Life Tech Law

Why start-ups need a lawyer

Shannon — Tue, 10 May 2011 19:44:45 +0000

Biotech CEO Craig Shimasaki discusses the importance of hiring top legal counsel early and using them often in the first years of your company’s development. He also includes a run-down on what you might have to spend at a traditional firm. Read more.

Legal Start-up Expenses – What Should I Expect?

Admin — Tue, 19 Apr 2011 20:10:43 +0000

Legal expenses are typically greater than you might anticipate, but getting your business established correctly will save you major headaches later. Depending on their experience and locale, corporate attorney rates for biotech startup expertise can range from $200 to more than $750 per hour. All attorneys should give a complimentary initial visit to discuss your situation. If they insist on charging you for an initial consultation, find another attorney.

Getting your company established and drawing up founder and employee documents and a license agreement can cost $5,000–$25,000 or more. Cost depends on the complexity of your business, the number of founders and the issues related to a technology license.

Legal assistance for closing a round of capital can be $10,000–$50,000 or more depending on the size of the round, the number of investors and other terms related to funding. Your attorney should provide you with a good estimate before beginning any transaction, and some may even give you a flat rate if the work is clearly defined. For larger deals, such as closing on a venture capital round of financing, you may be able to get a commitment for a maximum limit on legal fees. Some attorneys that specialize in startup organizations may even accept deferred compensation but may charge a higher fee and take a small equity position.

Do Patents Spur Economic Growth and Profit for Pharmaceutical and Information Technology Companies?

Admin — Sun, 20 Mar 2011 19:24:29 +0000

In a recent NY times article, two former Boston University Law School colleagues occupied the headlines on Sunday in a discussion of the economics of patent law. Michael Meurer and Jim Bessen are both economists and law professors. Over the past few years, the pair have complied a tremendous amount of economic data regarding patents and companies who patent. Their data shows that for pharmaceutical companies patents do spur economic growth by allowing them to pull billions in profits from brand name drugs, but for information technology companies patents just don’t work.

Meurer & Bessen’s conclusions is that , with the exception of the pharmaceutical industry, the patent system is bad for innovation. They find that the disincentives created by other people’s patents outweigh the incentives to build your own portfolio. It is widely known in the USPTO that the patent system for IT needs to be overhauled. Meurer & Bessen do not suggest dismantling the patent system, rather they believe that a number of serious reform measures are needed to shift the balance back to a positive state where patents incentivize innovation. Technological inventions are often not obvious, especially when it comes to the esoteric world of software, where it can be unclear what the patent will be good for.

Current reform proposals call for clear predictable patent boundaries. There are also patent reform bills in the House and Senate aimed at reining in litigation and damage awards. Another possible improvement to the system might be to increase the number of appeals courts handling patent cases, since right now there is only one.