AI and the Next Frontier in Healthcare and Patent Law

In 2018, Medtronic put the world’s first automatic closed-loop insulin pump and continuous glucose monitoring system on the market. For people living with Type I diabetes, like me, it was game-changing. It’s the closest thing to an artificial pancreas that I’ve ever seen.  My average blood sugar levels came down 20% in 4 months after I started using it. Like I said, game-changing.

Controlling diabetes is a lot of work. With the lows just as dangerous as the highs, diabetics must continuously monitor their blood glucose levels and regularly adjust their insulin levels. For most, these adjustments must be made several times a day and it can be a constant battle and distraction. In addition to monitoring glucose levels, people with diabetes must also monitor carbohydrate intake and exercise, which both impact glucose levels. When you have diabetes, you are never able to forget about it. 

Medtronic’s AI-driven insulin pump performs in many ways just like a fully functioning pancreas. It monitors and assesses glucose levels every five minutes and intuitively adjusts the amount of insulin it delivers twenty-four hours a day. It learns from your glucose trends and insulin delivery and makes adjustments to its delivery program along the way.  In short, it saves me from the burdens of constant monitoring and manual adjustments. 

It’s not just about diabetes. Artificial Intelligence (AI) is revolutionizing all aspects of health care. It fuels the wearable monitors that can alert us about everything from abnormal heart rates and respiration, to excessive UV exposure. The frontier for AI’s contribution to medicine is continually being pushed outward as new research and new patents are revealed. 

Patent Protection 

With new technology and new players continually entering the market, patent protection for AI driven medical technologies is even more critical than ever. Trade secret and copyright law can help protect programming code but patent protection will offer the broader protection that medical technology companies need. 

RELATED: What Lawyers and Clients Need to Know About the Use of Artificial Intelligence

Diagnostics

Much of the recent application of AI technologies has focused on its use in diagnostics. There are good reasons for this. It’s a lucrative field for AI companies and a costly one for healthcare practitioners in terms of potential errors and malpractice. 

The history of AI in diagnostics goes back to the 1950s when doctors first started using rudimentary computer systems to assist them in diagnosis. Today’s diagnostic AI, however, looks very different. Chatbots are leveraging complex algorithms, speech recognition, and learning from thousands of cases to help doctors choose the right medications and to help patients assess their symptoms. 

AI is helping to diagnose cancer, determine the size of tumors and assess the prognosis for patients. This saves time, a critical element in cancer treatment. For example, UT Southwestern researchers recently announced the development of software that leverages AI to recognize cancer cells from digital pathology images. With millions of cells in a single tissue sample, pathologists were previously limited to looking only at parts of a sample. The algorithms in this software promise to improve both speed and accuracy.  

This same speed and accuracy are also leveraged in laboratory analyses of fluids and tissues. Rare diseases can now be diagnosed worldwide through the use of facial recognition and big data using AI. 

Treatment 

Ensuring quicker and more accurate diagnoses is just one part of AI’s application in healthcare. It is also impacting patient treatment. 

Drug trials are time-consuming and costly. However, speed is essential in the highly competitive drug industry, just as it is for patients waiting for cures or relief from symptoms. AI can save time by streamlining the planning of clinical trials and through the quick processing of massive amounts of data. But AI isn’t just reducing time and saving money for pharmaceutical companies. AI is also improving clinical trials by providing researchers with analysis of potential participants and remote monitoring of participants’ adherence. With its ability to analyze tens of millions of genetic compounds in a single day, AI is leading breakthroughs in the treatment of major diseases, including Parkinson’s, Multiple Sclerosis and Ebola. 

Within hospitals, AI is driving innovations in triage, ensuring patients get timely treatment. Google’s DeepMind Health and IBM’s Watson are both engaged in improving patient’s experiences and outcomes. In hospital settings, these and other AI platforms help assess patients, track wait times and even determine the quickest ambulance routes. Hospitals are also partnering with companies such as GE to use AI to maximize operational flow and allow staff to see far more patients in much less time. 

Surgery 

Innovations in AI and robotics are also proving to be surgical game-changers. In 1985, surgeons employed a robot to awkwardly insert a biopsy needle into a patient. Thirty-five years later, surgeons conducted the first ever robotic eye surgery. In February of this year, Medtronic announced the first spinal surgery on a U.S. patient was performed using a combination of AI driven robotics and navigation developed by the company and a partner. In fact, last year alone, over 5,000 robots were employed in well over one million surgeries. 

Da Vinci was the first surgical robot to be approved by the FDA.  Its combination of cameras, surgical tools, analytics and robotic arms continues to be used for a variety of operations in hospitals throughout the U.S. Robots are used today in nearly every type of surgery, from orthopedics to heart surgery. 

Because it is often more precise, robotic surgery is also minimally invasive, resulting in less scarring and faster recoveries for patients. This precision also, for example, allows surgeons to target cancerous cells rather than regions of the body directly. 

AI is being used to stabilize physician’s hands and reduce tremors and to create virtual reality surgical theatres in which surgeons can test out procedures before they see the actual patient. It’s also driving microsurgeries and therapies. The Heartlander, for instance, is a miniature robot that enters the body through a tiny incision and can deliver treatment right on the surface of the heart. 

