Health & Technology Law Firm

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Health & Technology Law Firm Blog
Welcome to the firm's blog, which will contain postings regarding key developments in the law, articles on various issues and notices about upcoming firm events.

New Department of Labor Guidance on Classifying Independent Contractors

The U.S. Department of Labor is cracking down on companies that are improperly and/or intentionally classifying employees as independent contractors.  On July 15, 2015, the DOL issued an Administrator's Interpretation which significantly broadens the classification of "employees" and narrows the definition of "independent contractors."  

Under the new interpretation, it will be important for companies to look at the true nature of the work, level of supervision/autonomy and economic dependence of individuals classified as independent contractors.  Performing a proper analysis, and having appropriate independent contractor agreements will be more crucial than ever before.

We will be providing a more detailed analysis of the new guidance shortly.  You can read a full text of the Administrator's Interpretation here.

Can Pharmaceutical Companies Exit the India Market?

As reported today in the India Economic Times, pharmaceutical companies having more than a 1% market share of "essential" drugs may find it difficult to exit the India market based on new rules from the National Pharmaceutical Pricing Authority.  If a drug is on the National List of Essential Medicine, the pharma company will have to issue a public notice and alert the government at least 6 months in advance of discontinuing marketing of the drug in India.  In addition, the government has the right to require production for an additional 1 year.


Physicians - Are You Ready to Let the Sunshine In?

As physicians may be aware, the Physician Payments Sunshine Act (OPEN PAYMENTS) has gone into effect.  While physicians and practice groups do not have reporting requirements themselves, manufacturers of drugs, devices, biologicals, and medical supplies must report all "payments" and "transfers of value" made to physicians to CMS (the Center for Medicare & Medicaid Services). 

However, what many physicians do not realize is the breadth of the scope of the types of payments and transfers of value that will be reported and how much identifying information about the physician will be included.   

The following is a chart that broadly identifies the breadth of the payment and transfer of value information that will be collected and reported by manufacturers:




       Transfers of Value

  • Consulting fees
  • Advisor compensation
  • All phases of Research & Research Collaborations
  • Clinical Trials
  • Speaker Fees
  • Expert Science Panels
  • Room Rental Fees
  • Grants
  • Charitable Contributions
  • Meals
  • Travel, lodging and other reimbursable expenses
  • Journal Reprints
  • In-kind Services, such as Publication Support
  • Study drug and Supplies for Research
  • Anything that could be construed as an item of value


Manufacturers were required to collect the covered data commencing on August 1, 2013, and report the collected data through December 31st to CMS by March 31, 2014.  CMS will publish the reported data on a publicly available website by September 30th of this year. 

Among other implications, this will enable all patients to easily identify whether their physicians are receiving compensation from pharmaceutical companies, and if so, how much and from whom.  It is possible for physicians to dispute the data reported, but it is a time-limited right to dispute so it will be important for physicians and physician practices to have internal processes in place to monitor and dispute the OPEN PAYMENTS data.

Are you ready?


The Future of Computer Software Patents?

On Friday, December 6, 2013, the Supreme Court of the United States agreed to hear the appeal of the case Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298).  At issue in the case is whether claims for computer-implemented inventions – including claims to systems and machines, processes, and items of manufacture - are appropriate subject matter for patents. 

In May 2013, the US Court of Appeals for the Federal Circuit ruled that Alice Corporation's patent on computer software which contained a method of using "shadow accounts" in foreign currency exchange was essentially just an abstract method that was not entitled to patent protection.  Alice Corporation has appealed that ruling.

As many in the industry know, there has long been a battle brewing over the patentability of computer software and business methods.  At issue is Section 101 of the Patent Act, which broadly defines what kinds of inventions are patentable.  One of the long-standing exceptions to the types of inventions mentioned in that section is that an abstract idea can never be patented.  However, the concept of abstract ideas arises frequently in computer software and business methods. 

Many Justices on the Supreme Court have long been skeptical about software patents, and there has been confusion in the lower courts.  Hopefully, with the Alice Corporation case, the Supreme Court will bring a measure of clarity to the enforceability of computer software and business method patents. 

For many software companies, this could be a "do or die" moment - the ability to block competitors via patent rights.

