Critical Considerations For IP & Patents For Emerging Medical Device Companies
By Shabbi Khan, Nate Beaver, Austin Kim, and Jeff Simon, Foley & Lardner LLP
The global medical device market is estimated to be currently about $680 billion and is projected to grow to over a trillion dollars within 10 years at a compound annual growth rate of 6%.1 As the medical device industry continues to expand, intellectual property (IP) considerations — especially those concerning patents — are critical for medical device innovators and manufacturers. For companies, developing IP is essential for securing funding, negotiating partnerships, and positioning themselves as leaders in the industry. For investors, a company’s IP portfolio signifies its ability to maintain market exclusivity and defend against competition.
Types Of Patent Filings
Selecting the right type of patent filing depends on several factors, such as the nature of the invention, the stage in development, and global market expansion goals.
Utility vs. Design
Utility patents and design patents serve distinct purposes in protecting medical device innovations. Utility patents protect the functional aspects of a device, such as its mechanical structure, electrical components, or software operations. They offer broad protection, preventing competitors from replicating the functionality of the device, and are valuable at all stages of development. On the other hand, design patents safeguard the ornamental and aesthetic aspects of a product and are valuable for preventing competitors from producing visually similar products that could mislead consumers. Design patents are especially important for companies that sell products with an established market due to their ability to deter market confusion and imitation products. Companies should carefully evaluate their innovations to determine whether to pursue utility patents, design patents, or both.
Provisional vs. Non-Provisional Filings
Provisional patent applications can establish an early priority date while allowing companies up to 12 months to refine their inventions before filing a non-provisional application. This can be beneficial for medical device startups that are still gathering clinical data or finalizing product development. It should be noted that provisional applications do not undergo formal examination and must be converted into a non-provisional application within the one-year period to maintain priority. Non-provisional applications begin the formal patent examination process and, once granted, provide enforceable rights.
Choosing between provisional and non-provisional filings depends on factors such as development timelines, funding availability, and competitive pressures. In a highly competitive and fast-moving field, innovators may consider foregoing the provisional patent process in order to expedite the examination and grant of their patent.
Omnibus Filings
Omnibus applications are those that consolidate multiple innovations into a single patent application. This can be a strategic way to manage costs and streamline the filing process. By filing a broad application that covers various aspects of a technology, companies can avoid the need to file separate applications for each incremental improvement, thus minimizing filings fees associated with multiple patent filings. Omnibus filings can be particularly useful for companies with multiple interrelated innovations, enabling them to allocate resources more efficiently while maintaining comprehensive IP protection.
PCT Filings
The Patent Cooperation Treaty (PCT) provides an efficient mechanism for securing international patent protection. Instead of filing separate applications in multiple countries, a PCT application allows applicants to delay national filings for up to 30 months from the priority date. This additional time can be invaluable for assessing market potential, securing funding, and refining commercialization strategies. While a PCT application does not itself grant a patent, it streamlines the international filing process. Companies planning to expand globally should consider PCT filings as part of their IP strategy to optimize costs and maximize patent coverage.
Timing Filing Of Patents
For medical device companies, filing patents at the right time is crucial for both securing investor interest and protecting innovations. Public disclosures, such as investor pitches, industry presentations, or academic publications, can inadvertently invalidate future patent applications if not managed properly, especially outside the U.S. as many countries lack the one-year grace-period when it comes to inventor derived publications. Early engagement with investors and outside partners, while essential for raising funds, can potentially compromise patent rights. On the other hand, companies have a need to publicize their developments and innovations to investors, partners, and customers. As such, companies must carefully balance between disclosure and IP protection.
In general, players in the medical device field should file when truly necessary. One factor is competitor activity. For example, if it is known that a competitor is nearing market entry, filing for a patent can be a critical defensive strategy to secure rights before competitors stake their claims. Monitoring industry trends and patent filings by rivals can provide insight into the best time to act. Another factor is budgetary considerations. Patents can be expensive to prosecute and maintain, so early-stage companies should file when they have the necessary financial resources to support the process. Filing too early without sufficient funding may result in difficulties in sustaining the patent application through the examination process.
Another factor is the availability of clinical data, especially for therapeutic devices. Clinical data may be needed in a patent application to support evidence of efficacy and innovation. Waiting to file until such data is available can lead to stronger claims and increase the likelihood of successful patent grants. Another strategy includes filing a provisional application while in the process of obtaining clinical data and incorporating the clinical data in the non-provisional application when such data becomes available. Under this strategy, companies have one year from the data of filing their provisional to obtain and incorporate the data in the non-provisional application. This strategy allows companies to secure an earlier filing date while providing a window to obtain data that may be crucial to securing a patent during prosecution of the application.
