Editor: Catherine Holland
Royal Philips NV acquired BioTelemetry, Inc. for $2.8 billion US dollars. Headquartered in Malvern, Pennsylvania, BioTelemetry provides cardiac diagnostics and monitoring tools that, according to the press release, are expected to add to Philips’ line of hospital-based patient monitoring solutions.
As the COVID-19 pandemic drives up demand for telehealth and remote patient monitoring, Philips expects BioTelemetry business to contribute to sales growth and adjusted EBITA margin in 2021 and deliver double-digit growth and improve profit margins to more than 20% by 2025. According to Frans van Houton, CEO of Philips, “the acquisition of BioTelemetry fits perfectly with [Philips’] strategy to be a leading provider of patient care management solutions for the hospital and the home.”
According to BioWorld, Biotelemetry had 2019 sales of $439 million US dollars and annually monitors over 1 million cardiac patients remotely. Biotelemetry’s current portfolio includes wearable heart monitors and AI-based data analytics and services. Philips sees opportunities to “broaden the scope of wearables” using BioTelemetry’s remote monitoring portfolio. In addition, Philips expects BioTelemetry’s 30,000 referring physicians to provide cross-selling opportunities, geographical expansion, pipeline opportunities, and productivity gains. According to van Houton, the referring physicians “a new channel for Philips” that can “provide [Philips’] offering for multiple therapeutic areas.”
It is estimated that Philips’ acquisition of BioTelemetry gives Philips a significant share in the estimated $3.7 billion US dollars cardiac ambulatory market. According to Roy Jakobs, executive vice president and chief business leader of Philips’ Connected Care business, BioTelemetry currently is No. 1 in the cardiac ambulatory market space. Among top 3 competitors in the cardiac ambulatory market, only BioTelemetry offers all four cardiac measurement types: short-term Holter monitor, extended long-term Holter, cardiac event monitor and mobile cardiac telemetry.
According to Philips, Philips is acquiring all shares of BioTelemetry for $72 per share and BioTelemetry and its employees will become part of the Philips’ Connected Care business upon completion of the acquisition.
UCLA Biodesign is currently inviting professionals in engineering, medicine, design, computer science, and business to apply for an exciting year-long fellowship, starting in the summer of 2021, associated with the world-class resources at UCLA Health. Now in its 2nd year, UCLA Biodesign fellows will join a team of like-minded healthcare innovators and leaders on a three-stage development process, from the identification of meaningful clinical opportunities, to invention and solution development, and to the initiation of a new venture.
Launched in 2019, UCLA Biodesign’s first class of 10 fellows included two UCLA Health faculty members and eight postgraduate professionals from engineering, business and medicine. The program expanded in 2020 to include two tracks – the Discovery Track and the Accelerator Track. The Discovery Track includes 8 fellows who will start with three months of clinical immersion followed by nine months of product development. The newly formed Accelerator Track is geared toward the in-residence clinical entrepreneur or technical innovator with a mature idea or concept, and includes 10 fellows. All fellows will receive mentorship from industry experts in areas such as product development, business development, corporate venture and intellectual property. Mentorship in intellectual property will include guidance from IP experts and Knobbe partners Rabi Narula and Sabing Lee.
UCLA Biodesign is led by Co-Executive Directors Desert Horse-Grant and Dr. Jennifer McCaney. Desert is on the executive leadership team at UCLA Health and is Senior Director, UCLA Health Research & Innovation. Jennifer is an Assistant Director of the UCLA Clinical and Translational Science Institute and Adjunct Assistant Professor at the UCLA David Geffen School of Medicine and UCLA Anderson School of Management and a leading expert in disruptive technology and entrepreneurship in healthcare. Together, they are looking to train the future leaders who will develop the groundbreaking innovations to solve the most complex medical needs.
Medtronic recently announced that it received clearance from the FDA and CE Mark approval for its LINQ II insertable cardiac monitor (ICM). The announcement notes that ICMs “are small, subcutaneously implanted devices offering continuous ambulatory electrocardiogram monitoring” and that in particular, ICMs focus on detecting and managing subclinical atrial fibrillation. Articles have noted that recently some ICM’s have expanded their monitoring capabilities to assist with home monitoring of COVID-19 patients.
