Showing all posts written by Tom Cowan

Tom Cowan
Tom Cowan
Tom is a Partner in the San Diego office and serves clients worldwide in aerospace, mechanical, and medical technologies. He counsels clients on overall IP strategy, performs IP audits, prosecutes patents and trademarks, conducts pre-litigation enforcement of IP rights, negotiates licenses, and conducts offensive and defensive diligence such as patentability and infringement studies.

As a former aerospace engineer with experience at NASA and Northrop Grumman, and holding a master’s degree in biomedical engineering, Tom’s legal services are supplemented with his advanced technical abilities in a wide range of inventive domains.

Tom has particular experience with assisting startups from the conceptual design phase through acquisition. One recent example is Millipede, Inc., developer of a heart valve annuloplasty device. Tom prosecuted their patent portfolio and provided defensive patent diligence, resulting in investments and an acquisition by Boston Scientific totaling $540,000,000.

Other example particular technologies in Tom’s patent experience include cardiac devices, intracranial sensors, prosthetics, aircraft and rockets, robotics, unmanned aerial vehicles (drones), semiconductors, imaging and biosensors, high altitude balloons, control systems, thermal management systems, software, and more.

Additional highlights include:

Keynote Speaker, “Patent Basics for the Aerospace Industry,” at the 2019 Space Foundation Space Commerce Workshop

Former Mechanical engineer at Northrop Grumman, where he designed and tested complex structures and mechanisms for various spacecraft programs

Interned at NASA Armstrong Space Center, Aerodynamics Branch, where he analyzed data for the Quiet Supersonic Platform

Inventor of the “Inflate-A-Brake,” a system for de-orbiting small satellites to reduce space debris

Publications Coordinator for the firm’s medical device practice group, which leads the nation in medical device patent prosecution having obtained over 4,800 medical device patents since 1976 and 2,700 medical device patents since 2010

Member of the firm’s pro bono committee and coordinates with the U.S. Patent & Trademark Office’s regional patent pro bono program to assist indigent individuals and non-profit organizations

Co-Chair of the Licensing Executives Society (LES) for the San Diego Chapter

Holds a minor in Chinese and studied Chinese language and history at Shaanxi Normal University in Xian, China
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Strategies for Protecting Intellectual Property (IP) on a Reduced Budget

Shutdown orders due to the COVID-19 virus pandemic have created economic disruption, causing companies to scale back on intellectual property (IP) expense. This creates an opportunity to move ahead of the competition. This is especially true because the U.S. patent system, and many others around the world, reward the first inventor to file.

Below are some suggestions for protecting your IP on a reduced budget. This is not an exhaustive list. It is also not right for everyone. You should consult with legal counsel about your IP and what is right for your company.

Further, obtaining the best protection for your IP may involve filing for a utility patent, which is a long process. It involves, for example, understanding the client’s business and its goals; studying the technology; meeting with the inventors; discussing the invention, its genesis, and design alternatives; identifying target concepts to protect; meticulously drafting the claims and the written description; preparing the figures; and reviewing and revising the draft documents many times until they are right, among many other tasks.

By most measures, a pandemic is not an ideal time for many things, including companies trying to protect their IP. Consider discussing the following options with IP counsel to see if any of these might be right for you. For fuller discussion of these and other techniques, see this webinar presented to the Association of Corporate Counsel.

1. Get your place in line – On a reduced budget

The U.S. and many non-U.S. patent systems reward the first inventor to file. It is therefore important to stake your place in line before the competition. Below are some suggestions for reserving your place in line – your “priority date” – while keeping expenses down.

A. Consider a U.S. provisional patent application filing.

A U.S. provisional patent application holds your place in line at the Patent Office for up to one year. The government filing fee is currently 280 USD (potentially discounted for “small entities” or “micro entities”).

Provisional applications do not require the same level of formality as a non-provisional application. For example, a sketch, a slide deck, or an informal set of notes from an inventor can be filed as a provisional application. While you will only get credit, for priority purposes, for the amount of detail you file, it may be beneficial to file something rather than nothing.

Within one year of the first provisional application filing, you can supplement it with one or more “follow-on” provisional filings. This may be useful, for example, to file a follow-on later when IP budgets are subsequently increased.

All of the filed provisional applications within that one year can then be “rolled up” into a single non-provisional application. If you ultimately decide to do nothing with the one or more filed provisional applications, they will never publish.

B. Consider “coaching” preparation of the patent application.

While ideally a patent attorney will draft your application, this involves additional expense. One option may be to have your attorney “coach” you through the preparation process.

Trademarks Require “Use in Commerce” – But What If You Need Regulatory Approval Before Selling Your Medical Device?

The U.S. Patent and Trademark Office (USPTO) allows for a trademark application to be filed on an “Intent to Use” basis to establish a priority date before the mark is actually “used in commerce.” However, such use in commerce must happen before the trademark application will register with the USPTO. If your company markets medical devices or related goods that require regulatory approval, the use in commerce requirement presents unique issues.

Typically, use in commerce is established when the goods affiliated with the trademark application are shipped between two states or to a foreign country, and with a label or packaging showing the trademark on the goods. For most industries, use of a trademark “in preparation” of sales will not suffice to satisfy the use in commerce requirement. Additionally, a trademark owner is only given three years to use the mark in commerce and provide evidence of such use after the USPTO determines the application is otherwise ready for registration. If the owner does not submit proof that it has used the mark by the deadline, the application is deemed abandoned. Three years seems like ample time for many trademark owners, but anyone who has needed regulatory approval for a product knows the process can stretch well beyond these three years. How does one deal with this conundrum?

