MedTech Mindset Podcast: Staking Your IP Claim

EPISODE 8 – Staking Your IP Claim

In this episode, Gregory Bernabeo, Patent Attorney and Partner at FisherBroyles, covers intellectual property ground rules and special topics in the medtech space. 

Greg and Dan discuss:

  • Why a patent isn’t what (exactly) what you thought
  • Is my medtech innovation patentable?
  • Are patents valuable if I can’t afford to litigate?
  • Can medtech innovators protect their IP rights and publish their research?
  • What’s important when selecting a patent attorney for my medtech project?
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Episode Transcript

Dan Henrich:                     Hey Greg, thanks so much for coming in today to talk with us about IP and patent issues regarding medtech.

Greg Bernabeo:                My pleasure to be here. Yeah.

Dan Henrich:                     Before we get started, maybe you can just tell us a bit about who you are, your background, your position and the firm that you work at.

Greg Bernabeo:                Sure. Be Happy to do that. Well, thanks for having me today. I’m glad to be here to talk to you about these questions and issues today in intellectual property. It’s where I spend my time. I’m an intellectual property attorney, a patent attorney by trade. I’ve been practicing for over 20 years. I work as a partner at the law firm of FisherBroyles and my core of my expertise is patent prosecution.

Greg Bernabeo:                I’m a mechanical engineer by training, but my technologies span mechanical, electrical mechanical, computer hardware and software and is a very good fit for a lot of what we see in the medical device space.

Dan Henrich:                     Well, I’m so glad to have somebody who has both an engineering background and an IP background to talk with us about these things. So why don’t we jump in here and just start by talking a little bit about what a patent is in theory and in application. I think people conventionally think of a patent as a stamp of approval from the government to commercialize a particular product or technology, that’s not quite correct, right?

Greg Bernabeo:                Not quite.

Dan Henrich:                     Tell us your take.

Greg Bernabeo:                What is a patent? A patent is a grant from the government of course, and they’re territorial. A US patent has application in the United States. It gives you legal rights in the United States, specifically the right to exclude others from making, using, selling, offering for sale or importing into the United States the patented product or making use of a patented process. So ultimately it’s a right to exclude others, not a right to practice.

Greg Bernabeo:                And I think in some ways, this is maybe the least intuitive part of patent law, but the idea is that you can have an improvement to something that is patent worthy and yet someone may have a prior patent that’s broad enough to keep you from practicing your invention. And so there are slightly different analysis for determining whether what you have is patentable versus whether you have a right as they might say, to practice it, to use it.

Dan Henrich:                     Gotcha. Okay. And what about the various types of patents? I hear this is a utility patent, this is a design patent, this is a provisional patent. Can you talk to us a little bit about what the different aspects of it are?

Greg Bernabeo:                Sure. Absolutely. In this context, in the medical device field that we’re really talking about two different types of patents. Utility and design. So design covers the ornamental aspects of an article of manufacture. That’s the language in our law. The ornamental aspects are essentially how the product looks. Utility patent is really the other type of patent. The second type. Utility patent covers not particularly the way something looks, but more so how it is structured or how it works or maybe a process and how the process is used.

Greg Bernabeo:                It’s more about typically structure and functionality than appearance. And in a lot of ways a utility patent can be much broader than a design patent. A provisional is a utility patent concept. A provisional is not strictly speaking of patent, it’s a patent application. It’s a first step down the road towards utility patent protection. 

Dan Henrich:                     What are the elements that I have to demonstrate in order for my application to be granted?

Greg Bernabeo:                Essentially, what you have is new. It’s thinking about it a very high level, but the legal test are utility, novelty and non-obviousness. So what does that mean? Well, there’s a lot that we could probably talk about on that front, but it’s probably enough to say for any kind of device product that has a physical structure, utility is very unlikely to be a bar that you can’t overcome.

Greg Bernabeo:                In the field of medical devices, I think you’re a lot less likely to have the typical problem with respect to utility. You can almost put that off to the side. What you really need to be thinking about is novelty and non-obviousness. Novelty means your device is new. Nobody’s done it before, doesn’t mean not on the market. It means nobody’s done it before typically from a structural sense, and that means no one in the US, no one in the rest of the world. It’s a global standard as to whether your product is new, your invention is new.

Greg Bernabeo:                Non-obvious means maybe nobody’s ever done it before, so maybe it’s novel, but non-obvious means different enough from what someone has done before. If what you’ve developed is new and different than what anyone has done before, but it’s all such a minor and trivial variation that it’s a mirror obvious variation of what has gone before, patent law’s not going to give you a patent, but if you’ve made enough of a step away from what’s already been done before, then you can demonstrate that your development is not only novel but also non-obvious and that you’re entitled to a patent.

Dan Henrich:                     Okay. What about what is and isn’t patentable? For instance, if I’m a surgeon and I invent a new surgical technique that no one has used before, can I protect that for my institution or for my practice?

Greg Bernabeo:                Yeah, that’s a good question. I think sometimes you see different answers to this question, but my answer to this question is, yes those techniques are patentable. A surgical technique or method of treatment type of claim is generally speaking patentable. Generally, they’re not enforceable in the US against a surgeon or a doctor. Usually you find that those claims are somewhat disfavored because the thinking is, “Well, we’re not going to be able to enforce this method claim against the person who’s going to be carrying out the method, the person who’s providing the treatment.”

Greg Bernabeo:                But the truth of the matter is elsewhere in the world, methods of treatment are in some ways a little bit more patentable. And even here in the US there are reasons to have those claims. And one of the reasons is that a medical device manufacturer may be pursued because they’re contributing to or inducing infringement of the method claim by providing a device that can be used in the infringing method.

Greg Bernabeo:                It serves a strategic purpose, but to the extent people say those claims are in lay persons term invalid or you can’t get those claims, I think what they’re really referring to is you can’t enforce them against the practitioner because the public policy of making sure that you’re treated properly with the right treatment when you need it outweighs the patent interest. Nobody wants your doc running off for a patent license in the middle of your procedure.

Dan Henrich:                     Okay. All right. Can you maybe just take us quickly through the typical patent process? There’s a lot of terms that we hear. Freedom to operate, prior art, patent prosecution, request for continued examination, patent maintenance. Can you just take us through the process and explain where the main terms come into play?

Greg Bernabeo:                Sure, absolutely. The way I’d put those terms together is that you might normally start with a freedom to operate search or study or non-infringement study. What this generally means is non-infringement typically you know the patent and you want and determine if I make the product I intend to make, am I going to infringe this patent and hopefully you can come to a non-infringement conclusion. That might be one of your earliest steps.

Greg Bernabeo:                Freedom to operate search is generally a little bit of a broader term, meaning you’re looking at the field of patents more broadly and you’re trying to determine whether there are any patents out there that might be problematic for you, and when you find one you might do an infringement analysis and hopefully come to a non-infringement conclusion. So those terms are about understanding the rights of others before you move forward with your own rights or your own product.

Greg Bernabeo:                And when you’re looking at those patents that already exist before you came along, you’re looking at the prior art. That’s the term we use, the prior art, you might say the state of the art. You’re looking to a body of knowledge that predates you and it’s against the prior art that the novelty and non-obviousness of your invention will be determined. So you’re going to compare what you’ve developed to the prior art.

Greg Bernabeo:                When you start your own process, you’re trying to advance the ball with your own intellectual property rights, one of your first steps might be a patentability study. So you might go out, look at those patents and determine, regardless of whether you may infringe them and there’s freedom to operate, you might look at whether what you have is different enough that you’re entitled to your own patent, determine whether what you have is patentable. Then you may file an application and that’s where the patent prosecution process really begins.

Greg Bernabeo:                Patent prosecution is a little bit of an unfamiliar term. Prosecution used in an unconventional sense for most people, but what it really means is the process of applying for the patent and the back and forth communication with the patent office where you might say you’re negotiating the scope of your rights under the eventual patent, and so that starts with a patent application or a patent filing. And during the patent prosecution process, typically the patent office makes rejections and the attorney and patent applicant make responses to overcome those rejections. And if you’re successful at the end, you get a notice of allowance, which means the claims you’ve negotiated that define the scope of your rights have been approved and your patent is going to issue.

Greg Bernabeo:                And so when your patent issues, you get an actual physical hard copy with a nice seal on it and that is the paper documentation of your patent rights and it’s an issued patent. Along the way, you might have to go through multiple rounds of patent prosecution and you only get so many for your filing fee. And so they might at some point say, “We’ve given you as much review as you’re entitled to for your filing fee,” and you might have to request continued examination, which is more about the fee for continuing prosecution than it is about other requests.

Greg Bernabeo:                You pay the patent office to keep going. You get to your notice of allowance, your patent issues and post issuance. After the patent has issued, you have to pay maintenance fees in the US to keep it in force. And those are due in the US basically every four years after patent issuance.

Dan Henrich:                     The typical term for a utility patent as 20 years, is that correct?

Greg Bernabeo:                It is 20 years and it’s under the newer laws. It used to be 17 years, but under the newer laws it’s 20 years, but those 20 years are no longer measured from issuance. They’re 20 years measured from filing, but there are actually term extensions that are available for various reasons.

Dan Henrich:                     Okay. This is a question that came up was we were thinking through, what’s particular to medtech about this conversation we’re having. You’re going through this patent prosecution process with the US PTO, the Patent and Trademark Office, and you’re trying to convince them of the novelty of your idea. But many of the clients that we’re dealing with, and I’m guessing many of the clients you’re dealing with are going to take a 510(k) approval pathway through the FDA.

Dan Henrich:                     To do that, they have to then turn around and convince a separate federal agency that basically what they’re doing is not new, that it’s safety and efficacy, essentially how it works is the same as a product that’s already on the market or maybe a host of other products and they’re going to cite that as a predicate. Do those claims ever come into conflict your world?

Greg Bernabeo:                Well, I should start by saying I’m a patent attorney and not an FDA regulatory attorney. And so there may be FDA regulatory attorneys that are closer to that issue than I am, but I would say I haven’t seen that problem. I think what the best answer to that question is, is that the purpose and focus in meaning of same as the predicate device for safety and efficacy, it’s really a different analysis than what we’re talking about. We’re talking about novelty in the patent context.

Greg Bernabeo:                I think the FDA is really more focused on the impact to the patient and very often in the patent process. We’re not nearly focused as much on impact on the patient as we are on things like structural differences. I think the structure could be different and the impact to the patient could still be the same.

Dan Henrich:                     Okay. All right, well let’s talk a little bit about how your patent informs the rest of your business strategy. So if your patent is pending, you have filed the application. What protections do you have for your IP? Is it done at that point? Do you have to be worried about your intellectual property if you’ve got a good solid application that’s currently being prosecuted?

Greg Bernabeo:                A couple of answers to that question. Patent application is important for any inventor. It’s an important step because it can prevent the loss of your patent opportunity or the loss of your patent rights because you have only a limited window of opportunity in which to pursue patent protection. When you have something that’s new, it’s not new forever. And ultimately, if you sit on that development too long, your own work can be used against you in determining whether what you have is new in certain circumstances.

Greg Bernabeo:                Filing an application is important because then you are more free to go and talk to those potential commercialization partners because you’ve captured your IP in an application. At the same time, you’re not done, definitely you’re at the first step along the path towards an issued patent to having filed your application and you have not yet enforceable rights. You have inchoate rights. You have rights that are not yet mature. So you’ve captured your intellectual property, which is important because then you can more freely go out and talk to these commercialization partners without losing your patent opportunity.

Greg Bernabeo:                But you don’t have something that you can use at that moment to stop someone else from making or using your development. You need to advance the application through the issuance to have that enforceable right where you could actually sue someone and get a judgment that would pay you royalties or an injunction that would preclude them from practicing.

Dan Henrich:                     It’s still then probably very important if you’re having conversations in any detail with commercialization partners, potential investors or vendors that you have a non-disclosure agreement in place prior to getting into any confidential details. Is that correct?

Greg Bernabeo:                Absolutely. That’s getting a non-disclosure agreement in place is important for a couple of reasons. It’s not a substitution in any way for your patent rights, but it complements them and so by proceeding in a way such that you have a confidentiality agreement in place first, it’s supports your efforts in not disclosing your invention before you’ve filed your patent application or even afterwards.

Greg Bernabeo:                And it also creates an immediate contractual obligation on the other party, but you can hold them responsible to in terms of not using or commercializing or disclosing your technology, and that’s great because it’s an immediate contractual obligation when you do not yet have IP rights that you can use because you don’t yet have an issued patent. So it can provide you some measure of protection of a certain sort before you have patent right type protection.

Dan Henrich:                     A lot of our clients come from academic backgrounds, that might be part of a large research hospital or university health system and in those academic environments a lot of your progress is measured by how much you publish.

Dan Henrich:                     Publishing, there’s an emphasis on publishing research, but if that’s research that you’re hoping to commercialize, does that ever come into conflict and how should you try and negotiate that in terms of making sure that your IP is protected?

Greg Bernabeo:                Yes. This is definitely something that comes up quite often because there is pressure to publish and get it out in the hands of the public as soon as possible. That objective works in a lot of ways, contrary to the objective of the patent applicant, which is really keep it secret until you file the patent application. So really what you need to do or we do as attorneys working with our inventors who are sometimes faculty, we make sure that they understand that we can work best together when we coordinate our efforts.

Greg Bernabeo:                There is a way to play the game such that they can go ahead and publish and you can still file a patent application at least in the US, but you might trade all of your international rights for that publication. You’ll lose those international patent opportunities. The best answer to that question is why don’t we work together from the earliest point so that we can get a patent application on file for you before you publish a publication that might work against you and not every publication necessarily does.

Greg Bernabeo:                When the applicants or the professors or inventors are doing their job as well as they can and we’re doing our job as well as we can, we’re working hand in hand so we understand what’s going to be published and when, so we can build an IP strategy around that. My view is always that IP plays a supporting role for the business or the university or the applicants. And so we have to find a way to conduct ourselves that fits with the objectives, not to reshape the business processes so that it’s convenient for the IP process.

Greg Bernabeo:                So we play a supporting role and we try to tailor how we do and when we do what we do, so that supports what people want to do anyway. But we can only do that when we’re working together really from the early stages.

Dan Henrich:                     Okay. So what about the flip side of the equation where maybe an inventor is in a different environment where they know that there are competitors working to solve the same problem and they don’t want to tip their hand by filing a patent application which will become public. They don’t want to let their competitors know the approach that they’re taking to the problem. Does it ever make sense to hold off on filing?

Greg Bernabeo:                Yes, it can make sense to hold off a bit, but it’s very dangerous with respect to your patent opportunity, especially under the newer and relatively recent in the timeline of patent system laws that are first to file laws because if your competitor publishes before you file you’re out of luck really, your patent opportunity evaporates. The other part of my answer to your question is that, when you file your application will not necessarily be published and it certainly won’t be published immediately.

