| Can patent lawsuits in the medical device industry be | | | | duty to disclose all information known to be material |
| forecast? Recent studies suggest that certain | | | | to the patentability of the invention. To discharge this |
| features of patent applications themselves tend to | | | | duty, patent applicants typically file what is known as |
| correlate with a higher chance that some patents will | | | | an information disclosure statement, commonly |
| end up in court. Innovation is at the heart of the | | | | referred to as an IDS. In the IDS, the applicant lists all |
| medical device industry. As with many industries, if | | | | of the U.S. patents, foreign patents, and non-patent |
| you are not constantly working to bring new | | | | literature that they are aware of and that is relevant |
| products and technology to the market, there is a | | | | to the invention. Also, a USPTO patent examiner |
| good chance you will not survive. Companies that are | | | | conducts a search of the prior art and may cite prior |
| successful, and that continue to survive, invest | | | | art against the applicant that was not previously |
| millions of dollars in research and development every | | | | disclosed in an IDS. |
| year to create new or better products. Companies | | | | When a patent is granted, the prior art citations |
| that are successful, and that continue to survive, | | | | made of record during prosecution before the |
| invest millions of dollars in research and development | | | | USPTO are listed in the patent. Researchers have |
| every year to create new or better products. Not | | | | used this citation information to conclude that the |
| only are these companies investing in the | | | | number of prior art citations appearing in a patent is a |
| development of new technology, they are also | | | | good predictor of whether a patent is likely to be |
| investing in the protection of their innovations | | | | litigated. One study found that litigated patents on |
| through the patent system. In fact, for fiscal year | | | | average cited 14.2 U.S. patents, while non-litigated |
| 2006 the United States Patent and Trademark Office | | | | patents cited only 8.6 U.S. patents. The study also |
| (USPTO) reported a record of more than 440,000 | | | | showed that litigated patents are more likely to be |
| patent applications filed, more than double the | | | | cited as prior art by other issued patents, and that |
| number of applications filed ten years ago. | | | | litigated patents include more self-citations, that is, |
| Of course, with the record number of patent | | | | citations to other patents owned by the same |
| applications being filed, and the large number of | | | | assignee. |
| patents issued each year, it would be logical to | | | | How do patents from the medical device industry |
| expect that the number of patent related lawsuits | | | | compare? Again, using the small sample of endoscope |
| would also increase. Recent statistics tend to | | | | patents noted above as a proxy for the medical |
| substantiate this logic as more and more patent | | | | device industry, the average number of U.S. patents |
| owners are turning to the courts to help protect their | | | | cited was approximately 37. This is significantly more |
| valuable intellectual property assets. For example, | | | | than the study's finding of 14.2 U.S. patents. Does this |
| from 1995 to 2005, the number of patent lawsuits | | | | result mean that medical device patents are more |
| filed in the United States increased from | | | | likely to be litigated? Not necessarily. The study notes |
| approximately 1700 to more than 2700, a 58% | | | | that two particular categories of prior art citations |
| increase in just 10 years. | | | | (citations received and self-citations) are more |
| However, the chances of a lawsuit remain low on a | | | | significant predictors of litigation. Although the study |
| probability basis. While the number of patent suits | | | | does not cite an average for self-citations, it does |
| filed has substantially increased over the past ten | | | | find that litigated patents received an average of 12.2 |
| years, it is interesting to note that recent studies | | | | citations from other patents, compared to only 4.1 |
| estimate that on average only roughly 1% of U.S. | | | | citations received on average for non-litigated |
| patents will be litigated. However, these studies also | | | | patents. The average number of self-citations and |
| note a variety of characteristics that tend to predict | | | | citations received for the endoscope patents were |
| whether a patent is likely to be litigated. These | | | | only 1.74 and 0.34, respectively. Nevertheless, as the |
| characteristics include: (1) the number of claims | | | | study authors suggest, the large number of prior art |
| describing the invention; (2) the number and types of | | | | citations found in this small sample set may indicate |
| prior art citations; and (3) the "crowdedness" of the | | | | that the applicant anticipated the prospect of litigation |
| technological field. Each characteristic is described | | | | and took reasonable steps to make the patent as |
| below, including how the characteristic relates to the | | | | strong as possible. Similarly, the large number of |
| medical device industry. | | | | citations may be due to attempts to get around prior |
| Number of Claims | | | | art in the crowded and ultra-competitive medical |
| A patent must include at least one claim that | | | | device field. |
| describes with particularity what the applicant regards | | | | Crowded Fields |
| as his invention. The claims of a patent are often | | | | Both of the previously discussed characteristics of |
| analogized to the property description in a deed to | | | | litigated patents have mentioned the idea of crowded |
| real estate; both define the boundaries and extent of | | | | technological fields. It may be obvious, but the term |
