Thomas Prock, partner at Marks and Clerk, looks at the EU’s new ‘wildcard’ initiative, which will back high-risk medical device ideas.
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Certain health problems bring with them a level of risk and complexity that can make investment in their solutions difficult. These problems require blue sky thinking and public/private cooperation. Recent examples of such initiatives include former US President Barack Obama’s ‘cancer moonshot’ and Google’s significant investment in medtech aimed at making life easier for those with type 1 diabetes.
In a similar vein EIT Health, an offshoot of the European Institute of Innovation and Technology, recently announced that it would make €4 million of funding available for ‘wildcard’ medtech ideas which utilise emerging technologies like AI and big data or tackle urgent health challenges including antimicrobial resistance.
So, what can medtech innovators and entrepreneurs do to make wildcard ideas and inventions investable?
Underpinning all successful innovation is intellectual property (IP). IP takes many forms, ranging from the well-known such as patents and trade marks, to the less well known, such as know-how and database rights. One thing investors will be looking for when considering the potential of a new product, will be reassurance that those behind the product have a developed sense of how their IP portfolio and strategy will continue to support the business as it develops. The strategic use of IP protection can give a company a competitive edge, helping de-risk the business in the eyes of investors.
IP will also prevent third party imitation of your products, thus preserving your market and preventing competition from third parties. Beyond this, and especially in cases where an invention truly fits the description of ‘wildcard’, the lack of prior art (pre-existing knowledge that might limit the scope of a patent in a more established industry) means that well drafted IP might confer not just protection for your invention, but also the opportunity to licence your innovation to others, creating lucrative revenue streams and enabling access to new markets.
Demonstrating IP awareness
Having an effective IP strategy is critical for companies of all sizes, even if – in the case of pre-investment companies – it can only be implemented at some future time. Demonstrating an understanding of the opportunities offered by IP and prioritising the IP that needs to be protected first, will be key to attracting investment.
For example, is brand a big aspect of your business? If so, trademarks will be key in protecting that brand in the public space, ensuring trust is maintained in your services and products and the value in your brand is protected. If, on the other hand, your business is focused on technological innovation, then patent protection will be critical in stopping copycats producing cheap imitations.
Another key question for emerging medtech companies and entrepreneurs will be, who in the company owns the knowledge inherent in the business? Most of the knowledge and skill within small companies is concentrated within the memories of the small number of individuals who founded the business. This is both a blessing and a curse. The upside is that corporate knowledge is easily accessible and admin is minimised. As companies grow however, a lack of clear policies and documentation can lead to disputes. For example, if a founder member of the team leaves, he or she might take their knowledge with them unless there is some agreement to the contrary.
Decide early on who should own the IP, the individuals within the business or the business itself, and ensure secret know-how is secured, preventing disclosures of information which could be disadvantageous. Alongside ensuring IP around products and services is robust then, it is also important to ensure that IP ownership and procedures within the company are clear and well defined. This is most easily achieved early on, while all parties involved are on good terms.
There’s no one size fits all approach to IP and developing the right portfolio and strategy is a bespoke process. Engaging in this process early on however will put an emerging enterprise on sure footing, and make wildcard innovations all the more investable.
