In this episode we interview Kevin Nickels, COO of Preventice, about protecting wearable technology. We also have the latest news about Monsanto`s dual threats of IP theft, cool new features coming up in Apple products and a very helpful tool for searching patents – The Lens.

Kevin Nickels

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IP FRIDAYS

Co-Presenters:

Rolf Claessen and Kenneth Suzan

Episode 9 – August 22, 2014

RC = Rolf Claessen

KS = Kenneth Suzan

KN = Kevin Nickels, COO of Preventice

Hi. This is Jeanine Percival Wright, the Director of Legal Affairs for Intellectual Property and Litigation with True Religion Brand Jeans in beautiful Los Angeles, California. You are listening to IP Fridays. Thanks for the great podcast guys.

KS: Hello and welcome to this episode of IP Fridays. Our names are Ken Suzan and Rolf Claessen and this is THE podcast dedicated to intellectual property. It does not matter where you are from, in-house or private practice, novice or expert, we will help you stay up-to-date with current topics in the fields of trademarks, patents, design and copyright, discover useful tools and much more.

RC: Today we have the latest news on Monsanto and Apple. Ken is interviewing Kevin Nickels who is the COO of Preventice and they will talk about wearable technology, and also we will tell you about a very cool tool for patent searching which I frequently use and, in fact, I will tell you about this tool right now.

The Lens at www.lens.org, the link is in the show notes, is a patent search tool that I frequently use for prior art search. Many jurisdictions are covered by this database and you can build really complicated queries with the advanced search and one really interesting feature is that you cannot only search patent applications and granted patents, but you can also search search reports, you can search supplementary protection certificates, you can search plant patents, you can search design rights and some really cool other document types so you might cover even more prior art than with some paid search tools. You can search the full text or you can search inventors or owners, the title, abstract claims, or you can search applicants or you can search also by publication number or filing number, and you can also search classifications. So, it seems to be really powerful.

One thing that I didn’t find is the coverage of the databases and especially what kinds of countries are covered in full text and what kind of legislations are not covered in full text so I would not really use this tool for, for example FTO searches (freedom to operate searches), but for prior art it has given me a really, really helpful result. Typically, I use Total Patent by LexisNexis, but this tool, The Lens, has been complimentary for a while now and it has given me some different prior art documents that I didn’t find with Total Patent. So, go over to www.lens.org and try it out yourself.

Next, let’s head over to Ken and Kevin Nickels — they are discussing how wearable technology is changing the lives of many.

KEN SUZAN’S INTERVIEW WITH KEVIN NICKELS, COO OF PREVENTICE

KS: Thank you Rolf. I am joined today by Mr. Kevin Nickels who is the COO of Preventice. Preventice is a privately owned company and leading developer of mobile health applications and remote monitoring systems that connect mobile home-based and on-premises technologies to deliver continuous patient care across the health continuum. Welcome, Kevin, to our program.

KN: Good morning Ken. Thanks for inviting me.

KS: Yes, I am so glad you are able to join us. There are lots of interesting things I want to talk to you today about. Could you tell me a little bit about your experience and your background so our listeners can get an idea of the forty years of experience that you have.

KN: When you say it that way, it makes me feel a little old. I am a serial entrepreneur. I have technical roots. I have been in the healthcare field for not quite all forty years but had an interesting departure at one point in time into aerospace, came back into healthcare, done a number of startups, been in multiple clinical areas all the way from nephrology to cardiovascular, became interested in online behavior modification about 10-15 years ago, actually applied and received a patent on the topic, and have become a student of adherence to care plans over that decade period of time because I see a lot of the reasons for healthcare costs rising and staying high is tied to the fact that physicians frequently prescribe things and patients don’t always adhere to them. So, when the CEO, Jon Otterstatter, from Preventice approached me about joining him in building Preventice, I was excited at the opportunity because here I was a med-tech guy and had done a number of things in the medical device area but never have had a chance to take a swing at an IT arena as well as being able to actually do something that would perhaps be able to attenuate healthcare costs.

KS: Sure, and you have been with Preventice how long?

KN: Not quite a year. The company is about 5 years old. The company grew itself largely out of a group of IT folks out of Rochester, pulling software people out of IBM as IBM was repositioning and then licensing some cardiac monitoring technology from Mayo Clinic.

KS: And that would be the BodyGuardian® Remote Monitoring System?

KN: It is.

KS: What is that exactly?

