It is estimated that India spends $40 billion on healthcare annually, over 15,000 hospitals spend 50% of their funding while pharmaceutical companies spent over 30% on medical devices. The amount spent on medical equipment makes up around 20% of all healthcare costs.
The market for medical devices in India is estimated to be around. Rs. 50,000 crores annually and is expanding at a rate of more than 15%. Hence, Intellectual Property (hereinafter referred to as “IP”) naturally has become an important topic in this context.
A crucial component of healthcare nowadays is medical technology. To protect the relevant IP, it is vital to use acceptable approaches, facilitate commercialization, and remain competitive with minimum resistance.
WHAT ARE MEDICAL DEVICES?
The phrase “Medical Device” is specifically not defined anywhere. However, the Medical Device Rules 2017(hereinafter referred to as “MDR”) do, however define the word as any product that is intended to be used alone or in combination with another product, in the diagnosis of diseases or in the cure, mitigation, treatment, or prevention of diseases, injuries, life support, contraception, in humans or other animals.
Further, World Health Organization (hereinafter referred to as “WHO”) defines medical device as a medical device can be any instrument, apparatus, implement, machine, appliance, implant, reagent for in vitro use, software, material or other similar or related article, intended by the manufacturer to be used, alone or in combination for a medical purpose
TYPES OF INTELLECTUAL PROPERTY FOR MEDICAL DEVICES
The Indian Medical Device industry has been growing rapidly in recent years, with a compound annual growth rate of 15.8% between 2015 and 2020. This growth has been driven by several factors, including an increase in healthcare spending, the rise in the incidence of chronic diseases, and the Government’s focus on improving healthcare infrastructure.
As the Indian Medical Device industry continues to grow, it is becoming increasingly important for companies to adopt effective IP strategies to protect their innovations and maintain a competitive advantage. Some of the key IP strategies that Medical Device companies can adopt in India will be explored below:
- Patent Protection: Patent protection is one of the most common IP strategies used in the Medical Device industry. Patents provide companies with exclusive rights to manufacture, use, and sell their inventions for a period of 20 years from the date of filing. This means that competitors cannot legally manufacture or sell the same device during this period.
An invention must be original, non-obvious, and capable of industrial application in order to be granted a patent in India. Further, medical device companies can protect their innovations through patents covering the product itself, its use, the manufacturing process, or any new improvements or modifications. In addition, companies can apply for international patents through the Patent Cooperation Treaty (hereinafter referred to as “PCT”), which allows them to protect their innovations in multiple countries simultaneously.
- Trademark Protection: Trademark protection is another important IP strategy for Medical Device companies in India. A trademark is a distinctive symbol, word, or phrase that is used to identify a company’s products or services. By registering a trademark with the Trademark Registry, Medical Device companies can prevent competitors from using similar names or logos that could confuse customers.
Trademarks are valid for a period of 10 years and can be renewed indefinitely. In addition, companies can use trademarks to build brand recognition and differentiate their products from those of their competitors.
- Trade Secret Protection: Even though not statutorily, Medical Device companies can also protect their innovations through trade secret protection. Trade Secrets are basically confidential information that provides a competitive advantage to a company. This can include the formulation of a product, manufacturing processes, or any other confidential information that is not publicly available.
To protect trade secrets, medical device companies can implement strict confidentiality agreements with employees and partners who have access to sensitive information. In addition, companies can take steps to physically secure their facilities and information systems to prevent unauthorized access.
- Licensing: Licensing is another IP strategy that medical device companies can use to protect their innovations in India. By licensing their technology to other companies for use in different medical applications or geographic regions, companies can generate revenue and expand their reach without having to invest in additional resources.
Licensing agreements typically involve the payment of royalties to the patent holder. In addition to generating revenue, licensing agreements can also lead to collaborations and partnerships that can benefit both parties involved.
- Copyright: At manufacturing stage, copyright content associated with Medical Device must be protected. Artwork and text on packaging as trade dress, instructions leaflets and advertising is likely to be protected by copyright.
- Design: The design of the Medical Device will be protected by a design patent. A design patent offers the patent holder a monopoly over the design and prohibits anyone else from commercializing it or a design similar or identical to the patent holder’s design unless the patent holder consents or a license is obtained.
