Worldwide: Navigating Patent Minefields In Emerging Asian Medtech Markets

Last Updated: February 2 2016
Article by Gabriela Coman

Success in the Emerging Asian Markets (EAMs) requires medical device companies to ensure superior product and patent protection for both their products and related methods of use, given the ease with which devices can be copied by competitors.

In China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan, Thailand, Mongolia, Pakistan, Sri Lanka and Vietnam – the countries that can be grouped together as the Emerging Asian Markets (EAMs) – securing patent protection is critical.

Once in possession of a patent, a medical device company will be able to create legal barriers to entry for competing devices by preventing others from copying, selling or manufacturing the patented device. It will also be able to license the patented device to generate revenues.

Furthermore, the value of the medical device company can be enhanced via the equity and asset building associated with the patent, which in turn may attract further investment.

  • EAM patents applicants need to be aware of current and future business development objectives, market specifics and how local competitors could design around the patented devices of the company.
  • Filing in multiple countries can be prohibitively expensive, but mechanisms to control fees and costs include international application/PCT applications, or concepts such as the newly launched ASEAN Patent Examination Cooperation program.
  • All EAM countries observe a "first- to-file" rule in granting patents, which, in cases where two different entities apply for a patent, it is the first one to file an application that will obtain the patent if the invention is patentable. The US adopted this law in 2013.
  • What is patentable and what is not can be something of a minefield, with different EAMs applying different criteria to patentable matter, so the regulations of each country require careful scrutiny.

FIVE FACTORS TO FORESTALL FAILURE

But early in the pathway leading to an EAM launch of a medical de- vice, there are five factors that a company needs to consider or act on, centering around:

Core Technology Assessments And Tailoring Patent Portfolios To Individual EAMs

Medical device companies interested in not-fully-developed patent markets, such as the EAMs, should develop a product patent portfolio that is tailored to the needs of each respective emerging market. The first stage for the medical device company is to assess the core technology and file patent applications that are designed to provide the broadest possible coverage of the core technology.

The company must consider: its current and future business development objectives; the ways that local competitors could design around its patented devices; the specific needs of the markets targeted – the Chinese vascular or ultrasound scan market or the Indian orthopedic market, say – and the way the patented technology could affect them; and whether to file national, regional or PCT (patent cooperation treaty) applications. Broad patent coverage, when and where applicable, should be directed to the entire medical device, it sub- components, methods of manufacturing, methods of use and treatment, therapeutic uses and any other aspects of the invention.

For example, for sophisticated medical de- vices like blood glucose monitoring systems, claims directed to user interface, software, power-management system and IC chips, among others, may also be filed separately to protect fully the scope of the claimed invention.

Patentable Matter May Be Different In The EAMs Compared With The US/ Europe Medical devices are protected and patent- able in EAM counties and the US. Methods of surgery and medical treatment methods may be protected and patentable in the US and Australia, but they are typically not protected in Europe or in EAM counties such as China, India or Thailand.

In most countries, methods that include a surgical step on a human or animal body are not patentable, even if the effect of surgery is not therapeutic. Claim terms such as "non- medical" or "diagnostic" could be used to make a claim acceptable (provided that the claim could be reasonably interpreted to be directed to a non-medical method without producing a therapeutic effect).

CHINA

In China, neither methods of medical treatment nor diagnostic methods are pat- entable subject matter. How- ever, devices and apparatus for implementing these methods of diagnosis or medical treatment, including substances and compositions for use in such methods, are patentable subject matter. For claims of treatment of diseases, these could be written in the form of pharmaceutical or use claims such as"method for preparing a pharmaceu- tical." Also, the scope of the claims must be commensurate with the working examples provided in the specification.

INDIA

Similarly, in India, methods of surgical treatment of the human or animal body (by surgery or therapy) or methods of diagnosis are not patentable subject matter.

Patents may be obtainable, however, for surgical, therapeutic or diagnostic instruments or apparatus. In addition, the manufacture of prostheses or artificial limbs, and taking measurements of the human body, may be patentable.

KOREA/THAILAND

In Korea, methods of treating humans are not patentable. However, methods of treating non-human animals are patentable, as are methods which are non-therapeutic, such as cosmetic applications. In Thailand, methods of medical treatment are not patentable subject matter.

In contrast, in the US, surgical techniques and methods of medical treatment, as well as methods of diagnosis or treatment, are patentable subject matter. For example, an instrument that cuts bone in a retrograde manner to form a bone tunnel or socket may be patentable in both the US and in the EAMs. A method of arthroscopic surgery to form a bone tunnel or socket using a retrograde cut- ter instrument may be patentable in the US but not in most EAM countries, where methods of medical treatment are unpatentable.

Patent Standards And Systems Are Different In EAM Countries

EAM countries apply various patent standards when assessing whether a medical device invention is patentable. These standards are different from those applied in the US, that is, novelty and non-obviousness. Under Chapter 35 of the USC (United States Code) in §§102, 103, it states that an invention must be novel and non-obvious to be patentable. The requirement of novelty means that the invention (medical device or method) must be new, that is, not previously known or used by others. The requirement of non- obviousness means that the invention must not be an obvious variation or combination of subject matter previously known to those of ordinary skill in the art.

