patent cliff
n. A sharp drop in revenue that a company experiences when a lucrative patent expires.

Example Citations:
Lilly is already facing the biggest "patent cliff" in the industry. Five of its six leading products face generic competition in the next four years. Barbara Ryan, a stock analyst with Deutsche Bank, said Lilly's earnings will decline 35 percent by 2014 unless it makes one of the larger acquisitions it has historically resisted.
—Duff Wilson, "Lilly Stops Alzheimer's Drug Trials," The New York Times, August 17, 2010

There is a simple explanation for most of the mergers and acquisitions in the pharmaceutical world these days: the so-called Patent Cliff. Simply put, many of the drug industry's biggest earners — blockbuster medications that have paid the bills for the last decade — are about to lose their patent protections.
—Christopher K. Hepp, "Big Pharma gearing up to face the Patent Cliff," The Philadelphia Inquirer, November 12, 2010

Earliest Citation:
Stanford University is poised at the edge of "the cliff," its term for the financial turning point when its leading patent — the Cohen-Boyer recombinant DNA patent — expires.
—"At the edge of Cohen-Boyer patent 'cliff', Stanford seeks $ 15 M cushion," Biotechnology Newswatch, June 21, 1993

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