IP News

Supreme Court Broadly Interprets Safe Harbor Provision of Hatch-Waxman Act

On June 13, 2005, the Supreme Court issued its decision in Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. ___, 2005 WL 1383624 (2005), a case involving the “safe harbor” provision of the Hatch-Waxman Act, 35 U.S.C. '271(e)(1).

At the trial level, a jury found that Merck had infringed Integra's patents by performing animal trials with a potential new cancer therapy. The U.S. District Court for the Southern District of California ruled that Merck's research was not protected by the safe harbor provision of 35 U.S.C. '271(e)(1). The Federal Circuit affirmed the district court's opinion, pointing to the fact that Merck's experiments did not provide information for submission to the FDA.

Justice Antonin Scalia delivered the opinion for a unanimous Supreme Court. Justice Scalia began his analysis by noting that the statutory language of '271(e)(1) covers “uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA.” Integra argued that preclinical data related to a drug's characteristics other than safety, such as efficacy, mechanism of action, pharmacokinetics, and pharmacology, are not reasonably included in an IND (investigational new drug application) or an NDA (new drug application), and are therefore outside the scope of the safe harbor provision. The Court rejected Integra's arguments and found such characteristics were indeed relevant to FDA submissions, as IND applicants must provide information to make a risk/benefit analysis of the appropriateness of the trial, which necessarily includes more than just safety data.

The Court found that the safe harbor provision of '271 did not categorically exclude “(1) experiments on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA.” Rather, the Court noted that the safe harbor provision “leaves adequate space for experimentation and failure on the road to regulatory approval.” Therefore, the Court held that the safe harbor provision applies “[a]t least where a drug maker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA [since] that use is 'reasonably related' to the 'development and submission of information under … Federal law.'” The Court then vacated and remanded the case back to the Federal Circuit for analysis under the newly defined standard.

In a footnote, the Court declined to express an opinion on whether '271(e)(1) applies to the use of “research tools.” A more detailed analysis of the Supreme Court's decision will appear in the next issue of the IP Strategist.

Federal Circuit Affirms Inequitable Finding in OxyContin' Case

In Purdue Pharma L.P. v. Endo Pharms., Inc., Nos. 04-1189, 04-1347, 04-1357, 2005 WL 1330933 (Fed. Cir. June 7, 2005), the Federal Circuit affirmed the U.S. District Court for the Southern District of New York's finding that patents concerning OxyContin asserted by Purdue are unenforceable because of inequitable conduct.

The district court found that the inventors committed inequitable conduct by repeatedly arguing to the USPTO that they had “surprisingly discovered” an oxycodone formulation for controlling pain over a fourfold range of dosages for 90% of patients, compared with an eightfold range for other opioids, without informing the USPTO that the discovery was based on insight, rather than clinical tests.

On appeal, Purdue conceded that the inventors did not have scientific proof of their discovery, but argued that there was no misrepresentation because they never stated that they performed clinical tests. The Federal Circuit rejected this argument, finding that while the inventors continually relied on oxycodone's fourfold dosage range to support its patentability arguments, they failed to inform the USPTO that they did not have proof of its discovery. Thus, the court found that Purdue had failed to disclose material information that was inconsistent with its arguments for patentability. The court inferred intent to deceive the USPTO from the fact that Purdue had several opportunities to inform the USPTO that it had no proof, but “continued to describe its discovery in terms of 'results,' using precise, quantitative, and comparative language.”

Patent Reform Bill Introduced in House of Representatives

A patent reform bill sponsored by Rep. Lamar Smith (R-Texas) and Rep. Howard Berman (D-Calif.) was introduced in the House of Representatives and would make sweeping changes to U.S. patent law.

A major provision of the new bill proposes that courts automatically stay injunctions pending appeal once a patent is found to have been infringed unless the patentee can show irreparable harm. The bill also includes provisions that limit the grounds for willful infringement; establish post-grant opposition procedures; remove inequitable conduct determinations from federal courts; and replace the first-to-invent system with a first-to-file system.

