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The so-called fencing patent, or dominating patent, is a patent obtained for an aspect of an invention that the inventor has no intention of producing. However, the inventor wants to prevent others from using that aspect in making improvements to the invention. In other words, a fencing patent is obtained solely to protect other claims. It is a way of preempting rivals from introducing innovations that may compete with the original invention.
In the pharmaceutical industry, different categories of drug patents offer additional protection for a drug, including protection of processes, innovative formulations, or indications. However, it is not just the type of drug patent that is filed that offers the protection of fencing, but how and when the additional patents are filed.
A 2012 study of patent fencing in the pharmaceutical industry by Christian Sternitzke focused on a drug class known as PDE5 inhibitors – drugs including Viagra, Cialis, and Levitra that are used primarily to treat erectile dysfunction. Because patent fencing is widespread in certain industries (textiles, paper, chemicals), and somewhat widespread in the pharmaceutical industry, this study may offer lessons on what pharmaceutical manufacturers are trying to accomplish based on how and when they file various drug patents. First, it’s necessary to distinguish between two major types of patent fencing: defensive blocking and offensive blocking.
Defensive blocking by a pharmaceutical company assures that company has freedom to operate by protecting against imitation and blocking competitors. To create the blocking effect, companies write drug patents so that they are similar in nature to drug patents they already own and use. Sternitzke found that defensive blocking was more commonly used early in the drug life cycle for PDE5 inhibitor drugs.
Companies may also file patents to prevent others from utilizing a certain technology, and this is known as offensive blocking. The inventions covered by these drug patents are not incorporated into products the patentee makes. Offensive patent blocking typically means filing patents covering possible reasonable inventions as soon as they become practicably possible. While filing all these patents (and maintaining them) can be costly, it can help a manufacturer increase revenues by licensing or selling its collective patent portfolio.
When new inventions become technologically feasible, new blocking patents may be filed to further protect original drug patents
Sternitzke found that early in the drug patent lifecycle, defensive patent fencing offered high economic potential. These patenting types include patents for, as examples, crystals, isomers, processes, and formulations or dosing. However, drug patents related to formulation and dosing may be filed later on in the drug patent lifecycle, and may be considered as offensive blocking tactics, possibly due to technological advancements that make further inventions possible. These too offer high potential for financial benefit to the originator of a drug.
Another trend referenced in the paper is that of filing patents on formulations, molecular forms, uses, and processes five to ten years after the patent for the basic molecule. Then, when drug approval is near, companies may undergo a flurry of new filings covering dosing patents and other claims (like preferred crystals) to keep generic competition at bay.
These filing patterns are not necessarily set down in advance by pharmaceutical companies, but are based on patent legislation and employing strategies and tactics to use the patent system to maximum financial benefit.
In summary, in the earlier parts of the drug patent lifecycle, patent fencing is primarily a defensive strategy, while later drug patents designed for blocking tend to be offensive in nature. When the pharmaceutical investor understands these trends, following new drug patents can make more sense from an investment viewpoint. The particular study referenced here only covered PDE5 inhibitor drugs, but it makes sense that other drug categories with the potential earning power of PDE5 inhibitors may use similar blocking strategies at different stages of the drug patent lifecycle.