New directions in medical devices create challenges in IP Protection

A major new trend in medical devices was commented on repeatedly at the AusMedTech conference earlier this week. This is a consequence of the convergence, and increasing sophistication, of several key technologies.

In this class of device, a relatively simple sensor is disposed on a patient. This may be implanted or worn, and typically senses a particular parameter. The sensor communicates wirelessly to another device, which then sends the data via the internet to a remote server, or the cloud, for processing. The data is then processed, often in a very sophisticated way, and reports or provides indications to patients and/or their physicians. Device systems addressing conditions as diverse as epilepsy, hypertension, congestive heart failure and incontinence were discussed at the conference.

This is a very powerful new technical methodology, which also creates a new business model. As well as the supply and fitting of the sensor device, an additional source of revenue comes from the on-going processing, reporting and management of the devices and the processing. From the device manufacturer’s perspective, there are risks that, for example, the user or their physician could contract with an alternative provider for the processing and reporting work. There are thus multiple risks to the revenue base of the business – not just supply, fitting and servicing of the device, but also the on-going processing and report service.

In some cases, it may be possible to bundle the on-going services as free, or paid up front, particularly when the life of the product is relatively short. If the device is intended to be worn occasionally, for example in a blood pressure monitoring situation, then the business could proceed mainly as a fee for service operation. However, these
options are difficult for an implanted device, or one intended to be operated by an intermediary on multiple patients. To some extent, and in some situations, careful software licensing may be able to reduce the risks.

In terms of patent protection, the challenge is how to control the service aspect. One issue is territory – if the processing is happening in the cloud, then to the extent it is localised in any territory, that may not be a territory where the patent is effective. Generally, where a method is claimed, if key steps are not taken in the jurisdiction, then the patent is not infringed. Even if method steps are spread across multiple jurisdictions where there are patents, because only part of the method is performed in one place, there may be no infringement. For example, the pre-processing of the data may occur on a patient owned device; the data is initially processed in a second country, the report compiled and generated in a third country, and the report sent back to the physician in the first country. Depending upon the system, it may not even be possible with any certainty to define the territory where the steps are undertaken.

This kind of issue is inherent in cloud computing. Very careful attention to matching the scope and framing of the patent, in a full understanding of the business model and risks in that model, is critical to obtaining effective protection. It is critical for such businesses to undertake a careful analysis of their patent portfolio with a view to minimising the opportunities for opportunistic infringement.

by Peter Franke

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