IP considerations for orthopedic applications

Patents are essentially monopoly rights granted to the owner preventing others from using the patented technology, for a limited period in a specific country.  Governing authorities for patent law include national entities, such as the US Patent and Trademark Office (USPTO), and transnational or regional entities, such as the European Patent Office.  Article 52 of the European Patent Convention, for example, stipulates that “(European) patents shall be granted for any inventions, in all fields of technology, provided they are new, involve an inventive step, and are susceptible of industrial application.” [1] However, the right to commercialize a patent can only be determined by a Freedom to Operate (FTO) analysis for a particular region or country.  A patent is essentially constructed by a device and governingmethod, with the background, description and claims to such device written in a particular language that blends both technical and legal protocols.

Company value: how to build it while managing risk?

Numerous IP strategies can come into play both prior to 1^st patent filing and throughout the technology lifecycle, whether, for example, filing for a US provisional application or taking the traditional PCT to national phase (NP) route.  In the case of biotech companies, growth in product value can be exponential following proof of concept - with peak levels at beta stage and the crossing of regulatory hurdles.  Yet what is the right patent strategy to complement this nerve-racking phase?  The solution lies in striking the right balance between (maximizing) NPV considerations and (minimizing) regulatory costs, whether pursuing 510(k) notification or Pre-Market Approval (PMA) in the case of higher risk (FDA Class III) drugs. 

In Israel, biotech companies enjoy development of alpha or beta types at upwards of 55% total cost compared to US levels, shorter delivery schedules and a world class research infrastructure.  If biotechs here can reach breakeven point within the initial 2.5 year term for global IP protection (see Table 1 above), investors have much less risk in taking the decision to advance IP protection to the next level of investment, a much higher consideration over the full 25 year period.

Market prospects for orthopedic application: evidence of saturation or pre-disruptive technology stage?

While some evidence of market saturation in terms of competing research among top hospitals and health centers can be seen [2], Standard & Poor’s notes an improved pricing environment for orthopedics somewhat offsetting “slowing growth in the interventional cardiology category, particularly regarding drug-eluting coronary stents.” [3] 

Another area to watch for orthopedics is the growth in patent filings for total artificial discs, and the outcome of the Spine Solutions v. Medtronic case.[4] According to MCRA IP Consultants, while patent filings in this area have increased, it has also become somewhat more difficult for new entrants to create a design that has not already been patented.  However, there are signs that disruptive breakthrough technology is close at hand, when several disciplines begin to coalesce, as is happening with tissue regeneration, stem cells and new material structures.

Trends in orthopedic IP point to increasing consolidation and a need to build on the right strategy

Trends that can be seen in orthopedic applications include increasing market consolidation, with a smaller number of companies issuing larger number of PCT applications.[5]  At the same time the cost burden in commercializing new drugs has led to a decline in investment and R&D in this area, with corresponding increased investment in 510(k) instrumentation and product profiles with shorter exit v. risk curves.  Yet another important trend is adoption of focused FTO-type or patent expansion strategies (e.g. CIP filing, or “continuation-in-parts”). Ultimately, whatever niche technology you develop for the market, be sure it corresponds to a winning IP strategy!