Greg Bernabeo:                In the normal course of events, you file a provisional or a non provisional application and the first publication is 18 months later. So you’ve got at least 18 months, even if you’re going the route of making it available through the patent process as soon as possible. If you are willing to limit your rights to the US only and not pursue foreign rights, which is not always the case, but it’s sometimes the case, you can actually file your application and never have it published as an application, it will publish only when you have an issued patent, only at the very end of the process.

Greg Bernabeo:                So at that point, your competitor may learn of what you’re doing, but you’ve already have your IP rights in hand. You’re a little more vulnerable when they see your publication and you don’t yet have your rights in hand and they can learn from what you’re doing and perhaps even make use of it for your patent issues. But so there are different ways to address those concerns.

Dan Henrich:                     Okay. We’ve talked about a patent has really a means of not so much as a license to commercialize or that you necessarily have the ability to commercialize an idea, but you have the right to block someone else from commercializing whatever piece of the process you have patent rights to. That all makes sense, but for a startup company almost every one of them is running on limited cash. They have a limited runway and they cannot in most cases afford to litigate against a competitor who’s infringing on their patent rights, especially if it’s a large competitor with deep pockets.

Dan Henrich:                     In that case, my question is what’s the real value of a patent if you’re in that environment where you might go through the patent application process and pay your fees and pay your attorney and at the end of the day you have a patent, but you can’t afford to defend?

Greg Bernabeo:                Again, a few answers to that question. So when you file your patent application, you’re not going to have a patent immediately. So not going to be suing immediately, but you have to capture your rights immediately or almost immediately because that’s the way the patent system works. There’s only so much you can do and keep your patent opportunity before you file a patent application. So the patent model really is file early.

Greg Bernabeo:                If startups had their choice, they would develop something, commercialize like crazy, see it’s worth a fortune, then take a little bit of that and put it in patent process. Unfortunately, that’s not the way it works. And the reason for that is the objective and in our constitution is to essentially accelerate the progress of science. So the model is, come up with something, just put it in the hands of the scientific community essentially as soon as possible so that the scientific community can learn from it and grow.

Greg Bernabeo:                That’s the reason why you can’t just sit on it. Part of the reason why you can’t just sit on it and then come back and do the patent process later. Patent process is really one that needs to be addressed very early on in order to keep that window of opportunity open.

Greg Bernabeo:                The other part of my answer is that you can do something short of litigating. Well, even before I give you that part, if you have a good position, you can find litigation finance companies that have business models of even particularly in the IP space, financing litigation and taking a piece of the recovery. So that’s another reason why, even if you don’t have all the money in your pocket, it may still make sense.

Greg Bernabeo:                You can also do something short of litigation. Sometimes something can be resolved by a demand letter, and you certainly don’t need the same budget you need for litigation to do that.

Dan Henrich:                     Like a cease and desist-

Greg Bernabeo:                Like a cease and desist letter. Exactly. And there can be some pretty stiff penalties for a competitor that knows that they’re violating your patent and continuing to do so. And that puts pressure on settlement even when you’re in the demand letter context. And you may have to go further to get there, but still there are reasons that someone who receives a demand letter may want to pay some close attention, particularly if they’re a big player.

Greg Bernabeo:                Another reason is that, if you don’t pursue those rights early on, that window of opportunity closes and it’s lost forever. And another reason is that by capturing that IP and establishing even an inchoate right, even you don’t have an issued patent yet, you have an application that has value. And so you can attract partners, commercialization partners, potential licensees, you can leverage or sell the patent application at least procedurally. And it has value as of the time it’s captured in.

Greg Bernabeo:                The one that maybe comes into play most often is that it’s part of a portfolio or part of a package that is a startup’s value really. It’s part of a startup and it can be used to attract capital into the startup, and oftentimes that is a motivator for a startup to want to capture their own IP. It may be that an investment in IP handling it in a diligent and thoughtful way and demonstrating that the startup has the wherewithal to execute in development and documentation and the patent process is a little bit confidence inspiring, that there will be further innovation and even the first one isn’t fully funded, there’s something there.

Greg Bernabeo:                And a lot of times IP does take somewhat of a meandering, or maybe it’s fair to say an iterative path, and so that there are not only a development, but there are also follow on developments that can be captured. So all of that weighs in favor of capturing what you have, and you have to do it in a thoughtful and strategically meaningful way, but I think the decision process is really not, if I don’t have enough millions of dollars to litigate then I shouldn’t file because there are a lot of other paths that don’t lead directly to litigation.

Dan Henrich:                     As someone who advises startups in terms of their IP strategy, do you ever take that iterative approach to say, “Okay, well this is what you need to demonstrate is patentable for your next round of funding. Let’s worry about claims, 2 through 10, further down the road after you have more capital.”

Greg Bernabeo:                Yes. Essentially, yes. There are a couple of ways to do that. One of the ways may be to file on a first application that has a scope that you’re able to pursue now even if you have to put some stuff on the back-burner. Putting it on the back-burner does have some risks. You can also file a broader application with the intention that it may be broader than what you can handle in a single application, but at least you’ve captured it and you can put it on the back.

Greg Bernabeo:                Back-burner meaning you can divide the application essentially into parts and pursue one part now and the rest of the parts later. And yet by making your filing, you’ve established an early priority date. You’ve captured it and essentially gotten a place in line at the patent office or in the state of the art, so that you could come back and pick it up later.

Greg Bernabeo:                So there are a couple of different ways that you can play that game so that you may have IP but limited resources and there are ways to plan for taking off a comfortably sized chunk and dealing with it sooner and deferring some of the rest. There are also procedural opportunities to try to take the slow path towards patent protection.

Dan Henrich:                     Okay. Let’s keep with that idea of a medtech startup that’s has a limited amount of cash. They’re looking to stay lean. Are there steps that, especially if someone is technically inclined, like an engineer, inventor or something like that, are there steps those folks can take ahead of engaging an attorney or a firm to prosecute their patent application to do preliminary work?

Dan Henrich:                     Is it worth spending time on Google patents or going through the US PTO database to try to do a solo prior art search or whatever? What can folks do to try to be in the best position they can when it’s time to bring on someone like yourself?

Greg Bernabeo:                I think the question is really focused at the very small end of the startup. Correct me if I’m wrong, but if we have someone who’s maybe thinking about striking out on with a med tech development in a startup mode, is there something they can do to begin to get the ball rolling? I think maybe one of the best piece of advice there is, yes, there are.

Greg Bernabeo:                And one of the best things you can likely do for yourself is make sure that you have a clear articulation of the development. And so before you see an attorney that will allow things to proceed much more efficiently. And so if you can prepare some text or description or even PowerPoint slides and drawings that would be fantastic. Even hand sketches can be very useful, but what typically is most helpful is a careful consideration of what the development is, why it’s being developed and how it works in a way that communicates it well in documentation.

Greg Bernabeo:                That usually works best. You don’t have to have it, but if you went to promote efficiency, that probably helps. And the exercise of preparing those documents on the inventors part is worth something in and of itself in that it forces them to think carefully about, “What do I have? Why do I think it’s novel?” Even in the absence of the prior art that can be very useful.

Greg Bernabeo:                Doing their own search can also be useful. That said, everything you find and touch need to keep track of because in the application process we’ll need to disclose things that are relevant to the determination of whether or not what you have is new and so the inventor will have an obligation, the attorney will have an obligation. And so a reasonably focused search can be helpful. Even better would be a patent attorney’s patentability search. And the reason for that is poking around on Google patents and doing word searches or poking around in the patent office website and doing web searches is not the same way that a patent attorney would typically search for a patentability search. We focus using a subject matter based and indexed classification system that categorize a subject matter in a way that is really independent or not so dependent of any particular words.

Greg Bernabeo:                Doing a word search is different than a classified subject matter search. So we can tend to get better results. But doing some searching on the inventors part I think is a valuable step and preparing drawings, I would say yes, that’s worthwhile, although any drawings that are prepared will be very helpful. Well done drawings as you might get from a Smithwise or someone else would be very helpful. I think what should be kept in mind is that very often those drawings will not ultimately be used in at least a formal patent application, they may be used in a provisional, but in a formal patent application, there are strict and varied drawing requirements that the patent office has.

Greg Bernabeo:                So it’s very unlikely that a lay person is going to produce drawings that are going to comply with the way the patent office wants to see it, but in terms of communicating it to the patent attorney, that can be very, very effective and they’re often sufficient. They’re often sufficient for at least a provisional application where those drawing rules are not applied in the same way.

Dan Henrich:                     We talked a little bit then about when the right time to begin the patent process then. You alluded to something earlier about the change, I believe it’s the American Invents Act set, the change from a first to invent to a first to file system.

Greg Bernabeo:                Yes, that’s right.

Dan Henrich:                     In light of that change, how important are keeping good records, lab notebooks, documenting the timeline of your development and all that sort of thing?

Greg Bernabeo:                I think you’re asking that question is the role of lab notebooks has changed somewhat with the coming of the America Invents Act, which did change us to a first to file system. So the American Invents Act has to some extent created a race to the patent office in a way that it didn’t really exist before. Because under the old system, the first to invent system, someone who filed later would not necessarily be a problem for you as the applicant if you were the first to invent because the determinations were made by who was first to invent.

Greg Bernabeo:                Now, the system doesn’t work that way anymore. It’s first to file, it’s first inventor to file. It’s really what it is, but someone else can pose a problem for you in terms of getting your own patent rights if you are not the first to file. Lab notebooks used to be used or the importance of lab notebooks in the patent prosecution process used to be use them to show that you were first to invent. So for a newly filed application, you’re not going to use a lab notebook to do that anymore because it’s not relevant in the way it was in the past.

Greg Bernabeo:                That said lab notebooks are still important and they’ve always been used for purposes other than preparing a declaration to show that you were first to invent as part of the patent prosecution process. It can be used for fundamental documentation to show that you are in fact an inventor, it can be used maybe to document something that ultimately is a trade secret, it can be used for a number of different purposes.

Greg Bernabeo:                The other thing that it’s more likely to be used for under the American Invents Act is to show that something is your own work and not derivation, it’s not derived from somebody else, which is a concept that’s more central to the American Invents Act. It’s a newer concept. I would say the answer to that question is they’re still very important. There’s no reason to discontinue any keeping have lab notebooks. In the patent prosecution process, they won’t be used in the same way that they’ve always been used, but they should still be kept.

Dan Henrich:                     Okay. This is a question that comes up fairly often, I would say with our clients at Smithwise. Many of our clients are perhaps clinicians or that’s the origin of an idea and so they are the original inventor, but then many of those folks go out and they hire a firm like Smithwise or an engineering firm to develop that concept further and those people are often gonna get involved prior to the patent application being filed.

Dan Henrich:                     Who needs to be listed on the application as an inventor? And is there a distinction between inventorship and ownership even if you’re going to sign the IP rights over?

Greg Bernabeo:                That’s a great question. This fundamental question of who’s an inventor comes up in a lot of different context and it comes up pretty often. Absolutely, inventorship and ownership are two entirely … Well, they’re two separate concepts certainly. And the question of who is an inventor it’s really a fact question. It’s governed by certain legal principles, but the question when you’re thinking about inventorship is who are those people who actually conceived of the invention? Who created it? Without regard to, are they in my company or somebody else’s company?

Greg Bernabeo:                The inquiry is just who contributed? Who contributed to the creation? Ownership is handled separately from inventorship. Ownership may be governed by contract or by whim. You may choose to assign it to someone without an obligation. And typically when a party like Smithwise is engaged to contract with inventors to do some development work, in my experience, it’s not uncommon that there will be ownership provisions in there sometimes.

Greg Bernabeo:                Ownership provisions in there and sometimes it will provide that ownership will be in the hiring party. And so ownership would be handled by an assignment document where the actual inventors sign a document saying, “I’m transferring my rights over to a company.” They’re two entirely separate issues. You absolutely need to not allow ownership to interfere with the inventorship determination.

Greg Bernabeo:                Identifying the inventors properly is very important for the integrity of the patent. Under certain circumstances when you’ve improperly named the inventors, it can be grounds for holding the patent unenforceable. It can be invalid essentially.

Dan Henrich:                     If you had advice to give, an inventor who knows that they need IP help, how would you advise them to go about finding a firm or finding an attorney or an agent to assist them with their application? What should be their criteria and what should their process look like from your perspective?

Greg Bernabeo:                Well, it’s definitely important to shop around because not all attorneys or all firms are equal. You need to find someone that you’re certainly that you’re comfortable with. I think what you should be shopping for is someone who has, I’ll say the right experience, but what does that mean? There are certainly going to be good patent attorneys at firms of all different types, small, medium, large, but what I think you’re looking for when you’re looking for a patent attorney in this space is someone with the right technical background.

Greg Bernabeo:                If you’ve developed something that’s a chemical development, you’re going to want a patent attorney with a chemistry background ’cause they’re going to best understand what your development is and how to present it. If you develop something that’s more electrical, maybe you need an electrical engineer, maybe software, you want someone who’s familiar with software, if it’s mechanical, you want a mechanical engineer.

Greg Bernabeo:                Although many of us because the projects are so intertwined with mechanical, electrical and software aspects you find that we practice and really across all those fields. But fundamentally you’re looking for a good technical match between your patent attorney and what you’ve developed. So you wouldn’t want a biotech patent attorney, you’d really want an engineer who’s familiar with the issues, if you have engineering in your device. That’s one of the first things I’d look for.

Greg Bernabeo:                Another thing I’d look for is experience in the medtech space. I think that’s also very important. Perhaps secondary to making sure you find the right technical match, but can be very important in ways that go beyond just the pure patent prosecution process. Also, want to think about the firm and how the services will be delivered and make sure that you have a good fit there as well. So again, not all law firms are the same. Not all attorneys are the same. You need to find someone you’re comfortable with.

 

Dan Henrich:                    You alluded to this earlier a little bit, but can you just tell us when would you say is the right time to involve a patent attorney or an IP firm for the first time? Is it when you have a napkin sketch, should you have a functional prototype? When should you go have that first consultation meeting with a patent attorney?

Greg Bernabeo:                I think it’s never too soon to have that initial consultation. I know that I’m always happy to talk to inventors or companies, startups even before they’re really ready to engage me. And the reason for that is, as we mentioned earlier, there’s a limited window of opportunity to pursue patent protection. Typically, in that first meeting we’re thinking about have any activities already taken place that could compromise patent rights? If so, when did they happen? What’s a critical date that we need to monitor?

Greg Bernabeo:                Or if something hasn’t already occurred or at least having a conversation about the fact that there is a limited window of opportunity and making sure that they understand what they should be keeping their eye on in terms of activities so that they can proceed in a cautious and thoughtful way that will preserve their rights and meet their goals. And so I think it’s never too early to have that initial consultation.

Greg Bernabeo:                Sometimes I find that I have an initial consultation, I get the client oriented in terms of thinking about what they should keep their eye on to preserve their IP rights. But I tell them, “You’re probably not going to need me until you get a little bit further along in articulating your ideas.” You don’t need to engage me. You don’t need to hire me until we get a little bit further along. Sometimes, if I feel that way, I certainly say it, but I think from the client’s perspective or from the medtech companies perspective, med device companies perspective, it’s never too early to have that conversation because time ultimately is working against you and you’d hate to find that you just missed your window of opportunity.

