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Interest in associated costs and what potentially pharmaceutical companies may pay for such patents? Also do patents generate money without selling them?

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  • There is two questions in this so it might be better to split them. The second question is good by itself, but might not be found based on the title.
    – Eric S
    Apr 1, 2017 at 14:28

2 Answers 2

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I'm not an expert in medicinal plants, so I'll address your second question about how patents generate money. First, for companies that actually make and sell things, patents are valuable in that they protect the company from competition. If you can prevent competitors, presumably you can sell more product, possibly at a higher price. Patent holders can also generate money by licensing patents. In this case, the patent holder maintains ownership but allows another company to sell product that otherwise would infringe on the patent in return for compensation. The patent owner may decide to sell the patent in return for direct or deferred compensation.

A controversial use of patents to generate money is what is often referred to patent trolling. This is where the patent is used to threaten a company with an infringement suit. The cost of pursuing a law suit is high so the company may be inclined to pay a license even if the merits of the suit favor them.

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  • Actually patent trolling is when you don't produce anything but patents and therefore threaten others while at the same time not infringing any patents with which they could sue you back because you don't produce anything. All the trolls do is file patents and more patents and then use the broad ones to threaten anyone who might do anything that comes close to those patents
    – DonQuiKong
    Apr 1, 2017 at 14:41
  • @DonQuiKong I don't think what I wrote contradicts what you are saying. One could argue that some large companies (which I'm not going to name) threaten other companies with patents they are either not using or which really aren't being infringed upon. The idea, is that with the cost of a court case is so high (and the possibility of losing even when you shouldn't) there is an inducement to settle.
    – Eric S
    Apr 1, 2017 at 14:49
  • Yes, I just narrowed your claim ;) with many big companies you can use your own patents as a defense, not so against trolls
    – DonQuiKong
    Apr 1, 2017 at 16:49
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Patenting plants in Australia

Unlike most countries, there is no general prohibition in Australia of patenting plants1. Rather, all Australian standard patents (that is, ignoring innovation patents) must fulfil the usual criteria for patentability, regardless of their subject matter. Notably, the claimed invention must be novel and involve an inventive step2.

If you have discovered a naturally-occurring medicinal plant, this is not novel per se. That is, the plant has existed well before your discovery.

However, you may have discovered a use of the plant for the treatment of a disease, or a method of preparing the plant into a medicament, or something of that nature. As long as this part is novel and involves an inventive step, you could well receive a patent for your discovery (but still not the plant itself).

Alternatively, if you have bred a plant such that it is a new variety, you may be able to receive a patent for the plant itself. Alternatively, if your variety is distinct, uniform, and stable, you would be entitled to apply for plant breeder's rights3.

Costs

Like with any patent application, this differs significantly based on the nature of your invention, who your attorney is, and how prosecution goes. So it could be anything from AUD 2000–20000.

What would a pharmaceutical company pay for a medicinal plant patent?

This is impossible to answer in general terms. 0 would be pretty typical, I suspect. But could be millions (or billions?) for the right one.

Do patents generate money without selling them?

No: a patent does not inherently produce any income. Indeed, they cost money to maintain.

The only ways to make money from a patent are:

  1. Exploit your monopoly by selling the patented products safe from competition.
  2. License your patent to others to exploit.
  3. Sue other parties for infringement of your patent (or agree not to sue in return for a payout).
  4. Sell the patent (or ownership in an entity that controls the patent).

1. Grain Pool of Western Australia v Commonwealth [2000] HCA 14 [48].

2. Patents Act 1990 s 18(1).

3. Plant Breeder's Rights Act 1994 s 43(1).

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