Malta started to attract pharmaceutical companies thanks to the way in which it adopted the Bolar Provision into its laws.
The Bolar Provision resulted from the judgment in a case instituted by Roche Products against Bolar Pharmaceuticals, in an attempt to stop them starting the Food and Drug Administration approval process until the patent had expired. The US subsequently passed an Act which allowed generic companies to start the approval process.
It means that although the patent holder for a drug can protect it for 20 years, generic companies can do testing and clinical trials before this date. As soon as the patent expires, the generic company is ready to launch its alternative without wasting precious time.
In the EU, such a right was not harmonised at EU level until 2004, when a Bolar-type provision was introduced, but it varies among member states.
The Maltese legal system allows a wide definition. This competitive edge was enhanced by the fact that at the time there were only a relatively small number of patents registered in Malta.
In 2007 Malta joined the Europ-ean Patent Organisation, so all patents filed in Europe after this date were automatically valid in Malta.