Patent Law Update for Medical Device Companies 2018
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This document summarizes a presentation on recent patent law updates and trends for medical device companies. It discusses Inter Partes Review (IPR) proceedings, including what they are, filing trends, and changes under the new Director of the Patent Office. It also summarizes a Supreme Court case regarding the eligibility of temperature measurement patents and trends of decreased district court litigation due to IPRs. Finally, it discusses the importance of intellectual property for medical device companies and strategies for building a strong patent portfolio.
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Patent Law Update for Medical Device Companies 2018
- 1. Patent Law Update for Medical Device Companies 2018 Paul Conover, Irfan Lateef, & Curtis Huffmire MedTech Strategist Innovation Summit November 28, 2018 / 11:45 AM
- 2. 2© 2018 Knobbe Martens Medical Device Patents and IPR Proceedings • What is an IPR? • Latest trends in IPR filings • Important changes in IPR proceedings
- 3. 3© 2018 Knobbe Martens • IPR stands for Inter Partes Review • The procedure was initiated on September 16, 2012 upon the signing of the America Invents Act (AIA) Background on IPR proceedings
- 4. 4© 2018 Knobbe Martens IPR Stages • Initial Petition – “reasonable likelihood” of proving patent is invalid • Three judge panels of administrative law judges in the Patent Office (Patent Trial and Appeal Board – PTAB) • Within 6 months, PTAB reviews petition and decides whether to proceed • Parties hire expert witnesses and conduct discovery • Trial ending with oral hearing, followed by written ruling within 1 year • It’s expensive: typical cost for full proceeding is several hundred thousand dollars, but usually much cheaper than litigation in court
- 5. 5© 2018 Knobbe Martens IPR Trends Over Time • Patent Trial and Appeal Board at Patent Office demonstrated early that it would be aggressive in invalidating patents • Initial concerns of Chief Judge of U.S. Court of Appeals: “acting as death squads” in “killing intellectual property rights”
- 6. 6© 2018 Knobbe Martens Supreme Court confirmed constitutionality of IPRs • Last year, we reported that IPR proceedings were challenged as unconstitutional in Oil States Energy Services v Greene’s Energy Group • Summary of argument: patents are a private right that cannot be taken away without a jury trial • In April 2018, the Supreme Court affirmed the constitutionality of IPR’s • Dissent by Justice Gorsuch, joined by Chief Justice Roberts
- 7. 7© 2018 Knobbe Martens Who is filing IPR’s?
- 8. 8© 2018 Knobbe Martens Early and current statistics on IPRs in all technology areas • Initially: fiscal year 2013 had 87% trial institution rate • Current trend: 2018 had 60% trial institution rate • In most cases, it’s about winning the petition at the beginning because, after institution, PTAB has invalidated some or all claims in 80% of trials
- 9. 9© 2018 Knobbe Martens New Director of the Patent and Trademark Office • Andre Iancu was appointed by President Trump in February 2018 • Former patent litigator, believer in strong patent rights
- 10. 10© 2018 Knobbe Martens • Institution rate is decreasing and invalidation rate is decreasing (gradually) • Patent claim amendments will be allowed more frequently • Patent claims will be interpreted more narrowly, consist with court proceedings, resulting in less claims being invalidated in IPR’s Current Patent Office Trends Impacting IPR’s
- 11. ©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved.© 2018 Knobbe Martens 11 Patent Litigation Update – Irfan Lateef
- 12. 12© 2018 Knobbe Martens Not Everything is Patentable • 35 U.S.C. §101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent . . . .” • Mayo and Alice Supreme Court decisions: – Laws of nature, natural phenomena, and abstract ideas are not patent eligibile • Two Step Test for Eligibility 1. Are the claims directed to an abstract idea? 2. Do the claims’ elements, considered individually and as a combination, recite an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application?
- 13. 13© 2018 Knobbe Martens Medical Device Claim Types 1. Robots/Control/Sensor Improvements 2. Medical Imaging (MRI, CT, etc.) 3. Structured User Interface 4. Biochem (lab on a chip, test strip, etc.) 5. Determination of a Parameter 6. Information Management (EMR, cloud storage, telemedicine) §101
- 14. 14© 2018 Knobbe Martens Abstract ides • Collecting and analyzing data – Electrical Power Grid • Internet filtering – maybe (Bascom) • Encoding and decoding image data (Recognicorp) • Voter verification and tabulation (Voter Verified)
- 15. 15© 2018 Knobbe Martens Exergen v. Kaz
- 16. 16© 2018 Knobbe Martens The Invention
- 17. 17© 2018 Knobbe Martens Exergen • 48. A body temperature detector comprising: a radiation detector; and electronics that measure radiation from at least three readings per second of the radiation detector as a target skin surface over an artery is viewed, the artery having a relatively constant blood flow, and that process the measured radiation to provide a body temperature approximation, distinct from skin surface temperature, based on detected radiation.
- 18. 18© 2018 Knobbe Martens Decision? • Step 1: directed to natural law – Measuring body temperature • Step 2: significantly more? – “[S]tep two dispute in this case turns entirely on whether the combination of elements was well-understood, routine, and conventional at the time of the invention.”
