With the recent outbreak of COVID-19, the pharmaceutical and biotech industries are particularly prevalent in the public’s mind. Expected to reach over $1.17 trillion in net worth by 20211, the pharmaceutical industry sees significant yearly growth and development, despite being one of the most heavily regulated markets.
This regulation protects both businesses and consumers, ensuring lives are not put at risk but can add extra complications to pharmaceutical commercial contracts. Here, we will examine the importance of including intellectual property rights and protection within these contracts, and why it is essential to keep these clauses watertight.
The Rights & Protection of Intellectual Property
Intellectual property (IP) clauses in a commercial contract determine ownership of the property in question (which could be an idea or a physical invention) and identify how it can be transferred or licensed. They often cover the disclosure and confidentiality required and are vital parts of any commercial contract found within a pharmaceutical or biotech organisation.
There are several different ways to provide intellectual property protection, including copyrights, trademarks, and patents. Patents are vital to the industry, as they help to promote development and research of potentially life-saving pharmaceuticals and reduce the likelihood of market failure.
Ensuring a Balance
On the whole, IP rights are crucial in ensuring the successful continuation of a biotech or pharmaceutical company. They ensure that investments (including time, money, and effort) are protected and returned, which encourages economic growth within the organisation. This, in turn, leads to further medical breakthroughs and developments that benefit the consumer.
IP rights also prevent unauthorised use and piracy of the product, which protects customers from poor quality medications and disreputable pharmaceutical organisations. This will also prevent the brand reputation from being damaged by copycat products.
However, it is often a difficult balance. While having sole rights to the intellectual property will reap benefits for the business’ reputation, profits and (in the long run) the consumer, it can highlight ethical issues around not providing affordable, accessible medication to all.
The Difficulties with IP Rights
One of the key difficulties with IP rights is that new technologies and discoveries in the pharmaceutical industry have been so diverse and unique, that they have often challenged previous intellectual property rights. This has led to the requirement of a continuously evolving strategy to cover new influencing factors and ensure that property remains protected.
Additionally, across the world, different countries can vary in levels of safety and enforcement for IP rights, meaning that if a pharmaceutical company operates in more than one area, they may require international protection for their property.
Intellectual property clauses in a commercial contract are extremely important, and these factors affecting and changing them can lead to significant challenges for the pharmaceutical legal teams involved. For the benefit of the consumer, it is vital to ensure that all criteria and requirements are met around intellectual property, as it prevents harmful copycat products and encourages research and development to continue, leading to further medical discoveries. And as discussed above, IP is heavily relied upon by the companies themselves and without it, they would struggle to keep up with the competition.
Is LegalTech a Solution?
Keeping on top of changing IP rights and implementations is already extensive work, so when intellectual property clauses need to be reviewed or changed in a pharmaceutical company with hundreds of contracts, it can be incredibly daunting. However, due to the importance of intellectual property in this industry, nothing can be missed.
With so many different types of LegalTech available, this kind of task can now be streamlined and organised. Document management systems will enable legal teams to effectively store and organise their contracts and see what’s in them at a glance. Contract summary and review platforms, like Summize, can significantly speed up contract reviews or clause changes by pulling out the relevant information.
By using a platform such as Summize, a legal team’s experience and knowledge is not replaced, but tasks such as reviewing IP clauses can be completed across all contracts (instead of just the important ones) in less time. Any breaches or mistakes can be found more quickly, consumers can be confident in the products they purchase, and even more time and money can be spent on developing the new pharmaceuticals of tomorrow.
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