But the real power of robotic surgery lies in outcomes. Robotic surgeries are far less invasive, produce less scarring and studies are demonstrating that they can drastically reduce hospital stays. 

And for both patients and their doctors this new frontier is looking very promising.


Is Your Startup Making These Mistakes With Your IP?

When new companies are moving forward with a product at a rapid pace, some of the last things on their minds are details like patents, inventorship, and other intellectual property matters. Most times, however, these oversights can have dire legal consequences. Other times, they can lead some to take some crazy measures to cover up their missteps or protect their pocketbooks. Check out this story from my early days as a patent litigator.

In the very first patent infringement case that I worked on right out of law school, I represented the defendant in a case where the plaintiff’s CEO was caught falsifying his engineering notebooks in order to prevail in an inventorship and prior art dispute that was raised as a defense during the case. 

During discovery, we had the CEO’s original handwritten notebooks ink-date tested by forensic scientists to prove that they were doctored and he actually did not have exclusive rights to the technology. Turns out the ink used to create the notebook entries at issue was not manufactured until more than 10 years after he claimed he made the entries at issue (think old school meta data). . .The case only got crazier from there. 

After losing a multi-day evidentiary hearing to determine the admissibility of the notebooks, the judge in the civil case determined that the CEO (and others) had committed fraud on the Court and referred the issue to the U.S. Attorney for criminal prosecution. While attempting to flee the country, the CEO was arrested, his passport revoked, and he was thrown in jail while awaiting trial on the fraud charges. He lost and was sentenced to an extended jail term.  

But wait, it gets better. In a move straight out of a Hollywood drama, the CEO tried to hire a hitman while incarcerated to kill the judge in the underlying case. Unfortunately for the CEO — and fortunately for the judge — the prison contact he approached for the hit turned out to be a confidential informant to the FBI. Doh!  As far as I can tell he is still serving his initial 17-year prison sentence.

I know it is an extreme story, but it is a cautionary tale about the importance of protecting your IP from the get-go and paying attention to those often overlooked but legally impactful aspects of inventorship and ownership. Startup founders and entrepreneurs are often worried about the here and now. Being able to adapt and change with zero money is part of the startup philosophy. Meanwhile, intellectual property protection is more of a forward-looking, long-term vision. 

What are some of the issues that arise due to this disconnect? More importantly, how can you avoid making IP protection mistakes in your own startup? I’ll break down four common mistakes startups make with their intellectual property and how you can avoid them.

1. Missing Unextendable Deadlines

Say you’re in startup mode. You go through an accelerator, you tell the whole world about your great idea, you have a product and customers…but you haven’t filed a patent application. Nine months have passed. Soon, you won’t even have the chance to protect your IP, due to hard and fast deadlines that are embedded in the patent statutes. Once those deadlines pass, you can’t buy, lie, or muscle your way out of that situation and you seriously risk dedicating your invention to the public domain. No one — including you — will ever be able to patent it. 

For some startups, intellectual property protection doesn’t even come up until it’s a legal issue or an investor asks the inevitable question about whether you have already filed those applications. As some startups discover too late, there are very black-and-white deadlines within IP law that require you to protect your innovations by a certain date. If you fail to do so, you can’t ever get that chance back. 

Not sticking to deadlines for protecting your IP is one of the biggest mistakes that startup companies make.

2. Inventorship: Not Crediting the Right People 

In accelerator-style programs, lots of people with very philanthropic motivations come together to help young companies thrive. It is a hyper-collaborative environment. These mentors might casually mention an idea or a suggestion for tweaking your product over a cup of coffee and next thing you know, the startup founders run with an idea that was conceived by someone else. 

A version of this happened in another patent infringement litigation that I worked on some years back. During the development of our client’s technology, there were collaborative efforts between the company that owned the patent and an inventor who was part of another company. Originally, the company who filed the patent application acknowledged that the separate inventor contributed to the technology. They reached out to him to file the correct paperwork, but he hesitated, saying that he felt the idea wasn’t patentable and that he alone was the only inventor on the technology. While there are rules to specifically deal with this type of recalcitrant inventor situation, the company instead moved forward and filed the patent application on their own without attributing inventorship to this individual. 

Years after the patent issued, it was asserted against a number of companies in that industry including that same “other company.” The case was won based on the fact that the attorneys writing the patent application at the time had encouraged the company to not properly deal with the inventor and his statements about collaboration and inventorship. 

Inventorship is a legal definition and it’s very important to get it correct. So, if you file a patent application and the invention has contributions from others that are not listed as inventors on the patent, the patent can be held invalid and you can expose yourself as a company to ownership issues. Deal with these problems up front and it tends to be a matter of simple paperwork. Monkey with the rules for personal gain or to keep the cap table simple, you may lose your IP.

Related: Pitfalls to Avoid When Collaborating on Intellectual Property 

The proper inventors always need to be named, even if a collaborator or contributor isn’t part of the company — and yes, even if it’s just a mentor who mentioned an innovative idea over a cup of coffee. 

Now, I know what you’re thinking — does this mean that I can’t have coffee with someone to brainstorm? Do I need to credit everyone who provides even the slightest bit of input?

No, that doesn’t mean that at all. Ninety percent of these mentoring environments aren’t providing specific advice that could have legal implications later. Most of your discussions aren’t going to be about core technology or code functionality; they’re more likely to be about marketing or customers.

