Sian Banks May 4 2022 Protecting innovations in psychedelic medicines Pinsent Masons | Healthcare & Life Sciences - United Kingdom Sian Banks Healthcare & Life Sciences IntroductionBackgroundPatenting psychedelic medicinesHave patents been issued for psychedelic medicines?Protecting psychedelics with trade secretsPatents or trade secrets?CommentIntroductionFollowing a 40-year hiatus, research and development into the potential applications of psychedelic medicines has resurfaced, including investigation of their clinical benefits for a number of mental health conditions.This article considers avenues to protect psychedelic companies' intellectual property and their investment in research and development. Rising research activity has already led to an increase in patent filings for psychedelics in recent years, but this article also considers the need for a varied portfolio of IP rights, potentially utilising the protection offered to trade secrets.BackgroundGiven the world's current mental health crisis, with depression and anxiety in the top 25 causes of health-related burden worldwide, the need to discover alternative mental health therapies has never been higher. Psychedelic substances are consequently being reinvestigated for their benefits, ending a 40-year taboo that developed after the criminalisation of these substances in the 1970s and 1980s.A derivative of ketamine, the well-known party drug, is already being used to treat depression. Additionally, psilocybin, the compound responsible for the hallucinogenic effects of "magic mushrooms", is being tested for its clinical benefits in treating anxiety, depression and post-traumatic stress disorder, among other mental health conditions. Recently, research by Imperial College London has shown that psilocybin appears to "free up" the brains of people with severe depression in a way that other antidepressants do not.(1)This research may be in its (second round of) infancy, but it is hoped that it will be a game changer for mental health treatment. However, as researchers discover the benefits and innovate around these substances, a thought must be given to how those innovations can be protected. Although psychedelic substances are currently heavily regulated and subject to criminal sanctions, once any decriminalisation occurs, the market will likely be quickly flooded with competitors. IP rights will therefore provide a useful tool in protecting companies' investments and securing market share.Medical innovations have traditionally been protected by patents, but other rights including trade secrets should not be discounted and, indeed, should be considered seriously when developing robust IP portfolios for psychedelic medicines.Patenting psychedelic medicines Psychedelic companies' first port of call to protect their research and development is likely to be patents, as it will be for most traditional pharmaceutical companies. Patents are legally granted temporary monopolies over an invention that, once applied for and granted, allow the patent holder to enforce a monopoly in the relevant invention for 20 years. This 20-year term is generally fixed, but a limited extension can be available in certain circumstances for patents covering pharmaceuticals with marketing authorisations (a supplementary protection certificate, designed to compensate the patent holder where there is a delay between the patent granting and receiving the marketing authorisation).During the term of the patent, the patent holder can stop competitors from using their technology so, although temporary, patents are a strong weapon and there are various hurdles that must be cleared before one is granted. As with any other invention, a UK patent for a psychedelic innovation can only be granted if it is new, inventive, capable of industrial application and not excluded from patentability.(2)Turning first to the specific exclusions from patentability, "methods of treatment"(3) and "any variety of animal or plant"(4) are excluded, which in practice may mean that patenting psychedelic treatments, especially those derived from natural sources, is fairly hostile. However, the "methods of treatment" exception does not apply to inventions consisting of a "substance or composition for use in any such method"(5) – that is, the "methods of treatment" exclusion applies only to methods and not to materials to be used in such methods. Further, although products of nature may not be patented in their natural forms (so psilocybin from fungi, for example would not be protectable), related inventions which surround the psychedelic substance – such as processes of manufacture and artefacts – may be patentable.Another exclusion from patentability covers inventions where the commercial exploitation of those inventions would be contrary to public policy or morality. Currently, in the United Kingdom, most psychedelic substances are classified as Schedule 1 drugs under the Misuse of Drugs Regulations 2001, meaning they are classified as harmful and lacking medical application. Researchers can apply for a Schedule 1 licence, which allows them to develop medicines and therapies, but civilian use is criminalised with severe sanctions. The role of psychedelics for authorised medicinal use is unlikely to fall under this exclusion, but it is worth noting that this exemption may preclude developers obtaining patents for psychedelic products if they lack a clear medical application.Since many psychedelics currently being tested for clinical use are known compounds either deriving from