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Intellectual Property

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."

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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.

Visit www.BusinessOfScience.com for additional

information concerning Intellectual Property (IP) and the

business of science and technology.

About the author:

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, pharmaceutical, medical

technology and related industries. Visit www.mvssolutions.com for additional info

concerning Dr. Scarmoutzos and MVS Solutions.