By Kirsten S. Johnson, Ph.D. and Dinesh N. Melwani, Bookoff McAndrews, PLLC

As the final provisions of the America Invents Act (AIA) take effect in March 2013, medical device companies should consider using this historic milestone in U.S. patent law as an opportunity to review their patent portfolios and strategies to enhance their positions in the marketplace.

The changes in U.S. patent law brought about by the AIA not only present important considerations from a business development perspective, but also provide additional tools companies can use to their competitive advantage. By taking the following five steps, among others, medical device companies can adjust their patent strategies to accommodate changes under the AIA and maximize the value of their intellectual property assets.

1. File Early & Often

Under the AIA, the uniquely American “first to invent” approach to granting patents gives way to a “first-inventor-to-file” system.  The new rules remove the possibility for patent applicants to pre-date an earlier-filed application by showing inventive activity before that application’s filing date.  This new filing system has generated considerable discussion on how a race to the patent office will affect patent strategies, particularly in the medical device field where innovation is key to market success. To ensure their rights are properly protected, medical device companies will need to act on invention disclosures quickly and file new applications at the U.S. Patent and Trademark Office (USPTO) as soon as possible.

Pressure to secure an early priority date can prompt concerns as to whether certain inventions or innovations are commercially-relevant at a given developmental stage, in view of the resources needed for patent protection. This pressure can be alleviated by filing multiple provisional applications in succession to capture incremental innovations. These provisional applications can serve as placeholders until a company is prepared to pursue patent protection by way of a non-provisional application on an invention that is commercially significant. By filing provisionals at appropriate benchmarks (e.g., as inventors make modifications or refinements to a medical device or procedure), a company can ensure that those improvements are appropriately documented and time-stamped by the USPTO relative to filings by competitors. Once the first-filed provisional application nears the end of its one-year lifetime, patent counsel can confer with inventors to decide whether to capture that disclosure in a non-provisional application claiming the benefit of that earliest filing date.

If the first-filed provisional does not disclose inventive features of the product, however, the application may be simply abandoned to allow time for additional research.  For example, an early provisional application may pre-date a breakthrough or relate to a disregarded version or model of a product.  In such instances, the abandoned provisional application is not made public, thereby preserving the company’s confidential research and development activities.  Further, the filing of a provisional patent application allows a medical device company to begin marking any commercial products relating to the application with the words “Patent Pending,” which may assist with early marketing and commercialization efforts.

2. Consider Claim Scope

After establishing an early priority date, medical device companies should prosecute pending applications to strategically pursue claims that protect all aspects of their commercial products, as well as any alternatives or variations.  For example, a complex stent assembly can be covered not only with claims directed to the device itself, but also claims drawn to systems, manufacturing procedures, and methods of treatment or other uses of the device.  Similarly, medical device companies should ensure their patent portfolios include claims of varying scope for optimum protection, e.g., including some claims broadly drawn to key components of a device and other claims drawn to details of the device.  Obtaining a variety of claims hedges against risk and unpredictability in how a court may interpret claim terms if the patent is later the subject of a lawsuit.

Claims of varying scopes also frustrate efforts by competitors to design-around a company’s patent. Because the patenting process sometimes can take several years, companies should remain vigilant with respect to claim limitations to confirm that the pending claims continue to cover commercial products.  Otherwise, there is potential to insert limitations that lead to allowance but are commercially irrelevant.  When drafting claims, it is also important to consider the proof necessary to show infringement to ensure that any patent that ultimately issues adds real value to the company.  Finally, as alluded to above, strong patent portfolios must include claims that encompass alternatives, variations, and design-around modifications of the invention to ward off competitors and preserve market share.

3. Maintain an Orderly House

Claims painstakingly drafted and prosecuted to cover a commercial product have little value without rights to enforce the patent. Absent an agreement otherwise, each inventor enjoys an equal and shared interest in the invention claimed by a patent, and can assign that interest without the consent of any co-inventors. Delay or failure to resolve ownership issues could land a company in the unenviable position of having an inventor assign his/her rights to a competitor. Companies therefore should re-examine their employment agreements to verify that employees have an obligation to assign inventions created within the scope of employment. While patent rights can generally be assigned at any time, including application-specific assignments with the initial filing of an application can help to avoid difficulties with locating inventors at a later date.

