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Biotech vs Medtech: Divergence in Intellectual Property Strategy

The landscape of innovation and investment in the healthcare sector has changed dramatically with the digital revolution and the rise of medtech – the physical devices used in healthcare – ranging from drug delivery devices to diagnostic kits and software for the interpretation of health and wellbeing data.

Investors in biotech and biopharma, accustomed to high risk and long waits for return on investment, are increasingly seeing medtech as an opportunity to finance products and services that can reach the market comparatively quickly. Consequently, the total value of announced medtech M&A deals rose by more than 50 per cent in 2017.

Intellectual Property (IP) has always been paramount to any innovative healthcare company’s success. This is as true with medtech innovation as it is with biotech. However, differences in the global legal IP frameworks and the nature of innovation in these sectors mean that there are some important nuances in how a medtech IP strategy should be formulated. An IP approach cannot be applied straight from one to the other.

Over two articles, we’ll outline the differences in medtech and biotech IP strategy, and give guidelines for how each should be approached. In this post: when patents should be filed, what other intellectual property options are available, and who owns the IP?

When should patent applications be filed?

With patent applications, timing is everything, and the optimal approach varies greatly depending on the type of innovation concerned.

In biotech, there is often a conflict between the desire to file early in order to publish findings and the need to fulfil data generation requirements such as clinical trials, as the industry is highly regulated. While it is always the aim to file as early as possible, a valid biotech patent must at least contain enough experimental data to plausibly show the invention works and to prevent it from being considered obvious by the patent office.

Medtech, on the other hand, is a wider church and timing is more subjective. Typically, once an invention has been conceived there is sufficient information to support a patent application as the legal requirements are less onerous – so a filing can be done as soon as possible. Some innovations however, such as some aspects of software, may be better never filed at all, as they may be better protected as trade secrets. Medtech companies must seek expert advice to work out the best course of action for the innovation they have created.

What other options are there for IP protection?

Patents are not the only IP right relevant to healthcare innovation. In biotech, however, they are often the only form of IP applicable until a drug is approved, when regulatory data exclusivity and trade marks become possible.

In medtech, a number of other IP rights should be considered as part of a well-rounded portfolio. For example, registered design rights (design patents in the US) can protect the physical appearance of a medical device, copyright could protect the code behind a piece of software, and trade marks may be important for consumer-facing products such as inhalers, wearables, and apps. Indeed, in 2014, GSK was successful in obtaining a preliminary injunction in Germany against a generic inhaler, simply on the grounds that it was the same colour as its own device.

Who owns the IP?

Both biotech and medtech innovations are often spun out of universities, which makes establishing the entitlement to IP rights a tricky process – but it is critical that this is established before investors part with funds. Getting this wrong can mean that the rights a company thought they owned could in fact be enforceable against them, or even not valid or enforceable at all.

Many more people may be involved in the development of a biotech invention than a medtech invention, meaning entitlement can be more difficult to unpick. The involvement of non-employees and students also often complicates matters further. In medtech, however, the involvement of third parties outside of the core technical team, such as contractors for producing prototypes, get-up or software, could also create complications. The medtech company may have come up with the idea and the overall design, but who has the right to an innovative aspect of the device created by external developers? These are considerations that have to be accounted for throughout the creation and commercialisation of a product.

Biotech vs medtech intellectual property

While biotech and medtech operate in the same field, the innovations they create are vastly disparate, and therefore so are the IP considerations. In the next post, we’ll tackle how many applications are necessary per product for both biotech and medtech innovations, and the thorny issue of freedom to operate.

GJE is a proud sponsor of Biotech and Money. If you have any questions or would like further information, then please get in contact with your usual attorney at GJE.

This article was originally published on Biotech and Money as a two-part series. Read part two here.