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That concludes the formal presentations for today.
Once again, I'd like to thank our speakers
for providing us, I guess, three different views on the IP system.
What I'd like to do is invite the speakers to come up to the table here.
And we might ask if anybody has any questions.
If anybody's got a question, we've got some people over there with microphones.
Ah, and John.
So if you'd like to ask a question, please put up your hand
and feel free to ask the panel...
..any questions that you might have.
- Hi, Celia Poole, IP Australia. I'm not a plant.
We just have a few questions that I'd like to put to the panel.
In the panel's opinion, I'm interested in all three,
how could we improve the global patent system to support capital raising?
- Well, as an inadequate supplier of capital,
I guess I'd better have a shot.
So we invest when patents are
largely at a provisional PCT stage.
And the analysis we do has to be based on...
..external legal counsel's search and assessment
of the strength and weakness of that IP.
And as I mentioned before, it's also important to know that
you've got a group of people who can continue to...
..make new IP in that space and develop the product.
So I guess there's that side to it.
How can the patent system help that?
Erm...
I'm not sure...
New Zealand at two years, I guess, is usually the fastest,
and in our experience, usually New Zealand comes out first,
Australia second and then a long time for others.
I think speed would help,
but in the early investment cycle,
coming back from 11 in the States to, you know, five,
you're still going to be investing without issued patents.
Certainly an easy part of the answer to that question is to say,
if we knew we had equivalent standards and claims
in the major developing markets,
so that if we're spending one to 500 million dollars
to develop a drug through registration,
and it's gonna take between seven and 15 years to do that,
that when we get to the end of that road, in our area, in biotech,
that China and India will be there
and buying those intellectual property protected products for their IP,
that would change the demand for those products,
and with that, the supply of capital to meet that demand.
So that's an easy answer.
Whether there are front-end technicalities that would help,
certainly smoothing out standards, but, erm...
..I'm not sure they would radically change the uncertainties we face
with early intellectual property and whether it issues.
I think the second easy part of the answer is data exclusivity
and what we're doing now with patent term extensions.
Those are both important to our companies.
And so those are features of the system
that I think could deal with more harmonisation
in terms of do you regularly get patent term extensions,
and what is the data exclusivity,
which otherwise would let generics in earlier.
So those are big elements, but they're always down the track.
Upfront, I'm struggling to think of ways
that harmonisation would accelerate global issuance of patents
in time to change the way we would invest upfront.
- Perhaps I can add a little bit more flavour to that.
Certainly for the early capital raisings,
it's unlikely that there'll be patents issued in a lot of territories.
But as a company grows, they need to raise funds more and more often.
We've raised funds 14 times in 13 years,
and the latter funding is of the order of $50 million tranches.
So when you're starting to raise money at that level
to fund, say, phase three trials,
there should be reasonable expectation of issued patents in your major markets.
You know, at this stage, we're a 14-year-old company.
We should have protection in those major markets,
and I would expect that
speeding up the latter phases of national phase,
you know, the US at 11 and three quarter years is quite frankly ridiculous.
And that does make a difference to the ability to raise.
You know, maybe we only raise 50 million instead of 60 million.
It sounds trivial when you say it quickly,
but it does matter to funding a phase three trial.
- The only thing I might add
is to talk about what the IP5,
which I was having a bit of a joke about earlier,
but they do do some important things.
And one of them is to talk about collaborative examination
at the international search phase.
So they have run one very small trial
and are now running a slightly bigger trial,
where three of the IP5 offices collaborate.
And I think anything that can be done
to make that first report in the PCT system a very strong one
that you can really rely upon and that offices themselves will rely upon,
can give you confidence that,
even though you don't have the patent until it's granted in each jurisdiction,
you can be confident that you should have a reasonably smooth path,
if we could put some more rigour into that.
Of course, one of the difficulties at the moment is that
not all international search authorities
put the same degree of rigour into their international search reports.
In fact, there's one rather large office
that doesn't even rely upon its own international search reports,
ones done by its own staff,
when they come back into the national phase in that country.
And that certainly can not be a positive contribution
to speeding up national phase entries.
- OK. I think we might have a gentleman down the back.
- Two slightly esoteric questions, if I may.
Firstly to Josh, I notice Israel is a great producer of patents,
and I'm just wondering what you put that down to.
And for Michael, the particular drug you were talking about,
you said that you increased the life expectancy from two months to about six
and I'm just wondering, why is that so great?
If the person is going to die anyway,
you've only increased their life another four months.
- Erm, I'll take a crack at the first
and mention something briefly about the second.
