Medical Device Patentee Petitions Supreme Court Regarding On-Sale Bar and Price Quotes

A medical device patentee has asked the U.S. Supreme Court to save his design patent, related to an introducer sheath handle, from invalidity based on application of the “on-sale” bar, which prohibits patenting an invention if it has been for sale for over one year prior to the patent filing.

On July 6, 2022, in Junker v. Medical Components Inc., inventor Larry Junker filed a petition for certiorari asking the Supreme Court to review the Federal Circuit’s finding of invalidity of his design patent under the on-sale bar.  Mr. Junker alleged that Medical Components, Inc. and Martech Medical Products, Inc. (collectively “MedComp”) infringed U.S. Design Patent No. D450,839 (the “D’839 patent”), entitled “Handle for Introducer Sheath.”  An introducer sheath is a device used to place catheters.  The D’839 patent covered the design of the introducer sheath’s handle with rounded “Mickey-Mouse-shaped ears” that made the device easier to grasp when inserting the catheter and when peeling apart and removing the sheath.  Figure 1 from the D’389 patent is reproduced below:

Introducer Sheath

Mr. Junker and MedComp filed cross-motions for summary judgment debating whether the D’839 patent was invalid under the “on-sale bar” of  35 U.S.C.  § 102(b) (pre-AIA).  Under 35 U.S.C. § 102(b) (pre-AIA), a patent claim is invalid if “the invention was . . . on sale in this country, more than one year prior to the date of the application for patent in the United States.”  The parties disputed whether a 1999 letter regarding a price quotation, sent more than one year before the D’839 patent was filed, constituted a commercial offer for sale.  The letter was sent by a third party manufacturer to Boston Scientific.

The district court concluded that the letter was not a commercial offer for sale and accordingly granted Mr. Junker’s motion for summary judgment of no invalidity.  After a bench trial, the court awarded Mr. Junker $1.25 million in damages.  On appeal, the U.S. Court of Appeals for the Federal Circuit disagreed, finding that the letter contained sufficient terms to constitute a commercial offer for sale rather than a mere quotation.

In his petition for certiorari, Mr. Junker urges the Supreme Court to review the Federal Circuit’s ruling, arguing that the Federal Circuit misapplied contract law because the 1999 letter was sent by a third party who had no right to sell the invention, and the letter expressly stated it was a quotation rather than a price list.

Mr. Junker’s petition for certiorari is available here.

 

First closing of Acutus’s sale of its left-heart access portfolio to Medtronic completed

On July 1, 2022, Acutus Medical (”Acutus”), an arrhythmia-based medical device company, reported that it completed the first of its two closings in its left-heart access portfolio sale to Medtronic.  Acutus, the maker of the AcQCross™ line of sheath-compatible septal crossing devices and systems, first announced this deal in late April 2022, and it includes an upfront $50 million cash payment to Acutus Medical upon the initial closing of the transaction.  The sale of Acutus’s portfolio comes after Acutus’s restructuring announcement that resulted in layoffs in early January 2022, and Acutus’s recent FDA clearance of its expanded suite of additional left-heart access products such as AcQCross™ Qx system for use with the TruSeal™ and FXD™ delivery system for the Watchman™ LAAC Device.

Left-atrium access procedures require a multi-step process that often involves the exchange of wires and needles through the septum all while trying to obtain a proper angle and location.   “Crossing the septum at the proper location is important when doing any left-sided heart procedure, but it can be especially critical to the success of delivering Watchman to the left atrial appendage,” says Dr. Tom Waggoner.  “With AcQCross, I can easily reposition without withdrawing or exchanging needles or wires, so its new compatibility with Watchman has made my procedures much safer for my patients and far more efficient for me and my team.”

As stated in Acutus’s release, “US Left-atrial appendage closure procedures are expected to total over 50,000 in 2022…With this clearance, Acutus now offers sheath-compatible transseptal access devices that cover 409,000 electrophysiology and structural heart procedures in the US.”

It still is not clear when the entire deal between Medtronic and Acutus will be finalized.  The final closing details are also tied to another $35 million deal with Deerfield Management Company to refinance Acutus’ existing debt.

Medtronic’s acquisition of the portfolio follows Boston Scientific’s $1.75 billion acquisition of Baylis Medical and its transseptal puncture systems.

