377 Update

ITC Section 337 update: Expect heavy emphasis on public interest in pharma/medical device investigations

Intellectual Property and Technology News

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The principal form of relief for patent infringement available in the ITC is an exclusion order barring the importation of the infringing product into the US. Before issuing an exclusion order, the International Trade Commission must consider the effect of the order on (1) the public health and welfare; (2) competitive conditions in the US economy; (3) the production of like or directly competitive articles in the US; and (4) US consumers. While these public interest factors rarely present an obstacle to the grant of an exclusion order in typical investigations involving consumer electronics and the like, they can raise difficult issues when the product sought to be excluded is a potentially life-saving drug or medical device.

Consider, for example, an accused biologic drug approved for the treatment of certain types of cancer. How would the Commission evaluate the public interest if the alternative products on the market were approved for the same indications, but were somewhat less effective, or had equal efficacy but more side effects? What if they were equally effective but the noninfringing alternative had to be intravenously administered three times per week, while the accused product required infusion only once per week, potentially reducing the threat of infections from repeated IV dosing and improving patient lifestyle? What if switching from the new product to an alternative could cause unwanted immune responses in some patients? Should differences in insurance coverage be considered?

Public interest factors can raise difficult issues when a potentially life-saving drug or medical device is sought to be excluded.

The Commission recently identified such issues in Certain Recombinant Factor VIII, Inv. No. 337-TA-956, in which the accused product (Novoeight) was a recombinantly engineered analogue of the blood clotting protein used to treat hemophilia. The Administrative Law Judge recommended a limited exclusion order and cease and desist order if a violation were found. The ALJ further recommended, however, that those orders should not apply to importations for clinical trials within the scope of the safe harbor of 35 USC §271(e)(1), and that patients now taking Novoeight be given until 60 days after the conclusion of the presidential review period to transition to alternative products.

The Commission initiated a review of this recommendation and solicited comments from the parties and the public on several issues, including:

  • Alternatives to the accused product, and what criteria should be used to identify them
  • The likelihood that a patient who has insurance coverage for Novoeight will also have coverage for a comparable alternative
  • The costs patients will incur in switching from Novoeight to an alternative
  • The therapeutic and safety advantages, if any, of Novoeight over an alternative
  • Whether the Commission should consider hemophilia patients' fear of developing an inhibitor upon switching medications
  • Whether any remedial order should be tailored to allow patients currently using Novoeight to continue using it
  • Whether patients being treated for the first time should have access to Novoeight if the alternatives are not suitable

After receiving comments from the parties, patients, physicians and hemophilia treatment centers, the 956 investigation was terminated, settling before the Commission addressed these issues. Nevertheless, at least two things are clear from the Commission's questions. First, the public interest inquiry in pharmaceutical/medical device investigations may be extensive and potentially require input from many different sources besides the parties, including patients, physicians, hospitals and insurance companies. Second, any exclusion order is likely to be tailored to the needs of the affected patients, eg, by allowing patients who respond better to the accused product to continue receiving it, and/or providing safeguards allowing an orderly transition to noninfringing alternatives.

With pharmaceuticals and medical devices already making up the second largest category of ITC investigations by subject matter (after computer/telecommunications products), and with further growth on the horizon as increasing numbers of biosimilar medicines are imported, we expect that public interest considerations will take on growing importance in the Commission's efforts to fashion remedies for infringement.


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