Tuesday, 6 October 2015

Prosthetics: the next IP battleground?

"Prosthetics: the next IP battleground?" is the title of the most recent Aistemos IP Analytics contribution to IAM's Weekly Industry Reports (published by IAM last week here). This feature discusses prosthetics -- a US$ 20 billion dollar market but an area of IP investment that rarely features in any analytics -- and describes the key elements of a market that can expect substantial growth in the coming decades. We are reproducing this analysis here for the convenience of those of our readers who may not yet had a chance to read it.


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The concept of improving people’s lives using artificial limbs is as honourable as it is old (prosthetics have been around since the ancient Egyptians substituted missing toes with wooden replicas). Up until the latter part of the 20th century, prosthetics were essentially static limbs; but more recently prosthetic limbs – and joints especially – saw tremendous innovation and a surge in the number of companies entering the market. Add to that recent advances in materials science (eg, carbon) and electronics, and the prosthetics market is undergoing another change.
Figure 1 shows patenting happening over a long period of time, with a surge since 2000.
Source: Cipher, Thomson Reuters
As always, necessity is the mother of invention. With a large number of wars fought in recent decades, one of the many unfortunate side effects has been a surge in the number of disabled former soldiers (an ageing and increasingly overweight population is also contributing to this growth). Many armies, as well as being centres for excellence in electronics and materials science, have prioritised the care of soldiers, which in turn has led to the development of interesting technology. This has also helped to pave the way for prosthetics as a feasible, cost-effective solution for many, leading to a number of innovative small companies entering the space. More recently – with materials, software and electronics becoming the key elements of prosthetics – there has also been a move away from traditional medical doctor-based companies or research institutes to more high-tech driven ventures. With such substantial research requirements and an expensive end product, the need for IP protection is clear. This industry typically relies heavily on mergers and acquisitions, as well as venture capital, and for smaller companies this translates into intellectual property becoming their bargaining chip.
A mixture of technologies is always a hotbed for intellectual property, especially if elements of electronics are involved. Pharmaceuticals, telecoms and electronics are usually what come to mind when thinking about high-value IP sectors; however, the medical device and surgery area is characterised by intense activity and litigation, and has seen some of the largest settlements in history. Organisations in this area are not typically the subject of non-practising entity litigation; instead, there are (expensive and strategically important) head-to-head battles between competitors (see Table 1). This is another reason for smaller companies needing intellectual property to defend themselves, and as they grow the hunted may indeed become the hunter (a Cipher snapshot looking at litigation activities of billion-dollar start-ups (so-called 'unicorns') shows that as they grow, they start litigating against their peers).
Table 1 – Patent litigation within prosthetics
Plaintiff
Defendant
Start date
End date
Status
Thermo-Ply, Inc
Ohio Willow Wood
21/04/2005
28/04/2014
Settled
DJ Orthopedics LLC
Generation II
16/08/2005
18/01/2007
Settled
Molnlycke Health Care
Medline Industries, Inc
28/04/2006
17/09/2008
Settled
Steven Maynard
Hanger P&O
25/09/2006
15/11/2007
Settled
ALPS South
Ohio Willow Wood
13/11/2007
03/12/2008
Settled
ALPS South
Ohio Willow Wood
23/09/2008
-
Active
ALPS South
Ohio Willow Wood
03/03/2009
-
Active
Bulldog Tools, Inc
Prosthetic Design
12/11/2009
10/02/2010
Settled
ALPS South
Ohio Willow Wood
13/11/2009
-
Active
iWalk /MIT
iWalk, Incl v Ossur HF
03/05/2012
12/09/2013
Settled
Ossur
iWalk
03/05/2012
12/09/2013
Settled
Ossur
iWalk Inc
15/06/2012
13/09/2013
Settled
Otto Bock
Ossur
12/06/2013
21/07/2014
Settled
Ossur
Otto Bock
12/06/2013
21/07/2014
Settled
Thermo-Ply, Inc
Ohio Willow Wood
30/10/2013
17/06/2014
Settled
Freedom Innovations
Blatchford
25/06/2014
-
Active
Freedom Innovations

Blatchford

25/06/2014
15/10/2014
Other

Source: Cipher
Figure 2 drills down further into the field of prosthetics, examining some of the most well-known players and uncovering what is driving this surge. A couple of companies have exhibited tremendous growth in recent years, most of which primarily focus on exoskeletons (eg, wearable suits or walking assists). The largest portfolios are held by bionics companies (eg, prosthetics with microprocessors, also known as robotic prostheses) and the big incumbent orthopaedics/joint companies (eg, knee and hip replacements). There is also a clear difference in growth between incumbents in orthopaedics/joints and bionics, with bionics still exhibiting double-digit growth.
Source: Cipher and Thomson Reuters
As the area of fastest growth, is the exoskeleton sector full of small companies working on innovative new solutions? Figure 3 plots the largest patent owners and the most active companies. This field has attracted activity from universities and Honda is the leader in the field (the legacy from its Asimo project). However, other companies and universities/research institutes are the leaders in terms of growth.
Source: Cipher and Thomson Reuters
With universities and companies spread around the world, it might be imagined that they have broad geographical profiles. However, most protection is sought in the United States, as seen in Figure 4.
Source: Cipher
So what are the predictions? It appears that advances in electronics and robotics will lead to further innovations and advances in prosthetics and bionics – it could be argued that they already have. So in this area too, there is no immunity from IP wars. The market is currently valued at $20 billion and the potential for man and machine has never been greater.

1 comment:

  1. There's a good piece on IP Watchdog on the history of patents for prosthetics by Steve Brachman at http://www.ipwatchdog.com/2014/12/01/the-evolution-of-prosthetic-devices-a-patent-history/id=52227/

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