Hartford Business Journal

10 Hartford Business Journal • May 8, 2017 www.HartfordBusiness.com FOCUS TECHNOLOGY Q&A Tech industry fuels patent activity amid challenging environment Q&A talks with Michael Cantor, co-managing partner of Hartford- based Cantor Colburn LLP, one of the largest intellectual property law firms in the country. Q: Cantor Colburn is the largest intellec- tual property law firm in Connecticut and one of the nation's fastest- growing IP firms in the nation. What part of the coun - try are you seeing most patent activity right now? How does Connecticut stack up to the rest of the nation? A: Patents are not only developed in iso- lated regions, in fact there is patent activity throughout the coun- try. Wherever there are centers of technology, manufacturing, inno- vation, R&D, pharma- ceuticals, research centers like the National Institutes of Health, and so on, you will find patent activity. So for example, here in Con- necticut there is tremendous pat- ent activity spurred on by large research companies such as Unit- ed Technologies, Electric Boat, The Jackson Laboratory, and Lockheed Martin (Sikorsky). Simi- larly in the greater Detroit area the automobile industry, with compa- nies like General Motors, drives patent activity, while in New Jer- sey there are many patents being developed because of the pharma- ceutical industry, and of course in Silicon Valley there is the concen- tration of companies involved in technological innovation. Cambridge, Austin, Atlanta are among many cities with busy R&D sectors. Our own firm has patent activity from clients spread throughout the United States, such as the oil and gas industry in Houston and the entertainment industry in Los Angeles. Q: What types of patents are most in demand right now? A: If you look at the hundreds of thousands of patents that get issued each year, you'll find they're in virtually all aspects of technol- ogy and industry. That being said, all things electronics and soft- ware-driven are in demand, like telecommunications, automation equipment, internet-based inven- tions and apps. In addition, the pharmaceu- tical industry continues to be a large source of patents. And finally, there are a growing num- ber of design patents as opposed to utility. Companies today are using the design patent laws to cover virtually every new device and product in the marketplace. Q: What's the most significant legal issue patent filers face today? A: Because of recent U.S. Supreme Court cases, it is get- ting harder for pat- ent applicants to be granted patents. Legal hurdles that have been put in place by the Supreme Court have made it very dif- ficult to obtain a pat- ent, especially in the software and biotech/ diagnostic fields. This is a real problem for startups because it makes it harder for them to raise capital. The other big issue facing applicants is the advent of the Inter Partes Review, or IPR, which has made it easier and cheaper for competitors to invalidate patents. Q: When should companies file for a patent? A: Companies should file for a patent as early as possible in the development process for several reasons, not the least of which is that the United States has moved to a first-to-file system as opposed to a first-to-invent system. Of equal importance is the fact that the earlier an appli- cation is filed, the better the chances are of obtaining broad protection as opposed to nar- row protection. The broader the patent is, the more valuable it is, because this keeps competitors from copying the invention, and of course this is viewed more favorably by investors. Q: What are you recom- mending to clients in terms of protecting their patents? A: Counterfeiting and patent infringement are ongoing activi- ties in foreign countries. We rec- ommend extending patent pro- tection by filing applications in critical foreign countries. This is why there has been exponential growth in patent filings in China in recent years. It is important to be extremely vigilant in keeping track of competitors' product introduc- tions so that if there is counterfeit- ing or infringement, an appropri- ate response can be pursued. n MICHAEL CANTOR Co-managing partner of Cantor Colburn LLP and better assess and utilize their electronic health records, has seen significant growth in recent years and is part of a small but growing health-technology sector in Con- necticut that industry officials see as a major potential growth area — possibly one day forming into a hub. The state's abundance of large health insurers and healthcare pro- viders, which increasingly depend on analyzing huge swaths of "big data" to improve patient-care out- comes and costs, can be a breeding ground for digital-health startups, officials say. In fact, several organizations — Hartford HealthCare, Trinity College, UConn and Connecticut Children's Medical Center — are proposing to create a "digital-health" incubator in Hartford that would give researchers and startups a place to experiment and test their technology or ideas. The group is part of a larger consortium vying for millions of dollars in funding from the state's innova- tion places program, which aims to promote high-tech business growth. "We think Connecticut — particularly central Con- necticut — has all the elements [to] become a hub of health-tech innovation," said Hartford HealthCare Chief Medical Officer Rocco Orlando. "We're beginning to see the emergence of small incubators in the state. Part of it involves developing critical mass so that the area becomes attractive to these companies so they can make a go of it … [and] it becomes an ecosystem." Currently, the state's health-tech industry is still in its infancy. Diameter