Health & Justice: Intellectual Property in Healthcare: A Guide for Healthcare Professionals
By Jay L. Phillips, JD
In the healthcare industry, innovation is constant. Procedures, devices, and methods are constantly evolving. But if you come up with some new amazing idea, what are your next steps? How do you protect your work and your name in the medical field? And is there any way to earn compensation for your intellectual property?
Turns out, intellectual property law is very different in the medical field, largely due to the AMA’s opposition to medical and surgical patents, deeming them unethical. As the American Academy of Orthopaedic Surgeons concluded, “Medical Procedure Patents may impede the advancement of medicine, curtail academic access, compromise peer review, place unreasonable limits on the research community, directly interfere with the education of new physicians, and interfere with the physician-patient relationship and the quality of medical care provided to the patient.”
Although you can obtain patents for medical procedures, they cannot be enforced to stop others from infringing on them (per 35 U.S. Code § 287). However, there are other IP tools which can help you safeguard your work, protect your practice, and perhaps even capitalize on your ideas.
Copyrights, trademarks, patents (on medical devices), and trade secrets are essential tools for protecting innovations in healthcare, such as unique medical devices, medical records design or coding, pharmaceutical uses, and more. Though often misunderstood, Intellectual Property (IP) can be a valuable asset, protecting your innovations and creating opportunities for revenue.
Trade Secrets
Trade secrets protect processes, methods, devices, machines, compositions, and similar innovations. Trade secrets of a healthcare practice may include patient lists, financial information, contract rates or terms, client lists, collection rates, marketing strategies, rates, and methods of doing business. This kind of information, if discovered by a competing practice, could be used to gain an unfair advantage over your practice. For example, your active patient lists could be used to solicit your patients to transfer their care to another practitioner.
Trade secrets are enforced by exercising the individual’s right to exclude others from misappropriation, and do not require formal filing. Trade secrets are governed by state law and aim to protect processes, recipes, data, or the like, for as long as the owner takes adequate steps to maintain the secret’s security. The law provides a practice with the right to an injunction to stop a competitor from using your trade secrets, but you must show the court you had taken steps to protect it from discovery. Cybersecurity processes and insurance are two important ways to demonstrate to the court your data was protected.
Copyrights
Copyrights protect written works, art, graphic designs, and more. In healthcare, copyrights are often monetized by medical illustrators or scientific journals. Another common example of copyright in the medical setting is the design and source code for Electronic Medical Records systems (EMRs), which often come with substantial licensing fees.
To exercise the rights afforded under copyright law, the work must be federally registered. Copyrights provide the owner with the rights to copy, create derivative works, distribute, and display the works. Protections last for the life of the author plus an additional 70 years. Authors typically assign their rights to publishers or grant non-exclusive licenses while retaining some rights to their work.
Trademarks
Trademarks (or service marks) identify the source of a product or service. They grant the owner the right to exclude others from using confusingly similar marks in their market space. Trademarks and service marks are often used by health systems or individual practices to establish brand identity, which means that providers working with those entities can benefit from their association with the protected brand. For example, “UK Healthcare” is a federally registered trademark of the University of Kentucky, which allows the University to exclude others from using it in connection with healthcare-related services.
There are three options to obtain a trademark: federal registration with the USPTO (denoted by ®), state registration with the Secretary of State’s Office (denoted by TM), and general use, which affords weaker, common-law protection (also denoted by TM). Trademarks can potentially last indefinitely if renewal fees are paid and the mark is continually used.
Challenges and Risks
While intellectual property can be a powerful tool for protecting and monetizing innovations, it comes with challenges and risks that healthcare professionals should be aware of:
- Maintaining Trade Secrets: One of the biggest challenges with trade secrets is ensuring they remain confidential. In a highly collaborative healthcare environment, it can be difficult to keep proprietary information from leaking. If a trade secret is inadvertently disclosed or reverse-engineered, the protection is lost, and the value of the IP could be compromised.
- International Considerations: Intellectual property laws vary significantly from country to country. A patent, trademark, or copyright registered in the United States does not automatically provide protection abroad. This presents risks for healthcare professionals who work with international partners or markets. Navigating the complexities of international IP law requires careful planning and often additional legal expertise.
- Cost of IP Protection: Securing and maintaining IP rights can be expensive. Patent applications, trademark registrations, and copyright filings all involve fees, and the costs can add up, particularly if international protection is sought. Additionally, legal fees for drafting, filing, and enforcing IP rights can be substantial.
I’ve Created Something Cool – What Now?
Employment Contracts: Employment contracts often include provisions stating that any intellectual property created using employer resources belongs to the employer. However, employers often incentivize innovation by offering compensation in various forms.
Licensing: Ways to monetize intellectual property include through a total sale of rights, a royalty-based license, a flat fee license, or exclusive and non-exclusive licenses. When negotiating a license to use IP, consider the market in which the IP will be used, the duration of the license, and ownership of future developments.
You may not think of yourself as an inventor, but many physicians come up with innovations during the course of their practice. And if you own your own practice, you will want to protect its good name. The laws can be complex. If you are considering pursuing an intellectual property matter, consult an attorney specializing in Intellectual Property law to help you through the process.
Jay L. Phillips is a business and intellectual property attorney with Sturgill, Turner, Barker & Moloney, PLLC. He can be reached at jphillips@sturgillturner.com or 859.255.8581.