Greg Bernabeo:                You’d rather know about it and then you can decide whether to take advantage of it or not, but at least you can do it knowingly so it’s never too soon.

Dan Henrich:                     Sure. It seems like that initial conversation will be pretty important for a company that has just started to put together what is their IP strategy and how does it tie in when they’re presenting to investors, they would probably want to be able to say, “We’ve had preliminary conversations. This is our plan for when we’re going to file a patent if we haven’t already.”

Greg Bernabeo:                Absolutely. Absolutely. That can be very confidence inspiring and it demonstrates IP savvy and I think it can only be well received. Personally, I’m always happy to have that initial consultation at no charge.

Dan Henrich:                     Great. Well, we’ll make sure to post your contact information on the blog when we put this episode up.

Dan Henrich:                     Great. Thanks so much. I really appreciate.

Greg Bernabeo:                Thanks you. I love talking about these topics.

Dan Henrich:                     All right. Thanks.

Greg Bernabeo:                Thank you.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

Overcoming Pediatric Device Innovation Challenges

EPISODE 7 – Overcoming Pediatric Device Innovation Challenges

In this episode, Matthew Maltese, Executive Director of the PA Pediatric Medical Device Consortium covers why it can be so hard to bring devices to market for kids and what we can do to help fix that. 

Matt and Dan discuss:

  • Current barrier to pediatric device innovation
  • How pediatric specialists operate without pediatric devices
  • Risk/Benefit rationale for small patient populations
  • Current industry and FDA initiatives to bring more devices to market for kids

Please note: We reference the Biodesign textbook in our conversation as a great resource. It’s available for purchase on Amazon here

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Episode Transcript

Dan Henrich:     Hey, Matt.

Matthew Maltese:          Hey.

Dan Henrich:     Thanks so much for being our guest today. I’m really glad to have the opportunity to talk with you about pediatric devices and how we bring devices to market for small patient populations. I think you and I met for the first time last year at Children’s Hospital of Philadelphia at an event for FDA reviewers-

Matthew Maltese:          That’s right.

Dan Henrich:     … To understand what are some of the challenges for pediatric devices coming to market. I wanted to maybe take some elements of that event and those conversations and package them into an interview between us for our listeners, who may not be familiar with those challenges. Can you tell our listeners a little bit about why is it so difficult sometimes to bring pediatric devices to market and why are they different from devices for adults?

Matthew Maltese:          The challenge with pediatrics is that there are technical challenges associated with it. The growth of a child throughout the intended use of a device can be challenging, particularly for implantable devices. You can imagine a heart valve, for example. There’s wonderful unmet need potential for anyone who can develop a heart valve that’ll grow with the aorta or the other great vessel that the valve needs to go in.

Matthew Maltese:          There are those technical challenges, but then there are simply financial challenges. I’ve given talks around the country on medical devices and kids, and I will often ask the audience. I’ll ask them, “How many of you have parents?” And everybody puts their hand up, right? Everybody’s got a mom or a dad, or a mom and a dad. Then I ask, “How many of you have children?” A smaller subset of the group will put their hands up. Then I ask, “Okay, for everyone who has both parents and a child or children, if you had a choice to develop a medical device or other therapy or pharmaceutical that would save the life of your parent or save the life of your kid, who would you pick?” Uniformly, who would they pick, Dan?

Dan Henrich:     I’d pick my kid.

Matthew Maltese:          You’d pick your kid.

Dan Henrich:     Sorry, Dad.

Matthew Maltese:          Everybody picks their kid. Your dad would pick your kid too. Everyone uniformly chooses their kid. However, as a society, it doesn’t always work that way. In fact, it rarely works that way. We know that the marketplace for adult products, particularly, you take orthopedic products for the hip and the knee and elsewhere, there’s so much volume there. So many cases and so many devices to be sold that that’s where much of the attention goes.

Matthew Maltese:          It can be just very difficult to draw attention to the kids, because the populations, as you put in your opening remarks, are small, meaning there are few in the population in addition to be individuals in the population being small, physically small. That there are few in the population and so there can be challenges because the upside from a capitalist perspective is not as big. However, there’s still an upside. I think that’s there’s still an upside in most devices for kids.

Dan Henrich:     Are there VC firms or angel investors who specialize, then, in small population or pediatric devices?

Matthew Maltese:          There are. There are some firms that have, I guess, identified that this is something that they are interested in. More often than not, it’s individuals. You mentioned VC, so if we think about the stages of investing, the early round, the seed round, where individuals are involved who have enough financial resource to get something off the ground and enough business sense to identify a business opportunity, that’s where you’re most likely to find traditional investment, a willingness for traditional investors to get involved.

Matthew Maltese:          Venture capitalists, in the strictest term, are often spending somebody else’s money. They can’t really allow, just by their duty, they can’t allow these emotional matters to come into play, unless it’s part of their stated mission of their fund. Just as an aside, I’ve been working in this field for quite some time, and I’m impressed to find many, many individuals who have the means to invest and have some sort of connection to pediatrics. Maybe a child who was a pediatric patient or a sibling or a child who is a pediatric medical provider of some sort, and they are touched personally by this and therefore are willing to invest in some way.

Dan Henrich:     Given, then, the fact that there are many fewer options for a pediatric specialist when it comes to treating their patients, what does a pediatric cardiologist or a surgeon or anesthesiologist, how does he or she navigate that in terms of treating their patients with the devices available?

Matthew Maltese:          I once asked, I wanted to find out in my own hospital, the off-label use of medical devices. Of course, off-label means it’s outside the range of the FDA approved range for the device to be marketed. The uniform response was it was easier for my clinician colleagues at the time to make a list of the devices that are used on-label. That was the response almost uniformly. That’s how they do it. They patch, they cut, they modify when the pediatric specific device is not available.

Matthew Maltese:          That said, there are examples of pediatric devices coming to market even now. Where manufacturers who are being good citizens or recognizing market potential or a little bit of both or mission driven and can make something work financially, they will make their products, they will modify their products for the pediatric space.

Dan Henrich:     So, then, pediatric specialists, many of them are forced to sort of become device innovators on the fly, it sounds like. So I understand correctly and our audience understands correctly, if you have an off-label use, what that means is that the FDA has approved the device for certain types of use that are on the label. The manufacturer may not market it for anything but on-label use, but physicians can innovate where necessary to treat their patients using, basically, an unapproved use for a device that’s on the market. Is that right?

Matthew Maltese:          That is exactly right. A great example is cardiac stenting in pediatrics, where most of the pediatric stents are biliary stents from the adult market used off-label.

Dan Henrich:     How do physicians begin to appreciate whether a particular off-label use is an acceptable level of risk, then?

Matthew Maltese:          Oh. You know, I’d have to say that I’m completely unqualified to answer that question.

Dan Henrich:     That’s okay.

Matthew Maltese:          I wouldn’t answer that question. I think [crosstalk 00:09:27].

Dan Henrich:     We can cut it out.

Matthew Maltese:          You’d have to talk to a physician, but also, it’s going to vary from physician to physician and by the risk of the nature of the device.

Dan Henrich:     If we think about the fact that I’m sure FDA recognizes that it is ultimately, in the long run, better for the patient to have a device that’s gone through that learning process of is it acceptable risk benefit ratio for use in pediatric population through a regulatory pathway and through clinical trials, versus physicians who are doing what they need to do to treat their patients with the devices that they have. Is there anything going on at the agency to try to make that traditional pathway to get devices approved easier or less expensive or faster?

Matthew Maltese:          That’s a great question. There’s a new word out there, a new phrase. It’s called, quote, the New FDA. There really is a difference between the FDA of only five or 10 years ago and the FDA we see now. I think the things that I’ve observed myself and heard from others is much more collaborative, particularly at the pre-sub phase. Much faster. I think it’s been well documented that they can turn around approval evaluations much faster than they have in the past. It used to be that the standard was to go to Europe and get the CE Mark and then come back to the States for the FDA approval.

Dan Henrich:     For pediatric devices specifically or for devices in general?

Matthew Maltese:          In general. Very recently, I ran into a company from Norway working on a cardiac product for peds, incidentally, that was coming to the US first, because they just viewed it as a faster pathway. I think that there are great reasons to be very optimistic about all medical device development in the US market. That just extends to pediatrics. Let me just extend that a little further and say that there are specific people in the FDA and programs like the Pediatric Device Consortium program and other programs that are really designed to foster devices for kids, so there’s even extra reason to do kids first in your device idea.

Dan Henrich:     Can you tell me a little bit about the consortia? I know that you’re director, is that right, of the Pennsylvania Pediatric Device Consortium?

Matthew Maltese:          That’s right.

Dan Henrich:     Can you tell me about what those organizations are and what their mission is and how they work?

Matthew Maltese:          I can speak for our own organization, but I think in general the mission is to bring pediatric medical devices to market, period. That is the mission. As our consortium, the Pennsylvania Pediatric Medieval Device Consortium, we don’t care where they come from. They don’t have to come from the Philadelphia region, even though we’re branded Philadelphia, Pennsylvania. In fact, most of our devices that we’ve worked on come from outside of our region. We always just sought the best devices for kids and provided them with modest funding but hopefully better in kind resources to help them move their products to a point where they can get further funding and eventually make it to market.

Dan Henrich:     How many consortia are there?

Matthew Maltese:          There are five total in the United States, including ours in Pennsylvania.

Dan Henrich:     What about other initiatives at the agency? I know there’s a program called Humanitarian Device Exemptions. I know there’s a lot to talk about how real world evidence may be able to inform the approval process for new pediatric devices and making off-label uses on-label.

Matthew Maltese:          I could tell you what I’ve observed. I can also point you to someone at the FDA who might be willing to talk to you and can speak more, just has more knowledge on what all the FDA offers. A good example, though not pediatric specific, but I think something that will benefit pediatrics in a very big way is additive manufacturing, also known as 3D printing. The FDA has put a tremendous amount of effort into just understanding how additive manufacturing plays into the medical device market, because much of the value propositions for pediatric or other small volume populations pivots on the volume. For example, if you have to make something out of a polymer and injection molding is your manufacturing method, the molds alone can be tens of thousands of dollars.

Dan Henrich:     And depending on the size of the patient, you may need how many different sizes, right?

Matthew Maltese:          How many different sizes? Maybe only a handful per hospital per year or per month, but you still need them. 3D printing offers the great opportunity of being able to manufacture in very small lots. You can even envision the concept of a vending machine, if you will, that produces and sterilizes and packages a custom-sized medical device from raw materials and sits either at a centralized location close to several regional small population hospitals, or even in the hospital itself. So there are, I think, tremendous opportunities in additive manufacturing. That’s just one area that the FDA is working in, and there are many others, many others.

Dan Henrich:     What about all the talk around real world evidence? I know that in September, I think it was, you and I were both at a symposium that Children’s National hosted in Philly talking about real world evidence.

Matthew Maltese:          Say it 10 times fast.

Dan Henrich:     And how it may be able to inform and accelerate the device approval process for pediatric devices. Can you explain, what is real world evidence and how it might be able to …

Matthew Maltese:          Sure. Real world evidence is exactly what the name implies. It’s evidence or data or information that is gathered from real world experiences. To contrast what perhaps that means is real world is not the experimental world, like we might do on a bench top or with an animal in a laboratory, or real world is not what we might do in Insilico on a computer with various simulation packages that are available for simulating the laws of physics virtually. Real world is real world. Real patients experiencing real medical procedures with medical devices and all the other therapies that surround it.

Matthew Maltese:          I think what has really launched this is the electronic health record and the potential for connecting devices and in some cases the rich information that the device collects. You think about cardiac pacing now, where each device not only paces the heart but collects information at the same time. And connecting that back to the patient health record, which is then integrated into everything that that patient has experienced from a medical perspective throughout their course of care. That has great promise. I think, frankly, it’s something that we’re going to look back on and we’re going to be able to define much better years from now than we can define it right now, but the potential is great.

Dan Henrich:     Is the main appeal of that, then, that you already have these devices that pediatric surgeons and cardiologists and others, they’re designed for adults, they’re being used for children, and if we can collect that data on the off-label use, then perhaps we can use that data in lieu of or to make a clinical trial to get an on-label use approved?

Matthew Maltese:          That is one example.

Dan Henrich:     What about actually developing new pediatric devices, then? How would real world evidence inform that?

Matthew Maltese:          Well, I think the development of a brand new device that is being used for the first time will follow the traditional pathway of real world evidence generation, which is the clinical trial. That has been in place and will always be in place. The things that I talked about with regard to the electronic health record will presumably make those clinical trials easier or more informative or both.

Matthew Maltese:          There might be a way for this enhanced medical records to improve epidemiological understanding of disease in ways that reveal more information about unmet needs, and then spawns the development of new devices. I remain convinced that the best way to discover unmet needs is for innovators to be involved in the practice of medicine or close to the practice of medicine. That can be, for a practitioner, practicing medicine and, for an innovator who’s not a practitioner, being close to a practitioner who is practicing medicine and physically in the room when it’s happening so that they can observe what’s going on from a holistic perspective. And spending time with the patient, and spending time with the payer so that they understand fully what the unmet need is and how to intervene.

Dan Henrich:     So, then, could real world evidence uncover potentially larger markets than appreciated and mean that the traditional pathway to device approval is more viable for investors? Is that kind of the thinking behind that?

Matthew Maltese:          Most certainly. I think when investors, or I should say, when medical device innovators or even those who are working within large medical device companies who wouldn’t really consider themselves innovators, but maybe advocates for certain types of technology being developed within those companies, can look to real world evidence to help them justify to their own management a particular direction or course that they have to take.

Dan Henrich:     Something else I wanted to ask you about, this is a little bit of an ethical quagmire, but there is an ethical discussion going on when it comes to children and other vulnerable patient populations. There’s one side of the argument might say, really, we need lower regulatory barriers and less scrutiny for these devices because there’s such an unmet need that having something is better than having nothing, even if there’s a greater amount of risk. Whereas on the other side, and both sides of this argument are very understandable, I think, people say, no, since we have children who are not making these decisions themselves, they are unable to appreciate the risk, we actually need greater scrutiny, greater regulatory thresholds for safety and perhaps efficacy than we do for adult …

Matthew Maltese:          Great question. Maybe just a short story before I answer that kind of shook me at the time. It really brought reality to how I thought about my role in the world. When I was young and starting in the field, I was at an FDA meeting where we were discussing medical devices and medical devices for kids and the various medical and scientific aspects of it, and we were talking statistics and p-values. The kind of thing that makes geeks just drool at the mouth.

Matthew Maltese:          It was a public meeting, and a parent stood up and went to the microphone and said, “I have two kids, and they both have the same rare genetic condition. One of them has died, and the other one, who is two years younger than the one that just died, is going to die. We need to just take action. We need to do something, because their death sentence is already written.” I remember it very, very clearly.

