MediPurpose® Blog

Over the past few months, the LinkedIn group discussion that I moderated on the Medical Device Inventors forum yielded some valuable information on best practices in safeguarding medical device IP. Now that ideas have been presented on what to do, let me address for a moment why it is so important to implement these measures. Besides protecting medical device ideas and product designs from theft or misuse, what other undesirable—and costly—circumstances might be avoided?

For those who have never been through a patent dispute, a centimeter of personal experience may equal a kilometer of knowledge for new medical device innovators who are not only unsure about the protections available, but also the immediate and long-term costs if one must ultimately go to court to protect their medical device IP interests.

Here are just a few of the issues that medical device innovators could face if a patent dispute makes it into a public forum:

• Legal Expenses: These are what everyone thinks of first when they hear the word “lawsuit.” Court costs, attorneys’ fees, travel costs to-and-from court proceedings, and expert witness compensation are just a few of the financial burdens associated with being involved in a medical device IP dispute.

• Public Relations: Simply being a party to a lawsuit can be damaging to your standing as a medical device innovator or IP owner, regardless of whether you are a designer or an unintentional infringer. If you have just started building your reputation in the medical device market or establishing a medical product brand, quick work may have to be done to repair any collateral damage and to even save your fledgling startup.

• Relationship Building: There could be temporary or irreparable harm done to your relationships with investors, distributors, manufacturers, strategic partners and customers when they evaluate the uncertainties that a patent dispute could impact their businesses.

• Development/Production/Sales: Even though you are the plaintiff, be prepared for counter suits by the defendant (read Apple vs. Samsung). Cases could result in a court-ordered cessation in development, production or sales that could sideline medical product product advancement for months or even years.

• Management Distraction: Cases may drag on for months and years, taking away valuable management time which could be better used on developing, manufacturing and selling your new medical product.

Although it is important to note that not all patent infringements are malicious, it can be quite costly to both your bottom line and your reputation. For this reason, it is best to shield your medical device IP during each stage of its journey to market. Based upon the results of the LinkedIn discussion, the following represents the offensive and defensive strategies to employ at the most critical stages of your medical product’s lifecycle.

Protect Your Medical Device IP From Inception

To ensure that your new medical product IP is protected from its first stage of development:

• File for both medical device patent and medical product trademark protection.

• Reverse-engineer your medical product: It is best to file for protection for each alternate design or improvement.

• Establish where the medical product will be manufactured, sold and distributed: It is recommended that you file for protection in countries where the cost/benefit ratio is balanced.

• Require non-disclosure agreements (NDA): Obtain these from all investment partners, developers, manufacturers and distributors, as well as any other individuals who will have access to proprietary information.

• Consider IP insurance, balancing the cost versus the protection you’ll get.

• Utilize Google Alerts: Keep track of your own trademark, company name and generic product identification.

• Enforce your rights without an infringement lawsuit: This can be accomplished by a) sending a warning letter to the offender, b) requesting an opinion on patent infringement from independent counsel, or c) filing a complaint with the U.S. International Trade Commission.

• Enforce your rights with an infringement lawsuit: When selecting your legal team, remember that the size of the law firm chosen is not as important as the experience and expertise of the attorneys. If you cannot afford representation, locate counsel who will take a patent case on a contingency basis.

• Negotiate a license and royalty agreement with a patent infringer: Higher royalties charged to an offender can offset their past infringement and keep them out of direct market competition.

Protect Your Medical Device IP From Your Suppliers and Partners

Now that you have a solid idea on paper and you have built some protections around your medical device IP, you are ready to contend with potential issues that could arise as you bring suppliers and partners into your development circle.

To ensure that your medical device IP is protected from misuse by suppliers and partners:

• Select the right partners: Get recommendations or referrals from trusted colleagues or networks.

• Select the right countries in which to do business: Consult with representation that specializes in IP management.

• Research each country’s legal infrastructure: Investigate the protections that are afforded to IP owners.

• Use experienced counsel to draft all agreements.

• Execute non-disclosure agreements (NDA): Require all suppliers and partners with whom you intend to discuss proprietary information to assert their commitment to confidentiality in writing.

• Prevent medical device IP dilution: Ensure that your agreements specifically address all additions made to the original design.

• Control access to information: Divide all proprietary components among several suppliers and limit the number of individuals who have internal or external access to sensitive information.