KN: Yeah, it’s actually a fairly broad offering. The vision of the company I think early on started out looking at remote patient care or monitoring. We should be careful because monitoring is the passive monitoring used in a software platform with wearable technology. Remote patient care I think is where we are going from the standpoint of more active interventions. But most tactically, the company developed a low body burden ECG cardiac monitoring device. If you think about a halter monitor, I think a lot of people have worn those for telemetry for 12 to 24 to 36 hours of cardiac monitoring, this technology enables a patient to be monitored for cardiac arrhythmias for the better part of 30, 60, sometimes 90 days. So the cardiac application is the first clinical physiologic measurement but the company has built upon the software platform that obviously includes an Android phone and the server and then down into a portal for monitoring but it also includes things like blood pressure, weight scale, actively working on integration of glucometers, coagulometers, and Pulse Ox. So, it’s a fascinating platform. It’s a fascinating time to be in healthcare IT.

KS: What do you think about the growing prevalence of wearable technology? Now, it’s everywhere. We are hearing about it, we are seeing things in the media. Is this a fad that we are dealing with?

KN: Yes, that is a great question because you know my thoughts in preparing for this interview took me down two paths. One is that there is clearly a lot of froth and a lot of interest about things that are cool. More of the gadgetry, you know the fun glasses, the Fitbit® [device], you know, things like that. I think these are the things and a lot of people, frankly the younger generation, are excited about because they are things that they can talk to each other about it at a health club or what have you and that one I think is generating a lot of the noise in the market because it is quick to market. It’s a great opportunity and it is measured in the B numbers. It is a large market and we talk a little bit about how fast those product life cycles are but the reality is that I think a lot of the opportunity to really have an impact on health care is, if you will, at a little bit of a different end of the marketplace and that one is where technology has had to go through more regulatory shakedown. You’re basically trying to get a patient engaged but you are also trying to get a physician to prescribe and then obviously in today’s world and the U.S. healthcare system you have to get a payor to pay for it. So, there is a continuum and I just described two book ends…the consumer side, as well as the healthcare more classic fee for service. I think the inroads of where the wearable technology is going to arise is where it can actually impact healthcare by improving clinical outcomes reducing costs by enabling physicians to manage more patients away from the most expensive side of healthcare which is the hospital. So, that is the area that I have been the most interested in but it’s not to distract from a huge opportunity on the consumer side.

KS: Sure. Do you see any differences from where we were, let’s say in the late 1990’s, early 2000’s when there was basically an explosion of Web development and everyone was running to the Web? Is that the same thing here with wearable technology?

KN: I think there is. I mean, we as a country tend to like to run at large moving trends you know where you can put money to work and you can create a lot of excitement. I think in this particular case, it is an interesting natural build because micro machine sensors actually started, I was involved in buying a pressure micro machine pressure sensor business in the very early 90’s and so the reality is that micro machine pressure sensors and things like that have been evolving rather rapidly over the last two decades, I think really what you have seen is the convergence of a lot of software people that can do some pretty exciting things algorithmically with micro sized small accelerometers and other kinds of sensors that can allow, if you will, more data to be pulled off of the body and effectively converted into clinically valid or consumer interested physiologic measurements. So I think it is a natural evolution – much like the Internet. I think that to leverage it as much as the potential that it offers – its promise if you will, I do believe it does need to have some clinical value and not just a consumer spin because I think those are going to be very fast and furious and we’ll talk about IP shortly I’m sure but you know it sets up a very interesting discussion of what you do as far as having two very distinct markets.

KS: You have been with startup companies over many decades. If you were to talk to a startup company today, what would be some of the things you would tell them before they jump into the wearable space? What do they need to know before getting into something like this?

KN: Well, you know, I was touching a little bit just now. Because this is a continuum, it makes building a company very easily become confusing and when you are out raising capital, you know as you are going from Investor A to Investor Z, you will find yourself being tested because some of them will come from a strong consumer perspective and others will come from a strong healthcare perspective let’s say and so I think probably the biggest nugget there is — really try to identify where you want to pursue and try to maintain conviction on it and that means you have to have it thought through. It means you have to sit down and think through what’s it going to take for you to actually take a great idea and get it into the consumer market and, unfortunately, the healthcare system does have a lot of regulatory hurdles to get through, but it generally has a much larger sustainable terminal value than something that is more quick hit and then that starts to impact how you raise capital.

KS: Sure. With respect to intellectual property, the name of our podcast is IP Fridays, IP is very important to many companies. Can you tell me about the importance of IP in the wearable space? What do companies need to do before getting involved with wearables and how important is that asset to the company?

KN: Yeah, I think it is going to become even more important. You know, when markets start to become frothy, and start to grow the interest of a lot of investors, value starts to be assessed by intellectual property portfolios. I think frequently it is an afterthought. And filing patents is not an inexpensive activity. There have also been a lot of changes in intellectual property law. I would expand the discussion to include trademarks and brands, I might add.

KS: Yes, very important in what we do every day.

