The different patent landscapes of pharma and tech

21 February 2017

4iP Council speaks to Dr Dieter Tzschoppe, Director, Joint Cluster Pure & Applied Organic Chemistry (PAOC), European Patent Office (EPO) about the differences between patenting pharmaceutical innovation and high tech innovation and about the EPO’s work maintaining high assessment quality in the face of rising patent demand.

Are there required components for invention?

I think it is important that the inventor has some idea of the potential economic value of his or her work and also that he or she has a positive attitude to failure. Those who have fear of failure will never invent something. The fact is that 50 to 60 per cent of the ideas presented to the EPO for patenting never reach the grant phase.

The EPO offers tools to help inventors develop and file their applications. These include training like Search and Examination Matters, e-Learning programmes as well as Espacenet, a repository of over 100 million patent documents that are available for search for free. There is also the Global Dossier, a file wrapper portal that allows inventors for free to access via Espacenet or the European Patent Register patent family information of the IP5 offices (USPTO, KIPO, JPO, SIPO and EPO). It shows the family member applications of a European application as well as corresponding applications in other participating countries, search reports, communications and letters from the applicants, all with on-the-fly machine translation from Asian languages into English.

What are the main pitfalls an inventor should avoid?

Don’t disclose your idea before filing your patent application. In Europe there is no grace period such as exists in the US where for a period of one year prior to filing a patent, an applicant or inventor can publish with protection in certain circumstances. This difference between the US and the European system is sensitive when there is publication in the US and a corresponding application underway in Europe. The best advice is first to file, and then publish or talk at conferences.

It is also important to find the right moment to file, not too early or too late. For pharmaceutical applications different offices have different scientific data requirements for filing, so the availability of data can impact the timing and subsequent patentability of an application.

Has the process of invention become more challenging over the years? If so, why?

The patenting of certain bio-tech innovations has become more difficult in the US while in Europe the situation is stable. What is increasingly difficult is the search for prior art. This is a growing problem especially when you consider that in China in 2016 c.a. 1.45 million applications were filed, in Chinese. Commercial databases make abstracts of these patents and all patent offices have a classification system. The EPO classifies all Chinese patents, enabling people to find them by abstract and then machine translate. Before filing an application it is important to check what exists already, especially when you consider that ca. 80 per cent of all technological knowledge is published only within patents.

How does the patent system help invention?

All patent applications are published 18 months after filing which means that everyone can build on an existing invention. We don’t only see pioneering inventions, most are improvements on existing patented technology.

What are the main challenges of both invention and patenting in your sector of pure & applied organic chemistry?

One difference between pure & applied organic chemistry and other technology sectors relates to the lifecycle of patents. Pure & applied organic chemistry is slower moving than many other sectors. It frequently takes ten years to bring a new drug to market because many regulatory requirements must be met, like the market approval including lengthy and costly clinical studies. This means the time period for commercially exploiting the patented invention can be considerably shorter than 20 years, although for new drugs in the EU there is the possibility of up to five years additional protection with the Supplementary Protection Certificate (SPC), according to certain criteria.

The pharmaceutical sector is also a very competitive one. After patent expiry, the prices for blockbuster medicines often drop considerably since generic versions may appear on the market. However, this competition between originator and generic companies is also visible much earlier than patent expiry, i.e. immediately after grant of patents by the high number of opposed patents. This happens, of course, because of economic interests. If the patent for a blockbuster drug can be invalidated or limited in scope, competitors can reach the market earlier.

R&D investment is also highest in the pharmaceutical sector. If a company has ten drugs on the market, not all of the ten will generate sufficient revenue to cover their development costs, which amount on average to a billion euro, and there are many failures.

Could you describe situations where a patent is also valuable, or even stronger than before, after it is partially invalidated?

Yes. During the examination procedure once a patent application is published, third parties can file observations against the patentability, comprising arguments and facts, for example, also prior art documents that we did not find. Such observations are filed online, and they must be taken into account. Sometimes this results in a limitation of the scope of the claims during the examining procedure, resulting in higher quality of the patent.

In instances where we have opposing parties, a separate EPO division examines the opposition and then the patent can be revoked or maintained in amended form.

What are the main differences between your sector and other sectors, such as ICT, when dealing with patents?

The volume of patent filings between the two sectors is quite different. For example, the EPO’s biggest patent applicant last year was Philips with c.a. 2400 applications. In comparison the biggest pharmaceutical company filed around 100-150 patents. This difference is down to the fast moving nature of the technology sector. In telecommunications, innovation is fast. A smartphone can have up to 1200 different IP rights linked to it while some of the biggest drugs on the market may have only two or three patents related to them.

Another difference is in R&D investment. In the pharmaceutical industry, R&D investment is around 20 per cent of revenue generated while in other areas it is 12 per cent or less.

For the Digital Single Market we will see billions of devices interconnected. The more complex the technology the more technical solutions will be needed, which in general leads to more patents. This year again, users rated the EPO as top for quality amongst the world's five largest patent offices[1]. What is your secret and what measures are you applying to ensure patent quality is maintained as applications increase?

The grant process is ISO 9001 certified to ensure quality management. We regularly run user satisfaction surveys and visit applicants and attorneys to bring back feedback. We also have a complaints system and internal audits of quality checks. An important difference to other patent offices - unique to the EPO - is that we have a three, as opposed to one, member examining and opposition divisions.

The qualifications and language skills of our examiners are also important. We work in three languages and many of our examiners bring addition language skills to this mix. New examiners undergo two years training with tutors and the coaches are trained too to help ensure a harmonised approach. There is also continuous development through eLearning, new tools and procedures. Another advantage is that examiners tend to stay with the EPO throughout their working life because working conditions are good and the international environment is interesting. This helps guarantee quality as the examiners are highly experienced.

To manage increasing demand, we are recruiting more examiners. In the past few years we recruited around 500 examiners. We are also constantly improving our tools.

Dr. Dieter Tzschoppe, of French nationality, studied chemistry at the University of Stuttgart (Germany) and holds a PhD in organic chemistry from the University of Besançon (France). He joined the EPO in 1985 in The Hague (Netherlands) as Search Examiner in the field of pharmaceutical formulations.

After his transfer to Munich in 1989, he worked as search and substantive examiner in the field of medical use inventions. Since 1999 he is director of units of about 30 examiners, first in organic chemistry, since 2005 in pharmacology and since 2013 additionally in galenics and cosmetics in the cluster Pure and Applied Organic Chemistry (PAOC).

Responsible for external relations for cluster PAOC he frequently represents the cluster/EPO as a speaker at company visits, conferences or in the framework of international cooperation.

The views expressed in this feature are those of the interviewee and may not reflect the views of 4iP Council or its members. The purpose of this feature area is to reflect thinking on the topic of intellectual property and enable open discussion.

[1] See IAM survey available at https://www.epo.org/news-issues/news/2016/20160602...