Medical Device Link.

Originally Published MX May/June 2005

GOVERNMENTAL & LEGAL AFFAIRS

To make the most of their intellectual property portfolios, medtech companies seek out legal specialists who provide much more than just legal counsel.

Jon LeSage

When it comes to intellectual property (IP) concerns, medtech companies rely on their attorneys for much more than filing patents and offering basic legal advice. IP law firms act as consultants and business strategists for medical technology manufacturers and suppliers. After all, IP is a fundamental output of the medtech industry, in which the valuation and sustainability of a company can often depend on the defensibility of its concepts, technologies, processes, and finished medical devices.

Growing medtech firms inevitably become enmeshed in an increasingly complex web of IP issues. The most typical activities for such companies are conducting prior-art searches and filing new patents—the expected path of any emerging medtech company with an active R&D function. But companies may also find themselves challenged to navigate the IP regulatory system; to watch for IP issues raised when entering new international markets; to conduct IP due diligence when acquiring a competitor and its product line; to defend their IP when employees leave to start their own firms; and even to protect against industrial espionage from competitors and other unfriendly agents. Selecting the right IP law firm relationship is an important part of this growth process.

To discover the key issues that medtech executives must evaluate when selecting an IP law firm, MX spoke to several large firms with medtech specialization. For a list of medtech's top IP firms, see the commercial resources sidebar.

The First Steps in the IP Process

Like everything else, the IP legal process has to start at the beginning. The process typically commences with a medtech firm contacting legal counsel to initiate a new-product patent. Of course, this is a huge, complex undertaking in itself and requires legal firms with the proper support staff, experience, and expertise. If this link in the IP legal chain isn’t strong, the whole chain can fall apart later.

Baker & Daniels (Indianapolis) recommends that clients readjust their intellectual paradigm away from simply assuming they will be focusing on their own product for patent protection. The firm has represented a number of Fortune 500 medical device companies in patent procurement, infringement avoidance, opinions, licensing, and strategic alliance transactions. The firm's intellectual property practice group includes more than 40 professionals, many of whom have backgrounds in biomedical, mechanical, electrical, or chemical engineering, or in biotechnology, chemistry, biochemistry, or computer science.

John Hoffman

"The perfect storm created by the U.S. Patent and Trademark Office (PTO) relaxing the standards for granting a patent, and a federal court system that enforces patents much more vigorously and awards huge damages for infringement, has dramatically shifted the emphasis from getting your own patents to getting around your competitors' patents," says Baker & Daniels's John Hoffman. "Product infringement clearance and designing around existing patents is probably the number-one service that we provide to our clients today."

Mark Barrish

Townsend and Townsend and Crew (San Francisco) suggests that medtech companies must strike a good balance between focusing on their own products' patent protection and studying the competitive environment. "Medical device companies vary tremendously in how successfully they address patent and other IP issues," says attorney Mark Barrish. "Some companies throw too much money at their own patents, and others are distracted by hidden or unknown patents of competitors. The companies that do the best job of addressing IP issues for a project always seem to have a key individual on board who takes enough ownership of the IP issues for that project to help plan an appropriate course of action, and to adjust the plan as circumstances change."

"Effective medical device patent counsel cannot know what a medical device company knows about its particular market, products, and competitors—but they will know enough medical device language to understand the real differences between market competitors, and enough about the overall existing medical device patent landscape to provide guidance without trying to reinvent the wheel each time," Barrish says.

Townsend attorneys have developed medtech expertise in a number of recent high-profile client engagements. In recent years, the firm has represented many start-ups from initial financing to successful IPOs and acquisitions, including a surgical robotic research project that evolved into a successful billion-dollar-plus company; a new catheter-based abdominal aortic aneurysm therapy that evolved into the industry-leading technology and was acquired by a major medical device corporation; and a needle-based femoral artery closure start-up that was acquired by a multinational corporation and has become the core of its international cardiology line.

Avoiding Regulatory Entanglement

Navigating through the network of regulatory agencies such as FDA is a major fact of life for medtech firms, and obtaining effective guidance is critical. However, the groundwork that must be established to expedite regulatory approval must be carefully laid out and not create problematic litigation issues later on, one experienced law firm advises.