You only need to involve an outside individual like a mentor in your patent filing if they conceived of a critical idea associated with your invention and those concepts made it into the claims of your patent application. 

3. Looking for an Easy, Cheap Option

IP protection can also be a turn-off to some entrepreneurs or inventors because it is initially perceived as both expensive and time-consuming. Some startup founders tend to shy away from IP protection due to the cost or try to find a way to get IP protection for free. Some look for volunteers to provide IP services. 

Thankfully, there are new, more streamlined and inexpensive ways to get IP protection, particularly in the early phases of a company where all you may need is a simple provisional patent application and a single trademark application to cover the basics. You will likely still need to invest some of your own time but don’t be steered away just by the perceived financial costs.

Related: What Lawyers and Clients Need to Know About the Use of Artificial Intelligence

Inventors are often embedded in the day-to-day aspects of launching their company and getting it off the ground at a rapid pace. IP protection doesn’t interest them. Their attention, though, is crucial to ensure their IP is protected. 

4. Not Filing a Trademark Registration 

If you have a name for your company or key product, file a trademark application. There’s really no excuse not to. It’s cheap, it’s straightforward, and it only takes a moment of your time and you get a lot of benefits by having an early filing date for your brand. 

Related: Did You Get Punk’d By a Trademark Spammer or Patent Troll? 

Your Future Growth Is in Your IP

Being a startup is exciting and busy, but you need to keep your future in mind. Your IP is part of that. During the next phase of your company, when you're looking for money or talking to investors, they're going to want to know that this stuff was already taken care of. 

Make no mistake — 100% of the time you're going to get those questions from people wanting to put money in your company: “Have you filed patent applications? Have you filed trademark applications? Have you protected your IP?” If you can't answer yes, you're going to be scrambling to get it done. That's not a good situation for anybody.

Don’t fall victim to one of these potential mistakes. It might take you a little extra time, cost, or inconvenience to do the right thing. But when you have your IP protected properly from the beginning, your IP protection work should take a back burner for a while. You can breathe easier and sleep a little better, knowing you’re protected as you head into the next phase of your company. 


Tips to Protect Your IP as a Small Business or Startup

Tips to Protect Your IP as a Small Business or Startup

If you’re a small business and you hear the words “you need an attorney”, you likely envision buckets of money flying out the window. However, protecting your intellectual property as a small business, startup, or pre-funded company doesn’t have to be difficult or insanely costly. 

To make IP protection within reach as a small business, it comes down to a few smart tips. First, of course, is taking a proactive approach to protecting your innovations. Then, there are DIY measures that can save you money in filing patents and trademarks. Also crucial is finding the right IP attorneys that are proficient with and employ cost-saving systems (such as AI — more on that below) and pass those savings along to you. 

Take a Proactive Approach 

To minimize costs and time needed both now and down the road, you need to be proactive. Patents protect your ideas, not a finished product, so you may need to start working on your IP protection even before your company is formed. Beyond that, a lot of what you can do on an IP front can be done in advance. For example, a lot of companies don’t realize that they can file a trademark application before they are actually using the mark. That is something that can be done really quickly, right off the bat, and most times for a fixed cost. 

Being proactive rather than reactive keeps things running smoothly, and it makes IP protection less expensive. This foresightedness makes it easier for attorneys to control costs and give fixed prices that are of higher value to a client. 

If you were to instead come to your IP attorney and say, “I’ve been using this brand name for 10 months and we realized someone else just filed for the same mark,” guess what? That’s an emergency. In the patent world your IP becomes part of the public domain if not filed within a year of you starting to use it. So, in that same scenario you've only got a couple of months left before your IP is dedicated to the public. That’s a bigger emergency.

Naturally, that’s going to cost more. Your attorney has to drop what they’re doing, reformulate their plan and engage in more panicky back-and-forth with you.

When you take a proactive approach to protecting your IP, you take that frantic scenario out of the equation. You’re not putting out fires. You’re not reacting to potential bar dates coming up. 

Being proactive not only saves time and money. It also prepares you for investors. 

We commonly hear from clients that we talked to months before who come to us out of the blue and say that they’re in the middle of their Series A and their investors are asking if they’ve filed patent applications yet. 

Investors will always ask this. When investors and banks come at you, they want collateral. They want something to take a security interest in if they’re going to lend you money. In a smaller, early-stage company, especially those in the tech field where you don't really have any hard assets, the easiest thing to use is intellectual property for that collateral. 

You need to have patent and trademark applications filed with the trademark and patent office in order for someone to invest in your company. Every bank is going to require something like that. Every single one. You need to have that in place.

Basic IP DIY

Your attorney should empower you to do some of the basic IP legwork work yourself — tasks that will save you money if you do it ahead of meeting with an attorney. For example, if you’re preparing to file a patent, you can spend time doing your own prior art search. This can potentially save you thousands of dollars and even help you improve your innovation.

The same applies to determining whether you have the freedom to use your chosen company name. It sounds strange coming from a lawyer, but a simple Google search gives a good high-level first impression of whether a name is available for use as a trademark.  

