Keeping pace with the ever-changing life sciences industry, Morrison Foerster stays on top of the trends and political, legal, and economic drivers to support striking the balance between innovative discovery and purposeful business planning to assure our clients continued success. MoFo Life Sciences shares timely legal and business insights and in-depth analyses on trends and the complex technologies at the heart of the global pharmaceutical, biotechnology, diagnostics, medical devices, digital health, and AgTech fields.Learn more about our <a href="https://www.mofo.com/capabilities/life-sciences-healthcare" target="_self">Life Sciences practice</a>.<h2 dir="ltr">ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants. She represents clients ranging from large international pharmaceutical companies to midsized companies, startups, and universities.Meghan has filed numerous Patent Term Extension applications to secure additional term for her clients’ patents, which cover FDA-approved products. In addition, Meghan has extensive experience addressing complex obviousness-double patenting and subject matter eligibility issues impacting her clients’ patent portfolios. Meghan also represents clients in both investor-side and target-side due diligence, in deals from seed funding to initial public offerings.Prior to law school, Meghan attended graduate school at the University of California, Los Angeles, where she received a Ph.D. in biological chemistry based on her work on protein-protein and protein-DNA interactions at a molecular level. Meghan is the author of several scientific publications and has presented her research at international conferences.Meghan received her J.D. from the University of Southern California Law School and spent a year as a visiting student at Santa Clara University, where she focused on intellectual property.

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Morrison Foerster's patent prosecution and patent strategy team is highly qualified with more than 100 advanced degrees and multilingual capabilities.

With 80+ Ph.D.s, more than 100 advanced degrees, and multi-lingual capabilities, including Chinese and German, we offer clients around the world a patent prosecution and counseling practice that is unrivaled in its depth of industry and technical experience.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants.

Meghan Poon

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in life sciences, digital, and high-tech industries.His subjects of focus include research and development collaborations, complex licensing agreements, and other technology transactions, as well as know-how protection strategies, and employee invention law. He also has substantial experience in litigating patents, trademarks, and other intellectual property assets, often in a multijurisdictional context. In addition, Wolfgang and his team frequently clear trademarks and ad campaigns and prosecute trademark applications.Wolfgang is co-editor of our <a href="https://lifesciences.mofo.com/" dir="ltr" target="_blank">MoFo Life Sciences Blog</a>.Wolfgang is a partner of Morrison Foerster based in our German office in Berlin.<h4 dir="ltr">Representative Transactional Matters</h4><ul dir="ltr"><li>U.S.-based BioTech fund on various research collaborations and other transactions with German start-ups or research institutions.</li><li>Negotiate multimillion-euro strategic partnership between two AgTech leaders concerning the development and commercialization of pest-resistant transgenic traits.</li><li>Craft global multi-million collaboration regarding AI-powered robotic MaaS.</li><li>UK-based digital health company on product roll-out of RPM applications in Germany; coordinate international expansion.</li><li>Advise numerous German start-ups on their U.S. expansion.</li><li>Draft diverse global patent and know-how license agreements in the areas of AgTech and life sciences—including gene licensing and licensing of genome editing technologies (e.g., CRISPR)—and medical devices; draft correlating supply and distribution agreements.</li><li>Structure IP rights in connection with joint ventures and other M&A transactions, including the carve-out of a patent-heavy semiconductor business comprising nine jurisdictions into a German–U.S. joint venture.</li><li dir="ltr">Advise on government-funded, multi-partner R&D projects and/or R&D projects with academic institutions, as well as on employee invention law.</li></ul><h4 dir="ltr">Representative Contentious IP Matters</h4><ul dir="ltr"><li>Lead counsel in an international dispute between software companies on rights and obligations following termination of a multi-million licensing and distribution arrangement; coordinate local counsel.</li><li>Defend Japanese chip manufacturer in high-profile SEP-litigation; advise on global settlement arrangement.</li><li>Represent leading internet retailer in patent infringement and concurrent invalidity proceedings in the context of a multijurisdictional dispute concerning touch-screen technology.</li><li>Represent diverse pharmaceutical and life sciences companies in national and cross-border patent infringement proceedings and other technology-related disputes, including preliminary injunctions as well as pre‑trial discovery and inspection proceedings, concerning, inter alia, drug-coating technologies, toner cartridges, medicinal gases, transgenic plants, and vaccines.</li><li dir="ltr">Conduct trademark, copyright, and false advertising litigation, including, most notably, a high-profile trademark litigation for a German bank, and a nine-country cross-border trademark litigation involving a famous pharmaceutical brand.</li></ul>

