Global investment in artificial intelligence (AI) is surging, with the International Data Corporation predicting that spending on AI research and development will soar to $632 billion by 2028. This figure is more than double the anticipated investment for 2024. This escalation in funding has fuelled a significant increase in AI patents, rising from around 8,000 in 2018 to over 60,000 by 2022. The medtech industry is at the forefront of this AI explosion, with the U.S. Food and Drug Administration (FDA) approving 107 AI-enabled medical devices just this year.
Boston Consulting Group anticipates that the healthcare sector, which encompasses medtech, will invest in generative AI at a compound annual growth rate of 85% through 2027. However, capturing the full potential of AI in medtech is not without its hurdles. Companies must adeptly navigate data privacy, security, and intellectual property (IP) challenges. Here we delve into some essential strategies that medtech innovators can adopt to succeed in this evolving landscape.
Data Permissions and Privacy Compliance
Collecting patient data is integral to developing innovative medtech devices but requires strict adherence to data privacy regulations, which differ across jurisdictions. Companies must secure proper consent from patients before data collection, which involves creating detailed consent forms tailored to the specific type of data. For example, if biological data is collected, the consent must include provisions for deidentification to protect personal information. Additionally, these forms should ensure that patients authorise the use of their data for both research and commercial objectives while foregoing any commercial rights.
Risks of Open-Source Software
Open-source code provides a valuable resource for accelerating medtech innovation, but using it comes with legal obligations. Many AI models integrate open-source code into the solutions they generate, potentially affecting IP claims if not managed correctly. Open-source software licences typically fall into two categories: permissive, which allows free use without disclosure obligations, and copyleft, which requires any derivative work to also be openly licensed. Companies must establish stringent protocols when using open-source software to avoid entanglement in IP disputes, including tagging and scanning AI-generated code and opting for company-owned AI models that can identify the presence of open-source code.
Securing Intellectual Property
Ownership of IP can become complex when multiple contributors, such as hardware engineers, software developers, and medical professionals, are involved in developing a medtech device. The involvement of AI in generating solutions adds another layer of complexity. Companies should collect IP transfer agreements from all contributors to secure full ownership of the invention. Given that AI cannot hold IP rights, it is essential to establish clear human contributions to the development process.
Selecting IP Protection Strategies
Medtech companies can protect their innovations through patents or trade secrets, with both having distinct pros and cons. Patents offer exclusive rights but require public disclosure of the invention’s details, while trade secrets do not necessitate public disclosure but cannot prevent others from independently recreating the invention. Companies should weigh the likelihood of independent invention and the ability to detect patent breaches when choosing between these legal protections. The fast-paced advancement of AI technology may also render patent processes lengthy and obsolete before approval, making trade secrets a potentially viable alternative.
Challenges in AI Patent Applications
Securing patents for AI-related inventions poses unique challenges. Current legal frameworks in the US only allow humans to be listed as inventors, requiring companies to clearly define human input in AI-driven processes. Additionally, AI-based inventions often encounter scrutiny due to their overlap with non-patentable judicial exceptions such as laws of nature or abstract ideas. To substantiate the novelty of an AI invention, applications should highlight the AI model’s performance improvements over conventional methods, backed by statistical data demonstrating tangible advancements.
AI is reshaping the medtech sector, influencing data privacy, security, intellectual property, and regulatory frameworks. By implementing strategic measures in these key areas, medtech companies can safeguard their innovations and leverage the power of AI as the industry continues to evolve.
Source: Noah Wire Services