Theoretical Patent Thickets v. Data-Driven Patent Policy: Are Changes Necessary at the PTO & FDA?

An increasingly vocal group of critics complain that life-sciences patents are holding up legitimate competition. These complaints decry an alleged proliferation of patents—called “thickets”—that competitors struggle to pierce. These narratives have increasingly trickled into the mainstream, and have even become an apparent motivation for proposed alterations to patent policy at the USPTO.

These narratives are false. We present data refuting core claims made by proponents of the “thicket” theory, and show that that life-sciences patents are not, in fact, holding up competition—if anything, they are insufficiently protective. We offer a multi-part empirical analysis offering the following three key insights:

(1) the PTO is issuing life science-based patents at a lower rate than other industries, and are more expensive to procure relative to high-tech patents;

(2) the exclusivity conferred by those life science patents has a stable average of approximately 12 years—an under-protective term that is far less than the statutory promise of 20 years of exclusivity; and

(3) assertion of biologic patents does not cause delay in the time-to-launch for biosimilar drugs. We analyze a dataset containing every patent litigation to date accusing a biosimilar drug of infringement and compare the number of asserted patents to the time-to-launch for that biosimilar drug. Contrary to the prediction of the “thicket” theory, increasing the number of patents asserted in litigation does not increase (or have any effect on) the time-to-launch for biosimilars. Thus, the data-driven analysis shows that life sciences patents are not unduly delaying competition from biosimilar drugs.

Finally, we identify analytical underpinnings explaining the data above, showing the reasons why the data reflect that life sciences patents are not an impenetrable thicket, including (1) economies of scale, (2) expedited forums for validity challenges, like inter partes review, and (3) the inherent limitations of civil litigation.

In short, the “thicket” theory does not hold up. Notwithstanding its trendiness in some policy circles, the data squarely refute its core empirical premises, and suggests that policymakers—including the USPTO—should be cautious in making changes based on such theory.