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Biotechnology sector is growing strongly – funding depends on patents

01.10.2018
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October 1, 2018

The new European Unitary Patent System will create product protection challenges for Finnish small businesses, says Marjut Borgenström, a European Patent Attorney with Kolster. Companies must be more careful in ensuring that their activities do not infringe other patents.

Finland’s biotechnology and life science sectors are growing strongly. For example, in 2017 health technology exports increased by 5.3% from the previous year and EUR 2.2 billion worth of products were exported. Of total exports, most comprised devices of various kinds, such as patient monitoring and X-ray therapy equipment.

In Finland, we have huge expertise and great new ideas in the sector, but funding is tight for small biotech companies. It is practically impossible to obtain funding without a pending patent application.

I have met customers who begin by saying that protection is unnecessary, but get in touch soon after because they cannot obtain funding without filing a patent application.

Finnish inventions are leaking abroad

Finns are at the top end of the rankings in terms of patent applications per capita – perhaps due to the fact that funding is dependent on patents.

I have noted that patent applications in the biotechnology sector have been growing in recent years, particularly in diagnostics. We have also noticed that mere patenting is insufficient: companies must actively monitor the position of their own patents on the market. There has been a clear increase in the number of disputes, opposition proceedings and infringement cases. More claims are being made against European patents by Finnish applicants, i.e. attempts to revoke a patent.

A unitary patent covers the whole of Europe

Small Finnish biotechnology companies must now wake up to the possible entry into force of the unitary patent. With a unitary patent, a company can obtain geographically extensive and uniform protection for its invention. The current European patent only provides protection in Member States in which a company has validated European patent.

The registration of a granted European patent requires the submission of patent translations to each of the selected Member States. Because translations are expensive, if a company wants a patent covering all of the EU’s 38 Member States, the cost can even rise to hundreds of thousands of euros. This persuades many companies to opt for patent protection in the biggest central European countries, and Finland is often not selected. A large number of patents in Europe are therefore not valid in Finland. This means that companies in Finland are free to use inventions that are protected by patents in another European country. But they cannot export the related product to the territory in which the patent is valid.

When the unitary patent system moves forward in the near future, after a transition period European patents will automatically enter into force in each of the EU countries involved in the new system. Separate registration in selected Member States will no longer be necessary. During the transition period, an applicant may choose whether to use the new or old system.

Small businesses will benefit from the new system

The new patent system will be an advantage for small businesses, because patenting costs are reduced. This will also mean a radical increase in the number of patents in force in Finland following the transitional period, at the latest, and that Finnish companies must take greater care to ensure that they do not infringe the patents of other organisations. The role of Freedom to Operate (FTO) analyses will therefore increase and more disputes are likely to arise.

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