Health is one of eight health-tech startups that Connecticut Innovations (CI) — the state's quasi-public venture arm — is investing in. A few other, more established companies like Farmington health- care software provider Evariant have set up shop with- out state-backed investment. David Wurzer, CI's executive vice president and chief investment officer, and Matt Storeygard, director of investments, say smaller Connecticut-based companies that manage big data, particularly for health systems and insurers, could help boost economic growth here. "Connecticut can assert itself," said Wurzer. "Data will be key. That data ultimately resides with the provid- ers and payers. [It's] an opportunity for [them]." CI has invested more than $5.3 million in the eight health-tech startups since 2011. Those funds have lever- aged other outside investments to represent a total value of more than $11 million, not counting a couple of proj- ects that failed, Wurzer said. Diameter Health received $500,000 from CI and more than $1.8 million from other investors, for example. The company now employs 10 full- time workers and a handful of contractors. Founded in 2013, Rosow says Digital Health has sev- eral clients throughout the country, and is working with health information exchanges in Kansas, Pennsylvania and New York. He declined to share revenue figures but said the company is growing rapidly. Besides improving patient health, effectively manip- ulating big data can also help lower healthcare costs by giving medical providers more predictive analytics to improve their operations and care. Such evidence-based medicine is important to pro- viders who are increasingly being paid based on the quality of care they provide, rather than the number of tests or services they order. Meantime, big insurers like Aetna and Cigna are investing in digital-health compa- nies, or evaluating relationships with them. 'Gaining traction' Since 2011, Evariant's customer relationship manage- ment software has been helping hospitals all over the country identify groups of patients who need hospital services. Its predictive analytics takes claims and clinical data from insurers and hospitals and then pinpoints potential patients in need of care, says William Moschella, Evariant's co-founder and former CEO. For example, Evariant's software can analyze a hospi- tal's health records to pinpoint patients who might need orthopedic surgery. It can also inform providers how best to communicate with those patients via phone or email, their proximity to the hospital, and how much it might cost the hospital to get a return on investment. The service is gaining traction, says Moschella, who remains active as chairman of the board and chief strate- gy officer. The company, which has 150 employees and has raised $100 million since 2011, has close to 1,000 hospitals plugged into its software platform, of which more than 60 are larger health systems like Trinity Health on the East Coast and Dignity Health on the West Coast, he said. Moschella is passionate about his fledgling industry, but along with Wurzer and Storeygard, thinks Connecti- cut has some obstacles to surmount. Moschella, whose roots are in Connecticut, says his company has a national reach, so he has no need or desire to move to New York City or Silicon Valley. But venture capitalists still generally view Connecticut as lacking the talent pool needed to recruit health-tech companies — a perception that belies reality, he said. "If I lined up 100 venture capital firms and told them I was going to start up in Connecticut, 99 percent of them would have an adverse reaction to that," Moschella said. "They're going to say there's a better place to do it." "[Yet], Connecticut has got a talent pool that is very familiar with analytics," he added. "It's very cut-throat out there in other states. We just have to continue to build that statewide culture here. It's happening. It's possible. We just have to evangelize it here. It's time to activate this digital-health market." Attractive investments, partners Aetna and Cigna officials acknowledged the entrance of health-tech companies into the marketplace, but were reluctant to discuss their relationships with them, although they did say digital-health technology is grow- ing and affecting how they do business. Aetna has made some health-tech acquisitions. In 2011, the Hartford insurer acquired Healthagen, a start- up that developed a health app called iTriage, which helps users select a healthcare facility appropriate for their needs and geographical location. Meantime, Hartford HealthCare has growing rela- tionships with both global health-tech companies as well as startups, said Orlando, the chief medical officer. Hartford HealthCare has launched a pilot program with Diameter Health using some of their newest ana- lytics methods to help improve patient care. The health system is also working with GE Health to analyze data that will determine the busiest times of day in Hartford Hospital's emergency room so that efficient ER servic- es can be offered and integrated with ongoing elective treatments and surgeries, Orlando said. n from page 1 Big data spurs health technology CT Innovations-backed Health-Tech Companies Company Headquarters CI Investment ActualMeds Corp. East Hartford $750,000.00 CircleLink Stamford $350,000.00 Diameter Health Farmington $500,001.41 Fitscript LLC New Haven $566,151.68 InBox Health Corp. Bridgeport $1,011,020.00 My Gene Counsel LLC North Haven $500,000.00 PatientWisdom LLC New Haven $150,000.00 Umbie Health Corp. Middletown $1,508,668.00 S O U R C E : C O N N E C T I C U T I N N O V A T I O N S

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