An Interview with Rachel Goode, Ph.D, about Biological Patent Thickets

Kevin DeJong (Senior Editor) and Shweta Kumar (Editor) from the Big Molecule Watch recently interviewed Rachel Goode, Ph.D. to discuss an article she recently co-authored, “Biological patent thickets and delayed access to biosimilars, an American problem.”[1]  The article, published in the Journal of Law and the Biosciences, examines whether patent thickets covering biological drugs are responsible for delayed biosimilar market entry.

Dr. Goode currently serves as Senior Vice President of Legal and Intellectual Property, Biosimilars at Fresenius Kabi, a global health care and pharmaceutical company.  The views expressed herein do not necessarily reflect the views or policies of Goodwin or the Big Molecule Watch, and do not necessarily reflect the official policy or position of Fresenius Kabi.

  1. Before we dive into your recent article, can you tell us about your background and how you came to write this paper?

I’m licensed as a patent attorney, with a background (an undergraduate degree and Ph.D.) in biochemistry.  I have always had an interest in academia which led to my collaboration with Professor Chao at the University of Denver Law School.  Together we drew on my industry experience and his academic expertise to gather global data and publish this paper.  Our goal was to shine a light on certain patent practices of branded drug companies.  We concluded that the patent system needs to strike a better balance between encouraging development of new drugs and enabling access to affordable treatments for patients.

  1. How did you get interested in work on biosimilars?

Biosimilars are copies of biological drugs that are approved by the FDA based on demonstrating high similarity to an FDA‐approved originator drug.  Biological drugs are larger and more complex than small molecule drugs so they give rise to interesting inventions and patent strategies.  My day-to-day work at Fresenius Kabi focuses on obtaining freedom to operate for biosimilars so we can bring these low-cost medicines to patients and expand access to important drugs around the world.

  1. Before we get into the details of your article, what is a “patent thicket” in your view?

There’s not a single definition, but one common understanding comes from a 2001 paper by Carl Shapiro.  He described “a dense web of overlapping intellectual property rights that a company must hack its way through.”[2]  In my mind, the definition of a patent thicket is synonymous with “evergreening.”  In other words, it would be any portfolio of patents that extends the full scope of the monopoly of a branded drug beyond the expiry of the primary patent on the drug product.

  1. What was the objective of your research on patent thickets, and what did you conclude?

The objective was firstly to prove that patent thickets exist.  Our data showed that, not only do they exist, but they are a uniquely American problem.  We also showed that large patent thickets correlate with delayed launches of low-cost biosimilars in the United States.

Our initial findings begged the question, why does the United States have so many more patents covering branded drugs compared to other countries?  What we discovered was that the large scale of patent thickets in the United States is fueled by a patent multiplying maneuver called obvious-type double patenting (OTDP).  Double-patenting is exactly what it sounds like:  the practice of claiming the same or an obvious variation of an invention in more than one patent.

This practice is restricted by patent offices around the world.  The USPTO, however, will grant multiple patents, covering non-patentably distinct inventions (“duplicative patents”), provided the patent owner agrees to link those patents together with a terminal disclaimer (a common expiration date).  We found that U.S. patent thickets on branded drugs are overwhelmingly comprised of duplicative patents.  In some cases, up to 80% of the patents in a drug’s portfolio are non-patentably distinct from each other.

To be clear, I am highly in favor of granting innovative, high-quality patents.  Incremental innovations that improve therapies for patients are critical.  That’s not what is at issue here.

What is troublesome, however, is the pervasive use of duplicative patents.  It is too expensive for biosimilar companies to challenge scores of patents via inter partes review (IPR) or post-grant review (PGR) proceedings, so they cannot economically use IPR/PGR proceedings to sort the good patents from the bad.  Federal courts cannot effectively litigate scores of patents either.  Branded drug companies are strategically building thickets around their most profitable drugs to shield most of their patents from scrutiny.

  1. Can you give us an overview of the methodology you used for your research?

We downloaded court dockets and counted the number of patents litigated against biosimilars in three countries: the United States, Canada, and the United Kingdom.  To make it a fair comparison, we chose thirty (30) biosimilars because they are all of the biosimilars that have gone through regulatory review in all three countries.  This is different than some of the studies that have been called into question recently.  The difference in our methodology comparatively is that we counted the number of patents that branded pharma actively litigated against each biosimilar.  Therefore, we did not need to make our own assessment of which patents are relevant and how many of them cover branded drugs.  Across those three countries, we found that twenty-four (24) patents were litigated in the UK, fifty (50) patents were litigated in Canada and three hundred and seventy-seven (377) patents were litigated in the United States.  Our analysis showed that biosimilar litigation in the United States includes far more patents than the counterpart litigations in Canada and the UK for the same drugs.

Next, we made a deep dive analysis into the U.S. patent portfolios of specific branded drugs.  We assessed the file wrappers and counted how many patents were linked together through terminal disclaimers.  Given that terminal disclaimers are voluntarily filed to overcome a rejection from the patent examiner under OTDP, this means that the linked patents are claiming non-patentably distinct inventions.  It was disappointing to find that patent thickets on branded drugs are not comprised of mostly innovatively different or even incrementally different patents; rather they are comprised mostly of these duplicative patents.