The LINQ II system purports to offer remote programming and remote patient management that allow system optimization without the patient visiting the hospital. Rob Kowal, M.D. Ph.D, the chief medical officer of Medtronic’s Cardiac Rhythm and Heart Failure division touted this as an advantage of the LINQ II system in view of the COVID-19 environment:
[T]he LINQ II system offers patients a seamless way to experience ongoing connectivity between their device and their physician, while reducing the need for in-office visits.
Medtronic advertises the LINQ II as delivering the lowest published rate of false positives as compared to other ICM devices. Medtronic asserts that this increased accuracy will allow clinicians to spend approximately 33% less time reviewing ICM transmission, thereby streamlining their workflows. The LINQ II also purports to offer up to a 4.5 year lifespan, a 50% increase from the three year average lifespan of ICM’s reported in 2018. According to Medtronic, the LINQ II system also includes Medtronic’s MyCareLink Heart mobile app to automatically transfer data from the LINQ II to their physician. For patients who cannot use a cell phone, Medtronic notes that it offers a dedicated MyCareLink Relay Home Communicator.
COVID-19-related web applications have been popping up from the very start of the pandemic, and many, including Apple and others, have stepped up to contribute to the developments. The majority of COVID-related applications attempt to tackle the effort of contact tracing in order to get a better grasp on where the virus is spreading. Many of them have taken on a variety of approaches to tackle the issue – some apps are optional while others have mandated downloads. The MIT Technology Review Covid Tracing Tracker goes into an in-depth evaluation of the 25 applications it was able to identify. For example, Turkey requires all residents who have tested positive for COVID-19 to download Hayat Eve Sığar and share their data with the police, while India has become the only democracy that is making its app Aarogya Setu mandatory for millions of its people. On the other end of the spectrum are apps like Austria’s Stopp Corona and Iceland’s Rakning C-19, which are entirely voluntary to use.
Like many other players in the market, Apple also plans to build out a contact-tracing application in partnership with Google. However in the meantime, Apple released a US-focused website and app simply titled COVID-19 at the end of March. The goal of the website and app is to “help people stay informed and take the proper steps to protect their health during the spread of COVID-19.” To achieve this, the website notes that Apple provides users with a Screening Tool to help assess their condition and risks, and supplements that with a variety of COVID-19-related information. Contact tracing is not part of the app and website’s functions.
According to the press release, the Screening Tool can be used to evaluate your own condition or complete the screening on someone else’s behalf. Before diving into the questionnaire, users are shown a list of symptoms that would constitute an emergency and are asked to contact 911 if any of them are present. Once emergencies are ruled out, a list of comprehensive questions asks users the usual symptom and travel-related questions, but also goes into more detail with questions such as “do you work in a medical facility?” and “do you live in a long-term care facility?” At the end of the questionnaire, users are presented with recommendations on next steps, which for some may include testing for COVID-19, or reaching out to a healthcare professional. When using the app, the questionnaire answers and recommendations are stored in the app and can be accessed at a later date. When using the website, users will instead see an option to print their results for their records. In either scenario, Apple states that it does not collect answers from your screening, and only collects website/app usage information to improve usability.
The website and application were developed by Apple in partnership with the CDC, The White House, FEMA and local state governments in “a direct response to President Trump’s call for an all-of-America approach and will help Americans heed CDC guidelines and self-isolate to limit COVID-19 transmission.” Once a user selects their home state, they receive a summary of official guidance, such as quarantine and social distancing measures, applicable to them. The option to ‘Learn More’ takes users directly to state government websites with fully expanded explanations.
According to the press release, while using the website or app, users will see additional links that include resources for unemployment help, instructions for making cloth face coverings, latest updates featured on the Apple News app, and mental health crisis help lines. Furthermore, if the Screening Tool recommends reaching out to a healthcare professional for guidance, users are presented with a variety of telehealth applications. According to the American Foundation for the Blind, the site “works well when using a screen reader” and the app is accessible to those with disabilities.
The app and website purport to go beyond focusing on just the virus and stress the importance of maintaining good physical and mental health. It reminds users to exercise, eat well and reach out to a health professional for non-COVID related matters as well. The press release indicates that the website lists strategies for staying in good mental health while working from home, going to work, or dealing with unemployment is also presented. Finally, users are encouraged to connect with friends and family as a way of supporting one’s mental health – a timely callout for May’s Mental Health Awareness Month.