Dr. Wolfgang Schönig berät Mandanten zum Schutz des geistigen Eigentums sowohl in streitigen als auch nichtstreitigen Angelegenheiten, mit einem besonderen Fokus auf die IP-rechtliche Beratung von Unternehmen aus den Bereichen Life Sciences, Digitalwirtschaft und High-Tech.Zu seinen Beratungsschwerpunkten gehören Forschungs- und Entwicklungskooperationen, komplexe Lizenzvertragsgestaltungen und andereTechnologie-Transaktionen, sowie Know-how-Schutz-Strategien und das Arbeitnehmererfinderrecht. Er verfügt zudem über umfangreiche Prozesserfahrung zur Durchsetzung von Patenten, Marken- und anderen IP-Rechten, häufig auch in einem grenzüberschreitenden Kontext. Darüber hinaus bewertet Dr. Wolfgang Schönig zusammen mit seinem Team regelmäßig die Rechtskonformität von Werbekampagnen, prüft die Verfügbarkeit von Marken und entwickelt entsprechende Anmeldestrategien.Dr. Wolfgang Schönig ist Co-Editor des Life Sciences Blogs von Morrison Foerster.Er hat seinen Doktortitel an der Heinrich-Heine-Universität Düsseldorf und seinen LL.M. an der Fordham School of Law in New York erworben, jeweils mit Schwerpunkt im gewerblichen Rechtsschutz. Seinen MBA-Abschluss erhielt er von der European University in Barcelona.Dr. Wolfgang Schönig ist Partner des deutschen Büros von Morrison Foerster in Berlin.<h4 dir="ltr">Repräsentative Transaktionen</h4><ul><li dir="ltr">BioTech-Fonds mit Sitz in den USA bei verschiedenen Forschungskooperationen und anderen Transaktionen mit deutschen Start-ups oder Forschungseinrichtungen</li><li dir="ltr">Verhandlung einer hochvolumigen strategischen Partnerschaft zwischen zwei Technologieführern im Bereich Crop Science betreffend der Entwicklung und Kommerzialisierung von bestimmten Resistenzen</li><li dir="ltr">Gestaltung einer globalen Multi-Millionen-Zusammenarbeit für KI-gestützte Roboter</li><li dir="ltr">Ein in Großbritannien ansässiges Unternehmen für digitale Gesundheit bei der Markteinführung von RPM-Anwendungen in Deutschland; Koordination der internationalen Expansion</li><li dir="ltr">Beratung zahlreicher deutscher Start-ups bei deren US-Expansion</li><li dir="ltr">Strukturierung und Verhandlung diverser Patent- und Know-How-Lizenzen in den Bereichen Ag Tech und Life Sciences – einschließlich Fragen zu genome editing wie CRISPR-Medizingeräte, sowie Gestaltung von Softwarelizenzverträgen und Erstellung korrespondierender Liefer- und Vertriebsvereinbarungen</li><li dir="ltr">Strukturierung von IP-Rechten im Zusammenhang mit Joint Ventures und anderen M&A-Transaktionen, darunter die Koordination eines neun Länder umfassenden IP Carve-Outs im Rahmen eines Halbleiter-JVs</li><li dir="ltr">Beratung zu staatlich geförderten Multi-Partner F&E-Projekten und/oder F&E-Projekten mit akademischen Einrichtungen sowie zum Arbeitnehmererfindungsrecht</li></ul><h4 dir="ltr">Repräsentative IP-Streitigkeiten</h4><ul><li dir="ltr">Lead Counsel in einem internationalen Rechtsstreit zwischen Softwareunternehmen über Rechte und Pflichten nach Beendigung einer millionenschweren Lizenz- und Vertriebsvereinbarung; Koordinierung der lokalen Anwälte</li><li dir="ltr">Verteidigung eines japanischen Chipherstellers in einem prominenten Streitfall bezüglich Standardessentieller Patente (SEP); Beratung zu einer globalen Vergleichsregelung</li><li dir="ltr">Verteidigung einer führenden Internetplattform gegen Ansprüche eines Patenttrolls wegen vermeintlicher Verletzung von Patent bezüglich Touchscreen-Technologie sowie korrespondierende US-Streitigkeiten</li><li dir="ltr">Vertretung von Pharma- und Life Science-Unternehmen in nationalen und grenzüberschreitenden Patentverletzungsverfahren und anderen technologiebezogenen Streitigkeiten, einschließlich einstweiliger Verfügungsverfahren und vorprozessualer Beweissicherungs- und Besichtigungsverfahren, unter anderem in Bezug auf Arzneimittelbeschichtungstechnologien, Tonerkartuschen, medizinische Gase, transgene Pflanzen und Impfstoffe</li></ul>