On a statistical curve, going from two to six is really important
because some people will go out to two years
and some people will go out to a year, make a big difference.
Some people will be cured in that curve.
So it's worth thinking about averages as being a spectrum,
and it's always worth making improvements in human health
because ultimately you go from two to six to 12, to you might fix the disease.
So I think it's well worth the effort,
and Michael can talk in more detail to that one.
On your first question,
there are very different innovations systems around the world
and Israel and Australia are markedly different.
Australia is yet to get to be a net exporter of technology,
and I would very much concur that we have to, have to commit to do that.
We're actually a terrific research country,
we're just not a good exporter of intellectual property,
partly because capital is drawn to commodities which are easy.
Israel has some different characteristics
that are worth outlining.
They have no natural resources apart from their people,
and their people know it, and they value education hugely.
They had an influx of tertiary, technically-educated Russians,
about a million of those recently,
which redoubled their emphasis on human capital and technology
as the lodestone of their country.
So they have a huge base and culture which is very different from Australia.
Different from that, though, they have no functioning capital markets really.
Australia has an enormous savings pool
and very deep and liquid capital markets.
So a very big contrast.
Israel has repeatedly and routinely listed
now 30 or 40 companies on the NASDAQ as a tiny country with no market.
Australia has listed companies on the NASDAQ,
but has its own local market, which is a proxy.
Australia thinks of itself as sort of a market.
Israel and New Zealand know they are not markets,
they need to reach out beyond their markets.
So quite different dynamics, but overall,
if we could ever get to both the innovative culture,
the export of technologies and services,
and the expectation that our true value is in knowledge, like Israel,
Australia would be very well-served.
- I'd actually like a crack at both of those questions, as well,
if you don't mind.
We actually patent in Israel.
Israel is very, very strong in chemistry and in academia,
but also in biotech companies,
and a number of our competitors have emerged out of Israel.
So it's an interesting place strategically to patent in,
just to prevent competitors from doing what we're doing in a chemistry sense.
With respect to 2.4 months versus 5.2 months or thereabouts,
erm, the term that I showed you was progression-free survival,
so it's not...
We're not necessarily talking about death,
although death is one way to progress.
But a restaging of the tumour could be another way to progress.
So a patient, for example,
may experience 5.2 months or 10 months or some period of time
where the tumour partially responds, shrinks,
or is in a stasis period,
and the end of that stasis period would be
when the tumour starts to grow and not respond again.
So potentially you're talking about therapies that last much, much longer
than 2.4 months or 5.2 months.
I'm not a clinician and not a clinical expert,
so I can't give you very much more than that, I'm sorry.
- Another question down here?
- Aaron Mitchell here.
So, I've got a question about the Valley Of Death,
crossing the chasm between the innovation and the commercialisation.
So I'm sort of reflecting on what the speakers have said here today,
particularly with regards to the longer the delay in getting a grant,
the longer the delay in getting further investment,
and then further R&D to get the thing to market.
Would speeding things up in Australia, as far as getting granted patents,
actually have any impact on how venture capitalists and other investors
would invest in Australian technology?
If, you know, there's a lot of circumstances
where a granted US patent
is valued somewhat higher than, say, a granted Australian patent,
as far as investment goes with VCs.
Is this all holding true?
Or is there a limit to what Australia can do
to actually influence the VC investment in Australian technology?
- The answer to your question is no.
The US venture market has ups and downs,
but it flourishes and is the strongest market,
despite being the slowest to issue patents.
As I mentioned in my talk, the availability of capital,
so how much our superannuation and savings sector
puts into physical infrastructure, human infrastructure and skills innovation
and those sorts of assets,
as opposed to ASX200 companies,
is a critical factor in the availability of capital overall.
The availability of people who are entrepreneurial
and have direct experience or can build international companies
is a direct limit.
And regulatory risk,
in terms of will the FDA make you wait two years to do dog studies
before you can get going in the clinical,
or let you get started quickly.
Those are the three big things that stop our culture flourishing.
IP is secondary to those, so I don't think it is a primary driver of that.
But I think if we are to become
a net exporter and an information-based economy,
many of the policies that have been suggested need to come through.
They take a long time and you've got to get going on them,
but they are not primary drivers of this side of that economy.
They are probably somewhat necessary but by no means sufficient
in order to get us to be a net exporter of intellectual property.
- A question for the panel as whole. I've got a couple of questions.
The first one is, what's your thought about how technology has influenced,
whether it's hindered or improved IP?
So for instance, you mentioned about WIPO
and how the international database
could potentially help us to collaborate better.
But at the same time, with the internet and so forth,
does that mean that readily available information,
you can Google a lot of things,
so does that actually cause more infringement as a result?
