The Inventive Physician

By: PHILIP M. GOLDMAN

September 1999

Doctors are a creative sort and often develop new medical ideas or inventions, but few know the ins and outs of patenting a product.

Physicians, by their very nature, tend to be an inquisitive and creative lot. Given their diverse experiences and expertise, it is not surprising that this creativity often results in the development of new ideas and inventions in medicine. Most physicians probably believe they have, at one time or another, come up with a new or improved method of accomplishing some medical task. Very few, however, take the initiative to commercialize or even further develop the idea.

This article explores some basic principles underlying the protection and commercialization of new ideas and applies those principles to issues common to medical inventions. One area of particular importance is determining ownership of inventions, which often involves an assessment of the physician's relationship with partners, employers, universities, or outside companies.

Determining the Idea's Patentability

The form of protection that immediately comes to mind for new ideas is patenting. However, a number of requirements need to be met to patent an idea or invention. A first requirement is that the idea actually be of a patentable variety, as compared with ideas that are better protected by trademarks or copyrights. Briefly put, patents are best used for the protection of ideas that relate to new and useful "things", to methods of making things, to methods of doing or using such things, and to improved varieties of old things. These "things" can be visible or invisible, tangible or intangible, and as large as a stadium or as small as a new molecule or chemical formulation.

Trademarks, on the other hand, protect the name, symbol, or manner used to identify such things. The purpose of a true trademark is to help consumers distinguish products or services that embody a new idea from other products or services.

In contrast to both patents and trademarks, copyrights are used to protect the expression of ideas, rather than the ideas themselves. With a medical product, for instance, a copyright could protect aspects of its packaging or accompanying inserts, manuals, or software.

Assuming the new idea does, in fact, lend itself to patent protection, the inventor faces the initial hurdle or filing and then "prosecuting" a patent application through the patent office. The inventor will inevitably encounter the tripartite requirement that the idea be "new, useful, and unobvious."

The patent office frequently questions an invention's usefulness - otherwise known as "utility" - but rejections rarely stick. Most inventors, including physicians, are unlikely to spend their time or resources on something that is truly not useful. Still, the utility requirement perhaps finds it greatest application in the medical field, particularly when the utility of a material or method is merely speculative, or as yet unproven. An example of an invention that would face stiff opposition based on utility would be a cure for cancer or AIDS. Although the standard for patent utility is far lower than the efficacy standard imposed by the FDA or by consumers, the patent standard can still be significant.

Another requirement for patentability is that the invention be new. This essentially means that the invention, as claimed in the application, has not already been described or disclosed in "prior art," which often includes the relevant patent and scientific literature describing the work of other investigators.

Just as likely, however, prior art can include acts and disclosures made by the inventor himself. The patent system is intended to encourage the disclosure of inventions as early as possible. As a result, the government is willing to grant an inventor a limited monopoly around the invention in exchange for a full and prompt patent disclosure. It follows, therefore, that if the inventor is willing to disclose the invention without such a grant - such as by publishing or marketing the invention - the government no longer has any justification for granting a patent. If an inventor sells, publishes, or otherwise discloses the invention before filing a patent application, he creates prior art against his own invention.

The last and often toughest hurdle for patentability is obviousness. The word is a bit of a misnomer, having a legal meaning established by statute and case law that goes well beyond what might first come to mind. When applied to inventions, obviousness is determined by comparing the invention with the prior art. Volumes of case law and statutes can be relied upon to answer the somewhat subjective question of whether the invention provides "unexpected" properties or results in view of that art. Foreign patent offices often refer to the same concept as an "inventive step" in the invention's creation.

Most patent applications encounter at least one obviousness rejection over their course, and such rejections often become the main battleground in determining whether a patent will ultimately be granted.

Resolving Ownership Issues

Assuming that the physician has, in fact, made or contributed to the making of an invention, the next issue commonly encountered, particularly in medicine, is ownership of the invention. As a starting point, unless the inventors have signed agreements to the contrary, the law states that each inventor will be an equal owner of the invention. This is true regardless of the type or scope of the inventors' respective contributions. In turn, each will have the right to exploit that invention, either alone or with others.

Prior agreements dealing with ownership, however, are often the rule rather than the exception. An inventor's ownership rights can be transferred to others in the form of either assignment or license. In many respects, the differences between assigning and licensing a patent or invention are akin to the differences between selling and leasing a car. The seller of a car determines a single price for which he will relinquish all ownership rights in the car. The lessor of a car, however, merely agrees to allow the lessee to use the car for a predetermined time and in a prescribed manner. At the end of the lease period, or if the lessee fails to perform his end of the bargain, possession of the car returns to the owner. The situation with patents is similar in that inventions and patents can be assigned - sold outright - or they can be licensed. In the case of assignment, the patentee generally receives payment up front and transfers all ownership rights to the buyer. In the case of a license, however, the licensee is provided with only limited rights to the claimed invention, while the patentee retains all other rights pertaining to ownership. Retaining ownership, for instance, would mean that the patentee would continue to control the patent application and maintenance process.

The biggest difference between the car and the patent is that inventions can be assigned or licensed prospectively, that is, before they arise. In other words, a potential inventor can (and often does) commit herself to assign or license an invention even before that invention comes into being. An employee agreement, for instance, will often require the assignment of inventions. A consulting agreement might also require either the assignment or license of any inventions that arise in the course of the consultant's efforts.

In a similar vein, and again of particular importance in the medical area, are pre-existing obligations made in the course of obtaining federal grants or other sources of funding. Also affecting rights to an invention are agreements or understandings between the members of a physician's own practice group, or between the physician and the employees or students who collaborated on the development of the idea.

Understanding and dealing with these pre-existing obligations can be critical, since the path the physician takes to further develop or commercialize an invention needs to be consistent with all such prior obligations. Just as a car owners cannot lease a car to a second party if it has already been leased to another, an inventor may not be able to provide others with rights to an invention or even use those rights herself, if they have been preordained.

Even when a physician inventor clearly has not signed away rights, she may still be required to provide rights to her employer. This can arise under a legal doctrine known as "shop right" which is now codified in many states, although not Minnesota. This common law doctrine establishes factors used to determine whether an employer may have rights to an invention made by an employee in situations where patent ownership is not addressed in a prior employee agreement. The factors consider how closely the subject matter of the invention compares with the business of the employer; the type and extent of the employer's facilities, equipment, and overhead used in the course of making the invention; the job responsibilities of the inventor/employee; and so on.

Conclusion

This is but a brief overview of protection and ownership issues that can arise in the course of medical invention. Although the topic can seem complex, and the process perhaps daunting, the prudent physician will take the time and effort to settle these issues. The more commercially successful an invention becomes, the more likely it will be that others will someday question and scrutinize ownership. A new product idea that is otherwise worthy may be jeopardized if it relies on a weak infrastructure of protection and ownership.