Divisional patents: a system prone to abuse

Abstract

Abstract Divisional patents are derivatives to an already active patent or pending application used to separate part of the parent-patent’s subject-matter and create a new autonomous patent. They are extensively used in the pharmaceuticals sector to protect blockbuster medicines with multiple overarching patent rights, thus creating complex patent portfolios. These strategies have attracted the attention of competition enforcers and judicial bodies as potential abuses of dominant position because they aim to prevent and delay generic market entry for the patent holder to maintain their monopolistic prices. However, scrutinizing these strategies has proven challenging because the current rules are prone to exploitation, there is no unified approach to evaluating them, and the core of the issue is the much-debated interplay between IP and competition law. It will be shown that European case law varies across jurisdictions, with none of the current solutions fully addressing the issues. In the search for a functional, effective system, it is essential to understand the rationale behind patent rights, the unique features of the pharmaceuticals sector, and the arguments for and against the use of competition law to scrutinize patent strategies. On this basis, the article proposes a system which combines competition law enforcement with patent law amendments.