‘Patent trolls’: will they pounce on your company?

Ray Felts of crowdsource patent-research company Article One Partners shines a spotlight, along with mHIMSS and your editors, on the plague of what he terms ‘patent trolls’ attacking early-stage companies. Trolls are defined as non-practicing entities (NPEs) that don’t actually create or market products. Rather they buy up patents for licensing purposes and to collect related fees, but their real business is, in Mr. Felts’ words, holding up startups for settlements:

“The patent troll threatens to sue for significant royalties. The financial threat, business distraction and cost of defending the company disposes the startup to a lower settlement. Faced with possible ruin, the venture-backed company agrees to a tidy settlement of $20,000. If they instead choose to engage in a legal battle, the settlement threshold goes up, forcing them back to the initially intended amount. In the end, the startup takes the path of least resistance, and the NPE makes it up on volume.”

It also builds the war chest of the NPE to go after bigger fish, if they choose. (See related article below for example).

According to Mr. Felts, last year NPE litigation cost tech companies $29 billion, up more than 400% from 2005. For instance, Lodsys, a patent troll, has settled with 150 iOS app developers to date.

However there is hope for small companies. Knowledge is power, and he cites the Electronic Frontier Foundation (EFF) as a resource; a must read for any developer is its original work on how the US patent system is broken–failing in its basic premises with bad patents (e.g. overbroad) that have the paradoxical effect of stifling innovation. University of California Berkeley also has a controversial project on developing a Defensive Patent License to defend members from trolls. Finally, you can obtain patent liability (defense) as well as enforcement insurance (an overview by another law firm here); though not cheap, developers, angels and VCs could consider it a cost of doing business.

In Editor Donna’s view, these holdups by what one can charitably call bottom-feeders must stop, and the US patent system restored to a functional state. What do our readers think? Is a patent troll watching your business now?Venture Beat and reprinted in MedCityNews

Not quite a ‘patent troll’ but a view of an endgame?

Last fall/autumn (23 Oct), we noted that one company has developed the interesting tactic of going after users of health tech to gain fees. This was the curious case of one penny-stock company, patent holder and personal health record (PHR) developer MMRGlobal, sending out 250 letters per week to EHR/EMR users–practices, hospitals and notably pharmacies–to notify them of possible patent violations they were committing by using their contracted system, without licensing fees paid to MMR Global, and offering them licenses. As of late November the total was over 1,000. (FierceEMR, 28 Nov 12)

The evident aim of this fishing expedition was not to collect pennies from petite practices or pills from your local pharmacy, but to collect evidence of use for claims of patent violations from developers and large organizations. According to FierceEMR based on their November release, MMRG has signed license agreements valued at more than $30 million.

Here are the big tunas they are setting on the hook:

  • At the end of January, the company filed suit against Walgreens in US District Court, claiming that Walgreens’ “Manage Your Prescription Service” infringes on MMRG’s patents and seeks not only an injunction but also to collect fees. (FierceEMR, 5 Feb; company announcement 31 Jan)
  • In Australia, MMRG is investigating the National eHealth Transition Authority (Nehta), the federal/state entity rolling out a PHR, for infringement on patents it holds in Australia (The Australian, updated, 12 Feb, MarketWatch press release 5 Feb)
  • Posted 8 February on the MMRG Facebook page, they will also investigate the Microsoft HealthVault/AARP partnership, adapting HealthVault for AARP Health Record, for “any possible infringements”
  • And posted 7 Feb on Facebook, is this company also seeking to go into the insurance business? “Also very close to seeing the day when MMR Patent Infringement Protection is offered as part of underwriters Medical Malpractice Insurance coverage for hospitals.”

The timing is interesting, in that on 9 Jan (press release), they received approval for two more patents (with 57 claims, same as Heinz varieties) to their previous five in portfolio, and the release widely trumpets their global patents/pendings.

