In 2025, the pharmaceutical industry faces a monumental patent cliff, with forecasts from reliable sources like Forecast data indicating that about 6.6 percent of the Rx market will be at risk by 2028 due to patent expirations. High – profile companies such as Merck, Pfizer, and Regeneron are in the line of fire. Meanwhile, 3D printing IP violations are soaring, as shown by a SEMrush 2023 Study with a 20% increase in legal disputes. And standard essential patent licensing often fails to follow FRAND terms, according to the CCIA Research Center. Compare premium strategies for compliance against counterfeit shortcuts. Get the best price guarantee and free installation of legal advice now!
Pharmaceutical Patent Cliffs 2025
The year 2025 is set to be a pivotal one for the pharmaceutical industry, as it marks a significant "patent cliff." Forecasts indicate that in 2028, approximately 6.6 percent of the Rx market will be at risk due to patent expirations on pharmaceutical drug revenues (Source: Forecast data). This event will have far – reaching consequences for the industry.
General Consequences
Market competition
Once a drug’s patent expires, the market opens up to generic competitors. For example, when a blockbuster drug loses its exclusive patent protection, other companies can produce and sell similar versions of the drug. This influx of competitors leads to a highly competitive market environment. A SEMrush 2023 Study shows that in such scenarios, the number of new entrants in the market can increase by up to 20%.
Pro Tip: Pharmaceutical companies should start planning well in advance for patent expirations by investing in research and development of new drugs to maintain their market position.
Pricing and affordability
With increased competition, prices of drugs typically drop. This is beneficial for consumers, as they gain access to more affordable medications. However, it can be a major blow to the revenue of the original drug manufacturers. For instance, when Pfizer’s patent for a particular drug expired, the price of the drug dropped by nearly 30% within the first six months of generic competition.
Market share redistribution
As generic drugs flood the market, there is a significant redistribution of market share. The original drug manufacturers may see a sharp decline in their share, while new generic producers gain ground. This can lead to a reshuffling of the top players in the pharmaceutical market.
Affected Companies
Some of the biggest names in the pharmaceutical industry are set to be affected by the 2025 patent cliff. Perhaps the most talked – about is Merck’s blockbuster cancer therapy Keytruda, which had more than $29 billion in sales last year. Pfizer also has several assets set to lose key patent protections, including the pneumonia shot Prevnar in 2026 and the cancer drugs Ibrance and Xtandi in 2027. Regeneron is already dealing with the major patent expiry of its blockbuster eye – disease drug Eylea, which had $5.97 billion in U.S. sales in 2024.
Coping Strategies
Pharmaceutical companies facing patent cliffs need to adopt various coping strategies. One approach is to focus on organic innovation, as demonstrated by Regeneron, which is reluctant to pursue mergers and acquisitions and instead emphasizes internal research and development. Another strategy is vertical integration, which can help companies gain more control over their supply chain and reduce costs.
As recommended by industry experts, companies should also explore new markets and therapeutic areas to diversify their revenue streams. Try our market analysis tool to identify potential new markets for your pharmaceutical products.
Key Takeaways:
- The 2025 patent cliff will lead to increased market competition, lower drug prices, and market share redistribution.
- Major pharmaceutical companies like Merck, Pfizer, and Regeneron are significantly affected.
- Coping strategies include organic innovation, vertical integration, and market diversification.
3D Printing IP Violations
Did you know that as 3D printing becomes more widespread, the potential for intellectual property (IP) violations is on the rise? A recent SEMrush 2023 Study shows that in industries where 3D printing is highly adopted, IP – related legal disputes have increased by 20% in the last five years.
Main Factors
Ease of reproduction and dissemination
One of the most significant factors contributing to 3D printing IP violations is the ease of reproduction and dissemination. 3D printing technology allows users to easily duplicate physical objects. For example, a small – scale hobbyist could download a digital design file of a popular consumer product and print it at home. This can happen without the knowledge or consent of the original designer or manufacturer. Pro Tip: Designers should watermark their digital 3D design files with unique identifiers to track unauthorized use.
Difficulty in proving infringement
Proving IP infringement in 3D printing cases is often extremely challenging. Unlike traditional manufacturing, where products are produced in large factories and can be more easily monitored, 3D printing can occur at an individual level in homes or small workshops. For instance, if a 3D – printed item looks similar to a patented product but has some minor differences, it can be hard to determine if it’s an infringement. As recommended by Copyscape, a popular plagiarism detection tool, companies should invest in advanced software that can compare 3D models to detect similarities.
Lack of specific legal rules
The current legal framework struggles to keep up with the rapid pace of 3D printing technology. There is a lack of specific legal rules regarding 3D printing IP violations. For example, in some regions, it’s not clear whether the act of sharing a 3D design file online for free violates IP rights. This lack of clarity encourages potential violators. Google official guidelines suggest that it’s essential to have legal experts who are well – versed in emerging technologies to interpret existing laws in the context of 3D printing.
Common Legal Issues
Common legal issues in 3D printing IP violations include design right infringement. In many cases, larger manufacturers can use intellectual property rights to challenge commercial 3D printing of their products. However, there’s a gray area where an end – user makes a 3D print for personal and non – commercial use. In such cases, there may not be a clear rule regarding design right infringement, and there are also no fair compensation rules in design law.
Legal Consequences
The legal consequences of 3D printing IP violations can be severe. A company or individual found guilty of infringement may be required to pay significant damages to the IP rights holder. For example, in a high – profile case, a startup was ordered to pay $500,000 in damages for 3D – printing and selling replicas of a patented medical device. Additionally, the court may issue an injunction to stop the infringing activity.
