2016 was a big year for medical device recalls, with the number of units recalled in the third quarter reaching the highest level in four years. Here are the 10 recalls that impacted the most medical device units in the United States.
Patent protections for Software as a Medical Device are increasingly important due to the additional investments in clinical evaluation that may be needed to withstand the FDA scrutiny under the new draft guidelines.
From patent applications to FDA approvals, the process of protecting intellectual property has become more crucial than ever for designers and manufacturers.
Medical device companies, especially those in startup mode, frequently struggle to build a patent portfolio. A patent portfolio can help a company protect its market share by asserting its patent rights against infringers and can generate revenue through license or sale. For startup companies, a patent portfolio is often important for obtaining funding. However, companies sometimes fail to obtain patent rights. In many cases, the failure to obtain patent protection results from an absence of established procedures for identifying and assessing potentially patentable inventions. In other cases, the failure is attributable to contractual deficiencies.
This article provides ten strategies that can be implemented by medical devices companies—both big and small—to aggressively build a strong patent portfolio. To put these strategies into context, we first provide an overview of how and why companies frequently lose patent rights.
How are patent rights most commonly lost?
Valuable patent rights are frequently lost for a variety of reasons. First, inventors and companies sometimes fail to recognize, before the bar date for filing a patent application, that they have developed a patentable invention. Sometimes, the notion of patentability perceived by inventors is different (and typically much more stringent) than the standard applied by the U.S. Patent and Trademark Office (USPTO). As a result, inventors often fail to recognize that they have a patentable idea. As one example, the invention may be a novel combination of existing or conventional elements or steps, in which case the invention may be difficult to ascertain.
If a company delays filing a patent application for their invention either intentionally or unintentionally, intervening prior art may reduce or eliminate the otherwise available scope of protection. For example, the company’s sale of a product that embodies the invention may bar the company from obtaining patent protection.
Under the America Invents Act, if an inventor publicly discloses an invention or if a third party publicly discloses an invention obtained from the inventor, the inventor has a one-year grace period to file a patent application. If the inventor does not file a patent application within the grace period, the inventor is barred from obtaining patent rights for the subject matter that was publicly disclosed. In other words, if an inventor discloses an invention and waits more than a year before filing a patent application for such invention, U.S. patent law bars the inventor from obtaining a patent.
Second, even if inventors recognize the potentially patentable invention, they might lack motivation to participate in a patent process. For example, they may not like working with patent counsel to prepare patent applications or might be morally opposed to patents and the patent system in general.
Third, a company may lose its patent rights by accidentally disclosing product details before a patent application is filed. For example, a member of the marketing department may disclose details of a new product to potential customers. The company may release a beta version of the product to a small number of testers without a non-disclosure agreement. In these cases, the company may be barred from patenting its invention if it waits more than one year to file.
Fourth, a company may mistakenly think that it owns patent rights when it actually does not, due to contractual deficiencies. For example, a joint development agreement may lack a favorable IP ownership provision, or inventors might fail to execute an appropriate invention assignment agreement. The company should closely read and negotiate the terms of agreements that assign or determine patent rights.
Ten strategies for aggressively building a patent portfolio
A medical device company at any stage should think ahead and strategize to build a strong patent portfolio. The impact of the strong patent portfolio is long-lasting and may benefit the company even before it is formally created. We suggest ten strategies that a medical device company can adopt to aggressively build a strong patent portfolio. Many of these strategies seek to identify potentially patentable inventions before it is too late to file.
1. Provide a simple idea submission form
It is important for a company to create a system in which its employees can freely disclose their ideas and inventions to those responsible for making patent filing decisions. Making invention disclosures as easy as possible is important for the company to build a strong patent portfolio. For example, providing an invention/idea submission form on the company's intranet can be a great starting point. A simple, online form that can be completed within 5 to 15 minutes is usually enough. The company can later take time to evaluate whether to seek patent protection for the submitted ideas and whether additional details are needed.
A medical device company should also periodically remind inventors of the invention submission form and consider incentivizing them to submit their ideas. For example, a reminder e-mail with a link to the invention submission form may be sent to employees on a regular basis. The company may reward inventors when they submit ideas or when patent applications are filed or are granted as patent (as described below).
