Glass test tubes with red liquid on a white background. Test tubes are used by chemists to hold, mix or heat different chemicals. Perfect for medical, chemical and research theme backgrounds.

This is the first in a series of short articles on aspects of starting a bio science business

Although some very successful service businesses have been built without specific intellectual property and instead have relied on efficient delivery or the ability to source particular materials or skills most businesses in this space are built on a foundation of exclusive rights to a particular technology secured by patents and supporting intellectual property. Accordingly the first step in setting up a new business is usually to assess what intellectual property will be needed in the business and then to secure the necessary rights.

Firstly you need to review the competitive landscape to see if others are working in your field or own patents that could block your pursuing your idea. You may be able to do this initial search yourself but if you are anxious or if your own search turns up potentially conflicting patents you should engage a patent agent with specific expertise in your area of interest. If you are looking to spin out from a university or other business it makes sense to choose an agent who does not work for your current employer. Explain your proposed business to the agent and they will be able to review any potentially blocking patents and advise if there is a way through for you and also on the potential to patent your own ideas.  At this stage you will not want to spend a lot of money so the searching will be at a fairly high level but will generally be sufficient to give you an idea as to whether there is going to be sufficient freedom from the rights of others to take your ideas forward.

The next step is to secure rights to any third party patents that may be standing in your way or that you want to use in the business. For this you need to engage a specialist lawyer – again be sure to find someone who understands the industry and make sure you brief them in detail as to the business you have in mind so that they can give you the most appropriate advice. You can either buy the rights outright – an assignment – or take a licence to the technology in whole or just in relation to the field in which you are working. Universities generally want to see their technologies exploited so are open to discussing licensing but will not usually assign existing technology to a new company for fear that the company will fail and the technology will not be exploited however it may be possible to include an option to buy the university out once the business is more established. Remember if your idea arose in the course of your employment it will usually belong to your employer and there may be other restrictions in your contract of employment that limit your right to set up a business in competition to your employer. Read your contract carefully and show it to your lawyer.

There is a tendency to focus on patents but other types of intellectual property may be available; in particular do not overlook the significance and potential weaknesses of copyrights for software based businesses or the potential to exploit databases to develop your business. While trademarks are generally not important at this early stage they can be worth considering later as goods and services approach the market.

By Patricia Barclay