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How to protect your idea for a new medical device

on June 9, 2011 Source: Healing Innovation

We have all heard stories from doctors about some medical device company stealing their idea for a new product. Perhaps, there are real medtech bandits on the prowl, but in the vast majority of cases, it’s more a matter of misconceptions and miscommunication.

Critics will point to Dr. Gary Michelson who settled a patent suit with Medtronic for $1.35 billion (with a “B”). But, this is an example of the exception that proves the rule. Dr. Michelson is the farthest thing from a naive doctor who presented an idea to a company and was screwed.

In actuality, Medtronic sued Michelson for over $200 million, charging that he was marketing to competitors some of his inventions that were previously licensed to Medtronic. Michelson countersued, charging that Medtronic had failed to develop the inventions he had licensed to the Company, was infringing on his inventions and was therefore depriving him of tens of millions of dollars in royalties. Keep in mind that Medtronic was already paying Dr. Michelson $40 million per year in royalties for licensed ideas. One other small tidbit, Dr. Michelson had over 100 U.S. patents covering his ideas that Medtronic licensed as part of the settlement agreement.

For the novice physician inventor, four simple tips can avoid misunderstandings with companies:

  1. Document your idea in a bound lab book and have a witness sign and date the invention description.
  2. Have an attorney that is dedicated to intellectual property law review your idea and provide preliminary recommendations on whether to file a provisional patent. Prior art searches (i.e. investigation of past patents and publications in your subject matter) and full patent applications can add significantly greater expenses.
  3. Prior to providing any information that may be confidential to anyone (including a company representative), sign a confidentiality agreement or non-disclosure agreement (NDA). NDAs have relatively standard language, although every company likes to customize these documents.
  4. Formally document and submit in writing any of the confidential information that you have provided to the company.

If you do not sign an NDA with a company before discussing your idea or you present your concept in any non-confidential forum, you may have forfeited ownership of your ideas. This is especially true if you have not filed patents. Few companies will pay an inventor for an idea that they cannot protect with a patent and once a concept is public knowledge, the idea is potentially free game.

Be realistic about your idea and what you have invented. Unlike Dr. Michelson, perhaps you don’t actually have a solution (i.e. an enabling method or apparatus), but you may understand a specific clinical problem better than your peers or have a different perspective. There is great value for a company in consulting with you, but you are providing knowledge and judgment and not a product or something that is licensable.

If you provide expert guidance to a company and their engineers develop a solution based on your clinical expertise, they have not necessarily “stolen” your idea. The key is to gain proper compensation for your contribution to the effort, potentially via a consulting agreement that specifies the outcome of working together regardless of who invented the specific embodiment that hits the market.

At the end of the day, if you take basic steps in protecting your idea and understand that providing clinical expertise does not make you an inventor, you will avoid most conflicts and feelings of mistreatment. Regardless, I would not hold my breath on being the next $1 billion royalty deal.

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