ETHIC Act Targeting Patent Thickets Slammed as Destabilizing to Innovation Ecosystem by C4IP
ETHIC Act Targeting Patent Thickets Slammed as Destabilizing to Innovation Ecosystem by C4IP
Common perception is that patent thickets are a way for pharma companies to extend the life of a patented drug to the detriment of generic entry; however, C4IP termed this narrative as ‘misleading’.
A statement taking Congress to task for supporting a bill introduced in July that will restrict patent owners’ ability to assert more than one patent from the same ‘patent group’ was issued by the Council for Innovation Promotion (C4IP) in a patent infringement action with the objective of addressing so-called patent thickets.
A controversial term, patent thicketing, is criticized by the pro-patent community as being a misnomer. Common perception is that patent thickets are a way for pharma companies to extend the life of a patented drug to the detriment of generic entry; however, C4IP termed this narrative as ‘misleading’.
The statement reportedly read: “In reality, many patents can be necessary to capture the full scope of all the inventions in sophisticated and complicated products, especially in highly advanced fields — and, as confirmed by the US Patent and Trademark Office, the number of patents is not correlated to the timing of generic entry.”
ETHIC Act will prohibit anyone from asserting more than one patent in the same Patent Group against a particular party. In the bill, a patent group is defined as “2 or more commonly owned patents or applications that—”:
‘(I) are identified on one or more disclaimers under section 253 to remove obviousness-type double patenting of another commonly owned patent; or
‘(II) are subject to one or more disclaimers under section 253 to remove obviousness-type double patenting of another commonly owned patent.
‘(ii) For purposes of clause (i)(I)—
(I) each patent or application that identifies the same patent or application on a disclaimer under section 253 is part of the same Patent Group; and
‘(II) each patent or application that is identified on a disclaimer under section 253 is part of the same Patent Group as the patent or application subject to the disclaimer.’’
C4IP referenced in its statement the USPTO report published in 2024, which found that “simply quantifying raw numbers of patents and exclusivities is an inaccurate way to measure the intellectual property landscape of a drug product because not every patent or exclusivity has the same scope.”
The report especially suggested that some of the data most relied upon to support the need for bills like the ETHIC Act may be faulty. For instance, the Initiative for Medicines, Access & Knowledge (I-MAK), whose studies have been cited in many congressional hearings, has been charged with a lack of transparency about the underlying dataset behind its findings that makes its numbers ‘impossible to confirm’.
I-MAK’s or any other source’s data or methodologies were not specifically analysed by the USPTO report.
“Rather, the USPTO, with the assistance of the FDA, conducted an analysis of a representative sample of 25 New Drug Applications (NDAs) (representing 13 distinct active ingredients) listed in the FDA’s Orange Book between 2005-2018 that were also considered by these data sources using available public data points (e.g., patent numbers and exclusivities listed in the Orange Book, patent filing and issue dates, and drug application approval dates),” said the report.
Samples were selected based on several factors including “top grossing products by revenue in 2017, most prescribed branded products in 2017, and other factors….”
The USPTO found among the report’s conclusions that “[w]ith respect to multiple patents that cover a single product, multiple patents associated with a single marketed product are not unique to the pharmaceutical industry and are a common practice in many innovative industries, especially for complex products.”
The ETHIC Act was introduced in the Senate on a bipartisan basis by US Senators Peter Welch (D-VT), Josh Hawley (R-MO), and Amy Klobuchar (D-MN). It was also introduced in May in the House of Representatives by Representative Jodey Arrington (R-TX) along with two other Republicans and four Democrats.
As per the Senators’ press release, the bill would “streamline drug patent litigation, encourage fair market competition, and lower prescription drug prices by making it easier for generic and biosimilar companies to enter the market.”
According to C4IP, however, the bill would weaken patent rights and threaten innovation.
C4IP’s Executive Director Frank Cullen said, “Prohibiting the enforcement of validly issued U.S. patents destabilizes the entire innovation ecosystem. Limiting the innovators’ ability to enforce these patents would strip companies — especially startups — of the tools they need to attract investment, build partnerships, and bring new technologies to market. Weakening patent rights does not foster competition; it chokes off the development of future cures. A sector-specific measure like the ETHIC Act risks setting a dangerous precedent — inviting broader efforts to weaken the patent system and erode protections across all innovative industries.”