In December, Healthcare Holdings Group, a small Florida-based EHR company–one of those 600-odd in the US market–licensed for five years the patents around the MMRG PHR, MyMedicalRecords. This EHR had developed its own PHR and patient portal, AccessMyRecords. The announcement by the HHG CEO was not partnership language:

“In spite of the fact that our two companies regularly compete in the marketplace, we recognize the importance of MMR’s Patent Portfolio as we approach requirements under the HITECH Act mandating the use of Personal Health Records and Patient Portals by 2014. Therefore, for the benefit of our clients and shareholders, we have made the decision to license the technology at this time. Although we approach the market differently, we both have a mission to provide seamless connectivity between patients and physicians.The Agreement with MMR is consistent with HCH’s position to enhance and support industry-wide standardization efforts. HCH will launch its MU-1 compliant EHR at HIMSS13.” (HealthcareITNews, 18 Dec)

Unlike NPEs as defined by Mr. Felts, MMRG evidently seems capable of marketing its own system in conjunction with a licensee, Interbit, announcing 6 Jan that the MMR portal will be used in a Michigan hospital. The company CEO is also very active with governmental entities, based on activities posted on the MMRGlobal Facebook page, which is there for anyone to see with a Facebook account–and will be sitting in the audience for the State of the Union address.

There is a long road between lawsuit and settlement (especially in the US contingency system), but the activities of this company give us a view of a particularly audacious endgame.

IBM Watson’s open for healthcare business, claiming 90% accuracy

IBM Watson, which has been digesting the big data of healthcare for the past two years, is finally going to market with its oncology decision-making tool developed in conjunction with New York’s Memorial Sloan-Kettering and insurer WellPoint. According to Forbes, WellPoint’s chief medical officer Samuel Nussbaum claims that providers make accurate treatment decisions in lung cancer cases only 50% of the time, but Watson can make accurate decisions 90% of the time. WellPoint for now is the sole reseller of Interactive Care Insights for Oncology. Initial customers for the lung cancer application include WestMed Practice Partners and the Maine Center for Cancer Medicine & Blood Disorders. The other tools, the WellPoint Interactive Care Guide and Interactive Care Reviewer, is for WellPoint’s pre-authorization and utilization management, the arcane business of determining fair and appropriate treatment that they will pay (less) for. Watson has also been on a diet; it runs 240% faster on the cloud or a server about the size of a pizza box. IBM’s Watson Gets Its First Piece Of Business In Healthcare (Forbes) After a year of medical school, IBM’s Watson passes first milestone (ZDNet)

‘Fantastic Voyage’, 2013 remake

Way past the idea of the 1966 sci-fi film ‘Fantastic Voyage’, nanobots navigating the tiny corridors of the human body is fast turning into reality. This article details progress made from the large gastrointestinal PillCam of 2001 to current research: microtubes controlled by tiny magnets, bacteria propulsion and nanobots traveling through the bloodstream to determine blood glucose levels in diabetics. None look like Stephen Boyd or Raquel Welch, though. Microbots: Using Nanotechnology In Medicine (Yale Scientific, surprisingly the oldest college scientific publication, founded in 1894)

Sno’ news is good news? Not here! (US/CA/BR)

As what is being termed a ‘historic blizzard’ descends upon Editor Donna’s city….a blizzard of news:

Nearly $15 million round for Sotera Wireless: Dr. Eric Topol-approved (on NBC Rock Center) Sotera Wireless, with the wrist-worn VisiMobile doctor monitor capable of tracking blood pressure, respiration etc. for multiple hospital patients, raised $14.8 million in its latest round from a combination of eight investors, including Qualcomm Life, Delphi Ventures and Safeguard Scientifics. Gigaom……Outbound IVR partially successful in identifying adverse drug reactions. A Canadian study published in JAMA Internal Medicine tested outbound automated interactive voice response (IVR) at 3 and 17 days after prescriptions were issued to check on adverse drug reactions with 629 patients at family health practices in Quebec. The automated calls identified 46% of adverse drug reactions, with the most frequent events being non-compliance after three days (but 2/3 of patients did not comply) and new adverse symptoms after 17. iHealthBeat, HealthLeadersMedia……EHRs ‘underwhelming’ in pediatric practices. Only 19% met basic EHR definitions, with only 6% ‘fully functional’. Reasons why: EHR systems don’t typically have weight-based medication dosing features, automatic growth chart plotters, immunization tracking and catch-up immunization calculations. No wonder. Study published in Pediatrics with researchers from Seattle Children’s Hospital, East Carolina University and the American Academy of Pediatrics. HealthcareITNews…..Finally some news from Brasil. Telefónica Digital announced Monday (4 Feb) the acquisition of a controlling stake in Axismed, a chronic care management and eHealth provider which currently monitors about 180,000 patients. According to TechCrunch, this is Telefónica’s first eHealth investment…..Teledental? A group of 11 California health care organizations are participating in a program to increase access to dental care for an estimated 2,000 children from low-income households, the disabled and older adults. Exams will be performed at schools, residences and nursing homes by hygienists and assistants; results will be transmitted by imaging equipment and online dental record systems to dentists for review and action. iHealthBeat