Tim Malloy

"One of the key lessons we have learned deals with the interplay between FDA, which approves regulated medical devices for commercialization, and the patent litigation arena," says Tim Malloy, a board member at McAndrews, Held & Malloy (Chicago). "To obtain expedited approval, a medical device company will often compare its new product with a competitor's older product version, and then characterize it as an 'equivalent.' This has one meaning under FDA law. The very same term, however, is used by patent-law experts to describe a type of infringement. One can see how much trouble this coincidence of terms might create for those unfamiliar with both areas of the law."

Enforcing clients' IP rights, as well as protecting clients that have been unjustly accused of infringement, the McAndrews, Held & Malloy team of more than 80 attorneys has consistently achieved litigation success for medical device clients in jury trials, bench trials, and administrative dispute resolution proceedings across the country, Malloy says. The firm has handled scores of appeals before the Federal Circuit as well as the U.S. Supreme Court. In addition, the firm's $166 million patent litigation award on behalf of client Advanced Cardiovascular Systems (Santa Clara, CA)—now a subsidiary of Guidant Corp. (Indianapolis)—is ranked as one of the 10 largest in U.S. history.

Complexities of Global Markets

Creating a product for global markets brings its own set of complications due to divergent legal structures and business practices in various international markets. Choosing a firm with international capabilities is important for most growing medtech firms.

Latham & Watkins is an international law firm with more than 1600 lawyers throughout the United States, Europe, and Asia. Latham has more than 250 attorneys worldwide in its intellectual property and technology practice group. Many of them practice in the medical device and diagnostic design and manufacturing area. These attorneys are located in several major U.S. cities, along with London, Brussels, Frankfurt, Hamburg, Moscow, and Paris.

Perry Viscounty

"Latham is able to instantly assemble a worldwide team of top ntellectual property attorneys with various specialties and technical expertise to handle the most complex matters," says Perry Viscounty, global cochair of Latham's intellectual property practice group. "The ability to advise clients on a global basis gives Latham a tremendous advantage because the laws and procedures vary widely throughout the world."

The firm represented a well-known medical device manufacturer in an international counterfeiting investigation in Asia, Europe, and the United States. Latham & Watkins worked closely with FDA and similar organizations throughout the world.

Functional Foundations

Securing durable patent protection is an essential intellectual property law issue, especially considering the intensely competitive nature of medtech and the potential vulnerability to piracy in the global market.

Jeffery Lindeman

"To patent a device, focus not only on the structure and components of the device but also on its function," says Jeffery Lindeman, PhD, of Nixon Peabody LLP (Washington, DC). "Consider how to get the key, patentable concept or function into the patent claims. This can give broad patent protection covering not only this generation of the device but the next as well. This is particularly important for medical devices that may also enter the over-the-counter market, where a competitor can seek FDA approval for its device by relying on yours as a predicate device."

Patent prosecution and litigation are the foundations of Nixon Peabody's medical device practice. For example, the firm has developed portfolios of diagnostic assay patents for OraSure Technologies Inc. (Bethlehem, PA), and now represents the company in litigation enforcing its cryosurgical device patents. Complementing its patent practice, the firm also represents medical device clients in trademark and transactional matters. The transactional matters include licensing, technology transfer, and the purchase or sale of businesses.

Of course, medtech firms must reassure other partners such as investors and venture capitalists that their IP strategies are sound and can weather threats imposed by the global market. Morrison & Foerster LLP (San Francisco) represents U.S. and foreign clients, including major corporations, venture capitalists, and universities and nonprofit research institutions. Some of the firm's clients include Guided Delivery Systems, Medtronic, Medoptix Inc., C. R. Bard, NewCardio, Aqueduct Medical, Montreux Equity Partners, Thomas Weisel Healthcare Ventures, De Novo Ventures, and Pequot Ventures.

Tom Ciotti

"We work for start-ups as well as established companies, and have a significant number of venture capitalist clients," says Morrison & Foerster attorney Tom Ciotti. "In fact, we are unique in that we have a group specialized in performing IP due diligence in the life sciences (including medical devices). The firm's venture- side intellectual property due diligence practice enables us to get exposure to a wealth of medical device technology, which in turn allows us to understand many of the key technological and IP issues facing medical device companies today."