Related: 5 Common Issues with DIY Trademarking  

Finding the Right IP Attorney

Ask about a firm’s package fee structures to see what they can do for you. Some firms will give you a package deal, for maybe one provisional application plus one trademark application. Lumping different projects together, even though they are distinct legal inquiries, can save time and money. If an attorney is willing to sit down one time and get all the information needed for your separate projects, that saves everyone time and results in lower fees.  

You want to find a firm that’s not just lowering costs and doing fixed fees, but also a firm that is taking advantage of modern, smart systems like the AI that Neugeboren O’Dowd uses (which I wrote about earlier). This allows your IP attorney to focus on the work product output instead. Look for a firm that’s using these types of systems and approaches to pass cost savings on to you. If you’re able to find one, you can get some key pieces of IP protection on file and in place for a fair, reasonable cost, and pretty quickly.

What If I’m Already in Hot Water?

Let’s say you, as a small company or startup, didn’t take a proactive approach to protecting your IP. Now you’re faced with a potential legal case tied to your IP. What can you do then? Are you sunk? 

The worst-case scenario in this instance would be if you’re a small company and you receive a cease and desist letter from a larger company or a patent troll, someone who is just asserting IP that they don't actually practice. Then come the difficult decisions.

Related: Are You Being Punk’d By a Trademark Spammer or Patent Troll?

The one thing you can do as a small company is an infringement analysis to make sure that what the plaintiff in that case is asserting is actually accurate. It takes little effort, especially if you discover that the assertion is inaccurate. Even though that might not make the risk of a litigation or lawsuit go away completely, at least you've looked into the claim and you have an answer for any type of investor or other party that is doing diligence to investigate your company. 

Or, if you do look at the claims and they may have some validity, then your patent attorney can help you tweak your product so you don’t include the key elements of another patent in that product. You basically “design around” another patent. 

However, just note that taking proactive measures like those discussed above is much cheaper than having to do a design around, but a design around can also be much cheaper than a litigation.

Ready to Get Started?

Protecting your IP as a small business or startup isn’t as hard as you may think it is. You can make sure your IP is safely protected with minimal fees and time when you’re proactive, you know what you can DIY, and when you have the right IP attorneys on your side.


Protecting IP in the Food & Beverage Industry

So, you have an amazingly tasty, totally revolutionary, ready-to-package food or beverage product. Clever ingredients, GMO free, great reception from the neighbors. By all measures, you have a successful product in the works — but in this space, the reality is that someone else has likely put together your same ingredients in much the same way before. That’s part of what makes protecting intellectual property in the food and beverage industry so tricky. 

You might be surprised to learn that you might not really need a patent in the food and beverage industry. In fact, depending on the type of product you are pursuing, patent protection may not even be viable. A simple trademark and accompanying brand protection strategy may be all that’s required to keep your IP protected. 

However, while your product (i.e. the recipe) itself might not be patentable, you might have some other innovations at your company that are. Here are some unique aspects about trademarks and patents that often find themselves in the food and beverage industry. 

The Product Itself Is Not Likely Patentable

When we look at patentable subject matter, there’s typically no “technology” in a traditional food or beverage product that falls within the statutory realm of what’s available to patent. The closest you might get would be some type of recipe or a formulation — what the patent system calls a “composition of matter.” 

FDA regulations often require you to reveal basic information about your product such as all the product ingredients. Anyone can see what’s in your product, just not the specific ratios or the process of putting it together. You might not know how to make a soda that tastes exactly like Coca-Cola, but look on the side of a can of Coke and you can see the vast majority of what’s in it.

You can certainly patent what are called “compositions of matter”, such as a recipe that’s two parts dates, one part cherries and three parts corn syrup. However, these compositions are typically not patented. They would be super-easy to copy while avoiding patent infringement. Someone could just tweak a new product in a very slight way, while still copying you but without infringing on the patent. At least in the food and beverage industry, the protection you’re getting from a patent is usually not worth the effort and cost. 

Protect the Package Design or the Manufacturing Process Instead

Sometimes, companies patent the way they manufacture a food or beverage product. If you’re dealing with ingredients that have caused complications on traditional food manufacturing lines, or are just difficult to work with, you could patent a clever way of processing it.

For example, one of our local clients, Good Day Chocolate, makes uniquely formulated chocolate products. If you like chocolate and want an extra kick in your fix, check them out here. The confectionary industry is always dealing with problems associated with processing chocolate, which has to be in a liquid form during processing and requires some special equipment and know-how.  You can imagine how the hot, melted chocolate glops up the mechanics of a system. For these types of manufacturers a big part of their intellectual property is the process of knowing how to deal with the melted chocolate within processing machinery. 

You might also be able to focus on the product packaging. Occasionally, we’ll see IP concerning unique product packaging, whether it’s unique due to design or its utility. Perhaps the packaging provides increased spoilage resistance. Maybe it’s more environmentally friendly. An example of this would be self-stable milk products with unique packaging that preserves its freshness and shelf life. 

Focus Your Efforts on Branding and Marketing

The food and beverage industry doesn’t rely so much on true innovation as it does on deep marketing. Food and drinks have always been that way. A company gets a recipe together, it tastes good and then it’s time to focus on branding — packaging, colors, stylization, and name. Marketing, rather than innovation, is the best way to distinguish a brand in a saturated industry. 

