UPDATE : Saturday, February 22, 2020
‘Rules to be tougher on patent transfer due to ToolGen case’
  • By Nam Doo-hyun
  • Published 2018.11.29 11:48
  • Updated 2018.11.30 11:19
  • comments 0

As the regulation on the patent transfer to a company from universities and research institutions is getting tougher, drugmakers should accelerate licensing-in deals within this year, an expert said.

Cho Won-hee, a partner at D’light Law Group, gave his advice at a seminar on the pharmaceutical and biotech market trends and response strategies, organized by the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPMBA) and Korea Biotechnology Industry Organization on Wednesday.

Cho Won-hee, a partner at D’light Law Group, speaks at a seminar
on the pharmaceutical and biotech market trends and response strategies in Seoul on

“Due to the ToolGen issue, the rules on patent transfer to a third party from a university or a government-funded research institute are getting stricter,” Cho said. “If pharmaceutical firms are in license-in deals to receive a technology transfer from a university or a research institute, they should close the deal within this year because the procedure will be more complex next year.”

From next year, pharmaceutical firms should calculate the actual value of the patent to receive it from a state-funded research lab. This will raise cost and time significantly, Cho explained.

The changes aim to block the third party from obtaining a patent illegally. Earlier this year, ToolGen was mired in a controversy that the company unfairly diverted the patent on gene editing tool CRISPR-Cas9, which was co-developed with Seoul National University.

After the controversy at ToolGen, pharmaceutical firms have to estimate the actual value of a patent. “Calculating the actual value of a patent costs about 20 million won to 30 million won per patent. It costs over 100 million won for five patents,” Cho said. “In the medical field, it is more difficult to estimate the value.”

To prevent a controversy similar to that of ToolGen, state-funded research and business-funded one should be separated, Cho noted. If a research head (professor) should inevitably involve in a study, a company should recognize that it has joint ownership with the university, he added.

Cho advised that if a company did not secure a stake in the patent, it could obtain the same status of the patent owner by using an exclusive license, a right to use the invention of the other party. If the estimation of the value of a technology is difficult at an early stage, a company could consider paying running royalties, the patent expert added.

Some analysts said the patent issue at ToolGen, listed on KONEX, could hamper the company’s plan to move to KOSDAQ.

However, an official at ToolGen said, “Regardless of the patent issue, we are preparing to move to KOSDAQ as originally planned,”


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