June 13, 2012

Induced Infringement Pleadings Explained--May Impact Hatch-Waxman Cases

Thumbnail image for Thumbnail image for Thumbnail image for federalcircuit.jpgOn June 7, the Federal Circuit in In re Bill of Lading Transmission & Processing System Patent Litigation clarified the standards necessary to plead a claim of patent infringement. Notably, the Federal Circuit (O'Malley, J.) discussed the differences between stating a claim for direct patent infringement versus indirect patent infringement (i.e., induced infringement or contributory infringement). The case involves a patent directed to "a method in which documents are scanned on board vehicles for use by dispatchers in preparing manifests dictating which shipments should be consolidated and shipped on which trucks heading to which location." Slip op. at 28. The District Court dismissed the plaintiff's complaints under Rule 12(b)(6). Among other things, the District Court found that the complaints were based upon conclusory allegations of direct infringement that were based upon unreasonable inferences. The plaintiff then appealed to the Federal Circuit.

Regarding direct infringement, the Federal Circuit concluded that the District Court had improperly required too high of a standard to meet the pleading requirements for direct infringement. Specifically, the Federal Circuit pointed to Form 18 in the Appendix of Forms to the Federal Rules of Civil Procedure, which lays out a sample complaint for direct patent infringement. Form 18 requires: (1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that the defendant has been infringing the patent by making, selling, and using the device embodying the patent; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages. The Federal Circuit explained that under Rule 84, the forms are deemed sufficient. Accordingly, the Federal Circuit concluded, in the event of a conflict between the forms and the Supreme Court's pleading standards set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the forms control. Therefore, for claims of direct patent infringement, the question of whether a complaint contains sufficient specificity must be measured by the specificity required by Form 18.

Regarding indirect infringement, however, the Federal Circuit found that Form 18 is of no assistance. This is because the complaint in Form 18 only involves a claim of direct infringement. Accordingly, for claims of induced and contributory infringement, the standards outlined in Twombly and Iqbal apply. Therefore, the Federal Circuit explained, to state a claim for contributory infringement, the plaintiff must, "among other things, plead facts that allow an inference that the components sold or offered for sale have no substantial non-infringing uses." Slip op. at 21. More particularly, the Federal Circuit found it insufficient simply to set forth an infringing use and then baldly conclude that there is no other substantial non-infringing use. As for induced infringement, the Federal Circuit concluded that a complaint must contain facts plausibly showing that the accused infringer specifically intended its customers to infringe the patent and knew that the direct infringer's acts constituted infringement.

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June 11, 2012

Attorneys' Fees for Patent Infringement Litigation Misconduct Sends Warning to Overly Aggressive Litigators

scales.jpg On May 22, the United States District Court for the Central District of California granted
a prevailing patent infringement plaintiff's motion for attorneys' fees under Section 285 of the Patent Act. Jake Lee v. Mike's Novelties, Inc., et al., LA CV10-02225, Order Granting Motion for Attorney Fees and Motion for Enhanced Damages, May 22, 2012, ECF No. 197. The Court concluded that an award of attorneys' fees was appropriate, in part because the defendants had engaged in bad faith litigation tactics. These tactics included, among other things, bad faith settlement offers, unreasonable delay tactics during a deposition, and threats to report the plaintiff's attorneys to various state bars. To the extent patent challenges continue to be part of the landscape for applicants filing generic drug applications (Abbreviated New Drug Applications or "ANDAs"), new drug applications under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act ("505(b)(2) NDAs"), and in the future biosimilar applications, litigators involved in these challenges should consider best practices to avoid the payment of attorney fees for such behavior.