natural sources (eg, psilocybin and ayahuasca) or synthesised many years ago (eg, LSD, ketamine and DMT), it is likely that patent applications covering these compounds will lack novelty. Therefore, in order to be granted a patent, the applicant must disclose an invention over and above the known compounds or uses. Applicants are consequently likely to have to focus their patent applications on showing that their psychedelic innovation has an inventive step – that is, that the invention in the patent contributes something over and above the prior art, which is not obvious (eg, a new derivative or variation of a known molecule or the discovery of a new medical use or method of synthesis).Once the hurdles above have been cleared by an applicant and the patent has been granted, the patent owner can begin to enforce their monopoly. However, this asset also comes with a trade-off: the patent must disclose the invention in sufficient detail to be performed by a person "skilled in the art".(6) This is to ensure that the extent of the patent's protection corresponds with its technical contribution to the art, and so that others can use the technology once the patent has expired. This opens patentees up to the risk that competitors copy their innovations despite the risk of infringement, as well as the possibility that their patent is challenged and revoked.Have patents been issued for psychedelic medicines?A simple search for patents containing the words "psychedelic" or "hallucinogenic" in Espacenet shows 3,539 published patents globally.(7) The corresponding chart of patent family publications generated by Espacenet (Figure 1) reflects the activity in this area: a flurry of publications in the period between 1968 and 1982 when psychedelic research was active, followed by a sharp drop-off in published patent families until the turn of the century. Since the early 2000s, there has been a steady increase in the number of published patents, with nearly 500 patents being published in each of 2020 and 2021 globally in this area.Figure 1: chart of "psychedelic" and "hallucinogenic" published patent applications generated by EspacenetThe corresponding graphs for European patents (EPs) and United Kingdom (GB) patents reflect the same trends, though with noticeably lower volumes (of the 3,539 publications above, 357 are EPs and 56 are GB patents).Due to the lack of case law in this emerging area, it is difficult to assess the strength of these patents and comment on their attributes. Signs of scrutiny are starting to emerge, but outside the United Kingdom. For example, Compass Pathways, a British mental healthcare company, has sought and obtained patents in the United States and several European jurisdictions for its synthetic psilocybin compound. However, several of its patents are being challenged by a non-profit organisation, Freedom to Operate, in the United States, arguing that the compound is not novel.Protecting psychedelics with trade secretsAgainst a background of uncertainty surrounding patents for psychedelics, prudent innovators in this space would be wise to consider the range of rights available to protect their inventions. An alternative, and in some ways the opposite, to patenting is the use of confidential information protected as trade secrets.Trade secrets are not an IP right as such, but they can be a business-critical asset. Trade secrecy law(8) generally protects information that is secret, commercially valuable because it is secret, and subject to reasonable efforts to protect its secrecy. If the confidential information is wrongfully obtained by a competitor, the owner can sue for damages and may seek an injunction to prohibit the use of the relevant information.In order to protect commercially valuable information as a "trade secret", it must be kept confidential, and it should be clear (from a paper trail) how that has been done as remedies for trade secrets misuse are only available where "reasonable" steps have been taken to keep that information secret. It is important to note here that as soon as a trade secret loses its confidentiality, it becomes public information and can be used by anyone.In practical terms, this can mean a host of different precautions. Internally, investment in employee training regarding confidential information is vital to prevent accidental disclosure. Further, pharmaceutical or other innovative companies often enter partnerships and collaborative work environments where employees share discoveries, data and methods (eg, with research institutions, manufacturers and regulators). Entering into non-disclosure agreements is standard practice in these scenarios and should not be forgotten in order to maintain confidentiality and prevent other collaborators from using the information in an unauthorised manner.Importantly, pharmaceutical innovators (and psychedelic innovators) are particularly vulnerable to theft of electronically stored proprietary information by cyber criminals, and so opening up information-sharing channels with collaborators (particularly if they do not have stringent information security) can enhance the risk of trade secret theft. Robust contractual provisions should be implemented in any collaboration agreements to require parties to maintain confidentiality and set out the consequences if there is a breach.The risks above aside, it is also worth noting that, if a business relies on a trade secret and that operation is, at a future point, accused of infringing a later patent, the business can rely on prior use as a defence