BB&T Contributing Writer

ANAHEIM, California – The Medical Design & Manufacturing West (MD&M West) conference, held here in February, had record-breaking attendance at the Anaheim Convention Center. Show producer Canon Communications (Los Angeles) estimates that more than $600 million in sales were generated for the 2,045 participating exhibitors at the conference.

“Preliminary attendance figures are up about 15% over last year, which means the co-located shows attracted nearly 45,000 OEM [original equipment manufacturer] buyers,” said Diane O’Connor, Canon’s trade show director. “Several factors converged to make this happen, not the least of which was greatly improved show dates, which we thankfully will enjoy for years to come.”

During the trade show, the sponsors also offered a conference program where executives paid to learn. Subjects under discussion included “Advanced Submission for Vascular Devices and Combination Products,” “Practical Process Validation Solutions” and “Intellectual Property-Basics and Recent Trends for the Medical Device Manufacturer.”

The intellectual property (IP) discussion was led by Stephen Grossman, PhD, of Grossman, Tucker, Perreault & Pfleger (Manchester, New Hampshire). Grossman explained the four different types of intellectual property: patent, trade secret, trademark and copyright. A patent protects an invention, a trade secret protects “know-how,” a trademark protects a brand name and a copyright protects authorship.

He further explained the value of intellectual property. For a company’s financial objectives, IP protects money spent on research & development and capital. Grossman said IP can lead to increased margins and is a strong negotiation instrument in a competitive bid process. For sales and marketing, IP can be big for the company’s image. Many OEMs look toward technology leaders to solve emerging problems. And a strong IP position for the company can bolster global expansion efforts.

Grossman noted that a patent is a property right provided by the U.S. Constitution. It is awarded via a document granting the right to exclude others from making, using, selling, offering to sell or importing the invention. A patent does not grant the right to make, use or sell the invention without possible infringement of another patent. “What is patentable?” Grossman asked his audience rhetorically. “A product of manufacture, a process or method, a machine or apparatus or a composition of matter.” What is not patentable is a scientific theory, pure mathematics or laws of nature.

He said a patentable invention is defined as an invention that is novel. Every element of the claimed invention is not disclosed in a single reference. “This is typically easy to satisfy,” Grossman said. The invention must be non-obvious – that is, not obvious to a person skilled in the art at the time of filing the patent application. “This is a more difficult question to answer,” Grossman said.

Patents filed in the U.S. after June 8, 1995, have a term of 20 years from the filing date. International patents vary by country, but most are 20 years from the filing date. For those wanting to protect an invention, Grossman advised written, witnessed documentation. “This provides the strongest evidence available as proof of invention,” he said. The two most common methods of written documentation are record notebooks and invention disclosure forms. If the inventor/manufacturer takes care to mark his patent on his products, he has good point to count from if an infringement occurs. Failure to mark can result in loss in terms of available damages and negotiating position when an infringement issue arises.

Grossman asked, “What is a ‘trade secret’?” He said a trade secret is “business information that has value because it is not known in the trade, and is the subject of reasonable efforts to preserve secrecy.” In general, disclosure to persons who are under no obligation to maintain secrecy extinguishes the property right in a trade secret. He said trade secrets are best protected by reasonable corporate efforts to preserve confidentiality. A court will ask whether the person or company was under any obligation of secrecy such as a non-disclosure agreement or an employee agreement, Grossman said. Was the access to the information limited to a “need to know basis?” Were relevant documents marked as “Confidential?”

Grossman said copyright protection “subsists in original works of authorship fixed in any tangible medium of expression.” However, he noted, “Copyright only protects the expression of an idea, but not the idea itself.” He elaborated: “Facts are not copyrightable, [but] the expression of the facts in their selection and arrangement is copyrightable.” Notice of copyright is not required. Registration of a copyright is not required to obtain rights but is recommended to preserve the possibility of statutory damages. Registration is required to file a lawsuit.

“A trademark is any word, name, symbol or device, or any combination thereof used to identify and distinguish goods from those manufactured or sold by others and to indicate the source of the goods,” Grossman said. The exclusive right to a mark belongs to the one who first uses it in commerce in connection with the goods that bear the mark. “Use in commerce” means bona fide public use of the mark on intended goods placed in trade. Internal sales or shipments do not constitute “use in commerce.”

Summarizing his major points, Grossman said, “Patentable inventions are broadly defined and now reach into computer software manipulation. Claims are everything. Review carefully. The claim will be interpreted by judges, not juries, and consider your worldwide marketing requirements.”

On the exhibit floor

The MDM tradeshow floor was bursting with new ideas, products, services and processes. Among the most interesting and novel booths were those of SterlingTech (Tenafly, New Jersey), Insight Product Development (Chicago), Complete Inspection Systems (Indialantic, Florida) and the city of Austin, Texas.

SterlingTech has been developing medical device software for six years, working with such top-shelf companies as Guidant (Indianapolis). Now the company is reaching out, seeking to broaden its customer base and open offices in new locations. Its booth featured two main attractions. The first was a sampling of devices for which the company wrote software, including a noninvasive glucose monitor. SterlingTech developed the entire computer subsystem, selecting and integrating hardware with data acquisition, LCD and touch-screen subsystems.

Secondly, SterlingTech offered free project analysis at its booth. The offered service included key deliverables, a timeline and an investment schedule. The analysis was formatted as a tool that a start-up company could present to investors or a project manager could present to upper management. According to company founder and principal Dan Sterling, “It’s done in a format that gives people value.”

Insight Product Development reported the launch of its new web site dedicated to medical device product development,

Craig Scherer, senior partner, commented that the site was a logical and necessary step in Insight Product Development’s growth. “We’ve completed 85 medical development projects and 6,000 hours of user research in clinical settings in the past five years,” he said. “At this juncture, we recognized the need for a dedicated online forum for our medical product development business. speaks the language of medical product development to an audience that is highly knowledgeable and wants in-depth, targeted information.”

The site extends beyond sales-related content using informational sections on healthcare trends, design controls, white papers and case studies. The case studies highlight specific product development challenges and solutions across the categories of surgical products, treatment devices, diagnostics equipment and support systems.

Complete Inspection Systems is another company where the Internet is integral to its business. It provides on-line, real-time authentication of products and materials, using microscopic materials, 2-D and 3-D bar codes. Manufacturers can add microscopic edible markers or bar codes to their products for authentication.

The user simply goes to the CIS web site and is instructed where to look for the code information on the product. Using a digital camera, the manufacturer grabs an image of that area of the product. He then loads custom image analysis software and authenticates his product. Unlike using holograms or other codes that have no point of reference as to authenticity, the manufacturer, retailer and distributor can compare the product to an actual authentic product online. This makes tracking down counterfeit products much easier.

“Keep Austin weird” is the local cry in Austin, Texas, but the city is emerging as a preferred location for medical device manufacturers. Exhibiting at the MD&M-West show, representatives of firms located in Austin had a lot to say to the manufacturing executive who was searching for a good spot to locate his company.

Austin is home to some 85 companies in the medical product, pharmaceutical or bioscience areas. These include Abbott Spine, LDR Spine and Arthrocare.

According to Ambion CEO Matt Winkler, “When you get right to it, Ambion [which does RNA-based life science research] is in Austin because it’s easy to recruit scientists to live and work here.”

Bryan Koontz, CEO of Optive Research, noted, “We’re part of an emerging success story here in Austin. There’s a history here, significant vendor support and a growing network of professionals who are at the top of their game.”

Austin is a metropolitan region of 1.4 million persons that thrives on a balance of technology, business services, education and government – not to mention being the live music capital of the world.