Patenting practices surrounding improvement inventions in pharmaceutical industry sector has recently raised concerns. These concerns are important because firstly patent protection is one of the most efficient ways to recoup the cost of investments. Secondly, despite drastically increased R&D expenditure, the number of New Chemical Entity (NCE) approvals has remained unchanged or even declined. This may make investments for the new drug development less attractive and as a result, companies tend to focus more on strategically filing improvement patents. Thirdly, these patents may hamper competition vertically as well by blocking generic entry.
This research project approaches the above issues from two perspectives. Firstly, from the pre-grant perspective, the patentability for improvement inventions is revisited with a view to propose suitable criteria for examination to assess the patentability. Secondly, from the perspective on the impact of these patents to the competitors, the project explores the tension between the exclusive rights and competition in this sector. Particularly, the paper compares the practices of competition authorities in pharmaceutical sectors in Europe and Korea. Based on these, this paper would explore exploitation of patent rights on improvement inventions and the problems of abuse. Non-use including non-working, refusal to license, and the problems of Non Practicing Entities is to be explored. This is because under certain circumstances (e.g. when the same company own both basic and improvement patents), non-use may constitute an abuse weakening the competition. The distinction between legitimate and illegitimate non-use is difficult to draw. Arguments are also made for the promotion of capitalization/ donation of dormant patents. In conclusion, a proposal regarding these issues would be made for private actors and users of the patent system in pharmaceutical sector, and for the benefits for society.