Evergreening

evergreening

Evergreening refers to a variety of legal and business strategies by which technology producers with patents over products that are about to expire retain rent from them by either taking out new patents or by buying out or frustrating competitors, for longer periods of time than would normally be permissible under the law.

Evergreening is not a formal concept of patent law; it is best understood as a social idea used to refer to the myriad ways in which pharmaceutical patent owners use the law and related regulatory processes to extend their high rent-earning intellectual property rights, otherwise known as intellectual monopoly privileges, particularly over highly profitable ‘blockbuster’ drugs.

Thus, while the courts are an instrument frequently used by pharmaceutical brand name manufacturers to prolong their patent royalties, evergreening is rarely mentioned explicitly by judges in patent protection cases. The term usually refers to threats made to competitors about a brand-name manufacturer’s tactical use of pharmaceutical patents (including over uses, delivery systems, and even packaging), not to extension of any particular patent over an active product ingredient. The evergreening process has caused some controversy in the pharmaceutical industry. In this context, evergreening may be used by manufacturers of a particular drug to restrict or prevent competition from manufacturers of generic equivalents to that drug.

In 2002, an extensive and lengthy inquiry by the FTC, found that the Hatch-Waxman legislation or ‘Drug Price Competition and Patent Term Restoration Act’ (which was instrumental in establishing the US generic pharmaceuticals industry) had resulted in as many as 75% of new drug applications by generic drug manufacturers experiencing legal actions under patent laws by the original brand name patent owner. These were driving up US drug costs by keeping the cheaper generic versions off the market. The FTC recommended only one evergreening injunction against a potential generic market entrant be permitted per product, and an expedited process of resolving such claims.

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