Apple’s website and app can be found here: https://www.apple.com/covid19.
Balancing Intellectual Property (IP) Interests with National Interest in Response to the Coronavirus
Traditionally, it has been fairly uncommon to see new legislation in intellectual property (IP) law, compared to other areas of law. Instead, courts have generally been the avenue through which changes in IP law have been brought about and, for some, the Leahy-Smith America Invents Act of 2012 is the most recent IP legislation of particular relevance. This can provide a certain confidence to companies exploring or entering the IP field. However, developments associated with the coronavirus pandemic have, for some, highlighted issues with balancing the rights of a patent owner with a protection of the national interest.
As an example of the issues highlighted by the coronavirus pandemic, on January 21, 2020, the Wuhan Institute of Virology filed a Chinese patent application directed to the use of remdesivir in the treatment of coronavirus. Previously, in 2016, Gilead had also filed a Chinese patent application directed to a similar use of remdesivir in the treatment of coronavirus. The issue for the Chinese Patent Office was in balancing the traditional intellectual property rights of Gilead with the national interests at stake due to the coronavirus pandemic as proposed by the Wuhan Institute of Virology. While the Chinese Patent Office ultimately granted the patent to Gilead, it highlighted the potential for conflicts in IP law due to the coronavirus pandemic and further illustrated the need for a proper balancing of the rights of the patent owner with the protection of the national interest.
In an effort to balance the dual interests, numerous legislation has been proposed to modify the patent system in response to the coronavirus pandemic. Specifically in the US, Senator Ben Sasse recently introduced a bill dubbed the “Facilitating Innovation to Fight Coronavirus Act” designed to limit IP liability for healthcare professionals who are fighting coronavirus.
Under the Facilitating Innovation to Fight Coronavirus Act, healthcare providers would be protected from liability for:
- Using or modifying a medical device for an unapproved use or indication;
- Practicing without a license or outside of an area of specialty if instructed to do so by an individual with such a license or within such an area of specialty; or
- Conducting the testing of, or the provision of treatment to, a patient outside of the premises of the standard health care facilities.
The Facilitating Innovation to Fight Coronavirus Act would further limit the rights of a patent owner to protect the patent from unauthorized use as the effective date of eligible patents (e.g., pharmaceutical patents, medical device patents, or other patents related to the coronavirus) would be delayed until the cessation of the National Emergency corresponding to the coronavirus. The aforementioned portions of the Bill seek to protect the national interest by providing numerous protections to healthcare providers. However, the bill also seeks to balance the interests of the patent owners by providing for the extension of the term of each eligible patent for 10 years.
In defense of the Facilitating Innovation to Fight Coronavirus Act, Senator Sasse is quoted as saying “These heroes need a common-sense liability shield so that they don’t have to worry about lawsuits while they’re scrambling to save lives. This legislation gives emergency liability and patent protections to health care professionals who are innovating on the frontlines.”
Other examples of legislation in response to the coronavirus include the Covid-19 Emergency Response Act in Canada. Under this emergency legislation, the Canadian Patent Act has been amended to recite “The Commissioner shall, on the application of the Minister of Health, authorize the Government of Canada and any person specified in the application to make, construct, use and sell a patented invention to the extent necessary to respond to the public health emergency described in the application.” The compulsory licensing of the Act allows the Commissioner to take steps to protect the national interest. The Act further seeks to balance the rights of the patent owner by authorizing the government of Canada and other authorized persons to pay the patent owner any amount that the Commissioner considers to be adequate compensation under the circumstances, including the extent of use and the economic value of the authorization.
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. For example, the attorney may provide an application sketch or template for the inventor to complete. Then, the attorney can revise the draft to the extent desired. While this may risk losing some breadth in the scope of protection of the patent, it may still provide a suitable compromise between a “bare bones” provisional application and the ideal, fully-vetted application prepared by an experienced attorney.
C. Consider trade secret protection.
If your invention is not easily reverse-engineered, consider trade secret protection. Trade secret law addresses wrongful theft of certain secret, commercial information. Further, trade secrets protect more than just technological inventions. They can protect financial secrets, client lists, and other valuable commercial information.