INTELLECTUAL PROPERTY AT VARIOUS STAGES OF MEDICAL DEVICE
IP protection offers a potent mechanism for safeguarding creative concepts and assisting in the creation of goods that will eventually benefit patients, regardless of where the innovation came from. A robust IP portfolio may be a useful asset for an early-stage company that is not yet generating any revenue because it might take years to create and gain regulatory approval for Medical Devices.
The following stages comprises of an optimal life cycle for a Medical Device:
- Invention Disclosure: The first stage in securing IP protection for a Medical Device is to create an invention disclosure. This is a document that describes the invention in detail, including how it works and how it is different from existing technology. The invention disclosure is usually prepared by the inventor or the company’s technical staff.
- Prior Art Search: Once the invention disclosure is created, the next stage is to conduct a prior art search. This involves searching for any existing patents, publications, or other sources of information that describe similar technology. The goal of the prior art search is to identify any potential obstacles to obtaining a patent and to ensure that the invention is novel and non-obvious.
- Patent Application: If the prior art search does not uncover any obstacles, the next stage is to prepare and file a patent application. A patent application is a legal document that describes the invention in detail and sets out the claims that the inventor is making. The application must be written in a specific format and must include all the required information and drawings.
- Patent Examination: Once the patent application is filed, it is examined by a patent examiner at the relevant patent office. The examiner will review the application to ensure that it meets all the requirements for patentability, including novelty, non-obviousness, and usefulness. The examiner may also request additional information or amendments to the application.
- Patent Issuance: If the patent examiner determines that the application meets all the requirements for patentability, the next stage is for the patent office to issue a patent. The patent will include the claims that the inventor is making and will provide legal protection for the invention for a certain period of time usually 20 years from the filing date.
- Enforcement: Once a patent is issued, the inventor or the company that owns the patent can enforce their rights by taking legal action against anyone who infringes on the patent. This may involve filing a lawsuit or seeking an injunction to prevent the infringing activity.
CHALLENGES FACED BY MEDICAL DEVICE COMPANIES
The challenges medical device companies face in IP protection and explore potential solutions to overcome them are discussed below:
- Complexity of Patentability: One of the primary challenges in IP protection for Medical Devices is the complexity of patentability. Medical Devices often involve a combination of hardware, software, and biotechnology, making it challenging to determine what is patentable and what is not. Moreover, the patentability of Medical Devices is subject to strict regulatory requirements and may require regulatory approval before a patent can be granted.
- Patent Infringement: Another significant challenge in IP protection for Medical Devices is patent infringement. Due to the complexity of Medical Device technology, there is a high risk of unintentional infringement of existing patents. This can lead to costly litigation, loss of profits, and damage to a company’s reputation.
- Counterfeit Devices: Counterfeiting of Medical Devices are a growing problem, particularly in developing countries. Counterfeit devices not only harm patient health but also pose a significant threat to Medical Device companies’ IP rights. Counterfeiters often replicate a device’s design, branding, and packaging, making it difficult for consumers and regulatory authorities to differentiate between genuine and counterfeit products.
- Trade Secret Protection: In addition to patent protection, Medical Device companies also rely on trade secret protection to safeguard their IP. However, protecting trade secrets can be challenging, as they are often subject to employee turnover and the risk of unintentional disclosure.
- Global Competition: Medical device companies face competition from both domestic and international companies, making it difficult to protect their IP assets in all markets. Different countries have different IP laws and enforcement mechanisms, and companies may need to navigate complex legal systems to protect their innovations.
Hence, IP protection is a critical challenge for Medical Device companies, as it is essential for protecting innovations, attracting investment, maintaining a competitive edge, and improving patient safety. Medical Device companies must work with experienced IP attorneys and invest in advanced security technologies to overcome the challenges of IP protection. By doing so, companies can continue to develop innovative medical devices that benefit both the company and the public while safeguarding their IP rights
The bottom line is that a product’s success on the market will create rivalry, and the intensity of that competition will probably be inversely correlated with the success of the pioneering product. No matter where innovation comes from, there is conflict between IP budgets and other budgets during the development stage.
In order to be effective, IP protection must be initiated early because to the prevalence of patent restrictions and the rush to the patent office in India. In the medical industry, however, there are no reliable indicators of a product’s success, just as in any other sector. This prompts many to wonder how much money should be invested in IP protection and when it would be appropriate to do so.
– Team AMLEGALS, assisted by Ms. Juhi Bansal (Intern)
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