Chapter 19 Intellectual property in drug discovery and development
As is clear from the rest of this book, it costs a great deal of effort and money to discover and develop a new drug. No one would make such an investment if the results could simply be copied by an imitator who had invested nothing. The best way to protect the investment is by obtaining a patent for the drug. In this chapter we will look at what patents are, what kinds of inventions can be patented, and how a patent may be obtained and enforced.
Patents are not the only form of intellectual property (IP), but they are by far the most important for the pharmaceutical industry. Many patents that are filed and granted prove to be worth nothing, but a patent protecting a blockbuster drug against generic competition may be worth millions of dollars for each day that it is in force. An unexpected loss of patent protection may have a much larger effect upon the market value of the company holding the patent. In August 2000, when a US patent covering Prozac was held invalid by the Court of Appeal for the Federal Circuit, thereby reducing by about 3 years the expected term of exclusivity for this drug, 29% of the value of Eli Lilly stock was lost in 1 day – over $35 billion. This is serious money by any standards.
A patent is the grant by a nation state of the exclusive right to commercialize an invention in that state for a limited time. During that time (the ‘term’ of the patent, usually 20 years from the filing date) the patent owner can go to the courts and enforce his or her rights by suing an infringer. An owner who wins the infringement suit can get damages or other compensation, and more importantly can obtain a court order (an injunction) to stop any further infringement. Note that although the state grants the patent right, the state does not check whether the right is being infringed – the patent owner must do that.
It is important to realize that the rights given by a patent do not include the right to practise the invention, but only to exclude others from doing so. Many inventors and business managers think that having a patent gives them freedom to operate, but this is not so. The patentee’s freedom to use the invention may be limited by laws or regulations having nothing to do with patents, or by the existence of other patents. For example, owning a US patent for a new drug does not give the right to market that drug in the USA without permission from the FDA (see Chapter 20).
What is less obvious is that having a patent does not give the right to infringe an earlier existing patent. To take a simple example, if A has a patent for a process using an acid catalyst, and B later finds that nitric acid (not disclosed in A’s patent) gives surprisingly good results, B may be able to get a patent for the process using nitric acid as catalyst. However, because this falls under the broad description of acid catalysis covered in A’s patent, B is not free to use his invention without the permission of A. On the other hand, A cannot use nitric acid without a licence from B, and in this situation, cross-licensing may allow both parties to use the improved invention.
Patents are important to industry because they give the innovator a period during which imitations can be excluded and the investment in R&D can be recovered. They are of particular importance to the pharmaceutical industry because once the chemical structure of a drug is published it is usually rather easy to copy the product, and because the manufacturing cost of a pharmaceutical is only a small part of the selling price, an imitator who has no R&D costs to recover can sell the product cheaply and still make a profit.
A patent (which strictly speaking is just a one-page certificate of grant) is in most countries published with a printed patent specification, which typically will be 10–100 pages long, or even more. The patent specification consists of three parts, the bibliographic details and abstract, the description, and the claims. Each part has a different purpose.
The title page usually sets out the bibliographic details, giving information such as the names of the inventors, the owner or assignee of the patent, the title, the dates of priority, filing, publication and grant, and the name of the attorney, if any, who acted for the patentee. It may also give the international search classification, and a list of prior published documents considered by the Patent Office when examining the application. Generally it will also have an abstract summarizing the invention; this is meant as a tool for searching purposes and is not used in determining the scope of protection given by the patent.
The longest part of the specification is the description, the purpose of which is to give enough information about the invention to enable a reader who is technically qualified in the relevant field to reproduce it. This ensures that when the patent is no longer in force the invention will be fully in the public domain and able to be used by anyone having the necessary skills. The description will usually start with a brief account of the background to the invention, followed by a summary of the invention, then present full details, with actual examples where appropriate. There may also be figures (drawings, structural formulae, graphs, photographs, etc.) and if DNA or amino acid sequences are disclosed there will be sequence identifiers in standard form.