Field Expertise of Boutique Firms

Not every medtech company chooses to work with large, multinational law firms. Firms with a strong regional presence and expertise in the field can be effective advisors. What should you look for when choosing a legal partnership? Well, it doesn't hurt to inquire about relevant experience, major clients represented, and the technical expertise of staff members.

Patterson, Thuente, Skaar & Christensen (Minneapolis) is a law firm practicing exclusively in intellectual property law. Headquartered in a city that is a hotbed for the medical technology industry, the firm serves a wide variety of medical technology clients that make up a significant portion of its overall clientele. With more than 30 clients involved in medical technology fields, the firm has filed more than 500 patent applications covering various aspects of medical technology.

The majority of the firm's 32 attorneys have experience providing intellectual property protection and counseling to medical technology companies, including attorneys with PhDs in polymer chemistry, cell and developmental biology, plant breeding and genetics, chemistry, mechanical engineering, and chemical engineering. The firm also has a large litigation department dedicated to enforcing its clients' intellectual property and defending clients faced with accusations of intellectual property infringement.

Randy Skaar

"Our experience obtaining IP protection for our medical device clients, coupled with our experience counseling and representing our clients with regard to licensing and enforcement of their IP, puts us in a fairly unique position to advise our clients on how to maximize the value of their intellectual property," says the firm’s Randy Skaar.

Oppenheimer Wolff & Donnelly LLP is another Minneapolis firm with a specialty in medtech IP. The company has decades of experience working with emerging and established medical technology inventors and their companies, and also represents investors, venture capitalists, and underwriters in connection with emerging medical technology businesses. The firm's medical technology practice group comprises more than 20 attorneys who provide IP prosecution, litigation, and counseling services. Published surveys, including the annual rankings by Intellectual Property Today, routinely place Oppenheimer among the top 100 firms in the United States for patents issued.

Barbara A. Wrigley

"All of Oppenheimer's patent attorneys have experience working in the medtech industry—including a former senior executive of a leading medical device company," says Barbara A. Wrigley, partner in Oppenheimer's intellectual property practice group and cochair of the firm's medical technology industry group. "It's this kind of industry experience, paired with our depth of knowledge of intellectual property law, that enables us to address just about any business challenge encountered by a medical technology company."

According to Wrigley, Oppenheimer is distinctive because of its commitment to finding original and cost-effective solutions. "Our IP lawyers focus on what makes sense from a bottom-line perspective, not just a legal one," says Wrigley. "We stay focused on a client's strategic goals, whether we're rendering an opinion on the value of a target company's IP, managing a patent portfolio, or litigating a complex patent infringement suit in federal court or before the U.S. International Trade Commission."

Patents drafted and prosecuted by Oppenheimer attorneys have resulted in settlements and transactions in excess of $300 million. When called upon to enforce patents, the firm’s patent litigators have won collective judgments in excess of hundreds of millions of dollars.

The medical device practice at Nutter McClennen & Fish (Boston) includes 15 attorneys, technical specialists, and professional support staff who are experienced in the legal, business, and scientific issues that challenge medical device companies at all stages of growth. Many hold advanced degrees, and all have in-depth knowledge of the life sciences industries, from functional genomics and immunology to diagnostics and gene therapy.

The firm's attorneys have successfully obtained patents for 250 U.S. medical devices in the past nine years with nearly 30 medical device patents issued in the last 12 months. The firm has more than 1000 active medical device matters and regularly litigates patent issues. Its attorneys are also experienced in the full range of IP work for pharmaceutical, biotechnology, and other life sciences companies.

Conclusion

In a perfect world, protecting the integrity of a medtech firm's IP would be a nonissue. But that’s not the case in today's marketplace, where a major misstep can place the viability of a medtech manufacturer in serious doubt.

While there's no airtight protection against thorny issues developing in IP protection, the firms profiled in this article, and others listed in the accompanying sidebar, could become real partners in navigating through complex, troubled waters. Laying careful groundwork up front will most likely keep a company out of hot water. Should litigation occur, however, having a tested and effective relationship with professional legal counsel could make all the difference in the world.

Jon LeSage is a freelance writer based in Southern California.

Copyright ©2005 MX