New India Requirement for Audio-Visual Recordings of Informed Consent Interviews

On November 19, 2013, the India Office of Drugs Controller in New Delhi, India, issued an Order requiring that audio-visual recordings be made of all clinical study subject informed consent interviews, in addition to having signed written informed consent documents.  (See the full order HERE)  The purpose of the new requirement is to help ensure that study subjects' informed consent is truly freely given.

It will be important to balance this new requirement for making an audio-visual recording with the fact that the informed consent interviews will certainly contain personally identifiable information and need to be kept confidential.  In the age of easily transmittable digital media, this will be even more difficult to accomplish. 

One way to help accomplish this would be to provide clinical study sites in India with a pre-approved script that should be read at the beginning of each interview addressing these concerns, and providing uniformity on how your clinical trial is managed.  Such a statement will both help limit improper dissemination of the interviews and demonstrate compliance with the India Order.

Please contact the firm for guidance on how to craft a script for your specific needs.

Avoiding Intellectual Property Disputes in Joint Development Agreements

Parties entering into joint development and other collaborative agreements often are most concerned about what services each of them will perform as part of the collaborative effort.  As a result, they often neglect to address the one issue that is the most likely to lead to a dispute: who owns the intellectual property rights created as a result of the collaboration.  The parties’ attorneys can help them to avoid disputes related to this issue by making sure that the collaboration agreement competently allocates intellectual property ownership and responsibility for its protection and defense.


Apportioning Ownership


To avoid potential disputes among the parties, collaborative agreements should outline three major areas of intellectual property:  (1) that which each party brings to the transaction (i.e., that which each party has developed prior to and/or outside the scope of the collaborative agreement, the “Contributed IP”); (2) that which the parties create as a result of the collaborative effort (“Joint IP”); and (3) that which consists of modifications to or derivatives of a party’s Contributed IP (“Derivative IP”). 


          1.        Contributed IP 


                    Of the three categories of intellectual property, the easiest to define clearly is each party’s Contributed IP.  The parties to the agreement can identify their respective Contributed IP, either in the body of the agreement or in schedules.  The list would include not only patents, trademarks and copyrighted materials, but any trade secrets or other intellectual property that will be disclosed and/or used as part of the collaborative effort. 


          2.       Joint IP 


                    With regard to the Joint IP, the parties first should define clearly what they expect to come of the collaborative effort:  research reports, patentable technology, or an actual product.  Once the parties have defined the expected Joint IP, they can decide how to apportion ownership.  When doing so, it is important to carefully consider the purposes of the collaborative relationship, as well as each party’s respective needs. 


                    There are many means by which Joint IP can be apportioned so as to ensure that both parties’ goals are accomplished.  The most straight-forward method is for the parties to agree that any Joint IP created as a result of the collaboration shall be truly jointly owned by the parties.  This would be an appropriate structure if all parties to the agreement are willing to allow the unrestricted use of the Joint IP by each other.  In the case of a two-party agreement, each party would have an undivided one-half interest in the whole of the Joint IP and the agreement should specify whether the parties are obligated to account to each other for profits resulting from the use of the Joint IP.


                    If, however, due to the parties’ business or technical concerns, there need to be restrictions on one or both parties’ use of the Joint IP, this can be accomplished in a number of ways.  One option would be for all of the intellectual property rights to be assigned to one of the parties, which then would grant a license, limited as dictated by the business concerns, to the other party. 


                    Alternatively, both parties can be considered joint owners of all of the Joint IP, but with each party agreeing to certain restrictive conditions on their use or disclosure of it.  This situation often arises when a party wants to prohibit the disclosure of the Joint IP to one or more competitors. 


                    An additional concern arises when one of the parties receives government funding.  In such a case, the government may have rights to use intellectual property (and possibly any underlying Contributed IP) created as a result of the government funding.  This situation often occurs with academic medical centers or prominent life sciences research universities, which typically have either in-licensed or co-developed technology under a Cooperative Research and Development Agreement (“CRADA”) with the National Institutes of Health.   In such situations, the parties must ensure that intellectual property created with government funding will be usable without overly burdensome restrictions, or will not “infect” the Joint IP that is created under the new collaboration agreement.