You may think that you should wait to file your trademark application so that you don’t run out the three-year clock. But this may allow competitors to swoop in and file intervening trademark applications. If the USPTO believes your mark is confusingly similar to the mark in a competitors’ prior application or registration, it could prevent you from being able to register your mark.

With few exceptions, the best strategy is to file your trademark application as soon as possible. Fortunately, the law provides an accommodation for trademark registrants with goods and services that require regulatory approval. Legislators recognized the fact that “commerce” varies in different industries. For instance, while some companies can sell products as soon as they are ready for market, others must undergo testing to get a stamp of approval prior to marketing or selling their products. This latter group typically includes medical device companies. These and other devices may require pre-market approval (PMA) or a 510(k) clearance from the U.S. Food and Drug Administration (FDA), which can take many years.

Lawmakers revised the definition of “use in commerce” to state that such requirement:

be interpreted to mean commercial use which is typical in a particular industry. Additionally, the definition should be interpreted with flexibility so as to encompass various genuine, but less traditional, trademark uses, such as those made in test markets, infrequent sales of large or expensive items, or ongoing shipments of a new drug to clinical investigators by a company awaiting FDA approval (Senate Judiciary Committee Report on S. 1883, S. Rep. No. 100-515, p. 44-45 (Sept. 15, 1988))

This expanded meaning of “use in commerce” has been generally adopted by the USPTO and the courts.

FDA Issues Guidance on “Abbreviated” and “Special” 510(k) Pathways

The U.S. Food and Drug Administration (FDA) has issued two new guidance documents related respectively to an “abbreviated” and a “special” approach to the typical 510(K) process for medical devices.

The FDA describes the usual 510(K) process as “a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent, to a legally marketed device…that is not subject to premarket approval.”  According to the FDA, “Each person who wants to market in the U.S., a Class I, II, and III device intended for human use, for which a Premarket Approval application (PMA) is not required, must submit a 510(k) to FDA unless the device is exempt from 510(k) requirements of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) .”

Now, two recent guidance documents issued by the FDA allow for altered 510(K) approaches for certain medical devices.  The first guidance, issued September 13, 2019, is for a “Special 510(K) Program.”  The FDA describes this program as “an optional pathway for certain well-defined device modifications where a manufacturer modifies its own legally marketed device, and design control procedures produce reliable results that can form, in addition to other 510(k) content requirements, the basis for substantial equivalence (SE).”  The guidance is intended to clarify “the types of technological changes appropriate for review as Special 510(k)s.”  The new guidance also supersedes prior FDA guidance from 1998 regarding Special 510(k) policy in “The New 510(k) Paradigm: Alternate Approaches to Demonstrating Substantial Equivalence in Premarket Notifications.”

This MDDI article purports to offer a “handy checklist” to determine “if changes made to your medical device can be reviewed under the [Special 510(K)] program.”  Some of the questions listed on the article’s checklist include the following:

  • Is it a change to the manufacturer’s own device?
  • Are performance data needed to evaluate the change?
  • Is there a well-established method to evaluate the change?
  • Can the data be reviewed in a summary or risk analysis format?

The second FDA guidance, also issued September 13, 2019, is for the “Abbreviated 510(K) Program.”  The FDA describes the program as “an optional approach that may be used to demonstrate substantial equivalence in premarket notifications (510(k)s)” and that “uses guidance documents, special controls, and/or voluntary consensus standards to facilitate FDA’s premarket review of 510(k) submissions.”   The guidance is “intended to facilitate 510(k) submission preparation by manufacturers and review by FDA.”

A copy of the guidance for the Special 510(K) Program can be found here, and a copy of the guidance for the Abbreviated 510(K) Program can be found here.   The FDA currently states that comments on either guidance may be submitted at any time.  Public comments on the guidance for the Special 510(K) Program may be submitted here and for the Abbreviated 510(K) Program here.

Boston Scientific Exercises Option to Acquire Transcatheter Annuloplasty Ring Developer Millipede Inc.

Global medical device company Boston Scientific has announced on December 27, 2018, that it exercised its option to acquire remaining shares of privately-held medical device company Millipede, Inc. upon its recent successful completion of a first-in-human clinical study.  Boston Scientific previously announced on January 24, 2018, an agreement to make a $90 million investment in Millipede.  The current press release states the prior agreement included an option for Boston Scientific to “acquire [Millipede’s] remaining shares for $325M at closing, with a $125M payment becoming available upon achievement of a commercial milestone.”

Millipede has developed a non-invasive solution for repair of the heart’s mitral valve.  According to Millipede’s website, Millipede’s IRIS Transcatheter Annuloplasty Ring System reshapes the mitral valve annulus of the heart to treat severe mitral regurgitation (MR).  MR is caused by a leaking mitral valve, which causes blood to flow backward from the left ventricle into the left atrium.  Over time, MR can lead to or accelerate heart failure and rhythm problems.  Millipede’s website describes the IRIS system as providing the gold standard in surgical heart valve repair – a complete annuloplasty ring implant.  The implant reshapes and reduces the mitral valve annulus opening, enabling return of leaflet coaptation and reduction of MR.

According to Millipede, the implant is delivered via catheter, for example through a small cut in the patient’s leg.  This allows patients to avoid invasive open heart surgery, which is necessary for implantation of conventional annuloplasty rings.  Millipede describes the transcatheter ring as repositionable and retrievable.

“We are very satisfied with the early results of our clinical program and are excited to see this technology further leveraged by Boston Scientific to expand the mitral repair solutions for patients around the world.” – Randy Lashinski, CEO, Millipede Inc.

