evergreening evergreening evergreening is any of various legal, business, and technological strategies by which producers (often pharmaceutical companies) extend the lifetime of their patents that are about to expire in order to retain revenues from them. often the practice includes taking out new patents (for example over associated delivery systems or new pharmaceutical mixtures), or by buying out or frustrating competitors, for longer periods of time than would normally be permissible under the law. robin feldman, a law professor at uc law sf and a leading researcher in intellectual property and patents, defines evergreening as "artificially extending the life of a patent or other exclusivity by obtaining additional protections to extend the monopoly period." part of a series oncapitalism concepts austerity business business cycle businessperson capital capital accumulation capital markets company corporation competitive markets economic interventionism economic liberalism economic surplus entrepreneurship fictitious capital financial market free price system free market goods and services investor invisible hand visible hand liberalization marginalism money private property privatization profit rent seeking supply and demand surplus value value wage labour economic systems anglo-saxon authoritarian corporate dirigist free-market humanistic laissez-faire liberal libertarian market mercantilist mixed monopoly state national neoliberal nordic private raw regulated market regulatory rhine social state state-sponsored welfare economic theories american austrian chartalism mmt chicago classical institutional keynesian neo- new post- market monetarism critique of political economy critique of work marxist monetarist neoclassical new institutional supply-side origins age of enlightenment capitalism and islam commercial revolution feudalism industrial revolution mercantilism primitive accumulation physiocracy simple commodity production development advanced consumer community corporate crony finance global illiberal late marxist merchant progressive rentier state monopoly technological people adam smith john stuart mill david ricardo thomas robert malthus jean-baptiste say karl marx milton friedman friedrich hayek john maynard keynes alfred marshall vilfredo pareto leon walras ludwig von mises ayn rand murray rothbard joseph schumpeter thorstein veblen max weber ronald coase related topics anti-capitalism capitalist realism capitalist state consumerism crisis theory criticism of capitalism critique of political economy critique of work cronyism culture of capitalism evergreening exploitation of labour globalization history history of theory market economy periodizations of capitalism perspectives on capitalism post-capitalism speculation spontaneous order venture philanthropy wage slavery ideologies anarcho authoritarian classical liberalism democratic dirigisme eco humanistic inclusive liberal liberalism libertarian neo neoliberalism objectivism ordoliberalism privatism right-libertarianism third way capitalism portal business portal overview evergreening is not a formal concept of patent law; it is best understood as a social idea used to refer to the myriad ways in which pharmaceutical patent owners use the law and related regulatory processes to extend their high-earning intellectual property rights, particularly over highly profitable (either in total sales volume or price per unit) "blockbuster" drugs. thus, while the courts are an instrument frequently used by pharmaceutical brand name manufacturers to prolong their patent royalties, evergreening is rarely mentioned explicitly by judges in patent protection cases. the term usually refers to threats made to competitors about a brand-name manufacturer's tactical use of pharmaceutical patents (including over uses, delivery systems and even packaging), not to extension of any particular patent over an active product ingredient. robin feldman has documented several types of patent tactics commonly used in the u.s. by pharmaceutical companies, including evergreening, pay-for-delay, gaming the citizen petition process, and the misuse of trade secrets, among others. in one study of the prescription drug market, feldman found that 78% of new patents associated with prescription drugs were for existing drugs. controversy the evergreening process has caused some controversy in the pharmaceutical industry. in this context, evergreening may be used by manufacturers of a particular drug to restrict or prevent competition from manufacturers of generic equivalents to that drug. in 2002, an extensive and lengthy inquiry by the us federal trade commission (ftc) found, in the wake of the hatch-waxman legislation or drug price competition and patent term restoration act (which was instrumental in establishing the us generic pharmaceuticals industry), as many as 75% of new drug applications by generic drug manufacturers had been contested with legal actions under patent laws by the original brand name patent owner. these were driving up us drug costs by keeping the cheaper generic versions off the market. the ftc recommended only one evergreening injunction against a potential generic market entrant be permitted per product, and an expedited process of resolving such claims. linkage evergreening and international trade law the process of evergreening may involve specific aspects of patent law and international trade law. linkage evergreening is the process whereby pharmaceutical safety, quality and efficacy regulators are required to 'link' their normal evaluation with an assessment of whether an impending generic product may infringe an existing patent. by country australia a requirement for the ausfta to come into force was fulfilment of the article 17.10.4 linkage obligation; done by amendments to the therapeutic goods act 1989 (cth). the amendments inserted a new section 26b which required applicants for marketing approval to certify their product would not infringe a valid patent claim, or that the patent holder had been notified of the application. in response, the australian government passed anti-evergreening amendments in sections 26c and 26d of the therapeutic goods act 1989 (cth) designed to prevent patent holders from manipulating the court system to lengthen the term of the patent and delay the entry of generic pharmaceuticals into the market. they are a strong statement of australia's legitimate expectations of benefit (that is of freedom from pharmaceutical price rises due to evergreening) in this area. the chief australian negotiator of this aspect of the ausfta stated: we are not importing the hatch-waxman legislation into australian law as a result of the free trade agreement... will not extend the time of the marketing approval process, and it does not add or provide any additional rights to the patent holders in that process...there is no injunction that can be applied