- 19. 19© 2018 Knobbe Martens Not “Conventional, Routine, and Well-Understood” • The district court’s conclusion that these claim elements were not well-understood, routine, and conventional is a question of fact to which we must give clear error deference. • “Following years and millions of dollars of testing and development, the inventor determined for the first time the coefficient representing the relationship between temporal-arterial temperature and core body temperature and incorporated that discovery into an unconventional method of temperature measurement.”
- 20. 20© 2018 Knobbe Martens Dissent • The novel feature is identification through empirical testing of the coefficient that governs the relationship between core temperature and the temperature of skin above the temporal artery. • Even under a deferential standard of review, the district court clearly erred by finding that the claims embody an inventive concept. • Absent the patent-ineligible law of nature, the claimed invention consists entirely of elements already combined by the prior art.
- 21. 21© 2018 Knobbe Martens Decreased District Court Litigation due to IPRs Source: Docket Navigator
- 22. ©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved.© 2018 Knobbe Martens 22 Intellectual Property Drives Med Tech – Curtis Huffmire
- 23. 23© 2018 Knobbe Martens Increasingly, Businesses Value Intangible Assets
- 24. 24© 2018 Knobbe Martens Categories of Intangible Assets
- 25. 25© 2018 Knobbe Martens Protecting Med Tech IP • Intellectual Property plays a more significant role in valuations and acquisitions of medical device & biotech companies – Non-obvious nature of technical solutions to physiological problems – Complexity of the data & its interpretation – Novel manufacturing methods – Novel materials • Focus on all areas of IP protection – Protect ideas developed at your business – Copyrights & Patents – Protect good-will generated by your business – Trademarks – Protect trade secrets generated by “sweat equity” – Trade Secrets – Create barriers of entry to competition – important to attract VC funding – Provide legal rights that have value that can be monetized
- 26. 26© 2018 Knobbe Martens Copyrights • Protects your content • Provided to authors of “original works of authorship” fixed in a tangible medium of expression • Exclusive right to a work of expression, such as a written story, a photograph, or a computer program • Not for things that are functional (that’s utility patents) • Protection lasts for a very long time – 70 years after death; 95+ years for corporate author
- 27. 27© 2018 Knobbe Martens Trademarks • Protects your brand • Identifies the source of goods and services – Tool for Marketing • Words, logos, colors, sounds, and more • Protects consumer from counterfeit goods • Lasts as long as you continue using it • Standard of infringement: “consumer confusion”
- 28. 28© 2018 Knobbe Martens Trade Secrets • Protects your secrets: Any formula, pattern, device, or compilation of information which has value as used in one’s business and gives a competitive advantage – Secret formula, internal manufacturing processes, customer lists, internal company know-how (both what does/doesn’t work) • Immediately protectable, uniqueness is not important • Prohibits misappropriation (stealing) of the trade secret • Does not prevent reverse engineering or independent creation • When secrecy is lost, rights are lost
- 29. 29© 2018 Knobbe Martens Patents • Protects your ideas that are (1) novel, (2) useful, and (3) non-obvious processes, machines, manufactures, or compositions of matter • Gives owner right to exclude others from practicing the patent (~20 yrs) • Does NOT provide right to practice invention Rights you may think a patent provides (right to do whatever you want inside fence) Rights a patent actually provides (right to exclude others from trespassing) MEDM.000GEN
- 30. 30© 2018 Knobbe Martens Strategic Tips for Med Tech Patent Strategy • Patent strategy should include C-Level consideration • Build strong patent portfolio – Evaluate your own patents • Do claims target key clinical features? • Evaluate potential to design around? • Consider validity searching? • Difficulty of proving infringement? • Claims track revenue model? (disposables, kits, services) • Know your competition – Evaluate third party patents • Are there patents that can block your technology? • What are your options to avoid infringement? • Make sure you own the IP – Evaluate your agreements
- 31. 31© 2018 Knobbe Martens Ten Strategies For Aggressively Building A Patent Portfolio • 1. Educational seminars (online or in-person) – What can be patented – How to document invention and submit for consideration – Why patents are important to the company – How not to deal with patents of others • 2. Provide a simple idea submission form – Simple form that can be completed in 5 to 15 minutes – Periodically email link with reminder message
- 32. 32© 2018 Knobbe Martens Ten Strategies For Aggressively Building A Patent Portfolio • 3. Implement a patent incentive program – $1000 to $3000 per inventor upon filing (typical) – Additional award upon issuance (if still employed) • 4. Conduct periodic “brainstorming sessions” – 1-hour sessions with groups of 5 to 15 – Not limited in scope to ideas currently being implemented – No idea is too basic to be considered – Conduct at least once per year
- 33. 33© 2018 Knobbe Martens Ten Strategies For Aggressively Building A Patent Portfolio • 5. Form a Patent Committee – Evaluate each identified invention based on various criteria • Will infringements be detectable? • Is invention important to company and competitors? • Will the technology become obsolete in a few years? • Likelihood of getting a patent? – For each invention, decide whether to • file regular patent application • file provisional application • do nothing • create defensive publication (e.g., using IP.com)
- 34. 34© 2018 Knobbe Martens Ten Strategies For Aggressively Building A Patent Portfolio • 6. Conduct an IP audit – Review (or create) standard employee agreement, consulting agreement, and company NDA focused on IP ownership issues – Review (or create) internal procedures for making disclosures to, and entering into agreements with, other entities – Review existing license and joint development agreements • 7. Reassess pending patent applications – Compare claims to current activities of company and competitors; mine specification for unclaimed features
- 35. 35© 2018 Knobbe Martens Ten Strategies For Aggressively Building A Patent Portfolio • 8. Keep a continuation pending – Enables patent owner to: 1) pursue additional claims, 2) eliminate infringement loopholes, 3) have newly discovered references considered, 4) eliminate problems caused by new case law – Puts company in much stronger position for licensing and litigation • 9. Consider Track 1 – Prioritized Examination (PE) – PTO goal of “final disposition” within 12 months; OA in ~2-3 mo. Cost (PTO fee): $4,000 for large entities, $2,000 for small • 10. Buy patents and applications – Via patent auction, broker, or directly from patent owners
- 36. Orange County San Diego San FranciscoLos Angeles Seattle Washington DCNew York Paul.Conover@knobbe.com Irfan.Lateef@knobbe.com Curtis.Huffmire@knobbe.com Thank you!