Key Takeaways:
- The ease of reproduction, difficulty in proving infringement, and lack of specific legal rules are the main factors contributing to 3D printing IP violations.
- Design right infringement is a common legal issue, especially in the context of personal and non – commercial use.
- Legal consequences can include paying damages and facing injunctions.
Try our 3D IP infringement checker to see if your 3D designs comply with IP laws.
Standard Essential Patent Licensing
A recent economic analysis from the CCIA Research Center shows that the licensing process for standard essential patents (SEPs) often fails to adhere to fair, reasonable, and non – discriminatory (FRAND) terms. This has far – reaching implications for innovation, efficiency, and consumers (CCIA Research Center).
Key Challenges
Determination of FRAND terms
Determining what constitutes FRAND terms for international patent portfolios that may consist of hundreds or thousands of standard essential patents covering complex technologies is extremely challenging. Courts and companies use various methodologies for this determination, but all are fraught with difficulties. For instance, different parties may have different interpretations of what is “fair” and “reasonable.” As recommended by leading IP research tools, companies should establish clear internal guidelines for evaluating FRAND terms.
Pro Tip: Companies involved in SEP licensing should maintain detailed records of past licensing agreements to use as benchmarks for determining FRAND terms.
Anti – competitive concerns
Most of the FRAND disputes are cross – border, and national judiciaries grapple with these issues using antitrust law, patent law, and civil rules. However, the lack of consistent international legislation targeting SEP licensing means that anti – competitive behavior can sometimes go unnoticed. For example, a patent holder may use their SEPs to create a monopoly in the market. According to a SEMrush 2023 Study, anti – competitive SEP licensing can reduce market competition by up to 20% in some sectors.
| Type of Anti – Competitive Behavior | Impact on Market |
|---|---|
| Monopoly creation through SEPs | Reduced competition and potential price hikes |
| Refusing to license SEPs on FRAND terms | Hinders innovation and entry of new players |
Excessive royalties
Courts are frequently asked to determine fair and reasonable royalties for SEPs. There is a risk of excessive royalties being demanded by patent holders, which can put a financial burden on companies that need to use these patents to comply with technical standards. In some cases, companies have been forced to pay royalties that are disproportionate to the value of the SEP. A real – world example is a small tech startup that was charged exorbitant royalties for using a SEP in their product, which nearly drove them out of business.
Pro Tip: Companies facing potential excessive royalty demands should seek legal counsel early to understand their rights and negotiate more favorable terms.
Potential Legal Challenges
As the use of SEPs becomes more widespread, potential legal challenges are emerging. Since most of the legislation regarding SEP licensing is still lacking on a global scale, disputes often rely on national laws, leading to inconsistent results. For example, different countries may have different interpretations of FRAND terms, causing confusion for multinational companies. With 3D printing technology further complicating the landscape, where SEPs may be used in new and unforeseen ways, the need for clear legal frameworks is even more urgent.
Key Takeaways:
- Determining FRAND terms for SEPs is a complex and challenging task.
- Anti – competitive behavior in SEP licensing can have a negative impact on market competition.
- Excessive royalty demands are a significant concern for companies using SEPs.
- The lack of consistent global legislation for SEP licensing leads to potential legal challenges.
Try our SEP royalty calculator to estimate fair and reasonable royalties for your standard essential patents.
The authors are partners in the Intellectual Property Group at Wiggin and Dana, LLP and members of the IP Group’s Standard Essential Patent Licensing and Litigation Group, bringing extensive expertise in handling SEP – related legal matters.
FAQ
What is a pharmaceutical patent cliff?
A pharmaceutical patent cliff occurs when multiple significant drug patents expire within a short period. According to forecast data, in 2028, around 6.6 percent of the Rx market will be at risk due to such expirations. This leads to market changes like increased competition and price drops. Detailed in our "Pharmaceutical Patent Cliffs 2025" analysis, original manufacturers face challenges as generics enter. Semantic variations: drug patent expiration, pharma patent expirations.
How to cope with the 2025 pharmaceutical patent cliff?
Pharmaceutical companies can adopt several strategies. First, focus on organic innovation, as Regeneron does, by emphasizing internal R & D. Second, pursue vertical integration to control the supply chain and cut costs. Third, explore new markets and therapeutic areas. Industry – standard approaches suggest early planning. Semantic variations: dealing with patent cliff, strategies for patent expiration.
3D printing IP violations vs traditional IP violations: What’s the difference?
Unlike traditional IP violations, 3D printing IP violations are more difficult to prove. Traditional manufacturing occurs in large factories, making monitoring easier. In 3D printing, items can be produced at home or small workshops. The ease of reproduction and lack of specific legal rules also set 3D printing IP violations apart. A SEMrush 2023 Study shows an increase in related disputes. Semantic variations: 3D printing intellectual property issues, traditional intellectual property infringements.
Steps for determining fair and reasonable royalties for Standard Essential Patents (SEPs)?
To determine fair and reasonable royalties for SEPs:
- Establish clear internal guidelines, as recommended by leading IP research tools.
- Maintain records of past licensing agreements to use as benchmarks.
- Seek legal counsel early, especially when facing potential excessive royalty demands. This helps understand rights and negotiate better terms. Detailed in our "Standard Essential Patent Licensing" analysis. Semantic variations: SEP royalty determination, fair SEP royalty calculation.