Regarding the bad faith settlement offers, the court found that counsel for the defendants had repeatedly sent intimidating written communications to the plaintiff's counsel demanding that the plaintiff dismiss his claims and pay the defendants their attorney's fees. In one communication, the plaintiff was warned that he was "in a hole that is getting deeper every day," and that he should "settle this case and limit [his] exposure to a very bad result" in light of the Court's summary judgment and claim construction rulings. The Court found that these communications were made in bad faith. In particular, the Court pointed to the fact that the plaintiff had prevailed on its claim construction arguments, and further pointed to the intimidating nature of the communications. Accordingly, the Court found that these communications weighed in favor of an award of attorneys' fees.

Additionally, the Court considered the defendants' delay tactics during one of the depositions. In particular, when the plaintiff's counsel attempted to take the deposition of one of the defendants in the plaintiff's presence, the deponent refused to allow the deposition to proceed in the plaintiff's presence. The deposition did not continue until the Court ordered the deposition to proceed, resulting in a two-hour delay. Although the Court found that this conduct offered "modest support" for an award of attorneys' fees, it found that this behavior alone would be insufficient to justify such an award.

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June 8, 2012

AstraZeneca Settles Toprol XL® Class Action Suit

Thumbnail image for monopolymoney.jpgOn May 30, AstraZeneca Pharmaceuticals LP ("AstraZeneca") reached an agreement to a settlement with a class of indirect purchasers in an antitrust action involving the drug Toprol-XL® (metoprolol succinate) in Delaware. The class of indirect purchasers allege that AstraZeneca used frivolous patent litigation as a method of delaying generic competition for Toprol-XL®.

In an order signed by Chief U.S. District Court Judge Gregory M. Sleet, the case was stayed following a joint notice highlighting that the parties had reached an agreement in principle to settle all claims. Mark S. Merado, the lead plaintiff in the case, filed the suit in February of 2006, alleging that AstraZeneca created a monopoly or was attempting to create a monopoly for Toprol-XL® and was thus in violation of both the Sherman and Clayton Acts.



Merado alleged that AstraZeneca fraudulently obtained U.S. Patent Nos. 5,001,161 ("the '161 patent") and 5,081,154 ("the '154 patent") and filed sham patent infringement suits against generic competitors to delay the approval and market entry of generic metoprolol succinate. "Defendants knew that under the Hatch-Waxman Act, the mere filing of patent litigation--even groundless suits based on invalid or unenforceable underlying patent--would automatically prevent the FDA, for up to 30 months, from granting generic competitors final approval," the complaint said. The suit asked the court to find the '161 and '154 patents invalid and to order AstraZeneca to provide restitution for the plaintiffs by disgorging its unjust enrichment.

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June 7, 2012

SoloHealth's Station Kiosk Approved: Awareness Drives Action with New Self-Service Solution to Healthcare

On June 5, SoloHealth announced that FDA approved its next-generation SoloHealth Station, a self-service health care device which strives to assist people with both education and awareness about their health. SoloHealth, an Atlanta-based company, has worked to empower consumers through the use of technology to achieve a healthier, and consequently better, America. With the recent FDA approval and an aggressive rollout plan for 2012, the SoloHealth Station is taking the lead in using self-service technology to develop a healthier America.



Just prior to receiving the inaugural Intel Innovation Award, CEO and Founder of SoloHealth, Bart Foster, described the SoloHealth Station as a kiosk equipped with both the "functionality and technology to drive consumer education, awareness, and ultimately action." SoloHealth makes clear that the kiosk will not replace an examination by a medical professional. Essentially, the SoloHealth Station will provide consumers with an initial health screening and encourage them to visit a health care provider for a follow-up examination.

Written by Elizabeth Zinke

Other Posts By This Author

The SoloHealth Station offers a highly personalized, targeted, and interactive opportunity for consumers by employing a touch user interface and interactive video to guide consumers through the simple health tests. It will allow consumers to screen their vision, blood pressure, weight, and body mass index in less than seven minutes. In addition, the SoloHealth Station will provide a symptom checker as well as an overall health assessment. These services are provided free of charge.