Millipede is based in Santa Rosa, California and was founded in 2012 by majority investor Santé Ventures and Steve Bolling, MD, and has been led by CEO Randy Lashinski since 2014. 

Boston Scientific describes itself as a worldwide developer, manufacturer and marketer of medical devices, providing a broad range of high performance solutions that address patient needs and aim to reduce the cost of healthcare.

Millipede is a client of intellectual property and technology law firm Knobbe Martens.  With close to 275 lawyers and scientists nationwide, Knobbe Martens dedicates its practice to all aspects of intellectual property law including litigation and is consistently ranked among the top intellectual property firms worldwide.

Cook Medical Petitions for Inter Partes Review (IPR) of Medtronic “Jervis” Patent

Cook Medical Petitions for Inter Partes Review (IPR) of Medtronic “Jervis” Patent

On November 9, 2018, Cook Medical LLC filed a petition with the Patent Trial and Appeal Board requesting inter partes review (IPR) of U.S. Patent No. 6,306,141, assigned to Medtronic Vascular, Inc.  The ‘141 Patent is entitled “Medical Devices Incorporating SIM Alloy Elements.”  The ‘141 Patent states that it relates to “a medical device containing a shape memory alloy element.”

The ‘141 patent discloses using stress and temperatures below body temperature to restrain a metal alloy.  The alloy expands to its original shape after being released from its restraint and exposed to body temperature.  In one example, the ‘141 Patent describes that the disclosed device enables doctors to treat damaged or diseased heart valves with a less invasive transcatheter heart valve procedure.  Figures 3 and 4 of the ‘141 Patent, shown below, illustrate a “side elevation view of a partial section of a catheter” in stressed (Figure 3) and unstressed (Figure 4) configurations.

The petition seeks to review all claims of the ‘141 Patent.  Cook Medical’s petition submits two grounds on which the claims of the ‘141 Patent should be found invalid due to obviousness.  The status of the proceeding can be examined by searching for the patent on the Patent Trial and Appeal Board website.

This is not the first time that the ‘141 patent has been subject to a petition for inter partes review.  On January 17, 2014, Edwards Lifesciences Corporation filed a petition with the Patent Trial and Appeal Board requesting inter partes review of the patent for review of all claims of the ‘141 Patent.  According to a Medtronic press release, on May 20, 2014, Medtronic and Edwards reached a “global settlement agreement” to “dismiss all of the pending litigation matters and patent office actions between them.”

In May 2013, Lombard Medical filed a petition for inter partes review of Claims 1-10 and 18-22 of the ‘141 Patent.  Lombard Medical’s products, according to its website, include the AORFIX™ endovascular stent graft.  According to a Lombard press release, on October 17, 2013, Lombard was granted a non-exclusive license by Medtronic to the ‘141 Patent, and Lombard formally requested a withdrawal of its inter partes review petition with the USPTO.

The ‘141 Patent has also been previously litigated. The ’141 Patent, among others, was previously asserted by Medtronic against W.L. Gore & Associates, Inc. in 2006; Gore’s EXCLUDER® AAA, TAG, and VIABAHN SFA® endoprosthesis devices were at issue.  The parties entered into a confidential settlement in 2009.

Medtronic also previously asserted the ’141 Patent, among others, against AGA Medical in 2007.  AGA’s AMPLATZER® Septal Occluder, Duct Occluder, and Vascular Plug devices were at issue.  The parties entered into a settlement in 2010 in which AGA received a non-exclusive license to patents including the ’141 Patent in exchange for $35 million.  AGA Medical was subsequently purchased by St. Jude Medical in October 2010 for $1 billion.

Medical Device Market Returns and Recent Industry Activity

The medical device and related markets have shown some growth recently.  For example, IHI, an iShares U.S. Medical Devices ETF, has a total return of about 24% year-to-date in 2018.   In the same time period, the S&P 500 has a return of about 8%.  The IHI fund has an average annual return in the last ten years of about 14% compared to about 10.7% for the S&P 500According to MarketWatch, the IHI fund invests in “medical-products companies that deliver the tubes, pumps and tools that are necessary to make medical facilities function. . . .  While some of the products offered by these companies are indeed high-tech, such as artificial heart valves, many are less glamorous, such as catheters and blood-pressure cuffs. But despite their flash, these items are staples, and medical offices and hospitals nationwide remain big revenue sources for these companies.”

MarketWatch further reports that ETFs related to healthcare in general have “more than tripled the returns of the S&P 500 this year.”  For example, the largest healthcare ETF by funds, XLV, is reportedly up 10% this year, and the IBB fund is up about 330% over the last ten years. Other healthcare-related funds reported to be outperforming the S&P 500 year-to-date in 2018 include the following:

  • Janus Henderson Obesity ETF “SLIM,” up 20%;
  • iShares U.S. Healthcare Providers ETF “IHF,” up 22%,
  • Invesco DWA Healthcare Momentum ETF “PTH,” up 23%;
  • the Ark Genomic Revolution Multi-Sector ETF “ARKG,” up 23%;
  • the SPDR S&P Health Care Equipment ETF “XHE,” up 27%; and
  • the Invesco S&P SmallCap Health Care ETF “PSCH,” up 40%.

