Health Tech Startups Will not Reach the Market Without IP rights
In a field as heavily regulated as Health tech, special rules apply to startups that make the road to the market longer. But these barriers become an advantage once the intellectual rights are secured.
For companies like Facebook, the path to take was clear from the get-go: grow fast. In a couple of days, Mark Zuckerberg hacked together a simple website, which, within a few years, grew exponentially into a global phenomenon with billions of users.
Unfortunately, this growth strategy is hard to copy for health tech startups. The process of developing a meaningful product is longer and more intricate. They depend on approvals and regulations that can take months or even years to acquire. This is a challenge that Adent, a relatively new health tech startup, is very familiar with.
“Building the product was a three-year struggle, and it also took a long time to get a CE mark and to apply for patents. The product cycle is longer, which makes it even more important to manage the IP strategy very carefully,” Richard Bundsgaard, CEO and co-founder of Adent, says.
The company’s mission is to give everyone access to dental care, and the way they are attempting to achieve this is via a technological platform. Initially it was an app, but it has evolved into a complex system that, via questions, images and artificial intelligence, can provide feedback on the condition of the user’s mouth and help them form new habits that will keep their teeth healthy.
Although the company is working to strengthen the platform’s competitiveness through multiple channels at the same time, it has always placed an emphasis on its IP strategy, in order to even be able to reach the market.
IP strategy is the key to commercialization
Startups developing simple products – ones which can make it to the market quickly – may have second thoughts about whether their IP is even worth protecting. But, according to Peter Sylvest Nielsen, Head of DTU Tech Transfer, taking that precaution is almost always necessary in the health tech industry.
“IP protection is very important, specifically within health tech. The invention needs to be backed by great technology, but must also be protected properly. Startups without a protected IP typically do not reach the market because they can’t find investors,” Nielsen points out.
He gained this knowledge from commercialising DTU’s own inventions by licensing their rights to established companies or by spinning them out as startups.
“What’s most important is to be as well protected as possible. This applies even more to highly regulated areas where there is a long way to the market, and where a lot of money is needed to develop your products or services. You want exclusivity – both in the development phase, and when you reach the market,” he claims.
Nielsen adds that while there are many company assets that are important to protect, such as trade secrets, business models, unique clinical data or a fast-growing user base, his firm made sure it prioritised securing the IP rights for the majority of its 66 inventions.
A positive ripple effect
Adent has both a CE mark and a handful of patents pending in both software and machine learning. Although these have been time-consuming processes, Bundsgaard believes they have been vital for his company.
“We are careful to always patent our IPs and acquire the CE mark. As soon as you begin to deliver products in health tech, you have to be registered correctly. Freedom to operate is very important to us. We want to be sure that we have solid ground under our feet. This extra protection has a significant side effect of generating ripples that have an impact on the rest of our business,” Bundsgaard states.
Obtaining the CE mark and IP patent helped Adent establish credibility for their new product. This is a boon for the startup when it is engaging with potential investors, and it is also crucial for generating new users who will end up relying on the company’s solution.
“We are a medical product and deliver services that are compliant with regulations. It is important for us to reach as many people as possible, because whenever someone uses our app, it gets better,” he concludes.