Our data has been peer reviewed and published in the Journal of Law and Biosciences, which is a co-venture journal between Duke University, Harvard University Law School, and Stanford University.

  1. Do patent thickets affect entry of generic small-molecule drugs into the market to the same extent as biosimilars?

Patent thickets are a numbers game that branded drug companies know their competitors cannot win.  While it costs approximately $25K to prosecute, grant and maintain a patent, biosimilar/generic competitors budget $775K on average to file an IPR or PGR against a single patent.  Therefore, the U.S. patent system incentivizes branded drug companies to amass as many patents as possible.  In other industries, such as the mobile phone industry, competitors have more options to design around patents.  In these industries, there is inherent interest in designing something new and different and therefore less incentive to stack duplicative patents on the same invention.  Conversely, biosimilar/generic competitors, necessarily, have to be the same or highly similar as the branded drug which unfortunately makes the patent thicket strategy particularly amenable to the pharmaceutical industry.

For biological drugs there are many more possibilities to create inventions as compared to the small molecule field.  For example, there are many ways to manufacture each biological drug, and biological drugs often have many different indications (FDA approved uses of the drug for treating particular diseases) on their labels.  Some of these innovations will result in quality patents, but some will result in junk patents.  Using terminal disclaimers, branded companies can duplicate patents around each invention, making it difficult to sort the good from the bad.

Regarding your question on generic drugs, we are starting to see more and more “mini-thickets” in the small molecule field.  Although there tend to be fewer opportunities to file patents on a range of inventions, there is still the same incentive to branded drug companies to play the numbers game of having as many duplicative patents as possible.

  1. Your article touches on some of the features of the Canadian and UK patent systems that are more likely to give rise to high-quality patents and prevent patent thickets. Can you elaborate on those differences?

There’s a lot going on here, but some key themes emerge.  The UK and Canadian patent systems place more restrictions around obvious-type double-patenting (OTDP).  There is no terminal disclaimer equivalent in Canada or the UK; instead, this type of objection is overcome by addressing the overlapping claims either by argument, amendment, or abandonment.

In the United States, we also see a greater use of functional claim language in the pharmaceutical space as compared to what is permissible under the patent systems of the UK, Canada, and Europe.

  1. What are some features of the Canadian and UK patent systems that could feasibly be implemented in the United States?

With respect to OTDP, the USPTO should consider eliminating terminal disclaimers.  We have yet to hear a good argument as to why a company should need more than one patent on non-distinct inventions.  Patentees should pursue their best claims in the parent patent.

In Europe, patent examiners are stricter in that they do not allow claim language that defines a “result to be achieved” (i.e., functional language) and requires that the claims include all of the essential features (i.e., structural features) of the invention.  The USPTO could consider moving more in that direction to address the issue of patent thickets.

  1. Is there anything the U.S. patent system does better or more effectively than the patent systems in Canada and the UK, as it relates to patent thickets?

I appreciate the short timeframes for IPR/PGR procedures.  The PTAB does a very good job of keeping the timelines on track, which helps our planning and alignment with our FDA approval timelines.  Unfortunately, the Federal Circuit has held that a company that has not yet filed a regulatory application to the FDA does not have standing to appeal a negative IPR decision.[3] This becomes a major conundrum for us, as filing an IPR/PGR too far in advance of filing an aBLA may result in there being no standing to appeal after an unfavorable decision.  The result is that biosimilar applicants delay the filing of IPRs/PGRs against low-quality patents, rendering it difficult to obtain a final non-appealable decision prior to FDA approval of the biosimilar.  In addition to patent thickets, this also leads to delayed launch of low-cost biosimilar drugs.

  1. As you know, in July 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy, which directed the Secretary of Health & Human Services (HHS) to “help ensure that the patent system, while incentivizing innovation, does not also unjustifiably delay generic drug and biosimilar competition beyond that reasonably contemplated under the law.” In response, the U.S. Patent & Trademark Office recently outlined several initiatives.  Can you comment on whether any of those initiatives may help to address patent thickets?

Fortunately, the Director of the USPTO, Kathi Vidal, seems poised to tackle what others before her have overlooked or ignored.  On October 4, 2022, the USPTO issued a series of policy proposals for public comment, aimed at improving patent quality, encouraging consistency in examinations, and tightening written description rules.[4]  Most importantly, though, the request for comment seeks input on policies that would tackle the issue of patent thickets.  For example, there are policy ideas relating to capping the filing of continuation and divisional patent applications, as well as the idea to eliminate terminal disclaimers all together.

These policies would also incentivize innovation into new drugs.  Afterall, why should branded drug companies invest into research and development while they can stack patents on their old “cash cows”?

[1] Rachel Goode & Bernard Chao, Biological patent thickets and delayed access to biosimilars, an American problem, 9 J. L. BioSci. (2022).

[2] Carl Shapiro, Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting, Innovation Policy and the Economy, Vol. I 119-150 (Adam Jaffe, Joshua Lerner & Scott Stern, eds., MIT Press, 2001).

[3] See, e.g., Argentum Pharms. LLC v. Novartis Pharms. Corp., 956 F.3d 1374 (Fed. Cir. 2020).

[4] Request for Comments on USPTO Initiatives to Ensure the Robustness and Reliability of Patent Rights, 87 FR 60130 (Oct. 4, 2022).