So does it actually... Your comments on how technology
has either hindered or improved the IP as a whole.
And then second question,
I saw that Michael presented
that roughly seven percent of your capital is on IP.
I'm just wondering, as a guidance for small businesses,
as a percentage I know it's probably questioning the air,
but roughly how much, generally, do you see is spent on IP
from capital or revenue?
- Well, perhaps I might start off
about the use of technology in disseminating patent information.
I focused on what is pretty the narrow concern of IP offices,
to be able to see what other IP offices are doing.
But there's a whole other dimension about people being able to see
the full stock of the innovation that's disclosed in patent disclosures,
because, of course, people sometimes overlook the fact that
in exchange for the patent monopoly,
you must make this full disclosure within a certain time period.
And in the past, we loyally published that in the monthly journal,
and no doubt everybody avidly read it,
and it was almost a useless thing viewed globally.
But nowadays that's changing quite a lot as a result of technology.
I don't think it's anything IP offices are going to do
that will drive that to its natural conclusion.
I think there's a lot of private sector providers
that have some very interesting tools about mining patent data.
In fact, IP Australia is running a pilot programme at the moment
using some of the Thomson Reuters tools
and working with public sector agencies,
universities in particular,
to try to show them what they can learn by knowing what's being done,
even by other Australian universities in the patent space.
They can find collaborators, they can identify competitors,
they can see trends
and make strategic decisions based on that.
So I think the more information, the more readily available, the better,
and there's a lot of information technology
that is enabling the patent data
to be infinitely more accessible than it was in the past.
- I'd agree with that, but I take a wash, or a perspective on that
which is I think the use of patent information
and the enforcement of patents and the value of patents
is quite technology-specific.
And so if you think about a small molecule drug...
..a single atom change means that's not the drug anymore.
It could have significant toxicity, it won't get registered and approved.
So the ability to substitute that is very limited
and the intellectual property around that is very strong.
You've just seen the Apple case and Samsung.
That's a very different innovation system
with thousands of cross-reference patents
from big players basically stopping entry of small players and guiding.
So across those systems
I think patent information should be more widely available.
Certainly in drugs, and I think in many others,
it is used negatively to understand what competitors are doing
and what you're not allowed to do.
In my experience in biomedical innovation,
it doesn't provide a guidance to what does work and is positive,
that is the peer reference journals and scientific collaboration do that.
Most of our companies have broader claims
and their actual drug will be not identified
among a series of compounds that are claimed.
So working out what drug the company is actually using
is not immediately apparent from the patent.
So the positive information it gives you is limited.
It tells others what they can't work on
and it might be a range of 20 compounds.
So I think competitively and defensively,
patent information is its primary use,
and the positive information you get out of patents may be limited
and certainly is almost always going to be sector-specific, technology-specific.
- I'll have a crack at both of those, as well.
In terms of databases and technology,
it would be impossible to stop it.
You know, this is like Napster.
It's... You can squash a Napster
but you'll find ten others pop up in its place.
I think the important thing with the technological availability
of patent data and particularly prosecution history,
as it goes along, is the integrity of that data and the quality of that data.
So if you go to, for example, US PAIR,
you can download the case history in real time, as a public citizen.
If that's what you want to do.
And by and large there is integrity within that data,
although the office makes mistakes, as every other place does.
When you get a Google or someone else starting to collect that data
and re-categorise that data and mine that data in a different way,
you can't necessarily guarantee the integrity of it.
So I would be somewhat reluctant to rely on
the Wikipedia of patent prosecution histories, if you like.
With respect to the cost to patent, the cost of patents, erm...
..seven million on 124, five and a half to seven percent, yeah.
Currently we're spending a lot, lot more than we spent in the early years,
so I think the guidance is difficult to give there.
When you start to get a grant in Europe,
it starts to cost $200,000 a go,
depending on where you ratify, what translations you do,
all of that sort of stuff.
So, you know, it also depends on where you file,
and that is somewhat dependent on what type of company you have.
I think good IP counsel
should be directing their clients to what the major markets are.
There is little value in my company filing in Nigeria.
It simply is a waste of money.
And I think that by and large counsel don't just say,
"Here's all the places you could file."
They may say that, but they'd say,
"We would recommend this place, this place and this place,"
because they are the major markets
for bicycles or biotechnology companies or what have you.
So, really, your IP budget is as long as a piece of string.
- OK, we might have time just for a final question,
if anybody has one more question.
- Thank you. Just a general comment.
Today the speakers have concentrated on biotech,
but also looking at some of the graphs,
technology is definitely not invested in as heavily
or commercialised as heavily, whether it be through investment...
