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IP Protection and E-Lab Notebooks

By Patrick Tormey

May 12, 2005 | Despite the vast sums invested by the major pharmaceutical companies on R&D, with much of it devoted to sophisticated informatics software and a secure IT infrastructure, most of these companies still rely on the same antiquated technology dating back centuries to the days of Leonardo DaVinci and Francis Bacon to protect their intellectual property (IP): paper notebooks.

The strongest justification for this continued usage of an out-dated technology is the perception that IP protection cannot be
 managed by electronic systems. Further, there is a concern within pharmaceutical legal departments that without specific representative case law, there is a hesitation to be the first company submitting E-Notebook data in a contested patent case. Could the end of this dilemma be near?

The legal community of internal legal counsel, third-party firms and the US Patent and Trademark Office (USPTO) is increasing its involvement in the issue. As the scientific community reacts to the availability of electronic laboratory notebook solutions, the pressure on internal counsel to form an opinion increases. Sometimes, the reaction of internal counsel is to seek external advice as well as look to the USPTO for possible rulings.

Several presenters at the Electronic Notebook Conference, held in January in Atlanta, discussed the viability of collecting laboratory data and information within a fully electronic environment, versus on the traditional paper medium. The consensus was that the case law has already been established. The basis of their arguments forces us not to look specifically for electronic notebooks being used in case law, but to look for examples  where electronic evidence has been submitted.

Retired USPTO Chief Administrative Patent Judge Bruce Stoner (now with Greenblum & Bernstein, PLC) presented highlights of the USPTO’s new rules (37 CFR ß 41.152(a) and ß 41.200(a); September 13, 2004), which indicate that the Federal Rules of Evidence apply to contested cases. In short, electronic and paper laboratory notebooks will be treated as equivalent evidence.

As a further confirmation of the Office’s new rules, James Kanagy, Director e-Commerce & Business Method Patent, GSK, pointed out that in re Jolley (64 USPQ2d 1901, Fed. Cir. 2002), the court upheld the BPAI’s decision basing an award of priority in part on an e-mail,  which set out materials for solving a lubrication problem occasioned by having to switch to new gaseous propellants.  Scientists (who were not co-inventors) who had received the email testified they understood the concept expressed in the e-mail. Consequently the BPAI awarded priority based on this e-mail, and other evidence, a decision the court affirmed.

The legal community has the opportunity to embrace the benefits of electronic solutions that assist in the legibility of data, the enforcement of company signing and witnessing policies and automatic collection of critical data for patents. The time is appropriate for the pharmaceutical industry to embrace electronic management of their most valuable asset — intellectual property. 

IP Management: Financial Justification
With the myriad of IT projects facing the pharmaceutical industry and the trend to tighten IT spending, can the management of IP via an electronic solution be justified? What metrics should be used to determine success? Do ROI timelines of 12-18 months work? Productivity studies will prove or disprove this, when considering an E-Notebook project. The justification to implement electronic management of intellectual property may be best represented by the cost involved in a typical patent interference/defense. These costs can range from hundreds of thousands to millions of dollars for a single interference. 

An interference event requiring the delivery of electronic evidence could occur 5-10 years after production and a court case may not require the electronic evidence for as many as 30 years after creation. Although cost savings cannot be realized until what might be considered an unfavorable event in the future, there are other areas where the migration of IP to electronic form adds to the justification.

At the core of a patent claim is the date of first invention. By introducing the behavioral modification amongst their scientists, data archivists and managers, several companies have been able to ensure that all corporate data is captured throughout the invention process, that the data is properly witnessed and that the dates accurately reflect the reality of the invention. There have been patent cases where dates of invention within the same week have meant the difference for a patent claim. For example, at the March 2005 CambridgeSoft European User Group Meeting in London, Dr. David Price of the chemical company Lubrizol, described how a proper third-party electronic witnessing process (via ensured consistent, irrefutable date-stamping within their electronic system.

Bank SAFE(ty)
Recently, the SAFE initiative (Secure Access for Everyone) — created by the pharma industry to establish a common standard for digital identity and signatures for business-to-business and business to regulator transactions — published a new version of its standards. Banks are becoming accredited as issuers of SAFE credentials for the industry. Frank McCarthy (Royal Bank of Scotland) recently presented the benefits a major pharmaceutical company will derive by using the RBS TrustAssured SAFE service in conjunction with an E-Laboratory Notebook. The SAFE initiative has embraced the legal dilemmas by creating a common legal and technical framework for issuance, validation and usage of legally enforceable, regulatory compliant digital signatures now being adopted across the industry.

Productivity increases of 17-25 percent have been measured by top pharmaceutical companies in the areas of data legibility, data quality, data searching/retrieval, collaboration, paper reduction, and experimental setup. These benefits expand should the data be required in a later legal dispute, when the content, data, owner and witness need to be quickly produced and proven. Further, this data is accessed at the desktop via the company’s global network versus costly travel to retrieve and review hard to read paper notebooks.

With the continual acceptance of electronic management of IP throughout the pharmaceutical industry, each organization must reflect on the potential savings and increased opportunity to claim first date of invention. Will introducing electronic laboratory notebooks into the R&D process increase the competitive advantage for the early adopters?  l

Patrick Tormey is the Executive Director of Global Account Marketing at CambridgeSoft Corporation. Email: 

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