At the end of the specification come one or more claims, which have the legal purpose of setting out exactly what is covered by the scope of the exclusionary right. Readers who see that what they wish to do clearly falls within the claims of someone else’s patent are put upon notice that if they go ahead they may be sued for infringement, and will have to stop their activities unless they can prove that the patent is invalid. Unfortunately the reverse situation is not so clear. In many countries, particularly the USA, even an activity that does not fall within the literal wording of a patent claim may nevertheless be held to infringe by ‘equivalence’. The consequence is that before doing anything in the USA that is even close to the claims of a granted US patent, you must make sure that you get a written opinion from a US patent attorney that you are not infringing any valid claims. If you do not, and infringement is found, you may find yourself having to pay triple damages for ‘willful infringement’.
There are basically only two categories of subject matter that can be patented – products and processes. Products are broadly anything having physical reality, including machines, manufactured articles, chemical compounds, compositions comprising a mixture of substances, and even living organisms. A process may be a process for manufacturing an article or synthesizing a compound, or may be a method of using or testing a product. However, a patent for a process for making something, for example a chemical compound, also covers the direct product of that process. A patent claiming simply ‘the compound of formula X’ covers X however it is made, but a process claim to ‘a method of production of X by reacting Y and Z’ covers X only when made by that process, and not in any other way. A claim to the compound itself covers the compound not only however it is made but also however it is used. Thus a claim to a compound invented as a dyestuff will also cover the compound when used as a pharmaceutical.
There are also some types of subject matter for which the grant of patents is specifically excluded, and these exclusions vary from country to country. For example, some countries do not grant patents on any plants or animals, whereas in Europe only specific plant and animal varieties are excluded, and in the USA there is no such restriction. Similarly, the USA allows patents for methods of surgical or medical treatment or diagnosis, whereas most other countries do not. Nevertheless, the invention that a known drug may be used for a new indication may usually be protected in these countries by patents having a different form of claim. Generally, patents will not be granted in any country for aesthetic creations, mathematical and scientific theories, and discoveries without any practical application.
Within the pharmaceutical field, patentable inventions may include not only new chemical compounds of known structure, but also, for example, biopolymers and mixtures the structure of which has not been fully elucidated. Isolated DNA sequences and genes are also patentable as chemical compounds, although in some countries the scope of protection given by the patent is limited to the disclosed use. Even if a chemical compound is already known, it may be possible to patent variants, such as new optical isomers and crystal forms of the compound, as well as new galenic formulations, mixtures with other active ingredients, manufacturing and purification processes, assay processes, etc.
If a known compound, not previously known to have any pharmaceutical use, is found to be useful as a drug, this invention may be protected by claiming a pharmaceutical composition containing the compound, or, in Europe, the use of the compound as a pharmaceutical. Such claims will cover all pharmaceutical uses of the compound, not only the one found by the inventor. If the invention is that a known drug has a new and unexpected indication, such an invention may be protected in the USA by a ‘method of medical treatment’ claim (‘method of treating a human suffering from disease Y by administering an effective amount of a compound X’), or in Europe by a use claim (‘use of compound X for the treatment of disease Y’).
For an invention in any of the above categories to be patentable, it must meet three basic criteria:
The first and clearest requirement is that nothing can be patentable which is not new. If a patent were to be granted for something already known, then the grant of a patent in respect of this information would violate the fundamental principle that a patent cannot deprive the public of rights that it already has. There are, however, different definitions of ‘novelty’. The most straightforward is that of ‘absolute novelty’ applied in Europe, Japan, China, and the majority of other countries, which provides that an invention is new if it is not part of the ‘state of the art’, the state of the art being defined as everything that was available to the public by written or oral publication, use or any other way, in any country in the world, before the priority date of the invention. For example, if it could be proved that the invention had been described before that date in a public lecture given in the Mongolian language in Ulan Bator, a European patent application for the invention would lack novelty even if no European had heard or understood the lecture.
