FDA Lawyers Blog

by Russell A. Garman, Ph.D.

The popularity of dietary supplements continues to catch the attention of the federal government. Aside from the draft guidance recently released by FDA clarifying the requirements on dietary supplement distributors and manufacturers containing a new dietary ingredient, on June 30 U.S. Senators Dick Durbin (D-IL) and Richard Blumenthal (D-CT) introduced the Dietary Supplement Labeling Act (S.1310).

The proposed legislation requires companies to submit to FDA a description of each dietary supplement product that they manufacture, a list of all ingredients in each product, and a copy of the label and labeling for each product. The Bill also requires FDA to work with the Institute of Medicine in determining dietary supplement ingredients and proprietary blends of ingredients that can cause potentially serious adverse events, drug interactions, contraindications, and other effects, and to establish a mandatory warning label requirement for these dietary supplement ingredients and blends of ingredients. In addition, the Bill requires FDA to establish a definition for the term "conventional food," taking into account conventional foods marketed as dietary supplements and products marketed dietary supplements that simulate conventional foods.

The Bill is purportedly in response to a recent controversy involving "Lazy Cakes" brownies, which contain the neurohormone melatonin. In his May 18, 2011 letter to FDA Commissioner Margaret A. Hamburg, M.D. , Durbin raised concerns with about Lazy Cakes and other baked goods containing melatonin that are marketed as dietary supplements and do not require FDA pre-market approval for safety and efficacy. And now with the proposed Billtion, Durbin is looking to curb this practice. Durbin points out that products such as Lazy Cakes, Drank, and Monster Energy Drink "market themselves as dietary supplements that are safe ways to relax or get a boost of energy, when in reality they are foods and beverages taking advantage of the more relaxed safety standards for dietary supplements."

However, critics have accused the Bill as undermining the dietary supplement industry and of giving FDA unnecessary power to address problems that it already has the authority to remedy. For example, some critics question why the provisions in the Bill apply to supplement manufacturers and do not address the issues surrounding the illegal sale of Lazy Cake, while others note that FDA already has the authority to take action against the producers of Lazy Cake for its violation of the law prohibiting the sale of a supplement as food, and yet FDA has not acted. Further, some point out that a new dietary ingredient (i.e., a new supplement) is already covered through the existing new dietary ingredient ("NDI") notification process. In a press release, the Council for Responsible Nutrition summarized many of these criticisms of the Bill: "The bill contains duplicative requirements that already exist under current law that gives FDA the proper legal authority to take action to protect consumers and maintain safety standards. FDA needs to continue working toward becoming a more efficient steward of its resources, and we continuously call on the Agency to use its power under the law."

by Brian Malkin

On July 5, FDA announced in the Federal Register that it had finalized its draft exemptions from substantial equivalence requirements. The purpose of the final rule is to "establish procedures for requesting an exemption from the substantial equivalence requirements of the Family Smoking Prevention and Tobacco Control Act ("Tobacco Control Act"). The effective date of the rule is August 4, 2011.

Final Rule on Exemption for Substantial Equivalence

On January 6, 2011, FDA issued its notice of proposed rulemaking, which we blogged on here. According to the Tobacco Control Act, new products not marketed prior to February 15, 2007, require some form of premarket clearance or approval prior to marketing. For products marketed prior to March 22, 2011, the Act requires premarket approval or filing a 905(j) substantial equivalence report, unless FDA later determines the product is not substantially equivalent to a predicate (similar) tobacco product. A predicate product must have been marketed as of February 15, 2007. For products that a company intends to market after March 22, 2011, the Tobacco Control Act requires either a premarket approval, a finding of substantial equivalence, or a waiver for finding the product substantially equivalent prior to marketing. For all products not on the market as of June 22, 2009 (The date the Tobacco Control Act became law.), the Tobacco Control Act requires that FDA be provided with a list of ingredients in the product at least 90 days in advance of the intended marketing date.

