Abiomed's pulse is on its patents
The company has launched an aggressive campaign to shield its successful device AbioCor from competitors
by Jeffrey Krasner, The Boston Globe Staff, 8/1/2001
When surgeons implanted a self-contained mechanical heart in a middle-aged man a month ago, the news brought a wave of attention to Abiomed Inc., the small Danvers company that spent 20 years developing the device.
For Abiomed, the surgery marked a major milestone - the patient, who has not been identified, continues to make progress - and the possibility that it could one day reap billions of dollars if the heart pump proves effective over a sustained period of time.
But the company's ultimate success will depend on more than just the medical reports from the University of Louisville's Jewish Hospital, where the operation took place. Having beaten its competitors to the clinical trial stage, Abiomed faces another test: protecting the technology used in its replacement heart.
During the years the company's AbioCor heart was in development, it turns out, Abiomed made no moves to patent much of its work. The company says it feared the project could take so long that any patents it won early on might be close to expiring by the time an approved device reached the market.
Prior to the July 2 operation at Jewish Hospital, Abiomed filed 23 patent applications, however, the start of an aggressive campaign to insulate its device from competitors.
''Patents have limited lives,'' said John Thero, Abiomed's chief financial officer. ''We wanted the clock to start now.''
The company has acknowledged that its strategy carries some risk. Over the years, it says, it has sought to keep key technologies and processes under wraps as trade secrets, known only by company insiders but vulnerable to duplication by other researchers or disclosure by disaffected employees.
''A substantial portion of our intellectual property rights relating to the AbioCor...is in the form of trade secrets, rather than patents,'' the company said in its annual report to the Securities and Exchange Commission in June. ''We cannot assure that our trade secrets will not become known to or be independently developed by our competitors.''
According to Toby Kusmer, an intellectual property lawyer at McDermott, Will & Emery in Boston, ''The risk of trade secrets is that once somebody independently invents it or discovers it, you have no way of stopping them from using it.''
But company executives say that if the heart continues to prove itself in Louisville and other clinical trials, its strategy could yield enormous benefits, assuming the government grants the patents, which would remain in effect for 20 years from the date of the applications.
''It's a delicate issue,'' said David M. Lederman, Abiomed's chairman and chief executive. ''Now that the product is going to be in the hands of surgeons and other people who will be able to observe how it works, we've started a very rigorous campaign of patenting at the right time.''
Since 1989, the company has won a few patents covering the mechanical heart. Last April, it received the first patent under the initiative it launched in connection with the clinical trials. The patent covers a method for automatically charging the internal battery powering the device.
The company expects to win several more patents this year, but it will take at least two years for the US Patent and Trademark office to complete a review of all the pending applications.
Abiomed won't disclose any details of the technology or processes it is seeking to protect. Company officials, speaking in broad terms, say that some of the patent applications relate to the transfer of data from the replacement heart system to external monitors; the regulation of pumping between the left and right ventricles; and the specific shapes of pieces of the heart, which are specially designed to protect blood cells.
If the patents are granted, Abiomed will have to disclose the technical details of its device. Under the patent system, a patent includes descriptions of an invention or process, including diagrams. The goal is not only to grant proprietary rights but to disseminate advances in science and technology.
But the patent holder has a virtual monopoly and can protect the patent in court. Although competing companies can seek to create similar products or processes without violating a patent, doing so is often a difficult task.
When it won its first patent in 1989, Abiomed had to dislcose the details of the hydraulic pumping system
for the AbioCor heart, a key component in the device. At the time, the company was applying for funding from the National Heart, Lung and Blood Institute. Since it had to reveal how the system worked as part of a grant, it decided to also file a patent application.
Since then, however, the company has never had to defend the patent against a competitor.
Companies seeking to protect a new product like AbioCor will seek to obtain as many patents covering as many individual aspects of the device as possible, achieving a sort of blanket protection against would-be imitators.
But every application faces high thresholds for a patent to be issued. The device or process must be new, and must not have been described in a printed publication. The inventor must show that the device goes beyond the prior art in the given field. Moreover, the patent may be denied if government patent examiners determine that the differences would be obvious.
Abiomed's strategy of waiting almost 20 years to seek most of the patents it needs to protect the AbioCor heart seems in keeping with the company's culture.
Since its founding in 1982, the company has singlemindedly pursued its goal of creating an artificial heart that would give a patient a reasonable quality of life. It has maintained its independence when many other biotech or medical device companies have taken on big pharmaceutical companies as partners.
Last month, in the midst of intense, global media interest in the AbioCor and the Louisville patient, the company stuck to its rigid information policy, issuing only occasional updates. It also declined to disclose the contents of a one-page letter sent to the company by the patient, although it has displayed the writing inside a glass case in its offices.
Now it sees the patent applications as the final step in a development process that Lederman said is ''probably the longest of any medical device ever.''
Abiomed still faces competition from several other companies seeking to develop versions of self-contained mechanical hearts that do not require any connections outside the body. But it says it is confident it can keep ahead as long as the clinical trials are effective - and the government continues to approve its patent applications.
''We knew this was a very long project,'' said Lederman. ''The only choice you have is to keep the technology as tightly held knowledge as long as you can.''
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