What is the problem?

Both, product derivatives as well as new uses can have a so-called evergreening effect. What is supposed to "green forever" are existing patents. By only slightly modifying a pre-existing compound, the innovator might be granted a new patent for another, let us say, 20 years. In practice, patenting of product derivatives can result in the non-availability for generic competitors of the substance protected by the original patent.

You might ask yourself, why a third party may be precluded from using the old original patent if the new product is not identical with the old one, but protected by a different patent. Theoretically, it is true that the previously existing original patent is not affected by the newly granted patent on a product derivative. Thus, the old product should be freely available and any third party should theoretically be able to access it after the patent is expired. In practice, however, judges, lawyers and other pharmaceutical lay persons may encounter serious difficulties in trying to distinguish between the particular chemical entities covered by the prior original patent and those covered by the new derivative. These complexities may encourage patent holders to involve potential generic competitors in "strategic" infringement litigation which may often block or delay the competitors' market entry.

IDevice Icon The Paroxetine case

The Paroxetine case pictures well how patents on pharmaceutical product derivatives can delay the market entry of generic competitors.

A pharmaceutical company, after its original patent on the substance paroxetine had expired, filed a patent application for paroxetine hydrochloride hemihydrate, a modified form of the originally patented substance paroxetine. After several years of litigation between the originator company and a generic competitor, the new claim to paroxetine hydrochloride hemihydrate was held invalid by the competent appeal court. By alleging that the generic competitor's product (paroxetine hydrochloride anhydrate) fell within the scope of its (invalid) claim to paroxetine hydrochloride hemihydrate, the originator company succeeded in delaying considerably the market entry of the generic drug (which took place only five and a half years after the generic producer's application for marketing approval). During the court proceedings, the originator company pursued four additional infringement suits, alleging the generic product fell within the scope of several different forms and new uses of paroxetine hydrochloride. The infringement proceedings resulted in five overlapping 30-month stays, preventing the US Food and Drug Authority (FDA) from authorising the marketing of the generic product for over 65 months. During one year of artificially extended market exclusivity (based on an invalid patent), the originator company gained more than 1 billion USD in net sales of the respective pharmaceutical product.

Source: World Health Organization's Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) Report, Box 4.7 ("Evergreening in the United States", p. 133).


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