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June 6, 2012

Biosimilar Substitution Guidance Requested by Pharmacist Groups

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for dna.jpgOn May 31, the National Association of Chain Drug Stores ("NACDS") posted a press release announcing that NACDS, the American Pharmacists Association ("APhA"), and the National Community Pharmacists Organization ("NCPA") had filed a joint letter dated May 25, 2012 with FDA to help facilitate dispensing biosimilar products via pharmacies. The letter was filed in FDA's Docket No. FDA-2011-D-0618, which related to a one-day public hearing on May 11, 2012, where FDA heard comments on its three draft guidances released on May 9 and posted in The Federal Register several days later. We previously reported on the three guidances here.

In the letter, the pharmacist groups wrote:

Pharmacists will be greatly impacted by the decisions made on how the biosimilar pathway is implemented. Pharmacists are the most accessible healthcare professionals and recommending generic alternatives is a standard pharmacy practice. Allowing pharmacists to perform fully within their scope of practice by permitting automatic substitution of cost-effective biologic and specialty medications increases availability, thereby greatly benefitting the entire health care system and the patients it serves.

As part of their proposal, the pharmacist groups requested FDA to consider:

  • Biosimilar products should maintain the same individual nonproprietary names ("INNs") as their reference counterparts to help prevent confusion with no additional suffixes, as has been done for human growth hormone and insulin. For purposes of tracking products for adverse events or quality issues, systems should be retooled to utilize National Drug Code ("NDC")-type numbers.

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June 5, 2012

User Fee Bill Passed by House

Thumbnail image for Thumbnail image for Thumbnail image for house of representatives.jpgLast Wednesday, the House of Representatives passed the Food and Drug Administration Reform Act (H.R. 5651), which reauthorizes the user fee programs for brand-name drugs and medical devices and creates new user-fee programs for biosimilars and generic drugs. Like its counterpart in the Senate (previously discussed here), the Bill has significant bipartisan support, which is evidenced by the 387-5 vote.

The user fee provisions of the House version are almost identical to those on the Senate Version. Drug and devices makers will have to pay FDA $6.4 billion over five years to help finance the evaluation and review of their products. Again, brand-name drug companies will pay $4.1 billion, generic drug companies will pay $1.6 billion, device makers will pay $609 million, and biotechnology companies will pay $128 million. In exchange for the user fees, FDA will be required to meet certain performance goals throughout the five years. These performance goals are intended to decrease the average review time for FDA approvals of drugs, devices, and biosimilars.

The House's Bill also has provisions outside the user-fee arena. Of particular importance, the bill:

  • Provides for increased oversight of medical devices by pushing FDA to institute an electronic monitoring system and requiring post-market studies of certain medical devices.

  • Removes the requirement that every U.S. drug manufacturing facility be inspected every two years and increases FDA's discretion to inspect more foreign manufacturers.

  • Requires mandatory reporting of potential drug shortages.

  • Increases the maximum penalty for drug counterfeiting from 3 to 20 years in prison.

  • Allows FDA to relax the clinical trial standards for new medicines that address life-threatening diseases.

  • Requires that FDA provide reasons for denying medical implants within thirty days of issuing a rejection.

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June 4, 2012

Tablet Size Citizen Petition Filed by Osmotica for Extended-Release Venlafaxine Hydrochloride

Thumbnail image for Thumbnail image for pills.jpgOn May 17, Osmotica Pharmaceutical Corp. ("Osmotica") filed a somewhat unusual citizen petition requesting that FDA refuse to approve Sun Pharma Global Inc.'s ("Sun's") 225 mg Venlafaxine Hydrocholoride Extended-Release Tablets because of the size of Sun's tablets.

Wyeth Pharmaceuticals Inc. ("Wyeth") (now Pfizer Inc. ("Pfizer") first obtained FDA approval for Venlafaxine Hydrochloride, an antidepressant sold under the trade name Effexor®, in 1993. Wyeth's patent for the compound expired in 2008, although it still holds Orange Book-listed patents for methods of using extended release venlafaxine. In 1997, FDA approved Wyeth's Extended-Release Capsules, 37.5 mg, 75 mg, 100 mg, and 150 mg, under NDA No. 020699. As an aside, Wyeth's decision to list the method-of-use patents in the Orange Book and to assert them against generic competition has led to allegations of antitrust violations.