From there, a company’s success is mainly about distribution and breadth of its consumer base. It’s about getting on online platforms and strategic retailers. I always say, if you can get your product on the end cap at Whole Foods or Walmart, you’re pretty much set. Alternately, you can try to get sponsorship or a famous celebrity endorsement. If Kim Kardashian says, "Wow, I love this drink!" and puts it on her Instagram, that exposure is worth millions of dollars.

Trademarks and Trade Secrets May Be Better

The famous formula for Coca-Cola has never been patented, and yet no one knows exactly how it’s made. 

The formulation of Coca-Cola has been kept secret for many, many years and, in cases like this where you can maintain the secret, a trade secret has a perpetual life — something you don’t enjoy if you patent the same information. If someone at Coca-Cola had patented the recipe, that patent would have expired many years ago and the recipe would be in the public domain. Instead, the company has managed to keep the formulation secret all this time and its protection lasts forever. 

Related: Worried About Product Copycats? 5 Tips to Get Ahead of the Fast Followers

The downside of this? If the secret gets out, it’s game over; there’s no unringing that bell.

You Need to Secure the Domain Name First

As your lawyer does an availability search for a product name to trademark, you need to secure your domain name. It’s simple and cheap. If you wait until after you begin using your name publicly, it’s much easier for cyber squatters to go ahead and grab domains you might want, making it difficult for you to wrestle them away.

Don’t waste time on a product name before you’ve done that availability diligence with your attorney. It’s simple to do, doesn’t take a ton of time and can prevent impediments down the road.  Securing domain names is one of those “you don’t need a lawyer to do that” jobs. If it looks appealing pay the $10/year and secure the rights to that top level domain.

Your Distribution Network Is Everything

Focus on a business strategy that addresses distribution control. Whether your product is $2 or $10 per unit, the nature of food and beverage items is that they are low-dollar, high-volume products. You have to sell a lot of units to be successful and if you don’t maintain control of your distribution, you can end up competing against yourself on retailers like Amazon. (I wrote more about the problems with reselling on Amazon in my article “Read This Before You Become an Amazon Reseller”.)

Protecting Your Food or Beverage Business

When it comes to protecting your business in the food and beverage industry, there’s no one-size-fits-all approach, but you certainly don’t have to go the traditional business route of applying for a patent. There are plenty of surprising ways you can ensure your business is both protected and successful for the long-haul. 


My Brush With Big-Law Burnout

My path to founding Neugeboren O’Dowd required some personal trauma. And while my story in “Big Law” is my own, and might have some unique situational idiosyncrasies, the underlying plot is not out of the ordinary.

Attorneys have a very high rate of mental health, physical health, and substance abuse issues that stem from the demanding pressures of the industry. Increased national focus on mental health problems in the legal profession has brought some of the more traumatic stories to light, but the general theme persists.

My Story: Big Law, Big Problems

First, I don’t think Big Law firms are evil or inherently bad. My last firm was neither of these when I was there and isn’t now. My time there was filled with amazing and supportive mentors, unique opportunities, and an environment that was clearly designed to help me succeed. No one there was a jerk. I can’t think of anyone I wouldn’t want to work with again and that firm still supports me in my career today through friendships, referrals, and advice.

I was an engineer by training and then went to law school at night while I was still working. After my graduation from law school, I followed a fairly typical Big Law career path. I began working for a large IP-focused firm in California and then moved to an even larger general practice firm in Colorado. I had just turned 30, my family was growing, and I had a great job in a busy practice.

The law firm I was at had a typical Big Law environment — namely, high productivity requirements. I worked for great people and on a great team, and I was getting excellent experience and pay; honestly, I don’t think I would have ever been able to start my own practice without having that background.

But, it was a lot of work. It came to the point that I was burning the wick at both ends.

A turning point started with something small: a tiny cut on my elbow. Probably just banged it somewhere. But somewhere along the way, that little cut turned into a big problem.

I was in Phoenix at the time visiting family and it was literally 120 degrees in the shade, but one night I was shivering while under a heavy blanket. Something wasn’t right. I looked down at my elbow and it was swollen from shoulder to wrist like a balloon about to burst. A trip to the ER in Phoenix got me triaged enough to travel back to Colorado where I could get more focused treatment if needed.

But I had a trial approaching and there was work to do, including a deposition scheduled for the next day.

On Monday morning, things hadn’t improved. Before the deposition, I went to urgent care where they gave me IV antibiotics. They left the port in my arm while I went to the deposition so I could return to urgent care for more treatment.

When I returned later, the doctor’s expression let me know that something wasn’t right and my own body told me the same thing. Forty-five minutes later, I was in surgery to clean out the wound. I was on the verge of sepsis.

Following the operation, I was in the hospital for a week as the doctors worked to get the infection under control. But I had that trial approaching, so people were bringing me work while I sat in the hospital. I did deposition designations in my hospital bed, green highlighter streaks tailing off the page as I constantly drifted off.

Eventually, the infection was under control, but I was on an IV antibiotic drip four times a day for a month. I brought my IV bags to work with me, screwed a hook in the wall to hang them, and kept going. When one of the managing partners of the firm saw the situation, she was clearly horrified.