| the property. Since the claims set the boundaries of | | | | "crowded field" refers to an area of technology |
| the invention, the applicant has an incentive to define | | | | where there are many competitors and many issued |
| the invention through a number of broad claims. | | | | patents that define the technology. Thus, for patents |
| However, in some technological areas where there is | | | | that are issued in a crowded field, there is by |
| a vast amount of prior art, the applicant may have | | | | definition more competition and hence more |
| to define the invention through a number of narrow | | | | opportunity that the patent will be litigated. |
| claims to avoid the invalidating prior art. | | | | Under the current U.S. patent classification system, |
| So how does the number of claims appearing in a | | | | which includes over 430 classes, there appear to be |
| patent correlate to the likelihood that the patent will | | | | eight classes that are directly related to the medical |
| someday be litigated? Empirical studies have found | | | | device industry. Within these eight classes, there are |
| that litigated patents include a larger number of claims | | | | over 2300 subclasses in which a medical device |
| as opposed to non-litigated patents. In fact, one | | | | patent may be classified. The large number of classes |
| study determined that litigated patents had nearly 20 | | | | and subclasses seems to suggest that the medical |
| claims on average, compared to only 13 claims for | | | | device field, as a whole, would likely be considered a |
| non-litigated patents. Researchers cite a couple of | | | | crowded field. Moreover, most medical device |
| reasons that help explain their findings: the perceived | | | | manufacturers are sophisticated and have a better |
| value of the patent and the crowdedness of the field | | | | understanding of the value of their intellectual |
| of technology protected by the patent. | | | | property. Since innovation is the lifeblood of the |
| Patent claims are easily the most important part of | | | | industry, it makes sense that the industry protects |
| the patent. Therefore, it should come as no surprise | | | | more of their inventions, which leads to more medical |
| that claims are expensive to draft and prosecute. | | | | device patents being issued. Thus, more patents in |
| Paying more money for a larger number of claims | | | | the technological field bring about a higher likelihood of |
| suggests that the patentee believes a patent with | | | | patent litigation within that field. |
| more claims is likely to be more valuable. However, | | | | At least one study indicates that patents on medical |
| some researchers conclude that the reason litigated | | | | devices are significantly more likely to be litigated |
| patents have more claims than non-litigated patents is | | | | than the average of all patents. The study provides |
| that the patentee knew the patent would be | | | | an explanation for why medical device patents are |
| valuable, anticipated the prospect of litigation, and as | | | | more likely to be litigated by noting that the medical |
| a result drafted more claims to help the patent stand | | | | device industry, as a whole, view patents as valuable |
| up in litigation. | | | | assets. |
| The field of technology protected by the patent may | | | | Conclusion |
| also explain why patents with a large number of | | | | Patent litigation is, in fact, on the rise. The empirical |
| claims are more likely to be litigated. In a crowded | | | | studies conducted over recent years have identified |
| technological field there will likely be more | | | | some of the characteristics that are strong |
| competitors who are developing similar products. | | | | predictors of whether a patent is likely to be litigated. |
| Therefore, it seems to make sense that patents | | | | A large number of claims and prior art citations may |
| having a large number of claims in these crowded | | | | increase a patent's likelihood to end up before a |
| fields are more likely to conflict with competitors. | | | | court. A crowded technological field may also lead to |
| In order to get a general idea of how the number of | | | | a higher risk of patent litigation. |
| claims relate to the medical device industry, 50 of the | | | | By virtue of being in such a crowded field, the |
| most recently issued patents for endoscopes were | | | | medical device industry will likely remain very litigious. |
| analyzed. The results show an average of 17 claims | | | | Of course, this race to the courthouse is indicative of |
| per patent. This number falls somewhere in the | | | | the value that the industry as a whole places on its |
| middle of the claim numbers for litigated and | | | | innovations, and hence its survival. |
| non-litigated patents cited above. It would seem | | | | © 2007, Gallagher & Dawsey Co., LPA April |
| more likely, according to the empirical studies, that | | | | 2007 |
| these patents will have a higher chance of being | | | | DISCLAIMER |
| litigated. In addition to having a higher chance of | | | | We hope you understand that we cannot possibly |
| being litigated, these results may indicate that the | | | | give accurate legal advice to all inventors in a brief |
| crowded medical device industry values their patents | | | | article on intellectual property issues. Accordingly, |
| and anticipates litigation, with the end result being | | | | nothing in the above is intended as specific legal |
| patents having a larger number of claims. | | | | advice to any person. Such legal advice can only be |
| Prior Art Citations | | | | given by a qualified practitioner after a careful review |
| Under U.S. patent law, the inventor and every other | | | | of all the individual facts. We urge you to consult us, |
| person who is substantively involved in the | | | | or another licensed professional, before you proceed. |
| preparation and prosecution of an application has a | | | | |