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Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig focuses his practice on IP aspects relative to transactions in the digital, telecoms, high tech, life sciences, and pharmaceuticals industry, as well as legal representation in IP disputes.

Wolfgang Schönig advises clients on IP aspects relating to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. His additional focus areas include research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig

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Nearly one year after its introduction to the House of Commons, the Medicines and Medical Devices Bill 2019‑2021 (the Bill) was granted Royal Assent on 11 February 2021, becoming law as the Medicines and Medical Devices Act 2021 (the Act). The purpose of the Act is to create a structure for the UK Government to legislate for updates or amendments to our existing laws on human and veterinary medicine, clinical trials, and medical devices. Now that the Brexit transition period has come to an end, the Government views the Act as essential in ensuring that the UK retains its position as a world leader in the life sciences industry and is able to take advantage of innovative medicines and technologies more quickly.During its passage through Parliament, the Act was subject to a number of amendments, including the introduction of: (i) an independent Commissioner for Public Safety, and an overarching objective focused on safeguarding public health; and (ii) public consultations in relation to proposed regulations, and requirements for the Medicines and Healthcare products Regulatory Agency (the MHRA) to lay periodic reports before Parliament. These amendments were made to address concerns in the House of Lords surrounding the wide-reaching powers delegated to the MHRA under the Act.One aspect of the Act that remains largely unchanged, however, is the introduction of new enforcement powers for the MHRA. With these new powers, the MHRA can impose either civil or criminal sanctions for breaches of the Act or any secondary legislation made pursuant to it. These offences can be committed by corporates as well as individuals, including company directors. For more information on the offences themselves and the ways in which the resulting penalties can be defended or avoided, see <a target="_blank" href="https://www.mofo.com/resources/insights/201113-uk-life-sciences-regulation-post-brexit.html">our previous alert</a>.Now that the Act has become law, the MHRA must prepare and publish guidance as to the civil sanctions that can be imposed. In particular, the guidance should provide further information regarding monetary penalties and the MHRA’s power to accept enforcement undertakings in place of criminal conviction or the imposition of a fine.  With the objective of the Act being the safeguard of public health and safety it is, however, likely that financial sanctions will be onerous and tolerance for corporates without robust procedures in place will be low.Although the Act now allows the UK the flexibility to respond quickly to medical advances and developments in medical technology, we note that the UK-EU Trade and Cooperation Agreement does not provide for the mutual recognition of regulatory regimes. It will, therefore, be interesting to see how the UK Government and the MHRA seek to balance a new, robust and evolving regulatory regime with the need to remain commercially viable for multinational pharmaceutical companies, medical devices manufacturers and other affected parties that currently operate in both markets. Stephanie Pong, London Trainee Solicitor, contributed to the drafting of this alert.

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Of Counsel

Jenny Galloway advises corporate clients and senior executives on a range of complex dispute resolution matters, including general commercial and corporate litigation, investigations and contentious regulatory matters. 