When I was back to a normal state of mind, I needed to ask opposing counsel for an extension so I could redo those deposition designations. Clearly not my best work. (If I didn’t say it to him then, I’ll say it now: Thanks, Paul.)

This was the beginning of the end. I finally realized that I was completely burnt out.

As much as I loved my job and the people that I worked with, my body was deteriorating, weak from all the work. I needed a different job.

A great in-house role gave me a more normal routine as well as some unique experience, but was cut short when the company was “merged” with another and our entire legal team was let go. Efforts to find another in-house role never panned out and I started my own firm.

But, it needed to be different.

How Neugeboren O’Dowd Is Different

Although I wouldn’t change my experience, I certainly set out to model my own firm based on the goal of keeping a lot of margin in life — whether that’s to do fun things, engage in community activities, or just to keep sane in the work environment.

That’s fairly easy to do that when it is just you in a basement office, but as our practice grew and we added more lawyers, we needed to be more deliberate about it.

#1: Time Is Valuable

Most Big Law firms require between 1,800 and 2,000 hours of billable time per year. If you take no time off, that requires 160 billable hours per month leaving 6–7 hours a month of non-billable time in order to keep a 40-hour workweek. To maintain that type of productivity level while also taking vacations, holidays, personal time, etc., most lawyers work 60 to 70 hours per week.

Our target is 100 billable hours per month with an attorney option to set higher benchmarks, which the firm rewards. This gives our professionals a lot of flexibility and leeway. Absent some emergency or someone’s preference to be a night owl, weekend and after-hours work is really not a thing.

And, our focus is on productivity, not necessarily on hours, so everyone’s efficiency is rewarded. Our employee manual states, “Busyness is not a virtue.”

#2: Work More or Less; It’s Your Choice

Neugeboren O’Dowd attorneys’ annual salaries are certainly lower than salaries offered at large law firms — we can’t compete on that metric. But, when you look at the production requirements, our effective “pay per hour of time billed” is actually higher than most firms. And, if an attorney wants to increase their workload to make more money, they have the ability to do so.

Everyone in the firm has families and they’ve been able to work more or less around events in their lives, whether they’re having a baby, saving up for a house, attending to a medical need, or whatever they need to do, without stressing out over it. The margin is already built in.

#3: Incentives All Around

Every lawyer has an incentive to develop their own practice. While there is plenty of room to make a career off of other’s work, all attorneys are eligible for a compensation/origination credit for developing and managing their own work. If you bring clients in, either new or clients from your prior firm, you receive extra compensation for the work associated with that client. Partners, associates, and counsel all enjoy this benefit.

Full-Time Doesn’t Have to Mean All the Time

We’re a small firm, and while we can’t offer some things in terms of prestige, fancy office space or Big Law starting salaries, we do give our attorneys a better work-life balance, the incentive to build their own practice, and the flexibility that real life requires.

We (partners included) sacrifice a wide variety of benefits (our own pay included) to make this work, but we also have that same margin in our lives.

A full-time schedule doesn’t have to mean all your time. It can mean a lot less, without giving up an attractive wage and meaningful work. If this interests you, reach out. We are growing and always looking for new professionals to join our team.

 


Update on China’s Amended Trademark Laws

Traditionally, China has been a more or less outlier in terms of intellectual property protections, at least in terms in how they approach the enforcement of intellectual property. Now, though, the country is starting to move toward alignment with the rest of the world.

Subtle changes, possibly in response to controversial U.S. political decisions (including recent tariffs) are good news for U.S. businesses, inventors, entrepreneurs, and startups that rely on global enforcement of their technology and brands.

China’s Relationship with IP and the Rest of the World

China — particularly over the last few years — has been an economic force on the world’s stage. But unlike other major players across the globe, China has a questionable track record in its attention to enforcing IP rights, trade secrets, and the like.

This leads to counterfeit products, infringement, potential health and safety issues, and an overall bad deal for companies.

This includes those looking to either sell a product in China or manufacture a product in that country. Once you turn your product over to a Chinese manufacturer, you have very little control over what happens and who sees your sensitive product details, unless you have rigorous protections in place.

Many manufacturers — and the American public — have put up with this fact. It’s all in the name of cheap labor and cheap products. But could this business hurdle become a thing of the past?

China’s Most Recent General Institutional Reform

Possibly because of recent tariffs and other political pressures, China is showing some substantive changes when it comes to honoring trademarks and we’re starting to see it on the patent side of things as well.

A lot of these changes are due to China’s move toward some general institutional reform, including broad-based changes to the law that impact…

  • How IP is registered in China
  • Examination timelines within the Chinese intellectual property office
  • Bad faith filings in China (more on that below)

…and more.

For example, China is beginning to improve a brand owner’s ability to log and report online infringement complaints (similar to how Google, Amazon, and eBay allow you to do so). The country is putting cybersquatting laws in place. Generally, we’re seeing more robust and predictable enforcement mechanisms in court that are more reconciled with the way the rest of the world approaches IP.

While many do not agree with the tariffs and the methodology that American politicians used to encourage these amendments, most brand owners agree that it’s good for business. They are absolutely unique and even historically monumental in some cases.

If the changes are implemented and the tariffs go away, even better. The playing field becomes level.

Bad Faith Filings: The Most Important Change of All?