A few countries still have the system of ‘local novelty’, under which a disclosure of the invention before the priority date destroys novelty only if it is available within that country. Rather more countries, including the USA, have an intermediate ‘mixed novelty’ system, according to which a later patent application is invalidated by written publication anywhere in the world, but by oral publication or use of the invention only in the home country. Thus a US patent would not be invalidated by the lecture in Ulan Bator, but would be by an account of it published in a newspaper there. Similarly, prior use in a country outside the USA would not invalidate a US patent if there was no written description, whereas a European patent would be invalidated by prior use anywhere in the world, so long as the use made the invention available to the public – for example the sale of a chemical compound that could be analysed.
A more basic difference between the USA and all other countries is that all countries other than the USA have a ‘first-to-file’ system, whereby if two persons make the same invention the first one to file a patent application gets the patent. The present US system is ‘first-to-invent’, so that irrespective of who files the first application, the person who can prove the earlier invention date gets the patent. A consequence of this is that in most countries, prior art is what is published before the first filing date (the priority date). In the USA, however, prior art is what is published before the invention date. Since by definition an inventor cannot publish his or her invention before it is invented, self-publication cannot normally be prior art. However, if an invention has been published, by the inventor or by another person, after the invention date, a US patent application for the invention is regarded as lacking novelty unless it is filed within 12 months of the date of publication. This means that an inventor may publish the invention and still obtain a valid US patent so long as a US application is filed within this 12-month period. In the past, many US inventors, particularly those working in universities, sought to take advantage of this so-called grace period, only to find that by so doing they had destroyed their chances of getting any protection in other countries. Now most US inventors are aware of the dangers, and unless they are interested only in obtaining a US patent, they will adhere to the first-to-file principle and file an application before publishing their results. Following passage of the America Invents Act in September 2011, the US system will change to first-to-file on March 16 2013.
Whereas the concept of novelty is (or should be) an objective matter, the question of whether or not something involves an inventive step is intrinsically much more difficult, as subjective judgement is involved. The basic principle to remember is that the reason for requiring the presence of an inventive step is that ordinary workers in that field should remain free to apply their normal skills to making minor variations of old products.
Thus the person to whom the invention must be non-obvious in order to be patentable is the ‘person skilled in the art’, i.e. a worker who is competent but lacks imagination or inventive capability. In the days when the majority of patents were for simple mechanical devices, the person skilled in the art was usually described as an ‘ordinary workman’. However, for complex inventions in pharmaceutical chemistry and biotechnology, the ‘person skilled in the art’ may be considered to be a team of highly qualified scientists.
It is a legal fiction to suppose that such a team could be competent but non-inventive, considering that its members would, if employed in industry, be expected by their company to make inventions, and if academic scientists, would be expected by their university to produce original scientific work, which amounts to much the same thing. The point is that obviousness should be judged by a person with qualifications and imagination that are average for those in the field. It is tempting for a party attacking a patent on the ground of obviousness to use an expert witness with the highest possible qualifications, but it is not very helpful to have a Nobel laureate testify that something is obvious. It may be obvious to a genius, but the real question is whether it is obvious to the normal worker in the field.
It is often very easy to reconstruct an invention with the benefit of hindsight, as a series of logical steps from the prior art, but it does not necessarily follow that the invention was obvious, especially if there is evidence that the invention was commercially successful, or satisfied a need. The question ‘If the invention was so obvious, why did no one do it before?’ is usually a relevant one to ask.
In Europe it is a requirement that the invention should be capable of industrial application, which is broadly defined and includes making or using the invention in any kind of industry, including agriculture. In the USA, patentable inventions are defined as any new and useful process, machine, manufacture or composition of matter, or any new and useful improvement thereof. The US requirement that the invention be useful has generally been applied no more strictly than the corresponding European requirement, but recently US examination guidelines have been tightened up so as to make more difficult the patenting of DNA sequences for which no real function is known, and the courts both in the USA and the UK have held such patents invalid.
The strategies that should be used to obtain patent protection for a compound in development are described later in this chapter. However, some patent issues need to be considered at an earlier stage. Here we consider issues that concern the selection of a compound as a development candidate.
The two questions that need to be answered before significant sums are invested in development activities are:
• What sort of protection can we get for this compound?
