The Role of Patents and the Wireless Medical Device Market

Vena WristcuffTaken from the NERAC blog on medical innovation

Introduction to Mobile Medical Devices

Wireless mobile devices have the potential to significantly reduce medical costs, which makes the technology valuable to doctors, consumers, and insurers. Consequently, several industries are allocating R&D spending to mobile health (mHealth) technologies. A wireless medical device is defined as a medical device that utilizes Radio Frequency communication. Wireless medical devices can monitor patients in hospitals, collect vitals, monitor physiologic data for patients with chronic conditions, and dispense medication remotely. The benefits of wireless medical devices include more thorough and consistent monitoring, fewer doctor visits, increased efficiency, and reduced health costs.

By 2020, over 160 million Americans with chronic conditions will be monitored and treated remotely. The potential revenues are significant, which explains why so many industries are participating in this technological revolution. The continuing speed and volume of innovation, as well as inter-industry competition, are adding to the already dense patent thicket in the mobile medical device market. There may be some conflict between developers in the mHealth industry due to the rapid evolution of these technologies, number of industries involved, and volume of patent applications. The number of patents filed relating to the wireless aspect of devices, or medical device connectivity, has increased at a much faster rate than other device components, which suggests that there may be overlap in the scope of these claims.

What is the role of Patents in the Wireless Medical Device Market?

The purpose of patents is to protect intellectual property. Patents serve to protect a company’s investment in R&D and the value of IP while a product is being developed, and to prevent others from stealing the idea after the product is released. Patents are particularly important for high-tech companies because the initial investment in research and development is so steep. Until a product comes to market, most of the value of a new tech company lies in IP. IP can still be a company’s greatest asset, even after the R&D phase. Different companies are developing similar ideas concurrently in the mobile medical device industry. These companies are becoming more aggressive about enforcing their IP rights in an attempt to stay afloat. Given the competitive nature of this industry, it is important to understand the IP landscape and how to protect yourself and your product.

The mHealth Patent Landscape

Who owns patents in the wireless medical device market?
There are more industries involved in the development of wireless medical devices than there are for other medical devices. Only around half of the top twenty patent holders in the industry have a primary focus in the healthcare industry. Other industry players include those in communications, computer, and networking. Collaboration between industries is required because mobile medical devices require both FDA and FCC approval. Large companies in these industries hold the majority of patents.

Non-practicing entities make up another large group of patent holders. For example, the Intellectual Ventures (IV) Invention Science Fund owns several hundred patents. IV is a patent aggregator, defined as a non-practicing entity that purchases patent portfolios as an investment (not for the purpose of developing the acquired technologies.) Patent aggregators profit by claiming fees for the use of their acquired IP or selling patents to other parties for enforcement.

What Are the Causes of Increased Contention?
Historically, patent infringement conflicts in the mobile medical device market have been rare because litigation is expensive and the value of IP is not clear in the early stages of development. In 2009, over 9700 patents involving wireless communications and medical device technology had already been issued. The volume of patent litigation in the industry may increase because separately owned rights must be used collectively to develop new technologies, and the number of separately issued and pending patents is only increasing. Since patents from these different industries relate to the same technology, there may be overlap in the scope of their claims even if they evolved separately.

Inter-industry competition and the high value of IP are driving litigious action and patent contention in the industry. IP in the mobile medical device industry has become a market of it’s own. Failed companies with IP rights are immune to patent infringement counterclaims, and as a result, are becoming more aggressive about enforcing their patents in an attempt to recoup investments. Patent aggregators like IV have also created a market for companies to buy and sell rights.

Patent Thicket in the Wireless Medical Device Market

Patent thickets make it difficult to innovate within—or enter— an industry. It is more expensive to acquire licensing rights when multiple organizations own the individual patents to be used collectively. The increased cost to do business in the mHealth industry could be a barrier to entry for smaller companies. The time it takes to process patents could also slow innovation. It generally takes around three years for a patent to be issued after the initial application. Given the current speed of innovation, new technologies may become widely adopted during this time period, and subsequent technologies will develop before the original technology is officially patented. In some cases, the same technology, or the application of one component, may evolve separately. In both cases, the overlap between patent applications makes the entire process more complicated.

It is difficult to navigate the complex web of IP rights and acquire the necessary licenses. When adaptations of existing technologies develop within an industry concurrently, patent infringement is practically inevitable. All companies, big and small, must take measures to decrease risk and secure patent rights.