Maintenance Fees and Renewal of a Patent
If your invention has a patent, the lifespan of the patent protection is 20 years if it is a utility patent and 15 years if it a design patent. However after 20 years, your utility patent protection is no longer available, and anyone can use your invention for commercial purposes.
This article will cover the facts about how long your patent will last, maintenance fees, and how to get your patent protection extended where possible.
Term of a patent
Under US Law, the term of patent is 20 years. 35 U.S. Code § 154 reads in part;
Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States or, if the application contains a specific reference to an earlier filed application or applications under section 120, 121, 365(c), or 386(c), from the date on which the earliest such application was filed.
The term of a patent starts the day you file the patent application at the Patent Office. It does not begin until it is approved, but it usually begins on the day that you file your first application. This is a good thing, because it discourages people from using your invention while your patent is being reviewed. Fortunately, the Patent Office is willing to grant a later effective date in some cases.
The logic behind having a limited term is because patent holders can market their inventions and make money via royalties or licensing arrangements. In this way they can then recoup their investment in the invention. However, allowing patent protection to last too long could limit others who wish to improve the invention and would also limit free trade. Patent law stipulates that patents expire and become part of the public domain when they are no longer needed. This is to balance competing concerns.
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When it comes to retaining your patent, the fees are vitally important. If you don’t pay maintenance fees, a utility patent can also expire before it reaches its 20-year term. After the patent has been issued, the maintenance fees for it must be progressively paid in increments throughout the patent’s life cycle. This is broken down as follows;
- First maintenance fee: due at 3.5 year anniversary;
- Second maintenance fee: due at 7.5 year anniversary; and
- Third maintenance fee: due at 11.5 year anniversary.
However in cases of expiration for failre to pay maintenance fees, you can generally reinstate a patent for the remaining term of the term provided you pay additional fees to reinstate the patent within a specified time period. Additionlly, design patents don’t require maintenance fees.
If you’ve neglected to pay your fees, you can submit a petition for reinstatement. The USPTO will accept your late maintenance fees in exchange for reinstatement. But keep in mind that this may delay the patent’s enforcement as the maintenance fee is crucial to maintaining the patent’s enforceability.
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Knowing when your Patent has expired
In finding out whether or not your patent has expired, a search has to be conducted. These searches can be easily conducted on third-party websites .
The Patent Office also has a patent search program that lists various resources to aid in patent searches including;
- Patent Public Search
- Global Dossier
- Patent Application Information Retrieval (PAIR)
- Public Search Facility
- Patent and Trademark Resource Centers (PTRCs)
- Patent Official Gazette
- Common Citation Document (CCD)
- Search International Patent Offices
- Search Published Sequences
- Patent Assignment Search
- Patent Examination Data System (PEDS)
Additionally, a Google Patent Search will tell you when the patent was filed as well as any modifications that were made. You should ensure that the patent isn’t tied to another patent’s term. If this happens, the patent will expire earlier than the filing date. To determine whether a patent’s maintenance fee has been paid, you can also use the Pair Database maintained by the Patent Office.
Extending the life of a patent
Usually, inventors worry about how to extend the life of their patent near the end of its term. However, if you want to keep your invention protected for a longer period, it’s best to start improving it right from the start. This way, you can secure another patent for any improvements. This also creates a portfolio of patents that protect your invention for a longer period of time.
While it’s not possible to extend the life of the original invention, you can apply for another patent on an improvement of the same product or service. However, a new patent will protect only the improvement and not the original invention. This will allow others to copy the improved invention and make use of it when the original patent expires. This means that rivals can introduce lower-priced versions to the item after a patent expires. According to research in 18 industries, 17.2 new producers are introduced into the market every year after a patent expires. After two years, this number rises to 25.1. The main consequences for the company holding the patent are that their product is no longer in demand and that they lose profitability within a short time.
In some cases, a patent’s term can be extended by the United States Patent Office, but the application for extension must be made before the expiry date of the existing patent. This happens where there is need for reasonable patent term extension as anticipated under 35 U.S.C. 154(b).
The most common example is where there were delays cased by the Patent Office between the time your application was submitted and when it approved your patent. Such an adjustment to the term is ordinarily is listed on the front page of the patent.
Strategies to use when Your Product patent protection expires
While you can continue to manufacture your patented product even after the patent expires, you should be prepared for competition from others. Once a patent has expired, anyone can simply buy and sell an exact replica of your invention. This is one reason why the government limits the duration of a patent to twenty years. Ultimately, allowing it to last for an infinite time period would stifle competition.
Because of this, revenue differences can amount to hundreds of millions of dollars due to how quickly brand share falls after patent expiration. What strategy can pharmaceutical companies use to predict the rate at which revenue will drop?
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#1 Rely on Trademark Branding to Drive Customers to the Patent-Expiring Brand
Trademark registration can be used to protect the brand that is burned into doctor’s mind over twenty year life. However, the intermediaries such as the pharmacy can substitute generics if the cost is lower. As such you still have to factor in price with the major drug distributors.
#2 Understanding which factors influence share retention
Market share retention following drug patent expiration can be affected by individual product attributes as well as drug class attributes. Complexity of dosage administration is one example of product attributes. An innovative or novel drug delivery system is more likely to be a preferred choice than generic alternatives.
Generics that are already available in one drug class will not have an impact on the prices of others. Share losses due to drug patent expiration will be higher if a new therapeutic category is introduced to the market. These dynamics are essential to manage a drug’s post expiration strategy.
#3 To drop prices or not?
It might make sense for brands to preventively drop prices in order to maintain market share. However, this doesn’t always work. To maintain margins on sales, some brands will choose to increase or maintain the price of shares as they fall.
Sometimes, it is a good idea to preventively lower the price of brand-name prescription drugs. If the manufacturer lowers prices in order to be more competitive with generics, then products with high price retention characteristics are more likely to retain more market share. However, there are exceptions so it is important to have a good understanding of the market.
#4 Work with Authorized Generics Manufacturer
Authorized generics can be used to protect a brand that is facing patent expiration. This is the classic co-opetition game. There won’t be a flood of generics if you enter into an agreement before the patent expires. This means that the erosion of brand name prices is slower. Multiple generics are possible and a strong partner can be licensed to make the generic.
Brand names could experience rapid price erosion if they don’t have a well-researched strategy to deal with the expiration of drug patents. Prices will drop quickly after patent expiration depending on many factors, including the amount of competition and drug class as well as the complexity of drug administration. Price changes can occur as patent expiration approaches. Authorized generic deals may be used in certain cases to reduce the impact of drug patent expiration.
#5 Make improvements to the original patented formula
Using new advances, the company can improve the original formulation to enusre it is still a cutting edge product depsite facig stiff competition.