Legal redress for “misappropriation” of your trade secret requires that you take certain measures within your business to protect and maintain secrecy of the idea, such as executing non-disclosure agreements, having password-protection, and using safes. You will need to show that you took reasonable measures to keep your invention secret, that it has commercial value by virtue of it being a secret, and that it was wrongfully acquired by the third party.
These are just some facets of trade secret protection, and you should consult with IP counsel regarding whether trade secret protection is right for you.
2. Keep your place in line – on a reduced budget
You may already be in line (and thus have your priority date) with the Patent Office, so what can you do to maintain that filing date on a budget? Below are some suggestions for keeping your place in line while reducing or deferring expenses.
A. Consider filing a “placeholder” continuation patent application.
You may have a non-provisional U.S. application already pending with the Patent Office. If you get any kind of communication from the Patent Office regarding your application, it will likely have a deadline by which you must respond.
One option to defer costs associated with responding, while maintaining your rights in the application, is to file a new “placeholder” continuation application that claims priority to the presently-pending application, and allow the presently-pending application to go abandoned. If you do it right, you will not lose your priority date. For example, the abandoned application must have been in good standing (e.g. no extension fees due) and the continuation application must be filed prior to abandonment of the present application. Make sure to work with legal counsel to get this right, or else you risk losing your rights!
Patent Office filing fees can be paid months after you file the continuation application. You will get a notice setting a deadline to pay the required filing fees, which are typically due within two months from the date of the notice. If that is too soon, you may be able to delay payment for up to seven months after the date of the notice, but you will also have to pay extension fees. This strategy would allow you to delay costs until you have a bigger budget to pay for them.
B. Consider narrow claims with a higher likelihood of allowance.
Each round of negotiation with the Patent Office will incur expense. One way to reduce the number of rounds of negotiation with a utility application is to amend the claims to be narrow such that the likelihood of allowance is increased.
One option is a “picture claim” that recites all or most of the features of the invention. Even though the scope of protection may be sacrificed, you can still have a claim that actually covers the product or process. Further, such narrowly-drafted claims may be more difficult to invalidate than a broad claim.
Additionally, if you do get an acceptance of the narrow claim, you can then file a continuation application and pursue broader claims in the continuation application. This may defer, until examination of the continuation application, the higher costs typically associated with pursuing a broader scope of protection. The continuation application could be a “placeholder” continuation to try and defer costs even farther down the road (see section 2.A above).
C. Consider the PCT “holding pattern.”
If you already have an application pending in the U.S., then consider filing a related “PCT” application that claims priority to the U.S. application. The Patent Cooperation Treaty (PCT) is an international treaty signed onto by most of the developed nations of the world. It allows an inventor in one of the signatory countries to file an international PCT application with one of the designated patent offices. You can then wait up to about 30 months (some countries are sooner, some are later) from the earliest priority date of your application before deciding in which PCT countries to file the national application.
The PCT application filing fees are typically more expensive than a U.S. non-provisional application filing. However, the PCT application may buy precious time before incurring the expense of examination in multiple foreign countries.
Further, you may file a provisional application in the U.S. and then in one year file the PCT application. You will then have the remaining time – about 18 months – to decide whether to file in the U.S. or any other PCT country.
There are many other requirements for the international route, and rights can easily be lost if any requirements are not met. For example, the PCT application must be filed within 12 months of the earliest priority date, or you risk losing foreign rights all over the world. Further, some countries like China have “absolute novelty” requirements that bar patent protection if the invention is disclosed prior to the filing date. Make sure to consult with IP counsel with experience in international patent protection.
D. Consider delaying U.S. patent examination.
The Patent Office allows for extensions of time for some responses. For example, when the Patent Office issues an “Office Action,” you typically must file a response within 3 months. You can usually extend the response deadline for up to 3 more months (6 months total), but each month of extension will incur an additional, increasingly higher extension fee. The extension fees normally are not due until you file the response.
Although this is a mechanism for deferring costs, there are some drawbacks beyond the higher costs. For example, you may lose patent term if you take an extension of time. Further, if it is a “Final” Office Action, you may risk abandonment of the application if the extension is not obtained correctly. Make sure to consult with IP counsel regarding extensions of time.
