Ute Kilger, © Boehmert & Boehmert

IP Flash: Cost pressure

Small companies and academic institutions develop their assets, in most cases, under budget constraints. Still, they have to meet the expectations of future strategic partners or investors in order to be an attractive option for them and to have a chance to get the pro­duct onto the market.

Further, the small entity may be in competing with internal projects of the bigger partner or other projects that may have bigger financial resources. This may lead to catch-22 situations. On one hand, the partner expects certainty about the patent scope. On the other hand, the “big partner” expects validation of the patent in all European countries. A granted patent confers a credible degree of certainty about the scope of protection, although it may be challenged later on in opposition or nullity proceedings.

Thus, it may be advisable for the small entity that the patent may be granted as soon as possible – before they even approach future investors. On the other hand, a granted European patent needs to be validated in each and every country of the European Patent Convention in order to be effective in each and every country. Validating a European patent in all states of the European Patent Convention is an expensive exercise. A standard validation list for a European patent granted to a bigger pharma company costs between €50,000 and €170,000. That is an amount a small company may not be able to spend out of its own pocket. Therefore, it usually validates the European patent only in selected countries. This limitation may, however, not be competitive to internal projects of bigger companies having the longer lists of validated patents. One solution to this situation may be to advance prosecution of the patent application to a degree where major problems of patentability have been solved and it is credible that a patent maybe granted on the pre­sently discussed scope. But still – there is not a granted patent. 

Another possibility is to validate one patent quickly within an affordable number of countries – which creates certainty about the scope of protection. At the same time, others applications that also covers the business may be still pending – which may be validated with a much larger country list once an potent investor is on board. In any event, filing and granting strategies of patents have to be decided in a very creative manner in view of the needs of future potential partners and the individual business situation. Thus, there is no one-suits-all solution. 

Dr. Ute Kilger, Partner, Boehmert & Boehmert, Berlin, Germany