Despite the promise for a waiver process, the process outlined in the final rule is only effective August 4, 2011. This means that for products not marketed until March 22, in theory they have not been able to take advantage of the waiver process yet. While most tobacco reports to FDA have been by forms, either in paper or electronic format, the substantial equivalence report has no current form. The final rule states, however, that an exemption for substantial equivalence must be filed electronically. FDA also has a webpage on substantial equivalence and associated exemptions for additional updates, which also provides information for small businesses.

by Jason Kanter

On June 16, the House of Representatives passed a spending bill (H.R. 2112) cutting all funding from the Microbiological Data Program ("MDP"), which food safety experts have called the United States's most important defense against produce-borne E. coli . As we reported earlier, the bill also included approximately $200 million in cuts to FDA's 2012 fiscal budget.

The MDP was established by the United States Department of Agriculture ("USDA") in 2001 and is charged with monitoring and collecting data on important food-borne pathogens in produce. The program collaborates with 12 state agriculture departments to test over 15,000 samples of alfalfa sprouts, cantaloupe, cilantro, hot peppers, lettuce, spinach, and tomatoes annually for salmonella and multiple strains of E. coli. In comparison, the FDA tests only approximately 1,000 samples of produce each year, and screens for a smaller variety of pathogens.

The proposed cuts may be somewhat surprising given the recent highly-publicized outbreak of Shiga Toxin-Producing Escherichia coli ("STEC") in Germany. The outbreak, thought to be the result of contaminated bean sprouts, has caused nearly 4000 reported illnesses and over 50 deaths as of yesterday. Unlike FDA, the MDP tests for the types of STECs that have been found to be the cause of the Germany outbreak.

by Dan Constantinescu, Ph.D.

As we previously reported, the D.C. Circuit recently vacated a preliminary injunction granted by a district court, which limited the National Institutes of Health's ("NIH's") ability to fund human embryonic stem cell ("HESC") research. The decision is one in a continuing battle between the plaintiffs and the NIH in Sherley v. Sebelius, 1:09-cv-01575, currently before the U.S. District Court for the District of Columbia. At issue is whether NIH guidelines, promulgated in response to President Obama's executive order relaxing limitations on NIH-funding of HESC research, violate the Dickey-Wicker Amendment. In part, Dickey-Wicker prohibits the NIH from using appropriated funds for research in which a human embryo or embryos are destroyed, discarded, or knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero.

The plaintiffs claim, in part, that NIH's guidelines are in violation because the guidelines (1) fund research in which a human embryo or embryos are destroyed ("destroyed" claim); (2) fund research in which a human embryo is knowingly subjected to risk of injury or death ("risk of injury or death" claim). The plaintiffs argue that the meaning of the term "research," as used in Dickey-Wicker, is wide in scope and refers to systematic or extended research. Under this interpretation, funding of a project involving research of HESC cells that have already been derived violates Dickey-Wicker because the field of HESC research generally involves the destruction of the embryos from which the cells were derived. The defendants argue that the meaning of the term "research" is narrow in scope, and refers only to discrete research projects. Under this interpretation, funding of a research project using HECSs that have already been derived does not violate Dickey-Wicker because the actual funded research project does not destroy any embryos.

In Chevron U.S.A. Inc. v. Natural Resources Defense Council, the Supreme Court adopted a two-part analysis, for determining whether to grant deference to a government agency's interpretation of a statute that it administers. Briefly, the two part test consists of:

(1) "First, always, is the question whether Congress has spoken directly to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court as well as the agency must give effect to the unambiguously expressed intent of Congress." "If the Court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction of the statute . . . Rather,

(2) [I]f the statute is silent or ambiguous with respect to the specific question, the issue for the court is whether the agency's answer is based on a permissible construction of the statute." Chevron, 467 U.S. 837, 842-843 (1984).

by Michael W. Harkness

Attorneys involved in Hatch-Waxman work may want to take a good look at a recent decision from a District Court in the District of New Jersey. The unpublished decision, Nycomed US Inc. v. Tolmar, Inc. (D.N.J. 2011), involved a dispute over whether a Paragraph IV notice letter is a confidential document that should be protected from unrestricted disclosure under a related discovery confidentiality order. The New Jersey District Court deferred to FDA's previous statements in holding that Paragraph IV notice letters are to be considered public disclosures, and therefore available to anyone with access to the Internet. ANDA filers should now be aware that, at least in the District of New Jersey, information contained in a Paragraph IV notice letter can be made public, even if the information appears to be protected by an offer of confidential access.