There has been some activity and forecasts in the medical device market recently reported.  Some forecasts include the market for medical device connectivity projected to reach about $2.6 billion by the year 2023.  The global market for “IoT” (internet of things) medical devices is projected to grow at a compound annualized growth rate (CAGR) of about 25% from 2018 to 2023.   For the same period, the market for anesthesia-related devices is expected to have a CAGR of about 6.4%.  The global market for retinal surgery devices is reported as “likely to exceed $3 Billion by 2025, almost double from its current level in 2017.”  The global market for brachytherapy devices is reportedly predicted to rise at 4.2% CAGR from 2017 to 2022.

Some examples of recent medtech funding and M&A activity have included: CytoSorbents, a critical-care immunotherapy company that specializes in blood purification, received a research award of up to $3 million from the NIH.  Irvine-based Endologix, provider of solutions for aortic disorders, reportedly recently took out a $210.5 million convertible loan facility.  Urotronic, developer of a drug-coated balloon catheter for treating urethral strictures in men, reportedly raised $20 million in an equity offering involving 7 investors.  410 Medical Inc. a Durham, North Carolina-based company focused on technologies for resuscitation of critically ill patients, reportedly recently raised $3.1 million in financing.

Medical Device Connectivity Market Reported to Top $2.6 Billion by 2023

The market for medical device connectivity is projected to reach about $2.6 billion by the year 2023, according to a report published in April 2018 by several publishers.  The report states that the connectivity market for 2018 is expected to be about $940 million.  This equates to a compound annual growth rate (CAGR) from 2018 to 2023 of 23.2%.

According to news articles, the report states that “[t]he growth in this market is attributed to the increasing penetration of [electronic health records] and health information exchange systems in healthcare organizations, growing focus on care quality and patient safety, healthcare IT initiatives driving the integration of medical devices with hospital information systems, and the growing need to curtail healthcare costs through a connected healthcare environment.”

From 2018 to 2023, the medical device connectivity market CAGR is estimated to be 23.2%

The report further states the medical device connectivity services segment, as opposed to the device connectivity solutions segment, is anticipated to grow at the maximal CAGR during the “outlook period” from 2018 to 2023.  The report divides the technology sectors into wired, wireless, and hybrid technologies.  The wireless segment is projected to register the highest CAGR during the outlook period.

The report also breaks down the relevant markets into hospitals, home healthcare, ambulatory care settings, and imaging & diagnostic centers.  It finds in 2017 hospitals controlled the medical device connectivity market.  The report also finds that North America is expected to grow at the highest CAGR during the outlook period, followed by Europe.

The increase in the market is attributed in the report to “growing funding towards innovative projects in the medical market, [the] need to curtail the escalating healthcare costs in the USA, the presence of a big number of healthcare IT firms, rising investments in the healthcare sector by top market players, and increasing awareness about advanced technologies.”

The report is made available for purchase from several publishers, for example by Report Linker and Markets and Markets.

Boston Scientific Announces Agreement for Investment & Acquisition Option with Transcatheter Annuloplasty Ring Developer Millipede, Inc.

Global medical device company Boston Scientific has announced on January 24, 2018, an agreement to make a $90 million investment in privately-held medical device company Millipede, Inc.  Millipede has developed a non-invasive solution for repair of the heart’s mitral valve.  According to the press release, the agreement includes an option for Boston Scientific to acquire all remaining shares of Millipede, upon completion of a clinical study, for an additional $325 million in cash, with an extra $125 million in payments upon completing a commercial milestone.

According to Millipede’s website, Millipede’s IRIS Transcatheter Annuloplasty Ring System reshapes the mitral valve annulus of the heart to treat severe mitral regurgitation (MR).  MR is caused by a leaking mitral valve, which causes blood to flow backward from the left ventricle into the left atrium.  Over time, MR can lead to or accelerate heart failure and rhythm problems.  Millipede’s website describes the IRIS system as providing the gold standard in surgical heart valve repair – a complete annuloplasty ring implant.  The implant reshapes and reduces the mitral valve annulus opening, enabling return of leaflet coaptation and reduction of MR.

According to Millipede, the implant is delivered via catheter, for example through a small cut in the patient’s leg.  This allows patients to avoid invasive open heart surgery, which is necessary for implantation of conventional annuloplasty rings.  Millipede describes the transcatheter ring as repositionable and retrievable.

“We saw an opportunity to bring the gold-standard surgical approach to repairing the mitral valve to an underserved population of severe MR patients with transcatheter techniques, and are excited Boston Scientific also sees the unique abilities of the IRIS transcatheter ring” – Joe Cunningham, MD, Chairman of the Board, Millipede, Inc. and Managing Director of Santé Ventures.

Millipede is based in Santa Rosa, California and was founded in 2012 by majority investor Santé Ventures and Steve Bolling, MD, and has been led by CEO Randy Lashinski since 2014.

Boston Scientific describes itself as a worldwide developer, manufacturer and marketer of medical devices, providing a broad range of high performance solutions that address patient needs and aim to reduce the cost of healthcare.

Millipede is a client of intellectual property and technology law firm Knobbe Martens.  With over 275 lawyers and scientists nationwide, Knobbe Martens dedicates its practice to all aspects of intellectual property law including litigation and is consistently ranked among the top intellectual property firms worldwide.

FDA Exempts Numerous Medical Devices from 510(k) Premarket Notification Requirements

The United States Food and Drug Administration (FDA) issued a Notice on July 11, 2017, exempting 1,003 Class II medical devices from premarket notification requirements under Section 510(k).  The Notice indicates that anyone with pending 510(k) submissions for devices that are now exempt “should withdraw their submissions.”

