IP AND TECHNOLOGY DEVELOPMENT

Medical device start-ups have long been among the strongest of venture capital investments, having fared well even when compared with high-tech and Internet companies. Companies in this sector have historically generated significant varieties of intellectual property (IP) that create a foundation for their own products, increase company value, and often make medtech companies desirable partners for cross-sector ventures.

Against this backdrop, pharmaceutical companies are continually seeking ways to extend drug sales, whether by way of new indications, modified formulations, or augmented delivery mechanisms. In this context, the idea of combining FDA-approved drugs with medical devices seems like the perfect marriage and value-adding combination.

In this session, Richard Hsu, partner and chair of the technology transactions practice group at Townsend and Townsend and Crew LLP (Palo Alto, CA) will lead a distinguished group of patent attorneys, industry experts, venture capitalists, and entrepreneurs in a lively discussion about the licensing and intellectual property aspects of such business combinations. Areas to be discussed by the panelists will include the following.

• What intellectual property protection can be obtained for combination products, especially in light of the recent Supreme Court decision on patent obviousness in KSR International v. Teleflex?
• How does the IP component of cross-sector deals differ from or resemble traditional drug development and in-licensing deals done by large pharmaceutical companies and biotech start-ups?
• How is the IP component of such cross-sector deals valued, from the perspectives of the participating companies?
• How do venture capitalists view cross-sector uses of IP? How do they see such deals increasing valuation or the likelihood of a liquidity event?
• How are such cross-sector IP deals typically structured in terms of upfront payments, licensing royalties, milestone payments, and other research and development obligations?
• How should companies protect their IP when negotiating such a transaction? How do the perspectives of biotechnology, medical device, and pharmaceutical companies differ in this regard?

For companies that are considering entering into cross-sector endeavors—whether through licensing, alliance, or joint venture—this session offers a cautionary view of the difficulties that can arise with regard to intellectual property management. By avoiding those pitfalls, cross-sector partners will have a better chance of working together harmoniously to develop the innovative healthcare products and treatments they set out to create.

But as this panel of legal and business experts will illustrate, in such cases, the devil is truly in the details.