• What patent rights of others could prevent us from marketing this compound?
These are two completely different issues. As explained above, it is perfectly possible to have strong patent protection for one’s own invention, yet still to be blocked by earlier dominating patent rights owned by someone else. The ‘patent situation’ for a compound should attempt to give the answers to both questions.
The answers to the two basic questions depend upon the state of the art – patent jargon for all material relating to the technical field that has been published at the relevant date. The state of the art (sometimes called the prior art) includes not only published scientific papers, but also, for example, what is in textbooks, manufacturers’ brochures, newspaper articles, web pages on the Internet and oral presentations at conferences. It also includes patent documents, which may be either granted patents or published patent applications which have not been examined as of the date of publication.
The requirements that a patentable invention must be novel and must have an inventive step mean that nothing can be patented that is already part of the state of the art, and that anything that is very close to the state of the art may be very difficult to patent.
A granted patent is not only a description, which, like any kind of prior publication, is part of the state of the art. It also contains claims defining the scope of protection. Published patent applications also contain claims, but these are often much broader than the claims (if any) that will finally be granted.
Patent documents in the state of the art are therefore important in answering the second basic question, which concerns freedom to operate. Granted patents may be invalidated by a court, but as a rule they have a presumption of validity which is hard to challenge. Patent applications do not give exclusionary rights, but may act as a warning flag for rights that may be granted in the future.
The first person to evaluate the patent situation of a possible lead compound must be the research scientist responsible for the project. He or she should be aware of the work being published in the area, and should know who are the main players in the field, what journals and other information sources contain relevant information, and what competitor companies are likely to be filing relevant patent applications. To the extent that the chemical structure of the lead compound is a matter of choice, the research chemist should try to steer away from the known state of the art.
Where the research is in a field in which a number of competitors are active, it is clear that the closer you are to the competition, the closer you are to the prior art, and the more difficult it will be to obtain patent protection. Research managers are sometimes struck by what seems like a great idea – ask the patent department to check where there are gaps in the competitors’ patent protection, and then try to work in these gaps. This is actually a very bad idea if the intention is to produce something innovative. Research must drive patenting, not the other way around, and the initial work should be done before the patent situation is checked.
A professional evaluation of the patent situation of a new chemical entity (NCE) needs to be made at about the same time that the filing of a patent application is being considered. The timing of this will depend upon the patent policy of the company or organization owning the invention, but will usually be at the time the compound is ready to enter the development process, i.e. at the time of transition of the compound to ‘drug candidate’ status.
The patent situation must be established on the basis of a search of the scientific and patent literature. Ideally, the search should be carried out by a professional patent searcher and evaluated by a patent attorney or patent agent. However, it is becoming more and more easy for a patent attorney or a scientist to carry out searches online, and while these are unlikely to be as complete as those done by a professional searcher, such a ‘quick and dirty’ search may be all that is required at this early stage. At some stage after a patent application has been filed, searches will be carried out in the major patent offices, and these can be used to supplement the search made at the time of filing.
More complete ‘freedom to operate’ searches must be made at later stages, for example to ensure that the proposed manufacturing process and the chosen pharmaceutical formulation are also free from third-party patent rights.
For patent literature there are now a number of databases available online which allow full-text searching by keywords. One, available on the website of the US Patent and Trademark Office (www.uspto.gov), contains fully searchable texts of all US patents since 1976, as well as image files of all US patents back to 1790. A similar database (Esp@cenet) available through the home page of the European Patent Office (www.epo.org) allows searching of European patent applications and PCT applications. For Japan, the database JAPIO, available through the website of the Japanese Patent Office (www.jpo.go.jp), gives English-language abstracts of all Japanese early-published applications from 1976 onwards. Use of these databases is free.
Other databases, maintained by commercial firms which charge user access fees, add value by high-quality abstracts and additional indexing possibilities, and downloading and printing information from these may be quicker and easier than it is from public domain Internet databases.
Chemical Abstracts (CA), published by the Ohio State University, abstracts both patents and scientific literature in the chemical field. The information retrieval system is based on a CA registry number allocated to every published chemical compound; once this has been identified, abstracts of all patents or literature articles mentioning the compound can be listed, and printed out if required.
