08 Jan Part 2 – How Health Tech Startups Can Protect Intellectual Property Rights
As the application deadline approaches for the NOLAHI Challenge, Parker N. Smith & David C. Rieveschl of Stone Pigman Walther Wittmann L.L.C. explain how intellectual property is an important issue for health technology startup companies. Click here to read part 1 of this blog series, and watch for two more posts leading up to New Orleans Entrepreneur Week in March 2018.
A second form of IP that is important for Health Tech companies is copyrightable material, which includes original works of authorship (e.g., graphic designs, written texts, and software). A copyright grants the owner the right to copy, distribute and make derivative works from the copyrighted material. A copyright also generally grants the owner the right to prevent others of making such use of the material. However, copyrights do not protect ideas in the abstract. They only protect the expression of those ideas.
Although copyrights automatically arise when an original work of authorship is fixed in a tangible medium, copyright registration with the U.S. Copyright Office grants the owner significant additional benefits. For example, copyright registration is a prerequisite for suing a potential infringer in federal court. Considering the benefits of federal registration, companies should seriously consider registration, especially when copyrightable material is critical to the business and not treated as confidential.
However, in considering registration, Health Tech companies often overlook a primary concern—ownership. While many companies assume they own copyrights in their employee’s and contractor’s work product, this assumption may not be accurate. In fact, the “work made for hire” doctrine, which grants copyright ownership to someone other than individual authors, applies only if specified requirements are met. Thus, to ensure copyright ownership, companies must closely examine relevant contracts and policies.
A third form of IP that is important for Health Tech companies is patentable inventions. Depending on the jurisdiction, a broad array of subject matter may be patentable, including software, business methods, and IoT devices. In the U.S., such patentable subject matter is protected in one of three ways, by: (1) utility patents; (2) design patents; and (3) plant patents.
Unlike other forms of IP rights, patent rights are only acquired through registration with applicable authorities (USPTO in the U.S.). For this reason, Health Tech companies should not delay seeking the advice of a patent attorney when it develops or acquires patentable subject matter. A delay in registration will not only push back an already lengthy process but, also, may give others a chance to gain superior rights through earlier registration.
Once issued, a patent grants the holder the right to exclude others from, among other things, making, using or selling the invention in the U.S., but only for a limited time period. In addition to such temporal limitations, companies should consider the time and expense of patent prosecution as well as consequences of disclosing the subject matter before seeking a patent. It may be the case that other forms of IP rights protect the invention in a more cost-effective manner.
Names, symbols, phrases and devices used as identifiers for goods and services (known generally as “marks”) are a fourth form of IP that is important for Health Tech companies. In this sense, marks help businesses to build goodwill with end users and in particular markets.
In the U.S., rights in marks arise automatically through use in commerce, but federal registration with the USPTO provides important benefits to mark owners, such as nationwide protection. Regardless of whether a company plans to register its marks, and before investing too much in the marks, that company should “clear” its marks to make sure another person does not have superior rights in the marks.
Other Forms of Intellectual Property
Other forms of IP rights exist in the U.S. For example, a Health Tech company may have rights in internet domain names or the “trade dress” of its application interface. In addition, other countries have varying forms of IP protection available.
IP Rights of Others
Although this post has focused on a Health Tech company’s efforts to protect its own IP, it is equally important for a company to make sure it is not infringing the IP rights of others. In fact, even if a company does not technically infringe another’s IP rights, misunderstandings can lead to costly litigation. Thus, a Health Tech company should take a comprehensive approach to its IP strategies.
This post provides a broad overview of some IP issues affecting Health Tech companies. Of course, important issues and complex challenges pervade the world of IP. For this reason, companies should seek the advice of counsel when considering and implementing their IP strategies.