Collaborations warrant special attention due to the potential for non-employee inventors. Asking a consultant to analyze a prototype, for example, could lead to new and inventive features attributable to her input.  In such cases, the consultant may be a co-inventor in any claims ultimately reciting those features. For best practice, a company should come to agreement on patent rights with any potential partners before proceeding further so as to have mechanisms in place to handle disputes, should they arise during the collaboration. Keeping detailed records of product development is also important.  Even in a “first-inventor-to-file” system, companies are well-advised to continue documenting pre-filing activities.

The AIA introduces certain exceptions for disqualifying disclosures as prior art, where those disclosures are made by or derived from an inventor within one year of an application’s effective filing date.  To benefit from these exceptions, patent applicants will have to submit a declaration or affidavit as evidence of the disclosure.  Instituting company-wide procedures to document varying stages of research and product development also facilitates compliance with USPTO requirements during the patenting process, including the duty to disclose information to the USPTO that is material to the patentability of the claimed subject matter.

4. Monitor Competitors

In addition to building a patent portfolio to protect its own products, a medical device company should monitor the activities of others in the industry and challenge problematic applications or patents when necessary.  Several mechanisms are available through the USPTO to attack a competitor’s patent position that are potentially less expensive and more expedient alternatives to traditional litigation. For pending applications under examination, the AIA introduced an option for third parties to submit patent and/or non-patent publications of potential relevance to patentability via a pre-issuance submission. Thus, it is possible to bring publications to the examiner’s attention that otherwise may not be considered during the examination of a competitor’s patent application. The submission must be filed within a specific time period, however, and the applicant has no obligation to respond without a request from the USPTO examiner. While this mechanism includes some benefits, it is not without drawbacks.  In particular, should the patent still issue over a submitted publication, the patent will be rebuttably presumed valid over that publication. Thus, medical device companies should consult with a patent attorney and consider long term strategies prior to making such submissions. Once a patent has issued, a third party can challenge the patent’s validity through the longstanding (pre-AIA) practice of ex parte reexamination.

Similar to pre-issuance submissions, the challenger does not directly participate in an ex parte proceeding after inception. The third party may remain anonymous and is not barred from litigating the patent in court should it survive the reexamination proceeding. Additional mechanisms established by the AIA include post grant review (“PGR”) and inter partes review (“IPR”) through the USPTO’s Patent Trial and Appeal Board, although PGR will only be available for most patents having an effective filing date of March 16, 2013, or later.  IPR replaces the prior practice of inter partes reexamination, in which grounds for challenging patent validity are limited to anticipation or obviousness based on a prior art reference.

A PGR proceeding may be initiated on the same grounds, as well as additional rationales, including lack of enablement or written description to support the invention. In considering offensive positions, medical device companies should include these mechanisms among the options available. Challenging patents at the USPTO can sometimes create estoppel to prevent companies from later pursuing other options. Thus, as with the pre-issuance submissions noted above, medical companies should discuss their long term strategies with a patent attorney prior to pursuing one of the mechanisms for challenging patents at the USPTO.

5. Verify Freedom-to-Operate

Patents give the right to exclude others from practicing proprietary technology, and are an invaluable tool for keeping competitors at bay. But even a strong patent portfolio does not afford a medical device company the right to make and sell a product because it may still infringe the patent rights of a third party. As such, companies should regularly conduct patent searches in combination with monitoring competitors’ activities to ensure their ability to further develop existing products and expand into new areas. Understanding a competitor’s patent footprint in the medical device field enables a company to strategically invest its resources to achieve the greatest return on that investment. It may be preferable, for example, to spend valuable resources on developing devices and treatments less likely to be blocked from the market by a competitor’s patent.

Freedom-to-operate analysis can also unearth obstacles to market entry and identify potential adversaries at an early stage, providing sufficient time to thoroughly assess and counteract risk. The more informed a company is about the patent landscape relevant to their products, the better they will be able to disarm threats (e.g., by implementing product changes to design-around a third-party patent or securing a license to a problematic patent) and maintain a strong market presence.

By incorporating these five actions into their 2013 business plans, medical device companies can bolster their patent portfolios and enhance their competitive positions.  Maintaining a strong patent portfolio that keeps pace with technological developments is key to market success and important for attracting potential investors.  Companies that are up-to-date with recent changes in U.S. patent law and aware of the new opportunities provided by the AIA will be in a position to strategize, giving them an edge over less proactive or informed competitors.