Derwent Publications Ltd provides a wide range of abstracting and information retrieval systems for both scientific and patent literature. The latter includes the WPI (World Patent Index) database, covering all patents in the major countries issued since 1974. Searches can be made on the basis of keywords, or of partial structures of chemical compounds. Derwent also has a database covering all publications and patents in the field of biotechnology since 1982.
If the search shows that the compound lacks novelty, that is, it has already been published, then the best course is to pick a different one for development. Even though it may be possible to obtain some form of secondary patent protection, for example the use of the compound as a medicament if it was previously known for a non-pharmaceutical use, most companies will not invest in the development of a compound unless it will be possible to patent the compound itself.
If the NCE appears to be novel but the search shows that very similar compounds are known, so that the compound may lack an inventive step, the best advice is to go ahead anyway. If the compound proves to have superior properties compared to the known product, these can be used to establish the inventive step. If it does not, it will drop out of development whatever the patent situation.
If the NCE, despite being apparently novel and inventive, appears to be covered by a third-party patent, the advice would be to go ahead only if the third-party patent appears to be invalid or will have expired before your product can reach the market, or if you are sure that you will be able to obtain a licence on acceptable terms.
In addition to patent issues relating to the compound itself, research tools may also be covered by patents. By ‘research tool’ is meant anything that contributes to the discovery or development of a drug, without being part of the final product. Examples include genes, cell lines, reagents, markers, assays, screening methods, animal models, etc.
A company whose business it is to sell drugs is not usually interested in patenting research tools, but it is the business of many biotech companies to develop and commercialize such tools, and these companies will naturally wish to obtain patent protection for them. For pharmaceutical companies, such research tool patents and applications raise issues of freedom to operate, particularly if they contain ‘reach-through’ claims purporting to cover drugs found by using the patented tools.
Some scientists may believe that research activities, in contrast to the manufacture and sale of a product, cannot be patent infringement. This is not the case. If I have invented a process that is useful in research and have a valid patent for it, I can enforce that patent against anyone using the process without my permission. I can make money from my patent by granting licences for a flat fee, or a fee based on the extent to which the process is used; or by selling kits for carrying out the process or reagents for use in the process (for example the enzymes used in the polymerase chain reaction (PCR) process). What I am not entitled to do is to charge a royalty on the sale of drugs developed with the help of my process. I can patent an electric drill, but I should not expect to get a royalty on everything it bores a hole in.
Although some patents have been granted containing claims that would be infringed, for example, by the sale of a drug active in a patented assay, such patents have been successfully challenged in the courts, both in the USA and the UK. Similarly, patents claiming all drugs acting by a newly discovered mechanism have been held invalid as claiming ‘not an invention but a research programme’. It is probably an acceptable risk to ignore patents of these types, although some risk of litigation is unavoidable.
Should other types of research tool patents be the subject of a freedom to operate search at an early stage of product development? Probably not. There are simply too many of them, and if no research project could be started without clearance on the basis of such a search, nothing would ever get done. At least for a large company, it is an acceptable business risk to go ahead and assume that if problems arise they can be dealt with at a later stage, normally by taking a licence under any relevant patent.
Given that in most countries the first to file an application gets the patent, it would seem to make sense to file as early as possible as soon as an invention is made. It is not quite as simple as this, however. For one thing, the earlier a patent is filed the earlier it will expire, and particularly in the pharmaceutical field, the last year or two of patent life for a major product can be worth hundreds of millions of dollars. For another, a patent application filed at a very early stage may lack sufficient enabling disclosure to support claims of the desired scope. Too much delay, however, and another party may have filed an earlier application or published a paper that destroys the novelty of the invention.
For pharmaceutical inventions, the decision when to make a first filing will depend on a number of factors, including the intensity of competition in the relevant field. As a general rule, however, it is generally best to wait at least until one or more lead compounds within the scope have shown clear activity in a validated in vitro assay, or in an animal model, i.e. close to the point at which a drug candidate (see Chapter 4) is identified.