Matthew Maltese:          I think that stuck with a lot of people in the room, and that situation that I just described, I think, has been rehearsed many times with FDA regulators who have had the challenge of trying to field that sort of a plea from the public, a plea from a parent who’s going to lose their child. No matter what, inaction means my child dies. And try to reconcile that with the law. It’s very challenging.

Matthew Maltese:          Fast forward to just about a year ago, I was at a conference where the concept of patient preference was being merged with statistics of efficacy. What a patient defined as risky is maybe completely different than what the p-value, if you will, which is a measure of statistical significance and it can be used to determine if one course is more risky than another course. How to merge those things together.

Matthew Maltese:          In kids, it’s a bigger challenge, because many of them just simply can’t talk, and then those who can talk, they really may not be able to … They certainly can’t express themselves in a legally binding sort of way. You can’t enter into a contract with a minor. So the parent has to be in place. But there is a template here for getting patient preference from kids. When we do any kind of medical study, research on kids, it doesn’t necessarily have to be medical research, we have to pass through the institutional review boards. If a kid, depending on where it’s being done and how the local IRB panel has determined, there’s an age of assent, which is a child can’t give consent, but they can give assent. They can say, “Yes, I want to participate,” or, “No, I do not want to participate.” Then the parental consent is of course what decides.

Matthew Maltese:          That’s an evolving space as well, where it’s clearly been determined that there is not a one size fits all measure of risk. It depends on the population, it depends on the disease, it depends on the intervention that’s proposed. And most importantly, it depends on the preferences of the patient as to the type of life that they want to live with or without the intervention.

Dan Henrich:     I would imagine that conversation is very different depending on whether you’re talking about a life threatening situation or a condition which might mean paralysis or some other type of very debilitating, ongoing condition, versus something that we wouldn’t call it elective in the adult care setting, but something where the consequences are much less significant. How is the idea of this risk to benefit ratio evaluated? Should the conversation in more dire situations really be about not risk first versus benefit, but benefit versus risk? Does that make sense? Which of those things should be prioritized in the more dire situations, I guess?

Matthew Maltese:          I don’t know. It really depends. It really depends. I think there are people more qualified than I to comment on the situation. I’m an engineer. I’m responsible for building the intervention. I always have to keep in mind the ethics of it. Having the right people in the room when those decisions are being made, the clinical care team, the parents, the child, the patient. That’s really critical, and that’s where the decision has to be made. That’s at the point of care.

Matthew Maltese:          Taking a step back to the point of FDA approval, I think it’s the same sort of template. You have to have a panel that represents the clinicians who are experts in the field. You have to have somebody who understands the regulatory pieces and what the statutes and the law say. Then you have to have the patient, and in the case of kids, the patients and their parents, a panel of them or a body of them, who are collectively speaking about these critical issues. Of, “I see what the mathematical risk is, but this is what it means to my life.”

Dan Henrich:     When do humanitarian device exemptions come into play in those types of situations? Can you talk a little bit about what an HDE is and what type of situation the FDA might grant?

Matthew Maltese:          I don’t have a lot of personal experience with them. There’s a certain threshold in terms of patient population, that if it’s below that threshold then an HDE kicks in. But still, it’s a challenging pathway to go through. If you really want to talk to somebody about that, you’ve got to talk to somebody like Seth Goldenberg or somebody like that. He could describe very well the ins and outs and advantages of all the various pathways. It’s a matter of debate, too, ongoing debate between the industry and the FDA as to what those thresholds, in terms of patient population, should be set at.

Dan Henrich:     I hope we’ve done a good job of framing for our listeners what is this environment and what are the different struggles and trade-offs that innovators are dealing with when they’re trying to develop new devices for kids. You’ve mentioned a couple times how important it is to have clinicians either innovating themselves or to be very closely tied to the team that is developing this product. It would be interesting for me to understand better, how does a clinician who’s practicing medicine full time, most of them got into that for a very specific reason and they want to be, whatever their hours are, not 9:00 to 5:00, probably. They want to be every day hands-on helping kids and their families. What’s the model for a clinician innovator who, maybe, is using a device off-label for years and developing their technique and really seeing, in a way that no one else can, the potential for a pediatric device innovation? What’s the model that you’ve seen be successful for bringing that idea to market?

Matthew Maltese:          Let me walk back my earlier statement about clinician innovator. There are certainly great examples of clinician innovators, but maybe introduce a new concept called a clinician needs finder and decouple that you have to innovate and find the need at the same time. You could very systematically, as a clinician, spend time just understanding the need and recruiting others who may join you in the innovation process, the solution process downstream, but at the moment that you recruit them, you’re in the needs finding space of just trying to figure out, what is the problem? Because there are scores of devices and other so-called great ideas that die downstream because the upstream unmet need was either not there or not well defined. Spending a long time on understanding the problem and understanding the unmet need is always warranted. You heard it here first, folks. Clinician needs finder. It’s a new person. It’s a new title. The next part of your question was, how does a clinician innovator go about innovating?

Dan Henrich:     Well, what’s the model you’ve seen be successful in your experience or even, maybe, now I want to refine my question now that you’ve said that. You’ve spent a lot of time working in an environment with pediatric specialists. They’re aware of these needs. What’s the mechanism for collecting all those needs at a big research institution? Is there a method, does it vary from institution to institution? Or is it on the clinician to go to the biomechanics research department or whatever it is and say, “Hey, I have this problem. Can you help me solve it?” Or is there a mechanism for collecting those needs?

Matthew Maltese:          I think that there is not a mechanism, at least in my observance at multiple institutions. There are a few spots that do it well. The Stanford Biodesign program I think is excellent, and Cincinnati has a great program, and others too. I think that, for the most part, the clinician needs finder is not a frequently observed phenomenon. It’s mostly the clinician innovator, who hopefully starts out as a clinician needs finder and then blossoms as an innovator.

Matthew Maltese:          I’ve also found that clinicians are, in many cases, pretty good engineers. There’s a little engineer inside every clinician, and perhaps there’s a little clinician inside of every engineer. What I’ve experienced, it’s not the rule of law. It’s not how the universe must work. It just seems to be how the universe has worked that I’ve observed, if you will. I think some things that I’ve observed that I think are positive is that there’s now a trend where clinician innovator is an academic path. Do you understand what I’m saying?

Dan Henrich:     Mm-hmm (affirmative).

Matthew Maltese:          Just to give a contrasting example, at my own institution, the master of science in clinical epidemiology was a common degree, master’s degree, that was sought by clinicians following med school. There’s an emerging pathway of clinical innovator, almost like an equivalent to that, that is now gaining recognition in the academic setting. I think the more that that happens, the more that the traditional professional promotion standards and pathways recognize innovation as a legitimate academic pursuit, that we’re going to see a lot more clinician innovators come to be. Some are starting it in med school. I can’t imagine that, myself. I can’t-

Dan Henrich:     How you could juggle those things, right?

Matthew Maltese:          Yes. If I could think of a time when someone doesn’t have any spare time, it would be medical school. What I’ve learned is that there are times in medical school, particular years, that clinicians in training have time and choose to invest their time in innovation. Then they maybe step away from it while they go through the more intense portions, and then they return back to it as they move on in their career. I think, as I talked about the FDA and the future being bright there, I’m also very optimistic about innovation being a more intricate part of academic medicine and people’s careers as faculty and med schools.

Dan Henrich:     Putting aside the need for more clinician needs finders, maybe we’re going to call them that, not necessarily clinician innovators, but what is the path that you have seen for a device to move from an idea that a clinician has or a need that a clinician has and an innovator who has a potential solution, to getting the funding to go through regulatory approval and get, eventually, matched up with a manufacturer or whatever that might be?

Matthew Maltese:          Persistence on the part of the innovator. I think that’s the one thing, persistence. Less brilliance, more persistence. Maybe this is just because it’s fresh on the brain, but I’ve had two instances where people I had met several years ago who just asked me for advice on an idea, and I threw some significant cold water on their idea for legitimate reasons, I think, and legitimate reasons that they admitted too. They’re back. They’re back three years later, and they’ve adjusted, they’ve adapted, they’re still working on the same problem, but they’ve reinvented. Reinvented, if you will. They’ve adjusted. They’ve kept going. That willingness to persist is, I think, the biggest thing that is the biggest factor. It’s good news that people who go to spend a long time in school, who recognize that your final end point and final diploma granting point is many years away, they tend to be persistent people anyway. It’s a good cohort to be drawing from.

Matthew Maltese:          I think the second thing is, of course, don’t be hung up on your solution, because when you do that, you actually narrow the potential solutions to the problem. This is why, I think, separating needs finding and solution generation needs to be two separate things, because if you’re a hammer, everything looks like a nail. If you come in thinking that I’m going to solve this problem by a new type of stent, everything that you do for this particular problem will be a stent, when it could be something else completely different that actually solves the problem, that’s part of the stenting process, but maybe a just completely different solution.

Dan Henrich:     This sounds like something I’ve read in that Biodesign book you have on your desk there.

Matthew Maltese:          We keep it right at the hand, right at ready.

Dan Henrich:     We’ll have to put a link to that when we post this on our blog.

Matthew Maltese:          I would, I would. Biodesign is not rocket science, it really isn’t, but it’s a great book and a great framework that the group at Stanford has put together. It’s really critical to read it and read it fully and rethink how you approach medtech innovation through it.

Dan Henrich:     Let’s talk about a clinician innovator team, we’ll call it, they’ve gone through the initial steps of the process by that book. They have a clearly defined needs statement, and they have evaluated different solutions and settled on a particular pathway for good reason. We often at Smithwise, in our early interactions, we may deal with an innovator who has an idea and a patent or is working on filing their patent, and the model in their minds is, get a patent, get a prototype, and then Johnson & Johnson or some other really big device manufacturer is going to buy this from me, and that’s going to be my exit strategy. That’s almost never what we actually see.

Dan Henrich:     I guess particularly within the pediatric realm where there’s all these other challenges, as well, to gathering funding, what advice would you give to a team in that situation, that has what you would call a very legitimate solution to a very real problem, but there’s a long way to go before their device is going to be snapped up by a manufacturer?

Matthew Maltese:          First of all, I agree with your assessment. It often seems like the inventor may have a tendency to overvalue the idea, whereas the investor or the eventual acquirer, which may be one of these large device manufacturers, they value the proof. If you’re steeped in academia, this is the equivalent in academia. If you have a theory for how a particular disease mechanism, let’s say you have a theory, and you publish the theory. That’s basically worthless. It’s your idea, it’s your opinion. Not proven. It’s not until you take it into the laboratory or take it into the clinic or do some other empirical study to show, or not show, that your theory is right. A patent is like a theory, and it’s not a theory about whether the thing will work. It’s a theory about whether the market will accept it and buy it. It’s a theory as to whether your idea will add value to someone else’s life downstream. The second part of your question was?

Dan Henrich:     What advice would you, perhaps have you given, to a team that has a really good theory and really good evidence to suggest that it’s technically viable, they still need to attract investors, they still need to prove that value to the market? What advice would you give them?

Matthew Maltese:          I think, first of all, just recognize that, as I said earlier, the idea is just an idea. There are several stages that you can go through to increase the value of your idea. I don’t mean to say value in the sense of how much money it’s worth. That’s not what I mean. I mean in the sense of how viable is your product in making a difference in a patient’s life. The confidence, if you will, that X years from now, your idea will blossom into something that can make a difference.

Matthew Maltese:          If you have an idea and you’ve built a prototype and you’ve tried it out on a bench, on a phantom, or a surrogate for a human, you’ve proven the concept. Okay, so now you’ve notched up the likelihood a little bit that your idea will have some impact on somebody’s life downstream. Then, you figure out your regulatory pathway and you start down the pathway. By regulatory pathway, I mean, of course, what is the FDA going to want you to do before you can be cleared to sell the product? It’s an animal test, let’s say, or it’s a test on a human and so forth. Each one of these things is a milestone and is a risk reducer, if you will.

Matthew Maltese:          Then once you have your FDA clearance, you’re still not done, because you have to show to the potential acquirer that there is a market for the product. You have to go out and, in a very traditional door-to-door sort of way, sell it. Sell it. Then people who buy it may find that it has value or they may find that it doesn’t have value. The acquirer is looking for those initial indicators.

Matthew Maltese:          Now, there are no hard and fast rules as to when an acquirer will flip the switch and decide to take your device on and proliferate it across the world to benefit the lives of millions. It depends on the device, it depends on the idea. With some ideas and in some financial climates, something might be picked up very, very early in the process. In other climates or with other ideas, the acquirer is going to want more evidence. The short answer is, it depends. I’m sorry.

Dan Henrich:     No problem.

Matthew Maltese:          That’s reality, it depends.

Dan Henrich:     I think that’s a fitting piece of advice in this environment. If it were easy, it would be done by now. Matt, I really want to thank you for taking the time to talk with us about this. I think those of us who are within the industry really see a lot of promise for things changing and developing with regard to pediatric devices and helping underserved populations. I want to thank you for the role you’ve played in that and continue to play.

Matthew Maltese:          Thank you, Dan. Thank you for focusing on pediatrics. It is who is most important to us, and so I’m glad that you and Smithwise are making this part of who you are.

Dan Henrich:     It’s our pleasure. It’s been a good journey.

Matthew Maltese:          Thank you.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

MedTech Mindset Podcast: Navigating Regulatory with Monica Ferrante

EPISODE 6 – Navigating Regulatory with Monica Ferrante

In this episode, regulatory expert Monica Ferrante, VP of Regulatory and Quality at Aspire Bariatrics, talks regulatory strategy and approvals for new medical devices coming to market. 

Monica and Dan discuss:

  • FDA risk classifications and how to steer down various regulatory pathways
  • How FDA is changing in recent years
  • Trends in regulation–are medical devices under-regulated by FDA?
  • Formal vs. informal pre-submission meetings with FDA
  • How to go about finding trustworthy regulatory support
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Episode Transcript

Dan Henrich: Monica, thank you so much for joining me today, really appreciate you coming down. Would you mind introducing yourself and telling us a little bit about your background before we delve into our topic?

Monica Ferrante: Sure. I’m Monica Ferrante. I’ve been doing regulatory affairs for medical devices for, oh, probably more than 30 years, so I’ve been through the evolution. I’ve worked for large companies as well as startup companies and done a fair amount of consulting as well, so I have a pretty good breadth of device types, I guess, if you will.

Dan Henrich: Great, great. What’s your current role?

Monica Ferrante: My current role is Vice President of Regulatory and Quality at Aspire Bariatrics.

Dan Henrich: What type of products are you working on there?

Monica Ferrante: It’s a medical device for weight loss. It was a PMA submission because it’s a novel application of a device, and we were able to get through that process in less than a year and get the product approved and on the market so-

Dan Henrich: Great. Congratulations.

Monica Ferrante: Thank you.

Dan Henrich: That’s great. We already threw out the term PMA here. I think we have quite a variety of folks in our audience who are listening to this. Some of them know just what a PMA is, and they know what constitutes a Class I device or a Class III device, from the FDA’s perspective, and others don’t, so can we just briefly sort of run through what are device classes and what would be an example of kind of the different types of devices that would fall into the different risk classifications at FDA?

