Discovering, developing, and obtaining market approval for a new pharmaceutical product is a long, complex, and expensive process. By securing and maintaining a strong patent portfolio, innovative pharmaceutical companies may justify and even recoup the necessary investment.

Each patent secured by a pharmaceutical company gives that company certain rights. Having a U.S. patent means that the pharmaceutical company can exclude others from making, using, offering for sale, or selling the claimed invention in the United States or importing the claimed invention into the United States. If a competitor does so or in some cases, plans or threatens to do so the patent holder can sue the competitor in federal court for patent infringement. If the patent holder wins, the competitor may be ordered to stay off the market or pay money damages. Patent rights are territorial, with U.S. patent rights lasting for a period of generally 20 years from the time of filing. If a company’s goal is to have global protection, as is often the case in the pharmaceutical industry, it should pursue patent protection in each country of interest. Companies should focus on geographic locations of interest to them, their investors, and their competitors, balancing their desire for global protection with the cost of filing and maintaining each patent. Companies should also consider the patent laws in the various countries and evaluate the scope of coverage they will be able to secure, maintain, and enforce.

Patent value is multifaceted. In addition to providing value if a competitor is court-ordered to delay its market entry or pay money damages, a strong patent portfolio may mean that litigation is quickly settled or does not even occur because others are dissuaded from seeking approval for a competing pharmaceutical product during the patent term. Patents may also provide value by encouraging corporate ventures such as cross-licensing, collaborations, or joint research programs. A strong patent portfolio may generate revenue through the sale or licensing of patent rights or enhance valuation of the company for purposes of third-party acquisition or investment.

Obtaining a U.S. patent begins with filing a patent application at the U.S. Patent and Trademark Office (USPTO). The USPTO then examines the application through a back-and-forth procedure with the applicant known as prosecution, where the applicant may make amendments to its application and claims or present arguments in response to the USPTO’s review. The USPTO will issue a patent only if the application and claims, as amended, satisfy the legal requirements for patents. For example, the application must describe the invention in sufficient detail to demonstrate that the inventors had possession of the invention at the time of filing (known as written description) and explain how the invention can be made and used without undue experimentation (known as enablement). In addition, each claim must be directed to a “new and useful process, machine, manufacture, or composition of matter” or a “new and useful improvement thereof” (known as patentable subject matter), with the caveat that abstract ideas, laws of nature, and natural phenomena are generally considered unpatentable subject matter. Each claim must also be directed to an invention that is novel and would not have been obvious over what was already known in the art.

To obtain a strong patent portfolio, pharmaceutical companies should draft claims with a solid understanding of the important features of the invention and with consideration of how they will prove infringement in litigation. Preferably, a company will obtain patents with claims of varying scope. Broad claims are generally better when it comes to proving infringement and preventing competitors from designing around them, but they may be more susceptible to validity challenges during litigation or even in post-grant challenges at the USPTO. In contrast, narrow claims may better withstand validity challenges but may enable competitors to avoid infringement with minor modifications of the invention. A company will also preferably obtain patents with different claim types, such as claims directed to the active ingredient, compositions and products containing the active ingredient, ways to use the products to prevent or treat various conditions, and ways to prepare the active ingredient or products. Varying the claim scope and claim type will allow the company to maximize its protection.

Pharmaceutical companies should also consider filing patent applications for inventions occurring at each stage of pharmaceutical discovery and development. For example, applications may be filed early in a research program for drug discovery targets, new technologies, and research techniques. Once researchers begin to generate novel compounds that show relevant biological activity, patent applications may be filed on potential drug candidates, both specifically and generically, and their methods of use. As these potential drug candidates advance through preclinical and then clinical development, applications may be filed on further scientific advances such as new dosage forms, potential new uses, methods of administration, and possible novel drug combinations with other known drugs.

A critical step, therefore, in any patent strategy is developing a means for identifying and harvesting key inventions. Patent opportunities may be lost if a company’s employees are unaware of the value of patents or if they decide to self-police their inventions on the basis of a limited understanding of the law or business. Companies should educate their employees about patents and have clear internal procedures for identifying and protecting inventions. Proactive invention sweeps and harvesting sessions where new technology, major projects, and potential inventors are identified and discussed may be beneficial. Companies may also benefit from requiring or incentivizing employees to disclose potential inventions on invention disclosure forms and then regularly evaluating these forms for potentially patentable inventions in view of the company’s business goals.

Once a pharmaceutical company identifies an invention, deciding when to file a patent application may prove challenging. Because patent terms are measured from the date of filing the patent application, filing later likely means that patent protection will extend further into the future. For pharmaceutical patents, this is generally when the patent will have the most value. Waiting to file a patent application may also mean that the company has more information to include, which may better demonstrate that the patent and its claims meet the written description and enablement requirements for a patent. Whether an application will satisfy these requirements must be considered carefully, as there is no bright-line rule on the level of detail a patent must provide and a court will look to a variety of factors Pharmaceutical companies should balance the benefits of filing an application later, though, with the risk that if they wait too long, a third party could independently invent and file a patent application on the invention. In the United States, the first inventor to file a patent application is the one who gets to pursue the patent. Waiting to file a patent application may also mean that scientific literature or other art disclosing the invention or rendering it obvious becomes available. Sometimes, such problematic disclosure of the invention rendering it unpatentable comes from the company itself. While U.S. patent law allows a limited grace period for disclosures by an inventor, Europe and many other jurisdictions require absolute novelty. Therefore, when global protection is desired, the best practice is to file a patent application before the invention is publicly disclosed.

Companies should regularly consider additional patents to pursue by identifying gaps in their portfolios that may provide opportunities for targeted growth. However, investing money in securing a large patent portfolio does not necessarily mean the portfolio will provide value. The patent portfolio must be aligned with the company’s business strategy throughout the life of the patents and thus preferably involves input from business, technical, and legal representatives. Patent portfolios should be managed and strengthened by eliminating patents of little to no value and focusing on patents of high value. Patent value may depend on whether the patent covers a product of interest to the company, an investor, or a competitor, and it may depend on geographic location. For example, a company should consider dropping a patent on a potential active ingredient it is not marketing or pursuing, unless an investor or competitor has interest in a product containing that active ingredient. A company should also consider dropping patents in locations where products are not made or sold by them, their investors, or their competitors.

By securing and maintaining a strong patent portfolio, pharmaceutical companies may recoup the investment associated with discovering, developing, and obtaining market approval. And in doing so, they may be incentivized to continue innovating. Companies should develop a patent strategy that aligns with business goals, establish patent awareness within the company and procedures for identifying patentable inventions, and prepare applications with an eye toward monetization. Companies also should proactively manage their patent portfolios, focusing on patents of high value.