Open mHealth tackling mHealth integration in $100,000 developer challenge

Heritage Provider Network and UCLA are presenting a $100,000 challenge to developers using open software architecture designed by Open mHealth, a non-profit startup. The goal is to encourage integratable health apps on a standard, open architecture. This is reminiscent of Continua Alliance’s efforts in setting communications standards for networked sensors (ZigBee being one) and devices, and of course there will be questions on the quality and cross-device suitability of the architecture. Registration is due by 15 March, submission 1 May and the award will be made 3-4 June at the 2013 Health Datapalooza IV in Washington, D.C. InformationWeekHealthcare Heritage application

Blood pressure meta-analysis shows improvement (IT)

Some positive telehealth results from Italy. A meta-analysis of data from 23 home-based blood pressure telehealth (HBPT) monitoring studies demonstrated the effectiveness of using HBPT to improve BP control in hypertensive patients versus office-only monitoring. For the HBPT group, overall costs were higher and more medications were prescribed, but medical cost-only comparisons were similar as was risk of adverse events. Quality of life measurements were better. The analysis was performed by researchers from the Italian Institute of Telemedicine (IIT) in Varese with the collaboration of the Department of Cardiology, IRCCS Ospedale, San Luca, Istituto Auxologico Italiano and Department of Clinical Medicine and Prevention, University of Milano. Clinical usefulness and cost effectiveness of home blood pressure telemonitoring: meta-analysis of randomized controlled studies (Journal of Hypertension, March 2013; abstract only, subscription/access required)

Update 8 February: For a copy of the study, please email lead researcher Stefano Omboni of the IIT.

A telehealth investor’s POV (video)

This 36:52 video of Dr. Bernard A. Harris, Jr., CEO of Vesalius Ventures, past president of the American Telemedicine Association and former astronaut who conducted the first telemedicine consult from space, discusses Vesalius’ investments in telehealth companies (secure communications, disease management), plus what they look for in companies and management (an A-level team with a B-level technology is better than a C-level team with an A-level technology). Nirav Desai has also usefully put in time markers against topics covered. HandsOnTelehealth

Major EHR puts a $25 million bet on mHealth

EHRs, a/k/a the Rodney Dangerfield of eHealth, may be hedging their bets by placing their chips on mHealth. eClinicalWorks, one of the estimated 600+ EHRs in the US market, but one of the few with any real market share due to its preference by many state regional extension centers (RECs), announced yesterday that they are developing a from-scratch 100-person division called ‘healow’ (Health & Online Wellness) to develop systems that drive online consumer engagement–according to the article, “to make appointments, check test results, or ask their doctor a question on the go”. CEO Girish Navani claims that they have already been approached by telehealth providers to platform their data into practices. Of course, practices will be able to easily incorporate all this into workflow, and there are no existing systems out there that already do this. Warning: the CEO has pronounced that they are “creating an ecosystem around patient engagement.” Westborough-based eClinicalWorks commits $25M to launch mobile health business (Boston Business Journal)

Telemedicine consults save money, time: two-year study

A two-year (2010-12) study published in Health Affairs of 40,000 online consults via Minnesota-based integrated delivery system/insurer HealthPartners found that they reduced billing by an average of $88.03 per case (average cost: $40) and saved about 2.5 hours per patient. Patients were seen through the system’s 24/7 Virtuwell online clinic for 40 different primary care conditions, with the three most frequent being sinusitis, urinary tract infections and conjunctivitis. However, Virtuwell does not use video practitioner-patient consults, instead walking patients through an online automated interview about symptoms, medical history, allergies and medications. Then a nurse practitioner reviews each patient’s information and sends a treatment plan in a secure message, a process taking about 30 minutes. A phone call with the nurse is optional. Other results: no real increase in visits, and an episode resolution (no face-to-face visit) rate equivalent to ‘minute clinics’ at 89% to 95%. This sounds like an attractive template and option for concierge medicine, IPAs, ACOs and insurers, but needs to work around cross-state regulations. Neil Versel in Information Week, iHealthBeat, link to study abstract (Health Affairs)