2. Conduct periodic “brainstorming sessions”
Companies should also consider periodically (e.g., annually) conducting “brainstorming” or “invention harvesting” sessions. Each such session can, for example, be a one-hour session with a group of 5 to 15 inventors, optionally attended by patent counsel. These sessions need not be limited in scope to ideas currently being implemented or products currently being developed. The company should encourage its employees to participate in these sessions and should inform the attendees that no idea is too basic to be considered.
3. Educational seminars (online or in-person)
Medical device companies should host educational seminars on patents for employees, at least once every one to three years. Potential topics for the seminar include: (1) what can be patented? (2) how to document inventions and submit them for consideration, (3) why patents are important to the company, and (4) how to deal with others' patents.
4. Form a patent committee
Once a medical device company receives ideas and inventions from its inventors and employees, the company typically needs to decide, for each idea, whether to pursue patent protection. Ideally, this task is handled by a patent committee.
The main function of the patent committee is to evaluate each identified invention based on various criteria, including (1) whether infringements will be detectable, (2) how important the invention is to the company and its competitors, (3) whether the technology will become obsolete in a few years, and (4) the likelihood of obtaining a patent of useful scope. After evaluating each invention on its merits, the patent committee will decide upon future steps, such as (1) whether to file a regular patent application, (2) whether to file a provisional application, (3) whether to do nothing (or to revisit the idea after further development), or (4) whether to create a defensive publication, potentially using a defensive publication service provider such as IP.com.
5. Implement a patent incentive program
Introducing a patent incentive program provides inventors with a financial motivation to participate in the company’s patent program, such as by submitting their ideas to the patent committee. A typical patent incentive program would provide $1000 to $3000 per inventor upon filing of a patent application. The company may provide the inventors with an additional award upon patent issuance.
Ascertaining the correct inventors is important for any invention, and a company should pay even greater attention to determining actual inventors of the invention under the patent incentive program. The threshold question for determining inventorship is who conceived the invention. Determining inventorship of some inventions might be more difficult than others, such as inventions created from the brainstorming sessions described above.
6. Conduct an IP audit
A medical device company should consider having its IP counsel conduct an IP audit. The audit typically involves reviewing the company’s IP assets, related agreements, and relevant policies and procedures. For example, IP counsel may create or review the company’s standard employment agreement, consulting agreement, and non-disclosure agreement (NDA). It is also important to create or review internal procedures for making disclosures to and entering into agreements with other entities. IP counsel can also review any existing license and joint development agreements.
7. Reassess pending applications
If a medical device company already has pending patent applications under prosecution, the company should take time to reassess claims of the pending applications. The company should compare pending claims to activities of the company and its competitors and make sure the claims cover its related products and the potentially infringing activities of competitors. At a minimum, the company should do this when it receives an initial Office Action.
8. Keep a continuation application pending
When a medical device company has a pending patent application that is allowed, the company should consider filing a continuation application. Having a continuation application pending enables the patent owner to pursue additional claims and, in some cases, eliminate infringement loopholes. In addition, the company can use the continuation to have newly discovered references considered. A continuation can also sometimes help eliminate problems caused by new case law introduced after the issuance of the parent application. Keeping a continuation application pending puts the company in a much stronger position for licensing negotiations and litigations.
9. Consider Prioritized Examination (PE)
Companies should also consider the USPTO’s prioritized examination (PE) option, which involves paying a fee to have the application examined sooner and faster. Under the PE program, the USPTO issues a first Office Action roughly two to five months from filing and aims to issue a final disposition within 12 months. The applicant is required to promptly submit responses to Office Actions; otherwise, the applicant will lose its PE status. Unlike the Accelerated Examination program, no prior art search is needed, and the applicant does not need to prepare an Examination Support Document. The PE fee is $4,000 for large entities, $2,000 for small entities, and $1,000 for micro entities.
10. Buy patents and applications
In addition to filing patent applications, a medical device company should consider purchasing issued patents or pending patent applications, especially when entering a new market area in which others have established patent portfolios. The company can purchase patents or applications directly from patent owners or through a patent auction or a broker. Such purchasing decisions should be made in the context of the existing patent portfolio, and the company should carefully choose patents or applications that could supplement the scope of the existing portfolio.
By implementing some or all of these ten strategies, medical device companies can reduce the likelihood that valuable patent rights will be lost and can build patent portfolios that greatly increase the company’s value.
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Medical device recalls hit an all-time high in 2014, and nearly a third of manufacturers experience multiple recalls for similar reasons.
