The Secrets of MedTech and Digital Health

Protecting hidden value in an era of connected care and intelligent devices

With the explosion of AI and machine learning in the MedTech and Digital Health sectors, trade secrets are becoming an increasingly valuable tool to complement patents in protecting companies’ intellectual property (“IP”). While patents remain central to protecting core technological innovations, trade secrets offer distinct and different advantages that make them particularly well suited for protecting certain types of MedTech and Digital Health assets.

Although patents are considered the gold standard for IP protection, not all commercially valuable elements are eligible for patent protection. In many cases, there is significant commercial value residing in the industrial knowledge and fine-tuned parameters surrounding the core inventions which allow them to perform at a high level. This knowledge, often developed through extensive testing and development, is often ineligible or unsuitable for patent protection, not least because it would be made public upon publication of the patent application and the power of that knowledge lies in the secrecy of it. Once patent protection has been ruled out as a mechanism for protecting this knowledge, often no further thought is given to protecting this valuable IP, leaving it potentially unprotected. This is where trade secrets come in.

Trade secrets are often an underutilised type of IP protection which, unlike patents, are not published and can last indefinitely provided confidentiality and protection measures are maintained. Although trade secrets can be more difficult to enforce than patents, they provide a complementary route for protecting IP which might otherwise be challenging to protect. For example, MedTech and Digital Health companies may derive substantial advantage from:

• Proprietary datasets used to train or validate AI models
• AI model weights and tuning parameters
• Data filtering and preprocessing techniques
• Optimised manufacturing parameters
• Clinical datasets

These elements are often strong candidates for trade secret protection. Leveraging trade secrets alongside patents can help build a broader and more robust IP portfolio.

How to identify a trade secret and keep it safe

Trade secrets are unregistered IP rights which accrue if certain criteria are met. For information to qualify as a trade secret, it must be secret and have commercial value as a result of being kept secret. The information must also be subject to “reasonable steps” by the owner to keep the information a secret.

The success of a trade secret portfolio hinges on a company’s ability to demonstrate that appropriate internal procedures are in place to protect their trade secrets. There is no “one size fits all” and the extent of these protection measures will depend on many different factors, such as the size of the company, the type of information and how the secret information is used in practice.

Useful measures that may be put in place include a trade secret register for the company, a trade secret company policy, employee training to identify trade secrets in a timely manner, entry and exit policies for employees who access trade secrets and protocols to ensure access to trade secrets is restricted to those who require it for their job. Individuals handling the information need to be made aware that it is  confidential, its value lies in the secrecy of it so it must be kept secret.  Offboarding procedures should also be put in place to specify what information remains confidential following termination of employment.

It is also just as important to mitigate the risk of third-party trade secrets and confidential information contaminating your company’s trade secrets. For example, appropriate onboarding procedures should be put in place to ensure new hires do not integrate trade secrets from their previous employer into their new work product, opening the company up to the risk of costly litigation.

Conclusion

In summary, trade secret protection is a valuable tool which complements patents to provide more comprehensive IP protection, especially for MedTech and Digital Health businesses. It is important to develop a robust trade secret protocol to mitigate the financial risk of commercial secrets leaking to competitors and to reduce exposure to potential third-party. If you would like to find out more about trade secrets, contact our expert Michelle Davies.

This article was prepared by Patent Attorney Amy Kelly and Trainee Patent Attorney Aaliyah
Adesida.