Monica Ferrante: Sure. Actually, the FDA started regulating medical devices pre-market in 1976, which may be a long time ago to some people, but not to me. At that time, they went through all of the medical devices that existed at the time, and they classified them. The purpose of classification was to assign a risk criteria and then, based on that risk, they would develop the regulatory pathways for bringing new products to market.

Monica Ferrante: A Class I device is the lowest risk. They are devices that are simple and straightforward. There was good historical data on their use and simple and straightforward to use. An example of a Class I device would be a manual surgical instrument like a scalpel or a hemostat, something like that.

Monica Ferrante: Class II devices are sort of the middle risk, if you will, moderate risk. Back in those days, the intent was, if there was a standard or a standard could be written for that particular product, in other words, the safety aspects and performance aspects were well enough defined that you could write a standard, then they would fall into Class II. That’s how they determined that, that particular classification.

Monica Ferrante: Everything else fell into Class III, which is the highest risk. That was generally intended for new technologies, implants, things like devices that had never been used before or an intended use that hadn’t been thought of for a particular product.

Monica Ferrante: For each of those classifications, there’s a typical but not always guaranteed regulatory pathway. For Class I devices, the FDA, in the past several years, has actually exempted a lot of those devices from any pre-market approval process, although there are a few remaining that would require a submission to the agency. Class II devices typically go through what’s called a pre-market notification process or a 510(k). That process is intended to establish substantial equivalence. Basically, it’s a me-too process. There are already products on the market like a ventilator, or a defibrillator, or a radiant warmer, an incubator, whatever, product that’s already on the market that already has certain features and functionality. In those cases, there are all consensus standards for basic safety and performance, so those types of devices would go through the 510(k) process, and they would receive permission or clearance to market after going through the review process.

Monica Ferrante: For a PMA, since it’s new technology or a new indication for use for a current technology and the risk is considered to be high because you don’t know what the risk is at that point, generally, a clinical study is required, a phase-one study or a pilot study on a small population to determine basic safety, and then a pivotal trial which would provide statistical significance of the claims that you want to make for that particular product.

Monica Ferrante: The timeframes for these submissions, there’s a statutory timeframe. For a 510(k), the FDA has 90 days to review your submission. That’s actual review time. Simpler Class II devices will probably go through in a little bit less or in 90 days. More complicated submissions may take longer, particularly if the agency has to ask you for additional information, but their clock or their target timeframe is 90 days. For a pre-market approval, they have 180 days to review all of the information. There will almost always be a request for additional information in a PMA. A PMA that’s reviewed and approved anywhere between 180 days and one year is actually a really great review time, and it means the submission was well-prepared and all of the information that the FDA needed to make their decision was there.

Dan Henrich: Okay, so a 510(k) is limited to Class II products that have what’s called a predicate. Is that correct?

Monica Ferrante: Yes.

Dan Henrich: What about when you’re dealing with a Class II product that … or something that would be defined as a Class II level of risk or will ultimately be defined as a Class II level of risk but doesn’t have a clear predicate? What does the pathway and the timing look like for that?

Monica Ferrante: Okay, so when there isn’t a predicate device, the product is automatically a Class III and requires a PMA. The FDA, several years ago, introduced a process called the De Novo process, which allows for a submission and, pretty much at the same time, a classification of a new device that has low risk. The De Novo submission may look a lot like a 510(k), but it will probably include clinical data. A De Novo submission review time, statutory review time is 120 days. Again, if you have a lot of information to review or if your clinical study has a lot of data associated with it and there are questions, that timeframe can extend, but the statutory timeframe is 120 days.

Dan Henrich: Okay, and so does that mean that, typically, then … You said when a new device, a device without a clear predicate comes to the FDA, they automatically assign it as a Class III. What would be the motivation for trying to get that class brought down to a Class II? Would it help you get through regulatory faster, or would it just lower the barrier for a competitor to come along and cite your device as a predicate?

Monica Ferrante: Well, it does both.

Dan Henrich: Okay.

Monica Ferrante: Actually, the purpose of a De Novo is that the FDA was receiving PMAs, full 180-day, statistically-significant clinical studies on devices that were extremely low risk. Their thinking is that that is not a good use of their time, the taxpayers’ dollars, or the company’s time and resources.

Dan Henrich: And it’s bad for patients, right?

Monica Ferrante: Yeah, and patients would be able to have access to that technology much sooner, so they created the De Novo process so that it would be a streamlined process where they could review information and be able to give it a classification. It may still end up being a Class III device depending on how things pan out with the review process and what concerns there are remaining with the device. It may not be the physical device itself. It may be the application or the intended use of the device that puts you into Class III, but the benefits of having that classification are several fold. It’s a shorter review time. The burden of proof is usually lessened, in terms of clinical data, and then the follow-on.

Monica Ferrante: A 510(k) submission and a De Novo submission that are approved, if you make changes to the device or if you make tweaks and adjustments to your manufacturing processes and so forth, the FDA addresses those when they come through for their QSR inspections. For a PMA, anything you change, any change to your labeling, any change to your product, any change to your manufacturing processes, you have to submit a supplement and pay the associated fees and get that approved before you can implement it, so it extends every process significantly, not just the initial approval but the ongoing maintenance, if you will, of that product.

Dan Henrich: Okay. Would that be the same process? If your device is approved for a particular patient population and you want, say, to use it … you want it approved for pediatrics or for some other patient population, is that a supplement that you have to submit, or do you have to start the process over again for your new indication?

Monica Ferrante: You generally-

Dan Henrich: Is it an indication? Is that what it is? Yeah.

Monica Ferrante: Yeah. For example, if you have a PMA that’s approved for the adult population and, per your example, you wanted to expand it into a pediatric population, you would have to do a study, and you would have to submit that to the FDA. If it’s the same product, it’s under the auspices of the original PMA, but it’s still a 180-day supplement with all of that additional clinical data and analysis, so it’s effectively doing another PMA to expand that patient population.

Dan Henrich: My guess would be then is when you’re advising young companies who have maybe not brought a medical device to market before, there are different pathways that they may be able to take in terms of who will be … what’s their first application for this device, who’s the intended patient population, and that ties into their overall go-to-market and business strategy, right, if they want to establish a beachhead in a particular area and have some type of revenue stream that that can then support a further study or whatever they need to expand into a larger market?

Monica Ferrante: Sure.

Dan Henrich: Yeah.

Monica Ferrante: An example of that would be ventilators. A ventilator is a Class II device. You prepare a 510(k) submission, and you get clearance to market, and you bring it to market. There is an application on a ventilator called high frequency or oscillatory ventilation that’s used in premature babies. That application is a PMA application, so in order to have that feature on your ventilator, you have to do the clinical study, and you have to submit it to the FDA and get that PMA approved. That’s kind of an example of a company might want to bring a new ventilator to market, start bringing in the revenue, and use that to fund their study for that oscillatory ventilation claim or feature.

Dan Henrich: Got it. Got it. Okay. That ties in next nicely, I guess, to our next question, which is if you are a new venture, a company that’s, perhaps, forming around the new medical technology that you’re looking to bring to market, how early do you need to begin talking with someone experienced about your regulatory pathway, and how will it tie into your go-to-market plan?

Monica Ferrante: Think it’s really important to start the conversation early. It’ll be a preliminary conversation. There may not be anything from a regulatory perspective that you have to do, but understanding what the device is, what you really want it to do in the market or for your patients, and understanding what the potential regulatory pathway is important. To your point, it may be a product that, if you bring it to market minus one claim, you might be able to get it on the market thru the 510(k) process and give yourself a revenue stream to build out the rest of it. It might be that it’s a PMA from the get-go, or it might be that it’s low enough risk or you can reduce the risk enough, by design, to possibly fit into the De Novo process. Understanding which path you’re headed down and sort of where the lines are, what pushes you over the threshold from a 510(k) into a De Novo or a PMA is important to know so that you can make the right business decisions.

Dan Henrich: I think what we often find with our clients at Smithwise is that their regulatory strategy impacts not just our design process but, really, the market feasibility of their product, and so, very often when we speak with someone who has kind of an exciting new technology, usually I would say they have thought about … they come in and say, “Oh, well this is going to be a 510(k), so it’s no big deal,” but they may have a pretty broad idea of the claims that they’re going to be able to make for their product, and their business model might account for different market segments that are maybe not going to be able to fall under that simple of a process.

Dan Henrich: I think that’s one of the reasons we’re covering this topic now is because there’s a lot of … we see both kind of a dismissive attitude on the part of some medtech entrepreneurs of the regulatory process because people think of the 510(k) pathway as no big deal, and we also see a lot of anxiety on the part of others. Maybe they’re better-informed ones, but they’re a little bit paralyzed by the regulatory process as well, and so it’s great for them to be able to start thinking through these things but, often, we will bring in regulatory support early on in the design process as we’re coaching people through what we call phase zero of product development, so it’s-

Monica Ferrante: That’s good.

Dan Henrich: Yeah. Well, it’s great to have folks like you to call on in those situations. I think a lot of the anxiety that people feel centers around interactions with FDA. I have heard, from a lot of people who have dealt with the FDA very intimately over the course of their careers, that there’s been a big shift in kind of the agency’s approachability, you might say, or there’s been a positive evolution of interactions between industry and the FDA in the past few years. Can you tell me a little bit about the negotiation process and when … How do you know how much information to provide to FDA and when to start that conversation, and are you ever afraid to say too much too early before you have your data together or … you know?

Monica Ferrante: Their process has changed, and it’s actually well documented in a guidance document as far as the meetings that you can ask for versus the submissions, the pre-submissions that you can have them review. The reason for that whole evolution is because having an open-loop system is not beneficial to either side of the equation. I mean if you think you’ve prepared a proper 510(k) or a proper PMA, and you submit it to the agency, and they pick it up and they go, “Oh, my God. Half of what we need is just not here, and it’s because they didn’t know,” maybe it’s a product there’s no guidance document for or something.

Monica Ferrante: It wastes the company’s time and resources, and it wastes the FDA’s time and resources, so they’ve discovered and have been given permission or latitude, if you will, to have this open communication to foster those early conversations so that they can understand, A, where the technology is going, because if industry doesn’t bring it to them, they go out, but they may not get access to knowing what the newest, greatest things are that are going on, and how can you regulate something you know nothing about? So they’ve sort of opened the doors a little bit so that those conversations can happen.

Monica Ferrante: It’s important for a company to meet with the FDA once they know enough about their product to have some real questions. Coming in and saying, “Hey, I have this idea. What should I do about it?” you’re going to get a blank stare. Actually, the processes won’t let you do that. If you’re requesting a meeting or you’re doing a pre-submission, the guidance document tells you what information you have to provide to the agency. You have to describe your product. You have to describe what areas you have questions and concerns about and what are those questions so that the meeting or the pre-submission review can be meaningful, so the earlier the better as long as you actually have something to work with.

Dan Henrich: Yeah, yeah. Okay. Do you ever have a client or a situation where the person coming at this from the industry side may be concerned that a pre-submission meeting will lock them into a particular approach that they’re not ready to commit to?

Monica Ferrante: Well, the guidance documents actually describe a formal … and this is generally in the area of clinical studies, a formal pre-IDE meeting. If you request a formal meeting, the information that you have to have to go into the meeting is much more extensive, and you will get concrete, binding information on both sides of the equation. What you are told is binding. What they are told is binding. Nobody really does those meetings. Generally, you want to request an informal meeting, so …

Dan Henrich: Okay, so within an informal meeting, the … I don’t know. Guidance maybe is a bad word to use because it has official connotations-

Monica Ferrante: Yes.

Dan Henrich: … in this area, but the feedback that you get from the agency in an informal meeting is that. It’s informal. It doesn’t bind the agency to look at things in the exact same way when your actual submission comes in. Is that correct?

Monica Ferrante: Right, because what you may be submitting may be different than what you discussed in the meeting. In those meetings, the company is trying to understand some aspect of their product, their submission, and they’re the experts, so they’re there to explain what the product is, what their goals are for the market clearance for the device and for their patient population and so forth. What the FDA’s goal is in that meeting is to say, “Okay. I’m hearing what this is. Here’s what we’re going to need to successfully review that submission when you bring it to us based on the regulations and based on what the market requirements are.” Those are sort of the two sides of the equation. They’re not going to tell you how to do your job or what to do with the product. They’re going to tell you what they need to review it based on what you’ve told them the device is going to do, so-

Dan Henrich: One thing I want to ask you about, Monica, is you mentioned … I think, in your last response, you used the term IDE. Can you tell our listeners what is an IDE and how does it fit into the various regulatory pathways?

Monica Ferrante: Yeah. I apologize for the acronyms. It’s a world of acronyms out there. Actually, I believe one of your other podcasts had to do with clinical studies?

Dan Henrich: Yeah, yeah.

Monica Ferrante: IDE is investigational device exemption. Basically, if you have a product that requires a clinical study to go through the review process at the FDA, you will most likely require an investigational device exemption. It’s a document that you submit to the FDA that describes the clinical study, the patient population sample size, statistical analysis you plan to do, so forth and so on. An approved IDE is required for what’s called a significant risk device. If you have a non-significant-risk device, which would be something like a patient monitoring system that could be monitoring a patient while their normal device is taking care of their health, so a non-significant-risk device, you would still need all of that same documentation, but you wouldn’t need to submit it to FDA and get an approval back prior to starting your study.

Dan Henrich: Okay, so it’s really the approval to use your device within certain clinical study parameters on humans. Is that correct?

Monica Ferrante: Yes and, interestingly enough, the exemption technically is not for the study. It’s technically to allow you to take your unapproved product across state lines.

Dan Henrich: Okay, interstate commerce clause, yeah.

Monica Ferrante: It is [crosstalk 00:24:32]-

Dan Henrich: I remember that from Conlaw, yeah. Okay, so for most 510(k) products, though, where you’re not required to perform a clinical study, you can submit pre-clinical data, right, in terms of showing substantial equivalence? Is that how it works?

Monica Ferrante: Yes. 510(k)s are me-too, so you’re going to submit performance data to standards to your requirements and so forth. The FDA just came out with a new guidance document called Safety and Performance for 510(k)s where they’re expanding the abbreviated 510(k) process a little bit. That’s to say that you don’t have to take your predicate device and do a comparative bench study anymore. You can do what they’ve actually always allowed you to do in the past, which is do a study against a standard and provide that data, so just an aside.

Dan Henrich: I know there have been recent changes or proposed changes to limit the body of available predicates to a more recent period of time. Is that going to …

Monica Ferrante: That’s kind of part of this same guidance, but what they’re really trying to do is is make sure that you’re comparing yourself to something that’s reasonable in terms of sort of the state of technology. Claiming a predicate device from 1980, depending on what the product is, may or may not be reasonable to do, so they want you to be working on state-of-the-art product to the extent that … You know.