Healthbox Accelerator: applications open (US/UK)

New to Editor Donna is healthcare technology accelerator Healthbox. Perhaps uniquely, they are based in US and UK–Boston, Chicago and London–with partners in all three cities; a partial list is (US) Blue Cross Blue Shield Massachusetts, Express Scripts, Ascension Health (US largest Catholic health system), California HealthCare Foundation, Walgreens and (UK) Bayer, Bupa, Guy’s and St. Thomas’ Charity, and Serco Health. In its first year, Healthbox has fostered 27 companies to refine their offerings and gain market traction including investment (portfolio companies). According to Healthbox spokesperson Abbie Ginther, the highlights of what participants receive in the 16 week program is:

  • $50,000 in seed capital
  • Strategic guidance and mentorship from leading industry experts as well as business veterans
  • Participation in Innovation Day, an event bringing together hundreds of investors, healthcare leaders and entrepreneurs to hear from the companies and how they are bringing innovative solutions to healthcare needs
  • Collaborative, open workspace for companies to use for the duration of the program

They are currently accepting applications for its 2013 programs starting with their second Boston program starting in March. Application deadline is very tight here (10 February), but applicants for London/Europe (start date TBD in spring) can register on the same link. Applications

Organizing the ‘quantified self’

gimlet-eyeThe Gimlet Eye and Editor Donna were just chatting about organizing the tidal wave of email we receive every day, when over the transom floated startup Tictrac (a takeoff on TicTac breath mints?), a ‘lifestyle monitor’ that will organize All That Data for the Determined Quant. It synchs with over 45 services, including Fitbit, Facebook, Runkeeper and Withings, to not only aggregate and correlate data (e.g. to high email use) but also manage goals such as losing weight. Not only that, it will connect the dedicated quant to outside sources such as coaches (who undoubtedly will pay per connection.) But will it organize email, mitigating our (unmeasured but very real) stress? This Startup Measures How Much Stress Email Gives You, And Helps You Reduce It (Business Insider)

Nurturing a startup culture in healthcare

Healthcare accelerators (Blueprint Health, StartUp Health, RockHealth) have lately gained most of the buzz, but incubators and ‘labs’ have been where many companies have gained their start. Phoenix, Arizona has entered the fray with SEED SPOT, featuring three healthcare-related startups among 16. While they may be able to serve up their companies ‘piping hot’ into a lower cost, supportive environment, chilly New York City has the opposite situation. Even with the advantages of world-class academic and healthcare resources, it’s been a forbidding setting for startups for years with money and attention going to e-commerce and financial businesses. The Bio & Health Tech Entrepreneurship Lab, backed by the New York Economic Development Corporation (NYCEDC), intends to change this with a first class of 20 startups. Their technologies are along a broad spectrum including wound healing, genetic testing, imaging, diabetes treatment, big data for genomics and mHealth for high-risk patients. SEED SPOT incubates health startups in Phoenix (Forbes) NYC-backed health startup lab wants to turn academics into entrepreneurs (GigaOM) Bio & Health Tech website

Scaling telehealth programs: lessons from early adopters

The Commonwealth Fund, a foundation that supports health care research and makes grants to support practices and policy, has just published a compilation of three telehealth case studies from the Veterans Health Administration (VHA), Partners HealthCare/Center for Connected Health and Centura Health at Home dating back to 2004. These concentrated on reducing preventable rehospitalizations and used various aspects of telehealth/remote patient monitoring (RPM). The VHA’s was the most comprehensive (with best results in depression and mental health), Partners focused on cardiac and Centura on congestive heart failure, pulmonary and diabetes. While Commonwealth’s main point is the lessons to be learned (disruption of the status quo, the changes in processes and the time to scale), this early data is interestingly not well known–and should be. Overview, compilation PDF (note the overview has links to the full individual case studies)