Normally a single filing in one country will be made, which, under the Paris Convention for the Protection of Industrial Property, can form the basis for a claim to priority in other countries. Some national laws, such as those of the USA and France, require that, for reasons of national security, an application for any invention made in that country must first be filed in that country (unless special permission is obtained). The UK now limits this requirement to certain categories of inventions, but it may be safer to file all UK-originating inventions in the UK first. Other countries, for example Switzerland, are less paranoid, and allow a first filing to be made in any country.
The Paris Convention, now adhered to by the great majority of countries, provides that a later application filed for the same invention in another Convention country within 12 months of the first filing in a Convention country may claim the priority of the original application. This means that the first filing date (the priority date) is treated for prior art purposes as if it were the filing date of the later application, so that a publication of the invention before the later application but after the priority date does not invalidate claims for the same invention in the later application. If it were not for the Paris Convention, it would be necessary to make simultaneous filings in all the countries of interest at a very early stage, which would be extremely wasteful of time and money. Instead, a single priority filing may be made and a decision taken before the end of the priority year on what to do with the application.
During the priority year, work on the invention will normally continue, and for example further compounds will be made and tested, new formulations compounded, or new process conditions tried. All this material can be used in preparing the patent applications to be filed abroad, and, where possible, a subsequent application in respect of the country of first filing. It is also possible to file new patent applications for further developments made during the priority year, and then at the foreign filing stage to combine these into a single application. The advantage of this is that the new developments will then have an earlier priority date (the date of filing of the new application) than they otherwise would have (the date of filing of the foreign text).
There are four options to be considered:
• Obtain a patent in the country of first filing only
• File corresponding applications in one or more foreign countries.
If there is no commercial interest in the invention at all, or if a search has shown that it lacks novelty, one can simply do nothing. Sooner or later a fee must be paid or some action taken to keep the application in being, and when this is not done the application will lapse. It is best not to withdraw the application explicitly, as such a positive abandonment is usually irrevocable and applicants have been known to change their minds.
If the applicant wants to ensure that he retains freedom to operate and that no one else can patent the invention, he should have it published, either by continuing an application in his home country long enough for it to issue as a published application (see below) or by sending it to a journal such as Research Disclosure, in which any disclosure may be rapidly published for a reasonable fee.
It frequently happens that by the time the foreign filing decision must be taken it is not yet possible to decide whether or not to invest time and money in foreign patenting. Commercial interest may be low but could increase later, more testing may have to be done, or the inventors may not have done any more work on the invention since the first application was filed. In such cases the best solution is to start from the beginning again. The existing application is abandoned, a new application is filed, and the 12-month countdown starts all over again. In this case it is essential to meet the requirements of the Paris Convention that the first application be explicitly abandoned before the second application is filed.
Of course, refiling always entails a loss of priority, usually of 8–10 months, and if someone else has published the invention or filed a patent application for it during this time, the refiled application cannot lead to a valid patent. Consequently, in a field where competitors are known to be active refiling may involve an unacceptable risk, and, naturally, if there has been any known publication of the invention since the priority date, abandonment and refiling is ruled out. Such publication most frequently arises from the inventor himself. Most inventors know that they should not publish inventions before a patent application is filed; it is not so generally realized that publication within the priority year can also be very damaging.
If the applicant is an individual or a small company having no commercial interests or prospects of licensing outside the home country (which will usually be the country in which the first filing is made), the expense of foreign filing would be wasted, and the applicant will wish only to obtain a patent in the home country. Even where the applicant is a larger company that would normally file any commercially interesting case in several countries, individual applications may be of such low interest that protection in the home country is all that is needed. This option is, of course, more attractive if the home country is a large market such as the USA, rather than a small country such as Switzerland.
