New Patent Applications for Health Insurance Plan Technology Innovations

Health plans and health care providers need to be attentive to their own patent protection opportunities and potential patent infringement problems, in addition to the more “in the news” patent issues surrounding alleged patent and Hatch-Waxman law abuses by branded drug makers. At least one major health insurer, for example, has recently announced its filing of several patent applications seeking protection for its own innovations in predictive modeling to anticipate future costs and clinical events.

Patents are traditionally used by companies seeking exclusive rights for their innovations. At one end of the health industry spectrum, pharmaceutical companies use patents to protect their substantial investments in new drug products. The health insurers, providers and patients who pay for these drugs are often found at the other end of the spectrum, seeking maximum competition. Insurance companies in particular are sensitive to the drug prices levied by the pharmaceutical companies, and some health insurers have even filed lawsuits against pharmaceutical patent holders for anticompetitive and deceptive practices related to alleged fraudulent patent procurement and Hatch-Waxman Act abuses.

Recent health insurance plan patent filings are a reminder that the patent system is a legitimate tool to provide protection for a wide span of innovations, including business methods, by companies which are sometimes not widely viewed, and may not often even think of themselves, as technology innovators.

Once patents are granted, they may be used to prevent competitors from using the inventions, or they may become an independent source of royalty revenue through licensing arrangements. On the other hand, patent applications may also be used defensively, to prevent competitors from preempting a particular technology, by obtaining patents. In this manner, a company can ensure that it can continue to use certain innovations. Patents may also help to convince investors, stock analysts and potential acquirers that the company’s marketing advantages have an additional layer of protection.

At the same time, given the wide array of technologies and businesses which patents protect, companies in all industry segments need to consider that their own activities may infringe patents and other intellectual property rights owned by third parties. In addition to being aware of patents relevant to different technologies and business methods being used internally, even companies that once had little concern about patenting must be aware of what competitors are patenting both to avoid potential liability and to provide insight on the future business plans of those competitors.

For more information on patent law issues or if you have questions about securing patent protection for your innovations, please contact your regular Crowell & Moring contact or visit the webpage of the Crowell & Moring intellectual property practice group at http://www.crowell.com/ip.