The Divisional Games, the Case of Teva’s Blockbuster Drug, Copaxone: A Law and Economics Perspective

Patents offer exclusive proprietary rights to the inventor for a limited duration. These rights are a key enabler of innovation, for example when it comes to the development of new molecules in the pharmaceutical sector. In return, this knowledge enters public domain, as the product goes off-patent. Further, in light of the long regulatory approval, and clinical trials required in the pharmaceuticals sector, there exists a supplementary and extended period of protection. To manage their patent portfolio, the pharmaceuticals industry deploys various life-cycle management strategic patenting activities. Copaxone is a case in point. Whether these strategic patenting activities are ultimately beneficial from a welfare perspective, and legitimate from a competition law perspective, is contested. This contribution looks at divisional patent filing strategies from an economics, patent law, and competition law perspective. It uses Copaxone as a case study.