Read Time: 2 minutes
IP LITIGATION TRENDS:
- There is likely to be a move away from patent litigation over mechanical devices toward medtech software innovations.
- We anticipate more litigation around non-practicing entities and more litigation involving biologics.
In medical devices, the patent litigation battleground is moving away from mechanical devices toward litigation around medtech inventions that rely heavily on software implementation. In light of the significant innovation now occurring in the medtech sector, the primary objective of IP litigation is often the increase of market share.
With the significant growth of medtech inventions, there is an expectation that non-practicing entity (NPE) litigation — claims brought by entities that acquire patent rights but do not offer products or processes on the market — will also rise in the life sciences industry. Until now, NPE activity in medtech has remained remarkably low, just 23.3% of all cases from 2015 to 2021 (compared to 60–90% in other industries), according to a recent article on IAM. But as the medtech sector continues to achieve growth and profitability, NPE litigation is expected to increase.
We expect to see an increasing risk of patent invalidity under 35 U.S.C. §101 for lack of subject-matter eligibility, another import from the high-tech industry. As in the high-tech industry, we expect more medtech companies to turn to protecting their software innovations as trade secrets rather than publicly disclosing them in patent filings.
The increase in medtech litigation will impact both large, established players and smaller startup companies looking to gain a foothold in traditional markets. Smaller startup companies often tend to have innovative products and are looking to disrupt markets. This presents challenges to established companies, which fuels competitor litigation. Companies will need to increasingly prepare for inevitable litigation sooner and focus more on protecting their markets.
We also anticipate an increase in litigation in the biologics area, as pharmaceutical companies look to develop and bring to market products including biosimilars. This is likely to be particularly marked among big pharma companies, and will to a lesser extent affect biotech startups. One factor driving this type of litigation is the historically broad scope of biologics patents, which creates bona fide patent invalidity issues: for example, in relation to patent “enablement,” meaning whether a patent makes sufficient disclosures to enable a person of skill in the art to make and use the invention. But those considering embarking on biologics should bear in mind that many biologic patents have encountered effective challenges in litigation.
IP LITIGATION TIPS:
- Medtech companies should:
- ensure that their patent portfolios are sufficiently robust, so that they can pursue infringers and protect patents defensively if sued by a competitor;
- put robust confidentiality provisions in their employment agreements and separation agreements; and
- implement strict measures to protect their software innovations as trade secrets where possible, such as encrypting where necessary, and ensuring that disclosure is made only on a need-to-know basis within the company.
- In the biotech field in particular, patents should be written in a manner that better withstands enablement scrutiny. This includes having claims that are commensurate in scope with the patent disclosure.
- Investors should look for companies that have a robust patent portfolio, which can be used to create new market opportunities and defend existing markets.