avoid short circuiting in the digital health revolution · avoid short circuiting in the digital...

Avoid Short Circuiting in the Digital Health Revolution

ASHLEY SLOAT | July 13, 2017This presentation is for information purposes only and does not constitute legal advice.

Agenda

• Introduction

• Digital health company characteristics

• Challenges to digital health companies

• Licensing impacts

Aurora Consulting LLC © 2017

Who We Are

AshleySloat,Ph.D. KristenWolff,J.D.

All Around Us


Digital Health

“use of information and communications technologies to improve human health, healthcare services, and wellness for individuals and across populations”

- NCBI/NIH


Digital Health Subcategories

EHR/EMR Telehealth

MobileHealth WirelessHealthAurora Consulting LLC © 2017

Digital Health: A Growing Market

Statista 2017Aurora Consulting LLC © 2017

Digital Health: A Growing Market

Statista 2017Aurora Consulting LLC © 2017

>50% in 20 months

Agenda

• Introduction





Digital Health Spans Worlds

Software Devices

Healthcare

DigitalHealth


How are Digital Health Companies Different?

• Software + Device + Healthcare

• Regulation by multiple governing bodies

• Manage data analysis for a large volume of data

• Manage data security and anonymity for sensitive health data


How are Digital Health Companies Different?

• Heavily subsidized digital health economic sector since 2009 stimulus

• The direct customer is not necessarily the end user of the technology– E.g., Direct customer may be insurance

provider and end user is the patient

• Trust and credibility are paramount


Agenda

• Introduction





Challenges to Digital Health


• Eligibility for protecting intellectual property

• Data access and security

• Adoption and monetization


Regulation of Digital Health Companies

• Health Insurance Portability and Accountability Act (HIPAA)– If transmitting protected health information

• Health Information Technology for Economic and Clinical Health Act (HITECH Act)– Governs health information shared with medical

providers

• Penalties for willful neglect


• Food and Drug Administration (FDA)– No regulation of general wellness products– Key Determinations

• Invasive? Implanted device? Interventional/treatment device? Promises a diagnosis?

– More regulation in our future?

• Federal Trade Commission (FTC)– Requires notification of users if breach in data

access– Reviews claims of functionality/outcomes



• Federal Communications Commission (FCC)– Regulates communications devices– Radiofrequency equipment certification rules– Connect2HealthFCC Task Force

• State and Local Governments– Regulate privacy and healthcare industry– Protects consumers– Prevents medical professionals from practicing

medicine with unlicensed individuals



Licensing Impacts I• Has company obtained all necessary

authorizations and approvals to operate its technology?

• Has company complied with healthcare industry norms related to efficacy and safety?

• Ensure contracts include language that company has complied with all regulations, laws, etc.


• Having a more-regulated digital health product (e.g., FDA) may stave off competitors

• Does digital health technology meet the guidelines of the American Medical Association?

Licensing Impacts I




• Eligibility for protecting Intellectual Property




Protecting Digital Health Intellectual Property

• Utility Patents

• Design Patents

• Copyright

• Trade Secret

• Do NothingAurora Consulting LLC © 2017

BEST

WORST

Utility Patents

• Protect the function of a technology

• Must meet § 101 requirement– Process, machine, manufacture,

composition– Does not include “abstract ideas” without

“something more”

• Must be novel and non-obviousAurora Consulting LLC © 2017

Utility Patents


Essig L and Howard D. “Impact of USPTO Examination Guidelines on Software Patents Post-Alice.” Section 101 Blog: Knobbe Martens, September 2, 2016.

June 2014“Alice” Decision

May 2016USPTO Guidance

>80%

December 2014USPTO Guidance

~50%

Allowance of applications with 101 rejection

Factors that weigh in favor of patentability

• Software tied to a specific device

• Transforms data into different state or thing

• Solves a problem rooted in computers or Internet

• Clear problem: solution statement in appAurora Consulting LLC © 2017


• Utility Patents

• Design Patents

• Copyright

• Trade Secret


BEST

WORST

Design Patents

• Protect the ornamental design of a product– For software: the user interface layer• Icons, UX layouts, etc.