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Life Sciences Regulatory Framework Becomes Law Post-Brexit

UK Plans for Robust Life Sciences Regulation Post-Brexit

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Nearly one year after its introduction to the House of Commons, the Medicines and Medical Devices Bill 2019‑2021 (the Bill) was granted Royal Assent on 11 Febru

Life Sciences Regulatory Framework Becomes Law Post-Brexit

In Part 2 of our <a target="_blank" href="https://lifesciences.mofo.com/topics/Software-as-a-Medical-Device-in-Europe--New-Regulatory-Regime-About-to-Enter-into-Force--Part-1-of-6.html?utm_source=linkedin_elevate&utm_medium=social">series of consecutive articles</a> on the reformed regulatory framework under the <a target="_blank" href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R0745">EU Medical Device Regulation 2017/745</a> (“MDR”), which will soon govern medical devices software (“MDSW”) in the EU, we will shed further light on the expansion of the definition of “medical device” and the importance of the intended purpose of healthcare-related standalone software in determining the regulatory requirements of companies offering such software in the EU.<h4>Introduction: The Relevance of the Intended Purpose</h4>As is already the case under the current <a target="_blank" href="https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1993L0042:20071011:en:PDF">EU Medical Device Directive 93/42/EEC</a> (as amended by Directive 2007/47/EC – “MDD”), the purpose for which the software is intended to be used is and remains the critical factor when determining the obligations regarding regulatory compliance with the European medical devices regime. The intended purpose establishes whether standalone software is considered a medical device in the first place.[1]In particular with regard to so-called health apps or other apps related to biological functions or wellbeing (e.g., related to fitness, diet, sleeping habits, or mental health), no bright line can be drawn between normal software and MDSW. For example, an app that allows the user to monitor his or her food habits for weight control purposes will qualify as normal software, while the same app might qualify as medical device if the monitoring is intended to be used for prevention of diseases such as metabolic disorders. A standalone software application that is claimed by its manufacturer to be a natural method of birth control and in which the user enters certain parameters (first day of menstruation, body basal temperature, etc.) in order to obtain the fertility window, should qualify as a medical device as it is intended to prevent pregnancy or facilitate conception.The following table highlights some of the distinctions:<table border="1" cellspacing="0" cellpadding="0"><tbody><tr><td width="312" valign="top" style="width: undefined%; height: auto;">Medical purpose</td><td width="312" valign="top" style="width: undefined%; height: auto;">Non-medical purpose</td></tr><tr><td width="312" valign="top" style="width: undefined%; height: auto;">Prevention or diagnosis of disease or injury</td><td width="312" valign="top" style="width: undefined%; height: auto;">Patient medical education (e.g., giving general health tips)</td></tr><tr><td width="312" valign="top" style="width: undefined%; height: auto;">Treatment or alleviation of disease or injury (e.g., giving instructions to alleviate symptoms such as tinnitus)</td><td width="312" valign="top" style="width: undefined%; height: auto;">Monitoring of general fitness (e.g., physical exercise tracker), general health, and general wellbeing (e.g., wellness diary)</td></tr><tr><td width="312" valign="top" style="width: undefined%; height: auto;">Decision support or decision-making (e.g., with regard to therapeutic measures)</td><td width="312" valign="top" style="width: undefined%; height: auto;">Communication or simple search functions (e.g., finding a certain healthcare specialist)</td></tr><tr><td width="312" valign="top" style="width: undefined%; height: auto;">Control of conception</td><td width="312" valign="top" style="width: undefined%; height: auto;">Storing and displaying medical data (e.g., weight or body fat) without any change or analysis</td></tr></tbody></table> In this regard, we want to focus on three changes introduced by the MDR that are particularly noteworthy.