According to the Notice, the exemptions from the 510(k) requirements do not apply to other statutory or regulatory requirements.  Further, the Notice indicates there are limitations on some of the exemptions.  Table 1 in the Notice lists exempt devices that are subject to general limitations of certain sections of the Code of Federal Regulations (CFR).  Table 2 lists exempt devices subject to those general limitations and that must comply with partial exemption limitations as indicated in the table.  Table 3 lists exempt devices classified as “radioallergosorbent (RAST) immunological test systems” but which are only a subset of all devices in that classification.

The FDA claims the exemptions “will decrease regulatory burdens on the medical device industry and will eliminate private costs and expenditures required to comply with certain Federal regulations.”  Further, the Notice states, “regulated industry will no longer have to invest time and resources in premarket notifications, including preparation of documents and data for submission to FDA, payment of user fees associated with 510(k) submissions, and responding to questions and requests for additional information from FDA during 510(k) review.”

The Notice was published in accordance with procedures established by the 21st Century Cures Act, which was signed into law December 13, 2016.  According to the Notice, the 21st Century Cures Act requires the FDA to publish a list of each type of exempt class II device within 90 days after enactment of the Act and at least once every 5 years thereafter.  The Notice reflects the FDA’s final determination regarding a proposed list of devices for exemption issued earlier this year.  The relevant codified language for each listed device will be amended by the FDA in a “future action.”

FDA Issues Proposed Guidance for Changes to Medical Device Software

FDA Issues Proposed Guidance for Changes to Medical Device Software

The U.S. Food & Drug Administration (FDA) issued a proposed guidance on August 8, 2016, regarding software changes to medical devices.  The proposed guidance relates to requirements for submitting medical device software changes to the FDA for approval.  The final document will provide assistance to medical device companies and the FDA for determining when changes to software or firmware for a medical device require FDA clearance.  The medical devices covered include 510(k)-cleared devices and preamendments devices subject to 510(k).

The FDA’s proposed guidance explains that premarket notifications are generally submitted for commercially-distributed medical devices undergoing significant changes in design.  Such changes include modifications that “could significantly affect the safety or effectiveness of the device” or a “major change or modification in the intended use of the device.”  The proposed guidance relates to software changes and is an update to the original guidance issued in 1997 regarding changes to existing devices.

The “software” subject to the proposed guidance is defined as “electronic instructions used to control the actions or output of a medical device, to provide input to or output from a medical device, or to provide the actions of a medical device.”  This includes software embedded in a device, software that is an accessory to another device, and “software that is intended to be used for one or more medical purposes that performs these purposes without being part of a hardware medical device.”

The FDA provides a flow chart for assisting with the determination, see below.  Issues addressed in the determination include changes related to: strengthening cyber security; meeting specifications of the most recently cleared device; introducing or affecting hazardous situations; creating new risk control measures; and affecting clinical functionality or intended use of the device.  Additional factors to consider beyond those in the flow chart and some examples of modifications are provided in the draft guidance as well.

The proposed guidance notes that in some cases a new 510(k) is not necessary, and that existing Quality System (QS) requirements may suffice.  Such QS requirements mandate, among other things, that the manufacturer maintains records, for production upon request, regarding such changes and the processes used to determine the changed device meet the design specifications.  Further, the proposed guidance does not apply to software for which the FDA has previously said it will not enforce compliance, including some mobile apps used with medical devices.

Some observers think the proposed guidance will help with improving cybersecurity of connected medical devices.  The public may provide comments to the FDA on the proposed guidance until November 7, 2016: comments may be submitted electronically here.

FDA Issues Draft Guidance for 3D Printed Medical Devices

The U.S. Food and Drug Administration (FDA) issued draft guidance for additive manufactured medical devices, more commonly known as 3D printed medical devices, on May 10, 2016. The draft guidance document, available here, is for comment only and includes technical considerations for such devices.

The draft guidance states that the FDA developed the guidance “to provide FDA’s initial thinking on technical considerations specific to devices using additive manufacturing” and to outline “recommendations for testing and characterization for devices that include at least one [Additive Manufacturing] fabrication step.” The document addresses two broad areas: 1) design and manufacturing considerations, and 2) device testing considerations including characterization, validation and verification.

However, the guidance is not comprehensive.  According to the Regulatory Affairs Professionals Society (RAPS), the “FDA says the guidance is not intended to address 3D printed products containing biologics, cells or human tissues, and cautions that ‘point-of-care device manufacturing may raise additional technical considerations’ not covered in the draft guidance.” RAPS further indicates that the guidance resulted from a public workshop in 2014 and that “the major takeaways from the workshop include the importance of material control, the impact of the 3D printer and post-printing processes on final device performance and the need for a ‘robust process validation and acceptance protocol.’”

According to the FDA, the public has until early August to provide comments on the draft guidance.

Polymer for Celiac Disease is Confirmed as Class IIb Medical Device in European Union

According to a press release from the Israeli company BioLineRx, their novel polymer for treating Celiac Disease has been confirmed as a Class IIb medical device in the European Union (EU).  According to the company, the polymer, called BL-7010, is “a novel, non-absorbable, orally available co-polymer intended for the treatment of celiac disease. It has a high affinity for gliadins, the immunogenic proteins present in gluten that cause celiac disease. By sequestering gliadins, BL-7010 effectively masks them from enzymatic degradation and prevents the formation of immunogenic peptides that trigger the immune system. This significantly reduces the immune response triggered by gluten.”  The company is also investigating use of the polymer as a food supplement to target patients with non-celiac gluten sensitivity.

According to BioLineRx, the celiac co-polymer BL-7010, was invented by Prof. Jean-Christophe Leroux from the Department of Chemistry and Applied Biosciences, Institute of Pharmaceutical Sciences, ETH Zurich, Switzerland, and is being developed by BioLineRx under a worldwide exclusive license agreement with Univalor.

