A long legacy of empirical research suggests that patents are more important for stimulating research in pharmaceuticals than in any other industry (Levin et al. 1987;Cohen et al. 2000). Patents on new drug compounds are difficult to invent around, and thus are effective in preventing imitation. At the same time, without patents, imitation of existing therapies is comparatively easy. The very effectiveness of some drug patents has an obvious downside, which is to restrict access to low-price therapies in the meantime. Pharmaceuticals have been traditionally classified as a “discrete product” industry, in which relatively few patents cover a single product (Levin et al. 1987; Cohen et al. 2000). The ideal type arises when a single patent, covering a novel active ingredient, protects innovation on a newly available drug.
As we explain in this paper, this characterization is an increasingly poor fit. Brand-name firms have sought increasing recourse to ancillary patents to protect their market positions, including patents on chemical variants, alternative formulations,methods of use, and other relatively minor aspects of the drug. The result is a web of over lapping claims, which a generic drug maker must address or avoid in order to market a competing product. These patents are also conventionally viewed as “weak” patents (or 2 low quality patents) in the sense that if litigated to judgment, they are less likely to be found valid and infringed.