The court in Nycomed noted that FDA had previously stated multiple times that Paragraph IV notice letters were to be considered public disclosures. In particular, the court considered FDA's statement from June, 2003 in the Federal Register addressing the question "Should all Paragraph IV Certifications Be Made Public . . . ?" to be especially persuasive:

We decline to amend the proposed rule to make public all paragraph IV certifications . . . . Under current practice, paragraph IV certifications are subject to public disclosure under the Freedom of Information Act (FOIA) and FDA's public disclosure regulations once the notice of the paragraph IV certification has been provided to the NDA holder and patent owner. Because the notice to the NDA holder or patent owner of the paragraph IV certification is considered a public disclosure after notice has been given, the certification is available under FOIA.

by Andrew S. Wasson

FDA recently released a draft guidance clarifying the requirements that the Dietary Supplement Health and Education Act of 1994 ("DSHEA") places on distributors and manufacturers of dietary supplements containing a new dietary ingredient ("NDI"). In particular, the draft guidance ("Dietary Supplements: New Dietary Ingredient Notifications and Related Issues") describes when a distributor or manufacturer must notify FDA of an NDI and the types of information required by such a notification. FDA estimates that there are approximately 55,600 dietary supplement products on the market, and that FDA has received approximately 700 NDI notifications over the last 16 years. The draft guidance presents information in a question and answer format.

When Congress passed DSHEA in 1994, it created a new framework for the regulation of dietary supplements, which were previously regulated no differently than foods. Generally speaking, dietary supplements are not subject to pre-market approval, with the exception of a supplement containing an NDI. DSHEA defines an NDI as "a dietary ingredient that was not marketed in the United States before October 15, 1994 and does not include any dietary ingredient which was marketed in the United States before October 15, 1994." 21 USC § 350b. DSHEA provides that a dietary supplement containing a NDI is adulterated unless the supplement (a) "contains only dietary ingredients which have been present in the food supply as an article used for food in a form in which the food has not been chemically altered" or (b) the firm submits a premarket notification to FDA seventy-five days prior to introducing (or delivering for introduction) a supplement containing an NDI into interstate commerce. A firm must show in its premarket notification that there is "a history of use or other evidence of safety" establishing that the dietary ingredient "will reasonably be expected to be safe" when used as directed.

As some industry observers are quick to point out, the draft guidance does not change the requirements set forth in DSHEA or the related regulations. The draft guidance subsumes its recommendations generally under three categories: (1) when is it necessary to provide a new dietary ingredient notification, (2) a description of NDI notification procedures and timeframes, and (3) what to include in an NDI notification. In broad strokes, FDA recommends including (1) a full description of the NDI's identity, composition, and the marketed dietary supplement, (2) the basis for considering it an NDI, (3) the recommended or ordinary conditions of use, (4) and "an explanation of how the history of use or other evidence of safety in the notification justifies the notifier's conclusion that the dietary supplement containing the NDI will reasonably be expected to be safe."

FDA suggests submitting comments within 90 days of the draft guidance's promulgation (June 29, 2010) to ensure consideration.

by Brian Malkin

At the Drug Information Association's 47th Annual Meeting in Chicago, FDA spoke for the first time on the Biologics Price Competition and Innovation Act ("Biosimilars Act") and the challenges it has been facing developing useful guidance to industry wanting to develop a biosimilars market.

On June 20, FDA's first panel consisted of John K. Jenkins, M.D., Director, Office of New Drugs, who provided an overview, Janice L. Weiner, J.D., M.P.H., Office of Regulatory Policy, then provided an overview of the biosimilars approval pathway under the Biosimilars Act and selected related statutory requirements, and Leah Christl, Ph.D., Associate Director for Biosimilars, Office of New Drugs, discussed implementation of the Biosimilars Act, focusing on the review process for biosimilars. In addition the panel included a discussion on the evaluation and functional similarity between protein products: scientific and analytical tools provided by Emily Shacter, Ph.D., Chief, Laboratory of Biochemistry, Office of Biotechnology Products, CDER, and Robert A. Yetter, Ph.D., Associate Director for Review Management, Office of the Director, CBER.

