How companies can preserve market dominance after patents expire

Patents provide market protection for companies that invent a process or product and therefore they influence financial success. When patents expire however the profit streams can run dry as rival companies introduce their own, often cheaper, versions. This paper describes how companies with patents can forestall the impact of such competition and extend the profitability of the product or process. It discusses the nature of patent protection and identifies three options that are open to companies looking to put a pre-expiration strategy into place: pre-emptively launching a generic product; layering innovations; and creating line extensions. The author illustrates these strategies with examples from three sectors that rely on innovation: the pharmaceutical, semiconductor and software industries.