Steps doctors should take to protect patent inventions
■ A column analyzing the impact of recent court decisions on physicians
By Tanya Albert amednews correspondent— Posted April 11, 2005.
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Los Angeles orthopedic surgeon Gary K. Michelson, MD, went to court when he believed a company breached technology agreements and infringed on patents involving an implant he invented to help speed recovery after spinal surgery in which doctors remove discs. In September 2004, a federal jury in Memphis, Tenn., said Medtronic Sofamor Danek owed Dr. Michelson and his company $110 million in compensatory damages. It awarded another $400 million in punitive damages.
Medtronic is considering its options, including appealing the jury verdict, a company spokesman said. But the case illustrates that doctors who are inventing new tools need to protect themselves.
Dr. Michelson's attorney, intellectual property litigator Robert G. Krupka, a partner with Kirkland & Ellis in Los Angeles, answered some questions about patents and contracts for AMNews.
Question: If physicians develop new tools they believe could benefit others in their field, what is the first thing they should do?
Answer: Write the idea down. Then the physician should sign and date the written description and any drawings that would be helpful in understanding the invention. Next, have a trusted (nonrelative) colleague agree to strict confidentiality and have him or her countersign the description to confirm the date of the invention. Then the physician should seek out a competent patent lawyer to evaluate the protectability of the idea.
If the result of that evaluation is positive, the attorney can assist in obtaining a patent and in getting the idea developed. The attorney also can provide advice and counsel on disclosures to potential manufacturers or distributors to seek commercial development of the invention.
Information is available from the U.S. Patent & Trademark Office about the patent system, and can be obtained online (link). However, the U.S. Patent & Trademark Office cannot file patent applications for inventors. Most physicians have lawyers with whom they work (whether for business or personal reasons, such as estate planning or the like) and can seek referrals from them to appropriate patent lawyers in their geographic area.
Alternatively, the U.S. Patent & Trademark Office maintains a list of registered patent agents and lawyers (not all agents are lawyers; it is not necessary to be a lawyer to file patent applications on another person's behalf), and a referral can be obtained in that manner.
Q: Once a physician has those details taken care of, what is the best way to go about shopping the idea to companies? For example, how do physicians best protect themselves from having their ideas stolen?
A: It is best for the physician to file a patent application before making any disclosure to third parties (other than colleagues assisting with the invention under strict confidentiality restrictions or a patent attorney). Thus, the first step is to have a patent application prepared and filed. Any disclosures made to potential manufacturers or distributors should be done under the terms of a nondisclosure agreement, which a lawyer can help draft. Strict adherence to the proscriptions of the [nondisclosure agreement] is important.
Most physicians will know which companies are most involved in a particular field, and which are the best candidates to develop a particular invention. It is also very helpful, if possible, for the physician to prepare a prototype of the invention, so that the prospective manufacturer or distributor can actually see the invention. However, care should be taken not to allow a prototype to leave the physician's possession. Companies have been known copy prototypes.
Q: When a physician decides to sign a contract with a company, generally speaking, what are some key details that need to be covered?
A: This is a difficult question to answer in the abstract, because each contract is unique to its particular circumstances. However, some important provisions that should be considered for any agreement include:
- Clearly defined obligations to obtain patent protection throughout the world.
- Provisions for enforcing patents against infringers.
- Full audit rights to assure that payments due under the agreement are accurately reported and paid.
- Clearly defined obligations on the part of the manufacturer/distributor to devote "best efforts" or specified efforts in support of the development and sale of products based on the invention.
- Dispute resolution provisions satisfactory to the inventor.
Q: What should a physician do if he or she believes a company has violated a patent or a contract?
A: A physician should consult first with an experienced lawyer prior to making any accusations or engaging in any dispute resolution activities with an alleged infringer or a company that the physician believes has breached a contract.
This is a realm in which the companies have a great deal of expertise. Physicians, as intelligent, capable and resourceful as they are, typically do not have extensive business or legal experience.
Thus, most physicians do not have the expertise necessary to counter the business and legal skills of the companies with whom they are dealing. Retaining the services of an experienced lawyer is as important to a physician seeking to go up against an infringer or breaching business party as it would be for a lawyer to engage the services of a skilled physician to go up against a disease or an injury.
Q: How unusual is a jury verdict like the one in Dr. Michelson's case?
A: Less than 2% of all lawsuits are resolved by trial. And "average" jury verdicts are far lower than the jury verdict obtained in the Michelson case. Although very modest when measured against the sales of Medtronic covered by Dr. Michelson's inventions, the jury verdict in favor of Dr. Michelson was the largest jury verdict in the history of the Western District of Tennessee. Large jury verdicts (in the hundreds of millions of dollars) are not common but are possible when the facts support them, as they did in the Michelson case.
Q: This case was about a patent that involved a surgical instrument. There has been an ethical debate about whether physicians should obtain patents on surgical procedures and pursue lawsuits against colleagues they believe infringe on the patent. Where have courts come down on patents for surgical procedures -- have they generally been dismissing those cases?
A: Only a few of the patents involved in the Michelson litigation involved surgical instruments, although the surgical instruments involved are widely used because they substantially improve the safety and speed of surgery. The patentability of surgical procedures and instruments is governed by the U.S. Patent Act, which was enacted by Congress pursuant to authority of the Patent Clause of the U.S. Constitution. The validity and enforceability of patents are determined in accordance with the Patent Act, which allows patents covering new, useful and unobvious products, instruments, or methods.
I am not aware of any instance where a court has dismissed a case because the patent involved surgical procedures as compared to instruments or products.
Q: Is there anything else that you believe physicians should be aware of when it comes to patents?
A: Patents promote innovation by encouraging inventors to develop new ideas and share them with others. The patent system provides a reward for innovation and disclosure, granting limited exclusivity that allows the innovator to recoup the investment made and, hopefully, a profit that will encourage further innovation. Thus, patents are pro-competitive, not anti-competitive.
Although some physicians may decide, for professional or personal reasons, to openly share innovations with fellow physicians, others might refrain from doing so because of fear that others will take the credit or even seek to get a patent themselves that could exclude the originator from practicing the invention.
On a practical level, obtaining a patent is often necessary to induce manufacturers and distributors to undertake the significant expense to develop, obtain regulatory approval for and promote new innovations. Unless a manufacturer has the ability to protect its investment, it will be reluctant, if not unwilling, to make the investment necessary to bring an innovation to market, and make it available to physicians so they can help patients.
Thus, patents can promote more widespread use of innovations -- for the benefit of patients. Although this might seem counterintuitive, the proof comes from the experience of countries that have well-developed patent systems compared to those where intellectual property is not well protected.
Often innovators, and innovation, flee places that do not protect intellectual property well to places where intellectual property is protected. This benefits those who live in countries with well-developed intellectual property systems.
Tanya Albert amednews correspondent—