KN: Yeah, and so I think it goes back with having the end in mind and how you actually want to create, if you will, an exit and who would be potentially the exit partners and what would basically move their financial needle as to pay you a higher price for the asset that you are effectively building and I think IP, in that broad definition, is clearly a component of it. I think the consumer business is going to tend to be much more brand and trademark sensitive because you are going to have to deal with quicker S curves. The longer term ones are going to be powerfully important to have: technology, device, software, algorithms, and predictive analytic kind of IP protection because you are going to have to go through a much longer journey to get the product through all of the regulatory lifecycles. So it goes back to start with the end in mind — what market are you going to go after and then that is going to drive a lot of your investment dollars as you are building the company.

KS: Sure. Now, as the COO, I’m sure there a lot of issues that you deal with on a day-to-day basis. What are some of the pressing things that keep you up at night or that you are constantly thinking about or that you are grappling with? Particularly as we are talking about the wearable area and that sort of space?

KN: Well, you know, it is multifaceted. But I do believe that one of the most important assets that a company has is people and clearly this topic that we talked about earlier Ken is extremely frothy, very active, and I don’t think it’s going to be a fad so that means that hiring people that can solve problems today and actually can grow and solve tomorrow’s problems if not next year’s problem is one that keeps me awake at night a lot. Where do you find those kinds of people? That’s point one. Point two as it links to people is that what kind of regulatory or commercial trends are going to be hitting us? You know, in the case of Preventice, we have chosen a very healthcare strong strategy. We have spent a lot of time establishing clinical evidence and what have you, and what we are becoming more sensitive to is that in addition to the FDA compliance area, which is no small area relative to software development I might add, you also have huge issues and challenges associated with privacy and security. It is an area in which I think Preventice has done an outstanding job very early on. But the reality is that managing data is incredibly challenging. You know, you can basically say you can anonymize it but when you are actually monitoring key physiologic components, you are going to have questions that pop up, you are going to have to interrogate data, and in some cases you are going to have to actually have more clarity as to what kind of patient trends just to be able to handle the FDA issues, that then tees up the ONC issues which is a privacy regulatory body, and, of course, you are playing with telecommunications so you have the FCC. There are a lot of pieces in this market that people don’t fully grasp.

KS: Wow. Very interesting. Speaking of pieces, one of these pieces is actually the mobile piece which I think is a critical part on these wearable technology devices. Curious what type of mobile platform you use. I know you brought in a Smartphone today. Have you looked at wearable technology for yourself too?

KN: Well the answer is that I am still relatively healthy and have been for forty years, so my level of technology probably revolves around a pedometer and an app on my phone to see what kind of food I am consuming.

KS: Do you use that every day?

KN: I don’t. But I try to use it once a week. I think the reality is that the government, the FDA, is also trying sort through, as you are hearing about Apple and Samsung and the equivalent, and you are trying to figure out how to have powerful apps on a phone and then give the FDA, FCC and ONC the comfort that these apps are not going to get corrupted and basically cause other issues to flow out. So in the case of the Preventice solution right now we are using a lock down dedicated Android phone for the application. We get a lot of people that complain about the fact that they have to carry two phones. We did that on purpose. I think that as the FDA becomes more understanding and appreciative of certain kinds of controls that we can put in place, you can see our application evolve quickly into a phone app that would be just part of your phone. I think the reality is that Smartphones have the ability to handle these kind of technologies easier than an old flip phone if you will. But I would even argue that in some cases, you are dealing with, bump it up if you will, with remote patient monitoring which is where we are going with areas within the geographical areas of the country that just don’t have enough Internet access and you are hearing politicians talk about it that really the U.S. market really does not have as robust of a cellular system to really provide continuous monitoring. So that provides us some issues. So, where does that all lead you? Well, you start looking for Wi-Fi hubs, you are looking for other ways of communicating key information. Again, this goes back to where is your market focus. If you are dealing with a Fitbit® [device], we are only worrying about things that are maybe when you are active, at a health club or when you are exerting something like riding bike or whatever. You are not interested in continuous monitoring. In my case, if I am monitoring somebody for cardiac arrhythmias, being down for a couple hours is not a good thing.

KS: That’s right. And it is critical to have that access.

KN: And it becomes very use case driven. And I would argue that the more compelling use cases are going to have the higher value but I think this is all part of positioning focus and what have you.

KS: You know, I think about health insurance companies. Do you think that health insurance companies will take an active interest, if they haven’t already done so, in wearable technology in a way to help keep their subscribers fit and healthy?

