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Protecting Inventions and Brands: IP Due Diligence in the Product Development Process

In the medical device market, product development is the engine that never quits. Refinements to this evolving process have sought to increase efficiencies, speed time to market and improve the quality of clinical results. One important constant remains, however: the need for focused, timely intellectual property (IP) due diligence.

Generally, the product development process with an outside inventor occurs in eight stages. Nowhere in any of these stages is there a specific IP “gate” or review stop, because some aspects of IP due diligence need to be done at every stage. That may sound a bit overwhelming, but in an application, it is not. This article recommends best practices for IP due diligence at each product development and launch stage, and names those who should be involved. This overview shows how IP due diligence and the product development process must walk hand in hand.

Stage 1: Disclosure by Physician to Company

Agreements in place between a physician and company will dictate the IP due diligence step to be taken. If the physician has signed a nondisclosure agreement, then he/she likely still retains ownership of the invention. If the physician is under a product development or consulting agreement, the company probably already owns the invention (or the physician is required to assign it to them). Of significance, if the physician is an employee of a university, he/she may be under a pre-existing obligation to assign rights to the invention to the university. The company needs to carefully clarify ownership status when dealing with a physician-professor before any product development process starts. The ownership determination IP due diligence step should be an ongoing process, but must be looked at immediately upon invention disclosure to evaluate whether the company needs to buy or negotiate for the rights, or already owns them.

Even at this early stage, you may want to perform a freedom to operate/clearance search to see if third parties have issued patents that may cover the disclosed invention. Search results must be reviewed for potential patent infringement should they make, use or sell the disclosed product concept. The results also help identify possible competitors.

Stage 2: Marketing, Sales & R&D Perform Production Assessment

Marketing, sales and R&D must convene to see if the concept has viability. Marketing and sales may accomplish this through focus groups or discussions with physician consultants. R&D will likely ask patent counsel to perform a landscape search to identify “white spaces” in the target market and whether the disclosed product falls into a space as is or the design requires modification. Landscape search results also benefit marketing, because they reveal competitors for the target market segment and what IP may be encountered in the future as the design evolves. Typically, in crowded segments, landscape searches are updated semi-annually to track competitive filings and possible IP encroachment.

Stage 3: Product Development Begins

Here, the disclosed idea is transformed into an inventive product by the development engineering team. They start with the napkin sketch disclosure and create CAD models for discussions with manufacturing engineers on production viability and regulatory input. IP due diligence now involves evaluating the design to investigate whether it may be patentable. It is suggested that a Patentability Search be performed that will look at the novel aspects of the potential product and determine if any patents or materials in the public domain would preclude the inventor from obtaining a patent. Patentability search results are also helpful to design engineers to see what other inventive concepts may be protected that are similar to the disclosed product. Often, product development engineers can exploit patentability search results to guide them in developing new, creative products.