Highlights of the first panel included:

• Weiner explaining that FDA's first guidance will be very general with the goal of clarifying expectations. Weiner said that topics FDA is considering include: (1) product class transitions from 505(b)(2) NDAs to biologics license applications ("BLAs"), (2) how to utilize comparative animal and clinical data from non-U.S. biosimilar-type products in the evaluation of U.S. biosimilars, (3) clarifying "publicly available information" from referenced BLAs for biosimilars, (4) standards for naming biosimilars, (5) criteria for biosimilars to obtain their own 12-year exclusivities for product changes, and (6) pediatric testing requirements.
• Christl explaining the biosimilars committees formed (see our Biosimilars Resource section here for more) and the review process for requesting a biosimilars meeting and the current workload in CDER: 21 pre-IND meeting requests for 9 reference biologics products that has resulted in 15 pre-IND meetings. According to Christl, the review challenged are: (1) "global" development programs, (2) requests to follow European Medicines Agency's guidances, (3) extent non-U.S. licensed product data may be used and adequate bridging data or ability to use non-U.S. biosimilar as an active control; (4) determining standards for interchangeability, and (5) extrapolation for non-approved uses based on approval for one use. Christl suggested that the best practice for FDA meetings is to plan ahead, and in general FDA will grant one pre-IND meeting and an additional meeting end-of-phase 2 and pre-BLA, as well as general advice.
• Shacter emphasizing that FDA's review process is case-by-case and that for protein products, there are a variety of assays to use to evaluate the functional and structural similarity of two proteins. Shacter recommended that proteins should be evaluated in all domains and modifications using state-of-the-art, orthogonal methods, where it is useful to know the strengths and weaknesses of the techniques, sensitivity, and to conduct stress studies to reveal product differences and justify differences and evaluate multiple lots considering the shelf life, evaluate the impact of isolation procedures, and the potential for immunogenicity.

by: Howard Rosenberg. Ph.D.

The FDA recently released a report on the 'Pathway to Global Product Safety and Quality', it highlights yet again its problems in safeguarding America's food and medical products particularly in reference to imported goods. The concern for pharmaceuticals imported from facilities which, in the main, have not been inspected by FDA staff is a key part of U.S. Sen. Sherrod Brown's (D-OH) letter to the FDA. Senator Brown is a leading voice on the need to protect Americans from unsafe food and drug products. In 2008, he introduced the Transparency in Drug Labeling Act (S. 3633), which would require country-of-origin labeling for both active and inactive ingredients on all pharmaceuticals.

FDA Pathway to Global Product Safety and Quality

This new FDA document discusses the difficulties it faces especially in resolving such safety problems on its own. The report is a follow up to last September's GAO reports, GAO-10-961 and GAO-10-960, which pointed out the need for better long term planning to ensure import safety and improving knowledge about foreign manufacture and the number of foreign inspections.

The FDA states its " new approach rests on four core building blocks:

1. FDA, in close partnership with its foreign counterparts, will assemble global coalitions of regulators dedicated to building and strengthening the product safety net around the world.
2. With these coalitions, FDA intends to develop a global data information system and network in which regulators worldwide can regularly and proactively share real-time information and resources across markets.
3. FDA will continue to expand its capabilities in intelligence gathering and use, with an increased focus on risk analytics and thoroughly modernized IT capabilities.
4. FDA will effectively allocate agency resources based on risk, leveraging the combined efforts of government, industry, and public- and private-sector third parties.

by Erin A. Lawrence

On June 15, the House of Representatives approved an Amendment to the agricultural appropriations bill that stated that none of the funds made available to FDA can be used for approval of genetically-engineered salmon. The Bill was co-sponsored by Lynn Woolsey (D-Calif.) and Don Young (R-Alaska).

