Life Sciences Industry Bringing New Frontiers For Law Firms

Monday, September 1, 2008 - 01:00
McKool Smith, P.C.

Editor: McKool Smith recently announced the formation of a life sciences practice group. Can you tell us more about what that type of work involves?

Cawley: As we began to handle more and more life science cases, we realized that we could serve our clients better by organizing a team of lawyers with pertinent backgrounds and experience. Basically, we are helping companies and individuals protect their patented ideas and technology, which includes everything from pharmaceuticals to medical devices to gene therapy treatments. A team approach insures that we can bring the right people to the right case, and helps all of us stay on top of legal and technical developments.

Editor: Why did the firm decide to go into this area?

Cawley: We decided to expand our life sciences work based on several factors, including the fact that we're seeing more of these matters on a regular basis in courts where we already represent clients in other patent cases. Another reason is the obvious room for growth in the life sciences industry. Recognizing that a lot of the patent work in the so-called electrical arts is maturing, we've made the decision to pursue more clients and more cases in the biological arts, where many companies are still ramping up. McKool Smith is well known for being on the cutting edge in our legal work, and it doesn't get any more cutting edge than working in life sciences. We grew up litigating patents for computer and cellular companies during their early phases of development, and this experience helps us represent life science companies that are going through the same cycle.

Editor: What are some other signs that patent litigation in the life sciences field is going to increase?

Cawley: One example is the current U.S. patent classification system, which includes about eight classes that are directly related to the medical device industry. But there are more than 2,300 subclasses for medical devices. When you look at those numbers, it's easy to predict a crowded field of companies, technologies and patents. With that level of competition, we expect to see more patents being litigated. Also, most of the companies involved in the development of life sciences products have sophisticated management and a thorough understanding of the value of their intellectual property. These companies are always looking for new discoveries and innovations while also aggressively protecting their intellectual property and developing more and more patents. Those additional patents naturally lead to a higher likelihood of patent litigation. Unlike some other industries, patent protection is indispensable to the life sciences. A drug or medical product that costs billions of dollars to develop can easily be duplicated by an infringer, so the enforcement of IP rights is the only thing that secures that investment.

Editor: Now that McKool Smith has devoted a team to handling life sciences cases, exactly what type of work are you handling?

Cawley: We have a steady docket of life sciences work, including many medical device cases, pharmaceutical patent claims, disputes over gene therapy models, patents covering molecular diagnostic testing, and many others. Our firm is fortunate to have a deep bench of attorneys who are experienced in these types of cases, and we feel like that experience is necessary when we take on these complex matters.

Editor: The subject matter you described seems pretty technical. How do you absorb all the science in a life sciences case?

Cawley: There are several McKool Smith attorneys who worked in life sciences before going to law school, and that experience is invaluable. We also have been aggressive in finding attorneys with advanced technical degrees and "real world" experience. For example, one attorney on our life sciences team worked as the patent manager for a California pharmaceutical company before joining McKool Smith. Another has a Ph.D. in biology. Still others have worked as chemical engineers. The list goes on!

Editor: In addition to the hands-on industry experience, what type of advanced degrees are you talking about?

Cawley: Frankly, our life sciences group includes so many advanced degrees I can't name them all, but I do know that we have attorneys with degrees in biochemistry, biology, chemical engineering, computer science, electrical engineering, immunology, microbiology, nuclear physics and polymer science. And every time I check we've added new talent, so I'm sure this list is incomplete!

Editor: You mentioned the firm's work in pharmaceutical patent cases earlier. Most of the pharmaceutical companies based in the United States are headquartered on the East Coast, especially in New Jersey. How does a Texas-based firm like McKool Smith break into the market?

Cawley: Life sciences work, particularly pharmaceutical patent cases, is one of the main reasons our firm has opened two new offices on the East Coast in the past year. Our New York office includes several attorneys with significant life sciences experience, including Bill Todd, who has handled patent cases for some of the largest pharmaceutical companies in the world. In Washington, D.C., our attorneys are also very experienced in these types of cases. In fact, our D.C. team has represented many companies before the International Trade Commission on significant life sciences matters, including biotech companies and medical device manufacturers. Our Texas attorneys are also very experienced in handling cases around the country, and they'll be handling a lot of pharmaceutical patent cases from there while traveling to our East Coast offices in order to be closer to our clients and the courts. Fortunately, the patent practice is national, and we've found that the experience and background of the attorney is more important than where they live.

Editor: In what jurisdictions is McKool Smith representing life sciences clients?

Cawley: We've handled cases for clients across the country, from New York to California. We have quite a few life sciences cases in Texas as well, most of which are in the U.S. District Court for the Eastern District of Texas.

Editor: Who are some of the firm's Life Sciences clients?

Cawley: We handle a lot of work for medical device manufacturer Medtronic Inc., which is based in Minnesota. We're especially proud of the $250 million jury verdict our partners Sam Baxter and Ted Stevenson helped Medtronic win in a catheter case earlier this year. We represented Ciphergen Biosystems Inc., now known as Vermillion Inc., which is a California-based developer of molecular diagnostic testing. We've also handled litigation for Collagenex Pharmaceuticals, a drug manufacturer that's headquartered in New York.

Editor: Should the Patent Reform Act be approved in anything close to its present form, what effect will those provisions have on life sciences companies?

Cawley: Patent reform has been promoted by information technology giants and opposed by pharmaceutical companies. Basically, the big IT players don't want patents, and would be glad to see patent protection abolished altogether. They want to compete by brand and by being first in the market, and they see patents more as potential business disruptions than as assets. On the other hand, pharmaceutical companies - and by extension other life science companies - live and die by patent protection. They spend vast amounts developing products that can easily be copied, and rely almost exclusively on patents to protect their investments. The pharmaceutical industry is skeptical of wholesale reform of the patent laws, and I think with good reason. Fortunately, there seems to be a sense that the system is working, albeit slowly. The courts have made substantial corrections to the patent marketplace in the past few years, and the view is growing that Congressional action is unnecessary.

Editor: As the life sciences industry expands in other countries, what are the implications for patent litigation in U.S. courts? Does the firm plan on representing any international life sciences companies?

Cawley: We already represent international companies, because any major life science player must be international. Even though IP rights may stop at the border, the products don't, so these companies need international schemes to protect and enforce their IP. We're seeing more and more cases where actions in multiple jurisdictions are necessary to achieve effective enforcement. The European Commission has helped streamline this somewhat, but we're still a long way from any single global enforcement forum.

Editor: There's data to suggest that litigation costs can exceed the profits from the patent portfolios of many companies, especially those that are publicly traded. Doesn't this dynamic stifle innovation? What's the solution?

Cawley: We've all seen data like this but, in my opinion, it's mostly generated by those with a patent reform agenda. When a pharmaceutical company with a billion-dollar-a-year drug enjoins importation of an infringing product, does the litigation cost exceed the profit? Lots of companies have made money from patent litigation, and some haven't. Some have succeeded in protecting their essential products, some haven't. Many have never had to resort to litigation because it was known that they had credible IP and the means to enforce it if necessary. Sure, there are things that can and will be done to manage the cost of patent litigation, but I believe that companies are smart enough to figure out whether litigating their portfolios makes sense.

Doug Cawley is a Principal in the Dallas office of McKool Smith, a national intellectual property and commercial litigation law firm with additional offices in Austin and Marshall, Texas; New York and Washington, D.C. Mr. Cawley represents a variety of U.S. and international companies in intellectual property matters. The firm's work in life sciences includes the representation of medical device manufacturers, biotechnology providers and pharmaceutical companies.

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