A UK publication, Medical News Today, has asked for input on how to deal with the growing problem with royalty stacking, the sharing of third-party royalties caused by a multiplicity of overlapping patents. The article states that many companies are forced to pay large amounts to obtain these multiple licenses and, hence, are forced to raise prices and are being discouraged to undertake technical innovation. See the entire article here.
The article cited a vaccine plus adjuvant as an example of a product that would be a difficult option to commercialize due to the multiple, overlapping patents held by varying parties. They go on to state that growing litigation and rising production costs, along with stacking is also constraining research causing "closure of vital projects mid way through development." They especially point to biotech companies as being a problem area.
Some suggested remedies include (i) use of clearing houses, consortia and cross-licensing; (ii) patent pools, exclusive and non-exclusive licenses; and (iii) risk-adjusted royalties or demanding up-front payments rather than royalties.
This seems to be another one of those articles about companies saying "We want to make more money so stop asking for so much of a cut!" Look, it’s a free market and the market bears what it can or it doesn’t. I don’t think it’s fair that I have to pay my local telephone bill and then pay the "stacked" charges for long distance by the long-distance telephone company. But crying about it doesn’t make it the fault of the telecos. I have often been involved in renegotiating deals when the reality at the end of the road made commercialization impractical. No one will make any money unless the end product is a success so everyone is free to negotiate (or re-negotiate) as they wish.
If you are interested in an analysis overview providing an introduction into the Strategic Analysis of Royalty Stacking for Pharmaceutical and Biopharmaceutical Products – then send an email to Katja Feick -Corporate Communications at katja.feick@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Email. Upon receipt of the above information, an overview will be emailed to you.
