USPTO Backlog Impacts Biopharma Industry

Large pharmaceutical companies are increasingly turning to smaller biotechnology and pharmaceutical companies to supplement their drug development pipelines. When deciding whether to invest in a start-up or smaller firm, the acquiring company faces two major uncertainties: (1) Will a promising early-stage compound gain approval from the FDA? and (2) Will it be possible to obtain strong patent coverage to protect the new drug from generic competition?

Companies often evaluate the strength and breadth of patents and patent applications potentially covering a drug candidate before investing in the candidate. However, the U.S. Patent and Trademark Office (USPTO) is currently overwhelmed by a backlog of hundreds of thousands of patent applications, which delays patent examination and issuance. Thus, the strength of patent protection may be much more difficult to assess when decisions requiring substantial investment in late clinical trials are required.