to patent infringement under UK law.Patents or trade secrets?In simple terms, patents and trade secrets present opposing choices as identical subject matter cannot be protected both as a patent (which requires disclosure) and a trade secret (which requires confidentiality). Nevertheless, a successful IP strategy can and should incorporate both trade secrets and patents, which can protect different aspects of a particular product, including psychedelics. The main differences are illustrated as follows.Unlike patents, there is no need to demonstrate compliance with any statutory requirements before qualifying for trade secret protection. Therefore, commercially valuable subject matter that would otherwise be excluded from patentability can be protected.It takes time for patents to be approved and granted, whereas trade secret protection arises automatically. This is of particular benefit to innovators in fast-developing areas, which is likely to include the dynamic area of psychedelic medicines.Patents are only valid for 20 years, whereas trade secrets have the potential to protect information indefinitely (if the information is adequately protected and remains confidential). This could be useful for protecting information, such as manufacturing processes, once a related patent (eg, for a compound) has expired.Patents require disclosure of the invention to the public, whereas trade secrets protect innovation by keeping it secret. However, trade secret protection is immediately lost once the confidential information becomes known to the public.Patents are used defensively to prevent competitors from making use of the patented invention, even if they independently discover the invention. Conversely, trade secrets are not a monopoly right, so do not offer any protection where a third party has independently discovered the trade secret or reverse-engineers it from a final product. Therefore if the relevant innovation is easy to reverse-engineer from a finished product, patenting that innovation would be favourable as it gives innovators certainty that they can benefit from a 20-year monopoly.There are no direct costs associated with the generation of a trade secret, whereas the cost of applying for, granting and defending a patent can be prohibitive to some companies.However, investors and executives typically expect start-ups to show they have intellectual property on their books, creating an incentive to file patent applications.Patents are used by pharmaceutical companies as standard practice so there is substantial interplay between the patent system and the medical regulations. It is less clear how trade secrets interact with the regulations given the requirements to share data on clinical trials and patient safety, for example.Despite their differences, however, these rights also interact in another important way. In the United Kingdom, there can be no public disclosure of an innovation before a patent is filed as it will destroy the novelty of the patent (one of the requirements described above), even if the disclosure originates from the applicant itself. It is worth noting that some countries operate "grace periods" whereby if an innovator files their patent application within a certain time after publicly disclosing their invention, the earlier disclosure is not considered to be part of the prior art to the patent application. However, no grace period is available in the United Kingdom. Therefore to ensure the success of a patent application, the underlying invention must first be protected as a trade secret up to the date the application is filed. Prudent psychedelic IP managers should take care to understand the utility of trade secrets given that they, in some ways, open the door to other IP rights.CommentIt is plain to see that the number of patent applications covering psychedelics is growing due to increased interest in alternative mental health therapies in recent years. Patents provide a robust IP right to innovators but their counterpart, trade secrets, should not be underestimated and should indeed be used in conjunction with the protection that patents offer.Researchers and developers of psychedelic medicines should ensure that they are taking appropriate steps to obtain IP rights in respect of their innovations. Though not considered in this article, trademarks and design rights can also provide protection to psychedelic companies by defending their brands. Developing a varied portfolio of IP rights will not only ensure that new products are protected as vigorously as possible, but also provide comfort to potential investors.For further information on this topic please contact Sian Banks at Pinsent Masons by telephone (+44 20 7418 8250) or email ([email protected]). The Pinsent Masons website can be accessed at www.pinsentmasons.com.Endnotes(1) Daws, RE, Timmermann, C, Giribaldi, B et al, "Increased global integration in the brain after psilocybin therapy for depression", Nat Med 28, 844–851 (2022).(2) Section 1(1) of the Patents Act 1977.(3) Section 4A(1) of the Patents Act.(4) Schedule A2, section 3(f) of the Patents Act.(5) Section 4A(2) of the Patents Act.(6) Section 72(1)(c) of the Patents Act.(7) This search is not exhaustive and is used for demonstrative purposes only. The search parameters used were "psychedelic" or "hallucinogenic" and the search was conducted on 21 April 2022. Chart extracted from Espacenet.(8) This includes the Trade Secrets Directive 2019/943, implemented in the United by the UK Trade Secrets (Enforcement, etc.) Regulations 2018.