<h4>1. Expansion of the Definition of “Medical Device”</h4>The MDR broadens the scope of medical purposes that are covered by adding new specifications to the list of relevant medical purposes. The full list of medical purposes under Article 2(2) of the MDR thus reads as follows (emphasis added to highlight the changes compared to the MDD):<ul><li>Diagnosis, prevention, monitoring, prediction, prognosis, treatment, or alleviation of disease;</li><li>Diagnosis, monitoring, treatment, alleviation of, or compensation for, an injury or disability;</li><li>Investigation, replacement, or modification of the anatomy or of a physiological or pathological process or state;</li><li>Providing information by means of in vitro examination of specimens derived from the human body, including organ, blood and tissue donations; or</li><li>Control or support of conception.</li></ul>For standalone software, in particular, the addition of prediction and prognosis of disease can become relevant, e.g., for software providing healthcare professionals with information on a patient’s future health prospects or likely individual outcomes of a certain therapy. The importance of this addition also becomes palpable when looking at current COVID-19 apps. Based on a person’s recent contacts, such apps often make a prognosis with regard to the risk of the user developing COVID-19, while the app would not be in a position to actually diagnose the infection.<h4>2. Expansion of Relevant Material and Product Life Cycle Approach</h4>The MDR comprehensively includes further material to be considered when assessing the medical purpose. Under current law, according to Article 1(2)(g) of the MDD, “intended purpose” means the use for which the device is intended according to “the data supplied by the manufacturer on the labelling, in the instructions and/or in promotional materials.” In this regard, Article 2(12) of the MDR now also lists sales materials and statements to emphasize that any such information in whatever form given will be relevant. It also includes the specifications made by the manufacturer in the clinical evaluation (regarding the increased importance of the clinical evaluation, as we will describe in Part 4 of this series, available from March 5, 2021), which will require manufacturers to put even greater care on the framing of the intended purpose.In line with the new product life cycle-focused approach of the MDR, it further intends to prohibit any attempts by the manufacturers to expand the intended purpose after the conformity assessment has been carried out. Article 7(d) of the MDR stipulates this expressly and prohibits the use of text, names, trademarks, pictures, or signs in the labelling; instructions for use; or making available, putting into service, and advertising of devices that are not in compliance with the intended purpose for which the conformity assessment was carried out.<h4>3. The Intended Purpose Is Not the Only Factor Qualifying a Product as Medical Device</h4>The MDR introduces in its Annex XVI groups of products (e.g., contact lenses) that irrespective of their intended purpose qualify as medical devices. While these product groups currently are not relevant with regard to standalone software, this may change as Annex XVI will likely be expanded over time.<h4>Concluding Remarks</h4>Even though the changes introduced to the regulation of software by the MDR may seem subtle at first glance, developers and stakeholders in the fields of digital health, fitness, and wellbeing should be aware that more products might be regulated in the foreseeable future. The MDR will make inevitable a careful assessment of the intended purpose of apps and other software products, which must cover every part of their documentation and advertisement. Framing the purpose of MDSW correctly will not only determine the applicability of the MDR but also potentially limit the scope of use for which an app can be marketed. Only a proactive and consistent approach in this regard will prevent any interference by the competent authorities and secure a smooth transition into the future market under the MDR. [1] Software also falls under the MDR’s framework if the software is intended for controlling or influencing the performance of medical devices or is an “accessory for a medical device” within the meaning of Article 2(2) of the MDR. In this series, however, we focus on standalone software.