DC Circuit Allows 'Authorized Generics'

In Teva Pharm. Indus. v. Crawford, No. 05-5004, 2005 WL 1313849 (D.C. Cir. June 3, 2005), the U.S. Court of Appeals for the District of Columbia Circuit ruled that brand-name companies have the right to sell “generic” versions of their own drugs.

Teva had sued the FDA seeking to overturn the FDA's denial of Teva's “citizen petition” requesting that the agency prohibit Pfizer, Inc. from marketing its drug gabapentin in generic form during Teva's 180-day exclusivity period provided by the Hatch-Waxman Act. The district court ruled that “[n]othing in the Hatch-Waxman Act prohibits NDA holders from entering the market with [an authorized] generic drug during the exclusivity period.” Teva Pharm. Indus. v. FDA, 355 F. Supp. 2d 111, 117 (D.D.C. 2004). On appeal, Teva argued that the exclusivity period should be construed to cover brand-generic competition because Congress could not have anticipated such competition and a literal interpretation of the statute would lead to a meaningless result. The DC Circuit agreed with the district court, finding that the statute only applied to other generic manufacturers, and could not be construed to impose any limitations on the NDA holder.

BlackBerry Case Returns to Court

After settling its patent dispute with NTP, Inc., BlackBerry manufacturer Research in Motion, Ltd. (“RIM”) filed a motion to stay the pending appeal and to remand the case back to the U.S. District Court for the Eastern District of Virginia to enforce the settlement deal.

According to RIM, the settlement agreement calls for RIM to pay $450 million in exchange for NTP granting RIM the unrestricted right to use its BlackBerry-related wireless business without further interference from NTP or its patents. NTP asserts that the terms of the settlement do not cover any wireless e-mail technologies RIM developed and introduced after the start of the lawsuit.

RIM's motion comes on the heels of the USPTO's decision to invalidate one of the patents-in-suit owned by NTP.

Eric Agovino is an associate in the New York office of Kenyon & Kenyon. He can be reached at 212-908-6858.

Supreme Court Broadly Interprets Safe Harbor Provision of Hatch-Waxman Act

On June 13, 2005, the Supreme Court issued its decision in Merck KGaA v. Integra Lifesciences I, Ltd. , 545 U.S. ___, 2005 WL 1383624 (2005), a case involving the “safe harbor” provision of the Hatch-Waxman Act, 35 U.S.C. ' 271(e)(1).

At the trial level, a jury found that Merck had infringed Integra's patents by performing animal trials with a potential new cancer therapy. The U.S. District Court for the Southern District of California ruled that Merck's research was not protected by the safe harbor provision of 35 U.S.C. '271(e)(1). The Federal Circuit affirmed the district court's opinion, pointing to the fact that Merck's experiments did not provide information for submission to the FDA.

Justice Antonin Scalia delivered the opinion for a unanimous Supreme Court. Justice Scalia began his analysis by noting that the statutory language of '271(e)(1) covers “uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA.” Integra argued that preclinical data related to a drug's characteristics other than safety, such as efficacy, mechanism of action, pharmacokinetics, and pharmacology, are not reasonably included in an IND (investigational new drug application) or an NDA (new drug application), and are therefore outside the scope of the safe harbor provision. The Court rejected Integra's arguments and found such characteristics were indeed relevant to FDA submissions, as IND applicants must provide information to make a risk/benefit analysis of the appropriateness of the trial, which necessarily includes more than just safety data.

The Court found that the safe harbor provision of '271 did not categorically exclude “(1) experiments on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA.” Rather, the Court noted that the safe harbor provision “leaves adequate space for experimentation and failure on the road to regulatory approval.” Therefore, the Court held that the safe harbor provision applies “[a]t least where a drug maker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA [since] that use is 'reasonably related' to the 'development and submission of information under … Federal law.'” The Court then vacated and remanded the case back to the Federal Circuit for analysis under the newly defined standard.

In a footnote, the Court declined to express an opinion on whether '271(e)(1) applies to the use of “research tools.” A more detailed analysis of the Supreme Court's decision will appear in the next issue of the IP Strategist.