– Device appearance

• Must be novel and non-obvious– But no § 101 requirement


Design Patent Examples

USD717813,Facebook

USD627790,Apple

USD599372,Google



• Utility Patents

• Design Patents

• Copyright

• Trade Secret


BEST

WORST

Copyrights• Covers the particular expression of an idea,

not the idea itself

• Must be an original work fixed in a tangible medium

• Requires public disclosure of code


Copyrights• Advantages– Easier, faster, and cheaper than patents• Granted upon creation• Registration: $55 for standard online registration

• Disadvantages– Limited protection• Covers the particular expression of an idea, not the

idea itself• Potential Defense: Fair Use Doctrine


Copyrighting Application Program Interfaces

Holding:TheJavaAPItaxonomyiscopyrightable.

OracleAmerica,Inc.v.GoogleInc., No.13-1021(Fed.Cir.May9,2014)

Oracle,slideshownattrial



• Utility Patents

• Design Patents

• Copyright

• Trade Secret


BEST

WORST

Trade Secrets• Can protect any information that:

– Derives economic value from not being generally known, and – Is subject to reasonable efforts to be kept secret

• Best for source code, internal software, and other code that is neither publicly available nor easily reverse engineered

• Advantages:– No public disclosure requirement (must treat as confidential)– No formal process or filing fees

• Disadvantages:– No recourse if someone independently creates substantially

similar software or reverse engineers your software


Trade Secrets• Reasonable efforts to keep technology secret

may include:– Marking documents as confidential/trade secret– Requiring any 3rd party with access to sign an NDA– Requiring all employees to sign confidentiality

agreement at start of employment– Establishing strong document retention policies– Establishing reasonable physical security measures– Setting access controls on code repositories



• Utility Patents

• Design Patents

• Copyright

• Trade Secret


BEST

WORST

Licensing Impacts II• How has the company protected its IP?– Patent? Copyright? Trade Secret?– Ideally protecting each piece individually

and in various combinations

• Ensure that licensed IP covers all major pieces of the technology

• Ensure license covers software version updates/ improvements to technology




• Eligibility for protecting Intellectual Property




Digital Health Data Access• 46% of consumers of digital health say digital

health data is not incorporated into their healthcare*

• Integration with legacy systems (“data interoperability”)

• About 80% of digital health data is unstructured** – difficult to find relevant data

• How to distill data down to relevant information?


* HealthMine, Inc. May 12, 2016** Wiley F. “Will Digital Health Data Lead to Better Care?” iQ Intel, February 17, 2017

Digital Health Data Security• How to securely transfer data from point A

to point B?– Enable cloud, IoT, and mobile integration

• Risk analysis and management– Locate where sensitive data is received,

maintained, transmitted, and disposed of, and identifying reasonably anticipated threats

• How to prove the data is from the individual that sent it?


• Has the company performed a data security risk assessment?

• How is the technology integrated into existing systems and/or does it talk to other devices?

• Is there data analytics/security knowledge that should be licensed?

Licensing Impacts III




• Eligibility for protecting intellectual property

• Data volume and security



Digital Health Adoption• Efficacy– Drives satisfaction and reimbursement

• Efficiency– Increase number of patients being served

with same resources

• Risk management–More active participation in patient’s

outcome

• User engagementAurora Consulting LLC © 2017

Digital Health Monetization

• More than 90% of mobile health applications are free, so how to monetize?– Sell a device– Subscription– Pay-for-performance– Fee-for-service

• Who is the user? Who is paying for it? Who has the incentive?


Despite all of these challenges…

Licensing Impacts IV

• >50% of digital health startups will fail in the first 20 months*

• Know the challenges specific to the type of technology before licensing

• Review successes and failures of companies in similar space and/or with similar technology functionality


* Accenture April 13, 2015 (based on review of 900 companies

Thank You!

Any Questions?


www.aurorapatents.com

[email protected](650) 380-6913

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