In India, the patentability requirements for an invention are: novelty (the medical device must be new), non-obviousness (the medical device has to involve an inventive step), and industrial applicability (the medical device can be made or used in industry). Apart from satisfying these criteria, the invention should also not fall under the category of non-patentable subject matter of the Indian Patent Act. China adopts a dual approach in determining whether an invention could be considered inventive and thus patentable: "prominent substantive features" and" notable progress." Article 22 (3) of the Patent Law of the People's Republic of China prescribes that "inventiveness means that, as compared with the technology existing before the date of filing, the invention has prominent substantive features and represents notable progress, and that the utility model has substantive features and represents progress."

Under China's Guidelines on Examination of Patents," prominent substantive features" refer to "non-obviousness" and the examiner must conduct tests to establish the proximate prior art and the distinctive features of the invention and the technology issue to be solved, and must make a judgment on whether the invention seeking to be protected has obviousness to those skilled in the art.

"Notable progress" may be shown in the form of the "effect" of the invention or "the useful technological effective result." The Guidelines on Examination of Patents interpret the useful "effect" as: an invention that has a better effect than the prior art, an invention that has a technical solution involving a totally different concept but that has a similar effective result to the prior art, and an invention that represents a new trend of technological development.

In Korea, the criterion applied is whether it would be difficult for a person skilled in the art to arrive at the claimed invention.

All EAM countries observe a "first-to-file" rule in granting patents, a rule that was adopted in the US in 2013. Under "first to file," when two different entities apply for a patent, the first one to file an application will obtain the patent if the invention is patent- able. The US move to a "first-to-file" rule was a change from its prior "first-to-invent" rule.

US patent law adopted this major change to harmonize its patent process with that of the European Patent Office (EPO) and those of other foreign countries. In an effort to ease the transition from the" first-to-invent" to the "first-to-file" system, US patent law provides a one-year grace period, meaning that the inventor (or the person who directly obtained the information from the inventor) has the right to publish his/her invention within a year of filing the application without losing patent rights.

In contrast, no EAM countries observe a grace period. Most countries of the EAM group – and in Europe – apply an absolute novelty standard, meaning that any public disclosure of invention before the filing of a patent application will render the invention unpatentable. If the invention has become publicly available in any way prior to the filing of the application, the application will be rejected. "Publicly available" is typically defined as including: selling the invention; publishing the invention in a printed publication, such as a specialist brochure or magazine; giving a lecture about the invention; or presenting it to an investor without a non-disclosure agreement. The invention may be made "publicly available" by anyone, including the inventor(s) or any independent third party. Thus, if an inventor releases – before the filing of a patent application – a surgical brochure describing a medical device, the inventor will be barred from obtaining patent protection for the medical device in the EAM countries, whereas in the US, the inventor has one year from the release of the surgical brochure to file a patent application.

Best mode requirement is not a prerequisite to patentability in Taiwan and Korea. In Thailand and India, the patent specification must include the best method for performing the invention known to the applicant. In China, the specification must sufficiently describe details about the" preferred embodiments" or "optimized embodiments" but no oath from the applicant is required.

Opposition proceedings are not available in Taiwan (but relevant prior art may be submitted for consideration) and China (but patent invalidation may be available after grant of the patent). India, Thailand and Korea provide opposition proceedings. India, for example, allows for pre-grant opposition any time before publication and post-grant before expiration of a one-year period from the publication of the grant of the patent.

Filing Costs Are Different For National, Regional And PCT Applications

A patent is only enforceable in the jurisdiction in which it is granted. If a medical de- vice company seeks worldwide protection of a medical device, it must file a patent in each individual country worldwide. Filing in multiple countries, however, can be prohibitively expensive.

Various fees are associated with securing a patent. These fees include filing fees, fees for prosecuting the application, issue and maintenance fees, once the application has matured into a patent, and attorney fees, among others. Depending on the country or region, these fees may vary widely and may be spread unevenly over the course of filing and prosecuting an application, and maintenance of the patent.

One method of controlling these costs is the filing of an international application or a PCT application. The international application does not mature into a single international patent; however, it provides the company with the opportunity to delay making a final decision on whether to file a national application in member countries – for up to 30 months in most countries. During this period of time, the company applying for the patent can: assess whether the medical device is commercially viable, raise funds, explore potential markets and decide whether to enter the national/regional phase.

For the over 100 countries that are not members of the PCT (including Asian countries such as Cambodia and Myanmar), a patent application must be filed with the national patent office of the specific country to secure patent protection in that country. Direct national filing avoids the costs associated with the intermediate steps of filing via the PCT or a regional patent office prior to filing nationally.

ASEAN (the Association of Southeast Asian Nations) Patent Examination Cooperation (also known as ASPEC) has been recently launched as a regional patent cooperation program for sharing patent searches and examination results. ASPEC resembles a regional network of patent prosecution highways (PPHs) in the sense that each of the nine IP offices in the ASEAN countries accepts a patent application for expedited examination and search. In this manner, the results of search and examination from one country are used to expedite progress in the other countries.

Enforcement Of Patent Rights In EAM Countries May Be Limited

As noted, what may be patentable in the US may not be patentable in EAM countries and, even if patented, enforcement of the patented subject matter varies greatly. For example, methods of medical treatment are considered to fall outside the scope of patent protection in most countries including South Korea and European countries.

Although EAM countries have been gradually revising their patent laws to ren- der patents more valuable, medical device companies are not well-positioned when it comes to patent litigation and enforcing patent rights.

For example, while the courts in India (the District Court or a High Court) have gradually changed their understanding of complex patent infringement and validity issues, India still ranked as last in the Global Intellectual Property Center Index of 2014 (conducted by the US Chamber of Commerce), due mainly to its weak IP protection and enforcement.

Originally published by Informa Business Intelligence Inc.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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