Chinh H. Pham, co-chair of the Venture Capital and Emerging Technology Practice and Joshua I. Rudawitz, associate at Greenberg Traurig, LLP discuss the benefits of conducting a “white space” study, which analyses a company’s patent portfolio to identify patent claim gaps and helps bolster and strengthen them.
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Idea concept / lightbulb moment
Patents buttress and backstop growth for medical technology (medtech) companies, period. This is especially so for early-stage ventures staking their claim in the medtech ecosystem. A strategic patent portfolio is an essential building block to have in place for a medtech company’s growth and success, especially when it comes to generating revenue or fundraising. And, for a medtech company at any stage, having a solid patent portfolio can lead to licensing, joint ventures, and collaboration opportunities with strategic partners.
However, as many as 80% of patents are never commercialised, and approximately 95% of patent applicants don’t get a return on the investment for the patenting process. One important strategy that could maximise patent value and protection while increasing return on patent investment is to analyse the white space in your patent portfolio and/or your competitors’ patent portfolios.
A white space analysis typically looks beyond the commercially active embodiments in your patent portfolio to define if other potentially commercially valuable embodiments are available. Used as both an offensive and defensive strategy, this approach allows the company to 1) gain the necessary market intelligence to most effectively direct R&D and other technology investments for your portfolio, and 2) broaden the scope of its existing patent portfolio to block one or more competitor portfolios from encroaching into the company’s space.
For an effective white space analysis, a medtech company should work with patent counsel to conduct a patent audit that assesses the strengths and weaknesses of the current patent portfolio, and determines what competitor patents might exist. Medtech companies can then direct their patent filing strategy to the white space to enhance the strength of their patent portfolio and/or create opportunities to force their competitors to take a license.
What is white space?
White space is the gap(s) in the patent portfolio where commercially valuable opportunities may exist but are not yet protected.
As a strategic IP approach, a medtech company can assess its patent portfolio to determine whether patent protection in the white space will provide a competitive advantage, especially if more R&D on the technology bridging the white space is needed prior to filing. For example, if the company’s technology is directed to a surgical device that can push tissue aside using a mechanical design to expose the area, and there is industry interest in using other methodologies to push tissue aside, an initial assessment of the company’s patent portfolio to determine whether other methodologies are disclosed, for instance, using air, can allow the company to initiate R&D on the use of air and ascertain any competitive advantage prior to filing for patent protection.
Similarly, a medtech company can use white space analysis to deter or block competitors from encroaching into the company’s space or from making new or additional filings on the competitors’ technology. In doing so, a medtech company can force the competitors to enter into a licensing agreement should the competitor decide to expand its core technology. Such a strategy can potentially provide a new source of revenue through licensing for the medtech company.
How do you determine the existence of white space?
A white space analysis involves a process that analyses a portfolio of issued patents and pending applications in a particular technology to identify gaps that can lead to potential commercially valuable opportunities. Once these gaps are identified, the medtech company can focus on how to bridge the gaps to strengthen its patent portfolio or block others from using similar technology.
The analysis can begin with an audit of the portfolio to determine whether it covers the different designs and embodiments of the commercial product or process. In general, the audit can start with a search of the claims in the patent portfolio to confirm that the commercial embodiments are covered. As a next step, working with patent counsel, the medtech company can extrapolate and determine what other commercially valuable and market viable embodiments can be pursued based on the underlying technology in the patent portfolio.
Input from the medtech company is also helpful to ensure that next generation designs are protected, if not yet covered. Medtech company input can further ensure that 1) any gap in its portfolio can be bridged to prevent competitors from encroaching into the company’s space, and 2) any opportunity to cover the competitor space can be pursued to block the competitors from expanding its own core innovation.
Three phases of a white space analysis
- Internal Analysis: This is an inward-facing analysis of the strengths and scope of a company’s patent portfolio to identify adjacent opportunities and potential threats, as well as find ways to expand the business. Mapping the strength of a patent portfolio against known challenges in a given space helps find new revenue-generating options or broaden the scope of existing patent portfolios. This can reduce risk for the company when pursuing new products because it knows what obstacles may be holding it back before investing time or capital into an idea.
- External Analysis: Externally-focused white space mapping examines the market and analyses which products, services, and solutions (new or old) are dominant in order to spot a gap. The purpose of this is to find gaps in the existing markets that potentially can be exploited.
- Forward-Looking Analysis: This type of research involves using strategic foresight to identify prospective future white spaces so that the company is prepared to capitalise on them. Workshops, brainstorming sessions, and deep research are typically used in this phase. By studying current market trends, the company can make assumptions about future trends and prepare a strategy to capitalise on them. This approach could identify areas that require designing around competitors’ intellectual property, blocking a competitor from expanding its core innovation, and/or force a competitor to enter into a licensing agreement.
Once a gap is found, the medtech company should assess if there is a competitive advantage, additional revenue can be generated, and/or there is any additional return on investment before pursuing future patent filings.
Advantages of a white space analysis
Should additional patent filings be pursued, a medtech company should consider the following:
- To deter a competitor from encroaching into your space, a medtech company can assess whether a competitor’s recently released commercial product is covered by the disclosure in any of the company’s pending patent applications. Assuming that there is at least one patent in the company’s patent portfolio that predates the competitor’s product and/or any of the competitor’s patents, the company can work with its patent counsel to draft claims, supported by the company’s pending patent application(s), to pursue in a new patent filing, embodiments that cover the competitor’s recently released product. The newly filed application, claiming the earlier filing date of its parent, can now act to block the competitor from pursuing its own product and from encroaching into the medtech company’s space.
- To block a competitor from expanding its own core innovation, a medtech company can initially do some diligence on the competitor’s commercial strategy to anticipate the product lines or offerings that the competitor may pursue around its core innovation. With this in mind, the medtech company can simply look at its patent portfolio to see whether its pending patent applications have sufficient disclosure to cover the anticipated opportunities that the competitor may pursue. Assuming that it does, the company can work with its patent counsel to file new patent applications with specific claims covering the competitor’s opportunities. By doing so, the medtech company essentially creates a fence around the competitor’s core innovation, thus preventing the competitor from expanding its product lines. The competitor will then be forced to take a license from the medtech company should the competitor want to expand.
- If a medtech company is a late comer in a particular vertical space and needs to take a license from a competitor that has the seminal patent in that vertical, pursuing a strategy where it can block the competitor from expanding its core technology is advantageous. Such an approach allows the medtech company to create leverage for itself, force the competitor to cross-license the medtech company’s patent portfolio, and create more favourable terms for itself with respect to the license for the seminal patent.
A medtech company may also consider in-licensing an available patent or patent portfolio rather than filing its own to bridge the white space and fortify its patent portfolio. In-licensing may be advantageous because it can cut down on the R&D time and cost and can provide the medtech company with readily available IP to deter and block a competitor from encroaching. There are currently several IP marketplaces a medtech company can approach to in-license the necessary patent or patent portfolio. Alternatively, many academic institutions have readily available patents or patent portfolios from which a medtech company can license.
A driver for decision-making
As the patent landscape continues to shift in a highly competitive environment, a white space analysis of a patent portfolio can be an important tactic for a medtech company’s strategic planning and can be an iterative one. A white space analysis can help medtech companies in the early stages of product development, or a larger corporation with a new technology program find “untapped” or white space for R&D. Whether for expanding into new technology areas or identifying gaps in an existing technology market, a white space analysis can provide a lasting competitive advantage.
