Patent ""Evergreening"": Issues in Innovation and Competition (CRS Report for Congress)
Premium Purchase PDF for $24.95 (15 pages)
add to cart or
subscribe for unlimited access
Pro Premium subscribers have free access to our full library of CRS reports.
Subscribe today, or
request a demo to learn more.
| Release Date |
Nov. 13, 2009 |
| Report Number |
R40917 |
| Report Type |
Report |
| Authors |
John R. Thomas, Visiting Scholar |
| Source Agency |
Congressional Research Service |
Summary:
"Patent evergreening" is a potentially perjorative term that generally refers to the strategy of obtaining multiple patents that cover different aspects of the same product, typically by obtaining patents on improved versions of existing products. Although the patent system allows improvement patents to be obtained in any industry, evergreening is said to be most common in the pharmaceutical industry.
Some observers believe that the availability of so-called continuation applications at the U.S. Patent and Trademark Office (USPTO) may promote evergreening practices. USPTO regulations that would have restricted the availability of continuation applications have been struck down by the courts on the grounds that the regulations exceeded the agency's statutory authority to promulgate. Others believe that the Hatch-Waxman Act, specialized legislation that governs the resolution of patent disputes between brand-name and generic drug companies, may also encourage evergreening in the pharmaceutical industry. However, 2003 amendments to the Hatch-Waxman Act may have mitigated some of these concerns.
Critics of evergreening assert that the ability to obtain multiple patents on a product, over a period of many years, effectively extends the term of exclusivity that the patent holder obtains. They further assert that this practice is abusive, impedes the introduction of generic medications, and has a negative effect upon public health in the United States.
Other observers believe that the term "evergreening" is itself inappropriate. In their view, sound intellectual property policy allows innovators to obtain patents on improvement inventions. Most technological advance occurs incrementally, they observe, and many improvement patents cover advances that are of considerable practical significance to patients and other consumers. In addition, patents on improvements may not impede the ability of competitors to market products that were covered by expired patents on original technologies. Finally, the developer of the "original" product is not always the same entity as the developer of "improvement" technologies. The ability of any innovator to obtain a patent upon an improvement invention is said to promote competition.
Should Congress conclude that the current situation is satisfactory, then no action need be taken. If Congress wishes to intervene, however, a number of options present themselves. Congress may wish to consider the regulation of continuation applications or the introduction of statutory provisions that more directly address the perceived problem of evergreening. In addition, more generalized reform of the patent system may address concerns over evergreening. Current bills before the 111th Congress would potentially introduce a broad range of reforms in an effort to improve the patent system, and would perhaps respond to criticisms of evergreening practices.