• Monitor partners’ and competitors’ activities: Subscribe to patent-listing Websites, or pay a firm to monitor for the appearance of similar medical device IP filings.

• Address any infringements swiftly and thoroughly: This will benefit both parties involved.

Protect Your Medical Product in the Marketplace

Once your new medical product is ready for market, you will need a new arsenal of tools to help you stay ahead of infringers and copycats. To ensure that your new product is protected from intentional or unintentional IP infringement or reverse engineering:

• Be the first one to market: Strive to expand the gap between your medical product and similar ones that may follow.

• Expedite regulatory clearancesfor your medical device.

• Develop the market: Make a concerted effort to establish benchmarks in medical product quality and customer service.

• Establish a broad network of medical product distributors: Ensure that your product is inserted into all corners of the market.

• Continue to improve your medical product: Stay abreast of advancing technologies in order to provide your customers with the best, most up-to-date product available.

• Build your brand: Establish your reputation by being consistent with medical product quality. Develop recognition by being persistent with marketing messages.

Knowing about the potential threats that exist in a competitive marketplace is only half of the battle for new medical device inventors. Understanding how to shield your medical device intellectual property is key to facilitating a secure environment for bringing your ideas to fruition. The three stages above highlight critical steps in protecting your medical device IP as your product moves from concept to market.

At MediPurpose, our commitment to medical device innovation stems from our proven success at every level of the medical product development process. We are pleased to provide supplemental information about topics like medical IP protection, in addition to offering more comprehensive support to medical device inventors and innovators. For more information or to submit an idea, please contact us.

Thank you to everyone from the LinkedIn Medical Device Inventors forum that contributed his or her comments and suggestions to this discussion. Your input has helped us to provide support to medical device inventors and innovators.

 

 

 

Tags: Medical Device Innovation, Medical Devices | Medical Products, Medical Device Intellectual Property (IP) Read More

Special thanks to Ryan Schneider, a registered patent attorney and partner at Troutman Sanders LLC, for contributing this guest blog.

On September 16, 2011, President Barack Obama signed the Leahy-Smith America Invents Act (AIA) into law. This legislation introduces some of the most sweeping statutory changes to U.S. patent law in decades.

Here are some of the key changes that will take effect over the next 18 months:

First-to-File

The AIA implements a first-to-file system in the United States, where priority is given to an applicant that is the first to file a patent application rather than the first to invent.

The change to first-to-file is the most significant change to the law and was originally intended to harmonize U.S. patent law with the majority of the world. However, the numerous additional caveats in this new statute may essentially create what has been described as a “first-to-publicize” system, which is substantially different from the traditional first-to-file systems of other countries.

This change will apply to applications with priority claims that begin 18 months after the date of enactment.

Changed Reexamination Standard

The burden for granting aninter partes patent reexamination will change from a “substantial new question of patentability” to a “reasonable likelihood that the requester would prevail.”

This change will take place upon enactment.

Post-Grant Review

Chapter 32, a new chapter in the statute, will create a nine-month window for Post-Grant Review (PGR) challenging a patent on any ground, including challenges based on written description (which was previously not possible in re-exam).

PGR will take effect in one year for some patents, but otherwise will apply only to applications with priority claims that fall 18 months after the date of enactment.

PGR will be granted upon a showing by the challenger that it is more likely than not that at least one of the challenged claims is un-patentable.

Post-Grant Review of Business-Method Patents

The bill requires the PTO to issue regulations establishing a post-grant review process allowing those accused of infringement to challenge the validity of certain business method patents, presumably including challenges to the eligibility of the claimed subject matter. This new process will take effect one year after enactment.

Third-Party Submissions

The AIA gives third parties the right to submit prior art to the patent office for consideration and inclusion in the record for a limited time during the pendency of an application.

The prior art must be submitted before a notice of allowance and the later of (1) six months after publication or (2) the date of the first rejection by the examiner.

This provision takes effect one year after enactment and applies to all patent applications filed before, on, or after that effective date.

Supplemental Examination

Beginning on the one-year anniversary of the AIA’s enactment, new Section 257 permits a patent owner to request supplemental examination of its patent to consider, reconsider or correct information believed to be relevant to the patent.

If the PTO determines that the patent owner’s request raises a substantial new question of patentability, a reexamination will be ordered. This provision provides, in effect, an opportunity for the patent owner to preemptively avoid allegations of inequitable conduct based on withheld or mischaracterized information.

