‘Biotechs and the City’ Part 4/7 - Marks & Clerk

The following panel transcript is taken from the 4th September ‘Biotechs and the City’ – Tech Transfer, Translational Funding and Start-Up Capital event held at Imperial College Incubator, and produced by Biotech and Money and sponsored by Marks & Clerk LLP.

The panel included Keith Blundy from Cancer Research Technology, Dr Allan Marchington from Apposite Capital, Tony Hickson from Imperial Innovations, Dr Mike Capaldi from Edinburgh BioQuarter, Richard Seabrook from the Wellcome Trust and Simon Portman from Marks and Clerk.

Neil Darkes: Simon Portman heads up the Cambridge office of Marks and Clerk solicitors where he also heads the firm’s commercial team advising clients on non-contentious IP and commercial contract issues. He’s worked in the sector for over 15 years with clients ranging from small start-ups, universities, all the way through to big multi-nationals and if anyone has a great understanding of IP issues and tech transfer it’s Simon.

There’s a lot of changes going on at the moment in terms of IP, what are you seeing in terms of the main trends in relation to what your clients are coming to talk to you about and what are the challenges associated with those trends?

Simon Portman: The main interest we’ve seen lately is in the patents regime. I don’t know how many of you are aware of this where the idea is you get enhanced CGT relief on patent royalties. It took a few years for companies to wake up to this and accountants were banging on about it for quite a while before companies showed any interest, but we’re now seeing quite a lot of companies come to us about how they can structure their portfolios and their contracts to take the most benefit from it. Companies have also said is ‘that’s very nice but it would nice if we had some revenue to get the CGT relief on so it doesn’t alter the challenge that we face in getting funding for companies that haven’t got any royalty revenue through the door yet. I know the commission talked about the idea of SMEs getting preferential treatment and that would be helpful. That’s probably on the patent related field, that’s the thing I’ve had the most enquiries about.

Neil Darkes: Talking broadly about your clients, what is it that’s making the successful discussions you have successful, what is that companies are needing to be aware of? Is it about the appreciation of IP as an asset?

Simon Portman: As we’ve just heard we are in quite a patented sector so it is important to have your IP and landscaping right, to have your IP portfolio managed properly and to do it judiciously so not waste money on rights you’re not going to use, maybe licence or spin-out, things that aren’t core to your business. At the same time though as we’ve just heard, purely patents aren’t just everything, I’ve got a number of clients who are very know-how based and also when we get clients through the door as early stage start-ups, the ones you can tell are definitely going to fail, you’re fairly sure they’re going to fail and you think you don’t want to tell them, it generally has nothing to do with whether their technology is good or whether their patent is watertight, it’s generally down to the people. The ones that fail, fail for that reason and I’ve known companies rise and fall on the people or licensed deals or co-operations flounder and pick themselves up and flounder again purely because of the people. One of the most important things is get the people right from day one and also get yourself organised. It’s very important for new companies from inception to act like they’re going to sell the company, not necessarily because they will but because that disciplines you to run it in a good one from day one because having a tight ship to sell the company is the same as having a tight ship to go out to investors and as a lawyer it makes our job a lot easier if companies run themselves in that manner. We can probably make more money charging by the hour in sorting out their mess but I don’t actually enjoy it that much, it’s quite frustrating.

Neil Darkes: We’ve talked about management being critical to the success of IP discussions and so forth but what are the common oversights that you’re seeing companies coming to you with in relation to IP and what advice are you giving them?

Simon Portman: The biggest mistake we see in start-up companies and it’s got better of the years but it is they think they own something when they don’t. We’ll often get a case of a company set up by founders and the inventors and they set up a company and yet they forget to actually sign their rights as individuals into the company. So they then start acting as if the company owns those rights whacking in patent applications, they get the first round of funding and in due diligence, investors say ‘you don’t actually own your patents’ and they say ‘yes we do’ and they say ‘no the inventors and the founders never actually assigned their rights to the company’. I had one case where the guy had died and another went AWOL and it’s quite hard to get those rights assigned. Other cases where you can have academics or entrepreneur founders who have their fingers in a lot of pies and they bring IP to a company and say ‘I invented this when I was director of this company but I might not have funding from this organisation and there are strings attached there I also might have used facilities at this hospital and there might be strings attached there so I’m not sure if I can actually bring this to the company at all, when are we going to tell the investors’. And you’re often left with the dilemma of you can come clean as you ought to, they’re probably not going to touch it with a barge pole or they’re going to ask you where you did your assignments. Then you’re often left thinking if we kept our mouth shut no one would have found out. It’s always a hell of a lot easier to get this sort of thing sorted out at the outset.

Part 5/7 – Cancer Research Technology will be released on Wednesday morning. However, if you can’t wait for the release of the remaining pieces of content taken from the 4th September ‘Biotechs and the City’ event held at Imperial College Incubator and sponsored by Marks & Clerk, you can download the full transcript here including the group Q&A.

If you’d like to attend any of the forthcoming events in the ‘Biotechs and the City’ series, you can see ouOctober and November offering here. 

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