Conception & Inventorship Under Pharmaceutical Patent Law: Lessons And Best Practices

Introduction: The Centrality of Conception

In patent law, conception is the cornerstone of inventorship. For pharmaceutical companies, where billions in revenue hinge on patents for molecules, formulations, and methods, getting inventorship right is mission critical. A misstep in identifying inventors can render patents invalid, expose the company to litigation, or weaken exclusivity positions.

Conception of Molecules: Fixing the Structure

For a new chemical entity, conception requires a definite and permanent idea of the chemical structure. Conception does not occur unless one has a mental picture of the structure of the chemical, or is able to define it by its method of preparation, its physical or chemical properties, or whatever characteristics sufficiently distinguish it. Fiers v. Revel, 984 F.2d 1164, 1168 (Fed. Cir. 1993). The inventor must have mentally fixed the compound, such that one skilled in the art could synthesize it without undue experimentation. Board of Educ. ex rel. Bd. of Trustees of Fla. State University v. American Bioscience, Inc., 333 F.3d 1330, 1338 (Fed. Cir. 2003). Generic ideas like “try a phenothiazine” are insufficient; a specific scaffold or substituent pattern must be identified. In Burroughs Wellcome, NIH scientists who confirmed AZT's efficacy against HIV were not inventors, because Burroughs scientists had already conceived the idea of using AZT against HIV. Confirmation of activity was reduction to practice, not conception. 40 F.3d at 1228. This distinction is vital in pharma, where conception often precedes clinical validation.

Formulation Conception: The Role of Excipients

Formulations present a different challenge: inventorship lies not just in choosing an active, but in conceiving dose ranges, excipients, pH, viscosity, and stability conditions. In Ferring v. Allergan, a scientist's idea of “low-dose desmopressin” was not conception, because he had not fixed the specific dose ranges or inactive ingredients that defined the claims. Ferring B.V. v. Allergan, Inc., 980 F.3d 841 (Fed. Cir. 2020).

“Devil in the Details” for Pharma Formulations

Courts consistently stress that formulation inventions demand specificity. A mere general proposal (“make it sublingual” or “lower the dose”) is not conception. True inventorship arises when the scientist links the excipients, concentrations, and delivery route into a definite formulation plan.

Joint Inventorship Principles

Pharmaceutical R&D is collaborative. Joint inventorship under 35 U.S.C. Sec. 116 does not require equal contributions, but does require a qualitative contribution to at least one claim. As courts explained, inventorship is about mental contribution, not lab work alone.

It is critically important to secure proper inventorship amongst the inventors to assure that the patent rights are valid and enforceable. For example, suppose A and B are working on a R&D project together. B leaves the arrangement. A continues to work on the project and ultimately secures a patent, naming himself “A” as the sole inventor. With inventorship comes ownership. “A” sues XYZ company for infringement. XYZ investigates inventorship during discovery and learns about B's contributions. XYZ buys, via a quitclaim assignment, any rights to the invention B has. That is, B doesn't really know what he has yet, if anything ever, but sells what he might have to XYZ. In the litigation, XYZ is able to prove that B is an omitted inventor, thus the inventorship is joint. Once a court concludes that B is an inventor, then B is also an owner of the patent. And because B sold his ownership rights to XYZ already, XYZ is the co-owner of the patent. Case dismissed because XYZ cannot infringe his own patent. That's crazy a reader might think, but it happened.

In Ethicon v. U.S. Surgical, the infringement suit evaporated upon proving inventorship. Yoon and Choi collaborated to develop a surgical device. Choi left the arrangement thinking that the device was not marketable. Yoon obtained the patent, and licensed the patent to Ethicon. Ethicon then sued U.S. Surgical. U.S. Surgical found out about Choi's activities and paid a lump sum $300,000 to buy Choi's rights via a retroactive license. Choi would also be paid, contingently, another $100,000 for 10 years based on the litigation outcome. Ultimately, U.S. Surgical proved that Choi was an omitted joint inventor, and the trial court dismissed the infringement case. The Federal Circuit affirmed that Choi properly proved his inventorship and the contract rights to US Surgical. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998).

Chen v. Jung: Medicinal Chemistry Collaboration

In Chen v. Jung, disputes arose over whether a biologist suggesting ring substitutions and testing compounds was a co-inventor, based on suggestions of the chemical structure and then developing test methods to show its utility. The trial court understood the underlying facts but ruled that there was not sufficient corroboration of the evidence. Chen v. Jung, 2019 WL 7938449 (C.D. Cal. 2019), affirmed, 825 Fed. Appx. 908 (Fed. Cir. 2020). The issue was not really about ownership per se. A group #1 of set of inventors, including Dr. Chen, invented and patented a drug #1. There was no dispute that Dr. Chen was a bona fide co-inventor of drug #1. Drug #1 was out-licensed and the inventors were paid royalties. The inventor group continued to refine the drug and ultimately group #2 invented and patented drug #2. That too was out-licensed and group #2 inventors were paid royalties. But Dr. Chen, an inventor in group #1, was not a named inventor in group #2. Thus Dr. Chen was not paid royalties on drug #2. Dr. Chen began working on drug #2 but left the collaboration before drug #2 was finalized. This case was not about ownership per se, because Dr. Chen understood that he had already assigned his ownership rights away, but was nonetheless entitled to the royalty money pool if he was a co-inventor. There was no threat that proving co-inventorship would somehow disrupt patent enforcement rights.