These are some of the options available to you for protecting your valuable IP in this time of economic uncertainty. This discussion merely scratches the surface of available options, however. We strongly recommend that you consult with experienced IP legal counsel to determine which options are right for you.
In the realm of software development, the Open-Source movement emphasizes a decentralized development model predicated on making source code freely available for peer-to-peer collaboration and academic study. When copyright holders of open source software grant such broad licenses to the public, one purported advantage is that increased collaboration results in increased knowledge and discovery.
In the realm of public health, some have theorized that developing a vaccine effective against a global virus might benefit from an analogous “open-source” model. For decades, influenza vaccines were developed in a similar fashion. The World Health Organization (“WHO”) characterizes its Global Influenza Surveillance and Response System (“GISRS”) as a platform for enabling experts to share and analyze emergent data on the latest flu strains. According to the WHO, GISRS serves as a global mechanism and platform for surveillance, preparedness, and response for “seasonal, pandemic, and zoonotic influenza.” Legal scholar and Yale professor Amy Kapczynski calls this process “open science.” However, policymakers, academics, economists, and pharmaceutical companies all have varying opinions on how open science can and should interplay with various intellectual property regimes. While GISRS enables the creation of an annual, cost-effective (almost entirely government funded) and thus widely available flu vaccine, flu vaccines are an exception to the norm.
Tackling vaccine creation for COVID 19 presents unique challenges not present in developing a flu vaccine. Even after the outbreak of SARS and MERS, a successful coronavirus vaccine eluded the medical community. Complexity aside, developing a coronavirus vaccine raises the familiar issue of cost. “According to Michael Osterholm, director of the Centre for Infectious Disease Research and Policy at the University of Minnesota, it can cost as much as US$1 billion to develop, license and manufacture a vaccine from scratch – including building a facility to produce it in.” Normally, the patent system provides the financial means to recoup those development costs. However, a global public health crisis requiring mass vaccination is said by some to be incongruent with exclusivity and monopoly pricing.
Economics Nobel laureate Joseph Stiglitz notes “Because GISRS is focused solely on protecting human lives, rather than turning a profit, it is uniquely capable of gathering, interpreting, and distributing actionable knowledge for the development of vaccines.” However, many vaccines on the market today are patented. Patents understandably provide the economic incentive of exclusivity or monopolies. Conventional economic wisdom holds that the patent system fosters innovation by rewarding large research and development (along with production) budgets with even larger profits. In the face of a global pandemic, some have questioned how global IP regimes can best exist in harmony with public health initiatives.
Some governments are already making proposals for the path forward once a vaccine is widely available. For example, Costa Rica’s government recently called on the WHO to establish an even broader initiative to “pool rights to technologies that are useful for the detection, prevention, control and treatment of the COVID-19 pandemic”. In its letter, the country urged the WHO to create an IP rights pool which would “provide for free access or licensing on reasonable and affordable terms, in every member country.” Additionally, compulsory patent licensing for COVID 19 treatments is a topic of discussion and subject of new legal amendments in countries like Israel, Canada, Germany and Chile. According to a recent CRS white paper, “the term ‘compulsory license’ refers to the grant of permission for an enterprise seeking to use another’s intellectual property without the consent of its proprietor. The grant of a compulsory patent license typically requires the sanction of a governmental entity and provides for compensation to the patent owner. Compulsory licenses in the patent system most often relate to pharmaceuticals and other inventions pertaining to public health, but they potentially apply to any patented invention.”
As academic researchers across the world engage in promising collaboration and data sharing towards developing a COVID 19 vaccine, global governments require equal collaboration towards developing a plan of action once a viable vaccine exists. That distribution plan will inevitably involve elements that touch on not only global economics and IP rights for a variety of stakeholders, but human lives. Depending on its success, such a plan has the capacity to set a precedent for global cooperation during public health crises moving forward.
On March 3, 2020, Exact Sciences announced completion of its acquisition of Paradigm Diagnostics, Inc. and Viomics, Inc., privately held companies based in Phoenix, AZ. According to Exact Sciences, Paradigm and Viomics together provide a differentiated late-stage therapy selection test and deep competencies in sequencing and biomarker discovery, extending Exact Sciences’ lab testing and research and development capabilities.