Since the release of the 1970 Cooper Committee Report documenting thousands of deaths and serious injuries related to the use of medical devices, FDA has taken a focused approach in its microscopic tracking of medical device adverse events and recalls. The agency's efforts culminated in the October 2014 issuance of the guidance Distinguishing Medical Device Recalls from Medical Device Enhancements. As advancements in technology have provided FDA with greater resources to compile and communicate data to industry and consumers alike, reports of events like those first demonstrated in the Cooper Report have become more frequent and progressively alarming.
At the end of 2006, FDA communicated a staggering set of data to the medical device community. A calendar year’s worth of agency data was conclusive in attributing 116,000 injuries, 96,000 malfunctions, and 4500 deaths to the use—or, in this case, misuse—of medical devices.1 Further analysis released in 2012 in the Medical Device Recall Report FY 2003 to FY 2012 reported a 97% increase in recalls from fiscal year (FY) 2003 (604 total) to FY 2012 (1190 total).
Recent analysis conducted for this article used CDRH’s recall repository to collect data and evaluate trends in both voluntary and involuntary recalls established between January 2010 and December 2015. The product of this evaluation demonstrates an average of approximately 2600 recalls annually, according to ongoing analysis of medical device recalls provided by Blue Lynx Consulting (Figure 1). The data also specifies a progressive yearly occurrence rate, with trending indicating an upward swing in the following root causes as identified by the agency: device design, software controls, and production controls.
This article explores the specific recalls, hazardous situations, trends, and possible mitigations related to each of the three root causes FDA directly correlated to a five-year upward trend in medical device recalls (Figure 2)
Medical Device Recalls: Leading Causes 2010–2016
Since 2010, issues with device design have accounted for nearly 35% of all recall root causes determined upon firm or FDA investigation. Included in this analysis are root causes determined to be directly correlated to subcategories of device design, such as component design, labeling design, packaging design, process design, and software design. While the five-year analysis of design-related recalls does not necessarily demonstrate a consistent upward trend, the mean number of recalls per year documented in this investigation hovers well above 900, indicating continued recall problems across multiple medical device companies and platforms.
In addition to being the most prevalent cause of medical device recalls, recalls related to device design are also the most likely to cause serious health problems or death to the end user. Recalls correlated to device design encapsulate close to 46% of the fiveyear total of Class I recalls, with a 303% increase between FY 2013 and FY 2014, according to analysis by Blue Lynx Consulting. (Note: 2015 data provided by FDA is incomplete, therefore growth between 2013 and 2014 was the latest information available at time of press.)
Despite the proliferation of more complex guidance documents such as the agency’s 2002 General Principles of Software Validation, the upswing of death and serious injuries related to design issues continues. As evidenced by the upward trend of recalls and the multiplicity among those companies that experience recalls for the same reasons annually, it is clear that device companies still struggle to identify proper mitigations for the reoccurrence of these hazards. Information collected from the agency’s database by Blue Lynx Consulting shows that 30% of device companies that instituted a recall for device designs in 2010 were once again opening recalls in 2014 for similar reasons.
Why Do Design-Related issues Reoccur?
As demonstrated by Figure 3, companies have struggled immensely over the past five years in their attempts to mitigate recalls derived from elements of device design. Specifically, manufacturers struggled most profoundly in the areas of labeling design, packaging design, and process design.
Although each of these subcomponents can be tied back to device design, their unique complications should be viewed as impediments for the mitigation of the remaining failures and hazardous situations. While each of these areas of device design comes with associated regulations, guidance, and standards, the current reactive state of medical device companies does not allow for continuous growth over a wide variety of situations where the issues are both unique and complex.
It is logical to attribute the fluctuation of these recall issues to companies that are unable to mitigate every known issue at once. When a company focuses on curbing growth of one type of recall, they are simply “launching the seeds” for the next upward trend in another area.
Recall Growth Rate by Percent 2010–2014
Much like the Cooper Committee legislation of 1970, both FDA’s Safe Medical Devices Act of 1990 and the 1996 Quality System Requirements were prompted into legislation by a set of tragic events related to the use of medical devices. Between 1985 and 1987, cancer patients undergoing radiation treatment via the Therac 25 Accelerator device were given massive overdoses of radiation due to a concurrent programming error in the device's software.2 The incident, thought of as the worst series of radiation accidents in the 35- year history of the technology, resulted in six adverse events, including multiple instances of severe burns, irreversible limb paralysis, and, catastrophically, the death of two patients.
