Obtaining issued patents on your medical devices is an excellent first step. However, you should be ready to enforce these patents to disincentivize purposeful or accidental infringements, draining bottom lines. When organizations detect unauthorized uses, it is best to consider strategic actions. This guide blog summarizes how to enforce medical device patents effectively.

Prioritizing Patents for Active Enforcement

Since enforcement typically can involve significant costs and most companies have limited legal budgets, patentees must prioritize patents according to their overall value. Significant resources are employed to monitor and enforce the most valuable patents, while fewer resources are used on the less valuable patents. Factors influencing the valuation of patents include:

Core Technologies: Broad patents covering the core technologies common to many systems, products, and services, or product lines and service groupings deserve foremost attention since copied elements undermine expansive portfolios.

Products Generating Major Revenue – Patents that cover bestseller or ‘Flagship’ products also justify protections, ensuring market positions and preventing replicas or foreign counterfeits. Even after the patents expire, sales will remain artificially high due to the residual consumer’s familiarity with the products.

Young Product Line: Recently issued or acquired patents require substantial enforcement expenses. However, if successful, these will result in favorable early case law, establishing favorable precedents that usually result in licensing income that can last for decades.

Easily Reproduced – Devices that can be easily replicated are prone to imitation and need patents and monitoring to deter ‘knock-offs’. Some markets may advance so rapidly that many entities may produce the product before the patent can be enforced against a first infringer.

Aging Product Lines: Patents protecting the more peripheral or aging product lines that only marginally contribute to income and/or growth have less value.

Enforcement Tactics:

Several different enforcement options may be taken once an entity has been found to infringe at least one patent. The enforcement options include:

Cease & Desist Notices: Sending a formal notice to the alleged infringer of the patent, asserting that they are infringing the patent, and demand that they immediately cease making, using, selling and/or importing the alleged infringing product, and hand over infringing products to the patentee, will take appropriate enforcement steps.

Negotiations: After receiving a Cease-and-Desist Letter, the parties typically meet for a negotiation. At this meeting, they try to resolve the adverse matter. One way to resolve the matter is for the patentee to license the alleged infringer.

Licensing: A license is an agreement between the parties where the patentee grants some patent rights to the alleged infringer and forgoes litigation for something of value. If these are monetary payments, they are referred to as royalty payments. Agreeing to a license allows the patentee to receive revenue from his/her IP while waiving further costly legal actions. Many companies prefer negotiating fees benefiting both parties rather than disruption, especially for unintentional violations. Most adverse patent matters settle and allow some form of a license under the patent(s).

The value provided by the alleged infringer can also be other items of value, such as products, equipment, rights under their IP, markets, services, etc. If the alleged infringer grants licensing rights under their IP, this is referred to as a cross-license.

Civil Litigation: If the parties do not agree upon a settlement, the patentee may continue with the litigation. Infringement of patents falls under federal statutes in Title 35 of the United States Code. The patentee would decide if it would like to continue or not. If it decides to continue, it files a Patent Infringement Complaint in the Federal District Court.

There are interrogatories, production of documents, depositions, and other discovery performed by both Parties over several months.

If a Jury is requested, there is jury selection. There are Pretrial Motions, Hearings, and Judgments on the Motions.

There may be Interlocutory Appeals.

Then, there is a trial in which both Parties provide opening arguments, introduce evidence, question witnesses, and provide closing arguments. As you can imagine, this is very costly. It is estimated that legal fees for an average patent litigation (in District Court) are more than one million dollars.

If the patentee successfully prosecutes its patent infringement lawsuit in federal Court against the alleged infringer, the Court will award damages. These damages may be lost profits, a reasonable royalty and/or injunctions blocking further violations.

Overall, the time required by the patentee and the alleged infringer to provide documents, answer questions, prepare for depositions, etc., is significant. The loss in productivity of both the patentee and the alleged infringer is also significant.

The total impact upon the Parties can be many times greater than the actual monetary damages.

Therefore, before committing to litigation, one must look at the cost of the loss in sales due to the infringement, productivity loss, eDiscovery, expert witnesses, depositions, travel, and Court costs.

There are other costs that cannot be monetized, such as the stress of two-plus years of litigations, embarrassment of depositions, stress of cross-examination, etc.

For these and other reasons, most patent litigation cases settle. Most settle with some form of a license. A small minority go through trial and judgment.

US International Trade Commission (ITC) – The process begins by filing a complaint with the ITC alleging that an entity is trying to import infringing products. After the ITC verifies that the Complaint is correct, it can ban shipments with the infringing goods from entering US Ports. This approach focuses on keeping foreign IP theft completely offshore and preventing infringing goods from entering the US.

US Customs Office: Similarly, recording patent rights with customs officials can prevent overseas organizations from exporting infringing medical devices into the US. Customs can inspect cargo and block imports when violations are identified at the ports of entry. This also prevents infringing goods from arriving in the US.

Enforcing patents deters infringement, reduces competition for the patented products, allows the patentee to receive a premium cost for the product in the market, and typically increases sales.

For help with your medical device patent, feel free to contact Zale Law.

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