Brent Rexford Bellows
Which of your deals has been the most memorable and why?
J&J’s acquisition of Conor Medsystems Inc for US$1.4 billion, which followed the culmination of a sophisticated offensive and defensive patent strategy. We represented Conor Medsystems, a coronary-artery stent maker, which was entangled in worldwide patent infringement actions filed by Angiotech Pharmaceuticals, a licensor of Boston Scientific. The experience taught me the importance of having a strong IP portfolio that can be leveraged in a high stakes and competitive technological field, and how critical it is to ensure that all involved with the portfolio are aligned with its strategic use.
You served as past chair of the IP section of the Georgia State Bar and are a lecturer on IP issues domestically and internationally. Could you tell us more about both of these appointments and how they have contributed to your professional development?
I have been incredibly lucky through these appointments to have met hundreds of people whose careers revolve around intellectual property, including practitioners, academics, judges, policy makers and equity stake holders. So many of these individuals have also become a reservoir of knowledge that I find myself drawing from when faced with particularly complex IP issues.
What changes would you like to see in the FRAND/SEP landscape and do you think that they will happen?
A permanent policy that fairly balances the rights of patent holders and implementers. The 8 June withdrawal in the United States from the 19 December 2019 Policy Statement on Remedies for Standard-Essential Patents Subject to Voluntary F/RAND Commitments lacked clarity on holdout tactics employed by implementers to efficiently infringe SEPs. Agreeing to license SEPs under FRAND terms does not obviate the exclusionary right inherent in a patent. Patents are not public goods. Although SEP owners voluntarily enter FRAND commitments as a good-faith invitation to negotiate, there are currently no repercussions for implementers to initially avoid a licence, as the remedy after conclusion of a dispute may simply be the original terms offered in the FRAND licence. A policy explicitly allowing for injunctions, such as is provided in Germany, would re-level the playing field and maintain the inherent rights of the patent holder. By withdrawing the 2019 policy, US courts now have no guidance in determining whether an injunction is proper in an SEP dispute, and are inevitably left to rely on the factors in eBay Inc v MercExchange LLC (547 US 388 (2006)), which generally weighed against SEP injunctions where the SEP holder has made a FRAND commitment. Holding out for years while practising a patent and then being able to receive FRAND after the fact provides too much incentive to implementers to efficiently infringe and game the system.
What, for you, are the most crucial steps of any IP monetisation process?
The most crucial step, at least within the pharma/biotech field, starts with the filing of patents around the composition of a potential clinical asset, as these will form the foundation for the rest of the portfolio. Implementing a plan tailored for monetisation at the start can drastically increase the ultimate value of a portfolio. All too often, we encounter portfolios with a value that has been compromised by the initial failure to account for the ultimate positioning of the portfolio necessary to maximise monetisation. Strategic implementation of a monetisation programme on the front end can be expensive. But in my experience, front-end spending can set the stage for maximising returns.
You focus on pharmaceutical and biotechnology patent strategy, including domestic and international patent preparation and prosecution, portfolio creation and management and due diligence. How do you expect the US biopharma licensing landscape to evolve in the next five years?
We will see a move to a broad-based licencing model for foundational technologies. Given the capital necessary to get clinical assets approved, exclusive licences are generally preferred, with sub-licences provided in fields that do not compete with the licensor/licensee. Whether this model is the most efficient use of foundational technologies is debatable, but its use is often necessary to entice development. Nonetheless, owners and users of foundational technologies may be better served by implementing broad non-exclusive licensing and cross-licensing models that make the technology available to all comers willing to pay. The renewed interest by US policy makers in the use of federal funds in developing these technologies will further force the issue. I fully expect a great deal of effort to be put into developing the contours of such a licensing model using current SEP/FRAND regimes as an initial benchmark.
Brent Rexford Bellows
Brent R Bellows is a partner with Knowles Intellectual Property Strategies in Atlanta, Georgia. He focuses on pharmaceutical and biotechnology patent strategy, including domestic and international patent preparation and prosecution, portfolio creation and management, and due diligence. Dr Bellows is particularly attuned to the strategic positioning and strengthening of patent portfolios encompassing clinically valuable assets, and represents a diverse range of clients, from entry-level and emerging start-ups to global corporations.