According to their website, BioLineRx is a “clinical-stage biopharmaceutical company dedicated to identifying, in-licensing and developing promising therapeutic candidates. The Company in-licenses novel compounds primarily from academic institutions and biotech companies based in Israel, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization.”

 

FDA Announces 2016 Medical Device Fees

The Food and Drug Administration (FDA) recently issued a notice announcing the fiscal year (FY) 2016 medical device user fees, which apply to, among other things, applications for medical device approval.  The National Law Review reports that the new fees reflect an increase of greater than 4%.

The new fees will apply from October 1, 2015, through September 30, 2016.  Some of the standard user fees for FY 2016, which are listed in the FDA notice as percentages of a full premarket application fee, are reportedly as follows:

  • Pre-Market Application (PMA): $261,388
  • Panel-track supplement: $196,041
  • 180-day supplement: $39,208
  • Real-time supplement: $18,297
  • 510(k) premarket notification submission: $5,228
  • 30-day notice: $4,182
  • 513(g) request for classification information: $3,529
  • Annual fee for periodic reporting on a class III device: $9,149
  • Annual establishment registration fee: $3,845

Small businesses may pay reduced fees if they qualify before making their submission to the FDA.  To qualify, businesses must file a FY 2016 Small Business Qualification and Certification request (as well as several other documents, including tax records).   The establishment registration fee is not subject to reduction for small businesses; consequently, if that is the only fee a business anticipates paying in FY 2016, a Small Business Qualification and Certification request is unnecessary.

The FDA notice includes information on how the fees for FY 2016 were determined, the payment procedures that should be followed, and details regarding how businesses may qualify for reduced small business fees.

Innovative Collaboration – IP Considerations

It is common for medical device makers to partner with doctors, universities, designers, manufacturers, R&D labs, or salespeople in the development of medical devices.  To reap the intended benefits of such efforts, collaborators should consider at least three aspects of intellectual property (IP) law: disclosure, inventorship, and ownership.

Disclosure – Identify Each Party’s Pre-Collaboration IP 

It is important to identify the know-how of each party before collaboration begins.  This pre-collaboration IP can be identified in a collaborative agreement or contract, which may be a Joint Development, Consulting, License, or Manufacturing Agreement.  How pre-collaborative IP is identified depends on the nature of the know-how.  For example, medical devices may be identified with engineering drawings, whereas software could be identified using functional descriptions, flowcharts, or code.

One approach for identifying pre-collaborative IP is using patents and patent applications. A utility patent application should clearly identify the subject matter possessed, and a pre-collaboration filing date of the application can help prove prior possession.

Inventorship – Identify Each Party’s Contribution to the Developed IP 

To be an inventor under U.S. patent law, conception of the invention is key.  The inventor must contribute a “definite and permanent idea of the complete and operative invention” such that one of ordinary skill in the field could practice the invention.  Thus, a technician or manufacturer merely reducing an idea to practice is generally not an “inventor.”

Combining ideas from multiple people results in “joint inventorship.”  To qualify as a joint inventor, a person need not have contributed to every “claim” at the end of a patent.  Rather, contribution to one claim is all that is required.  Even when partnering with seemingly non-inventive collaborators, joint inventorship may still occur.  For instance, if a manufacturer or technician alters an idea to make it work, he or she may be an inventor.  However, such alterations must help distinguish the invention from the existing state of the art (i.e., more than just an existing idea or an obvious modification).  The analysis is contextual. For instance, conceiving of screws to fasten parts together does not typically help make an idea patentable. But, in the context of regenerative scaffolds secured to tissue or bone, the use of a screw may qualify as an inventive contribution.

Ownership – Identify Each Party’s Ownership of the Developed IP

In the U.S., inventors are the default owners of their patentable inventions. However, employers typically require employees to assign ownership to the employer.  In collaborations, assignment to another party across the table may be required. Therefore, collaborators should be alert for conflicting agreements, such as where an inventor has assigned one invention to multiple parties.

Further, inventions can be assigned before they are conceived. In collaborations, this can be good, for example, to proactively address allocation of ownership. But it can also cause problems, for example, where the scope of the assignment is not appreciated.  Ownership of expected innovations may be straightforward, but ownership of unexpected spinoffs may be less obvious.  Where capturing ownership is desired, assignment clauses should be broadly drafted.

Knobbe Partner Joseph Re Featured in Of Counsel Report

Knobbe Martens Olson & Bear partner Joseph (“Joe”) Re is featured in the March 2015 edition of Of Counsel: The Legal Practice and Management Report.  The monthly report is a must-read for legal practitioners to stay competitive in the American legal market.  The latest edition includes an interview of Mr. Re in a feature titled “Litigating for the Greater Good: Knobbe Martens Lawyer Scores Big Wins.”

Indeed, wins in high-stake patent cases have made Mr. Re a nationally recognized trial and appellate attorney.  As an appellate specialist, Mr. Re has argued dozens of appeals in patent cases before the U.S. Court of Appeals for the Federal Circuit.

Some of Mr. Re’s recent “big wins” include leading trial and appellate teams to help longstanding client Masimo protect its ground-breaking patient-monitoring technology.  In the Of Counsel interview, Mr. Re discusses one such big win in which Masimo’s ground-breaking patents were successfully asserted against patient-monitoring giant Philips Electronics.  “[W]hat’s most important about this technology,” Mr. Re said, “is that the health benefits have been enormous.  It saves lives, eliminates premature blindness in babies, and reduces health care costs. It’s really been remarkable.”  In 2014, a jury awarded Masimo over $466 million against Philips for infringing two Masimo patents.  The jury also rejected Philips’ claim of patent infringement and its plea for $169 million.  The case was featured in The National Law Journal’s “Top Verdicts of 2014” as the #1 IP verdict and #5 overall.  Law360 also listed the verdict as the “Top IP Award of 2014.”

