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Growing competition in healthtech underlines the importance of IP rights for startups
As I’m writing this post, the activity tracker on my wrist starts beeping to remind me that I’ve been sitting far too long and should get up and moving. That’s how health technology is sneaking into the life of a sedentary office-working patent attorney. Of course I don’t need a beeper to understand that exercising is vital to stay healthy. Yet I admit that tracking my activity even in such a simple way has already – through inspiration or guilt-tripping, whichever way you want to put it – changed my life to a healthier one.
This change is also very visible when I’m meeting companies in startup events or other places. More and more I’m being presented, or keep finding on my desk, innovations related to subjects such as diagnosing a person’s state of health, or using data from physiological measurements in a new way.
So how do you define health technology? You could say it includes devices used by healthcare professionals, such as imaging and treatment devices. On the other hand, you could say it covers diagnostics, support systems, portable health monitoring applications, or utilization of genomic data.
Innovations in health technology are often related, for instance, to health care workflows, quality of treatment and patient experience. In other words, they are coming closer and closer to the users and patients, and are present in our everyday lives. Also digitalization affects health technology applications.
Healthtech is an IP-intensive industry
Health technology is one of Finland’s largest and most rapidly developing high technology exports, its value being over 2 billion euros last year. It provides employment for more than 10 000 people in Finland, and is also an export industry that’s clearly in surplus. According to an estimate by Forbes Magazine, health technology was also the most profitable industry in the United States in 2016.
The flipside of this is that growth increases competition in the healthtech business. This can be seen for instance in the increasing number of filings for patents and other types of intellectual property rights. Statistics from the European Patent Office show that in 2016, more patents were filed in the field of medical technology than in any other field, including ICT which is well known for its patenting activity.
How can a startup convince investors and users of the uniqueness of its innovation?
Hundreds of Finnish startups have sprung up in the healthtech industry, which I of course see as a good thing. However, these new enterprises should be aware of the severe competition and the increasing number of IP registrations. If your startup goes to a trade fair to present a new and innovative wearable smart device for tracking the vital signs of a person, how can you stand out from the dozens of other smart devices on display? You should be able to convince the investors, as well as users, that you’re offering something different from the other products on the market.
Is your brand in good order and properly protected? Are you able to prevent your competitors from introducing similar devices? One of the possible pitfall scenarios could be that you’d receive a letter from your competitor after the fair, claiming that your device infringes on their patent, or that the brand you just launched infringes on their trademark and you may no longer use it.
If you want your business to prosper in an IP-intensive industry, such as healthtech, whether in Finland or abroad, it’s important to make sure that your core technology is properly protected, or at least be aware of the IP owned by other companies. Unfortunately, in my experience, startups don’t always pay attention to intellectual property rights until they are forced to.
The earlier you set up a clear IP strategy, considering both your own IP as well as that of other companies, and the better you plan and implement your long-term strategy, the better will be your chances to respond to the competition and convince your investors.