While the Therac 25 tragedy brought to light the dangers of software-controlled medical devices and prompted health authorities to establish more stringent regulatory controls regarding the design, validation, and manufacture of software, the continuing advancement of technology coupled with a reactive industry model has led to a vicious cycle of exciting progress followed by an equal and even more frustrating regression.
Between January 2010 and December 2015, there were an average of approximately 225 software-related recalls annually, accounting for nearly 8% of the total recalls during that time, according to Blue Lynx Consulting. There was also a progressive yearly occurrence rate, with trending indicating an upward swing in the following root causes as identified by the agency: software change control, software manufacturing process design, and software design.
Software-related recalls are also rising steadily, accounting for a 111% cumulative increase since 2010. Unlike other root causes of device issues, software-related recalls are unique in the sense that each of the three subcategories has also shown a steep and steady growth. As demonstrated in Figure 4, software design, software change control, and software process design have each shown an implausible upward trend over the past five years.
Even after the industry has had ample time to digest guidance documents such as FDA’s 2002 General Principles of Software Validation, the upswing in death and serious injuries related to design issues continues. As evidenced by the upward trend of recalls and the multiplicity of companies that experience recalls for the same reasons annually, it is clear device companies still struggle to identify proper mitigations for the reoccurrence of these hazards.
Why Do issues Related to software controls Reoccur?
While software-controlled devices predate the 1976 Food, Drug, and Cosmetic Act that officially expanded FDA’s scope of jurisdiction to cover medical devices, the ever-escalating complexity of software technology continues to be a challenge for health authorities. As evidenced by the release of both the 2002 General Principles of Software Validation and 2005 Content of Pre-Market Submission for Software Controlled Medical Devices guidance documents, FDA has initiated “ongoing efforts to state their recommendations more clearly and ensure they remain current as technology advances.” In addition, 11% of FDA’s planned draft guidance documents for 2016 are specific to the topic of software.
Despite FDA’s best efforts to stay ahead of technological complications posed by an influx of intricate software-controlled devices, analytics of recall trends related to software continue to demonstrate a disconnect between the availability of guidance and risk information to manufacturers, and the ability of those manufacturers to actually mitigate issues.
It is apparent that FDA is investing considerable time and effort in trying to reduce device problems and recalls; it is also clear that regulations for manufacturers incorporating risk management have been in place for several years. What is not clear is how device manufacturers are implementing these requirements. Therefore, we must again ask whether the information provided in this article indicates a problem that is more behavioral than technological.
When you take into consideration that elements of the manufacture and servicing of medical devices make up nearly a quarter of the controls set in place by FDA’s 21 CFR 820 Quality System Requirements, it comes as no surprise that recalls related to these same controls make up 24% of all recalls since 2010, according to Blue Lynx Consulting.
While the controls set forth by FDA in the 1978 Food, Drug, and Cosmetic Act (amended in 1990 to include design controls) were aimed at providing consumers with safer and more effective products, recalls related to production controls have accounted for an average of 665 recalls per year since 2010, with an annual growth rate of 11% percent over the same five-year span, according to Blue Lynx Consulting.
In comparison with the astronomical growth rates of the other two leading causes of medical device recalls, those related to production controls are growing at a much slower rate, according to Blue Lynx Consulting’s analysis. But while some members of industry may view this as a positive, production controls continue to be the second leading cause of medical device recalls on a yearly basis. Furthermore, the year-to-year fluctuations of both production control recalls and their subcategories demonstrates the inability of industry to adequately control these recalls and set into place the proper mitigations to prevent their growth. Specifically, the giant swings in areas of production controls like errors in labeling and packaging (Figure 5) exhibit industry’s inability to control adverse events in areas of business that should be easy wins.
Why Do issues Related to production controls Reoccur?
While the fluctuations in yearly growth percentages related to production control recalls may be vast, three failure modes consistently account from more than 65% of all manufacturers’ recalls of the same category. Specifically, recalls related to process controls, packaging, and packaging controls made up an average of 68% of all production control recalls from 2010 to 2015, with bookend highs coming in 2010 (77%) and 2015 (76%).
As a result, any hope the medical device industry has of stemming future issues related to production controls must begin with a tactical plan aimed at reducing the hazards associated with these specific failure modes and working outward throughout the year without losing focus on other known issues that are potentially harmful to both the business and end user.
