On April 16, the R Street Institute hosted a congressional briefing entitled “The Hidden Tax: How Bad Patents Drive Up Drug Prices for Everyone,” featuring speakers from other anti-IP activists such as Public Citizen and the Coalition Against Pharmaceutical Patent Abuse. The conversation focused largely on a familiar, false narrative — that companies frequently file patents on frivolous changes to their products in order to extend patent protection and prevent competing products from coming to market, a practice often referred to as “evergreening.”
R Street’s discussion of evergreening focused on the pharmaceutical industry and the alleged impact of drug prices. But similar accusations have historically been leveled against other companies, such as smartphone manufacturers, as well. Regardless of the industry context, the evergreening narrative is false, as it fundamentally mischaracterizes the nature of the patent system. Companies can’t extend patent life by filing additional patents, and they can’t patent just any “minor” product tweak. All patents must meet the statutory requirements of the Patent Act to be issued, and the patent system exists in part to promote the very improvements that these critics decry. Importantly, patents on improvements do not extend the life of earlier patents, allowing for anyone to make and use the products covered by the earlier patents once they expire.
Below, we set the record straight on the two major assumptions that underpin the evergreening narrative:
| Claim: Companies can block market competition by filing new patents on existing products. |
| In reality: Filing new patents allows companies to protect newly developed improvements to their products, but it does not extend the life of earlier, existing patents. Every new patent covers only the specific invention it claims. Existing patents still expire on the same timeline regardless of any related patents that were filed afterward. As a result, competing companies will typically be able to reproduce the original product and its components roughly 20 years after those initial patents are filed, even though consumers may prefer the version that has been updated with new improvements.In the context of drug development — where “evergreening” claims are often most common — there is clear data demonstrating that companies do not extend their patent life by filing additional patents. In 2024, the USPTO investigated claims about purported patent abuses and published a study showing that the effective market exclusivity for the drugs it studied was much shorter than the statutory patent term — about 11.4 years, on average. It also found that the number of patents associated with a drug does not correlate with longer exclusivity periods. In other words, more patents do not mean more time without competition.
Across sectors, companies continue to invent and patent related innovations, but these patents do not — and cannot — force out competition. Once the original patents expire, competitors are free to enter the market by making and selling the underlying invention as originally claimed, regardless of any later-filed patents covering distinct improvements. |
| Claim: Companies often file frivolous or low-quality patents just to extend exclusivity. |
| In reality: Companies cannot acquire patents on just any product tweak. To be patented, an invention must meet strict statutory requirements, including being novel, useful, and non-obvious. In other words, it must be a patentable invention, not a trivial change. Some patent detractors argue that many granted patents are low-quality and do not meet these standards. But empirical evidence debunks that view. A study by the nonpartisan Sunwater Institute found that the rate at which the USPTO erroneously grants patents that do not meet statutory requirements is low — only about 7% — and that the USPTO outperforms many other patent offices in this regard, including those of the European Union, Japan, and South Korea. The study also found that the USPTO is more than twice as likely to deny a valid patent claim than it is to approve an invalid patent claim.More importantly, the benefits of so-called “follow-on” innovation are often substantial. In medicine, improvements can make medicines safer, more effective, or easier for patients to use — which can save lives by reducing side effects and promoting adherence to treatment prescriptions. In smartphones, incremental innovation has dramatically improved battery life, camera quality, processing power, and connectivity. In automobiles, patented inventions have, over time, enabled advances in fuel efficiency, crash safety, emissions reduction, and driver-assistance technologies.
Additionally, many consumers and patent critics may erroneously view patents that are part of complex technologies, such as smart devices and medicines, as unimportant because they are viewing these innovations in isolation — when in reality, they are best understood as components of highly integrated systems. For instance, the first iPhone included roughly 200 patents. But by 2012, when the iPhone 5 was released, Apple owned more than 270 patents related to phone camera technology alone. That number may seem large, but it contributed to significant improvements in image quality — and it reflects the fact that even incremental improvements to today’s complex technologies require substantial research and development and the combination of many distinct technical innovations. In short, patenting changes to existing products does not amount to gaming the system. Patenting is critical to protecting R&D investments in the expensive process of iterating and improving. Without patent protection, competitors could copy product improvements immediately, making it unsustainable for companies to continue developing products that have already reached the market. Far from being abusive or anti-competitive, patents on improvements are essential to incentivize continuous progress that delivers real benefits to consumers. |