First, Do No Harm. Then, Get A Patent

It wasn't exactly what Samuel L. Pallin was seeking in the spring of 1990, when he put the finishing touches on a research article and submitted it to the Journal of Cataract & Refractive Surgery. Pallin, an ophthalmologist in Sun City, Ariz., claimed to have developed a new technique for performing stitchless cataract surgery and was hoping to earn the imprimatur of a prestigious trade publication. What he got instead was a tersely worded rejection letter that, among other things, dubbed his research of "very little importance."

The U.S. Patent & Trademark Office thought differently, however. The agency issued Pallin U.S. Patent No. 5,080,111 for his surgical innovation in January, 1992. Now, instead of seeking accolades from colleagues, Pallin wants their money. He's hoping to collect hefty royalties from 2,000 eye surgeons who perform his cataract technique on patients an estimated 500,000 times a year. His first offensive: a patent infringement case filed against Vermont ophthalmologist Jack A. Singer. "I'm going to enforce my patent," vows Pallin, 54. "I'm not going to accept a handshake."

Pallin's legal quest highlights the growing conflict between the tough new economics of managed care and the tradition of freely sharing expertise and ideas for the benefit of patients. Squeezed by the rising costs of providing health care and by a decline in their personal income, a growing number of enterprising physicians are turning to surgical-technique patents for new sources of revenue. The U.S. Patent & Trademark Office says it's now granting some 15 surgical-method patents to doctors a week--up from just a trickle of such actions three years ago. These exclusive rights cover even the most commonly used medical practices such as blood-collecting techniques or administering insulin. "It's a way for physicians who have spent time and money doing research to get their money back," says Stephen G. Kunin, the office's deputy assistant commissioner.

UNETHICAL? The trend has splintered the ranks of the medical establishment. The American Medical Assn. issued an uncharacteristically blistering statement last month declaring the patenting of surgical methods unethical. Further, the group decried attempts by physicians such as Pallin to enforce their intellectual-property rights as opportunistic. The AMA and other critics worry that forcing doctors to pay royalties on surgical procedures will drive skyrocketing medical costs even higher and limit some consumers' health-care options. "If physicians start franchising healing like Burger Kings, we're all in trouble," warns David Berkowitz, director of technology assessment at Premier Health Alliance Inc., a cooperative of 225 hospitals.

In Pallin's lawsuit, believed to be the first of its kind, the Arizona ophthalmologist is seeking just $5 per operation. That doesn't seem like much, considering that his technique, which he has written about in medical journals and has taught to other ocular surgeons, significantly reduces the risk of patients' developing astigmatism following cataract surgery. But given the frequency of the procedure, Pallin stands to make $2.5 million every year. That's if he succeeds in proving that Singer and others infringed on his patent. Defendants will argue that Pallin's surgical discovery doesn't merit a patent since it is widely known and used.

The same kind of windfall could come to John D. Stephens, a San Jose (Calif.) physician who recently put dozens of radiologists on notice that he plans to sue them over infringement of his 1991 patent on an innovative ultrasound procedure used in determining the gender of a fetus. And Men's Health Resources, a group of urologists in Kansas City, Mo., has threatened 500 colleagues with litigation if they don't pony up a $350 licensing fee per year to use its patented treatment for impotence. "The economics of medicine today are driving doctors into the patent stream," says Vermont patent attorney John Welch, who represents physicians who hold surgical patents.

The doctors dismiss claims that enforcement of their patents is immoral. Rather, they say they are simply asking for the same financial recognition for important contributions to medicine enjoyed by many university researchers and corporations. As a comparison, they point to the relationships between doctors and manufacturers. Medical device maker Baxter International Inc., for instance, licensed the rights to a treatment for kidney failure held by a group of physicians at the University of Texas back in the 1970s. The company then developed a small portable dialysis system to be used in tandem with the patented procedure, which today is among its hottest-selling products. "Without [the doctors'] exclusive rights to the process, we wouldn't have had any incentive to invest in and to manufacture the device that goes with their process," says Paul C. Flattery, Baxter's chief patent counsel.

But critics point out a big difference between the Baxter scenario and Pallin-type cases. Whereas universities and companies invest heavily in their researchers' discoveries and to bring new products to market, surgeons such as Pallin derive patents from clinical experience. Moreover, opponents fear that enabling doctors to patent their inventions, which can be a lengthy process, will unnecessarily delay treatments for patients who need them most. "This isn't about toothpaste," gripes Chicago patent attorney Ronald L. Wanke, who represents several radiologists who have been contacted by Dr. Stephens. "This is about the best way to cure a health problem and how much that cure will cost."

PATENT LAW PENDING. The brouhaha has spilled over into Washington politics, as well. A bill, pushed by the AMA and co-sponsored by Representatives Greg Ganske (R-Iowa), himself a surgeon, and Ron Wyden (D-Ore.), would strictly prohibit the patenting of medical procedures. The ban already exists in several foreign countries including Germany, Japan, Britain, and France.

It's too early to tell whether infringement litigation will become widespread enough to prevent doctors from using certain surgical methods or inspire insurers to jack up premiums. But no matter what the consequences, Samuel Pallin seems unlikely to change his renegade course. "Physicians have always turned to the medical establishment to get recognition," Pallin says. "I'm taking away their authority by going through the U.S. government, and they don't like it." Whether Pallin and like-minded colleagues can bank on patents to cushion the blow of health-care reform may depend on how many of them leave the operating room for the courtroom.



Doctors favoring patents say they:

-- Provide incentives to doctors to fund research efforts

-- Enable physicians to benefit financially from medical discoveries

-- Broaden channels for professional recognition


Medical groups opposed to patents say they:

-- Inhibit access to new medical innovations and reduce quality of care

-- Drive up health-care costs by imposing licensing fees on physicians

-- Invite abuse by physicians making spurious claims for protection


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