(Update: See also the follow-up post – a List of eClinical Patents)
The Patent system was designed to protect individuals and companies from others that might steal their ideas.
If I was to invent a new kind of can opener that never jammed, and didn’t need replacing every couple of years… I would probably patent that. If a company then saw it, and made an exact copy of what I had patented, I could claim infringement and request licensing fees. That is the good side of the patent system. It protects the inventor.
The bad side is now being manifested in the world of technology for Clinical Trials. It is recognized that the greatest challenges to the Patent system are manifested with Software patents. [Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk, James Bessen & Michael J. Meurer – Sample]
DataSci’s Private eClinical Club
DataSci are what some might call a patent troll 1, 2. They do not have a commercial product, never had a commercial product (see note below 4), and only hold a patent that was prospectively raised in 1998. Boiled down, it claims ownership over the idea of checking clinical trial data at point of entry. Most EDC systems do this, but only a few make significant revenue. These are the ones DataSci are interested in.
DataSci has accumulated more than 20M USD over 6 years in what appears to be out of court settlements. eClinicalOpinion put this well;
… EDC vendors have a love/hate relationship with this patent. It’s a kind of rite of passage to be sued by DataSci. It says you’re big enough to be worthwhile. It’s painful to go through the process but once you are through and have settled you don’t want to see the patent invalidated because the pain moves to one of your competitors.
Taking DataSci on and invalidating the patent would be long, drawn out and expensive. Maybe Datatrak have prior art that could put a stake through the heart of this patent but they just scared DataSci away and didn’t nail them. Why would they? To help everyone else? Get real.
So – why would the likes of Medidata, and Phaseforward having paid such enormous fees – why not fight it in court?
The following news articles link help explain from ClinPage –> Vampires 3 – Society 0
In addition, Medidata reported revenues for 2011 of 184 Million USD. Future revenues are projected to be higher. Working in a risk averse industry- how much would Medidata’s revenue or for that matter share price suffer if they were caught up in a multi-year court battle, that might be perceived as placing sponsors at risk? Possibly more than the cost of settlement?
Medidata announced in March 2012 that they had paid a further 6.3M USD for a fully paid up license to use the approach as they wish… The announcement of this, together with a jump in profits / revenue resulted in a stock value increase of 25% – 100M USD. Will Medidata R&D ever look at the patent? Of course not. Nothing can be learned or applied from 1998. This is just a paper transaction.
This probably explains the high proportion of DataSci cases that have been settled out of court. For companies that are big enough for DataSci to chase, the revenue impact of a clash is higher than a cost to settle.
Could or would I challenge? I doubt it. I don’t have a legal fees war chest, and I don’t now work for the company that owns the technology, but an evolution of the product is successful in the market today, so I wouldn’t rule it out.
DataSci – another patent on the way?
In 2008, DataSci lodged a 2nd patent application – WIPO Patent Application WO/2010/059691. This was lodged together with Kim Nitahara from Metasolutions. Unlike the earlier financially successful patent, this one is lodged in the WIPO – Worldwide Intellectual Property Organization allowing them to go forward and take out country specific patents on this. This new patent is low tech and broader than the original data validation patent, but along a similar theme. I will post more on this in a later blog article.
The Datasci Patent impact on eClinical
The urgent demand for edit checking data at point of entry went away for a few years. Online was sufficient for most purposes. With the re-emergence of patient data capture, and a likely demand for offline modes, the DataSci patent is back on the critical list. It is virtually impossible to write an effective web based ePRO system without clashing with this broad patent. It is synonymous with patenting the use of a browser to capture data.
One of the by-products of DataSci is the rash of other patents to emerge since. Companies either see patents as a means of self-protection or, as a future cash cow. Either way, Patent applications are being made by eClinical vendors now, more than ever.
The danger we face now is that the cost of entry to the eClinical world is becoming high – either by risk, or monies. The number of companies that may create or innovate is going to reduce. The technology choices available to develop something new have largely disappeared. This will keep the price tag on the expensive systems high as competition will be limited. The individuals that will suffer will be lower down the food chain – the academics that cannot find an affordable technology, or, the patients that cannot find a drug due to the high cost of development.
The actual principle of a patent – to protect organizations from their products or ideas from being copied/stolen – is not relevant. In my experience – and I have worked for a few of them – companies that are paying up in patent disputes never saw, or were influenced by the patent. In addition, the patent itself has not useful information or value. This was repeated by Jeff Green of DataTrak and by Phaseforward. Proving that is of course difficult. To a degree, unlike theft, this is a case of guilty until proven innocent.
Active Vendor :- If the company that holds a patent is an active vendor, but has secured a patent that is considered by the community to be either a). obvious or b). builds off public standards, then the eClinical community are able to get together. This has already happened with one small eClinical vendor that patented eSource. Bad press is as effective against company that has a patent that is felt to be unjust as it would be for an organization that is being challenged for patent infringement.
Patent Troll :- This is not as easy, as public opinion is less critical. They are not selling a product, so are not impacted by negative public opinion. I can think of some methods, but I won’t repeat them here.
Appeals to the US Patent Authority:- What is possible, is that public moods regarding the granting of patents in this area will impact the initial assessment. The US Patent Authority will not grant a patent if there is sufficient evidence, and public opinion that the application is not merited. Unfortunately, the knowledge of the existence of a patent claim to those that would be in a position to assess or appeal the claim is often achieved after the patent has been granted. I believe this to be the case with the eSource patent (No. 8045581).
Organizations that use, or develop eClinical systems should take steps to ensure the technology they are using, or developing does not infringe on existing patents. This is not altogether easy. Hopefully, the information posted here, and in my next article will be of assistance
A followup post provides an assessment of the principle eClinical patents that have an impact on the industry as a follow-upDisclaimer Note: Information above is not to be read as any form of legal advice. I am an expert in the design and architecture of EDC systems, but, I am not legally trained. The above information should be considered a personal opinion open to public comment. Any factual errors will be corrected following notification by comment or email here. Footnote:  As part of the deal ClinicalInk signed with DataSci, Datasci ‘bought into’ ClinicalInk. ClinicalInk agreed to an equity state in the company in part payment to a licensing deal. This presumably provided DataSci with a future ‘position of credibility’ when fighting future license battles.