Boston Scientific Agrees to Purchase Majority Stake in M.I.Tech as M&A Deals Are Expected to Pick Up

On June 15, 2022, Boston Scientific entered into a definitive agreement to purchase a majority stake in M.I.Tech Co., Ltd, a publicly traded Korean medical device company in the field of endoscopic and urological procedures. The agreement includes a purchase price of approximately $230 million.  According to the announcement, M.I.Tech is the creator of the HANAROSTENT® technology, a family of conformable, non-vascular, self-expanding metal stents.  Non-vascular stents can be used in gastrointestinal applications and in airways to clear obstructions or constrictions in areas such as the biliary tree, pancreatic duct, esophagus, colon, and duodenum.

Boston Scientific’s Art Butcher, executive vice president and group president, MedSurg and Asia Pacific, stated:

M.I.Tech is an innovator in non-vascular stent development, with product offerings that complement our existing stent portfolio, including the differentiated AXIOS™ Stent and Electrocautery Enhanced Delivery System and the flexible and conformable Agile™ Esophageal Stent System.  We are committed to investing in technologies that advance care for patients around the world and are eager to work more closely with M.I.Tech to expand their international footprint.

Under the agreement, Boston Scientific will be purchasing a 64% stake in M.I.Tech from Synergy Innovation Co., Ltd, whose website identifies M.I.Tech as a subsidiary and a top 5 player in global non-vascular stents.  M.I.Tech’s website also describes other products such as lithotripter baskets, polypectomy snares, veterinary stents, and glucometers.  The transaction is expected to be completed in the second half of 2022.

According to PwC, semi-annualized M&A deal value in the medical device sector is down 85% this year in comparison to the same period in 2021 when $76.4 billion was invested across 93 deals.  PwC attributes the slow-down to acquirers shifting their focus to integration and value capture activities, while the sector deals with regulatory headwinds and semiconductor shortages.  PwC expects deals to pick up across all pharmaceutical and life science sectors in the second half of 2022, with the medical device sector searching for alternative forms of revenue, particularly from new consumer-centric technologies.

WTO Agrees to Partial Patent Waiver for COVID-19 Vaccines

On June 16, 2022, the World Trade Organization (WTO) agreed to a partial waiver of intellectual property rights related to COVID-19 vaccines.  The agreement came on the heels of an all-night negotiating session.  The agreement followed years of proposals and negotiations among the WTO members.

Ultimately, the WTO members agreed to a waiver that was limited to “the subject matter of a patent required for the production and supply of COVID-19 vaccines.”  The United States had previously expressed its support for a vaccine-only TRIPs waiver.  Previous proposals by South Africa and India also included COVID-19 tests and treatments, as well as including access to trade secrets.

The agreement allows member countries to “authorize the use of the subject matter of a patent … without the right holder’s consent through any instrument available in the law of the Member.”  However, any country making such a waiver must provide “adequate remuneration” to the patent holder.

WTO Director-General Ngozi Okonjo-Iweala praised the agreement: “[N]ow we have something in hand,” “[i]t’s really exciting now to go to those factories that are starting to set up all over the developing world and start to work with them about how this will actually be made real.”

However, the agreement did not meet with universal praise.  Indian Trade Minister Piyush Goyal stated:

[W]hat we are getting is completely half baked and it will not allow us to make any vaccines. They have no intentions of allowing therapeutic and diagnostics and if at all they try to say that we are the cause for its collapse, I think we should unanimously speak to the world and tell them that no, ideally we want a holistic solution including therapeutic and diagnostics.

Pharmaceutical industry organizations also criticized the WTO agreement, as did some members of the U.S. Congress.

The full text of the agreement is available on the WTO’s website.

BD and Mayo Clinic Collaborate to Share De-Identified Patient Data

Becton, Dickinson and Company (BD) has partnered with Mayo Clinic to gain access to de-identified patient data from Mayo Clinic Platform_Discover, as reported by a press release dated June 13, 2022. The platform includes data sets from 10 million patients. BD announced that the company intends to utilize this real-world patient data to enhance existing products and address unmet needs.

The Mayo Clinic Platform website describes the platform as a “suite of products enable customers to develop and deploy health care solutions quicker, with higher quality and lower cost.”

BD said the historical database includes both structured and unstructured data, images, 1.2 billion lab test results, 3 million echocardiograms and more than 640 million clinical notes.  It plans to use this to understand device use, increase clinical trial efficiency, and streamline medical device regulatory submissions (supplementing data from randomized control trials).

Mayo Clinic has previously announced partnerships with nference in connection with the Mayo Clinic Platform in 2021 and, separately, with Google in connection with AI-enabled digital diagnostics in 2019.

Medtronic and DaVita Join Forces for Kidney Health

Medtronic plc and DaVita Inc. are joining forces to form a new, independent medical device company to provide enhanced kidney health care. The new company will focus on making different dialysis treatments more accessible to patients, especially at-home patients.

