Science Research Management

Science Research Management ›› 2021, Vol. 42 ›› Issue (7): 22-30.

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A research on the risk early-warning of patent invalidation requests of innovative pharmaceutical enterprises in China

Zhu Xuezhong1,2, Li Yan1   

  1. 1. School of Economics and Management, Tongji University, Shanghai 200092, China; 
    2. Shanghai International College of Intellectual Property, Tongji University, Shanghai 200092, China
  • Received:2020-04-15 Revised:2020-12-07 Online:2021-07-20 Published:2021-07-19
  • Contact: zhu xuezhong

Abstract:     China is accelerating its transformation from a big country of generic drugs to a big country of innovative drugs, and more and more enterprises are transforming from generic pharmaceutical enterprises to innovative pharmaceutical enterprises. Under the new role, the risk of drug patent invalidation requests is increasing day by day, which poses a new challenge to the enterprise patent management practice. Patents are relied upon more frequently to protect pharmaceutical innovation. The cost of engaging in invalidation over issued drug patents diminishes their value as an incentive to invest in new drug R&D. From the perspective of enterprises, it is of great theoretical value and practical significance to study how to effectively carry out the early warning of the risk of drug patent invalidation requests. 
     In this paper, we examine the characteristics of drug patents involved in invalidation requests and their owners by combining, for the first time, information about"Catalogue of Chinese listed drugs"issued by China Food and Drug Administration (CFDA) with detailed data of case filings from Reexamination and Invalidation Department of the China Patent Office. By comparing filed cases to a control group, we show that there is substantial variation across patents in their exposure to risk of invalidation requests. We use this empirical evidence to examine hypotheses about the determinants of requests for invalidating drug patents. We show empirically that the risk increases with patent value , asymmetric information (or diverging expectations of invalidation outcomes) and low legal quality. In contrast to the theoretical predictions, the empirical findings suggest that formulation patent is challenged more frequently than composition of matter patent. 
      The possible contributions of this paper are as follows: Firstly, it expands and complements the previous studies on the determinants of the probability of occurrence of patent validity challenges, which mainly focus on patent invalidation proceedings in the United States and patent oppositions in the European Patent Office. Secondly, on the theoretical level, it takes the drug invention patent type as the index to measure the patent value from the dimension of protection scope/intensity, reveals the phenomenon that is inconsistent with the theoretical prediction under the actual national conditions, and enriches the understanding of the determinants of the probability of occurrence of patent validity challenges. Finally, at the practical level, it provides empirical evidence and useful reference for Chinese innovative drug enterprises. It is suggested that the ability to associate observable characteristics of drug patents to requests for invalidation risk should be exploited in developing forecasting tools, a classified management system should be established according to risk grade. "Patent invalidation insurance" can be insured for important pharmaceutical invention patents with high risk of request for invalidation. Early-warning of potential requests for invalidation risk of pharmaceutical invention patents is helpful to improve the patent management level of Chinese innovative pharmaceutical enterprises. 
     In addition, great importance should be attached to the writing quality of patent application documents including the specification, so as to improve the quality of patent law from the source. Chinese pharmaceutical enterprises still need to further strengthen the innovation of key technologies such as pharmaceutical compounds and medicinal biomolecules. 

Key words:  innovative pharmaceutical enterprises, drug patent, patent invalidation requests, risk early-warning model