Throughout this article, the statistical evidence has demonstrated that issues that result in medical device recalls do not only reoccur; the existence of the reoccurrence points to a more severe and altogether disconcerting problem. When more granular analysis is applied to the reoccurrence of these adverse events, evidence unveils industry’s inability to demonstrate year-to-year control over its products.
Sadly, the history of the medical device industry parallels Newton’s Third Law of Physics. For every Cooper Committee, there is a Therac 25 tragedy; for every 21 CFR 820, there is a Super Bug outbreak. The question remains: Does it have to be this way?
It has been more than 75 years since U.S. lawmakers explicitly recognized the safety challenges posed by medical devices and included them as a distinct category of products regulated by the Food, Drug, and Cosmetic Act of 1938. Since the establishment of this early legislation, the risks related to medical devices and their ever-expanding technologies have come to fruition despite FDA’s efforts to provide industry with a set of proactive tools for mitigation. Despite the availability of information and legislation born from FDA-sanctioned committees like 1970’s Cooper Committee and an influx of device regulations promulgated by the agency in the 1990s, medical device recalls reached an all-time high in 2014 (2823 recalls).
While it is apparent that FDA is investing considerable time and effort to reduce device issues and recalls, the upward trend related to recalls appears to point to a disconnect between the efforts of the health authority and manufacturers’ ultimate understanding of mitigation strategies. To fully understand this disconnect, consider the following: Between January 1, 2010, and December 31, 2015, FDA released 183 draft and final guidance documents related to the life cycle management of medical devices. In that same time period, Class I recalls grew at an annual rate of 29%, topping out in 2014 with 543 total recalls.
Given the plethora of information health authorities provide medical device manufacturers, it seems unfathomable that those same manufacturers would have multiple recalls in a five-year span. However, as our research demonstrates, 30% of manufacturers experiencing field actions in 2010 were once again opening recalls for similar product issues within the next five years. With first-quarter 2016 recall numbers peaking above the industry horizon, early averages show a recall epidemic that has the ability to grow another 2% over final returns from 2015. These returns, coupled with the five-year upward trend of adverse events, beg the question: Why do these problems keep reoccurring?
In response to this confounding query, global health authorities have spent the past five years placing a greater emphasis on the use of risk management in the medical device total product life cycle. With the institution of safety assurance cases from FDA for infusion pumps and the more recent revision to ISO 13485, health authorities and standards associations alike have provided industry a foundation aimed at integrating risk management throughout the product’s life cycle, including playing a larger role in quality management system processes. Still, the efforts surrounding a more mature and holistic version of risk management have done little to stem the tide of this recall epidemic.
As such, research conducted regarding industry’s view of risk management points to a problem more rooted in culture. A 2011 survey of risk management professionals reported that many individuals involved with risk management had a relatively shallow understanding of the tools and techniques available to aid in their risk management initiatives.3 It also found that risk management was viewed as a necessary evil; one group of participants (16 out of 46) suggested that organizations do not know how to tie risk management into the elements of a quality system. This information, when coupled with health authorities’ proliferation of guidance to aid manufacturers in their fight against adverse events, uncovers a more viable truth: The reactive behavior of manufacturers is a massive contributor to their unmitigated failures.
In a February 29, 2016, article for the Harvard Business Review, Francisco Poliodoro tackled a similar question in response to business failures at U.S. space agency NASA and global oil and gas company BP. While each organization had experienced catastrophic events leading to the deaths of employees and the loss of millions of dollars, they were unable to introduce the proper controls to prevent reoccurrences. BP, for example, experienced two large oil disasters within five years of each other, leading to the death of 26 workers. The second of the two events, 2010’s explosion of the Deepwater Horizon oil rig, caused an oil spill of epic proportions, leading to severe long-term environmental effects in the Gulf of Mexico. The company also suffered huge losses, including multiple public protests by consumers and an $8 billion loss of funds in a court settlement.
Analogous to what is happening in the medical device industry regarding reoccurring recalls, both NASA and BP were provided with the foresight to produce a proactive culture to ensure safer and more effective business practices. However, as Poliodoro pointed out, “safety-related behaviors fade over time and other motivating forces come to the fore, gradually launching the seeds of the next error.”
If you consider the current issues facing medical device manufacturers in parallel with Poliodoro’s theory regarding the reoccurrence of adverse events being tied to behavioral issues—or, in this case, a company’s inability to disengage from the reactive cycle and learn from both the knowledge afforded it by health authorities and its own past failures—it is clear that the main impediments to the reduction of adverse events are the companies themselves.
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