The genetically altered salmon, dubbed "frankenfish" by its critics, was created by the Massachusetts company, AquaBounty in 1989. The salmon grows twice as fast and eats less than natural salmon. The increased growth is due to an added growth hormone that is found in a Chinook salmon which allows fish to produce their own growth hormone all year long. In other words, it acts as an on switch for the salmon's growth hormone. The growth hormones in natural salmon are only active for part of the year, hence their smaller size.

FDA is set to decide this year whether to approve the modified fish to be on consumers' dinner tables. Last September, FDA held a public meeting to discuss the issues potentially related to genetically-altered salmon (see our earlier blog). FDA concluded that the genetically-altered salmon was likely as safe as conventional salmon, but more studies were needed for a final decision. If the genetically-altered salmon is approved it would be the first time the government allowed such modified animals to be marketed for human consumption. FDA is also considering whether the fish needs to be labeled as genetically altered or not.

This Amendment would prohibit FDA from spending any money to approve the genetically-altered salmon. The House approved the Amendment based on concerns such as competition with wild salmon, adverse reaction to wild salmon that would decimate the natural population, unknown human allergies, etc. The Amendment is also supported by natural salmon farmers and Trout Unlimited, a group focused on conserving and protecting coldwater fisheries and their watersheds.

by Andrew S. Wasson

The Supreme Court granted Caraco's petition for a writ of certiorari to hear its appeal from the Federal Circuit's decision in Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 615 F.3d 1374 (Fed. Cir. 2010). This case has been closely-watched by generic and brand-name companies alike. In March, the Supreme Court asked for the Solicitor General's view on whether it should take the case. The Solicitor General recommended that the Supreme Court grant Caraco's petition. The Solicitor General also took the position that the Federal Circuit's decision in April 2010 was incorrect. The Supreme Court's recent action makes sense looking back on the contentious and fractured opinions of the last year. For this blogger, the Supreme Court's action guarantees a steady stream of topics for the rest of the year.

We have been following this case closely, but for those of you still unfamiliar with the case, in Novo Nordisk, the Federal Circuit determined that Caraco could not compel Novo Nordisk to revert a patent use code narrative to its original form. The Federal Circuit's determination hinged on the statutory interpretation of 21 U.S.C. § 355(j)(5)(C)(ii), added to Hatch-Waxman Amendments in 2003, and authorizing a generic applicant to file a counterclaim to correct or delete patent information in certain situations. 21 U.S.C. § 355(j)(5)(C)(ii) provides in relevant part:

(ii) Counterclaim to infringement action.-- (I) In general.-- If an owner of the patent or the holder of the approved application under subsection (b) of this section for the drug that is claimed by the patent or a use of which is claimed by the patent brings a patent infringement action against the applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) of this section on the ground that the patent does not claim either--

(aa) the drug for which the application was approved; or

(bb) an approved method of using the drug.

by Rachael P. McClure

On June 23, the Supreme Court ruled that generic drug manufacturers cannot be sued for failing to warn patients of adverse side effects of their products when the warning was not present in the referenced product's labeling. In a narrow 5-4 decision, the Court concluded that federal law, mandating that generic drugs carry label information identical to their brand-name counterparts, preempts "failure-to-warn" claims filed under state product liability law. We previously reported on generic drug preemption issues most recently here.

Thursday's ruling concluded a case in which two women alleged that their use of metoclopramide, the generic version of Reglan®, resulted in development of a serious neurological disorder known as tardive dyskinesia. The women sued generic drug manufacturers, including Pliva, under Louisiana and Minnesota state tort law for failing to include warnings about the potential effects from extended use of metoclopramide. Justice Clarence Thomas, writing for the majority, observed that the relevant state laws, requiring drug manufacturers to update product labels as they discover new risks of harm,"imposed a duty on the manufacturers to take a certain action, and federal law barred them from taking that action."

The practical result of this decision is that a brand-name company can be held liable for consumer harm resulting from deficient label warnings, while the exact same suit is barred as against a generic producer. Indeed, in 2009, the Court upheld a $6.75 million jury verdict against brand-name pharmaceutical firm Wyeth for a nearly identical cause of action. The difference, in the words of Justice Thomas, is that Wyeth was allowed "of its own volition to strengthen its label in compliance with its state tort duty."

