Ian Bolland spoke to Thomas Prock from Marks & Clerk about the controversy surrounding IP rights stopping the unauthorised 3D printing of medical equipment, and the advice that can be provided to medtech firms during the Coronavirus pandemic.
Given the amount of manufacturers switching their production to medical equipment during this crisis, how easy is it for them to, perhaps unwittingly, infringe on the IP rights of another company?
Avoiding other company’s IP rights requires manufacturers to consider the IP landscape within which they operate carefully. If the required amount of care is taken then risks can readily be identified and dealt with. Courts will not accept lack of knowledge of the existence of an IP right as an excuse for infringing the right so this preparation is essential.
The better an overview a company has over its competitors’ IP landscape the easier it gets to identify competitor’s IP rights. Companies that switch to a new area of commerce are at a disadvantage in this respect and run a higher risk of (inadvertently) infringing other company’s IP rights. Extra care is required in this respect. The indemnity offered by the chancellor in respect of IP right infringement in the context of the efforts in fighting COVID-19 is testament to this risk.
What can medtech companies do to protect their IP whilst also do the right thing?
If a company’s IP position is to be protected then filing a patent application is the most reliable way of doing so. Patent attorneys have seen an uptick in the number of patent applications that are being filed for medtech innovation since the beginning of lockdown, indicating both the role of medtech in tackling COVID-19, and a clear understanding on the part of manufacturers of the need for IP protection.
While some have criticised IP rights holders during the coronavirus pandemic, making the familiar argument for an ‘open source’ approach to IP, it is actually clear that having secure IP makes it easier, not harder, for IP rights holders to do the right thing and contribute to pandemic responses.
Having IP protection affords the innovator an element of control over the dissemination of her or his invention. The innovator can, for example, allow others to manufacture a device he/she has invented but impose strict quality requirements on such manufacture, for example for the purpose of ensuring product safety or consistency of performance of the product, irrespective of who has manufactured it. Any licence under an IP right may further regulate payments that are to be made to the innovator. Whilst arranging royalty payments may well seem out of place in an emergency situation, allowing the placing of a large amount of non-disposable product on the market to cope with an emergency can keep the market saturated for years to come. This is likely to significantly affect the future performance of the IP right holder in later years and must be accounted for at the time of IP sharing.
What kind of things are medtech companies most at risk from when it comes to IP infringement?
It takes considerable time and investment to get a product market ready, not least so as obtaining the requisite regulatory approval for a new product is onerous. If the new product is then found to infringe a competitor’s IP right this investment is at risk. Being prevented from continued sale of the product also comes with a large loss in credibility for sales of other products and may deter potential buyers based on a perceived lack of legal certainty.
Medtech companies tend to mitigate this risk by investigating the IP environment within which they operate in detail during the product development process with a view to avoiding potentially problematic third party rights. Additionally medtech companies tend to fervently protect their own innovation. This does not only allow them to protect their market segment but also provides a bargaining chip for cross-licencing agreements, should they inadvertently and despite all efforts to avoid infringement, find themselves in an infringement situation.
In common with other manufacture based industries, the medtech market is also vulnerable to disruption from new technologies such as AI and 3D printing. It is vital therefore that when seeking IP protection, medtech companies don’t just protect against infringers in the present tense, but also consider possible future infringers who might – for example – replicate a product in a digital format that can then be downloaded and printed with a 3D printer. Patents have a long lifespan, and good IP should be future proofed ensuring long-term protection for the rights holder.
What did you make of the government’s move to protect ventilator manufacturers against IP rights?
The indemnity offered by the government is a necessary provision when trying to persuade manufacturers to operate in a new area of commerce, given that the risks of inadvertently infringing a third party right are high, as discussed above. As such, this indemnity must be seen as an enabler. That it’s breadth is ill defined should be of some concern to those seeing the indemnity as a mechanism for de-risking their new activities though it must be said that, given the speed at which the indemnity had to be provided, providing a clearer definition may well have run the risk of terms of the indemnity not being as well-crafted as is desirable. By keeping the scope of the indemnity somewhat undefined the government maintains some room for manoeuvre when the indemnity is called upon. In the meantime manufacturers relying on the indemnity have to hope that the government will decide to use this room generously, should the need to rely on the indemnity arise. It would appear that manufacturers are happy with this, given their keen interest to help in the fight against COVID-19.
When it comes to 3D printing – given it can be done at home and in various workplaces – what kinds of IP infringements have you come across so far in the life science space?
While we cannot discuss individual cases, it is safe to say that sophisticated players have been very keen to check their IP position before they start to 3D print products, often at very short notice. Small companies and private individuals printing products in small batches are clearly those most at risk of inadvertent IP right infringement. Whist is may well be unlikely that they will be pursued for monetary reasons, IP right holders may well seek to ensure that replicas of their products meet the necessary quality requirements.
In an article on 8 April, you speak of a need for companies to proactive to protect IP – given a health crisis has had a knock-on effect into other sectors to make things challenging, what advice can you give medtech firms to quickly secure their IP?
As mentioned above, we have seen a distinct increase in patenting activity in the medtech field since the beginning of lockdown. Innovators in this space have an immense contribution to make to global efforts to beat coronavirus, but should also maintain a focus on IP rights – thus their mitigating downstream economic challenges. At the same time other people’s IP rights should not be ignored and the required due diligence in finding these rights and assessing the risk associated with them should be expended.
3D printing has become a prominent issue during the coronavirus pandemic, what have we learnt?
The Coronavirus crisis has highlighted both the risks and the benefits presented by 3D printing. In terms of the beneficial applications of this technology, we have seen how 3D printing can allow for the rapid production of medical technology, often at dispersed sites and without any great deal of technical knowledge necessary on the part of the 3D printer operator.
The other side of this coin however is the IP questions this raises. 3D printing relies upon creating a ‘digital twin’ of a product, the design file which can be sent to a printer. While this opens up new worlds of possibility, it also presents manufactures of physical goods with a challenge similar to that faced by the entertainment industry when streaming came along. The key question is, how can innovators protect both the physical or analogue expression of their innovation, while also protecting the digital version? In an increasingly digital economy, protecting both is crucial.