For helping client Access Closure with a win before the Federal Circuit that saved the company, Mr. Re recently received a “game changer” award from The Recorder.  The medical-device maker lost at trial and faced a pending permanent injunction.  Mr. Re took over on appeal and obtained a reversal, allowing his client to survive and later be acquired by Cardinal Health for $320 million.

In the Of Counsel interview, we get a glimpse of the mind behind these and other big wins.  Mr. Re expounds on a wide range of topics including, among others, the following:

  • His upbringing: “My parents met in law school and were both lawyers…I have seen trials since I was nine years old.”
  • Early career milestones: “I worked with [Knobbe founding partner] Don Martens on a patent case” which paved the way for Markman, the 7th Amendment right of trial by jury on claim construction in patent cases.
  • Challenges in attorney recruiting and management: “The problem areas are the lawyers who’ve been told by their mothers that they are the greatest person ever…”
  • Growing the firm from an IP boutique with only 30 attorneys to an AmLaw 200 giant with over 250 attorneys: “I really get a charge out of seeing somebody who’s a little rough around the edges but has great brainpower and has some charisma and I say this person is outgoing and has a great career ahead of him or her and doesn’t even know it.”

Before he embarked on his own great career, Mr.

Medical Device Trade Group Pens Letter in Opposition to Innovation Act

The Medical Device Manufacturers Association (“MDMA”) has been vocal in lobbying Capitol Hill for what they consider “necessary changes” to patent law for continuing medical device innovation.  Part of that lobbying has included opposition to recently proposed patent reform legislation, the so-called Innovation Act., or H.R. 9.

As reported by other publications including Medical Device and Diagnostic Industry (MD+DI), the trade group has now taken to writing a letter to the lead legislators of the Innovation Act, expressing the group’s concerns with the proposed law. The letter was sent by the president and chief executive officer of MDMA, Mark Leahey, on April 14, 2015, to legislators Bob Goodlatte (R–VA), chairman of the House Committee on the Judiciary and introducer of the legislation, and John Conyers (D–MI), ranking member of the Committee.

MDMA sees the law as weakening intellectual property rights and creating a potential “chilling effect” on medical device innovation.  “It takes years, sometimes a decade or more, and tens of millions of dollars to secure regulatory approval and reimbursement for new medical devices,” the letter states. “Because the industry is so highly regulated, investment in early-stage medical device companies is a very risky proposition.”

The letter further states that “[t]he patent is the lifeblood of the medical technology industry and serves as the bedrock on which risk-taking entrepreneurs are able to create new markets and new jobs, and most importantly, deliver break-through technologies to patients who need them.”

According to articles, the Innovation Act was drafted largely in response to a perceived “patent troll” problem, or those who own and assert patents against others –  including against medical device companies – but who don’t practice the patented invention themselves.  Some of these “non-practicing entities” have been accused of making frivolous legal threats against small businesses, or gaming the system for quick six-figure settlements from large corporations with deep pockets.   Mr. Leahey contends in the letter that “the provisions in H.R. 9 that purport to target only abusive patent practices are so broadly drafted that they would make the defense of legitimate intellectual property from infringement more costly and burdensome, and discriminate against innovation models such as those who develop technologies and license them to larger players for distribution purposes.”

The letter generally alleges five areas of concern: 1) unfair fee shifting; 2) broadly-drafted customer stay provisions; 3) increased pleading requirements and potentially burdensome discovery limits; 4) providing patent challengers too many bites at the apple; and 5) no provisions preventing diversion of Patent Office fees to other government entities.

As an example, on the fee shifting issue, MDMA argues that the “loser pays” provision of the Innovation Act would severely harm solo inventors and start-ups. “Faced with the prospect of having to cover the legal expenses of large companies, start-up companies with limited capital either will not bring otherwise meritorious cases against infringers of their patents or will be forced into early settlements when defending against alleged infringement,” Leahey wrote. MDMA does acknowledge that such “fee shifting” should be done if “a party acted in bad faith or was unreasonable.”

Another concern is the joinder provision of the Innovation Act. 

FDA Issues Guidances for Medical Device-Related Apps and Systems

The U.S. Food and Drug Administration (“FDA”) recently issued guidance on an array of medical device-related software and systems.  A first guidance for “Data Systems and Imaging Devices” issued on February 9, 2015, and contains nonbinding recommendations for “Medical Device Data Systems, Medical Image Storage Devices, and Medical Image Communications Devices.” This first guidance expresses the FDA’s intention to not regulate many of these systems and devices.  However, a second guidance issued on the same day for “Mobile Medical Apps” and identifies a subset of mobile device software or “apps” that the FDA does intend to regulate.  Both of the guidances are meant to convey the FDA’s “current thinking” on the respective topics and do not operate to bind the FDA or industry.

The first guidance for “Data Systems and Imaging Devices” states that it is in response to growth in “digital health” and in recognition of the need to communicate and display medical data across multiple computing platforms.  The guidance further states that the FDA believes that medical device data systems, medical image storage devices, and medical image communications devices pose a low risk and are important in advancing digital health, and that therefore the FDA “does not intend to enforce compliance with the regulatory controls” for these systems and devices.

