How Many Patents Does It Take to Make a Drug - Follow-On Pharmaceutical Patents and University Licensing

As described by Professors Dan Burk and Mark Lemley, drugs are[...] special because of the low number of patents per product: In some industries, such as chemistry and pharmaceuticals, a single patent normally covers a single product. Much conventional wisdom in the patent system is built on the unstated assumption of such a one-to-one correspondence. Although many have repeated this one-patent, one-drug assumption, there has been little empirical analysis of how many patents actually protect each drug. In fact, most small-molecule drugs are protected by multiple patents. The average was nearly 3.5 patents per drug in 2005, with over five patents per drug for the best-selling pharmaceuticals; these numbers have increased over time. This Note contains a detailed empirical examination of how many patents cover FDA-approved small-molecule drugs, what factors influence the number of patents, and the implications of having multiple patents on a drug. In particular, follow-on patents have important implications for the growing number of universities and other public-sector research institutions that want to make their patented medical technologies accessible in developing countries. For example, if a university chooses not to patent a new drug molecule in India but subsequently licenses its U.S. patent on that molecule to a pharmaceutical company that files a follow-on method-of-treatment patent in India, then Indian generic manufacturers will be unable to produce the drug. These results are important for the ongoing debate about public-sector patenting. The widespread prevalence of follow-on patents also has implications beyond the university context, since these patents generally extend the patent life of a drug. This Note proceeds in four Parts. Part I examines the role of patents in drug development and the regulatory environment under the Hatch-Waxman Act. Part II discusses ways in which follow-on patents can impede socially responsible licensing efforts by universities and other public-sector institutions. Part III presents an empirical analysis of drug patent data, which shows that the number of patents per drug has increased over time, and examines factors that have influenced this trend. The data also reveal that drugs with public-sector patents are more likely to have follow-on patents than drugs without public-sector patents. However, because many of these follow-on patents are additional public-sector patents, the drugs with public-sector patents are actually less likely to have private-sector follow-on patents. Finally, Part IV describes a table of detailed patent information for eighteen recently approved drugs with both public- and private-sector patents and discusses the implications of these results for university patenting and licensing. Over half of public-sector drugs still have private-sector patents, so public-sector institutions that want their drugs to be generically produced for patients in developing countries will need to request licensing terms that prevent private-sector patents from blocking patient access

How Courts Adjudicate Patent Definiteness and Disclosure

Section 112 of the Patent Act requires patentees to clearly explain what their invention is (a requirement known as claim definiteness), as well as how to make and use it (the disclosure requirements of enablement and written description). Many concerns about the modern patent system stem from these requirements. But despite the critical importance of § 112 to the functioning of the patent system, there is surprisingly little empirical data about how it has been applied in practice. To remedy the reliance on anecdotes, we have created a hand-coded dataset of 1144 reported court decisions from 1982 to 2012 in which U.S. district courts or the Court of Appeals for the Federal Circuit rendered a decision on the enablement, written-description, or claim-definiteness requirements of § 112. We coded validity outcomes under these three doctrines on a novel five-level scale so as to capture significant subtlety in the strength of each decision, and we also classified patents by technology and industry categories. We also coded for a number of litigation characteristics that could arguably influence outcomes. Although one must be cautious about generalizing from reported decisions due to selection effects, our results show some statistically significant disparities in § 112 outcomes for different technologies and industries—although fewer than the conventional wisdom suggests, and not always in the direction that many have believed. Just as importantly, our analysis reveals significant relationships between other variables and § 112 litigation outcomes, including whether a district court or the Federal Circuit made the last decision in a case, whether a patent claim was drafted in means-plus-function format, and whether a case was decided before or after Markman v. Westview Instruments. Our results showing how § 112 has been applied in practice will be helpful in evaluating current proposals for reform, and our rich dataset will enable more systematic studies of these critical doctrines in the future

University Patenting: Is Private Law Serving Public Values?

Article published in the Michigan State Law Review

Pierson, Peer Review, and Patent Law

When has a researcher done enough to merit a patent? Should the patent belong to the researcher who first suggests an invention or the one who brings it to fruition? The canonical dispute over a fox in Pierson v. Post is used to illustrate the competing policy considerations in deciding when to award a new property right, including providing efficient incentives, setting forth clear rules to guide future behavior, and respecting natural rights. In patent law, all of these considerations suggest that in practice, many patents are awarded too early, before an applicant has demonstrated that the invention is likely to work. The main problem seems to be not with the substantive standards but with the\u27 Patent Office\u27s institutional competence to enforce these standards. A patent is supposed to teach a researcher of ordinary skill in the field how to make the invention without undue experimentation. Yet it often takes extraordinary skill to recognize when this standard is not met based merely on reading a patent application-expertise that the typical patent examiner lacks. To address this information asymmetry, it is worth experimenting with bringing those of extraordinary skill into the patent examination process through a robust peer review system. So far, opportunities for outside input such as the Peer To Patent. pilot project have focused on providing examiners with additional prior art, but peer review would be far more valuable for evaluating patent disclosures to assess whether applicants have in fact done enough work to merit a patent or whether it remains too early in the chase

