In healthcare startups, patents can act as the core assets at least specifically in the early years of the business lifecycle. Globally, medtech is one of the most active sectors from the patent filing perspective. In India, however, patents in medtech accounted for just 2% of the total patents filed over the last 5 years. And out of these, 80% were filed by foreign companies or institutes. That being said, a patent filing for medtech in India is on the rise; in fact, in last decade or so, the number of patents filed within this sub-sector has almost doubled. We believe that the growing momentum in medtech has the potential to seriously disrupt the market and it’s critical that this indigenous innovation successfully navigates the intellectual property and patenting roadmap.
In our experience of evaluating, funding and mentoring startups we realize there are numerous blind spots and many startups do not receive the right guidance at the right time. Delays in formulating optimum patent strategies could become costly for the business at a later stage.Moreover, given that the medtech sector has long gestation periods and slower adoption cycles, patents become key differentiating factors and barriers to entry.
To defend novelty, companies should look to file patents as early as possible – in fact, provisional applications can be filed as soon as the idea starts taking shape. However, if a startup does choose to file a provisional application, it must submit a complete specification within 12 months. Generally, it is safe to disclose a patent once the provisional is signed and a priority date is received.
A good patent application will incorporate both functionality and implementation scenarios for the current use case as well as other cases. Thus, the patentability search needs to be comprehensive and inclusive of the long-term vision. The search should include both vertical and horizontal landscaping to ensure that there are no existing infringements and also discover adjacent whitespaces. In addition, startups should also test the pulse of market dynamics to ensure that their innovation will not be outdated by the time the patent is granted.
There are several free tools available to perform a patent search such as patentscope, USPTO, Espacenet, google patents. These tools are ideal for a preliminary search, but professional help can also be taken further to fine tune the invention. On average, it can take a startup anywhere from 3 to 4 years to obtain a full patent. The process can also be costly; depending on the skills and experience of the attorney, it could cost anywhere between INR 50k to 1 lakh per patent. In order to reduce the financial burden, startups can make use of schemes offered by the government for facilitator engagement and fee relaxation.
In some cases, a startup may want to utilize the patent for generating value through other channels. Monetization of patents is a complex and tricky step and requires a startup to have a strong IP policy as well as a deep understanding of how well patents are going to perform in the market. The two most common ways to monetize patents are licensing and assignment.
Devising a conducive IP policy from the beginning breeds a culture of innovation that can enhance branding as well as valuation for the company. In fact, depending on factors such as distance from the prior art, scalability, viability as well as market needs, patents can prove to have substantial short and long-term value and act as defensible intangible assets for the company.