KN: They are clearly moving in these different directions. I don’t believe I know of any payor, whether it is government or private, that is not looking at this area. They are all scratching their heads trying to figure out what the value proposition is for them. That could be a clichéous kind of comment but the reality is that this kind of data and the conversion of the information is effectively longitudinal in nature. What you are doing is trying to see if you can actually change somebody’s behavior. You were just asking me how often do I wear my pedometer and update the thing. That is an example of the kind of key questions that the payors are interested in because if they pay to have something done for 30 days, with the anticipation that you are going to continue it for the rest of your life, and you don’t, then that is a lost investment in their world and we see that with regard to pharmaceuticals. So what I see right now is a lot of interest, a lot of questions, and they are looking for companies that have got the investors that can basically support the company through a journey of proving clinically and economically the value proposition.

KS: Excellent. Two final questions: Do you think that wearable technology is totally dependent on the success of mobile phones, for example, or will there be other technologies that drive that success?

KN: Yeah, I think that I am already aware of a couple of the large communications companies that are trying to figure out how to make the technology smaller, lighter, and easier. You know, lapels. I mean, look at the things that Samsung is doing which is exciting. Apple is doing the same thing. I think at the end of the day, it is going to evolve fairly quickly. I think it is going to evolve as quickly as the regulatory, if you go down that pathway, will tolerate it. I think the engineers have the ability to drive it. I think it becomes an issue of the channel as well as what the regulators can tolerate and approve and accept. I think you are seeing a lot of activity with Samsung and Apple these days with the FDA trying to educate and help them move down the road so I think stay tuned on that one.

KS: Yeah. I’ve seen a number of trademark applications being filed by Apple recently in connection with their HealthKit.

KN: I think it is a very frothy area. I think, not to keep going back to a regulated area, but if you want to pursue something that is going to have a longer term sustainable model, even though you have to make that system move faster, I think you do find yourself looking at basically a lot of upstream education.

KS: Excellent. Any sage advice or any words of wisdom, I know we talked about a lot of things — that you could impart to our listeners wherever they are around the world?

KN: You know, I said it a little while ago, it’s always about people. It’s about clarity of where it is you are trying to g– and trying to find access to finding capital that can actually help you get all the way through the journey, probably times two. It always takes more time and money than anybody wants to believe. I think it is an extremely exciting time. I think the amount of people that are excited to hear the company’s stories are wildly high. I think everybody is interested in seeing this kind of technology brought forward so I think it is an exciting time, finding good people, finding people that can grow with the company is always key in patient investors.

KS: Kevin, this has been so fascinating. Thank you so much for joining us today.

KN: Appreciate it. Thank you very much, Ken, for the opportunity.

KS: Thank you.

KN: Good bye.

RC: If you want to know more about Kevin, please go to www.ipfridays.com/kevin.

In the beginning I promised to tell you more about Monsanto and Apple. Well, there was a recent article on the CBS Website about Monsanto facing a threat after intellectual property theft. They are actually fighting against two different kinds of opponents. One kind of opponent is competitors in China who are trying to steal the latest research of Monsanto because developing their own technology would be more expensive than stealing the technology and, on the other hand, they are facing intellectual property theft by critics who want to expose the latest research of Monsanto in order to generate negative press. Both is not very helpful and I think that many companies struggle with these kinds of intellectual property theft. If you want to know more about this, head over to www.ipfridays.com/monsanto.

There is another interesting story I want to share with you. On the famous blog Patently Apple, there was a recent story about Apple patents covering touch screens for Apple Mac and a new way to define tasks while working on a document, called Atomic Tasks, and then there is a new gesture to invoke Siri on the desktop. So it seems to be clear from the patent applications that were published that touch screens are coming to Apple Mac and they will have really cool functionality like calling for the help of Siri by just drawing a double circle on the desktop and then there is another really cool feature where when you are working on a document and you want to find a suitable image that you can include into the document, for example, you can give the operating system a task like an Atomic Task to search for a particular image based on, for example, keywords and then after awhile you return to this Atomic Task and then you just select the image or choice of images that you want to include into your document. If you want to read the full article at Patently Apple, please go over www.ipfridays.com/patentlyapple.

KS: That’s it for this episode. If you liked what you heard, please show us your love by visiting ipfridays.com/love and tweet a link to this show. We would be so grateful if you would do that. It would help us out to get the word out. Also, please subscribe to our podcast at ipfridays.com or on iTunes or Stitcher.com. If you have a question or want to be featured in one of the upcoming episodes, please send us your feedback at ipfridays.com/feedback. Also, please leave us a review on iTunes. You can go to ipfridays.com/itunes and it will take you right to the correct page on iTunes. If you want to get mentioned on this podcast or even have comments within the next episode, please leave us your voicemail at ipfridays.com/voicemail.

You have been listening to an episode of IP Fridays. The views expressed by the participants of this program are their own and do not represent the views of nor are they endorsed by their respective law firms. None of the content should be considered legal advice. The IP Fridays podcast should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents of this podcast are intended for general informational purposes only and you are urged to consult your own lawyer on any specific legal questions. As always, consult a lawyer or patent or trademark attorney.

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