Whether developing groundbreaking therapies or designing innovative medical devices, intellectual property (IP) is a vital asset, and effective IP management can mean the difference between market leadership and commercial success, and lost opportunities.

In a sector driven by innovation, patents are often the most valuable form of IP. The patent lifecycle begins with a provisional application to establish priority, usually followed by an international filing under the Patent Cooperation Treaty (PCT). After 18 months, the patent application is published, and between three and ten years later, it is granted in selected jurisdictions – providing a 20-year monopoly and safeguarding new technologies from competitors.

An international patent strategy will involve complex timing issues and decisions. Ensuring that appropriate decisions are made to support regulatory and commercial strategy can optimise patent protection outcomes and get the best bang for the IP budget buck:

Tip #1

Evaluate patentability alongside regulatory and commercial strategyEnsure early assessment of novelty, inventive step, and commercial relevance. For therapeutic goods, consider how the invention aligns with regulatory requirements (e.g. TGA, FDA, EMA). Early-stage IP decisions should be coordinated with your regulatory pathway and overall commercial goals to avoid misalignment.

Many patents are put at risk of invalidation through early public disclosure of inventions before filing. Publishing findings in academic journals, presenting at conferences, or even submitting a publicly accessible PhD thesis can compromise patent validity.  Publicly available information about clinical trials can also pose a threat to patent validity.  To safeguard inventions, patent strategy should be considered before making any public disclosures:

Tip #2

Protect confidentiality—don’t disclose without safeguardsPublic disclosure—whether through scientific papers, conference presentations, clinical trial registries, or informal discussions—can jeopardise patentability.  Best practice is to ensure provisional filings are in place before disclosure, even within collaborative environments, however enforceable NDAs are crucial where early disclosure is necessary.

In collaborative projects across institutions or countries, IP ownership can become fragmented. Having certainty in IP ownership will prevent costly and disruptive legal disputes concerning the right to use, protect, commercialise and defend the IP assets. Investors are more likely to invest in businesses with ownership of IP assets clearly defined, as it adds value and reduce risks. Consider and address IP ownership early, including with inventors, contributors and collaborators to avoid navigating a myriad of issues that may become obstacles for exploiting the IP:

Tip #3

Clarify IP ownership and contributor rolesConfirm that employment contracts, research agreements, and trial protocols clearly define ownership rights.  This will assist in the establishment of a clear chain of entitlement, which is vital for any future commercial deals.

There are several pathways through which patents or other IP can be strategically leveraged for commercial gain. Such a decision will depend on a range of considerations and individual circumstances, but these can be broadly categorised as:

·        Licensing - allows the IP owner to retain ownership while generating ongoing revenue through royalties.

·        Outright sale (assignment) - selling IP outright provides an immediate capital injection.

·        Joint ventures and spin-offs - enable collaborative development, bringing innovations to market while sharing risks and rewards.

·        Keeping the IP as a trade secret for competitive advantage.

Tip #4

Consider licensing, partnerships, and market fit earlyWho will take the product to market? Whether it’s through internal pipelines, out-licensing, or partnering with biotech or medtech companies, identifying potential commercial partners and market positioning early helps shape your IP strategy and development priorities.

In licensing, it is often difficult to find comparable market deals, however, the ‘25% Rule’ which suggests that licensors should receive around 25% of the licensee’s profits, may be a useful staring point in royalty negotiations. Valuations can vary based on a variety of factors, including the strength and commercial potential of the IP, and the risks that a party is willing to take:

Tip #5

Royalty negotiation is not a zero sum gameRemember that successful IP commercialisation benefits both the licensor and the licensee. The relationship should be collaborative and not adversarial. 

The cost and timeline to develop a therapeutic product are significant—from preclinical work and GMP manufacturing to regulatory approvals and market launch. A fair income distribution would generally mean that the party which takes more risks has a higher share of return. This principle helps to ensure that both parties are motivated to reach a fair distribution of financial returns.

And finally, be prepared to defend your IP strategically. 

The pharmaceutical and medical research sectors are high value, so IP challenges are common - from competitors seeking market entry to disputes over inventorship. Remember to strengthen your position by ensuring your IP is well-documented, clearly owned, and strategically protected.

Acting quickly can also significantly improve the chances of achieving the desired commercial outcome. If you become aware of potential infringement, take action promptly. This does not always mean litigation. Other strategies may provide a cost-effective pathway to resolution.

From securing patent protection at an appropriate time, to selecting appropriate commercialisation strategies and taking action quickly if IP rights are infringed, intellectual property is a strategic asset that underpins business success.

To maximise its value, effective IP management at all stages of the IP life cycle is essential, and engaging an IP specialist early in the development process can help navigate complexities and unlock the full potential of intellectual property.

Whether you are a biotech startup, clinical researcher, or medtech entrepreneur, your approach to IP today can define your future success.

This general information is provided by Spruson & Ferguson patent attorneys and lawyers. With a large team of PhD and technically qualified and industry experienced professionals, they help guide and protect some of the world’s largest pharmaceutical and medtech companies through to outstanding universities, R&D and therapeutic goods innovators.