Historically, it’s been easy to file trademark applications in China, and the China trademark office didn’t do a lot of diligence in terms of validating whether they were legitimate filings or not. That’s changing.

The new IP law amendments state that “applications for trademark registrations in bad faith which are not intended for use shall be refused.” This nearly mimics the sworn declaration that U.S. trademark applicants need to sign when filing an application.

Some might argue that this is the most important recent revision China has made to its brand protection system, so what else does this mean for you and your IP?

  • Chinese companies will no longer be able to apply for trademarks or any commercial signs that are similar or identical to existing, well-known trademarks and commercial signs.
  • Chinese companies can no longer apply for marks that reflect a notable place name, scenic spot, or building.
  • Applying for a large number of trademarks is also in violation of the new amendments, unless a good reason for the applications can be proven.

Because of this amendment, now anyone can file an opposition or invalidation of a mark on the grounds of bad faith. Previously, in order to do so, a person or business would have needed to establish prior rights in China before filing an opposition.

Plus, infringement fines have increased substantially. Overall, this makes it easier for you and your company to defend your brand while operating overseas.

What’s Next?

We can be optimistic that these changes to how China approaches IP and the rest of the world are just the start of building better business relationships with the country.

Are the changes solely the result of tariffs? And if those tariffs are removed, could China revert back to previous behaviors? Only time will tell, but for now, business owners, startups, and entrepreneurs can feel a little more confident when approaching Chinese manufacturers and doing business in China.

 


If Insulin is Patented, How Did Colorado Cap the Price?

Recently, Colorado took a bold stance against the pharmaceutical and health insurance industries by capping the price of insulin — a life-saving medicine used by more than 7 million Americans — at $100 per month for each patient, regardless of how much insulin is needed.

I followed this story closely not just because I’m a Coloradoan, but also because I’ve been a Type I diabetic for 35 years.

I’ve spent my whole life wrestling with diabetes and have seen first-hand how the prices have gone up over time. When I was a child, insulin cost less than $50 a bottle. Today, the over-the-counter price for a single bottle of insulin is approaching $300, if not more — and I use two bottles a month.

Before the Affordable Care Act (aka Obamacare), I couldn’t even get private insurance due to my “life-threatening” pre-existing condition. Thankfully, Cover Colorado, Colorado’s high-risk insurance pool, was available to me at that time.

But even now with the ACA, my plan’s high deductible means I still pay for my insulin out of pocket most years. That’s a chunk of change for anyone, but imagine that burden on someone in a low-wage or underpaid job.

Insulin literally keeps people alive. I will die in a matter of days if I can’t access it. Yet, due to the rising cost of healthcare, people actually ration their insulin because they can’t afford it — sometimes with dire consequences.

It’s great that Colorado passed this law to cap the price of insulin, but it is really a reaction to some broader legal issues: artificial patent extensions and anticompetitive price control.

Insulin’s Patenting Problem

The first form of insulin was patented nearly 100 years ago. The inventors believed it was unethical to profit from a life-saving drug, so they sold it to the University of Toronto for $1. The sale also gave drug companies the right to manufacture and improve it as they pleased.

That’s where part of insulin’s patent problem lies.

Even though the basic formulation of insulin is nearly a century old and the original patents are expired, refinements have been constantly made over the years. The compounds have been changed and improved to the point where the pharmaceutical companies have been able to (what most say, artificially) extend the terms of these patents. This is essentially over-patenting, sometimes known as “evergreening.”

In the case of Sanofi, more than 70 patent applications have been filed in the U.S. on one form of their insulin, which could hold off competition for decades. It makes it almost impossible to have a generic version mimic what they’re doing.

This is commonplace and completely legal. Broadly speaking in the pharmaceutical industry, those companies have been able to file new patent applications on improvements to the drug. Building a robust patent portfolio based on improvements is a strategy that’s employed across most pharmaceuticals and drugs. We counsel clients on these strategies all the time, just not typically in the pharmaceutical industry.

However, in the case of insulin, it’s remained virtually unchecked. The drug companies say that rising prices are simply “the cost of innovation”.

The Question of Insulin Price Control

The second part of Colorado’s price cap is not really a patent law issue, it’s an insurance law issue and a question of competitive pricing.

First, a state can generally tell insurance companies that if they want to do business there, the state has the right to regulate those insurance practices. Insurance companies were in the bargaining room when Colorado was trying to get this regulation passed. To their credit, many feel that they were generally cooperative in getting this legislation passed.

The second part is about pricing, which is where there’s a deeper problem.

In a normal business environment, if there is competition, especially for the exact same product competing for identical customers, prices should go down. A company should be doing everything they can to get that same customer, which usually means they’re going to offer it for a dime less than the competition and people are going to opt for the cheaper of the two.

In the case of insulin, that hasn’t happened.

A century after the first patent for insulin was sold, we have only three companies that manufacture insulin and they all happen to sell it at roughly the same price point. Prices have steadily gone up in lockstep with each other, defying a normal competitive environment. Looking at the prices historically, Drug Company A will increase their prices by $5 a bottle, and then immediately Companies B and C do the same thing.

That’s not healthy competition. It’s too coincidental that their prices have mirrored each other over the years — which many feel reeks of some type of anti-competitive price-fixing behavior. It implies that there’s some sort of behind the scenes discussions saying, “Hey, let’s all set our prices at the same level.” And that’s illegal.

