Cell and gene therapy platforms licensing – exclusivity and carving-up fields

Cell and gene therapies (CGTs) are highly complex and sophisticated technologies with a lot of constituent parts. To bring a product to market, innovators often need to license-in IP from external partners. Much of this IP can cover components of the CGT itself, or be required to manufacture the CGT, and examples include IP in cell lines, gene editing technology, vectors for delivery of a therapeutic gene or promotors to help control gene expression. Often the technology licensed-in is a ‘platform technology’ which the licensor simultaneously licenses to many different partners to be used in multiple products. Indeed, many of the top recent strategic-alliance deals in the CGT field involved platform technologies.

What are the potential issues when licensing a platform technology to multiple different partners? There are many different points for a licensor and licensee to consider, including how patent prosecution, maintenance and enforcement is controlled and co-ordinated when there are multiple licensees, who has access to the licensee’s improvements to the platform technology and how a licensee can protect itself from being over-burdened by royalties due to multiple third parties.

In this post, we consider issues around exclusivity and how the licensor of a platform technology might carve-out fields for different licensees.

Exclusive or non-exclusive?

One of the most fundamental aspects of any IP licence is whether it is exclusive, sole or non-exclusive. It is generally understood (under English law principles) that an exclusive licence means that only the licensee has the right to exploit the relevant IP rights, to the exclusion of anyone else, including the licensor. ‘Sole’ licences, although fairly uncommon, are generally understood to mean that the licence is exclusive except that the licensor also has rights to exploit the IP. A non-exclusive licence gives the licensor the right to exploit the IP itself and grant others the right to do so.

Exclusivity and carving-up fields

Full exclusivity can of course never be granted where an IP owner is granting multiple licences, so exclusivity in this context is achieved by carving-out exclusive fields or territories for each licensee.

An exclusive licence to the IP might be granted to develop and commercialise products for ‘the treatment of disease X in humans’, or, more broadly, for ‘the treatment of neurological disorders in humans’, for example. Alternatively, exclusivity might be expressed by reference to a defined product. For example, the licence could be expressed as an exclusive licence to the IP to develop and commercialise a gene therapy product that incorporates gene Y.  Other options include defining exclusivity with respect to a particular biological target.

A licensor must take care to define the field and territories carefully to ensure there is no ambiguity as to the scope of exclusivity. A simple example could be an agreement that grants exclusivity in the field of ‘respiratory diseases’ and another that grants exclusivity in the field of ‘inflammatory diseases’. There is overlap between these two fields and asthma, for example, could fall into both categories. If a licensor inadvertently grants two parties an exclusive licence in regards to the same disease by virtue of a poorly worded ‘field’ definition in the licence agreements, this could lead to both licensees having claims against the licensor.

If the licensor has already granted a field-specific exclusive licence, it is also worth considering expressly excluding that field in future licences for clarity.

Finally, where the licensor is a university or other academic or charitable organisation, the licensor will inevitably require the licence agreement to preserve its ability to continue with its academic (and possibly clinical) research using the licensed IP (a topic we have previously covered here). Licensees need to bear in mind that this principle of academic freedom is non-negotiable for universities, although the precise boundaries around the university’s right to continue using the IP in the licensee’s exclusive field can often be negotiated.

Considerations for non-exclusive licences

Although a licensor can in theory grant an unlimited number of non-exclusive licences in the same field, it is still important for licensors to carefully consider the field of use in a non-exclusive licence.

If the licensor grants a non-exclusive licence to its IP that is not field-limited, this prevents the licensor from later granting an exclusive licence in any field. Where the licensor grants a non-exclusive licence in a particular field, this only prevents the licensor from later granting an exclusive licence in that field.

There may also be certain fields and territories that the licensor wishes to reserve for itself or for future exclusive licensing, or that have already been exclusively licensed. If this is the case, the licensor should ensure that these fields are expressly excluded from the scope of any non-exclusive licence agreement.

Conclusion

Where a licensor has a valuable technology that has the potential to be licensed to multiple partners developing different CGTs, and one of the most fundamental things to consider is how the licensor carves up the fields in which its licensees are entitled to use the licensed IP. This needs to be considered on a strategic basis at the outset by the licensor and the wording of each licence must be thought about carefully to avoid the licensor inadvertently breaching any of its licensees’ exclusivity.  

Very similar considerations also apply in situations where the licensor is not licensing out its platform technology directly, but uses its platform to work with a collaboration partner and accepts restrictions in the collaboration agreement that prevent it from working with third parties on similar projects.  In these cases the licensor will need to take care to ensure that the restriction is not overly broad in scope or too long in duration, otherwise it runs the risk of unduly cutting itself out of other, potentially significant, opportunities with other partners or in relation to its own pipeline.

In future posts we will cover other aspects of licensing platform IP, including patent prosecution and enforcement (including issues with the Unified Patent Court) and licensee improvements.