Drug Labeling Patents: A New Line of Defense for Protecting Old Drugs?

Pharmaceutical companies have had some success extending the lives of their patent portfolios by obtaining patents that claim the combination of a known drug, a container for holding it, and a label providing instructions for a new use of the drug. These “drug labeling patents” have given such companies a leg up in their ongoing battle with generic drug manufacturers. However, a little-noticed judicial decision handed down by the Court of Appeals for the Federal Circuit (“Federal Circuit”) has cast serious doubt over whether drug labeling claims constitute patentable subject matter.

Drug Labeling Patents

For a blockbuster drug, each additional month of market exclusivity can mean $50 million or more in revenue. Pharmaceutical companies thus employ a variety of strategies to extend patent protection as far as possible. For example, early stage patents protecting a drug are typically directed to the specific composition of matter and related compounds classes or chemical structures. During the drug development stage, patents are typically directed to potential therapeutic uses and demonstrated biologic activity. During the clinical stage, patents may be directed to specific formulations, dosage forms and manufacturing methods. Finally, after-market modifications may warrant patent protection for improved pharmacokinetics or side effect profiles. All of these patents work together to fully protect the enormous amounts of innovation involved in bringing a successful drug to market.

One recent approach to extending market exclusivity adopted by pharmaceutical companies is the procurement of drug labeling patents. Such patents typically claim “an article of manufacture” that includes the combination of a known drug, a container for holding the drug, and a label describing a new method of use of the drug. Drug labeling patents would appear to provide a number of unique benefits. For example, these patents can provide a vehicle for extending patent protection beyond claims directed to the method of use itself. Also, it is quite simple to identify an infringement of a drug labeling patent ' one need only locate the combination of drug, container and label described in the patent claims. Indeed, once this combination is found, the patent is infringed regardless of whether the ultimate use of the drug is on- or off-label. It is even conceivable that FDA-mandated labeling requirements could actually require generic pharmaceutical companies that market the drug to infringe a drug labeling patent.

To date, the pharmaceutical companies that have applied for drug labeling patents have largely been successful in obtaining them. The authors have identified a significant number of drug labeling patents issued by the U.S. Patent and Trademark Office (“PTO”). An even larger number of patent applications including drug labeling claims are currently pending.

Validity of Drug Labeling Patents Called into Question

In March 2004, the Federal Circuit issued a seemingly routine non-precedential opinion affirming the PTO's rejection of certain claims in a patent application by John Ngai and David Lin. The application was directed to a novel method of amplifying RNA. The first 18 claims covered the novel method, and were allowed. Claim 19, however, recited: “A kit for normalizing and amplifying an RNA population, said kit comprising instructions describing the method of claim 1 and a premeasured portion of a reagent selected from the group consisting of: [a known group of reagents].” Claim 19 essentially recited the combination of a known kit with instructions for the new use. The claim, which would have been very valuable from an infringement standpoint, was finally rejected by the PTO.

On appeal to the Federal Circuit, it was undisputed that the contents of the kit were known in the art. Ngai rested his argument for patentability on the fact that claim 19 is limited to kits containing instructions teaching the novel method of use described in claim 1. The addition of new printed matter, argued Ngai, distinguished the kit from the prior art. The PTO, on the other hand, argued that the claim merely teaches a new use for an existing product, and while the applicant can claim the new use as a method, he cannot claim the existing product itself. Both Ngai and the PTO invoked a rarely cited legal principle ' referred to as the “printed matter doctrine” ' to support their position.

The printed matter doctrine traces its origins back to a long-standing rule that abstractions, mental theories and business methods are not patentable subject matter. In an 1893 case, the doctrine was used to strike down a patent directed to a means for insuring merchants against bad debt losses where the claims were directed solely to certain forms used to prepare records of business transactions. The leading exception to the rule stems from a 1913 case upholding a patent for a trolley car transfer ticket with a detachable coupon. The court stated “we think the device should be classed as an article to be used in a method of doing business and thus a 'manufacture.'” Subsequent cases attempted to draw a line between the printed matter doctrine and this functional relation-to-physical structure exception.

As technology advanced, the PTO and the courts struggled with the printed matter doctrine as it applied to a primitive analog-to-digital converter (1967), specialized stereophonic recordings (1984), and computer memory devices (1994). Most notably, in 1995, the PTO attempted to use the doctrine to strike down computer programs embedded in tangible medium such as floppy disks. However, the PTO reversed its position and now states that such computer programs are patentable subject matter. The now famous 1998 State Street Bank decision, in which the Federal Circuit overturned the long-standing judicial ban on business method patents, appeared to weaken the printed matter doctrine. Nonetheless, it was used again in 2004 by the Federal Circuit in In re Ngai to strike down Ngai and Lin's RNA kit.