Auxilium Case: Testosterone Gel

In Auxilium v. Watson, inventorship disputes arose over testosterone gel formulations enhanced with CPE-215. Earlier work by Dr. Hsieh showed permeation enhancers, but whether later formulators conceived the claimed gel compositions became central to inventorship. This highlights the importance of carefully distinguishing between derivation from prior work and new conception. Auxilium Pharmaceuticals, Inc. v. Watson Laboratories, Inc., 2014 WL 9859224 (D.N.J. 2014).

Method Claims vs. Compound Claims

Inventorship can differ between claim types. In Burroughs Wellcome, NIH scientists might have been inventors of a method claim (because they discovered a new property of AZT), but not of composition claims. Companies must therefore evaluate inventorship claim-by-claim, not application-by-application. Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223, 1231 (Fed. Cir. 1994). In Brown v. Regents, a technician who brought sick cats to virologists was not an inventor of the isolated virus. The court held that discovery of a natural phenomenon is not conception as only those who devised methods to isolate and apply the virus conceived the invention. This illustrates that conception is an intellectual act, not mere discovery or assistance. Brown v. Regents of University of California, 866 F.Supp. 439, 445 (N.D.Cal. 1994).

AI in Drug Discovery: The Immaculate Conception Problem

Modern AI platforms generate vast numbers of virtual molecules. But inventorship still requires a human mind to select, interpret, or modify those outputs. Without human conception, a patent risks invalidity. The “immaculate conception” problem means that companies must ensure scientists, not algorithms, fix the inventive concept. Though AI can assist in drug development, AI itself cannot be an inventor because it defies the statutory requirement that inventors are natural persons. Thaler v. Vidal, 43 F.4th 1207, 1213 (Fed. Cir. 2022).

Corroborating Conception: Documentation

Because conception is a mental act, courts require corroboration. Inventions should be documented through contemporaneous lab notebooks, invention disclosure forms, dated emails, and meeting notes. Oral testimony alone is rarely sufficient. The corroboration requirement prevents the omitted inventor from self-serving testimony, potential fraud, and mistakes. Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1170 (Fed. Cir. 2006). In Ferring and Burroughs Wellcome, documentation proved decisive in determining inventorship. Such documentation, in pharma, can include emails, reports, publications, lab notebooks, meeting minutes, purchase records, test analyses, etc.

Practical Advice: Inventor Audits

Companies should conduct inventorship audits before filing, mapping each claim to specific contributions. This is especially critical in pharma, where compound claims, formulation claims, and method claims may each involve different inventors. And often, the inventor audit could also be used to get invention ownership assignments executed (or revised). This way the company is not only auditing for who is an inventor, but also to secure ownership (via assignment) of the inventions.

Practical Advice: Record-Keeping Policies

Robust documentation protocols are vital:

• Require signed, dated, and witnessed lab notebooks.
• Standardize invention disclosure forms with spaces to record contributors' roles.
• Store records centrally to prevent disputes years later.
• Train scientists on the legal meaning of “inventor” versus “author” or “contributor.”

Practical Advice: Internal Review Committees

Establish an internal inventorship review committee (legal, R&D, IP management) to review disclosures. This reduces the risk of errors and provides contemporaneous evidence of good-faith inventor determinations.

Trade Secret Protections

Beyond patents, companies must safeguard trade secrets. Departing employees pose a risk if they take proprietary know-how, data, or early-stage inventive concepts to a competitor. Without strong trade secret controls, a new employer might file patents on subject matter that originated at the former company. This matters because a departing employee may either continue R&D development or file his own patent applications to the inventions. Upon issuance, the original company may be subject to a patent suit based on an invention it might have itself owned. Subsequent litigation will likely involve claims to theft of trade secrets, breach of contract, correction of inventorship, etc. And following this example, suppose a departing employee takes information to another competitor and obtains a patent. The patentee now sues the original company for infringement. Typically, a defendant argues non-infringement and/or invalidity. But here, the defendant may not want to “trash” the patent in the event that the original company obtains ownership or co-ownership of the patent.

Practical Advice: Policies Against Misappropriation

To mitigate this:

• Implement exit interviews requiring employees to confirm return of all materials.
• Maintain confidentiality agreements with clear survival clauses.
• Monitor for suspicious patent filings by competitors involving former employees.
• Use invention assignment agreements to ensure the company owns inventive contributions conceived during employment.

Conclusion: Strategy for Long-Term Protection

While 35 U.S.C. Sec. 116 governs who is an inventor; Section 256 governs how to correct inventorship. Correct inventorship is not just a legal technicality, it is a business imperative. Pharma companies should integrate inventor audits, meticulous record-keeping, and trade secret safeguards into their IP strategy. By applying lessons from cases like Burroughs Wellcome, Ferring, Auxilium, Cumberland, and Chen, companies can protect their innovations, enforce their patents, and prevent departing employees from undermining corporate IP with rival patent filings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.