The Medical Device Patent Strategy Problem-Case Study

An IP Strategist like myself spends considerable time “Monday Morning Quarterbacking” patent strategy for medical devices and other inventions for the purposes of valuation, commercialization and otherwise. In this regard, I am frequently asked to review medical device patents to provide my opinion regarding claim coverage in relation to commercialization potential. Most of these reviews indicate that the medical device patent fails to create a scope of protection sufficient to justify the investment needed to fully realize the value of a new market opportunity. Alternatively, I will provide a “freedom to operate” opinion to a competitor that wishes to enter the market with a non-infringing alternative but which nonetheless leverages the key insights that formed the basis of the patented medical device innovation.

To this end, a medical device investor recently engaged me to conduct a preliminary review of a patent for a device invented by a medical specialist–for the purposes of this post, for let’s say she’s an ENT who is a recognized expert on sinus surgery. Like many experienced practitioners, this doctor was frustrated with the tools available to her and, after performing her umpteenth procedure, she experienced a key insight about improving a particularly tricky aspect of treating a condition of the sinuses. This “ah hah” moment made her realize that patient outcomes could be significantly improved if the design of an instrument was tweaked to allow better contact with a part of the sinus cavity that was hard to reach in a significant subset of patients. She saw herself as licensing her patented invention to an instrument company to augment the increasingly uncertain revenue stream in her medical practice. With these outcomes in mind, our ENT sought referrals from her friends and colleagues for a good patent attorney. She selected someone with a stellar reputation, and an hourly fee that matched that reputation.

The patent attorney drafted a very strong patent application that broadly covered the instrument that our ENT envisioned as the appropriate implementation of her surgical insight. Notably, the pre-filing search appears to have encompassed only the ENT-related prior art, which is not surprising given the “stove piped” nature of most medical practices. Because of this limited search, a highly relevant piece of prior art in an adjacent area–let’s say the gynecological instrumentation space–was properly cited by the patent examiner against our ENT’s patent application, which necessitated a narrowing amendment that substantially limited the claim scope. The patent was allowed after this amendment and, after spending $25K, she now has a patent covering the instrument design that resulted from her original surgical insight.

Knowing that she could not commercialize her patented invention and still maintain her busy medical practice, our ENT contacted my client, the medical device investor, who, in turn, brought me in to review the patent. I was quickly able to discern that, although the patent itself was of high quality, the business opportunity was not promising due to the limited scope of the patent claims. As such, I recommended that the investor pass on working with our ENT.

You are probably wondering how a high quality patent could nonetheless result in a low quality commercialization opportunity. It’s pretty easy, actually–there is not a problem with the medical device patent, there is a problem with the medical device patent strategy. In this case, the specific instrument design claimed in the patent addresses only one of the likely several ways that the sinus cavity access problem could be solved. The narrowing amendment made to gain allowance further limited the value of the patent because competitors can freely use the feature deleted from the claims. The decisions made in application drafting and prosecution necessarily limit the value of the patent for commercialization. After my client, the investor, put the time and money needed to drive this medical device innovation into the marketplace, the limited scope of the patent would leave much opportunity for others to provide the same functionality without also infringing the ENT’s patent. In short, the benefits provided by the instrument in sinus surgery would be left for others to copy once the investment was made to validate the importance of the ENT’s innovation. It therefore made little sense for the investor to move forward the ENT’s patent failed to “make it cheaper to go through her than around her.”

Unfortunately, this scenario is the rule, rather than the exception. Time and again, I see medical device patents that clearly resulted from a practitioner’s insight relating to improved functionality leading to improved patient outcomes, but where the patent covering that insight is nonetheless focused specifically on a particular implementation of that functionality. Moreover, the siloed nature of medical practice means that pre-filing searches are specifically focused on devices intended for the same specialty, which meant that similar implementations in other spaces–the gynecological instrument area in my example–were not considered when drafting the patent.

It is noteworthy that the patent attorney did nothing wrong here; to the contrary, he did exactly what he was paid to do: competently draft and prosecute a patent application claiming our ENT’s invention. It was not his job to create market value from the filing. Indeed, inventors must remember that the patent attorney is merely their “mouthpiece” to the Patent Office–that is, the attorney’s job is to communicate using legal language the scope of the invention sought to be owned. This communication can be skillful (as in this example) or poor (as is, unfortunately, often the case). This communication can be expensive (as in this example) or it can be inexpensive (as is less likely these days). But, if the inventor does not understand how her fundamental insight will create value in the market, it will necessarily follow that their patent attorney will not be able to generate patent coverage that will allow them to capture that value in the marketplace.

Fortunately, it is pretty easy to fix the problem of too-narrow patent coverage for medical devices, as well as other potentially significant innovations. In short, one must focus on the functionality imparted by the innovation, not specifically how the inventor sees the functionality being implemented. Notably, medical specialists are not product development experts, so they really have no business trying to guess at how their key insight will be implemented in the marketplace.

If our ENT would have come to me prior to filing the application, I would have recommended that we conduct competitive patent and market analysis that would have given us the context to determine how to characterize her key medical insight in terms of the new functionality provided, so as to better align her innovation with its potential value in the market. Then, and only then, would the patent attorney come into the picture to serve as her “mouthpiece” to the Patent Office. Of course, this means extra work and expense for our ENT on the front end of the process but, given the existing outcome of an expensive patent with no real commercial potential, it does not make sense to do it any other way.

In closing, I would like to say that I get no joy out of telling people that their patents do not form a sufficient basis upon which a medical device company should be built. Indeed, I am looking forward to the day when more medical device innovators–and their patent attorneys–understand the value of IP Strategy as a value creation mechanism. Until then, however, I expect that much of my practice will continue to be as the bearer of bad news to those who have spent much of their valuable time dreaming of a way to create recurring and scalable revenue from their medical expertise.