Dan Henrich: Yeah, yeah. Does substantial equivalence then mean that you’re now going to have to demonstrate that your predicate has not just previously been approved by the agency, but it’s sort of predicated off of the standard of care, effectively, or …

Monica Ferrante: What that does is that eases your process. For example, if you have an electromedical device, go back to the ventilator, there’s a performance standard for a ventilator, which tells you about the features and functionalities that all ventilators should have. There’s the 601 standard, which is electrical and mechanical safety, and then EMI standards to make sure that you’re not emitting or susceptible to radio interference. Your submission would have to have test data to all of those requirements, and then your predicate device would be something fairly recent that also has testing to those same standards. The way you get at that is, on the FDA website, you pull up the summary of safety and effectiveness that’s on the website for your predicate device, and you’ll be able to see what testing they did compared to what you’re planning to do, so-

Dan Henrich: Yeah, yeah. Okay. This all sort of ties into a conversation that I’ve been a part of recently if I’m at a cocktail party or just out and about making small talk. Of course, when you meet someone, they ask, “What do you do, and what kind of company is that that you work for?” When I mention that my company designs medical devices, often, they bring up, I’ve found, one of two things. One is there’s a Netflix documentary called The Bleeding Edge, and there was also a Wall Street Journal article published, I think, at the beginning of this year or maybe the very end of last year. Basically, the narrative that these pieces are building is that medical devices are dangerously under-regulated by FDA and that they haven’t been addressed in the same way that drugs have over the past, say, 30 years.

Dan Henrich: There’s been a lot of backlash from industry towards those types of sentiments, and I think the way that a lot of members of the public are seeing it is sort of as a, “Well, who do we believe? Are we going to believe the people who make money from bringing new drugs to market or new devices to market, or are we going to believe the journalists who are documenting this without an agenda?” I wonder if you could just tell us what are your impressions, sort of, of that general sentiment that FDA has been sort of sitting on its heels for quite some time and letting their regulatory system for devices become outdated?

Monica Ferrante: Very interesting question. I get that question a lot. Actually, there is a push in Europe to align medical device regulation much more with the way drugs are regulated. If you look at the overall history of regulation in the United States, I’m talking all the way back to 1906 when it kind of all started. Actually, it started before that, but the evolution has always been the drug industry being regulated and certain things being applied, and then devices did come along afterwards. There’s a pendulum that swings. I think we talked about this a little before we got started.

Dan Henrich: We did, but I want our listeners to hear it too because it was well put.

Monica Ferrante: The regulation pendulum goes from, “Leave us alone. We’re fine. You don’t need to regulate us at all,” to, “Oh, my God. They’re killing the American people. Every single thing that gets done needs to be regulated.” The pendulum swing goes back and forth. It has for the past, well, since 1976. The swings are getting smaller, which is a good thing because it means that we’re honing in on a nice balance between appropriately protecting the public health while appropriately promoting the public health. In fact, the FDA changed their mission statement several years ago to exactly that. It used to be protect the public health, so we need to make sure everything is as safe as it can be no matter how long it takes. It was actually the advent of the AIDS epidemic that caused that philosophy to change, and promoting the public health, making sure that our citizens have access to the best and the greatest medicines and medical devices became part of their mission.

Monica Ferrante: It’s a scientific process, but the FDA can only evaluate whatever science has put in front of them, and they have to evaluate it based on the regulations, so they try to balance the risk versus the benefit of a particular device. You try, in your clinical studies, to determine what those risks are, and you address those risks as best you can through risk mitigation and design through proper application of the product to the appropriate patient population and so forth, but it is a little bit of an iterative and learning process. It’s never going to be 100% the first time out the door.

Monica Ferrante: I will say that the agency, being science-based, is sort of blind to public sentiment in that regard while they’re doing their assessment. There have been times when people have petitioned the FDA and said, “You should never have approved that medical device,” and it turns out that the people that are making those claims may not understand the number of people that have actually benefited from that therapy and that it’s a small subset that has had the issue. Whenever you read these things in the literature or in various social media or publications or whatever, you kind of have to take the perspective of digging into the detail. What is the context of that particular failure, and how was it responded to?

Monica Ferrante: That way, as the public, you can be better informed and you can understand, oh, the FDA didn’t see that coming. They did address it, and now the product can be safely used in a more limited application, or the FDA actually has had it right all along, and one particular event is being blown up to be a terrible, terrible travesty when, in fact, it was anticipated and understood by both the medical community and the FDA as something that could potentially happen. There’s never any device or even any drug, for that matter, that’s zero risk.

Dan Henrich: Yeah. Well, one of the things I think just very few members of the public appreciate is the number of devices, perfectly good new medical technologies that simply don’t make it to market because of a number of things that derail it from its path. That might be a regulatory problem, or it might be a market problem that, simply, the market can’t justify the cost of developing this device, especially if it’s for a small patient population. One thing that we see, I think we all become aware of things that go wrong and grab top headlines, like superbugs in endoscopes or the vaginal mesh class-action lawsuits and things like that.

Dan Henrich: What we don’t become aware of, I think, as just members of the public, is all the products that do not make it to market because they have encountered some barrier that they just can’t get over for one reason or another. Now, being on the inside of the industry, I’m extremely encouraged when I see FDA take proactive steps to try to lower unnecessary barriers while still ensuring safety and efficacy so that new devices can come to market, particularly for small patient populations where the market … just to make the market case and make something make business sense and attract the investors that it will take to develop the product can be so difficult.

Monica Ferrante: Yeah and, to that end, the agency hasn’t lowered its standards, for example, for pediatric devices and so forth, but they have eliminated user fees and things like that, so they’re doing … within the realm of what they have control of, they’re trying to facilitate the whole humanitarian device exemption, which is the device equivalent of an orphan drug, if you will, where they reduce cost but not necessarily performance thresholds so that companies that have those kinds of technologies have a much better chance of actually bringing their product to market.

Dan Henrich: Right, right. Yeah. I’m not sure if it will be the next podcast we release, but we have an interview coming up with a pediatric device specialist, and I think he and I are going to talk a bit about what are those programs that FDA is instituting to try to compensate for some of the deficiencies in the free market model when it comes to bringing devices to market for underserved populations or for very small patient populations where it’s just difficult to overcome that barrier? They can’t lower the safety or efficacy standards, and we don’t want them to, but how can the FDA or how can the Patent and Trademark Office or how can other government agencies facilitate still navigating those products through the same regulatory pathway in terms of ensuring that they’re safe but lower barriers in terms of the overall cost to bring them to market?

Monica Ferrante: Yeah.

Dan Henrich: Yeah. One other thing, Monica, that I certainly wanted to discuss with you is we talked a little but about how, when you’re evaluating your regulatory strategy, which pathway will you try to steer a device down, at least when you’re first establishing your revenue stream if you’re a medtech entrepreneur? What about the idea of bringing a certain type of product to market which is kind of on the line of whether or not it’s actually a medical device or whether it’s a piece of consumer health technology? Can you talk a little bit about how a company might evaluate whether they want to be regulated as a device and how they would approach that situation?

Monica Ferrante: Well, that’s sort of the very first step of your product idea. Is it a medical device or is it not a medical device or is it something that could bridge? The FDA has established several guidance documents in areas that are of high activity, so apps. Are there apps that should be regulated as a medical device, or should they not? The guidance document addresses that, actually, pretty clearly. Same thing, when does exercise equipment become physical therapy equipment and things like that? They’re trying really hard to provide some framework in terms of when you’ve crossed the line and you really are a medical device.

Monica Ferrante: They actually did that with 23andMe. When they first came out, they were like … they didn’t even think about whether or not they were a medical device. They had no clue, right? Interactions with the FDA and, “Oh, yeah. We sort of cross that line.” They did the submission that they needed to do, actually, through the De Novo process, and now they’re adding functionality. They added a diagnostic for BRCA, so that’s been approved under a De Novo or cleared for market under a De Novo and so forth, so they are expanding on their technology, moving more and more into medical and doing the appropriate regulatory work along with it.

Monica Ferrante: If you’re in an area where you’re not sure if you’re a medical device, that’s a really good time to call the FDA and say, “Hey, this is the product. These are the things that we want to say about it. This is what we want it to do. Is there a line or where is there a line?” That doesn’t prevent you from staying in the commercial world. It just informs you that, when you’ve crossed the line and you’re moving into the medical world, what you’ll need to address.

Dan Henrich: Is coming to market, say, with limited claims as to what your product does, is that a strategy that a company might be able to employ in order to gather the data that they will need to show to FDA, or is that … It sounds like a tricky-

Monica Ferrante: Yeah. Well, I mean it’s-

Dan Henrich: Maybe it’s not a fair question to ask you, but-

Monica Ferrante: You can do that, absolutely. The question becomes how do you gather that data and what are the processes that you need to do that? If you’re testing a product that’s not a medical device but you’re testing potential medical claims, is it an investigational device that you need to follow the regulations for clinical studies and informed consent and so forth? There are a lot of interesting questions there that need to be evaluated, but yeah, it’s all possible. It’s a matter of how you sort of work through it.

Dan Henrich: Yeah, yeah. It sounds, to me, that when you’re dealing with a young medtech venture and they’re just starting to think through a lot of these things, they really need to form a relationship early with a really qualified regulatory consultant, maybe even one that has experience in a particular area. Do you have any recommendations in terms of how people should go about forming those relationships? Should they take multiple meetings at first? What if they don’t feel they have great referral networks? How should they go about finding a regulatory consultant and then determining that that person is trustworthy?

Monica Ferrante: Yeah. There are a lot of ways to do that. There’s an organization called RAPS that is actually regulatory affairs professionals. If you go on their website, they have listings of regulatory people who are actually certified, but obviously, in this age of the internet, you can do your own searches. There are a number of different ways to come across regulatory professionals. I think the main thing, to your point, that you want to have a conversation with that person about, their comfort level with your area or your device type or whatever and your comfort level with them.

Monica Ferrante: I mean, to me, working in this arena with the FDA, it’s about relationships and conversations and the ability to communicate, so finding a person that you can do that with, in terms of the regulatory expertise, if they need to go and research something to figure it out, that’s not necessarily a bad thing. The regulatory environment and landscape changes, so you need someone who can know where to go to figure things out and who to ask and when to ask as much as someone who already has all the expertise in their head. You’re not necessarily always going to find that.

Dan Henrich: Yeah, yeah. Great, great. Well, thank you. I’m sure we could keep talking about this for a really long time.

Monica Ferrante: Oh, yes.

Dan Henrich: I know this is going to be helpful. This has been helpful to me even though I have a little bit of a background in it. I think it’s going to be really helpful to our audience and to folks who are just starting out on that journey to bring their products to market so, Monica, I want to thank you so much for your time.

Monica Ferrante: Oh, thank you. It’s actually something that I love to talk about. I love my work, so-

Dan Henrich: That’s great. That’s great.

Monica Ferrante: It’s always changing.

Dan Henrich: Great. Well, thank you.

Monica Ferrante: Thanks. 

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

ActiveProtective Announced as Extreme Tech Challenge Finalist

R to L, ActiveProtective CTO Wamis Singhatat, CMO Drew Lakatos, and CEO R. Scott Jones pose after being announced as an XTC Finalist at CES in Vegas last month.

Like many great medtech companies, ActiveProtective started with a clinician recognizing a problem as solvable and working towards a solution. Dr. Robert Buckman wasn’t alone in realizing how devastating a fall can be for an elderly patient. But, as a trauma surgeon who saw patients facing life-threatening consequences after suffering hip fractures, he wanted to find a way to shield those most at risk.

A third of Americans over 65 fall each year and many of those falls result in broken hips. Hip fractures are often associated with a rapid downward spiral for elderly patients, who must endure invasive surgery, recovery time immobilized in bed, and, usually, a less active lifestyle moving forward.

ActiveProtective was born from Dr. Buckman’s quest to prevent injuries to seniors, rather than just treating them afterwards. Their solution is a high-tech belt system, one that monitors and analyzes the motion of the wearer to recognize a fall in progress in milliseconds and deploy airbags to shield the hips before impact.

After many prototype iterations, user interviews,deployment tests, and investor pitches, the ActiveProtective team was among the ranks of promising tech startups selected to participate in Sir Richard Branson’s 2019 Extreme Tech Challenge. The team also made the down-select to the semi-finals, where companies were invited to pitch before a panel of judges at this year’s CES conference in Las Vegas. It was there they learned they would continue their journey as a top three finalist to pitch the Smart Belt to the celebrity tech mogul in person this April–on his private Necker Island.  

“We’re so proud of our friends at ActiveProtective for the way they’ve driven this technology forward to this point of being recognized as a medtech leader,” said Eric Sugalski, President of Smithwise. “I’m honored our team has been able to support them in their mission throughout the evolution of the ActiveProtective smart belt. Know that the whole Smithwise team is rooting for you.”

You can see a video of the ActiveProtective Smart Belt deployment and listen to Eric Sugalski’s interview with ActiveProtective CTO Wamis Singhatat on our blog here.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

MedTech Mindset Podcast: Branding in MedTech with Bill Gullan

EPISODE 5 – Bill Gullan and Finch Brands

In this episode, branding expert Bill Gullan, President of Finch Brands, speaks with Smithwise Marketing Director Daniel Henrich about what branding is and why’s it’s critical in the world of medtech ventures. 

Bill and Dan discuss:

  • What branding is, and what it’s not
  • How company identity and go-to-market strategy are reflected in a brand
  • When is the right time to worry about branding?
  •  Developing market and buyer insights
  • Naming your product and company
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Episode Transcript

Dan Henrich: Some of our listeners, Bill might be wondering why are we talking about branding for a MedTech audience.

Bill Gullan: Sure.

Dan: I’m sure you have this experience even just as a marketer. People tend to have, outside the world of marketing, a pretty narrow definition of what marketing and what branding is.

Bill: Right.

Dan: They think of Mad Men ad agencies as what marketing is, and branding is maybe logos and color pallets.

Dan: So, what do we mean when we talk about the world of branding?

Bill: Well, there’s a lot of similarities with Mad Men in terms of how I look and how I behave. No.

Bill: I’m glad you asked, thanks for having me.

Bill: Branding as a discipline is often misunderstood and in part that’s because the word is thrown around fairly loosely and liberally.

Bill: We define branding to be the sum total of how you think and what you do to assert difference and provide expectation of what an experience is gonna be like. So, that includes colors and names and logos, and packaging, and websites. Those are artifacts of a brand.

Bill: But, branding is an overall discipline, is a much larger concept than simply that which emerges from a branding process or are things that you can pick up or hold, or say, or read.

Dan: How does the process of coming up with those tangible aspects of your brand that people are gonna associate and think of as your brand. How do you go about tying those into your deeper sense of identity as an organization?

Bill: That’s a good question, and one of the premises of the question is a very important idea, which is that branding is again, not just a graphic designer set of choices for what might look pleasant.

Bill: It’s based on a deeper system of belief: a sense of purpose, a sense of direction, a sense of difference, a sense of value. That ultimately is expressed creatively.

Bill: And so, when we talk about branding, one of the things that’s really important and often where our processes start, though not exclusively. Is that definition of purpose.

Bill: And so, we spend a lot of our time working with leaders of companies on concepts like vision, mission, and values.

