Legal Challenges

With technology advancing so rapidly in many potential commercial areas of life science, patent attorneys, intellectual property (IP) and commercial lawyers, and lawmakers will face a number of challenges over the next 10 years, says Trevor Davies.

Although many potential difficulties faced by innovators and IP practitioners are common to most countries, Australia will face a number of specific issues due to our population size and relative isolation.

Critical mass Each big scientific breakthrough or development with great promise can be superseded in a relatively short period of time by an alternate technology or discovery. In many developing areas of life science, a 20-year patent term may be of little commercial use if the technology has been replaced before a market has been established. In general, a company or organisation based on a single product or idea and working in isolation has a lower chance of success compared with a company with one or more core technologies capable of generating a number of products or commercialisation opportunities. Although Australia has numerous small biotech companies and spin-offs, many of them have limited funding or backing, inadequate IP protection, and lack sufficient technical resources. For the Australian biotechnology industry to mature and develop to compete on the world stage, size or critical mass is essential. To this end, there will need to be mergers, takeovers or closures of a number of existing small to medium companies. Successful consolidation of the present biotech industry will require innovative legal solutions and creative IP management.

Technical expertise Due to the rapid expansion of knowledge and research in life sciences, IP advisers acting at the cutting edge of science will require an even stronger scientific and technical background to ensure full comprehension of an innovation. Knowledge of the law and a limited technical background may no longer be enough to provide the best IP advice to an innovator. Not only must the science be understood, there also needs to be sufficient understanding of the innovation to obtain solid patent protection in a number of countries. A challenge for IP advisers will be to keep up with the ever-expanding scientific knowledge in life sciences to assist innovators to strategically protect innovation with creative IP advice to ensure that patent protection will be of relevant commercial use. As a result, there may be more technical specialisation and training required for IP advisers acting in the life sciences.

Patent protection Australian innovators may no longer be able to rely on patent protection for a single invention as a basis of a new company or commercial endeavour. It will be more difficult to obtain broad patent protection for an invention from a single patent application. As patent examiners and the law courts in Australia and in other countries gain more experience with life science-based inventions, patents will continue to be granted with a more narrow scope of protection than that which was previously available. To ensure adequate protection for innovation, it will be even more important to ensure that not only initial findings are protected, but also that all advances and improvements are captured by additional patent protection. As a consequence, Australian innovators will need to commit adequate resources to fully protect their IP in major markets.

GMO issues Although Australia has a good history in agri-biotechnology research and development, the general community backlash against the development and use of genetically modified organisms (GMOs) and foods, together with lack of clear support at the state and federal government levels, has adversely affected commercialisation potential in this area. For agri-biotechnology to grow and attain its commercial potential, scientists, IP professionals and lawmakers face a challenge to set up and monitor an appropriate legislative environment to allow active and safe Australian participation in this area.

Patent office issues Major patent offices around the world are experiencing an increasing backlog due to the number of patent applications being filed and the lack of experienced and technically qualified examiners. Delays in obtaining a granted patent prevents enforcement of rights and can influence commercial dealings with third parties. Over the next 10 years, we may see more cooperation between at least some of the major patent offices (US Patent and Trademark Office, European Patent Office, Japanese Patent Office, and IP Australia, for example) in that searches or examination carried out in one patent office will be used as the basis of substantive examination in another country. The possibility of one international patent being granted from only one patent application that is enforceable in a number of countries, however, is still a long way off.

Patent pools and commercial cooperation An issue facing the global biotechnology industry in general is an ever-increasing number of patents issuing in the life science area. Unless organisations have access to third party IP on a reasonable commercial basis, it will be either difficult to get products or services to market or, alternatively, the cost of those products and services will be prohibitive for successful introduction and uptake by the marketplace. In various areas of life science, larger organisations working in particular areas may form patent pools where patented technology is made available to members of the pool to assist in the commercialisation of products or services in a given technology. If Australian organisations are not able to participate in these patent pools, it may be difficult to successfully commercialise new technology based on Australian research and development. Thus, it will be essential that Australian organisations form or participate in scientific and commercial networks to ensure successful commercialisation opportunities. If patent pools in life sciences take off, then IP professionals and lawmakers must ensure that such activities are not anticompetitive and are formed for the ultimate good of the community.

Legal challenges Until recently, legal challenges over IP rights in Australia in life sciences have been relatively few. As the industry matures and products and services come to market, there will be more challenges to patent rights either through IP Australia (oppositions and re-examinations) or in the relevant courts (infringement and revocation). As technology becomes more complicated, scientific experts and IP professionals may play a greater role in the legal process. If litigation and challenges continue to increase, companies and organisations will need to be prepared to commit substantial funds to defend, enforce or challenge IP rights in Australia and in important markets.

Free trade agreements There may be new challenges faced by the life sciences industry as Australia enters more free trade agreements (FTAs) with its neighbours. The recent Australia-US FTA resulted in changes to Australia's IP and therapeutic goods regulatory legislation to accommodate issues raised by both parties. Principal changes related to the pharmaceutical industry with tension between innovator companies and generic manufacturers. As the biopharmaceutical industry grows and there are more medicines based on life science innovations, more regulatory issues may appear regarding generics. Moreover, further recognition of moral and indigenous rights could form part of new FTAs which may have an effect on bioprospecting and other environmental activities presently being carried out in Australia.

Trevor J Davies is a partner at Allens Arthur Robinson Patent & Trade Marks Attorneys.