I'm just curious as to some of the factors,
would it be the IP process, venture capitalism?
What are some of the factors that are hindering us
from commercialising technology, engineering-type processes?
- I think we probably all have something to say about it.
From my perspective,
the limiting factors
to commercialisation of technology are three,
the availability of funds,
the availability of funds, and the availability of funds.
- I won't be quite so crude. I think the availability of funds is limiting.
The availability of people is limiting,
but that is a necessary thing that grows over time
with experience and generations of entrepreneurs.
I think the alternative uses of capital and easy money in Australia,
as I mentioned before, in terms of we have resources.
The great entrepreneurial countries like Singapore, Germany, Israel,
England before coal,
extraordinary in their lack of natural resources and their... identification.
I was in a taxi in Singapore the other day,
and the taxi driver wasn't telling me about sport
and he wasn't telling me about, you know,
the last immigrant group to arrive in Singapore.
He was saying Singapore, we don't have any resources,
our people are our natural resource,
this government's big into biotech.
What are you doing in Singapore?
I happen to be in Singapore for biotech, too.
I had a taxi conversation about biotech!
Now, Australia hasn't got that culture yet.
We're a long way from that culture.
But until you've got the culture,
all the funds and all the people and all the technologies don't go anywhere.
So those things need to come together.
I don't think it's just money,
and you can't pour a lot of money quickly into a small number of companies
that aren't prepared to receive it,
and you can't pour a lot of money quickly into companies
that aren't very good, because you lose your money.
So it takes a series of generations and success across a portfolio.
Australia with biotech is getting that.
When I came back to the country eight or so years ago,
there was CSL, ResMed, Cochlear and Daylight.
And now we have about a dozen companies, including Alchemia,
we're proud of that as an investor in Alchemia among others,
that are in the $100-$500 million market cap
and providing a portfolio,
some of which will fail, some of which will go on to become global products.
That's enormously healthy
and Australia has the biggest concentration of biotech
on its public markets than any other country in the world.
So we are doing some good things
and that culture and those generations of entrepreneurs are developing.
But we need four, five, ten times that sort of emphasis.
And hopefully, as the terms of trade come off, we'll be able to build that.
- I think I had the same taxi driver in Singapore.
(LAUGHTER)
- They must have bullet points every week for tourists!
- Maybe it's not unrelated
that Singapore is a very good place to recruit patent examiners from.
And it's another dimension of harmonisation as language skills,
which I didn't touch upon.
I'm told we have 13 Mandarin-fluent people now
and I think China is churning out the patent applications
at two million a year, so they're 13 that work very hard.
(LAUGHTER)
- OK. All right. Well that... Oh, sorry, yes?
- Philip, you talked about Raising The Bar
and that it was important for harmonisation
that the robustness of the patent system
be brought up to the level of other jurisdictions.
One thing that concerns me is the dropping off of the innovation patent,
which performs a really useful function in the overall patent system.
Is there any possibility of introducing something like a utility model
that other jurisdictions would understand the meaning of
and understand the role that it would play?
- So, just to give a little bit of context,
there's a proposal currently out at the moment
to make one adjustment to the innovation patent,
and that is to raise the inventiveness requirement from the innovative step,
which was a new concept in 2000 and turned out to be nothing much,
up to inventive step,
the same level as applies for a standard patent.
So there's a proposal out and we've received submissions on that.
So I won't kind of pre-empt the government's next step on that,
but I would say this,
that when we were going around with the Raising The Bar Act consultations,
three rounds of them,
there was no question that we got more often than to say,
"All this stuff about raising the standard,
isn't the innovation patent going in the opposite direction
by making it very easy to get something that you can represent as a patent?"
It's only eight years long,
but eight years of a monopoly for something that was obvious
is still a potentially damaging thing.
So I think that we have to do something,
and if I read the submissions, everybody agrees,
we need to do something about the innovative step threshold,
otherwise we will not be able to throw off that reputation
that I was talking about before.
But what exactly that is will be a matter for the government to decide.
- OK.
Well, I'd like to say,
if all of you could please join me in thanking our panel for today.
(APPLAUSE)
- On behalf of IP Australia,
we would also thank you for contributing and turning up today.
And there is a lunch available at the back.
We would encourage all of you to fill in the evaluation form.
Your feedback is important to us.
There's also an opportunity maybe to catch up with the speakers,
and there's a number of people from IP Australia Executive here.
They might want to put their hand up, just so that people...
So if you want to catch up over lunch and ask some questions, feel free.
So thank you very much.
(APPLAUSE)