Excedr Newsletter | March, 2023
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In this month’s newsletter edition, we cover intellectual property, patent licensing, and R&D tax credits:
As someone who is passionate about scientific innovation, it can be strange to think about ideas as property. The reality is that because so much technology is already patented, protecting your innovations will give your company the best shot at success by ensuring that another company doesn’t obtain legal rights to your idea first and then sue you for using it.
Protection of your innovations is important in seeking financial backing and enabling you to take steps against another company that might obtain legal rights to your idea first and sue you for using it. If you take proper actions first, you have the best shot at maintaining your rights.
The concept of intellectual property (IP) can be challenging to define, but as a life sciences or biotechnology company, it’s essential to consider as you’re building your business. Regardless of the specifics of your technology, you are entitled to ownership over your inventions.
In the greater scientific community and academia, many people believe in sharing ideas with others because they all are pursuing the same goals of scientific progress, but in the corporate world, this isn’t always the case; there is more to it.
It takes a considerable amount of time and money to develop a healthcare-related product, whether it’s a medical device, diagnostic kit, or novel therapeutic.
Sustaining R&D costs over multiple years, however, can be a lost investment if a competitor can simply launch a competing product or exact copy. Furthermore, it can be impossible to see a scientific idea or discovery through to execution if the idea isn’t protected somehow.
This reality makes intellectual property (IP) an essential component of biotechnology, pharma, and life sciences companies. Without IP, biotech startups have no way to shield their inventions against potential competition, other than the risky and uncertain process of maintaining secrecy.
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?Protecting your intellectual property can be a critical part of growing a biotech startup, especially when you’re in the early stages of development.
Patents and patent protection play a large role in the development of biotechs. But the utility of patents extends beyond simply acquiring and maintaining rights to intellectual property. Patents can be critical assets that life sciences startups can leverage to achieve short-term and long-term goals.
?Through patent licensing, researchers and startups can leverage their patents to establish themselves as formidable players in the industry, bring in revenue for the business, and build partnerships with larger pharmaceutical companies.
Intellectual property rights (IPRs) are the rights given to an individual or company that provide rights over the use of the IP for a limited period of time.?For example, securing a patent for an invention is an essential step towards protecting your IP rights.
?Biotechnology and pharmaceutical companies of all sizes are powered in large part by intellectual property, with IP and IPRs being major drivers of their value. This is due to the fact that sound IP protection safeguards your most important assets, positions your company to be financially rewarded, and attracts investors.
It’s possible for IPRs to have meaningful impacts on both upstream and downstream aspects of biotechnology innovation. However, IPRs are most applicable to downstream aspects, such as, commercialization, manufacturing, and market access/share.
Understanding and properly using IPRs, as well as implementing a well-designed IP strategy, can provide companies with protection for their most valuable assets, offer a competitive edge in a specific market, and increase their value in the eyes of investors. As a biotech startup founder and entrepreneur, IPRs should be on the top of your list from day one.
Factors like time, costs, and risk play a huge role in the life sciences. Properly funding R&D projects can be extremely difficult considering the time, cost, and risk that goes into developing a biological product.
To ensure R&D activities continue, the federal government created the Research and Development tax credit, which provides businesses with qualified R&D expenditures the ability to save money at tax time. There are also a number of tax incentives provided by state governments that make it easier for laboratories to fund their research and development.?
However, despite significantly high R&D costs, there are far fewer life sciences companies taking advantage of tax credits and incentives in the US than you think.
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Hope you've enjoyed reading and take care!
Cheers,
-Tom