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Abandoned and expired patents can have outstanding potential for pharmaceutical manufacturing. Patents confer a set of exclusive rights for a defined time period. Outside that time period lie many opportunities.
Typically, granted patent applications include one or more claims defining the invention in detail. Patents often include numerous claims, each of which must define a specific property right and must meet patentability requirements, the most important of which are usefulness, novelty, and non-obviousness.
What a patent confers is the right to prevent others from commercially making, selling, or distributing the patented invention without obtaining permission. Patents can be sold, licensed, assigned, transferred, or even mortgaged. A person or company may obtain a patent and never use it.
Regardless, when a patent expires or is abandoned, others will not have to negotiate for rights or pay licensing fees to make the product. In an industry with as complex a regulatory environment and product development process as pharmaceuticals, abandoned and expired patents can be a way to bring new products to market at a lower cost than might otherwise be possible.
A patent owner abandons a patent when he or she does not pay the maintenance fees that are required at prescribed intervals over the 20-year life of the patent. Finding out if a patent is abandoned is fairly simple and straightforward with online tools.
But what if the patent owner revives the patent after you have used the abandoned patent to create a new product? The patent owner has 24 months to file for revival and pay a revival fee and applicable maintenance fees. Even if the patent owner does all this, you will probably maintain your rights to sell the product in the meantime as long as you went into production in good faith that the patent had become part of the public domain. In general, however, you want to be confident that the patent really has been abandoned before investing too many resources into product development based on it.
A patent may have expired, but that does not mean a pharmaceutical company is free to use the invention. It is possible the patent owner has filed a very similar patent or applied for a continuation while letting the original patent expire. In these cases, the pharmaceutical company could still be liable for infringement. Therefore, it is essential when searching for expired patents that a patent search also be conducted for similar inventions to reduce this risk.
Before moving forward based on an expired or abandoned patent, due diligence is essential
Additionally, continuation applications are new, complete patent applications derived from patent applications filed earlier. An applicant files a continuation application to pursue additional claims to an invention that was previously disclosed in an earlier application. A successful continuation application claims priority from the "parent" patent application. This is important because it then claims priority from the parent application date, reducing the amount of prior art it faces. Prior art is evidence that an invention is already known.
Finding a patent file history on an expired or abandoned patent is only step one in building a new product based on it. An additional search for new prior art informs an acquiring party about what was known about the pharmaceutical product in question before any original patent applications were filed.
But to bring a product to market based on an abandoned or expired patent, you must also establish Freedom to Operate (FTO). An FTO investigation determines if there are patents or patent applications controlled by third parties that could block your commercialization of the pharmaceutical product. These patents may claim any number of aspects of the compound, such as method of manufacture, methods of patient selection, or methods of patient monitoring. The risk is that your new drug could be derailed if you are unable to establish FTO.
Obtaining an FTO opinion can be expensive, and even if you get one there is no guarantee that you will not be sued. However, FTO opinions do give developers peace of mind about whether it is reasonable to pursue a business opportunity. And an FTO opinion is still remarkably cost-effective compared to the costs of developing a pharmaceutical from scratch and patenting it.
With pharmaceutical companies increasingly pursuing more cost-effective methods of bringing products to market (including working with abandoned and expired patents), it is wise for the pharmaceutical investor to frequently check the DrugPatentWatch Patent Application Database to be able to better anticipate market opportunities.