Defense Turned Into Offense: Owning, Holding And Never Using Medical Patents

Medical Patents Broker Inc.
By Kenneth Pearce, President

Many of us believe the only reason to own a medical patent is to bring the invention to market. Most frequently, this is true. However, viable business reasons dictate when to and when not to use.

Some Strategic Applications of the Hold

1. The Takedown

Maintaining and increasing market share in a specific niche is the goal. Awareness of a medical patent that has potential to disrupt market share is an alert that action could be required. If due diligence shows there is significant potential to interfere with business as usual, purchase of the patent shortly after grant for a few million is much less expensive than IP insurance. Once you have a medical patent, you can bury it, or you can select to exploit the invention in preselected international markets where the cost of doing business justifies the strategy, or you can use it as a dart board.

2. Litigation Insurance

One cannot infringe what one owns.

Litigation expenses can cost millions of dollars, particularly in the United States, which is the busiest platform for lawsuits in the world. Of course, the United States is the largest single market for medical inventions.

MPB’s attorney tells me that in most other countries, the loser pays all court costs and attorneys’ fees. This is a definite deterrent to litigation.

3. Strategic Redirection & Dual Marketing

Depending on the terms of the remaining monopolies for your current portfolio of medical inventions, the newly purchased medical invention can begin its FDA journey to the patient.

If the clinical results prove that the newly purchased medical invention is better than or equal to the current portfolio, after FDA approval, both the new and the old can be sold simultaneously. When the old monopoly expires, the new remains patented.

My understanding is some of the more successful companies in the world frequently use a dual marketing strategy.

The President’s Viewpoint

What the industry labels as a “defensive” buy can easily be turned into an “offensive” play. I suspect the success rate is for the defense-offense strategy much greater than gambling on penny stocks. The so-called defense can generate two revenue streams.

To this broker, that looks like a win-win-win. The seller, the buyer, and the patient all benefit.