One of the most important assets of a medical device company is often its patent portfolio. The portfolio can include issued patents, patent applications, and patentable inventions that are not the subject of issued patents or pending patent applications. Whether the seller or buyer of a medical device company, it is imperative to know what assets are in the company’s patent portfolio and factors that affect their value. Commercially available, off the shelf patent databases do not often exist to hold the company’s patent portfolio information – at least for many medical device companies of a small to moderate size. Instead, the patent information might be in an excel spreadsheet kept by someone internally in the company. The information might be in the form of paper files kept in a file cabinet. So, where do you look for patent information?

1. PATENT DUE DILIGENCE IN THE SALE-ACQUISITION OF A
MEDICAL DEVICE COMPANY
One of the most important assets of a medical device company is often
its patent portfolio. The portfolio can include issued patents, patent
applications, and patentable inventions that are not the subject of issued
patents or pending patent applications. Whether the seller or buyer of a
medical device company, it is imperative to know what assets are in the
company’s patent portfolio and factors that affect their value.
Commercially available, off the shelf patent databases do not often exist
to hold the company’s patent portfolio information – at least for many medical
device companies of a small to moderate size. Instead, the patent information
might be in an excel spreadsheet kept by someone internally in the company.
The information might be in the form of paper files kept in a file cabinet.
So, where do you look for patent information? The following is a
primer on where to look.
Issued Patents & Patent Applications
After checking the seller’s informal ways of keeping its patent
information, the following steps can be taken:
1. Search the US patent office for issued patents and published patent
applications
This can be done at the patent office website – http://patft.uspto.gov/.
Michael Shimokaji
www.shimokaji.com
949-788-9968
Page 1 of 5
© Michael A. Shimokaji, 2015
The contents of this article represent the opinions of the author and not those of the
author’s law firm or clients.

2. The Boolean search engine allows one to search in various fields of a
patent. For example, the search can be conducted by searching for seller as
“assignee”, for known affiliates of the seller as “assignee”, and for known
inventors of the seller as “inventor”. Though more difficult and time
consuming, searches can be made of keywords in the “abstract” that describe
the seller’s technology.
2. Search foreign patent offices for non-US patents and patent
applications
It is common for a patent application to be filed not only in the US but
also in foreign countries where the seller makes and/or sells significant
quantities of goods and services. If one is selling or buying a US patent asset,
one would likely want to sell/buy counterparts to the US patent asset that exist
in foreign countries.
A search for these foreign patents and applications can be made through
a search engine at the European patent office website –
http://www.epo.org/searching/free/espacenet.html.
At this website, not only can one search for European patents, but
patents and applications from around the world. If one has a US patent number
and/or serial number, it is also possible to identify its related patents and
applications in foreign countries.
3. Determine who owns the patent and application
For US patents and applications, a search of the patent office
assignment database will provide a title history of recorded assignments -
http://assignment.uspto.gov/
One limitation to searching for assigned patent applications is that the
search is be limited to published applications, as opposed to non-published
and/or not yet published applications.
If one has the patent number or application number, a title search based
on that information can be easily conducted. If that information does not exist,
Page 2 of 5
© Michael A. Shimokaji, 2015
The contents of this article represent the opinions of the author and not those of the
author’s law firm or clients.

3. a search of the currently recorded owner can be found by searching according
to the seller’s name and/or seller’s affiliate name as “assignor” and “assignee.”
A reason to search the seller/affiliate as “assignor” is to verify that a patent or
application has or has not been transferred from the seller/affiliate to a third
party.
In addition, the assignment database search can disclose encumbrances,
like security interests, held by third parties on the patent asset. Such
encumbrances can affect the ability of the seller to transfer the asset, but also
affect the value of the asset.
4. Determine the actual life of a patent
The life or term of a US patent is generally twenty years. The actual life
of a patent, however, can vary in individual situations.
For example, the non-payment of maintenance fees can prematurely
terminate the life of a patent. These fees are payable for utility patents at the
third, seventh, and eleventh years following the issuance of the patent. The
failure to pay a maintenance fee will result in the patent expiring at the end of
the payment period.
If one knows the US patent number or application number, a search of
the maintenance fee status can be conducted -
https://ramps.uspto.gov/eram/patentMaintFees.
Another factor that can affect the actual life of a patent is a terminal
disclaimer. This is a document that disclaims part of the normal twenty year
life. The existence or non-existence of a terminal disclaimer can be found by
examining the file history of the patent. The file history can be found in PAIR
at the US patent office -
http://www.uspto.gov/patents/process/status/index.jsp
Yet another factor that affects a patent term is “patent term adjustment.”
Due to delays in the patent office, the term of a patent may be adjusted to
actually be longer than twenty years.
Page 3 of 5
© Michael A. Shimokaji, 2015
The contents of this article represent the opinions of the author and not those of the
author’s law firm or clients.

4. The above factors can be used in the patent office’s “patent term
calculator” to determine an actual expiration date of a patent -
http://www.uspto.gov/patents/law/patent_term_calculator.jsp
5. Patents involved in litigation
When patents become the subject of US district court litigation, a notice
is sent to the USPTO and the notice becomes a part of the patent file history
found in PAIR - http://www.uspto.gov/patents/process/status/index.jsp.
The notice will identify the district court and case number. This will
enable one to search PACER - https://www.pacer.gov/ - and view the
documents filed in the litigation. The court documents can shed light on
possible bases of patent invalidity, for example, which can affect the value of
the patent.
6. Identify non-published applications & provisional applications
What might be viewed by some as a shortcoming in the US patent office
is that certain non-provisional applications are not subject to public inspection
because they have not been published. Provisional applications are not open
to public inspection. Design patent applications are not published.
Non-provisional applications may not be published earlier than
eighteen months after filing. A further limitation is that the patent owner can
request that the application not be published, even after eighteen months, if
the application will not be filed in a foreign country.
In these instances, both seller and buyer of the medical device company
will need to rely on the company’s internal documents for identification of
non-published applications and provisional applications.
Patentable But Not Applied for Inventions
For many medical device companies, patentable ideas are generated
month after month. But many patentable ideas do not make it into patent
applications. The reasons can be many – such as budget constraints or product
Page 4 of 5
© Michael A. Shimokaji, 2015
The contents of this article represent the opinions of the author and not those of the
author’s law firm or clients.

5. priorities. Yet, these patentable ideas can be valuable.
Where can these patentable ideas (but not applied for patents) be found?
The days of the bound lab notebook maintained by inventors may be
gone in some companies. Some inventors may keep a computer journal of
their patentable ideas. Some companies may have a process whereby
inventors submit their ideas on “invention disclosure” forms.
The challenge for seller or buyer of the medical device company is to
work back through whatever processes (formal or otherwise) exist in the
company to identify these patentable ideas.
COMMENTS:
These steps are basic ones for a buyer or seller of a medical device
company to consider as part of its patent due diligence. Some steps can be
used as a quick filter to determine that a specific patent asset has little or no
value. Whatever steps are employed, they need to account for the value of the
transaction. Greater value, greater diligence.
Page 5 of 5
© Michael A. Shimokaji, 2015
The contents of this article represent the opinions of the author and not those of the
author’s law firm or clients.