                    Because the Joint IP often will contain some of the parties’ Contributed IP, each party needs to be cognizant of the potential downstream exposure of its Contributed IP—regardless of how the rights to the Joint IP are apportioned.  For example, even if the agreement provides for true joint ownership of the Joint IP, it may be appropriate to include: (1) a limitation in the agreement providing that neither party may sever the other party’s underlying Contributed IP in a manner that permits use of that property independently of the Joint IP; and (2) a corresponding requirement that any downstream agreements obligate any potential sublicensees or other third parties that may come in contact with the Joint IP to abide by such limitations. 


          3.       Derivative IP


                    The third and final category of intellectual property rights created in joint development agreements is Derivative IP, which often can be the most difficult to address.  First, there is often a fine line between a modification or derivative of a party’s previously existing intellectual property and the joint development effort that is the fundamental purpose of the collaborative relationship.  This distinction can be made clearer by including in the agreement a careful and specific description of the Joint IP expected to be created as a result of the effort.  This consideration is important because each party to a collaborative effort typically wants to retain the unfettered right to continue to use its individual Contributed IP, including any modifications or derivatives, without restriction. 


                     This situation often arises in the computer software arena.  While a party that has developed a complex computer program may be willing to allow a “plug-in” module to be jointly owned, the party is likely to want to own any modifications to the original program that may be made to accommodate the plug-in module.   If the parties agree that modifications to each party’s Contributed IP are not intended to fall within the definition of the Joint IP but shall be owned by the “contributing” party, it will be important to include express assignments from each party to the other of any modifications to or derivative versions of a party’s Contributed IP.   To ensure that such express assignments are effective, it is important that only employees and consultants of each party who have signed appropriate assignment of invention and assignment of copyright agreements perform work under the collaborative agreement.

Protecting Joint IP and Managing Infringement Claims


          Related to the determination of ownership of intellectual property rights is the manner in which any patent protection and third party infringement claims will be handled with respect to the Joint IP.  It is helpful to address in the collaborative agreement which party or parties will:  (1) decide whether to protect Joint IP through patent, trademark or copyright (as applicable) or to maintain it through trade secret, and in which countries to secure patent, trademark or copyright protection if applicable; (2) be responsible for filing and prosecuting patent, trademark or copyright applications, maintaining the resulting patents, trademarks or copyrights; and (3) pay for the costs of such patent, trademark or copyright applications and maintenance. 


          This type of provision should clearly provide that, if the party charged with filing the patent, trademark or copyright application and prosecuting and maintaining the patent, trademark or copyright either expressly elects not to make the filing or is not handling its responsibilities in a timely manner, the other party is entitled to file the application or take whatever steps are necessary to protect the patent, trademark or copyright rights.  It is particularly helpful to include an express power-of-attorney provision to enable the other party to take the necessary actions more easily when deadlines are looming.  In addition, it is worthwhile considering whether the party who takes over the application prosecution should be entitled to become the sole owner of the application and the underlying intellectual property rights regardless of how the parties had previously agreed to apportion the Joint IP.  


          Further, the collaborative agreement should specify which party has responsibility for defending, and paying any expenses and damages in connection with, claims that the Joint IP infringes a third party’s intellectual property rights.  It is common to include language stating that if the real cause of the infringement claim is one party’s underlying Contributed IP, the party who contributed such infringing intellectual property will bear the burden of the infringement claim. 


          Finally, the agreement should also address the converse situation: a third party’s infringement of the Joint IP.  Once again, the collaborative agreement should specify which party or parties have the responsibility for prosecuting the third party infringer.  It also should require the parties' cooperation in any prosecution, and establish how any settlements or awards would be split. 


* * * * *


          A joint development or other collaborative agreement that includes the foregoing provisions regarding the apportionment and protection of intellectual property rights should avoid many disputes that might otherwise arise between the parties.  Neither party should be reluctant to raise these issues during negotiations.  A clearly written agreement that is commercially reasonable and fairly takes into account the parties’ respective contributions will benefit both parties, and will likely lead to a more positive relationship.



Is Your Content Protected?

When artists, developers and broadcasters create and license custom content to third parties, whether for broadcast via radio, television or the Internet, are they fully protected?  As the technology supporting transmission and retransmission races ahead, have the laws caught up?  The World Intellectual Property Organization considers these questions in an insightful article here:  Protecting Broadcasters in the Digital Era.

However, regardless of whether the body of copyright and other legislation governing content has caught up, appropriate contractual agreements can help artists, developers and broadcasters protect their economic investment.  Please contact the firm if you would like to discuss how to more fully protect content rights.


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