Bill: Those might not typically be associated with branding. Branding is just not the stuff that appears sort of above the waterline.

Bill: In fact, in many ways the hardest and most important element of branding, is what exists most deeply. But beneath the water, and so that often strategically and sort of emotionally comes from that core purpose in the sense of the why that everyone talks about.

Bill: And then, it shows itself through all the communications and touch points that are both internal and external. By the way, we like to say at Finch Brands that the best brands are built inside-out. So, we spend a lot of time on the inside piece. Whether its working with organizations that are going through some M&A activity or some transition, or launch, or whatever the case may be.

Bill: The ambassadors or the carriers of the brand, the deliverers of the brand’s story are gonna be the team.

Dan: Right.

Bill: Client-focused or not, product-focused or not. Those are gonna be those folks who really need to understand and buy into what it is that we’re doing here and what we stand for, and what makes us different.

Bill: If they get that, and have been in some maybe efficient, yet inclusive way, co-authors of that. There is both a muscle memory, but also a sort of concerted and deliberate impact on the work they do every day and consequently what the company puts out into the world.

Dan: So, it’s kind of a chicken and egg situation in terms of constructing a brand as an expression of your corporate identity and culture, and values. Are your employees that way because we’ve said this is how our organization is going to be. Or, do you attract and seek out people who are already part of that?

Bill: That’s a great question, and the answer is both.

Bill: In the early stages, and for those of your listeners who are sort of in an entrepreneurial situation, whether it’s an idea and a couple of people, or early stage companies. Often leadership and co-founders, and early leaders of building a product or whatever are true believers and are there for some common sense of opportunity, yes, but also purpose.

Bill: So there is a need to kind of define or memorialize that, document that often what’s in the hearts and soles are often a greatest service to an organization like that is to help sort of extract it and package it in a way that everyone can act on.

Bill: However, to the premise, again to the question. These core principles that underlie brands also, underlie culture. And thus, the best organizations are those that into the hiring and onboarding and training, and rewarding process of how teams are built as companies grow. Those core principles, be it values or other components of who the company is, have to insinuate themselves into these core processes that have to do with people and have to do with culture.

Bill: So, often for early stage organizations there is a process to develop and document those core beliefs. And then, to imbue everything that comes after in hiring and training, and a lot of that is important in what comes after with those core sets and precepts.

Bill: Another thing often where this is really put to the test, I mean here at Finch, we work a lot with companies and brands that are in transition and that often means, how do you integrate a company that you’ve acquired? How do you make choices and how do you educate new members of the team? Who maybe for a couple of years have been glaring across the trade show floor at you. And now all of a sudden they’re part of you. How do you, in a really quick short-hand pro-enrollment kind of way, engage these folks.

Bill: Often, by growing you earn the right for this to be challenging. And so, I think one of the topics we’re gonna get into is … and it may be surprises for someone in my position to urge restraint in part of entrepreneurs when it comes to time and investment associated with branding in the early stages of a business. But, when you reach a level of scale, where … one of the core elements of smart branding is consistency. There’s a reason why UPS trucks aren’t all different colors.

Bill: So, consistency means that these internal lessons are well taught, and well received. So often, when brands grow and when there’s another ring of employees outside of that core founder base, is when this becomes even more important culturally to document these things.

Dan: Yeah.

Dan: That’s all, I think all those thoughts are really important for those members of our audience who are early-on in their stages of developing their company, defining their identity.

Dan: Often I think, we’re dealing with MedTech startups who have maybe most commonly maybe two people, and those people have a very well defined but maybe not well articulated or a common understanding of who they are and where they wanna go.

Dan: But, as they start growing their team, that doesn’t always come to the forefront, or they’re not always putting that at the very beginning of their conversations to say, “Here’s who we are when you’re joining us, or here’s who we think we wanna be.”

Dan: So, I think, marketer to marketer, you and I can talk about that all day, but maybe let’s dive into some of these other questions that we outlined.

Bill: One thing I’ll say though just to put a really fine point on it and then underline it, and then bold it, and then italicize it.

Bill: All these [inaudible 00:11:44] are situational Dan, I mean depending on capitalization, depending on go-to market strategy, depending on all … so, with that caveat, generally speaking, it is not in the interest of early stage, in my opinion, early stage one or two person shops. Even if they’ve raised friends and family. Even if they raised series, whatever. To plow a ton of resources into branding.

Bill: What they could do, or should do is maybe have a trusted advisor in the form of a firm, or even just a mentor to the business help maybe mediate some of these conversation. Help maybe build some frameworks around “What’s our first vision mission? How do we do that?”

Bill: Certainly, you want your market facing website, you want your investor and client pitch deck to be really well integrated, to be consistent and to be reasonably sharp.

Bill: But, beyond that there are better uses of process. In my opinion, most often when it comes than plowing a ton of money into having the best branding without a minimally viable product or with a bunch of vapor, or with a lot of things still to be untangled, because that’s the things about that stage. There’s a lot when it comes to target markets, when it comes to how stakeholders are defined, when it comes to zigging and zagging. Everything changes.

Bill: And so, other than that kind of core sense of purpose and maybe the development of a look and feel in personality at the very sort of early stages. You just don’t wanna have to bother with that and tie up your resources. It’s all gonna change anyway.

Dan: Yeah.

Dan: I think you maybe have then just sort of answered what we had talked about as a next question in terms of when is the right time to start worrying about branding?

Dan: But, when’s the right time to start worrying about maybe those mission vision values underlying parts?

Dan: I think a lot of our listeners, you don’t have to sell them on the fact that it’s maybe too early to plow a lot of money into the process. But, what should they have done even at the very early stages of their company before they start growing their team from an organizational identity, underlying future branding standpoint?

Bill: I would not plow a ton of money into it, but I would certainly think about vision mission values from day one. I would certainly among even a very small self contained team of founders and sort of early stage team members. I would certainly think through, again, not be paralyzed by it, but think through and document a best guess on vision. Which is sort of that North star, what’s our purpose?

Dan: More the internal-

Bill: The power of what we do mission, which is sort of the high level answer to how we do it and values. Which these are the norms and behaviors that we wanna encourage within our culture among the many things that we can ask people to do. These are 3 or 4, or 5, that we think are essential to building that type of company that we want to. That’s important to get done.

Bill: It’s also important early on, to get an effective market facing website done. Now, the good thing is with SasS, web options like Squarespace and others, you don’t need a big dev team, and you really don’t need a big design team. These are fairly easy to do, so you’re able to control cost.

Bill: So, I think those are things that you really do wanna think about early. And, you really wanna engage those true believer inner ring types of folks into conversations like that.

Bill: You probably wanna do the best you can on naming, and I don’t mean the best you can on hiring some crazy naming firm to go through 37 rounds of ideas. But, you should name with an eye toward, not just your neighbor’s  dog who you happen to like, but I mean a name with an eye toward conveying something about what you’re building.

Bill: But, when it comes to the larger stores, I think the moment when you really probably need to think about it, invest in that, is when you are going to market with scale. That doesn’t necessarily mean hundreds of thousands of people sorts of scale, but when the meetings that you’re taking are a little bit less about, “Hey, you can be a development partner. This is what we’re working on. What do you think?” And more about, “I want you to buy this. I want to transact with you.”

Bill: And, the more that those types of conversations are both dominating your investments in terms of hiring and sales and marketing, and also just how you’re gonna evaluate your own performance. That’s when you kinda need to start getting the stuff right, or right enough.

Dan: Yeah and that’s when not having it is going to start to clearly impact the results of those conversations?

Bill: Correct. Yes.

Dan: Okay. Give me a moment here just to look at this list because I think our conversation has been following this stream of thought all by itself.

Bill: I always jump the gun.

Dan: No problem, I think it’s better for it to come out in natural flow of thought.

Dan: So, let’s talk specifically about MedTech and healthcare. You’ve worked with a lot of healthcare related clients. And I’m sure you’ve encountered this as marketers we’re always told that we need to humanize our brands, especially if it’s a business to business brand. Or, especially if you’re doing something that’s not very sexy, right? You need to find a way to connect emotionally on some level to your stakeholders.

Dan: I think what often comes out of that in healthcare space is a broad claim that companies make that there are really patient-centric.

Bill: Yes.

Dan: But, if everybody is just saying that, then your humanization maybe falls flat and it becomes very generic and you’re not really differentiating yourself at all.

Dan: So, how can MedTech players, how can folks in the startup realm define their brand in a way that’s both humanizing, but not overly broad?

Bill: Yeah, great question. And I have a blizzard of thoughts, so please help me keep them structured.

Bill: The first thought is an old adage that, again, marketer or marketer is probably something you’ve heard 100 times, and I’ve heard 100 times.

Bill: But, continues to have the most profound impact on me and acts as a check in terms of my own direction and the work we’re doing with clients, which is, and I forget who said it, Professor Levitt said it. Which is that, “People don’t wanna buy a quarter inch drill, they want a quarter inch hole.”

Bill: What that is imploring us to do as marketers is to focus less on features and more on benefits. So, part of appealing to and remember to master the emotional and rational sides of our stakeholders, and they always … people are people. So, there’s always a rational and emotional piece to this. Is to remember to communicate through the lens of benefits, not product features. Because of the fact in MedTech, many of your most high potential founders are coming at this with product knowledge and as engineers, and are approaching this, and that’s their comfortable place. That’s where their soul resides, it is particularly important that people like that are remembering to talk about the hole, not the drill.

Bill: Now, you’re right. This whole, “Hey, I’m making this device that the patient will never know by name, or identify by name. Yet, I read somewhere that I need for this brand to be emotional, so I’m gonna talk about saving the world.”

Bill: No, you’re right. There’s a disconnect there that falls flat, it’s cringy, it’s trickily, it isn’t something that’s gonna connect.

Bill: But, by goodness, if you are selling through let’s just take a medical center, and you think about the need states and the frustrations of the chooser and user in this. Let’s say the nurse. Boy, what problems are you solving for her or him? What are the things that day in and day out are areas that really motivate and constrain him or her?

Bill: Some of those are emotional. I mean nurses who, and again I’m over-generalizing here, but let’s say if you’re dealing with head nurses and their team at an assistant living facility. When you think about it, you really go through and build a map of the journey that they deal with day in and day out, all the touch points with their patients, with their colleagues, administrators, all the challenges that are thrown on them day in and day out.

Bill: And, you talk to a couple of them and you understand what deeply frustrates them, and you really hopefully have hit on a problem that you’re solving for your product. There’s incredible terrain to make that emotional.

Bill: And so, emotional brands isn’t just going to this as far as you possibly can in terms of the actual end-user of this and saying that we’re gonna save their lives. That’s a recipe for not connecting.

Bill: But, when you look at your stakeholder, in some cases it’s a complex web of stakeholders. And you really think about the problem you’re solving and the impact you’re having on their day, and on their sense of themselves, and on their sense of their own performance and efficacy. You will find terrain there that is absolutely possible to sort of anchor into.

Bill: In the MedTech realm, even if you don’t touch the end-consumer, or you don’t wanna run the risk of saying, “Oh, we make the world a better place.” Or, what you’re dealing is sort of definitively un-sexy, you’re helping someone have a better day and get a better outcome. And, it’s important for you to get your finger on what that is.

Dan: Yeah. So, as a follow up to that, how can brands know how to strike the right balance between being really aspirational in what they claim in making somebody’s day better or saving their lives. Without kind of like overextending themselves and laying claim to something that they really haven’t earned. So, I think what comes to mind is, I think I was listening to it, an old episode of your podcast the other day.

Bill: I think … I’ll piggyback on what I said earlier, because this may not be satisfying, “How to” answer, but the best way not to do it, is not to do it in this case.

Bill: If you have a clear sense of how your stakeholders live and work and what they value and where they need allies, and the role that you’re playing in being that ally in a certain sphere in a certain sector. If you really, really know that well, and you’ve been able to sort of articulate again, rationally and emotionally the value that you create for them, or the problems that you solve for them. You will, and you should always resist temptation to claim to be a savior in areas where you’re not, but you should be able to calibrate that message pretty effectively if you have a pretty good sense of how they live and what they do.

Bill: I’ll give you an example, we’ve been working on a branding process for a company that’s mindblowingly amazing, that may be a hyperbole but we like them very much, we respect them very much called, Belmont Instrument, the rebranding is Belmont Medical Technologies. They’re sort of flagship product, which is known in the ER as “The Belmont”. Is this temperature regulation, the rapid infuser that helps regulate temperature when it comes to blood transfusions and get rid of the bubbles and other things. I mean this is literally lifesaving, but it is a tool for critical care providers to save lives, and there’s a temptation because the tool is lifesaving because you wanna sort of inspire the internal workforces and because you want the market to be aware of the impact that you have. There’s a temptation to say that this product alone saves lives and maybe it does, but it made more sense from our perspective and theirs to really nestle into the degree in which we support critical healthcare heroes in saving lives and enhancing outcomes.

Bill: To come to market with confidence and humility simultaneously was the right answer for them. And I think it generally is when it comes to MedTech.

Dan: So, kind of key there it seems like is making your … maybe not your ultimate customer, but your stakeholders the hero of the story, right?

Bill: In many cases, that’s right.

Dan: And your product is often a means of them accomplishing that feat, right?

Bill: And that is a high percentage of the time, a viable and smart, strategic direction.

Dan: Yes. Okay, so that’s kind of a good Segway into another question I have for you, which is, you alluded to, not alluded to, you talked about the importance of understanding the ins and outs of your users and your stakeholders, and the importance of research underlying your branding and your messaging, and your identity.

Bill: Yeah.

Dan: A lot of our listeners are very early on in their process, they might be thinking about what they want their brand ultimately to be or to mean, or how they’re gonna communicate their message, but they don’t have a product yet, let alone customers or these other stakeholder relationships that ultimately they hope will come later.

Dan: What advice can you offer to people in terms of doing that broad research when you don’t have those relationships in place. You can’t call up your customer and say, “Hey, can I come [crosstalk 00:27:28]

Bill: Thankfully, there are many, many different ways today to do or to begin the process of having those types of interactions with folks that in the olden days might’ve necessitated that you pay for it.

Bill: Use social media to network to nurses, for example, in your relationship base. Take people to coffee. I would imagine most of the founders who listen to this have some connection, somewhere in the [inaudible 00:28:00]. They don’t have a customer to survey, perhaps.

Bill: But, they have a concept, then they have a mentor and they have the ability to network their way to have just a couple of really deep conversations, that can be enough.

Bill: Market research so to speak were in this political season, the Midterms just happens everyone was looking at the polls, right? The reasons the polls are accurate sometimes down to a couple of percentage points is because they do them with a statistically significant respondent base. They do them with enough volume that they know.

Dan: But, good luck funding that.

Bill: Yeah, good luck. But I mean in this case, all you need is a directional sense. Plus, if we’re talking about these branding topics, we’re looking for depth and texture. We’re not looking for a margin of error level of statistical validation.

Bill: So, the best way to do this is to have a series of conversations with folks that you network to, take them to coffee, buy them a gift card, whatever, and benefit from the depth and texture of having a palms up, open conversation to understand what their world is like.