Osmotica's 505(b)(2) application (NDA No. 022104) for Venlafaxine HCl Extended Release Tablets, 37.5 mg, 75 mg, 150 mg, and 225 mg, received FDA approval in 2008, referencing Wyeht's Effexor XR® capsules. Later the same year, FDA granted Osmotica's citizen petition requesting that FDA require ANDA applicants, specifically Sun, to submit new ANDAs and conduct new bioequivalence studies using Osmotica's tablets, rather than Wyeth's capsules, as the reference listed drug ("RLD"), because it is the most similar pharmaceutical equivalent (i.e., an extended-release tablet). Sun, an Indian Corporation, subsequently obtained FDA approval for tablets on three of Ostmotica's four dosage strengths, 37.5 mg, 75 mg, and 150 mg. Sun's Venlafaxine HCl Extended Release Tablets have an AB-therapeutic equivalence rating to Osmotica's product (i.e., a generic substitute product).

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June 1, 2012

EMA Side Effects Report Now Available on Public Website

EMA Logo.jpgThe European Medicines Agency ("EMA") has launched a new website that makes suspected side effect reports for medicines authorized in the European Economic Area ("EEA") publically available. The data comes from the medicines safety database EudraVigilance, and the new website is part of the EMA's continuing efforts to ensure EMA's regulatory processes are transparent and open and is in part due to implementation of the EudraVigilance access policy. The launch also highlights the importance of side effect reporting and pharmacovigilance in safeguarding public health within the European Union.

The data covers approximately 650 medicines and active substances authorized via the centralized procedure and it is hoped that the database will be expanded to cover nationally authorized products by the end of the year. The aggregated data can be viewed by age group, sex, type of suspected side effect, and by outcome. This new EMA website makes the information both readily accessible and readable to lay people, who are not familiar with the usual detailed reports provided to health care professionals. The EMA explains in its press release that a side effect (also known as an adverse drug reaction) includes side effects arising from use of a medicine within the terms of its marketing authorization, as well as from its use outside the approved indications, including overdose, misuse, abuse, and medication errors, and those associated with occupational exposure.

Most importantly the EMA explains that information on the website relates to suspected side effects, i.e., medical events that have been observed following the use of a medicine, but which are not necessarily related to or caused by the medicine. As a consequence, information on suspected side effects should not necessarily be interpreted as meaning that the medicine or the active substance causes the observed effect or is unsafe to use. A detailed evaluation and scientific assessment of all available data is required for correct conclusions to be drawn as to the benefits and risks of any medicine. It is expected that the reporting of side effects is normally to be carried out by healthcare professionals, but patients are able to report suspected side effects directly through various methods such as online patient reporting forms hosted by national medicines regulatory authorities or by telephone.

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May 31, 2012

Canadian Drug Importation Amendment Rejected by Senate

canada.jpgIn a recent 43-54 vote, the U.S. Senate defeated a proposed amendment to the FDA Safety and Innovation Act (S.3187), which we previously reported on here, that would have allowed Americans to purchase drugs from Canadian pharmacies. The Amendment, proposed by Sen. John McCain (R-Ariz.) sought to lower the cost of prescription drugs for Americans.

In the days leading up to the vote, McCain had been critical of the pharmaceutical industry for lobbying the Senate to defeat the Amendment. "In a normal world, this would probably require a voice vote, but what we're about to see is the incredible influence of the special interests, particularly pharma, here in Washington, that keeps people who cannot--that have to make a choice between eating and medicine," McCain said. "So what you're about to see is the reason for the cynicism that people have for the way we do things in Washington. Pharma, one of the most powerful lobbies in Washington, will exert its influence again at the expense of average, low income Americans who, again, will have to choose between medication and eating."

