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OGT Says Licensing Deals Could Ease IP 'Confusion,' Stimulate Growth in Japanese Microarray Market

Oxford Gene Technology said this week that it has signed licensing deals with Japanese firms Bio Matrix Research and Filgen that will give the companies access to OGT’s intellectual property covering the manufacture and marketing of oligonucleotide microarrays.
The two new deals come just weeks after OGT announced similar licensing arrangements with NGK Insulators and Yamatake, and could herald a proliferation of new chips and services in the Japanese microarray market, according to an OGT official.
Michael Bennett, vice president of licensing in Asia at OGT, told BioArray News this week that he believed the new deals could not only further the company’s licensing position in Japan, but could infuse the Japanese microarray market with a number of new products.
“I think there’s been an element of confusion in the Japanese microarray market [regarding IP],” Bennett said. “I think that’s one of the reasons that, for a country that has such a large population and large [gross domestic product], the microarray market is relatively small.”
“I think they’ve been constrained, thinking about all the issues to do with IP and what they can actually do with microarrays themselves. So, I think it’s going to help to open up that marketplace and get more people using microarray technology there,” he added.
Bennett said that OGT has been able to focus more on Japan over the past year and a half since due to a management reorganization. He served previously as VP of licensing for Europe and Asia until the company decided to create separate positions for North America, Europe, and Asia.
“We have three people basically looking after the world and we split on a country/territory base. So we have somebody looking after the US, someone else looking at Europe, and I have been looking after Asia,” he said.
The Four Deals
The deals with Bio Matrix Research, Filgen, NGK, and Yamatake aren’t the first for OGT in Asia, but they are the first the firm has announced.
According to Bennett, the company actually closed four deals before it announced the agreement with NGK Insulators at the beginning of the month (see BAN 8/1/2006).
However, the deal with NGK Insulators, based in Nagoya, Japan, has been the largest for OGT in Japan, Bennett said. The agreement gave NGK OEM rights, the right to manufacture its own NGK-branded arrays, as well as the right for NGK customers to use its chips in a service business, making it the only Japanese company to gain the right for its customers to use its arrays in their own service businesses, Bennet said.
“NGK [has] probably the largest set of rights that’s been acquired by any organization in Asia,” Bennett said
The service rights could give NGK a head start among microarray companies selling to service labs in the nascent Japanese microarray market.
“At the moment, there are a number of licensees that haven’t purchased that right, so it gets a little confusing,” Bennett said. “They say. ’Well it’s a licensed microarray, why can’t I use it in my service business?’ Well, you can’t use it in your service business because the manufacturer did not acquire the rights for you to use it in your service business, which means that the service business itself needs to acquire a service license.”
According to OGT, Filgen bought the rights to conduct a microarray service using licensed microarrays this week. Unlike the deal with NGK, Filgen did not purchase OEM, manufacturing, or commercialization rights at this time. The other two firms — Bio Matrix Research, a bio venture company launched by Tokyo University of Science, and Yamatake — opted to license rights to manufacture and commercialize their own arrays, but did not license service-related rights.

“I think they’ve been constrained, thinking about all the issues to do with IP and what they can actually do with microarrays themselves. So, I think it’s going to help to open up that marketplace and get more people using microarray technology there.”

The Yamatake deal, announced last week, gives the company the right to manufacture and commercialize its arrays as well as market them, via its distributor Sigma-Aldrich Japan (BAN 8/8/2006).

Bennett said that OGT inked its first licensing deal in Japan in 2005 and that the company expects to sign more agreements in the Japanese market before the end of the year.

“Over the next six months there will be some more. I can easily see maybe three or four coming out,” Bennett said.
Japanese IP Position
Bennett said that OGT is approaching the Japanese market with an open licensing strategy, offering interested parties a “menu” of rights to purchase with their associated costs. The deals, therefore, represent the amount the individual companies are willing to invest to gain certain rights from OGT.
“We have a menu effectively of rights that you can purchase. And you can have all of them, or you can just have the first course. It’s up to them what they want to do. We don’t restrict them. We have a very open licensing policy. Anybody can acquire any of the rights they want to acquire,” Bennett said.
Japan is the only Asian country where OGT’s core IP — the patent estate of microarray pioneer Sir Edwin Southern — is covered. Bennett said that the company’s patents were originally opposed by Canon in Japan, “but the opposition was unsuccessful and our patents were reissued with very minor amendments in October 2005.”
But Bennett doesn’t perceive the company’s lack of IP protection in other key Asian markets — like Korea, Singapore, Taiwan, and China — as a disadvantage.
“The basic issue for [Asian microarray firms] is, ’Where’s the main market?’ The main markets are coming back to US, Europe, or actually selling into Japan itself — in which case these companies have to acquire a license to do that,” he said.

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