According to the guidance, systems and devices for which compliance will not be enforced include hardware or software that transfers, stores, retrieves, converts formats, or displays medical device data or images.  For such devices and systems, the FDA does not intend to enforce manufacturer compliance with premarket review, postmarket reporting, or quality system regulation.  However, this category does not include devices or systems that modify the data, control the functions or parameters of any connected medical device, or are used for active patient monitoring.  The guidance provides, as an example of a device that would not be subject to compliance, a data system that is an in vitro device intended for assessing the risk of cardiovascular diseases or for use in diabetes management.

The second guidance for “Mobile Medical Apps” is in response to the proliferation of software or “apps” on mobile devices used for health purposes.  The guidance notes that it was issued to let industry know that the FDA intends to enforce compliance for a subset of such mobile apps.  That subset includes mobile apps that fall under the definition of a medical device and “whose functionality could pose a risk to a patient’s safety if the mobile app were to not function as intended.”  Therefore, according to the guidance, a mobile app that constitutes a “medical device” but poses a low risk to the public will not be subject to the regulation.

The guidance states that a “mobile medical application” is an app that meets the statutory definition of a “medical device” and that is either a) intended for use as an accessory to a regulated medical device or b) transforms a mobile platform into a regulated medical device.  The guidance further notes that consistent with existing criteria, an app will be considered a “medical device” if the intended use is to diagnose, cure, mitigate, treat, or prevent disease or to affect the structure or function of the body.

Medical Device Clinical Trial Data from Johnson & Johnson To Be Made Available

According to MedicalXpress, expansive data from a company’s medical device clinical trials will soon be made broadly available to medical device researchers for the first time.  The Yale University Open Data Access (“YODA”) Project will make data from certain Johnson & Johnson (“J&J”) businesses available to outside researchers.  YODA will act as an independent gatekeeper to access the data.

Previously, only pharmaceutical data from J&J was available through the YODA program.  Under the extended program that now includes data related to medical devices and diagnostics, clinical trial results from the Medical Devices and Diagnostics divisions of J&J will be made available.  As with the J&J pharmaceutical data requests, YODA will review the requests for device/diagnostic patient data, which has been sanitized of patient identifying information.   However, the agreement only covers products approved since early 2014 and thus excludes many products currently on the market.  One device for which data will be available is J&J’s Thermocool Smarttouch catheter, a device used to treat atrial fibrillation that received approval in 2014 .

YODA launched in 2011.  According to the YODA website, the Project

“advocates for the responsible sharing of clinical research data” and “is committed to open science and data transparency, and supports research attempting to produce concrete benefits to patients, the medical community, and society as a whole.”

Medical device giant Medtronic, Inc. has also partnered with YODA, albeit currently only with regard to Medtronic’s recombinant human bone morphogenetic protein-2 (rhBMP-2) data.  Medtronic has previously shared medical device clinical trial data with the YODA Project for a single product, a bone formation product called “Infuse.”  Given J&J’s expansion of its available data, other industry leaders, such as Medtronic, may well follow suit and make available additional data.

More information about the YODA project is available here, including a listing of available clinical trial data and how to make a request.  An FAQ on the YODA project is also available here.

 

 

 

The Medical Device Tax in the Wake of 2014 Midterm Elections

Repeal of the medical device tax has seen frequent news coverage since the tax’s enactment in 2010 as part of the Affordable Care Act.  The tax, which went into effect in January, 2013, imposes a 2.3% sales tax on a range of medical devices and accessories, from pacemakers to dentures to tongue depressors.  Repealing the medical device tax became a major issue during the 2013 government shutdown, but there was insufficient support to successfully repeal the tax.  However, following the 2014 midterm elections – in which the Republican Party increased its majority in the House and gained a majority in the Senate – there is renewed interest in the issue.

With about 7,000 medical device companies  competing in the $125 billion medical device market in the U.S. – the world’s largest – there has been no shortage of lobbying efforts.  Lobbying on medical devices and related supplies increased steadily from 1998 to 2008, with about $30 million spent each year since 2008 by device makers and industry groups lobbying the Hill.  Recent lobbying efforts have focused on the medical device tax and resulted in broad bipartisan support for its repeal.  Eighteen Senate Democrats supported delaying the tax in December 2012.  In the most recent midterm election cycle, 60% of medical device companies’ support was given to six Republican candidates while only 40% was given to four Democratic candidates.  The top two recipients include Rep. Erik Paulsen (R-MN) – industry giant Medtronic is based in Minnesota – and Sen. Mitch McConnell (R-KY), who will drive the agenda in the Senate next year as the Senate leader.

The Republican-controlled House has approved repeal of the tax three times in the last two years, most recently in September 2014.  The Democrat-controlled Senate also backed repeal during a series of non-binding votes on a 2013 budget resolution.  Now that Republicans control both chambers, it appears that repeal may be submitted for Presidential signature early next year.  Despite being opposed to past efforts to repeal the tax, President Obama may now be more willing to consider signing it: when asked after the recent elections about the Republicans’ plans to repeal the tax, the President did not rule it out.

Industry participants see a real chance of passing the repeal.  J.C. Scott, chief lobbyist for the Advanced Medical Technology Association, the industry’s main lobbying group, says device makers are “cautiously optimistic” that the repeal could happen this time.  Further, the nonpartisan Congressional Research Service released a report  last week stating that the tax is challenging to justify.

It appears the stars may have aligned for proponents of repealing the medical device tax.    Only time will tell.  For now, you can find answers here from the Internal Revenue Service to frequently asked questions about the medical device excise tax.