under this article...it will be clear in the legislation tomorrow....we are establishing a measure in the marketing approval process that will fully meet the commitments under this article." in november 2004, the us expressly signalled their disapproval of australia's implementation of article 17.10.4 in an exchange of letters between the australian minister for trade and the us trade representative on the implementation of the ausfta, in which the ustr stated: if australia's law is not sufficient to prevent the marketing of a product, or a product for an approved use, where the produce or use is covered by a patent, australia will have acted inconsistently with the agreement. we will be monitoring the matter closely, and reserve all rights and remedies as discussed below. we also remain concerned about recent amendments to sections 26b(1)(a), 26c and 26d of the therapeutic goods act of 1989. under these amendments, pharmaceutical patents owners risk incurring significant penalties when they seek to enforce their patent rights. these provisions impose a potentially significant, unjustifiable, and discriminatory burden on the enjoyment of patent rights, specifically on owners of pharmaceutical patents. i urge the australian government to review this matter, particularly in light of australia's international legal obligations. the united states reserves its rights to challenge the consistency of these amendments with such obligations. the capacity of the us to make such threats is arguably facilitated by the linkage of article 17.10.4 of the ausfta to a non-violation nullification of benefits provision. canada in 1993, under the nafta-induced canadian notice of compliance (noc) regulations, drug safety, quality and efficacy regulators at health canada were prevented from issuing an authorization for market entry, until all of the relevant patents on a brand name product had been proven to have expired. as a result, when a canadian generic company (such as apotex) submits its application to get a product approved, it also sends a notice of allegation (noa) to the patent holder claiming that no patents are being infringed. the patent holder then has 45 days in which to initiate an application in the federal court of canada, seeking an order to prohibit the relevant minister from issuing a notice of compliance to the generic manufacturer for a period of 24 months, or upon resolution of the court application, whichever is sooner. the problems with this were analysed in the royal commission on the future of health care in canada or romanow report. in 2006, the supreme court of canada ruled against an instance of drug patent evergreening, two days before the food and drug regulations extended data protection on brand-name drugs from 5 to 8.5 years. india indian patent act was amended in 2005 under obligations to trips. novartis v. union of india & others is a landmark decision, in which indian supreme court upheld rejection of novartis patent by indian patent office. the key basis for the rejection was the part of indian patent law that was created by amendment in 2005, describing the patentability of new uses for known drugs and modifications of known drugs. that section, paragraph 3d, specified that such inventions are patentable only if "they differ significantly in properties with regard to efficacy." south korea the us has achieved a similar provision to article 17.10.4 of the ausfta in article 18.9.4 of the republic of korea-united states free trade agreement (korusfta). such provisions are sometimes referred to as trips-plus meaning that they are in addition to the patent requirements of the world trade organization multilateral agreement on trade-related aspects of intellectual property rights agreement. some academics prefer to refer to them as trips-minus due to their potential, but controversial and still largely unproven, deleterious impact on public health. united states various laws have provisions to limit the practice, but as of 2018 the issue remains a concern among legislators. according to one study, 12 top-selling drugs attempted an average 38 years of patent protection, above the granted 20 years. another study found that nearly 80% of the top 100 drugs extended the duration of patent protection with a new patent. issues which prevent generics from reaching the market include: lack of availability of samples to do testing; the creates act is a bill, intended to address issues in getting samples, was passed on december 20, 2019 risk evaluation and mitigation system (rems) requirements reverse payment settlements, which involve payment to delay; these are required to be reported to the ftc for generics since 2004 and biosimilars since 2018 “citizen petitions”: citizen petitions and petitions for stay of action subject to section 505(q) of the federal food, drug, and cosmetic act allow the food and drug administration to delay action on a pending generic drug application. by law, the fda is required to prioritize these petitions. however, the citizens filing concerns are not individuals, they’re corporations. the fda recently said branded drug manufacturers submitted 92% of all citizen petitions. many of these petitions are filed near the date of patent expiration, effectively limiting potential competition for another 150 days. “authorized generics": an authorized generic is exactly the same as the brand name drug, but marketed without the brand name on the label. by law, the first generic company to market a drug gets an exclusivity period of 180 days. during this time, no other companies can market a generic product. but the company with the expiring patent is not barred from launching an “authorized generic.” by selling a drug they are already making under a different name, pharmaceutical firms are effectively extending their monopoly for another six months. regulation the main arguments in favor of governments regulating against evergreening are that rapid entry of multiple generic competitors after patent expiry is likely to lower prices and facilitate competition, and that eventual loss of monopoly was part of the trade-off for the initial award of patent (or intellectual monopoly privilege) protection in the first place. in canada, the office of patented medicines and liaison under health canada has become an important regulatory mechanism for policing "linkage" evergreening. no attempt has been made to create a similar multidisciplinary regulatory agency in australia. yet, it appears that article 18.9.4 of the republic of korea-united states free trade agreement (korusfta) has been specifically drafted to permit the establishment of such a pharmaceutical patent "anti-evergreening" oversight agency. the office of patented medicines and liaison is located in the therapeutic products directorate, health products and foods branch, health canada. the notice of compliance regulations it administers require the