Drug manufacture: trade secret or patent?

In the pharmaceutical industry, patents are commonly sought to protect the drug product, with protection for the process of its manufacture often deemed less desirable due greater difficulties in enforcement.

Here, we examine how a recent case from the European Patent Office’s Board of Appeal (T 2543/22) demonstrates a different approach, and explore whether patent protection or trade secrets are preferable where a manufacturing process is concerned.

Patent protection and trade secrets often play distinct roles in a pharmaceutical company’s intellectual property (IP) strategy.

Whilst patent protection is more frequently sought for the end drug product (where applicable), the know-how around preferred aspects of manufacture is often also protected by trade secrets.

Multinational biopharmaceutical company Amgen, however, recently sought patent protection for the method used to manufacture AMG416, a peptide drug. Marketed as Parsabiv, AMG416 is used as a treatment for secondary hyperthyroidism (sHPT) in adults with chronic kidney disease or haemodialysis.

What did Amgen’s patent application include?

Amgen’s patent application primarily concerned the formation of a disulfide bond between a D-cysteine and L-cysteine residue. This method also involved an intermediate peptide that contained a 2-pyridinesulfenyl (SPy) activating group on the D-cysteine residue.

This application was opposed by an anonymous party, which objected to the claimed inventive step of the manufacturing process involving the intermediate peptide. According to the opponent, this step was both well-known in peptide chemistry, and obvious to someone skilled in the art, thus making it ineligible for patent protection.

According to Amgen, the method of manufacture improved the yield of AMG416. A skilled person also faced multiple possible methods for manufacturing the intermediate peptide, meaning that the process was not obvious.

The European Patent Office’s Board of Appeal agreed, stating that “the skilled person would not have had a reasonable expectation of producing AMG416 in an alternative way”, and that the claimed method was not obvious given that the closest prior art only covered general information about the peptide synthesis methods. Amgen’s patent was granted, and the appeal dismissed.

Why did Amgen choose patent protection over trade secrets?

Whether a business opts for patent protection or trade secrets is dependent on what it wishes to protect, with advantages and disadvantages to both.

Protecting the drug product with a patent is often the ‘go-to strategy’ for the pharmaceutical industry, largely due to the advantages it offers in enforcement, prosecuting infringement, securing investment, and developing licensing agreements.

Nevertheless, opting for patent protection for process of manufacture can have its benefits. In Amgen’s case, securing a patent for the manufacturing process has essentially extended the period of protection for AMG416’s composition by four years, so long as another method of manufacture is not discovered and used during this time.

Patent protection versus trade secrets

Patenting manufacturing processes comes with its own difficulties, however. For generic or biosimilar drug producers in particular, it is often easier to work around a protected manufacturing process than it is for a protected product. In fact, regulatory approvals processes often require a specific manufacturing process, allowing producers to develop their own processes to avoid infringement.

It is also more complex to prove that a third-party has infringed a precise process when enforcing a patent.

Why are trade secrets used?

In some cases, trade secrets may offer more distinct advantages. Patent protection, for example, lasts for a limited time, whereas keeping know-how confidential can be achieved indefinitely, providing the right confidentiality agreements and restrictive covenants are in place.

Indeed, many biosimilar and generic drug companies rely on trade secrets to prevent competitors from reverse engineering particular processes, thus maintaining an advantage in manufacturing drugs at a competitive cost long after a patent for the original drug has expired.

Trade secrets may also become more crucial as AI-assisted drug discovery continues to gather pace. During the time it takes to grant a patent, platforms may develop so rapidly that the original application loses its commercial value or even becomes obsolete. The immediate protection provided by trade secrets would also help to prevent ‘open source’ access that would allow developers to use, and learn from, a platform.

How should I incorporate patents and/ or trade secrets into my IP strategy?

Deciding whether to choose patent protection or trade secrets will vary case-by-case. For example: drugs which are hard to manufacture, or which produce a high yield and/ or greater product purity, may be better suited to trade secrets, as these will prevent a method from being published for competitors to see.

On the other hand, when a product patent is less likely to be available, having a patent for the manufacturing process may provide the added security of an enforceable, and marketable, form of IP protection.

Quite often, therefore, a robust IP strategy in such circumstances will involve both a combination of patent protection (where possible) for enforcement, supplemented by detailed trade secrets and know-how, thereby affording the owner multi- layered IP protection to add value to their portfolio.

Given the complexity of this decision, it is advisable to have a detailed discussion with a patent attorney when developing an IP strategy. This will ensure that the business identifies the option, or combination of options, that will be the most effective approach.

^{This article was co-written by Anya Mottram.}