While the Amendment was defeated, several fellow Republicans voiced support for McCain's proposal. Sen. Charles Grassley (R-Iowa), a proponent of importation of Canadian pharmaceuticals, reasoned that allowing importation would provide economic incentives. "I have always considered drug importation a free-trade issue," Grassley said. "Imports create competition and keep domestic industry more responsive to consumers. If Americans could legally and safely access prescription drugs outside the United States, then drug companies will be forced to re-evaluate their pricing strategies."

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May 30, 2012

Infringement Without Paragraph IV Certification Predicate

lightbulb.jpgOn May 16, Judge Leonard Stark of the District Court of Delaware held that a Paragraph IV certification is not a necessary predicate to an infringement claim under 35 U.S.C. § 271(e)(2)(A). Section 271(e)(2)(A) states that it is an act of infringement to submit an abbreviated new drug application ("ANDA") for a drug or the use of a drug claimed in a patent. If an act of infringement is found under Section 271(e)(2)(A), Section 271 (e)(4)(A) states that "the court shall order the effective date of any approval of the drug . . . involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed."

In March 2009, Galderma sued an ANDA filer for infringement under section 271 (e)(2)(A) based on the applicant's ANDA for a generic doxycycline product. In its ANDA, the applicant included certifications under 21 USC §355(j)(2)(A)(iv) that four of Galderma's patents (later listed in the Orange Book for Galderma's Oracea® product) were either invalid or not infringed by the applicant's manufacture, use, or sale of its generic product. FDA later granted the applicant a tentative approval for its ANDA.

Following the ANDA applicant's tentative approval, another patent issued (U.S. Patent No.7,749,532 ("the '532 patent") that was listed in FDA's Orange Book as covering Oracea®. The ANDA applicant did not amend its ANDA to include the '532 patent, but instead brought a declaratory judgment action asserting that its generic product does not infringe the '532 patent. The District of Delaware consolidated the declaratory judgment action with the ANDA suit, and after a bench trial, Judge Stark held that the '532 patent claims were valid and infringed by the generic products. Judge Stark also held that FDA must withdraw the tentative ANDA approval, and FDA cannot approve the ANDA until at least December 19, 2027, the expiration date of the '532 patent.

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May 29, 2012

User Fee Bill Passed by Senate

Thumbnail image for Thumbnail image for Capitol Building.bmpOn May 24, the Senate passed the FDA Safety and Innovation Act (S.3187), which reauthorizes the user fee programs for brand-name drugs and medical devices and creates new user-fee programs for biosimilars and generic drugs. The Bill (previously discussed here), sponsored by Sens. Mike Enzi (R-Wyo.) and Tom Harkin (D-Iowa), passed by a 96-1 vote. The sole dissent came from Sen. Bernard Sanders (I-Ver.), who said that the Bill did "far too little" to address the high prices Americans pay for prescription drugs."

In terms of user fees, the Bill will require drug and devices makers to pay FDA $6.4 billion over five years to help finance the evaluation and review of their products. Specifically, brand-name drug companies will pay $4.1 billion, generic drug companies will pay $1.6 billion, device makers will pay $609 million, and biotechnology companies will pay $128 million. In exchange for the user fees, FDA will be required to meet certain performance goals throughout the five years. These performance goals are intended to decrease the average review time for FDA approvals of drugs, devices, and biosimilars.

User fee agreements are not the only topic addressed in the now-passed Bill. The Bill contains provisions addressing:

  • Increased inspection of foreign drug manufacturing facilities and the ability for U.S. border agents to turn away drugs from companies that have denied or delayed FDA inspections.

  • Mandatory reporting of potential drug shortages.

  • Protection of confidential information received from foreign government agencies relating to drug inspections.

  • Independent assessment and evaluation of FDA's review of drug and biologic applications.