The modern printed matter doctrine, now more than 100 years old, still requires examination of the functional relationship between the printed matter and the substrate upon which it rests. If the functional relationship is new and unobvious, then a patent may be obtained. Applying the doctrine to Ngai's kit, the Federal Circuit sided with the PTO and affirmed the rejection. The court stated that “the printed matter in no way depends on the kit, and the kit does not depend on the printed matter. All the printed matter does is teach a new use for an existing product.” The court concluded “[i]f we were to adopt Ngai's position, anyone could continue patenting a product indefinitely provided that they add a new instruction sheet to the product.”

When the non-precedential opinion issued, the PTO exercised a seldom-used provision to file an unopposed motion for the Federal Circuit to make the case precedential ' that is, give the case the full force of law. In its motion, the PTO cited the dearth of case law explaining the printed matter doctrine. It argued that many pending and future patent applications may be affected by the Ngai decision, particularly in the medical device and chemical art units. The PTO concluded by stating “[r]eissuing Ngai as a precedential decision would provide clear authority to patent applicants that they should not seek to re-patent old products by adding a new instruction sheet.” The Federal Circuit complied, and in May 2004, the case quietly reissued as a precedential opinion. In re Ngai, 367 F.3d 1336 (Fed. Cir. 2004). Little notice was paid, but the impact on issued drug labeling patents and pending applications appears clear ' patent protection for an old drug may not be extended merely by claiming the drug in combination with a label instructing a new method of use.

Impact and Suggested Actions

Pharmaceutical companies currently relying on drug labeling patents to protect market exclusivity will want to consult with IP counsel to determine what impact, if any, the In re Ngai decision may have on the company's patent portfolio. If such patents form only a subset of a large and otherwise diverse patent portfolio that protects a drug, there may be little cause for concern. However, if the drug labeling patents are among the last in the company's patent arsenal, it may be time to consider other strategies for extending exclusivity.

For patent applications with drug labeling claims still in the pipeline at the PTO, it may be appropriate to add new claims that cover other subject matter disclosed in the patent specification. For example, the patent specification may support more traditional method of use claims. By diversifying the claims in this manner, the patent that eventually issues may be more likely to survive an invalidity challenge based on In re Ngai.

Thomas C. Fiala is a director and Jon E. Wright is an associate in the Electronics Group of Sterne, Kessler, Goldstein & Fox P.L.L.C.

Pharmaceutical companies have had some success extending the lives of their patent portfolios by obtaining patents that claim the combination of a known drug, a container for holding it, and a label providing instructions for a new use of the drug. These “drug labeling patents” have given such companies a leg up in their ongoing battle with generic drug manufacturers. However, a little-noticed judicial decision handed down by the Court of Appeals for the Federal Circuit (“Federal Circuit”) has cast serious doubt over whether drug labeling claims constitute patentable subject matter.

Drug Labeling Patents

For a blockbuster drug, each additional month of market exclusivity can mean $50 million or more in revenue. Pharmaceutical companies thus employ a variety of strategies to extend patent protection as far as possible. For example, early stage patents protecting a drug are typically directed to the specific composition of matter and related compounds classes or chemical structures. During the drug development stage, patents are typically directed to potential therapeutic uses and demonstrated biologic activity. During the clinical stage, patents may be directed to specific formulations, dosage forms and manufacturing methods. Finally, after-market modifications may warrant patent protection for improved pharmacokinetics or side effect profiles. All of these patents work together to fully protect the enormous amounts of innovation involved in bringing a successful drug to market.

One recent approach to extending market exclusivity adopted by pharmaceutical companies is the procurement of drug labeling patents. Such patents typically claim “an article of manufacture” that includes the combination of a known drug, a container for holding the drug, and a label describing a new method of use of the drug. Drug labeling patents would appear to provide a number of unique benefits. For example, these patents can provide a vehicle for extending patent protection beyond claims directed to the method of use itself. Also, it is quite simple to identify an infringement of a drug labeling patent ' one need only locate the combination of drug, container and label described in the patent claims. Indeed, once this combination is found, the patent is infringed regardless of whether the ultimate use of the drug is on- or off-label. It is even conceivable that FDA-mandated labeling requirements could actually require generic pharmaceutical companies that market the drug to infringe a drug labeling patent.

To date, the pharmaceutical companies that have applied for drug labeling patents have largely been successful in obtaining them. The authors have identified a significant number of drug labeling patents issued by the U.S. Patent and Trademark Office (“PTO”). An even larger number of patent applications including drug labeling claims are currently pending.