But in order to take advantage of this potential avoidance of inequitable conduct, the supplemental examination (a) must be requested before an allegation of inequitable conduct is pled with particularity in a civil action or (b) must be completed before the institution of a Section 337 action in the International Trade Commission

The submission of a supplemental examination request is not without its risks to the patent owner, however. In addition to exposing the patent to potential invalidity, the provision permits the PTO to refer matters involving fraud discovered during the course of the supplemental examination to the Attorney General for possible prosecution.

Micro-Entity

Micro-entities will be entitled to pay 75 percent of the total fee amount (50 percent of the small entity fee).

A micro-entity is defined as an entity that meets a number of requirements, including qualifying as a small entity, not being named as inventor on more than four previously filed patents, and not having gross income exceeding three times the median household income for the preceding calendar year.

This change is effective upon enactment.

Increased Fees

All surcharge fees will be increased by 15 percent, and many other statutory fees will be increased, including a $400 fee for documents, which are not filed electronically.

These take place either upon enactment, 10 days after enactment, or 60 days after enactment.

Marking

The AIA effectively ends current and future qui tam actions of false patent marking brought by anyone other than the United States or a person who has actually suffered a competitive injury. Only the United States may recover statutory damages for false marking. A competitor may recover only those damages adequate to compensate them for their injury.

The revisions also make clear that marking a product with an expired patent that once covered the product is not actionable.

The AIA also permits Virtual Marking. In lieu of physically marking products with patent numbers, the patent owner can “virtually” mark their product with the word “patent” or abbreviation “pat,” along with a publicly accessible website address that associates the product with the patents covering the product.

The change will take place on enactment. With regards to qui tam actions, the change will apply to any False Marking case that is pending on, or commenced on or after, the date of enactment.

Prior Commercial Use Defense

The AIA creates a defense to patent infringement if the alleged infringer can prove a good faith commercial use of the infringing device/method more than one year prior to the earlier of (a) the effective date (filing date of earliest application to which priority is claimed) of the patent or (b) the date the subject matter of the patent was publicly disclosed by the inventor.

This provision applies to all patents issued on or after the date of enactment.

Best-Mode Defense Eliminated

The best-mode defense has been eliminated and is no longer included in the list of invalidity defenses.

While no longer a defense, the best mode requirement remains in 35. U.S.C. 112, and thus theoretically could be used by a patent examiner to reject an application.

This change is effective upon enactment.

Tax Strategy Patents or Patents With Claims Encompassing Human Organisms Eliminated

Patents with claims regarding “reducing, avoiding, or deferring tax liability” will no longer be granted. These exclusions will not apply to certain inventions relating to particular types of tax preparation software and financial management software.

Additionally, patents may no longer issue “on a claim directed to or encompassing a human organism.”

These changes are effective upon enactment.

In addition to those changes briefly outlined above, the 37 sections of the AIA include numerous additional provisions that will have far-reaching changes in the U.S. Patent law system. Please feel free to contact Troutman Sanders LLC for a detailed discussion of how the changes will affect you.

Do you expect this new legislation to better help you protect your medical product intellectual property? Why or why not?

---

Ryan Schneider | Registered Patent Attorney and Partner | Troutman Sanders LLC

Tags: Untagged Read More

So far, all of our blogs have been authored by MediPurpose staff.

As a “master medical product distributor,” there is much more to us than our staff. We have a network of partners and consultants that are an essential part of the MediPurpose family, including Troutman Sanders LLP, an international law firm that has been our trusted ally in our ongoing battle to protect our medical device intellectual property.

Our relationship with them now advances to a new dimension: the blogosphere. Tomorrow, we will be publishing our first guest blog, written by Ryan Schneider, a registered patent attorney and partner at Troutman Sanders. His blog will provide some fascinating and qualified perspectives on the Leahy-Smith America Invents Act (AIA), which President Barack Obama signed into law on September 16, 2011.

We want this blog to be an interactive forum for both newcomers and experts in the medical product industry. Along with encouraging you to comment on any of our blogs, we also welcome submissions from guest bloggers.

In the meantime, check back tomorrow for Ryan’s blog…I’m sure that you’ll find it to be very informative.

---

Patrick Yi | Founder and CEO | MediPurpose®

Tags: Untagged Read More