27 May What Do You Do If Someone Copies Your Medical Device Invention?

Last month, I asked a question in a LinkedIn discussion forum for members of a Medical Device Inventors group. Several knowledgeable participants responded to my question sharing their advice and experiences.

One member, Jory T., suggested that a summarized “operation cookbook” for IP owners to minimize infringement damage be created. So, using that as a cue, I am in the process of putting together such a resource. In the meantime, I thought I’d summarize the key points that were made in the group conversation. Here they are, divided into two groups: IP Protection and Market Protection.

IP Protection

• Consider the “what, where and when” of IP: Before you can protect your IP, you first need to articulate exactly what that IP should be. Matthew A. made a valuable point not thinking about intellectual property as a singular concept, but instead, to evaluate features (or combinations of features) as multiple intellectual properties. Michael Z. offered the additional advice of filing and enforcing trademarks in addition to patents.

  The next step is to figure out where to protect that IP — which, as I and Matthew A. suggested, should not only evaluate where the medical product will eventually be manufactured, sold and distributed, but also balancing the cost of filing for patent protection versus the business potential in those countries.

  Finally, there’s the timing of getting IP protection. Ralph A. astutely mentioned the need to at least require non-disclosure agreements (NDA) before introducing your invention to manufacturers, distributors or the market. Otherwise, premature disclosure could prohibit your ability to file your patent later.

• Find infringers: If a tree falls in the woods and nobody hears it, does it make a sound? If somebody infringes your IP, you would want to know immediately. One of the easiest — and virtually cost-free — ways to immediately discover infringement, as Matthew A. explained, is to setup free Google Alerts for your trademark, company name and generic product name.
• Enforce your rights without an infringement lawsuit: Before attempting to resolve matters in court, which can be a lengthy and expensive process, there are some easier, faster and more affordable options.

  When I suspect a possible infringement on one of MediPurpose’s IPs, my first action is to have an IP attorney send a warning letter to the offending company.

  If a warning letter doesn’t succeed, a next possible step, as Matthew A. said, is to request an opinion on patent infringement. A positive infringement opinion might dissuade some infringers, rather than continuing and allowing the matter to reach the courts. Yet another reasonable method is to file a complaint at the U.S. International Trade Commission (ITC), as indicated by Darrin A. and Ralph A., who said that the ITC, a specialized court could provide a speedy resolution, broad jurisdiction and general/limited exclusion orders with customs enforcement.

• Enforce your rights with an infringement lawsuit: “Laws are made to be broken,” the saying goes, and when you believe that laws that protect your IP have been violated, an unfortunate reality of the medical device business is that matters may need to be resolved in the courtroom. As I can attest, this is a very unpleasant, time consuming and outrageously expensive process. One way to mitigate the cost of an IP lawsuit is to invest in IP insurance, which Matthew A. and I discussed. As with any type of insurance, it’s a gamble that doesn’t reveal its value until it’s needed — which includes being able to collect a settlement if the lawsuit is won. Another way to reduce and even offset IP legal fees is to find creative and cooperative solutions with attorneys. Ralph A. suggested using a mixed contingency or hybrid contingency fee arrangement if you can’t afford counsel. Maria G. mentioned that there are now many law firms that take a patent case on contingency.
• Negotiate a license and royalty agreement: As an alternate to expensive lawsuits, and rather than competing with an infringer that also may try to undercut your pricing, Dawn E. opted to create a hybrid license/OEM agreement where her client charged the infringer a higher royalty payment than usual in lieu of any cash up front for past infringement.

Market Protection

Lawsuits and other legal actions are only some of the weapons in a medical device IP owner’s arsenal for defending against or fighting back against IP infringers. As John S. said, IP protection is just one leg of a defensive strategy.

The other leg moves the strategy out of the attorneys’ offices and courtrooms and into a venue where most of us are better equipped for battle: the market.

• Be the first mover: John S. made a solid point about leveraging first-mover status by accelerating the distance between yourself and a follower.
• Expedite regulatory clearance: John’s suggestion of accelerating your medical device’s regulatory clearance can be another way to improve your product’s competitive advantage over an infringing competitor’s.
• Develop the market: Simon S. put it simply, “Don’t focus energy and money on protecting the intellectual property when starting out. The device does not sell itself. It’s rather how the company develops the marketplace that is key to success and victory.”
• Establish distribution channels: When starting out, the small medical device manufacturer needs to go through established distributors to reach the market. MediPurpose took a year to sign up most of the key distributors in our market and even longer to build relationships with GPOs (Group Purchasing Organizations).
• Add more features over time: Jory T. urged us to monitor newer replacement technologies to provide cheaper, better, and friendlier products.
• Ensure quality products: Customers will pay a slight premium for better quality products. When cheaper competitors attacked our customer base, MediPurpose was able to keep most of our customers because of our focus on product quality.
• Reduce cost: As I mentioned above, quality products only command a small premium. So we have to continually improve our processes to lower costs. As David M. said, “Exceeding your customer’s expectation and being the low cost producer wins.”
• Build your brand: When all is said and done — especially if it’s been done well — building a respected and widely recognized brand in your niche can not only reinforce critical marketing protection, but as Michael Z. said, it can help protect IP since such a brand’s trademark (if properly filed and enforced) can be much easier to defend than a patent.

For MediPurpose, a consistent priority of delivering quality medical products and increasing their value to customers has been essential for our survival, growth and competitiveness, as well as dashing the maligned ambitions of IP infringers.

In simplest terms, we have done this by being savvy and diligent marketers, establishing medical product distribution channels and GPO relationships, providing excellent customer service and reducing costs.

These are but a handful of options. Can you suggest others? Have you had your medical device invention’s IP infringed? How did you handle it?