An experienced medical device entrepreneur engaged us to review a patent upon which a physician wished to build a new medical device company with our client as a business partner. The entrepreneur sought our advice as to whether the patent could serve as a strong foundation for the company.
The patent was prepared by a well-known and highly competent patent attorney, costing the physician about $25K to obtain. The patent clearly indicated that the physician had generated a key insight into improving a common medical procedure that could improve outcomes if a device incorporating the new functionality.
Unfortunately, however, the patent did not encompass the functionality but, rather, the specific features of a device that would provide the functionality. This meant that other companies could provide a non-infringing product that provided the same functional benefit.
Because this meant that there was a high risk that the investment and effort needed to create a startup medical device company would not meet the entrepreneur’s required ROI, he passed on the opportunity to partner with the physician.