An ROI Moment: Submit The 510(k) or PMA Before The Patent, Or Wait For The Patent?

Medical Patents Broker Inc.
By Kenneth Pearce, President

It seems like the other ROI—the Risk of Incompletion—determines how we proceed. The answer is rarely a simple "Yes" or "No." It’s the age-old risk versus reward. Someone must make the decision, otherwise the technology never sees the patient.

The FDA First Argument

1. Patent Term Restoration: Under the Hatch-Waxman Act, a "buy back" of the time lost during the FDA review is possible. If a patent application has been filed when you start the FDA testing phase, you can apply for a Patent Term Extension (PTE) once the device is approved. Five years is the maximum extra time that can be "purchased."
2. Valuation: A “Patent Pending" device that has advanced into the first or later regulatory path is generally worth more to an acquirer than a granted patent sitting on a shelf. Acquirers prefer progress over just the patent.
3. Leaping Ahead: Filing with the FDA starts the clearance pathway to market. When an invention is significantly original, it forges a new standard for that space. Being first to market establishes that others will follow only as soon as the law allows. As long as Medicare and Medicaid pay for treatment, that pharmaceutical, biotech, or hybrid device just became the go-to for the masses.

The Patent Application First Argument

1. The FDA Disclosure: Your FDA submission contains data—lots of data—about the invention. A third party could file a Freedom of Information Act (FOIA) request and see far too much. This is a public disclosure that is often better kept private. Such disclosure could be hostile to the marketing of the invention later.
2. Opposing Counsel: Juries tend to dislike it when the owner provides data to the FDA that appears to oppose the public information in the Patent and USPTO records. Claiming “Breakthrough Technology” at the FDA while your Patent claims only show a minimal change (like a new circuit or three additional carbon groups to overcome prior art) does not bode well for the owner arguing for a "Game Changer" status in court.
3. Shorten The USPTO Time: Have a patent attorney familiar with medical inventions write the application—one who understands how to get to the heart of the matter to clear the USPTO in 3.5 years or less. After the first patent, you can always change the scope down the road. If the 510(k) takes two years, you still have 14.5 years of monopoly left. If a Class III PMA takes 8 years, you have 8.5 left, plus the 5 years from Hatch-Waxman.

The President’s Viewpoint

As we all know, the above possibilities are simply a few of the contingencies to consider. Further still, as with most everything in this world, it’s about the crystallization of so many separate decisions at a single moment in time. Over the years, quite a few CEOs told me, “I don’t always have to be right; I just can’t make a decision that bankrupts the company.” For many years now, I have agreed with those mentors.