According to the joint press release on May 26, 2022, the new co-owned company “will focus on developing a broad suite of novel kidney care products and solutions, including future home-based products, to make different dialysis treatments more accessible to patients.”

During a May 26, 2022 earnings call, Medtronic CEO, Geoff Martha, stated that this joint venture had “been under consideration for a while” and that both Medtronic and DaVita will get to “participate in the expected upside.”

Medtronic will spin out its existing renal care product portfolio into the new company, as well as its product pipeline, global manufacturing, and R&D teams and facilities in the renal care solutions sector. As one of the largest providers of kidney care services in the U.S., DaVita will contribute its depth of knowledge and expertise in providing kidney care to patients in hospitals, outpatient dialysis centers, and at home. Medtronic and DaVita will each contribute approximately $200 million in cash to launch the new company, according to a regulatory filing submitted to the Securities and Exchange Commission.

The CEO of the new company will be Ven Manda, who is currently the president of Medtronic’s Renal Care Solutions business and who has worked for Medtronic for more than 20 years.  In the press release announcing the proposed joint venture, Ven Manda emphasized:

Our singular focus on end-to-end kidney health solutions will position this new company to make a measurable difference in the lives of more than three million patients with kidney failure globally-a figure expected to double over the next decade.

The new company is expected to be formed in 2023.

The announcement of this new joint venture comes concurrently with Medtronic’s announcement during a recent earnings call that it experienced a 2021 Q4 shortfall relative to its expected revenue .  Medtronic stated that the shortfall was primarily due to COVID lockdowns in China and global supply chain challenges.

 

 

U.S. FDA Approves Monkeypox Treatment Formulation

By Mark Rubinshtein

(May 25, 2022) SIGA Technologies Inc., a New York-based pharmaceutical company, has received approval from the U.S. Food and Drug Administration (FDA) for an intravenous formulation of TPOXX (tecovirimat) for the treatment of smallpox.  The U.S., Canada, and Europe have approved an oral formulation for treating smallpox, and Europe has also approved it for treating monkeypox and cowpox.  The newly approved intravenous formulation provides an option for patients who are unable to swallow.

The approval is welcome news as over 100 cases of monkeypox have been identified outside its endemic area.  Australia, Belgium, France, the U.K., Sweden, Italy, Spain, Portugal, Canada, and the United States have reported cases.  The World Health Organization (WHO) warns more cases are likely.

Monkeypox is endemic to Central and West Africa and belongs to a subset of the Poxviridae virus family, which includes smallpox and cowpox.  Monkeypox symptoms (fever, sweating, headaches, enlarged lymph nodes) are generally much milder than smallpox.  The infection generally spreads from animal to human.  However, it can also be transmitted between humans.  This can occur through contact with bodily fluids, lesions on the skin or on internal mucosal surfaces, such as in the mouth or throat, respiratory droplets, and contaminated objects.

TPOXX is the first antipoxviral drug approved in the United States.

SIGA is the Assignee of multiple patents relating to tecovirimat.  These include U.S. Pat. Nos. 8,124,643, 8,802,714, 9,862,683, 10,029,985, and 10,864,282.

Medtronic acquires Intersect ENT, sells Fiagon to Hemostasis LLC as required by FTC

On May 13, 2022, Medtronic, Inc. announced that it completed the acquisition of Intersect ENT, Inc.  The transaction was only able to gain approval of the Federal Trade Commission (FTC) upon the agreement that Medtronic sell the assets of Fiagon NA Corp., a key subsidiary of Intersect ENT.  Medtronic sold Fiagon to Hemostasis LLC and was thereupon able to finalize the acquisition of Intersect ENT.

As a result of the transaction, Medtronic acquired Intersect ENT’s PROPEL™ and SINUVA™ (mometasone furoate) sinus implant product lines and technology, intellectual property, and Intersect ENT’s facility in Menlo Park, CA.  Intersect ENT employees joined Medtronic as a result of the acquisition.

SINUVA is an FDA-approved biosorbable, steroid-eluting implant that, according to Intersect ENT, is clinically proven to reduce polyps and symptoms of nasal congestion.  PROPEL is also an FDA-approved biosorbable, steroid-eluting implant, indicated for patients with chronic rhinosinusitis (CRS).  The PROPEL implant, which has reportedly also received CE mark clearance in Europe, is designed to keep sinuses clear after an endoscopic sinus procedure, while the SINUVA device is inserted to treat nasal polyps that develop after ethmoid sinus surgery.

Medtronic reports that acquiring Intersect ENT’s product lines and customer base will further Medtronic’s efforts to help patients who suffer from chronic rhinosinusitis, reported to be one of the most common health care problems in the U.S.

