End of the Monopoly: When Patents Expire

When you have a patent registered with the USPTO, you get up to a 20-year exclusive monopoly to practice your patent. No one can make your patented invention or use your patented process without your permission.

Patent = Monopoly on your Invention

One of the key benefits of having a patent is it gives you the exclusive right to practice your patent for up to 20 years. This essentially creates a market of one product. Other companies may create products that are similar to your invention or that accomplish the same task, but it cannot copy your invention.

Without exact competition in the marketplace, it is easier to set higher prices for your product. This can lead to more profit for the company and therefore, more available funds to spend on marketing. When you are the only supplier, you get all the demand. Many companies try to capitalize on their monopoly while it lasts.

Expired Patent = End of the Monopoly

“Viagra” by Paille from Flickr (Creative Commons License)

When a patent expires, it enters the public domain. (When you file a patent, you have to disclose enough information so that a person of ordinary skill can create the invention.) Anyone can use the information from your patent to create and use your formerly-patented invention or process – and sell it. The monopoly for the patent owner ends and there is increased competition in the marketplace.

We see this situation play out in the pharmaceutical industry. When a patent for a drug ends, other companies can make and sell generic versions of the drug. This drives the price down, as many consumers don’t want to pay full price for the name brand version when the generic brand is the exact same product at a lower price.

Patents Playing out in Real Life: NFL Advertising

“Goal Post 2” by Matt Denton from Flickr (Creative Commons License)

We are seeing this issue play out in real life as the 2017 National Football League (NFL) season approaches: both Viagra and Cialis, erectile dysfunction drugs that were frequently advertised during NFL games, have not purchased any advertisements for this season. These two drugs spent an estimated $50 million in NFL advertising last season and now they don’t appear to be spending a penny.

The most likely reason? Both drugs are losing their patents later this year.

Viagra, which was once one of the NFL’s top 40 highest-spending advertisers has not aired a national television commercial since May 15, 2017. The first generic version of Viagra expected to become available later this year.

Likewise, the patent for Cialis will expire during the 2017 NFL season. It has not purchased ads to run during football games to date. Erectile dysfunction ads, which were commonplace during NFL games for over a decade, may be completely absent with Viagra and Cialis both losing their patent exclusivity this year. (Note: The pharmaceutical companies that own these patents haven’t gone broke. They will likely reallocate their advertising dollars to medications that are still under patent.)

Patents and Marketing

When you are thinking about applying or if have applied for a patent, consider the impact that the patent will have on your marketing budget and efforts. If you get a registered patent, the law gives you a 20-year monopoly to maximize your profits before your patent expires and your invention or process enters the public domain where anyone can use it for any purpose, including to compete with you.

If you need more information about filing for or obtaining patent, please send us a message. Our attorneys have over 100 years of combined experience and are licensed in Arizona, Connecticut, and New York. We can handle federal intellectual property matters in any U.S. state and assist with international matters. For even more information, sure to connect with us on Facebook.

Post written and edited by social media attorney Ruth Carter.

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