Hinweis der Redaktion
- Right to exclude or prevent someone from doing something Government registration – Enforce it in court Intellectual Property Tools: Copyrights: protect content and expression Trademarks: enhance marketing strategies Trade Secrets: keep proprietary info confidential Patents: obtain exclusivity in your market niche Utility: functionality Design: appearance
- Copyright Owner has Exclusive Right to: Reproduce Exception: backup copies of computer programs Adapt Distribute to the Public Exception: First Sale Doctrine - Purchaser can resell purchased copy Public Performance or Display With some exceptions, Copyright Owner has Exclusive Right to: Reproduce, Adapt, Distribute to Public, & Public Performance or Display Mark to provide notice (No registration necessary, it’s automatic!): © 2018 Company Name All Rights Reserved Federal Registration to bring lawsuit and be eligible for statutory damages.
- TM is any symbol capable of identifying and distinguishing its owner’s products from those of others… Fanciful marks A fanciful / inherently distinctive trademark is prima facie registrable, and comprises an entirely invented or "fanciful" sign. For example, "Kodak" had no meaning before it was adopted and used as a trademark in relation to goods, whether photographic goods or otherwise. Invented marks are neologisms which will not previously have been found in any dictionary. Arbitrary marks An arbitrary trademark is usually a common word which is used in a meaningless context (e.g. "Apple" for computers). Such marks consist of words or images which have some dictionary meaning before being adopted as trademarks, but which are used in connection with products or services unrelated to that dictionary meaning. Arbitrary marks are also immediately eligible for registration. Salty would be an arbitrary mark if it used in connection with e.g. telephones such as in Salty Telephones, as the term "salt" has no particular connection with such products. Suggestive marks A suggestive trademark tends to indicate the nature, quality, or a characteristic of the products or services in relation to which it is used, but does not describe this characteristic, and requires imagination on the part of the consumer to identify the characteristic. Suggestive marks invoke the consumer’s perceptive imagination. An example of a suggestive mark is Blu-ray, a new technology of high-capacity data storage. Descriptive marks A descriptive mark is a term with a dictionary meaning which is used in connection with products or services directly related to that meaning. An example might be Salty used in connection with saltine crackers or anchovies. Such terms are not registrable unless it can be shown that distinctive character has been established in the term through extensive use in the marketplace (see further below). Lektronic was famously refused protection by the USPTO on ground of being descriptive for electronic goods. Generic terms "Generic term" redirects here. For other uses, see Generic term (disambiguation). A generic term is the common name for the products or services in connection with which it is used, such as "salt" when used in connection with sodium chloride. A generic term is not capable of serving the essential trademark function of distinguishing the products or services of a business from the products or services of other businesses, and therefore cannot be afforded any legal protection. This is because there has to be some term which may generally be used by anyone—including other manufacturers—to refer to a product without using some organization's proprietary trademark. Marks which become generic after losing distinctive character are known as genericized trademarks. Search existing marks before you invest in branding and marketing Evaluate potential for TM registration and infringement Preferably select strong marks that are arbitrary or fanciful Not weak marks that are descriptive or generic to product or service To get a trademark: For TM – Start marking sold goods with the MARKTM – common law For ® – Register with USPTO Properly display trademarks in marketing and police infringement
- Identify – What trade secrets do you have? Classify – Have systems in place to organize secret information. Protect – Take reasonable measures to maintain the secrecy. Valuate – How much are your trade secrets worth?
- Do you have good patents? Do you have issued patents? Do you have comprehensive specifications, with lots of alternatives? Are the claims too broad? Too narrow? Do they cover your product? Do they cover your competitors? Were they filed on time? File early! When will they expire? What countries do you have covered?