Published at Psych
Here is the introduction to the piece
The patent portfolio of a pre-revenue pharma company with significant R&D burn can be its lifeblood. Absent an exclusionary right, to protect the fruits of the R&D, all the resources and talent in the world may not be enough for a company to prevent a less-endowed pirate from ripping off a future blockbuster – and capturing the profit for itself.
Enter psychedelic medicine patents. A patent does not guarantee a right to practise an invention. Rather, it bestows a right to exclude competitors. By excluding other players for a limited term, the theory goes, an inventor can capture the fruits of production for him or herself over that term, thereby rewarding and incentivising innovation.
Thus, a patent’s value derives from what it excludes. Think of a patent like a fence surrounding a vineyard. The value of that fence comes not from the area it covers -the breadth of coverage – but from the value of the vines contained therein. A fence could cover very little property, but, if the enclosed vines yield many grapes, that fence could be quite valuable. Indeed, a small fence ensconcing a single productive vine could be far more valuable than a fence surrounding a vast, barren acreage.
In addition, for a patent to have value, it must be valid. A valid patent claim must be new and inventive or non-obvious. This means that the exclusionary fence must enclose new, non-obvious material. As such, the name of the patent game is not always breadth. After all, the more area enclosed by a fence, the greater the danger that the fence covers old ground.
Orange Book patents
Many (but not all) patents in the emerging psychedelic space are pharma patents: patents directed to a product or process involved in the administration of an approved pharmaceutical product or therapy. In addition, for the reasons stated above, such patents that closely track new drug products—even very narrow ones—can be some of the most lucrative in the world. Weeks of exclusivity tied to a blockbuster drug product can translate to millions in revenue. Also, these pharma patents tend to fare better when challenged in court, with significantly lower invalidation rates.