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in the digital, high-tech, life sciences, and pharmaceutical industries.

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Counsel

Stephan is counsel at Morrison Foerster’s German office in Berlin. He focuses on advising major German and international clients with regard to drafting and negotiating complex technology-related agreements and on matters concerning cloud computing, software, e/m-commerce, digital media, intellectual property rights, consumer rights, electronic communication, big data and cyber security requirements.

Stephan Kreß

Stephan is counsel at Morrison Foerster’s German office in Berlin. As a member of the technology transactions group, he focuses on advising major German and international clients with regard to drafting and negotiating complex technology-related agreements and on matters concerning cloud computing, software, e/m-commerce, digital media, intellectual property rights, consumer rights, electronic communication, big data and cyber security requirements.

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Robert advises companies from the technology and life sciences sectors on a wide range of commercial, intellectual property (IP) and regulatory matters. His clients range from multinational corporations to startups and scaleups.

Robert Grohmann

Robert Grohmann is counsel at Morrison Foerster’s German office in Berlin. As a member of the technology transactions group, he focuses on advising domestic and foreign companies and startups in all areas of technology and IP law, including patent and software licensing, employee inventions law, as well as know-how protection. Moreover, Mr. Grohmann’s expertise encompasses the judicial and extra-judicial representation in matters of trademark law, design law, and competition law.