Validity of Drug Labeling Patents Called into Question

In March 2004, the Federal Circuit issued a seemingly routine non-precedential opinion affirming the PTO's rejection of certain claims in a patent application by John Ngai and David Lin. The application was directed to a novel method of amplifying RNA. The first 18 claims covered the novel method, and were allowed. Claim 19, however, recited: “A kit for normalizing and amplifying an RNA population, said kit comprising instructions describing the method of claim 1 and a premeasured portion of a reagent selected from the group consisting of: [a known group of reagents].” Claim 19 essentially recited the combination of a known kit with instructions for the new use. The claim, which would have been very valuable from an infringement standpoint, was finally rejected by the PTO.

On appeal to the Federal Circuit, it was undisputed that the contents of the kit were known in the art. Ngai rested his argument for patentability on the fact that claim 19 is limited to kits containing instructions teaching the novel method of use described in claim 1. The addition of new printed matter, argued Ngai, distinguished the kit from the prior art. The PTO, on the other hand, argued that the claim merely teaches a new use for an existing product, and while the applicant can claim the new use as a method, he cannot claim the existing product itself. Both Ngai and the PTO invoked a rarely cited legal principle ' referred to as the “printed matter doctrine” ' to support their position.

The printed matter doctrine traces its origins back to a long-standing rule that abstractions, mental theories and business methods are not patentable subject matter. In an 1893 case, the doctrine was used to strike down a patent directed to a means for insuring merchants against bad debt losses where the claims were directed solely to certain forms used to prepare records of business transactions. The leading exception to the rule stems from a 1913 case upholding a patent for a trolley car transfer ticket with a detachable coupon. The court stated “we think the device should be classed as an article to be used in a method of doing business and thus a 'manufacture.'” Subsequent cases attempted to draw a line between the printed matter doctrine and this functional relation-to-physical structure exception.

As technology advanced, the PTO and the courts struggled with the printed matter doctrine as it applied to a primitive analog-to-digital converter (1967), specialized stereophonic recordings (1984), and computer memory devices (1994). Most notably, in 1995, the PTO attempted to use the doctrine to strike down computer programs embedded in tangible medium such as floppy disks. However, the PTO reversed its position and now states that such computer programs are patentable subject matter. The now famous 1998 State Street Bank decision, in which the Federal Circuit overturned the long-standing judicial ban on business method patents, appeared to weaken the printed matter doctrine. Nonetheless, it was used again in 2004 by the Federal Circuit in In re Ngai to strike down Ngai and Lin's RNA kit.

The modern printed matter doctrine, now more than 100 years old, still requires examination of the functional relationship between the printed matter and the substrate upon which it rests. If the functional relationship is new and unobvious, then a patent may be obtained. Applying the doctrine to Ngai's kit, the Federal Circuit sided with the PTO and affirmed the rejection. The court stated that “the printed matter in no way depends on the kit, and the kit does not depend on the printed matter. All the printed matter does is teach a new use for an existing product.” The court concluded “[i]f we were to adopt Ngai's position, anyone could continue patenting a product indefinitely provided that they add a new instruction sheet to the product.”

When the non-precedential opinion issued, the PTO exercised a seldom-used provision to file an unopposed motion for the Federal Circuit to make the case precedential ' that is, give the case the full force of law. In its motion, the PTO cited the dearth of case law explaining the printed matter doctrine. It argued that many pending and future patent applications may be affected by the Ngai decision, particularly in the medical device and chemical art units. The PTO concluded by stating “[r]eissuing Ngai as a precedential decision would provide clear authority to patent applicants that they should not seek to re-patent old products by adding a new instruction sheet.” The Federal Circuit complied, and in May 2004, the case quietly reissued as a precedential opinion. In re Ngai, 367 F.3d 1336 (Fed. Cir. 2004). Little notice was paid, but the impact on issued drug labeling patents and pending applications appears clear ' patent protection for an old drug may not be extended merely by claiming the drug in combination with a label instructing a new method of use.

Impact and Suggested Actions

Pharmaceutical companies currently relying on drug labeling patents to protect market exclusivity will want to consult with IP counsel to determine what impact, if any, the In re Ngai decision may have on the company's patent portfolio. If such patents form only a subset of a large and otherwise diverse patent portfolio that protects a drug, there may be little cause for concern. However, if the drug labeling patents are among the last in the company's patent arsenal, it may be time to consider other strategies for extending exclusivity.

For patent applications with drug labeling claims still in the pipeline at the PTO, it may be appropriate to add new claims that cover other subject matter disclosed in the patent specification. For example, the patent specification may support more traditional method of use claims. By diversifying the claims in this manner, the patent that eventually issues may be more likely to survive an invalidity challenge based on In re Ngai.

Thomas C. Fiala is a director and Jon E. Wright is an associate in the Electronics Group of Sterne, Kessler, Goldstein & Fox P.L.L.C.