Real-World Prior Art

The most fundamental requirement of patent law is that a patented invention must be new. Given the longstanding, foundational nature of this novelty requirement, one might expect its contours to be well settled. And yet some of its most basic aspects remain unresolved. At the center of these unresolved issues lie what we term “real-world prior art.” In patent law, prior art is something that predates an invention and may render it not new. “Real-world” prior art activities involve using or selling real-world embodiments of the invention. Consider a few examples. Suppose Aleida demonstrates her invention to members of the public but does not allow them to touch it. Has she put the invention into “public use,” thus preventing others from obtaining a patent? Does it matter whether someone viewing her demonstration could learn how to make and use the invention? Suppose Aleida keeps her invention secret but uses it to provide a commercial service. Has she put the invention into public use, or placed it “on sale”? Or suppose Aleida offers her invention for sale to Charlise, who declines to purchase it. It is black-letter patent law that after one year passes, Aleida cannot patent this invention. But imagine that Bruno independently develops the same invention—can he obtain a patent? These questions are not outlandish law school hypotheticals—they are central issues surrounding whether an invention is or is not novel. Yet litigation over these issues has resulted in conflicting outcomes and contradictory explanations, leaving lower courts and the Patent Office to flounder in applying these doctrines. In this article, we sort through this conceptual confusion. We suggest both doctrinal and institutional changes that would elucidate an area of law that is likely to grow in importance. And we argue that the value of resolving these questions runs much deeper than determining the answer to particular cases. The answers to these questions depend upon—and reveal—the conceptual superstructure of patent law. They implicate patent law’s most central questions: What does it mean for an invention to be new and thus patentable? What policy interests is patent law attempting to achieve, and whose interests does it aim to protect? And what are the conditions under which a party has forfeited the opportunity to obtain a patent? By addressing these issues, we endeavor to place the entire jurisprudence of patent novelty on more solid footing

CBA at the PTO

What are the costs and benefits of patent laws? While Congress and the courts are often able to evade this difficult question, there is one institutional actor that is not only well-advised but also required to consider costs and benefits: the Patent and Trademark Office, which—as an administrative agency—is required by executive order to conduct cost-benefit analysis of all economically significant regulations. Yet the agency’s efforts have been less than satisfactory. In its cost-benefit analysis, the PTO overlooks crucial functional considerations, misunderstands basic precepts of patent economics, and resists quantification when quantification is required. In combination, these shortcomings suggest that the PTO has not correctly measured the social costs and benefits of the rules it creates, in part because it has adopted an overly limited view of the welfare effects of intellectual property and the agency’s own role in promoting or discouraging IP. In other instances, the PTO has promulgated rules that will likely have tremendous economic significance without recognizing their importance or conducting a cost-benefit analysis. These errors cast doubt on whether the PTO’s regulations will increase or diminish social welfare. Before the PTO is granted any additional substantive authority, reform will be necessary

Real-World Prior Art

The most fundamental requirement of patent law is that a patented invention must be new. Given the longstanding, foundational nature of this novelty requirement, one might expect its contours to be well settled. And yet some of its most basic aspects remain unresolved. At the center of these unresolved issues lie what we term “real-world prior art.” In patent law, prior art is something that predates an invention and may render it not new. “Real-world” prior art activities involve using or selling real-world embodiments of the invention. Consider a few examples. Suppose Aleida demonstrates her invention to members of the public but does not allow them to touch it. Has she put the invention into “public use,” thus preventing others from obtaining a patent? Does it matter whether someone viewing her demonstration could learn how to make and use the invention? Suppose Aleida keeps her invention secret but uses it to provide a commercial service. Has she put the invention into public use, or placed it “on sale”? Or suppose Aleida offers her invention for sale to Charlise, who declines to purchase it. It is black-letter patent law that after one year passes, Aleida cannot patent this invention. But imagine that Bruno independently develops the same invention—can he obtain a patent? These questions are not outlandish law school hypotheticals—they are central issues surrounding whether an invention is or is not novel. Yet litigation over these issues has resulted in conflicting outcomes and contradictory explanations, leaving lower courts and the Patent Office to flounder in applying these doctrines. In this article, we sort through this conceptual confusion. We suggest both doctrinal and institutional changes that would elucidate an area of law that is likely to grow in importance. And we argue that the value of resolving these questions runs much deeper than determining the answer to particular cases. The answers to these questions depend upon—and reveal—the conceptual superstructure of patent law. They implicate patent law’s most central questions: What does it mean for an invention to be new and thus patentable? What policy interests is patent law attempting to achieve, and whose interests does it aim to protect? And what are the conditions under which a party has forfeited the opportunity to obtain a patent? By addressing these issues, we endeavor to place the entire jurisprudence of patent novelty on more solid footing