Why Buy a 510(k) Device With Only Three Years Before Expiration

Medical Patents Broker Inc.
By Kenneth Pearce, President

People think you must be insane to buy a medical patent with such a short window. Right?

In America, there is potential for profit in most legal business endeavors.

First, the 510(k) clearance is a runway through the generic market. Sales are based on price, perception and performance. It’s about as close to unbridled capitalism as possible in the United States.

Strategic Applications for the Short Runway

1. Controllers Already Granted Authority for Takeoff

Full throttle monopoly in the tanks, three years lift off, autopilot in control of sales and marketing. Soar like an eagle!

Manufacture the devices as soon as possible pursuant to FDA guidelines. List with CMS during the initial manufacturing run.

Contact administrators of all 6000 plus US hospitals. Shoot the moon and have acceptance level calculated for necessary percentage of US hospitals need for profitability.

The device can be uniquely marketed as “patented generic” that is less expensive than currently used similar devices. Since the performance must be the same as the predicate devices, make the new 510(k) shinier and more soothing to the eyes and touch than competitors’ products.

Very importantly, your sales team needs to be people-people. Personable people are better at sales than some experts.

2. The Hangar Zone

If sales of the patented generic are sufficient, make minimal changes to the device and piggyback your new 510(k) on top of your previous patented generic. This increases your product line.

Hire a packaging and aesthetic designer for improved appearance of the newer device to further differentiate your product from competitors.

For millennia, a pleasant and comforting appearance increases sales. When relying only on price, perception and performance, perception can get your foot in the door.

3. The Double Eagle (Risk versus Reward): How to Score a Double Eagle?

In golf, the rarest score is a “double eagle.” Those who dare such shots are the winners! A par 5 in 2. Here's how it works in the patent world:

• Engineers discover a better structure
• Engineers discover a better composition
• The double eagle has less structural components than its predicate device and it is potentially patentable.
• Patent application is filed and USPTO eventually grants a medical patent with a long tail
• This new long-term patent creates a big feather in manufacturer’s cap!

4. What Feather to Pluck?

• Option 1 – Retain ownership and conduct the necessary FDA trials for authority to use in commerce
• Option 2 – Sell to another manufacturer
• Option 3 – Hybrid license to a third-party manufacturer where you retain ownership of the IP
• Option 4 – Partner with or merge with another manufacturer
• Option 5 – Any other creative business deal the parties agree to

The President’s Viewpoint

I have not picked up the sticks in more than thirty years. I cannot remember for sure, but I think I shot a 75. Without being on a course for at least three years prior to that round, three over par was excellent for me.

For those few “double eagle” companies, it is a rare happening. But when it does happen, it can shoot the moon and benefit the patient and the company!