Bill: At the same time there are other ways to do this? Yes, social media. But, all of these places have trade organizations. All of these occupations do. They’re often, and depending on where you live, you may have a university nearby that’s offering undergrad or grad level degrees and XYZ. Talk to faculty, talk to grad students who are doing rotations. If you have a little bit of energy, certainly roll up your sleeves and at very minimal cost have conversations of this sort that will be helpful, not necessarily in validating within a two decimal place margin of error that something that you believe in is right or wrong.

Bill: But, in providing the texture and the depth with which to build these maps of experience and build brand content, that has power and meaning, and is directionally valid. So, you don’t need a paralysis by analysis research process that spins the entire angel around that you’ve raised, and exhaust you and now you’ve learned something, but you have nothing else.

Bill: You don’t need to do that anymore.

Dan: Right. And really hopefully, I’ve always sort of felt as a marketer in a lot of ways my job is easy if what I’m marketing has been developed correctly.

Bill: Yes.

Dan: Right. If the team that has developed the product I’m selling, or put together the service package I’m selling has done that with market knowledge. Then, branding and messaging and all that sort of thing should be a natural extension of that, right?

Bill: Sure.

Dan: So, I guess what I’m trying to get at is hopefully those conversations and those interactions are already happening at informing all of what comes prior to hanging your shingle, right?

Bill: Yeah. Totally.

Dan: Yeah so.

Bill: But that said, entrepreneurs have to make calls. Again, there’s zigging and zagging in that process, and there’s probably some choices that you make either at the product level or at the pitch level, or whatever it is.

Bill: That’s based on incomplete information and you do your best to get there and that those hypotheses get refined over time and it certainly makes sense to make this level of exposure to the marketplace a persistent and perpetual component of the growth of a concept and continue to bring ideas and concepts back to this base of folks who can react to them through the lens of their own professional experience and then the needs that they have day in and day out.

Bill: So, I agree with you that these companies are built brick by brick and ideally good choices now result in better outcomes later. But, one shouldn’t fret that every choice they’ve made doesn’t have to be perfect for the company being successful, except to do your best and then continually refine the approach.

Dan: Right. Yeah, I guess what I mean is hopefully you didn’t get to market with a product that you haven’t already really established the need for and the value of within your own process of developing it and funding the development thereof right?

Bill: It’s true, and I mean if you have investors, a lot of people are kicking the tires on this thing, and a lot of people are assessing in addition to their respect for you which is probably palpable and important to this. They’re assessing what the market opportunity is and whether it clicks or connects for them. And so, by virtue of building a company, even in the very early stage, there are people who have been put in a position to evaluate whether they think you’re on the right track. So, I guess there’s perhaps wisdom which each incremental opportunity that you have to put this in front of somebody who has good judgment and some level of experience. You know, the closer you come to know that you’re on to something.

Dan: Sure.

Bill: Forgive the emergency vehicles in the background. It’s not for us.

Dan: It’s part of life in the big city, if you can hear the emergency vehicles in the background. We’re recording from Finch’s  s today.

Bill: I hope everybody is okay.

Dan: And there’s some city noises.

Dan: Let’s talk briefly about the process of naming, both company naming and product naming.

Bill: Yes.

Dan: That’s a really painful process in my experience.

Bill: Can be, yeah.

Dan: And the larger the group is that’s making this decision, the more painful the process may be though. I guess on the other hand the more input and reactions you get.

Dan: What’s the right way for a startup to go about the naming process. Say just naming their company, or maybe naming their product that is the name of their company or vice versa.

Bill: Right. Many are, yeah.

Dan: Is it the two founders sitting in a room alone? Or, when’s the right time to have that conversation? When should you reevaluate … when should you be willing to reevaluate your working title?

Bill: Yeah, I think the second question is a little easier than the first, but I’ll try to address them both.

Bill: Everybody works differently and has different rhythms and for example, even at Finch, and we do a lot of naming and my own personal naming history goes back to the late ’90s. My first real job out of college what at a firm that adjusted naming, and so I have a passion for it, it’s my favorite thing to do. It’s hard, to your point, and it’s always a mix of hope and fear. I mean the hope is that you come at something that really effectively encapsulates the energy and the positioning, and you can get it and go to market with it, and it helps.

Bill: The fear is legal availability and linguistic appropriateness, and just the overall challenge of a process like this. So, anyway, suffice it to say my scars are still fresh and have been for 20 years from naming.

Bill: But, everybody works differently even within Finch we have some folks who really thrive in group brainstorming sessions. I’m not like that, I personally am somebody who prefers to brainstorm independently and use the output from the group sessions and anyway, too much sausage making. Suffice it to say that there’s no right answer as to who should be in the room and how they should do it.

Bill: What there is a little bit of at least guidance on perhaps is, what makes a successful name? And, to your second question, when to be flexible and reevaluate it?

Bill: There are a couple of different types of names. It’s most simply and this may be overly simple. There are three types and they all have strengths and weaknesses.

Bill: Type one: we would call that neologism, it’s a newly created word. It’s your Verizon. It’s your Exxon. It’s your Texaco. These names may have an obvious derivation, but they are … I used all the petroleum companies, so let’s use Verizon as an example, which is the Latin prefix, the truth, and horizon. So true future, it was GTE and Bell Atlantic merged. There was no chance that either one of those, old wire line companies was gonna really be the right identity to carry forward into even then they knew was a mobile future in the mid to late ’90s.

Bill: So, a new name was developed, Verizon.

Bill: Now, the good thing about it is you can make it mean what you want it to mean. It was an undisturbed landscape and you had an opportunity, Verizon did, to define what they wanted it to be. Of course, day one, everyone said, “How do you pronounce this? Verizzon? Or, What does this even mean? I hate it. It sucks.” Whatever, and then, as is so often in the naming process, naming is not a thunderbolt from [inaudible 00:36:26] and oh, there it is, we got it. There’s one name and it could can only be one name, and it’s the greatest name ever. It’s never like that. What it is, is finding a name candidate that has enough absence of negatives and enough that you can build a brand around it.

Bill: When I was doing naming in the ’90s, clients would come and say, I want the next Amazon, I want the next Windows. So, we understood that. Of course, the response obviously was, you don’t want their names, you want their businesses, right?

Dan: Right.

Bill: So anyway, it’s important to not hold yourself to the standard of the thunderbolt is gonna come and the angels are gonna sing in holy, and holy crap I have my name. Because it doesn’t happen like that. It really doesn’t. The best names are those that have the best business and brands built around them.

Bill: But, back to the point neologisms. The detriment perhaps or the challenge of neologism is that it costs a lot of money to make it mean what you want it to mean.

Bill: In the absence of your ability to educate the marketplace, they’re gonna be forming their own conclusions or more likely confused by it. So, the neologism has strengths and weaknesses.

Bill: The second type that you see that is predominant is a metaphor. It may be a popular word that everybody knows what it means, but you use it out of context to … Amazon, which was the longest river in the world, it’s a conveyed selection. Finch as well, coming from Darwin and the research on finches in the Galapagos. These are metaphors. Jetta is a wind current for Volkswagen. There’s hundreds of examples. But, the benefit of that is you can still make it mean what you want it to mean and it won’t be, “Ugh, I’ve seen it 100 times-

Dan: And nobody asked how to pronounce it-

Bill: But, people know how to pronounce it. So metaphors are interesting. The challenge of them is that you still need to tether it to what you’re doing so that it makes some degree of sense and then the third name can be-

Dan: It may be a lot harder to be found as the first search result, right?

Bill: That true. [crosstalk 00:38:15] it’ll be used out of context or in different context in a bunch of different ways.

Bill: The third, we would say is more of a descriptive name candidate. The name that comes pretty darn close to saying exactly what the product does.

Bill: And then I would say the fourth is more of a proper name. It might be after a place or after a person. So, I guess I’ll amend that and say there’s four.

Bill: Anyway, straight to the weaknesses to each. The right name ultimately is based on situational factors in terms of the category and it needs to have some level of connection. Ideally, it says something and it does a little bit of the work of introducing the company. Ideally, it is easy to spell. Ideally, the domain name is available or a quick work around is available. Obviously, ideally the intellectual property is available and linguistically it needs to not mean something horrible in another language. We’ve all heard those stories.

Dan: Yup.

Bill: And so, these are things that the name needs to do.

Bill: Now, the right name type, or the right specific name for a company is very situational based upon what the company is doing, what the nature of the category is. Are you a first mover with a new innovation? Are you leaning into something different in terms of what you’re providing?

Bill: Long answer to an easy question. The second part of your question of when to reassess is before you go to market and scale. There may be a time where you put a little bit of momentum in a closed community, like the entrepreneurial ecosystem, or among investors, or in an HR sense where you have built a little bit of equity in what it is that you’re trying to do. There may have been a story or two written about it. You may have raised a couple rounds, whatever.

Bill: But, before you really go to market and scale, that’s the time to think differently about it. I don’t like the necessarily, “Hey, my roommate and I had a pet dog and the dog name was Spot, so we’re gonna name our company Spot.” Who knows, you look at the successful companies out there. There’s a lot of random proper names that have stories associated with them that are really personal to the founders.

Bill: Again, for a guy at a firm that does a lot of naming, it maybe strange to say. But, there are certain things the name needs to do, but a lot of the success or failure is way beyond what the name does or doesn’t do.

Dan: You do post naming right?

Bill: Yeah totally. So, I think naming is important, but again, not something to get stuck on or be paralyzed by.

Bill: Another thing that we’ve seen pretty frequently, again, to your point is, often there are what we call brand architectures, which have to do with how different brand equity is within a company fit together.

Bill: Where there’s a corporate name that isn’t the product, the lead product name. Once you go to market, maybe you want the corporate name to exist in your corporation documents, maybe you want the corporate name to exist because there may be future directions that the company would day beyond its maiden product concept. So maybe you want a different corporate name from a different lead product.

Bill: Now, that makes sense in situations where the corporate name isn’t asked to do that much. If the corporate name is asked to do a lot when it comes to HR, when it comes to fundraising, when it comes … then it doesn’t make sense early on to have to build equity in two names simultaneously. That’s a diversion of resources and that’s a confusing waste of times and resources.

Bill: But, if the corporate name is a DBA that’s gonna exist and be held for later as a larger umbrella into which other concepts they fit or sit down the line, then it may make sense for an initial product that has a very specific utilization and it may be a very specific space to have the ability to narrowly tailor its value to the space and the stakeholder type that it exists to impact.

Bill: So those are meandering thoughts about naming. But yes, naming can be hard. Naming is emotional. Part of the reason I think it’s hard, my own hypothesis is that when it comes to the work that designers do, there’s a skill gap. Most people can’t do what they do.

Bill: When it comes to naming, we all know the language.

Dan: Right.

Bill: And we all have opinions about it and that’s good. So, within a process, we’re working with clients, it’s on us to harvest input, to lead but listen, and to understand that great ideas can come from all other the process. It doesn’t make sense for us to discourage. They’ve hired us and they want us to leave, but that doesn’t make sense for us to discourage either candidates that were developed internally or if people are having fun thinking about it, we appreciate those additions to the process and the right answer in a process, I don’t care where it comes from or where it comes from. I mean there’s no pride in authorship. And there shouldn’t be just because we want the best. We want the best outcome.

Bill: So, when founders are brainstorming and they feel really good about something, that in it of itself means something.

Dan: Yeah, great. Well I think you and I can geek out for a while about branding and naming and marketing topics, but one thing I wanted to make sure that we do cover before we wrap up here in a minute is the issue of stakeholders within the healthcare space.

Dan: Many of our listeners are working on products that are gonna have a whole host of stakeholders and ultimately they may even end up inside a patient for the rest of their lives. But, the patient may never even know that brand name, you may not know you have the Metronic hip or a J&J hip.

Dan: How do you decided who the most important stakeholder are? Are they the hospitals, are they the insurers, are they the surgeons or the nurses? And how do you tailor your brand messaging to multiple sets of stakeholders that have their own sets of concerns.

Bill: Right. Most medical devices do not reach the level, nor to they aspire to, nor should they aspire to be an, “I want my MTV” kind of end-user pull.

Bill: Because the budget is required to do that. As well as their very specific categories where a patient or a consumer may even care.

Dan: And may even [crosstalk 00:44:14]

Bill: System or something like that. And they even exercise their own, very few where they would do their own research or exercise their own level of discretion, I mean it has to do with pharmaceuticals yes. But, in the device side, not as much.

Bill: So, I would in most cases not even really worry about end-user adoption unless it’s gonna be there and they’re gonna be able to access it and it has to do with how they think about themselves and their recovery and you don’t wanna … you certainly don’t wanna name a product, cadaver. When you’re trying to have a patient trying to get better and working hard to get better. So you don’t wanna name a product, buzzard, you know that’s geared towards older folks.

Bill: So, those are obvious you don’t wanna step in it.

Bill: Stakeholders we talked about a little bit earlier. It helps initially, you build a map of that chooser and user journey. Who are you selling to? Who’s using it? What are the differences? And then who’s ultimately using it? What are their differences, and needs, and motivations, and pain points?

Bill: If you build a real brand journey map, and you see the world through the lenses of those distinctive stakeholder groups. We go through a process there at Finch called laddering, that is really important from a messaging perspective. You start with those needs.

Bill: And the stakeholders may be different. But, you diagram what their needs are. And then you continually ladder up and I won’t give you the whole thing until you have a sense of the core emotional terrain that you’re occupying.

Bill: So, assessing the stakeholder needs, but then understanding what an umbrella concept that spans them. That’s a mixed metaphor, but umbrella concepts that can encapsulate both of them, or all three of them, or all four of the stakeholder types is likely where you’re gonna find fertile branding territory.

Bill: In terms of finding which stakeholders are important. Again, it’s a situational answer, but the end-consumer, maybe as a “Huh.” Don’t want to offend them, but they’re not actively engaging in a choice. So, that’s something to think about. But, certainly if we’re talking about large hospitals, for example, you’re dealing with a procurement apparatus, you’re dealing with an operation chain of command that has to do with cost savings, and has to do with regulation, and has to do with outcomes. All the things that matter to them from a regulatory and a performance perspective.

Bill: Then, on the medical and clinical side, you’re dealing with doctors, nurses, and everybody in between, and how they treat certain situations. How the actual work gets done, in terms of who does what.

Bill: So, choosers, users, building a map of those stakeholders, diagramming, and documenting their unique needs, and finding terrain where there is both functionally and emotionally those connection points we have found is an effective way to kind of ladder up to a core brand message that’s sound and powerful. That balances the rational with the emotional. And that speaks in the right language simultaneously to the different stakeholders that matter all the way down that path.

Dan: Great. Thank you.

Dan: Well that’s probably as good a note to end on as any. But Bill, I wanna really thank you for your time, it’s been a great conversation, I hope our listeners are enjoying this conversation as much as I am.

Bill: I can go forever on one answer.

Dan: Thanks [crosstalk 00:47:22] you and I can do that separately, we’ll let our listeners off the hook.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic