Specialized Legal Services Critical To Capitalizing On Evolving Science

Wednesday, March 1, 2006 - 01:00

Editor: This is an exciting time for the nanotechnology and biotechnology
industries. Please tell us about your practice.

Kordzik: Our firm has been representing Rice University for the past
several years, and we had the great honor of working with the late Dr. Richard
Smalley who won a Nobel prize for his work on the buckyball and its related
structures. Named for architect R. Buckminster Fuller, the buckyball is rugged,
stable and capable of withstanding extreme temperatures. Stretching the
buckyball into a carbon nanotube increases its durability and repertoire of
potential applications.

For more than a decade, I've been representing Nano-Proprietary Inc.
(formerly named SI Diamond Technology, Inc.) and its subsidiary Applied
Nanotech. They work on using carbon nanotubes for field emission, which have
useful applications such as making flat-panel displays.

Our growing practice also represents several other universities in Texas
involved in research and development in nanotechnology, and we support several
nanotechnology companies in the region.

Harder: I have focused on the biotechnology industry since moving to
The Woodlands, Texas, from Chicago more than 20 years ago to work for Mitchell
Energy & Development Corp., the developer of The Woodlands. It was an
exciting time as Mitchell began to develop the Research Forest with
biotechnology companies using technology transferred from the Texas Medical
Center in Houston to bring new products, drug compounds and other ways of
potentially curing diseases to the marketplace.

Winstead's commitment to being at the forefront of the technology revolution
attracted me to the firm. Members of our biotechnology practice include Ph.D.s
in microbiology, genetics, chemistry, biochemistry and organic chemistry, and a
significant number of our shareholders hold life sciences degrees. Our history
of working with leading universities in patenting their inventions ties in
nicely to my practice of assisting their technology transfer offices in
licensing out new inventions and setting up companies to commercialize those
inventions. By combining our practices in biotechnology and nanotechnology,
we're able to provide a unique and effective service to our clients.

Editor: Please tell us about the legal framework needed for the
nanotechnology and biotechnology industries to flourish.

Harder: Private investment is essential for developing the full
potential of the nanotechnology and biotechnology industries. Raising capital
and developing the commercial products that reward investors for taking risks
require strong intellectual property positions. The strength of an IP position
depends on the sophistication of its strategies for protecting, defending,
enforcing and transferring the related patents, copyrights, trademarks and other
proprietary interests.

The legal framework for securing private investment encompasses such vehicles
as corporate formation, partnership transactions, mergers and acquisitions,
licensing and collaboration agreements, research and development agreements,
confidentiality agreements, material transfer agreements, supply and
manufacturing agreements, clinical trial agreements, and distribution, sales,
and co-promotion agreements.

Kordzik: The private sector often hesitates to invest in long-term
development, which results in a funding gap between the research and prototype
phases that needs to be filled.

Although the federal government makes some funding available, the states need
to do more. California and New York have been leading the way. To keep pace,
Texas enacted the Texas Emerging Technology Fund, which dedicates $200 million
to foster innovation, research and job creation in nanotechnology, biotechnology
and other high-tech industries like semiconductor manufacturing, environmental
sciences and advanced energy.

I would love to see the Houston area develop a nano-energy research center
funded by the federal and state governments along with academia and private
industry. They would be able to attract the best nanotechnology scientists from
around the world to help solve our energy problems.

Editor: Do the legal issues related to nanotechnology and biotechnology
development mirror each other?

Kordzik: Biotechnology and nanotechnology are long-term processes.
Substantial time passes before products can be brought to market to reward the
R&D expenditures and capital investments. The legal issues mirror each other
as investment, corporate structures, IP and commercial arrangements are
negotiated for allocating the risks and rewards. Other areas of commonality
include the environmental, health and societal issues that need to be resolved.

Harder: I agree with Kelly that the many similarities between the
nanotechnology and biotechnology industries include their dependence on new
ideas and their protection; their need to raise capital for development; and,
once a product is ready for market, corporate partners are needed for
distribution and sales.

One unique aspect of biotechnology is that new products require extensive
clinical trials with human beings and FDA approval before coming to market.
Products that are device driven can get to the market faster. The clinical
trials for new compounds and drugs can be quite expensive and take many, many
years.

Editor: Why is it important to have specialized legal services available
to serve the nanotechnology and biotechnology sectors?

Harder: An obvious benefit of having a decade of experience in an
industry like biotechnology is that a specialized practice can offer more
efficiency than a general practice firm whose attorneys are learning on the job.
Such efficiency translates into savings for the clients.

Having a broad client base, coupled with leadership in public forums,
establishes relationships that can be invaluable for matching potential research
partners and pointing clients to the right contacts from a strategic standpoint.

Kordzik: Highly educated patent attorneys and patent agents with
experience in the nanotechnology and biotechnology fields are extremely
important in our representation. Their deep knowledge of what the inventors are
doing helps them to communicate not only with our clients, but also with the
government's patent examiners.

Having government contract experience is also important, as well as contract,
intellectual property and corporate securities expertise. A firm with experience
in all those areas can be invaluable in protecting the client's immediate and
long-term interests.

Harder: Experience in a broad range of nanotechnology and
biotechnology matters gives our firm the depth needed to understand the complex
issues surrounding establishment of a successful new venture and greatly
facilitates its ability to provide counsel to entrepreneurs and boards of
directors and successfully complete their transactions. Familiarity with
investors of all kinds also enhances the firm's ability to assist its clients in
raising the capital necessary to develop their technology.

Editor: What trends do you see in the way that universities leverage their
technology?

Harder: Much of the cutting edge biotechnology research being done in
the U.S. today is conducted in universities. They are increasingly more involved
in spinning out the technology and providing seed money for initial investment.
It is an exciting time to be working with universities as they grow more and
more sophisticated in the transfer of technology.

Kordzik: Universities are finding innovative and far-reaching ways of
disseminating the knowledge they create. One example is the Rice Alliance
Nanotechnology Venture Forum, which provides a model for how universities are
working with leading scientists, early-stage nano-technology-related companies
and leading venture capitalists to share their perspectives on such commercial
applications as nano-gold, nano-robots and nano-cars.

Editor: Please tell our readers about your participation in professional
associations, coalitions, committees and summits that help advance the
nanotechnology and biotechnology industries.

Kordzik: A few years ago, I was asked to serve as President of the
Texas Nanotechnology Initiative. This statewide organization brings together
scientists to facilitate cooperation in innovation and the promotion of the
nanotechnology industry in Texas.

My prior activities include heavy involvement in lobbying for passage of the
Emerging Technology Fund. This year our focus is on nanoTX '06 (for more
information visit target="\'_blank\'">http://www.nanotx.biz/) to be held in Dallas at the end
of September.

Our firm also sponsors and hosts the biweekly Nanotechnology Colloquiums
presented by the Nanomaterials Applications Center at Texas State University. We
video conference the presentations and provide Q&A sessions for guests at
our offices in Houston, Dallas, San Antonio and Austin. We also linked with a
group in Chicago and Arizona on some of the colloquiums and are considering
expanding the web cast to London and Japan as well.

Harder: Our firm is an underwriter of the BioHouston Commercialization
Symposium as well as Rice Alliance's Biotech Venture Forum, and we support a
variety of other events that bring together scientists, investors and
entrepreneurs. I have a strong passion for the biotechnology industry because it
has so much potential for helping people with chronic and incurable diseases.
I'm delighted to be a part of Winstead's superlative legal team in this dynamic
and promising arena.

Please email the interviewees at jharder@winstead.com or kkordzik@winstead.com with questions about this
interview.