When To Conduct A Freedom to Operate (FTO)?
When considering whether to expend resources on a product or patent filing, a company should consider conducting a Freedom to Operate (FTO) analysis to mitigate risks of infringement. An FTO analysis assesses whether a product infringes on existing patents. Conducting an FTO early in the development process can save significant time and resources by identifying potential barriers to commercialization before costly investments are made.
Performing a broad scope FTO, however, may be unsuitable for emerging medical device companies, due to budget constraints. An initial analysis – such a landscape analysis – can be carried out at a much lower cost to help companies understand the competitive landscape and identify potential risks. This type of analysis can be limited in scope, focusing on key competitors and narrow classes of technologies. The level of analysis should balance budget constraints with the need for thorough risk assessment.
One consideration regarding the breadth of the FTO analysis is that art identified in an FTO can affect a company’s ability to secure its own patents. Under U.S. patent law, there is a duty of disclosure under which all parties involved in the patent application process are required to disclose all material information to the United States Patent & Trademark Office (USPTO), such as patents found in an FTO analysis. If existing patents present significant roadblocks, companies may need to explore design modifications, licensing agreements, or even legal challenges to secure market access.
FDA Submission Considerations
In addition to IP strategy, companies seeking to bring a new product to market must also consider whether there are FDA submission requirements. There are four general pathways: the 510(k) notification process and De Novo process for low-to-moderate risk devices; premarket approval (PMA) for high-risk devices; and, for the lowest-risk devices, classification as 510(k) exempt.
The 510(k) notification process is the most commonly used regulatory pathway for medical devices in the U.S. It allows companies to obtain market clearance by demonstrating that their device is “substantially equivalent” to a “predicate device.” This pathway is generally faster and less costly but requires careful attention to how a new device is compared to existing technologies. (Devices that are considered in the lowest risk classification may be considered 510(k) exempt and do not require any FDA submission process at all.) The De Novo process, on the other hand, is designed for novel medical devices that lack a suitable predicate under the 510(k) process. De Novo classification allows for regulatory approval based on general and special controls that ensure safety and effectiveness. The PMA process is the most rigorous FDA regulatory pathway and requires substantial clinical evidence demonstrating safety and effectiveness before approval.
Out of these three pathways that require FDA submission and review, the 510(k) process is the simplest, fastest, and cheapest. It should be noted that 510(k) submissions require applicants to show “substantial equivalence” with a predicate device in terms of safety and efficacy.
Although these types of statements made to the FDA as part of the 510(k) submission process cannot by themselves be admissions of patent infringement, companies should be careful about how they characterize their invention relative to the predicate device. A recent case at the Patent Trial and Appeal Board (PTAB) found claims on vaccines invalid as obvious based in part on FDA submissions made by the patentee.2 Furthermore, it should be noted that USPTO’s duty of disclosure requirement extends to statements and information submitted to FDA.3
Conclusion
A well-executed IP strategy is vital for medical device companies. Understanding the different types of IP filings and strategically timing them, together with conducting FTO analyses, are critical steps in a successful IP plan. Strategic IP management not only secures competitive advantages but also enhances investment appeal, ultimately driving business success.
References
- https://www.precedenceresearch.com/medical-devices-market
- IPR-2023-01358 (Pat. No. 10,702,600)
- MPEP 2001.04
About The Authors:
Nate Beaver is a partner and seasoned FDA attorney who co-chairs Foley & Lardner’s Medical Devices Team. He counsels medtech and life science companies on federal and state agency compliance and regulatory issues.
Shabbi Khan is a partner and co-chair for Foley & Lardner's Artificial Intelligence, Automation, and Robotics group within the firm's Manufacturing Sector and a member of Foley’s Electronics Practice. A registered patent attorney, he provides advice on all aspects of IP strategy and enforcement, technology transactions, and licenses.
Austin Kim is an intellectual property lawyer with Foley & Lardner. He counsels clients in strategic patent portfolio development through various stages in procurement and across multiple jurisdictions.
Jeffrey Simon is an intellectual property lawyer with Foley & Lardner. He advises biotechnology, pharmaceutical, and medical device companies on intellectual property rights.