 Fax 1.801.760.0659 mvs@mvssolutions.com www.mvssolutions.com www.mvssolutions.biz www.mvssolutions.us Contact Us for advertising opportunities. 
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