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Software as a Medical Device in Europe – New Regulatory Regime About to Enter into Force – (Part 2 of 6)

Fourth Circuit’s Decision Revitalizes First Amendment Challenge to the TCPA

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In Part 2 of our series of consecutive articles on the reformed regulatory framework under the EU Medical Device Regulation 2017/745 (“MDR”), which will soon go

Software as a Medical Device in Europe – New Regulatory Regime About to Enter into Force – (Part 2 of 6)

The COVID-19 pandemic has significantly accelerated the adoption of digital health and virtual care in Europe, as well as globally. Fueled by technological advancement, including in the space of data analytics and AI, <a href="https://www.fiercehealthcare.com/tech/7-predictions-for-how-technology-will-shape-healthcare-2021?_lrsc=24600661-c20a-46c7-b0d4-aa4705e23af1&cid=other-soc-lke" target="_blank">this trend is likely to continue</a>.As with every health-related product or service, manufacturers of software addressing certain health issues must navigate a complex regulatory landscape. In Europe, prior to being placed on the market, software applications must obtain a CE marking when intended to be used for one or more of the following medical purposes:<ul><li>Diagnosis, prevention, monitoring, treatment, or alleviation of disease;</li><li>Diagnosis, monitoring, treatment, alleviation of, or compensation for, an injury or disability;</li><li>Investigation, replacement, or modification of the anatomy or of a physiological process; </li><li>Providing information by means of in vitro examination of specimens derived from the human body, including blood and tissue donations; or</li><li>Control or support of conception.</li></ul>Software also falls under the medical devices regulatory framework and requires CE marking if the software is (i) intended for controlling or influencing the performance of medical devices (e.g., software controlling the dosage of automatically given medication) or (ii) is an “accessory for a medical device” (e.g., software on a smartphone linked wirelessly for data collection to a monitoring medical device).The relevant framework is currently laid out in the EU Medical Device Directive (93/42/EEC, as amended by Directive 2007/47/EC – “MDD”), as transposed in various national laws of the EU Member States, in Germany, for example, the German Medical Device Act (Medizinproduktegesetz).On May 26, 2021, the MDD is intended to be replaced by the <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R0745" target="_blank">EU Medical Device Regulation 2017/745</a> (“MDR”). The MDR will provide for a revised and, in certain areas, significantly stricter regulatory framework not only for medical devices in general but also for medical devices software (“MDSW”) in particular. Other than the MDD, the MDR will apply directly in all EU Member States without requiring transposition into national law.The MDR was initially intended to come into effect on May 26, 2020. This date was moved to May 26, 2021, to avoid the chance that medical device companies will be burdened with additional requirements amidst the COVID-19 pandemic.Albeit rumor has it that the EU lawmaker is contemplating a further postponement. Given the time and resources that will be required to comply with the new requirements that lie ahead, it is high time for companies planning to offer new MDSW products or services in the EU to start getting up to speed with the new framework now if they have not already done so.In this series of consecutive articles, we will give a detailed overview on certain key changes that the new MDR regime will bring about for companies that market stand-alone MDSW in Europe.[1] In our upcoming five articles, we will discuss the following issues in greater detail:<ol><li><a href="https://lifesciences.mofo.com/topics/Software-as-Medical-Device-in-Eu--New-Reg-Enter-into-Force--Part-2-of-6.html" target="_blank">A more detailed approach to the “intended purpose.” </a>The new definition of “intended purpose” covers more devices. This includes MDSW for the purpose of “prediction and prognosis” of diseases and health conditions. Furthermore, companies should be aware of the way the intended purpose is determined, as this requires a consistent approach to labelling, use instructions, and promotional material. (Available 2/19)</li><li><a href="https://lifesciences.mofo.com/topics/Software-as-Medical-Device-in-Europe-New-Reg-Regime-to-Enter-into-Force-Part-3.html" target="_blank">Risk class re-categorization</a>. The new risk categorization regime of the MDR introduces a specific rule dedicated to stand-alone MDSW, according to which many stand-alone MDSWs are expected to be categorized as Class IIa and higher. As a result of that, mere self‑certification will no longer suffice, and there may be a need to update technical documentation. There will, however, still be room for categorization in Class I. (Available 2/25)</li><li><a href="https://lifesciences.mofo.com/topics/Software-as-a-Medical-Device-in-Europe--New-Regulatory-Regime-About-to-Enter-into-Force-Part-4-of-6.html" target="_blank">Additional quality assurance and documentation requirements for MDSW</a>. In contrast to the MDD, the MDR places more emphasis on the entire life cycle of a MDSW. This approach entails new requirements and an increased level of detail to Quality Managements Systems, Clinical Evaluations, and Technical Data, as well as the reinforcement of the post‑market obligations. (Available 3/11)</li><li><a target="_blank" href="https://lifesciences.mofo.com/topics/Software-as-medical-device-in-Europe--New-Regulatory-Regime-About-To-Enter-Into-Force--Part-5-of-6.html">Introduction of a Unique Device Identification requirement for MDSW</a>. The MDR introduces a more detailed tracking mechanism. The unique device identification (“UDI”) must be used by any MDSW company. It allows the company and authorities to trace individual devices through their supply chain. The intention here is to make recalls fast and efficient if devices have been deemed a safety risk. Moreover, the MDR aims for a more efficient access to information about approved MDSW through the European Databank on Medical Devices (“EUDAMED”). (Available 3/24)</li><li><a target="_blank" href="https://lifesciences.mofo.com/topics/Software-as-medical-device-in-Europe-new-regulatory-regime-to-enter-into-force-part-6.html">How about Class I MDSW already on the market?</a> MDSW currently classified as a Class I medical device under the MDD, which would be moved into a higher-risk class under the MDR, will only be required to comply with the new rules as of May 26, 2024, if it continues to comply with the requirements of the MDD and there are no significant changes in design and the intended purpose. Guidance on what constitutes significant changes can be found <a href="http://www.doks.nbog.eu/Doks/NBOG_BPG_2014_3.pdf" target="_blank">here</a>. Yet, these MDSWs, too, will be subject to the requirements of the MDR relating to market surveillance and post-market surveillance, vigilance, registration of economic operators, and of devices from May 26, 2021. (Available 4/13)</li></ol>MDSW companies placing or intending to place MDSW on the EU market should be aware of the key changes of the MDR and consider whether these affect their operations in order to ensure a smooth transition from the MDD to the MDR. Read more in our weekly series publications. [1] Note that this article does not address the In Vitro Diagnostic Regulation (“IVDR”); the interested reader can find information <a href="https://www.gov.uk/government/publications/in-vitro-diagnostic-medical-devices-guidance-on-legislation" target="_blank">here</a>.