In fact, Colorado Governor Jared Polis publicly called it “price gouging”. Part of the new Colorado price cap includes an investigation by the state attorney general into the rising costs of insulin. That rabbit hole will likely extend to other states and the federal government as well.

 


Read This Before You Become an Amazon Reseller

Amazon sounds like a great way to get your product out there — billions of shoppers, cross-promotions, and paid spots on the biggest online retailer in the world.

But beware of the terms you are signing when you establish that reseller account. There’s a lot in the fine print that can easily undermine your e-commerce efforts!

Selling on Amazon: What Could Go Wrong?

You’ve developed a great product. You’re getting traction in the market. But, if it’s a small-dollar item under $10 — like an energy bar, a beverage, or that new trendy small plastic gadget that you make in China for 5 cents — the key to your business’ success is selling a lot of units. One way to do so, especially for small companies, is to sell your product on Amazon.

After all, if you’re not on Amazon these days, you’re at a big disadvantage. Compared to the efforts needed to get your product to a nationwide audience on your own, Amazon seems like a win-win. If you wanted to get that energy bar or beverage into a place like Whole Foods or Safeway by yourself, you’ll deal with distribution companies, warehouses, resellers, etc., that all make the process much more complicated.

But with Amazon, it seems as simple as creating an account, uploading a few photos and you’re in business . . . right?

It’s true that setting up an Amazon reseller account is easy. Click through a few forms online, upload those photos, send some stuff to Amazon, and then the company fulfills the order. Where do things go wrong?

Are You Your Own Biggest Competitor?

One pitfall you might come across? You could actually end up competing with yourself. Let me explain.

If you’re not 100% in control of your product distribution and others have legitimate access to a supply of your product, then you might not have control over the final consumer cost when that product is sold on Amazon.

Consider these scenarios.

Scenario 1:

  • You sell your product to your distributor for $5
  • The distributor sells your product to the retailer for $8
  • The retailer sells it to the customer for $10
  • You also sell it for $10 on Amazon

If your product is priced consistently across selling platforms, this is fine! However, consider this . . .

Scenario 2:

  • You sell your product to a distributor for $5
  • The distributor sells your product to an online store for $8
  • The online store sells it to the consumer for $9
  • You list the product at your price point: $10

Suddenly, you’re competing against that other online retailer for your own product — and if they’re selling at a lower price point, they’re going to win.

You could even be competing against someone else directly on Amazon who maybe buys your product at the store and then posts it on Amazon for a low price. The bigger rub? That competitor can actually use your own Amazon advertising collateral to point toward their lower price offering. Wait, what?

As a part of the boilerplate Amazon reseller terms of service, any reseller can promote the sale of their instance of your product by pointing to the images and other advertising that you originally put up on your reseller page. Amazon refers to this broadly as the “buy box” where those “other sellers on Amazon” get to compete solely on price with your marketing collateral in the background. No bueno.

The only way to prevent this from happening is by strictly controlling your distribution network, making it very difficult, if not impossible, for a third party to obtain your product and undercut you on price.

In instances like the ones above, some businesses assume they can sue either Amazon or the other seller. Unfortunately, this just isn’t an option. No one is doing anything wrong in the situation. There’s no counterfeiting or misrepresentation. No one is pretending to be you. They purchased your product through legitimate channels and are now openly reselling it for a lower price.

Even further, the terms and conditions you agreed to when setting up your Amazon account make the entire situation 100% legal.

The Key to Amazon Success

Is becoming an Amazon reseller all bad? Of course not! You just need to be aware of what can happen and the problems that exist when you have no control over your product’s distribution.

The key is controlling the distribution system from the start and really putting effort into your initial agreements with third-party distributors. These are the agreements that you can control and negotiate (versus your reseller agreement with Amazon, which leaves zero room for negotiation).

When creating these agreements, think downstream about pricing pressures and legitimate market competition; and develop terms and conditions of sales, including terms for minimum pricing and quality standards.

Fighting Fires After the Fact

If you haven’t put these conditions in place, there are a few things you can still do.

Third-party Monitoring

Third-party services exist that will monitor on a weekly or monthly basis to see if retailers are competing against you with your own product online. Some of these services will even send quasi cease-and-desist letters on your behalf, but the legalities can be a bit hazy.

Buy It Back

In some cases, you might try to buy some of the products from these third parties and look at the condition in which they arrive. If your product comes in bland or defective packaging or the product has been handled in a way that dilutes its quality, you may be able to address the issue of brand damage and misrepresentation directly with Amazon since situations like this actually do violate the Amazon reseller terms and conditions.

Of course, if that third party product comes with any evidence of actual counterfeiting or trademark infringement, you have a separate cause of action, both on your own and directly through Amazon.

Often, a simple letter to the reseller is enough to cause them to either drop the product or work with you on agreeable terms, as they likely don’t want to deal with any potential legal issues.

Making Amazon Profitable for Your Brand

Selling your product on Amazon isn’t something you should shy away from. It can be quite profitable — as long as you have the right precautions in place.

Look at your distribution agreements right from the beginning, from all angles. Taking the future of your business into consideration is essential to protecting your brand and your profits, on Amazon and anywhere else.