[Valuable Intellectual Property] Alteogen Hits 6 Trillion Jackpot by Avoiding Patents

⑦Established Patent Strategy Opens Export Path
Bio Company Avoids Hundreds of Patent Barriers
Participated in KIPO 'IP R&D Strategy Support Project'

Komyeong-suk, Senior Expert at the Korea Patent Strategy Development Institute under the Korean Intellectual Property Office

[Asia Economy Reporter Kim Bo-kyung] Alteogen, a biopharmaceutical company specializing in biologics, is famous for hitting a jackpot worth over 6 trillion KRW solely through technology exports. In 2020, it surprised everyone by signing a contract worth 4.7 trillion KRW with a global pharmaceutical company. Alteogen's main product is a technology that converts drugs requiring intravenous injection into a convenient subcutaneous injection form, similar to insulin. Utilizing this technology reduces the administration time for drugs such as anticancer agents, greatly benefiting both patients and medical staff. It is no exaggeration to say that the hidden driving force behind Alteogen's rise to its current position is its 'patents.' Because the technology was developed and protected by patents, it was able to avoid disputes with the global monopoly company (U.S.-based Halozyme).

Before Alteogen emerged, Halozyme had already secured this technology and monopolized the global pharmaceutical market. Holding hundreds of patents, it received royalties amounting to 350 billion KRW annually. It was impossible to stop Halozyme's dominance with technology alone. A strategy to commercialize while circumventing Halozyme's patents was necessary.

Thus, they turned to the Korean Intellectual Property Office (KIPO). Since 2009, KIPO has been conducting the Intellectual Property (IP) Research and Development (R&D) Strategy Support Project. This project helps companies reduce the risk of patent disputes, secure core patents, and pioneer new markets. A dedicated team of IP experts and patent analysis institutions provides one-on-one customized support to companies. This year, about 500 companies are planned to be supported through this project. The companies' contribution ranges from 20% to 40% of the project cost. Alteogen participated twice in this project, in 2013 and 2018, to devise its patent strategy. Ko Myung-sook, a specialist at the Korea Patent Strategy Development Institute under KIPO, collaborated with Alteogen as an IP expert.

In an interview with Asia Economy, Specialist Ko emphasized the importance of a 'patent strategy' to bypass the patent barriers built by leading companies. He said, "When I first met Alteogen, the technology development was already underway, and I was confident that the technology could be commercialized." However, having good technology does not guarantee commercialization. If there is a leading company with the original technology, it would have certainly built patent barriers to prevent latecomers from entering the market.

"Alteogen's need was a way to commercialize without infringing on Halozyme's patents."

"Alteogen's need was a way to commercialize without infringing on Halozyme's patents." Specialist Ko thoroughly analyzed Halozyme's patents and derived an R&D direction that could avoid infringement and enable commercialization. He recalled, "Alteogen participated very actively in the IP R&D project," adding, "The CEO never missed a strategic meeting held every two weeks, attended by a patent attorney, Alteogen, and myself."

Examining and analyzing each patent to find a loophole for avoidance was not an easy task. If the analysis concluded that avoiding Halozyme's patents was impossible, all the R&D results to date would have to be discarded. Specialist Ko said, "Avoiding one patent might infringe another, so comprehensive judgment and strategy were necessary." After meeting regularly for three months to discuss and brainstorm ideas, they found a way to commercialize without infringing on Halozyme's patents.

"Although we avoided other companies' patents, once Alteogen's technology is commercialized, another latecomer will imitate Alteogen's technology. Alteogen also had to build patent barriers like Halozyme."

But it was not over until it was over. "Although we avoided other companies' patents, once Alteogen's technology is commercialized, another latecomer will imitate Alteogen's technology. Alteogen also had to build patent barriers like Halozyme." Specialist Ko said he benchmarked Halozyme's patent strategy like a textbook. He evaluated, "Halozyme's patent strategy was an excellent case," but added, "Of course, since we found loopholes in Halozyme's patents that allowed avoidance, we did not copy it exactly."

Specialist Ko emphasized, "A company's survival depends on its technology, and the first gateway to protecting that technology is a patent strategy." The first mover must build high patent barriers to shake off followers, and the followers must break through the first mover's patent barriers. He warned, "Commercializing without interest in technology protection carries significant risks." He also advised entrepreneurs, "All ideas in the world can be found in patents, as patents are a vast repository of diverse knowledge. Developing technology without reading patents likely means duplicating existing technologies." He added, "If you read the ideas in patents, you can gain valuable insights to upgrade your current ideas. A company led by a manager with such ability will have twice the potential for success."