Federal Circuit Affirms Inequitable Finding in OxyContin' Case

In Purdue Pharma L.P. v. Endo Pharms., Inc., Nos. 04-1189, 04-1347, 04-1357, 2005 WL 1330933 (Fed. Cir. June 7, 2005), the Federal Circuit affirmed the U.S. District Court for the Southern District of New York's finding that patents concerning OxyContin asserted by Purdue are unenforceable because of inequitable conduct.

The district court found that the inventors committed inequitable conduct by repeatedly arguing to the USPTO that they had “surprisingly discovered” an oxycodone formulation for controlling pain over a fourfold range of dosages for 90% of patients, compared with an eightfold range for other opioids, without informing the USPTO that the discovery was based on insight, rather than clinical tests.

On appeal, Purdue conceded that the inventors did not have scientific proof of their discovery, but argued that there was no misrepresentation because they never stated that they performed clinical tests. The Federal Circuit rejected this argument, finding that while the inventors continually relied on oxycodone's fourfold dosage range to support its patentability arguments, they failed to inform the USPTO that they did not have proof of its discovery. Thus, the court found that Purdue had failed to disclose material information that was inconsistent with its arguments for patentability. The court inferred intent to deceive the USPTO from the fact that Purdue had several opportunities to inform the USPTO that it had no proof, but “continued to describe its discovery in terms of 'results,' using precise, quantitative, and comparative language.”

Patent Reform Bill Introduced in House of Representatives

A patent reform bill sponsored by Rep. Lamar Smith (R-Texas) and Rep. Howard Berman (D-Calif.) was introduced in the House of Representatives and would make sweeping changes to U.S. patent law.

A major provision of the new bill proposes that courts automatically stay injunctions pending appeal once a patent is found to have been infringed unless the patentee can show irreparable harm. The bill also includes provisions that limit the grounds for willful infringement; establish post-grant opposition procedures; remove inequitable conduct determinations from federal courts; and replace the first-to-invent system with a first-to-file system.

DC Circuit Allows 'Authorized Generics'

In Teva Pharm. Indus. v. Crawford, No. 05-5004, 2005 WL 1313849 (D.C. Cir. June 3, 2005), the U.S. Court of Appeals for the District of Columbia Circuit ruled that brand-name companies have the right to sell “generic” versions of their own drugs.

Teva had sued the FDA seeking to overturn the FDA's denial of Teva's “citizen petition” requesting that the agency prohibit Pfizer, Inc. from marketing its drug gabapentin in generic form during Teva's 180-day exclusivity period provided by the Hatch-Waxman Act. The district court ruled that “[n]othing in the Hatch-Waxman Act prohibits NDA holders from entering the market with [an authorized] generic drug during the exclusivity period.” Teva Pharm. Indus. v. FDA , 355 F. Supp. 2d 111, 117 (D.D.C. 2004). On appeal, Teva argued that the exclusivity period should be construed to cover brand-generic competition because Congress could not have anticipated such competition and a literal interpretation of the statute would lead to a meaningless result. The DC Circuit agreed with the district court, finding that the statute only applied to other generic manufacturers, and could not be construed to impose any limitations on the NDA holder.

BlackBerry Case Returns to Court

After settling its patent dispute with NTP, Inc., BlackBerry manufacturer Research in Motion, Ltd. (“RIM”) filed a motion to stay the pending appeal and to remand the case back to the U.S. District Court for the Eastern District of Virginia to enforce the settlement deal.

According to RIM, the settlement agreement calls for RIM to pay $450 million in exchange for NTP granting RIM the unrestricted right to use its BlackBerry-related wireless business without further interference from NTP or its patents. NTP asserts that the terms of the settlement do not cover any wireless e-mail technologies RIM developed and introduced after the start of the lawsuit.

RIM's motion comes on the heels of the USPTO's decision to invalidate one of the patents-in-suit owned by NTP.

Eric Agovino is an associate in the New York office of Kenyon & Kenyon. He can be reached at 212-908-6858.