Software as a Medical Device in Europe – New Regulatory Regime About to Enter into Force – (Part 1 of 6)

The COVID-19 pandemic has significantly accelerated the adoption of digital health and virtual care in Europe, as well as globally. Fueled by technological adva

Software as a Medical Device in Europe  – New Regulatory Regime About to Enter into Force – (Part 1 of 6)

On January 28, 2021, the United States’ Department of Justice (DOJ) announced an $18.25 million <a target="_blank" href="https://www.justice.gov/opa/press-release/file/1361441/download">settlement</a> with athenahealth Inc. (“Athena”) to resolve allegations that Athena violated the False Claims Act by paying impermissible kickbacks related to its electronic health records (EHR) product. At the center of the DOJ’s complaint was Athena’s use of three different marketing programs, which the DOJ alleges violated the False Claims Act and the Anti-Kickback Statute.<h4>Marketing Programs</h4>In its complaint, the DOJ highlighted three of Athena’s marketing programs, all of which allegedly incentivized the use of Athena’s EHR product in return for cash payments or other luxury amenities. In its “Concierge Events” program, Athena provided key decision-makers at current clients and potential new clients with tickets, travel, and luxury accommodations to events such as the Kentucky Derby and the Masters golf tournament. In a second marketing program, Athena implemented a “Lead Generation” program to find new customers, which provided existing customers with direct payments that varied based on the volume and value of business generated for Athena’s services. In a third marketing program, Athena entered into “Conversion Deals” with competitors that were going out of business. Athena paid these competitors based on the volume and value of the health care practices that the competitor was able to refer and convert from the competitor to Athena’s product.<h4>Compliance Program</h4>DOJ contended that Athena implemented these programs despite having policies and procedures in place that barred the payment of kickbacks and business payments, including a specific policy prohibiting gifts that were “likely or intended to influence a specific decision or deal.” The DOJ’s complaint also alleges that Athena’s internal documents acknowledged the issues with the Concierge Events program. In particular, internal documents referenced recruitment challenges because invitees’ compliance issues would prevent the invitees from accepting an invitation. Further, the DOJ alleges that due to its previous settlement with another EHR vendor due to that vendor’s impermissible referral program, Athena had actual knowledge that its referral program was also impermissible, given the substantial similarities.The DOJ’s action here shows that it is not enough for companies to have policies and procedures in place, but rather a company’s actions must match what is set forth in its compliance program. Similarly, companies need to be aware of DOJ enforcement actions and adjust their practices in the event the DOJ finds that a similar program violates the Anti-Kickback Statute.<h4>Alleged Anti-Kickback Statute and False Claims Act Violations</h4>The DOJ alleges that the marketing programs described above constituted illegal remuneration under the Anti-Kickback Statute. In turn, these illegal payments caused Athena’s health care provider customers to submit millions of dollars of false claims for payment to Medicare and Medicaid under the Health Information Technology for Economic and Clinical Health Act’s (HITECH) electronic health record incentive program, later replaced by the Merit-based Incentive Payment System (MIPS).<h4>Other EHR DOJ Settlements</h4>This settlement comes on the heels of last year’s $145 million resolution with Practice Fusion, Inc., to resolve criminal and civil investigations related to its EHR software. In that arrangement, Practice Fusion received impermissible kickbacks from pharmaceutical companies in exchange for implementing clinical decision support alerts in its software that prompted health care providers to prescribe the pharmaceutical companies’ drug products. Together, these DOJ actions show that the DOJ will continue to crack down on the provision of incentives that influence health care providers’ decision-making.

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EHR Vendor Settles Kickback Allegations to the Tune of $18.25 Million

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On January 28, 2021, the United States’ Department of Justice (DOJ) announced an $18.25 million settlement with athenahealth Inc. (“Athena”) to resolve allegati

EHR Vendor Settles Kickback Allegations to the Tune of $18.25 Million

Since the decision of the European Court of Justice (“ECJ”) in the Schrems II case, transfers of personal data from the EU to the United States have been under scrutiny. The ECJ reviewed the situation where personal data are sent from an EU affiliate to its U.S. headquarters as part of how the company structured its business-as-usual practices. But what the ECJ did not consider is whether the mere fact that an EU company is affiliated with a U.S.-headquartered company is problematic, even if no transfer of personal data to the United States takes place.Whether merely being affiliated with a U.S.-headquartered company is a problem from a data transfer perspective is precisely what a number of associations (“claimants”) and the French data protection authority (“CNIL”) argued in a recent appeal before the French Council of State. This question arose in the context of a case involving Microsoft Ireland in respect of its hosting of French public health data. The claimants and the CNIL argued that any affiliation of an EU hosting provider, in this case Microsoft Ireland, with a U.S. parent company, in this case Microsoft U.S., is in and of itself problematic. The claimants and the CNIL contended that because of such affiliation, U.S. authorities could have jurisdiction over data held by Microsoft Ireland in the EU. As a result, the claimants called for the immediate suspension of the use of Microsoft Ireland, even though Microsoft Ireland had already committed to storing the data in a pseudonymized form in the EU. The French Council of State, however, denied the immediate suspension of the use of Microsoft. While this seems like a good outcome for transatlantic commerce, the Council’s decision suggests that in the future, organizations will be required to use a French-based cloud solution.Read our <a target="_blank" href="https://www.mofo.com/resources/insights/201113-health-date-made-in-france.html?utm_source=publication&utm_medium=email">client alert.</a>

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Managing Partner, Amsterdam and Brussels

Alex van der Wolk, co-chair of Morrison Foerster’s preeminent Global Privacy & Data Security practice and managing partner of the firm’s Amsterdam and Brussels offices, employs his nearly 20 years of experience to advise global companies on their most complex data strategies and compliance programs governing all aspects of information management. 

With more than a decade of experience, Mr. van der Wolk helps clients develop privacy strategies for digital transformations, industrial IoT, telematics, Big Data, commercial and marketing programs, a