Patenting strategies for medtech startups

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Patenting may be a daunting task, but it is critical to facilitating a company’s success. Here are some tips on how and when to think about patents.

David Dykeman has advised numerous startup companies during his more than 20 years practicing patent law. The intellectual property attorney serves as co-chair of the global life sciences and medical technology group at international law firm Greenberg Traurig. Dykeman’s overarching advice for startups is to embrace an old adage with a twist, “You get what you pay for, so spend on patents wisely.”

“Investing resources in patents offers medtech companies many rewards. You can cheaply file patent applications, but companies often learn a painful lesson later – when it’s too late – that the protection is not as strong as the company hoped for.”

David Dykeman patents

David Dykeman

Dykeman suggests that startups hire a strategic patent attorney who understands the medtech market and has the proper technical background to assess the invention. The right patent attorney can put startups on the path to patent success and staking meaningful claims in the medical technology patent gold rush.

Dykeman helped us understand some of the nuances of patenting for startups in the following Q&A:

MDO: What is the first piece of advice that you would give to a startup about patenting?

Dykeman: Patents fuel growth for medtech companies. In today’s innovative economy, a medtech company’s success depends on the strength and value of its patent portfolio. A strategic patent portfolio is crucial for a medtech company’s growth and survival and can help secure funding, which is vital for startups. For early-stage medtech companies, patents are often the only way for investors to place value on the company’s technology and judge the potential success before sales, which often only begin after FDA regulatory approval.

As a medtech company grows, patents become the currency to secure financing through venture capital or private equity investment. Strategic patents can also lead to joint ventures, collaborations and licenses with strategic partners.

MDO: Should startups think about patenting differently from other companies? How so?

Dykeman: For early-stage companies, the key is to develop a strategic patent portfolio having comprehensive patent coverage around the company’s innovations. The core technology must have adequate patent protection to provide flexibility and room to operate in a desirable market. Companies should file one or a series of patent applications providing the broadest possible patent protection to cover the core technology. To obtain broad patent protection, a medtech company should consider both current and future business objectives and contemplate ways that competitors may attempt to design around its patents.

Where applicable, patent claims should be directed to the entire device, key components, disposables, mobile applications, methods of manufacturing, methods of treatment, therapeutic uses, combination therapies and any other aspects of the invention. Design patents can also provide protection to the ornamental features of medical products. As the core technology evolves, incremental improvements should be patented to form a “picket fence” of patent protection around the core technology. By filing patent applications covering incremental improvements, medtech companies can expand their presence in the market and grow their patent portfolio.

MDO: Can you provide an example of how a good patent strategy can lead to success?

Dykeman: I’ve worked with a serial entrepreneur for many years, and before founding his latest orthopedic startup we conducted a patent landscape search and reviewed hundreds of patents before deciding to form the company. After finding white space in the patent landscape, we filed strategic patent applications that targeted the open space. Now, a decade later, the company has more than 100 issued patents in 17 countries around the world and has secured significant venture capital funding for its innovative products.

MDO: How should startup companies protect themselves when they have limited resources or expertise on patenting?

Dykeman: In light of the changing patent environment, early-stage companies should get to know the patent landscape to determine the best return on their patent investment. Companies should work with strategic patent counsel who knows their technology well, and conduct a patent audit to assess the strengths and weaknesses of their current patent portfolio and also determine what competitor patents might be lurking in the patent landscape. Early-stage companies should direct their patent filing strategy to areas of white space to receive more valuable patents.

The patent audit should also make sure the company’s patent strategy is complete to capture as much white space in the patent landscape as possible and also plug holes that competitors can use to design around the company’s patents. The patent audit should include a freedom-to-operate analysis of third-party patents to access potential threats. By ensuring that the patent portfolio is strategic and complete, the company enhances its strength and value in the medical technology marketplace.

International patent filings are also important. Filing international patent applications further strengthens a patent portfolio and expands a company’s presence in the global marketplace. Although foreign patent applications can be expensive, filing in strategic countries can be crucial to the commercial success of a medical product. A company should consider filing in specific countries with a large target market for the product, countries where competitors’ manufacturing facilities are located, and countries that export medical products to other regions through distribution channels. Although the U.S., Europe and Japan have historically been top patent filing countries, China and Brazil are now increasingly important in the global medtech industry.

MDO: Where on the timeline does patenting fall within a strategic plan?

Dykeman: Startups should file patent applications as early and as often as their budget permits. A key thing to remember is to file patent applications before any public disclosure. It’s prudent to file a patent application before the invention is first published, disclosed, used or offered for sale. Public disclosure of an invention impacts and possibly limits potential patent coverage. For U.S. patent coverage, a patent application must be filed within one year of the first public disclosure. For foreign patent applications, however, the patent application must be filed before any public disclosure. Failure to file a patent application prior to public disclosure will result in the loss of potential international patent rights. To ensure both U.S. and international patent coverage, a patent application should be filed before any public disclosure.

MDO: How much should be done early in the process and what can wait?

Dykeman: A patent portfolio can be a medical technology company’s most valuable asset, but there is a cost to build a strategic patent portfolio. A cost-saving strategy for early stage companies is to file provisional applications, which provide one year of protection, followed by the full-developed U.S. and PCT international patent applications. By filing a provisional patent application, early stage companies can defer larger costs for up to one year and file follow-on provisionals to cover incremental improvements as they build their picket fence of patent protection.

Foreign patent costs can be delayed for an additional 18 months by filing a PCT international patent application. This gives companies time to further develop their product and potentially enter the market to help defray some of the patent costs.

In the dynamic medtech market, a strong patent portfolio is crucial for securing investment and gaining market share. By working with a strategic and business-minded patent attorney, medtech companies can take advantage of the changing patent landscape to stake bigger claims in the medtech patent gold rush.

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