Finally, if an invention appears likely to be commercially important, the decision may be to file corresponding applications in a number of other countries. For the pharmaceutical industry one can assume that the costs of patent protection would be small compared with the value of protection for any compound that actually reaches the market, but at the time when a foreign filing decision must be taken, it is usually impossible to estimate the chance that the product in question will progress that far. Accordingly, one must rely upon some rule of thumb such that if the product is being developed further, foreign filing should be carried out as a matter of course. High patenting costs are a necessary part of the high research overheads of the pharmaceutical industry.
It is possible to file patent applications (in the local language) in the national patent offices of each selected country individually. This involves a large outlay of money at a relatively early stage, and also means that all necessary translations must be prepared in good time before the end of the priority year. It is also very labour-intensive, as the application must be prosecuted separately before each national patent office. Fortunately, there are ways to simplify the procedure.
One is that there are certain regional patent offices by which patents in a number of countries can be granted based on a single application filed and prosecuted in one patent office. By far the most important of these is the European Patent Office, which as of April 2012 grants patents for a total of 37 countries. These are all the 27 current EU states plus Albania, Croatia, Iceland, Liechtenstein, Macedonia, Monaco, Norway, San Marino, Switzerland and Turkey. The European application can be filed in English, French or German, and translations into other languages are required only at the time of grant. Once the European patent is granted, opposition to the patent may be filed by any other party within 9 months of the date of grant. If the opposition is wholly or partly successful, the patent is invalidated or limited in scope for all of the designated countries.
Although the European Patent Convention provides for a central filing, grant and opposition procedure, once the European patent is granted it is treated as if it were a bundle of national patents in the designated contracting states, so that, for example, the European patent may be invalidated by the courts in one country without directly affecting its validity in other countries. Proposals have repeatedly been made by the European Commission for a single unitary patent to cover all EU countries, just as a single US patent covers all 50 states, but little real progress has been made in this direction.
Other regional patent offices are the Eurasian Patent Office (Russia and certain former Soviet countries), and ones for English-speaking and French-speaking African countries.
The PCT allows rights to be established in a large number of countries (144 as of April 2012) by a single international application. Search and optional preliminary examination are carried out before the application goes to the national or regional patent offices. This system gives the maximum flexibility and allows the costs associated with translations, etc., to be significantly postponed. There are now very few economically significant countries that are not members of the PCT, of which the most important is Taiwan. An initial international phase, in which a search and possibly also a preliminary examination is carried out, is followed after 18 months by a national phase, in which selected national or regional patent offices conclude the examination process and grant (or refuse) the patent. The PCT procedure is described in more detail in Box 19.1.
Box 19.1
PCT procedure
An international application can be filed by any national or resident of a PCT country, at a national or regional patent office competent to act for that applicant, or at the International Bureau (World Intellectual Property Office, or WIPO) in Geneva. A single filing fee can give rights in all Contracting States.
The PCT application is published 18 months from the first priority date, and the search report drawn up by the International Searching Authority (selected from one of a number of patent offices including the USPTO and the EPO) is published at the same time or as soon as possible afterwards. At the same time, a Written Opinion on Patentability is drawn up, indicating on the basis of the search report whether or not the invention appears to be new and non-obvious. If no further steps are taken, this will be issued as the International Preliminary Report on Patentability (IPRP).
If the applicant wishes to contest the findings of the Written Opinion, he may within 22 months from the priority date file a Demand for International Preliminary Examination, pay a fee and respond to the Written Opinion, possibly also making amendments. This will then be taken into account in the final form of the IPRP.
After 30 months from the priority date the application may be sent to any of the national or regional patent offices, translated into the local language as necessary. The individual patent offices may rely on the international search and examination reports to any extent they choose in deciding whether or not to grant a patent. This varies from offices which usually ignore the IPRP altogether (e.g. the USPTO), to those which will grant a patent without further examination only if the IPRP is positive (e.g. Turkey), to Singapore, which will automatically grant a patent on any PCT application with an IPRP, whether it is positive or negative. Singapore very sensibly puts the burden on the applicant, who, if he wishes to enforce the patent, would have to prove to the court that the negative IPRP was incorrect.