The FTC’s Bureau of Competition investigated the planned acquisition of Intersect ENT and determined that Medtronic, Inc., a wholly owned subsidiary of Medtronic plc, and Intersect ENT violated Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45.

An agreement was reached between Medtronic, Intersect ENT, and the FTC, pursuant to which Fiagon was sold to Hemostasis LLC.

Fiagon makes ear, nose, and throat navigation systems and balloon sinus dilation products.  According to the draft Complaint prepared by the FTC, without this divestiture, the acquisition of Intersect ENT by Medtronic would pose a threat to future competition in the United States for both ENT navigation systems and balloon sinus dilation products.

The press release by Medtronic is available here.

 

FDA Draft Guidance for Fostering Medical Device Improvement Using the Voluntary Improvement Program

On May 5, 2022, the FDA’s Center for Devices and Radiological Health (CDRH) issued draft guidance regarding the FDA’s Voluntary Improvement Program (“VIP”). The draft guidance, Fostering Medical Device Improvement: FDA Activities and Engagement with the Voluntary Improvement Program, can be found here.  According to the FDA:

“The VIP is a voluntary program facilitated through the Medical Device Innovation Consortium (MDIC) that evaluates the capability and performance of a medical device manufacturer’s practices using third-party appraisals, and is intended to guide improvement to enhance the quality of devices.”

The VIP draft guidance, is an extension of the 2018 pilot program Case for Quality Voluntary Medical Device Manufacturing and Product Quality (“CfQ Pilot Program”). According to the FDA, the CfQ Pilot Program assessed the “capability and performance of key business processes using a series of integrated best practices detailed in the Information Systems Audit and Control Association (ISACA) Capability Maturity Model Integration (CMMI) system.” The results of the pilot program can be found here.  Participants in the CfQ Pilot Program reported that “the appraisal had a direct value to product quality and over 90% reported a positive experience with the appraisal.”

As described in the draft guidance, the goal of the VIP is to “elevate and enhance manufacturing practices and behaviors through which quality and safety of medical devices can be improved.” As indicated in its name, this program is voluntary. Through use of the program, third-party appraisers visit participants to evaluate their practices in order to identify strengths and areas for improvement.

According to the draft guidance, VIP offers various benefits and opportunities for those manufacturing sites who demonstrate sustained capability and performance. Examples of opportunities from the draft guidance include:

  • FDA Consideration in Risk-Based Inspection Planning
  • Utilization of a Modified Submission Format for Premarket Approval Application (PMA) and Humanitarian Device Exemption (HDE) 30-Day Change Notices for Modifications to Manufacturing Procedures or Methods of Manufacture
  • Utilization of a Modified Submission Format for PMA and HDE Manufacturing Site Change Supplements
  • Utilization of a Modified Submission Format for PMA or HDE – Manufacturing Modules

The VIP has various participation and enrollment criteria for manufacturing sites, which can be found here.

The FDA requests comments on the draft guidance by July 5, 2022.

FDA Publishes Draft Medical Device Cybersecurity Guidance Amidst Continued Cybersecurity Concerns

On April 08, 2022, the Food and Drug Administration (FDA) published a draft cybersecurity guidance document for medical devices, titled Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions. The draft guidance covers a wide range of issues, including cybersecurity device design, labeling, and documentation. The guidance is intended to provide medical device makers a road map on how to satisfy the FDA’s quality system and patient safety regulations and how to address cybersecurity considerations within their premarket submissions.

The FDA’s draft guidance was released shortly before a report underlining the cybersecurity security practice deficiencies of various medical device makers. On April 20, 2022, Cybellum – a company specializing in assessing product security – reported the results of its 2022 medical device cybersecurity survey in an article titled Medical Device Cybersecurity: Trends and Predictions. The survey found that, although 83% of the medical device companies surveyed saw device security as a competitive edge, 75% of respondents noted that they do not have a dedicated senior management who takes responsibility for device cybersecurity.

The Cybellum survey also revealed that only about a quarter of the medical device companies surveyed (27%) generate and maintain a Software Bill-of-Materials (SBoM) for their products. An SBoM is a formal record containing the details and supply chain relationships of various components used in building software. President Joe Biden previously highlighted the importance of an SBoM in his Executive Order on Improving the Nation’s Cybersecurity from May 2021. Moreover, the National Telecommunications and Information Administration published The Minimum Elements for an SBoM on July 21, 2021, in an effort to bring “transparency to the components and connections within and across supply chains.”

The FDA’s draft cybersecurity guidance document is available here and is available for stakeholder comments until July 7, 2022.

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