What Medtech Entrepreneurs Need to Know about Patent Reform

MD+DI:  Why is the U.S. patent system switching from a “first-to-invent” system to a “first-inventor-to-file” system and how will this change affect medtech startups?

February 20, 2012

4 Min Read
What Medtech Entrepreneurs Need to Know about Patent Reform

Bill Betten of UBM TechInsightsBetten: While the change from “first-to-invent” to “first-inventor-to-file” does bring the United States into a closer alignment with the rest of the world, it may have some interesting consequences for the development teams within the medical device companies. For many years, companies had a tremendous emphasis on documenting all aspects of the design. Personnel training emphasized the keeping of notebooks to track design and development work, including having witnesses review, date, and sign them to provide a verifiable trail to insure the timing of the invention. The focus now will be on getting the paperwork done first with regard to the filing. This may result in getting products getting rushed to file prematurely. In addition, the big companies with deeper pockets who can afford to file quickly may have an edge with regard to the smaller companies.

MD+DI: What risks does the “first-to-file” reform pose for medical device innovators? And what is the upside?

Betten: As mentioned previously, what may have been a more deliberate process with careful traceability and focus on making sure that the concept has been well-proven may now be turned into a rushed process. When I worked in product development for a Fortune-100 firm, we had a very deliberate process, with a strong emphasis on intellectual property development. We had a formal process for idea generation, turning the ideas into records of invention (ROI), then evaluation by a combined technical and management team to assess which ones to move forward into patent applications. This was all done in an environment of understanding how the concepts and proposed patents fit into the overall business plan. The emphasis on speed can be a detriment. On the other hand, companies that are doing their homework up front by having an effective IP strategy that considers the various factors and how they play together may benefit. In this case, being prepared up front and having a framework upon which to “hang” the new applications may provide an advantage in the market. Unfortunately, the gap between idea and product launch in the medical device space does tend to be rather long, particularly when clinical trials and regulatory reviews and approvals are factored in.

MD+DI: How should small medical device start-ups compete with the big players to be the first to file patents?

Betten: I’ve worked at both large Fortune 100 as well as some relatively small companies. I truly enjoy the small companies for several reasons. A small company provides an opportunity to do a lot of different jobs, including turning the alarm off in the morning and back on again at night. A small company also benefits from a traditionally shorter decision chain. Small medical device start-ups should be able to make critical decisions more quickly and take advantage of that. To the extent that patent reform and, perhaps in the future, regulatory reform enable products to move quickly (and safely) through the development life cycle, the small companies should leverage these advantages. A small company that has a clear vision of where they are going as well as a solid intellectual property plan tied to that vision should be able to execute more quickly. Again, this means having a strategy with regard to whether or not these will be offensive or defensive, whether they will create a picket fence approach to keep others out, and what other patents need to be filed to support that strategy.

MD+DI: What strategic advice do you have for medtech entrepreneurs looking to build a patent portfolio?

Betten: Entrepreneurs are good at inventing and building. However, they might not be as good at the not-so-fun stuff like maintaining, sustaining, and trimming. This is seen quite often in the product development world. However, managing an IP portfolio is analogous to managing product development. There is a design stage (patent creation), followed by a manufacturing stage (patent issuance). This is the fun part of product (or patent) development. However, continuing to manage the portfolio by assessing, trimming, and killing patents should be an ongoing part of the process. It is a living, dynamic process that, treated well, will hopefully build for the future. Done poorly, it can be a financial drain and take you nowhere.

MD+DI:  Is there any other advice else you would like to share?

Betten: Intellectual property has a life cycle that should be an integral part of a company’s strategy. It should support their vision of where they want to go through product development. This also includes keeping an eye on the competition and what they are doing by monitoring their patent applications and grants as well. Integrating technology, intellectual property, and business together will help companies navigate the changing landscape of product development.

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