In deciding the list of countries in which patent protection should be obtained, the main criteria are the strength of patent protection in the country and the size of the market. Now that most countries have joined the World Trade Organization and are obliged by the TRIPs (Trade-Related Aspects of Intellectual Property Rights) agreement to introduce strong patent protection, the most important criterion has become market size. There is no point in filing patents in a country if the size of the market does not justify the costs, no matter how strong its patent laws may be. Nevertheless, for a new chemical entity that may become a market product, filing in 40–60 countries is normal practice. To avoid long discussions each time a decision must be taken, the use of standard filing lists to cover most situations makes a lot of sense.
In nearly all countries, periodic (usually annual) renewal fees must be paid to keep a patent in force. These generally increase steeply towards the end of the patent term, thus encouraging patent owners who are not making commercial use of their patents to make the invention available to the public earlier than would otherwise be the case. To save costs, pharmaceutical patents should be abandoned as soon as they no longer provide protection for a compound that is on the market or is being developed. Maintaining a collection of patents that are not being used is an expensive luxury.
The standard patent term provided in the TRIPs agreement is at least 20 years from the filing date. However, because it takes a long time to bring a drug to market, the effective term (the term during which a drug is sold with patent protection) is much less than this. To compensate for these regulatory delays, a number of countries, including EU states, the USA, Switzerland and Japan, allow for patent term extensions of up to 5 years for pharmaceutical (and sometimes agricultural) products. In the USA, patent term extension is one part of the Hatch–Waxman Act, in which the interests of the innovative companies are balanced against those of the generic companies. The former get a longer patent term, the latter are allowed carry out testing for FDA approval during the patent term, so that they can come on the market as soon as patent protection expires. In Europe, extension is provided by means of a separate form of intellectual property right known as a Supplementary Protection Certificate (SPC).
Governments grant patents, but do not enforce them. The patent owner must take action against infringement by suing an infringer in the civil courts. If successful, the patentee can obtain an injunction to restrain further infringement, as well as other remedies such as damages and costs. Usually the alleged infringer will counterclaim that the patent is invalid, and if the patentee loses the case the patent may be revoked. This risk, as well as the high cost of litigation, must be weighed against the benefit gained if the infringer is forced out of the market. As an alternative to litigation, the patentee may choose to exploit the patent by granting exclusive or non-exclusive licences for royalties or other forms of compensation, or in exchange for a cross-licence.
Although the procedure for obtaining a patent has been harmonized to a large extent by the PCT and other means, the procedure for enforcement, as well as the cost and the chance of success, varies enormously from one country to another. In the USA, patent cases are heard at first instance in the Federal District Courts, in which the judges are not specialized in intellectual property law and in which many cases are decided by jury verdicts. At the appeal stage, however, the Court of Appeal for the Federal Circuit is a specialized and technically competent court. In England (a separate jurisdiction from Scotland), on the other hand, patent cases are heard either in the Patents County Court or, more usually, in the Patents Court, which is part of the High Court. Both of these are specialized courts with technically literate judges, but appeals from them go to the general Court of Appeal, where the majority of the judges are not patent experts. Which of these two systems gives the fairest results is a matter of debate.
In both the USA and the English systems issues of patent validity are dealt with by the same court that deals with the issue of infringement, and this is also the case in the majority of European and Asian countries. In Germany, Japan, China and Korea, however, these issues are kept separate, and a patent may be invalidated only by a special court or by a branch of the patent office.
It is a problem in many parts of the world that even if the country has a good patent law on paper, enforcement of patent rights may be very difficult for a number of reasons, ranging from lack of experienced judges to inefficiency and even corruption.
A trademark is a word, design, shape or colour used to distinguish the goods of the trademark owner from those of another manufacturer. Unlike patents, registered trademarks may be renewed at the end of their term and may be kept alive indefinitely, although they may be liable to cancellation if they are not used. Thus, once a patent for a drug has expired a competitor will be able to sell a generic version, but must sell it under the International Non-proprietary Name (INN) or his own trademark, not that of the originator.
Additional forms of IP include copyright (e.g. for the text of advertisements and package inserts), and Internet domain names, which may, for example, incorporate the name of a product and may be a useful marketing tool.
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