Thomas noted that the suit would have been allowed had the women "taken Reglan, the brand-name drug prescribed by their doctors." Justice Sotomayor, joined in dissent by the more liberal fraction of the Court, countered that the majority dictates that a patient's ability to obtain relief will now be controlled by "the happenstance of whether her pharmacist filled her prescription with a brand-name or generic drug." Sotomayor further argued that a generic company has a duty to propose necessary label changes to the FDA, which can in turn call on the brand-name to update its label such that the generic can comply with both state and federal law.

This decision is a significant victory for generic drug companies, whose products account for seventy-five percent of prescriptions dispensed in the United States. They are now shielded from liability for failure to warn as long as their labels match those of corresponding brand-name drugs. John LaRocca, Vice President and chief legal officer of generic drug company Actavis, approved of the ruling as "accurately reflect[ing] the difficulties generic manufacturers faced in trying to comply with federal and state laws." The Pink Sheet (June 23, 2011). It may, on the other hand, result in more patients requesting that their prescriptions be filled with brand-name products.

Given the Court's admission that the discrepancy between generic and brand-name producers "makes little sense," and remark that Congress and FDA "retain the authority to change the law . . . if they so desire," generics should be on the look out for future regulatory change.

by Andrew M. Nason

On June 23, the United States House of Representatives voted 304-117 to pass H.R. 1249, their version of the "America Invents Act." As reported here, the Senate passed its own version by an even more lopsided margin of 95-5 in March. A House and Senate conference committee must now reconcile the two versions of the Bill before it heads to President Barack Obama's desk for his signature. Despite strong support for the Bill in both chambers and Obama's statements that he intends to sign what Congress puts before him, lawmakers could face significant hurdles in their reconciliation efforts.

While the two versions of the Bill are nearly identical in many respects, most notably the change from the current "first inventor" system to a "first-inventor-to-file" system, they still differ in key ways that could hamper the Bill's progress. For instance, while both versions allow the U.S. Patent and Trademark Office ("Patent Office") to set and collect its own fees, the House version would require that a certain dollar amount be appropriated to the Patent Office, and Congress would decide annually whether any fees collected would go to the Patent Office. The Senate version would simply let the Patent Office keep all the fees it collects. Critics of the House compromise on the Patent Office funding provisions note that it does not differ significantly from the current system, which they claim has led to the backlog of 1.2 million patent applications and associated three-year average pendency period for granted patents.

Congress has not set a timetable on when the bicameral conference will take place. With an important and contentious debt-ceiling debate ongoing, they will likely delay the reconciliation conference. Even so, supporters of the patent reform legislation are encouraged. "The effort to reform our nation's patent laws began a decade ago, and House passage . . . brings patent reform a significant step closer to becoming law," said David Kappos, Patent Office Director, in a written statement issued Thursday. "This bi-partisan legislation will transform our patent system, enhance our nation's competitiveness and promote economic growth and job creation."

If passed into law, the legislation would represent the first significant change to the U.S. patent system in almost 60 years.

by Leann M. Clymer

Earlier this week, the Boston Biotech Conference ("BBC") group held its chief executive officer ("CEO") conference, bringing together senior executives from both the biotech and pharmaceutical industries, in advance of next week's Biotechnology Industry Organization ("BIO") Convention in Washington, D.C. Representatives from Cubist, Genzyme, Allergan, Biogen, Targacept, and GlaxoSmithKline, among others, served as speakers and co-hosts at the BBC CEO Conference.

Also in attendance at this week's CEO Conference was Jim Greenwood, the BIO CEO, who presented an Introduction to the Role of Biotech in Drug Discovery and Development to the conference attendees. Greenwood also provided some insight on what BIO hopes to achieve during next week's international convention in the District of Columbia, June 27-30, at the Walter E. Washington Convention Center. He stated: "We want to change the formal legal mission statement of the FDA" to one that would place a greater focus on minimizing the time it takes to approve a new drug product. Specifically, BIO's CEO noted that the industry understands that FDA has failed when they approve a new product that is neither safe nor effective, but took issue with the fact that it is not considered an Agency failure when patients die because availability of a new therapy was delayed due to a slow approval process.