According to Kevin Conroy, Chairman and CEO of Exact Sciences:
The addition of these companies and their talented team members to Exact Sciences is another step forward in extending our leadership in advanced cancer diagnostics. Viomics’ research capabilities and the Paradigm therapy selection test and scalable clinical lab, combined with the powerful Exact Sciences commercial platform, allow us to provide patients with smarter, faster answers throughout the cancer continuum.
According to Paradigm Diagnostics, its core product, Paradigm Cancer Diagnostic (PCDx) test, can provide genomic and proteomic information about a patient’s cancer, allowing oncologists to personalize each patient’s course of treatment. The PCDx test can provide a comprehensive genetic result in three to five business days, often on specimens with a very limited amount of tumor.
According to AZBio, Viomics, Inc. was founded by David Mallery and Scott Morris, chief scientific officer. Viomics provides extensive sequencing capabilities and expertise in identifying unique biomarkers that can indicate presence of cancer in solid tissue or blood.
Exact Sciences describes itself as one of leading providers in cancer screening and diagnostic tests. Its products include Cologuard, a multitarget stool DNA test, that was FDA approved back in 2014 as recommended option for adults over the age of 50. In September of 2019, FDA expanded its previous approval for ages 50 or over by approving Cologuard for eligible average-risk individuals ages 45 or older. Since launch, Cologuard has screened over 2 million people, and detected over 10,000 early-stage cancers and over 70,000 pre-cancerous polyps, according to Exact Sciences.
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. Therefore, shipments across a state line that include use of the mark for testing, investigation, studies, and similar efforts may satisfy the “use in commerce” requirement within industries that require regulatory approval. This may be true even if regulatory approval and sales to customers are many years down the road.
A key factor is whether the use is genuine. A token “use” just to obtain a trademark registration will not suffice for any industry. But if there are legitimate efforts being undertaken for getting a product ready for the market, and your company falls within one of these regulatory carve-outs that provide for earlier use in commerce, you should consider using your company’s mark as soon as possible in connection with all pre-approval activities. Whether such use is sufficient to constitute “use in commerce” under the law will depend on the particular facts of each situation. Even if you are unable to submit evidence of use prior to the USPTO deadline, however, you will have prevented others from registering confusingly similar trademarks during the pendency of your application. In addition, you may file a new application for the same mark prior to the expiration of the first application. This will give you additional time to begin using the mark in commerce. You should consult with legal counsel for guidance with your particular facts.
Wearable fitness products company Fitbit Inc. announced Friday it entered a definitive agreement to be acquired by Alphabet Inc.-owned Google for $7.35 per share in cash, valuing the company at approximately $2.1 billion. James Park, co-founder and CEO of Fitbit, said of the deal: “Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone.” The deal is expected to close in 2020.
Founded in 2007, Fitbit launched its step-counting Fitbit Tracker at the end of 2009. The wearables market has grown rapidly in the past decade. According to IDS, Apple leads the wearables market with 16.2 million devices sold in the 4Q18, followed by Xiaomi, Huawei, Fitbit, and Samsung. Google’s presence in wearables includes WearOS.
“This move should put the eHealth market on alert—Google just acquired 25-30 million active users who care about monitoring their health. This is exactly the demographic that eHealth is designed to reach. And I would say that ‘preventative health’ within eHealth just got more competitive.” – Michael Luther, Co-Founder and CEO of MX3 Diagnostics
This year Fitbit sought to diversify its income stream by working with health care companies and offering subscription-based services. Some analysts see the Fitbit acquisition as a data play on Google’s part. Tom Taulli of InvestorPlace notes: “Google is a global leader in AI and this technology will likely prove extremely useful in transforming the healthcare industry.” Omri Shor, CEO of Medisafe notes: “Quality AI is predicated on an abundance of validated data, the tools to analyze that data in a meaningful way, and the ability to drive action. Google and FitBit together certainly have the potential to develop groundbreaking AI.” D.A. Davidson’s Tom Forte agrees and said in a note to clients “We see Google as a natural acquirer for the company that would leverage Fitbit’s: 1) data, 2) hardware and 3) brand into a larger ecosystem that would allow Google to further penetrate the healthcare sector and the smartwatch category.”