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May 25, 2012

Over-the-Counter Drug "New Paradigm" Coming--FDA Urges Patience

IMG_0148.JPG On May 11, FDA reportedly told attendees of the Consumer Healthcare Product Association's Regulatory & Scientific Conference in Washington, D.C. to be patient while FDA implements its "new paradigm" for prescription to over-the-counter ("Rx-to-OTC") switch applications (The Tan Sheet (May 21, 2012). Andrea Leonard-Segal, M.D., Director, Division of Nonprescription Clinical Evaluation, Office of Nonprescription Products, Center for Drug Evaluation and Research, said that FDA's anticipated, revised Rx-to-OTC regulations will allow for expanded conditions of safe nonprescription use.

Leonard-Segal acknowledged, however, that the process will take time, warning "if you submit [a new drug application] where we don't have the regulations to support the switch, if you're ahead of your time compared to the regulations, then I think the project won't go where you want it to go." While waiting for FDA to final the regulations, Leonard-Segal suggested that firms make business decisions about initiating switch programs that employ new diagnostic technologies and other measures, according to their internal estimate project timelines. Leonard-Segal, however, sympathized with sponsors that had failed to meet FDA's current, less flexible regulations that only permit OTC conversions where the Drug Facts label has full comprehension. An example of failed Rx-to-OTC switches cited was statins to lower cholesterol, but other categories of products that may benefit from the new regulations are sleep aids and triptans to treat migraines.

Commenting further, Leonard-Segal said at the Conference: "One of the frustrations of being in the switch business . . . has been watching the regulations interfere with, what in my perspective have been some very interesting and very innovative ideas, but that just can't move forward because the regulations don't allow us to go there." Leonard-Segal further noted that a priority for the new regulations will be to consider how diagnostic devices could work together with OTC drugs, which is currently a complex approval process involving multiple centers and considerations.

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May 24, 2012

First Stem-Cell Therapy Receives Approval in Canada

Stem Cell.jpgOn May 17, Health Canada approved Prochymal® (remestemcel-L) for the treatment of acute graft-versus-host disease ("GvHD") in children. GvHD, a complication of bone marrow transplantation, occurs when the white blood cells in the grafted tissue recognize the host's organs as foreign and attack the host. Acute GvHD usually presents within three months of the bone marrow transplant, and most often causes damage to the liver, skin, stomach, and intestines. Acute GvHD is categorized as stage I, II, III, or IV based on the number of affected areas, and the severity of the damage. Prochymal® is the first approved treatment for GvHD worldwide, and it receives eight and one half years of exclusivity in Canada.

Currently, the standard treatment for GvHD is intravenous steroids, which suppress the immune system to prevent attack of the transplant recipient's organs. Treatment with steroids, however, is only successful in 30 to 50 percent of patients, as suppressing the immune system can lead to infections or even death. Health Canada approved Prochymal® for use in children with acute GvHD where steroid treatment has been unsuccessful.

Prochymal® is comprised of mesenchymal stem cells from the bone marrow of a healthy adult donor. Prochymal®'s approval falls under Canada's Notice of Compliance with Conditions ("NOC/c") Pathway, which requires that Osiris Therapeutics, the drug's maker, continue with confirmatory clinical testing. Osiris presented data to Health Canada showing clinically meaningful responses in 61 to 64 percent of children with severe GvHD that failed to respond to steroids. This data is very encouraging, considering that severe GvHD has a mortality rate of close to 80 percent. Health Canada relied on this data in granting regulatory approval to Osiris. Prochymal® is currently available in the U.S. (and several other countries) under the Expanded Access Program, for patients "2 months to 17 years with acute GvHD, grades B-D, that is not responsive to steroid therapy."

FDA has required additional data from Osiris before it will consider Prochymal® for approval, so Osiris plans to apply for approval in the U.S. later this year after it collects the required information. Osiris also plans to use Prochymal® for the treatment of Crohn's disease, heart attack, COPD, Type I diabetes, and for potential Acute Radiation Syndrome. The company is currently conducting clinical studies for these indications.

