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Strategies for navigating European patent portfolios in
healthcare.
Securing patent protection is critically important for
innovative companies operating in the healthcare sector. European
patent filings in healthcare, and particularly those in the field
of medical technology (MedTech), represent the highest application
sector with a total of 14,295 European patent applications filed in
20201. In this article we consider the continued growth
of patent activity across the healthcare market and how the
European opposition process can be used to weaken the strategic
position of companies who dominate the sector with their patent
portfolios.
Growth of MedTech IP
As MedTech patent filings grow, so do the number of rights
obtained by applicants operating in the healthcare market. In
addition to restricting the actions of new entrants in the
marketplace, patent portfolios can be monetised to provide
licensing income and returns on R&D investment. The graph below
(based on statistics from the European Patent Office) shows that
the number of MedTech patents granted in Europe has vastly
increased over the last ten years, reflecting the expansion of
R&D activities throughout this industry.
The volume of granted MedTech patents presents a barrier for
those seeking entry to the market and also obstructs existing
MedTech companies who are looking to expand the scope of their
operations. It is not unusual for certain applicants to obtain
“patent thickets” that provide an overlapping set of
patent rights with the intention of monopolizing a particular
technical field. Unless the problematic patents can be nullified,
labour intensive “design-around” options may be needed to
circumvent each patent. If the claims of the relevant patents are
very broad, it may not be possible or commercially feasible to
develop an alternative design. In such cases, the only remaining
options could be to negotiate a licensing deal with the patent
owner(s) or abandon commercialization entirely. Not only therefore,
is it important for innovative healthcare companies to obtain
patent protection to protect their own R&D, but relevant IP
held by competitors must be carefully monitored and kept in
check.
Patent watching
An effective risk mitigation strategy requires monitoring the
evolving patent landscape and development of competitor IP in and
around the relevant technology space. Patent watching services can
be employed to track new filings and identify granted patents which
could pose a commercial risk. If the claims of the granted patent
are considered to be a threat, steps can be taken to challenge the
validity of the patent across one or more territories in which the
patent is in force.
Patent oppositions in Europe
The most effective way to nullify a patent across Europe is to
oppose the patent at the EPO. The outcome of the opposition is
effective in all contracting states in which the patent is in force
and cannot be appealed nationally.
Recent statistics released by the EPO2 show that
granted patents relating to healthcare have a higher probability of
being opposed. The statistics in 2020 indicated a 5.5% and 5.9%
opposition rate for biotechnology and pharmaceutical fields
respectively, with the average across all fields being 2.4.%.
Patents in the MedTech field were just above the average at
2.5%.
An opposition can be filed by any third party within 9 months of
the date of grant of a patent. Additionally, the third party can be
a “strawman” such that the identity of the true Opponent
remains unknown. This can serve as a useful cloaking tactic to
avoid alerting the patent owner of the specific relevance of their
IP.
Following an opposition, the patent may be maintained as
granted, maintained in amended form, or revoked. Statistics from
the EPO show that approximately two thirds of cases result in
revocation of the opposed patent or maintenance in an amended form.
When the patent is amended, the scope of protection covered by the
patent is reduced or focused in a particular direction. This may
open up further design around possibilities or diminish the
relevance of the patent to the existing or envisaged commercial
product. An opposing party can therefore obtain a favourable
outcome via the European opposition process even if the patent
cannot be revoked in its entirety.
How the European patent opposition process works
Timescales
After the filing of an opposition, a party can expect to receive
a decision on the outcome of the opposition within 18
months3 based on the current rate of processing by
the EPO.
The decisions issued by the Opposition Division are open to
appeal and it is relatively common for parties to appeal the issued
decision. At present, the speed of processing by the Opposition
Division is not yet matched by the Boards of Appeal with parties
often waiting 3 years or more before a final decision is issued
following appeal. Recent changes have however been made to the
Rules of Procedure at the Boards of Appeal which are intended to
expedite the appeal process.
Format
The opposition proceedings are mainly conducted in writing and
will culminate in an oral hearing when requested by one or more of
the parties. At the hearing, each party presents their case to the
EPO with a final decision announced at the end of the oral
proceedings. Ordinarily, the oral proceedings will be completed in
less than a day but may run for longer in complex cases. In order
to minimize disruption during the COVID-19 pandemic which prevented
travel to in-person hearings, the EPO launched a pilot project
mandating video conference (VICO) as the default for oral
proceedings in opposition. To ensure the continued processing of
opposition cases, the EPO has extended the pilot project for
conducting opposition hearings by VICO until 31 May
20224. Some additional parties may attend an opposition
hearing as a member of the public. This can be a useful information
gathering tool for parties who are not active participants in the
hearing but have commercial interests in the outcome.
Costs
The fee for filing an opposition at the EPO is relatively modest
at 815 Euros. The appeal fee for large entities is 2,705 Euros and
is reduced to 1,955 Euros for smaller entities such as SMEs and
universities. Although the official fees for opposition and appeal
are quite low, the majority of costs borne by a party arise from
professional or other fees associated with preparing submissions
and attending the oral proceedings. However, oppositions at the EPO
remain considerably less expensive than patent invalidity
proceedings in other jurisdictions such as the US. The recent
availability of VICO for European oppositions has also enabled
further savings through the reduction of travel costs. Indeed, two
thirds of users surveyed by the EPO rated VICO for oral proceedings
in opposition positively, one of the major reasons being the
reduced travel costs5.
Summary
The continued expansion of patents rights across the MedTech
field in Europe highlights the importance of capitalising on
R&D investment through the development of an effective patent
strategy. Although innovative companies generally invest
considerable resource in establishing their own patent portfolios,
it is equally important to restrict or mitigate the commercial
impact of granted patent rights held by competitors. The European
opposition procedure is a useful instrument available to third
parties that can be employed as an accessible, cost-effective
mechanism to weaken the strategic position of a dominant patent
holder, obtain freedom to operate and avoid litigation, one which
many third parties are shown to take advantage of.
1 E. Pullicino (June 2021), Medical
technology most patented subject matter at EPO in 2020, HGF
healthcare scanner
2 EPO Statistics 2020, President of the European
Patent Office
3 EPO Quality report, section 6.3.2.3 (https://documents.epo.org/projects/babylon/eponet.nsf/0/66A405546212DDF4C12586FC00330A90/$FILE/quality_report_2020_en.pdf)
4 https://www.epo.org/news-events/news/2021/20210520.html
5 https://www.epo.org/news-events/news/2021/20211130.html
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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