Senator Scott Brown (R-MA) provided a welcome and the opening remarks at this week's BBC CEO Convention. Sen. Brown was more verbose in his criticism of FDA's slow response to approve applications to market new drugs and medical devices in U.S., claiming that the Agency is "crushing businesses" in Massachusetts that seek to sell new and lifesaving technologies. Brown said FDA's slow response to approve new therapies, created by the "most innovative, intelligent workforce potential in the world," was "putting a wet-blanket" on the discovery and development of new drugs and medical devices. Furthermore, Sen. Brown proclaimed that "we're losing out to a lot of what's happening overseas" because FDA's slow response wastes money, time, and innovation.

FLH BIO 2011 Brochure

FLH Partners Sandra Kuzmich, Charles Raubicheck, Brian J. Malkin, Elizabeth Leff, Associates Kathleen Ehrhard, Shelly Fujikawa, Brian McGuire, Ami Simunovich, and Scientific Advisors Ali Berkin, Russell Garman, and Blaine Hackman will join the world's leading biotechnology companies at the Annual BIO International Convention this year, to be held in Washington, D.C. from June 27-30. The FLH team will be located at Booth 2857, where they will feature information about Life Sciences at FLH, including a number of articles and presentations on biotechnology authored by FLH and will answer questions of fellow participants and exhibitors.

by Andrew M. Nason

On June 20, the Intellectual Property Owners Association ("IPO") reported that the House has scheduled floor debate of its version of the "America Invents Act" (H.R. 1249) for "Wednesday or later in the week." The House Rules Committee delayed its meeting to discuss the parameters of the debate, originally scheduled for sometime last week, until 5:00 pm on June 21. The Committee delayed its meeting because of a now-resolved disagreement between some House members over the U.S. Patent and Trademark Office's ("Patent Office's" or "USPTO's") funding provisions of H.R. 1249. Specifically, Speaker John Boehner (R-OH) and several House Appropriations Committee chairmen agreed to amend the provisions of the Bill intended to end fee-diversion (section 22). With the amendments, the Bill's fee provisions essentially track current 35 U.S.C. § 42(b) and (c), which diverts fees the Patent Office receives in excess of their annual appropriation to a reserve fund. The inclusion of this amendment has cast doubt on whether patent reform can pass this year, and indeed has caused some groups to withdraw their support of the Bill's passage.

On July 20, the Innovation Alliance, a group representing innovators, patent owners, and stakeholders from various industries, issued a short statement, noting its disappointment with the removal of language to end fee diversion permanently. The group said the new language in the Bill "amounts to a promise to end fee diversion in the future, a promise that has repeatedly been broken in the past." The Innovation Alliance also noted its concern that "the USPTO will continue to earn . . . more fees than the funds it is allocated, and Congress will continue to impose the tax on innovation that fee diversion represents." With the removal of the anti-fee diversion provisions, the group said it had "no choice but to vigorously oppose" the Bill.

Similarly, the American Bar Association ("ABA") sent a letter to House Judiciary Chairman Lamar Smith (R-TX) stating its opinion that the end of fee diversion is an "indispensible component of any patent reform measure." The ABA called the provision "essential for the [Patent Office] to conduct effective and efficient financial planning and business operations." The National Association of REALTORS ("NAR") also sent a letter to House members indicating that its support for H.R. 1249 depends on the retention of anti-fee diversion provisions in the Bill. Without the funding provisions in place, the NAR expects that "delays in processing patent applications will continue to undermine American innovation and stymie the nation's economy."

The amendment and ensuing debate followed a letter on June 13 in which Representatives Joe Donnelly (D-IN) and Dan Boren (D-OK) urged their colleagues to support passage of the bill. In their letter--discussed in more detail here--Donnelly and Boren noted that the current backlog of over 700,000 patent applications is largely due to a lack of adequate resources and funding. The Representatives quoted estimates that "the U.S. could create as many as 2.25 million new jobs, over the next 3 years, simply by eliminating the patent backlog." Eliminating the backlog, however, would require adequate funding, which the now-stripped anti-fee diversion provisions would have provided.