May 24, 2012

ACI's Off Label Communications Conference June 25-26 in New York

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Off-Label Communications:
The Definitive Legal and Regulatory Forum on the Evolving Off-Label Landscape
Monday, June 25 to Tuesday, June 26, 2012
The Carlton on Madison, New York, NY

Attendees of ACI's Off Label Communications Conference will:

  • Benchmark best practices against leading companies such as Endo Pharmaceuticals, Lundbeck Pharmaceuticals, Novo Nordisk, Pfi zer, Purdue Pharmaceuticals, Sandoz and many more
  • Learn how to reposition your company's policies and protocols according to these shifting boundaries and determine what's fair and foul in off-label communications and promotion
  • Master preparation skills for the new off-label framework based on the free speech defense
  • Hear directly from the FDA and DOJ and several former federal prosecutors on how to guard proactively against impermissible off-label communications
  • Over the years, previous attendees have demanded even more in-depth information on responding to government investigations so this year we are pleased to offer a customized post-conference Master Class on Creating a Culture of Compliance: Best Practices for Working with the FDA and DOJ in an Off-Label Investigation.
FDA Lawyer's blog readers are entitled to a discount when referencing the code: FDA 200

For more information on how to register, please visit our website: www.americanconference.com/offlabel.

May 23, 2012

America Invents Act Under Review - Patent Challenges

lightbulb.jpgPatent challenges prior to product marketing are part of the landscape for applicants filing generic drug applications (Abbreviated New Drug Applications or "ANDAs"), new drug applications under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act ("505(b)(2) NDAs"), and now biosimilar applications. As with all other products, patent challenges also can be made subsequent to market entry of an allegedly infringing item. On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act ("AIA"). The AIA makes significant changes to United States patent law, such as creating new post-grant procedures in the United States Patent and Trademark Office ("USPTO"). Leahy-Smith America Invents Act, Pub. L. No. 112-29, §19(b ), 125 Stat. 284, 331-32 (2011). Congress is now reportedly considering making additional changes to the AIA that could impact how applicants pursue their options to challenge patents.

Relevant here, the AIA creates a new post-grant review procedure whereby within nine months of a patent's issuance, a person other than the patent owner may challenge the validity of the patent. 35 U.S.C. §§ 321-329. The Director of the USPTO may authorize the initiation of post-grant review if the Director is satisfied that the information set forth by the petitioner, if not rebutted, demonstrates that it is more likely than not that at least one of the claims challenged in the petition is unpatentable. Id. § 324. Through this procedure, Congress seeks to encourage early resolution of patent validity challenges.


However, of concern to some is an estoppel provision in the post-grant-review statute. Specifically, if the USPTO reaches a final written decision with regard to the patent's validity, the petitioner is thereafter estopped from raising invalidity arguments in litigation "that the petitioner raised or reasonably could have raised during that post-grant review." Id. § 325(e)(2). In a recent Congressional hearing, Robert Armitage, General Counsel for Eli Lilly & Co., expressed the concern that the "reasonably could have been raised" language could potentially cause the post-grant review provision to become a "dead letter." Mr. Armitage explained that this estoppel is "so draconian in character that it would be highly problematic for a patent challenger to use." This is because a post-grant review proceeding, unlike an inter partes reexamination, is not limited merely to issues of novelty and non-obviousness based upon published materials, but instead can be used to challenge the patent's validity on any ground. By way of example, the post-grant review procedure can be used to challenge lack of utility or patentable subject matter under section 101, public use under section 102, or sufficiency of the specification under section 112. By estopping petitioners from later asserting invalidity on grounds that "reasonably could have been raised," rather than limiting the estoppel to grounds that were actually raised during the post-grant review, Mr. Armitage expressed concern that challengers would find the post-grant review procedure too risky. Therefore, Mr. Armitage argued, accused infringers would choose to mount its validity challenges in court rather than in the USPTO.

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