The economic theory of patent protection (ETPP) holds that innovation in any given field only occurs due to patents protecting the R&D investment made by the innovator, without patents proponents of this theory claim that innovation would not occur. ETPP is often cited in relation to pharmaceuticals in the literature and by industry, to justify the patenting of life-saving medicines.

Numerous elements of the manufacturing process and components of the pandemic influenza vaccines (PIV) are patentable, and are subject to patent protection in multiple jurisdictions, and this paper considers the applicability of ETPP to PIVs. This paper does this by examining a number of factors including: the patent landscape for pandemic influenza vaccines; the risk from imitators making generic vaccines if patent protection were not in place; the market dominance enjoyed by PIV manufacturers; and, the licencing and regulatory provision for creating generic vaccines.

According to the economic theory of patent law a patent serves only to incentivise innovation by providing a manufacturer with a dominant market position, and protecting them from the threat posed by imitators who wish to make a cheap replica of the product, undercutting the innovator. However, even without a patent, PIV manufacturers are in this position; because of the complicated regulatory and licencing frameworks to bring a PIV to market, manufacturers are at little to no risk from generic imitators. Moreover, the fact PIV manufacturers are selling a product that demand for outstrips supply of, to a captive market of states and organisations each hoping to secure as much vaccine as possible, provides a very strong incentive to innovate.

The unique conditions associated with pandemic influenza vaccines appear to provide more of an incentive to innovate and research in this field, than the fact that the innovations can be patented.