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The Pharmaceutical Corner

Post-issuance patent review: Not the game-changer that was predicted in pharmaceutical patent litigation

Intellectual Property and Technology News

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Welcome to the first of many Pharmaceutical Corners, a new feature in IPT News from our Pharmaceutical Patent Litigation group that will address issues concerning IP in the life sciences industry.

In this first installment, we address inter partes review (IPR) and post grant review (PGR) proceedings. While these post-issuance reviews have had some impact on pharmaceutical patents and have been used successfully in some circumstances (which we describe below), they are not as frequently used in Hatch-Waxman litigation by generics as much as they are in other types of patent litigation.

Complications with using IPR and PGR with Hatch-Waxman litigation

The pharmaceutical industry’s lower usage of post-issuance proceedings relates to certain features of the Hatch-Waxman statutory scheme.  One feature is that the first generic applicant who challenges a brand company’s patents (first-filer) can receive 180 days of market exclusivity.  Another feature is that once a branded company sues a generic filer, the FDA will hold off granting the generic “final approval” for 30 months, allowing the court a limited time – but no more than that period of time – to resolve the patent litigation.  Thus, Hatch-Waxman litigation is entwined with the 180-day exclusivity and the 30-month stay of generic entry.

This entwinement complicates the relationship between Hatch-Waxman litigation and post-issuance proceedings in several respects.

First, it is unclear whether a first-filer will be able to claim 180-day exclusivity if it defeats a patent in post-issuance review rather than in a Hatch-Waxman litigation context. Generic companies do not want to go through this process, taking on the associated risks, without the potential upside of 180-day exclusivity. As such, IPR has generally been used by subsequent filers (not first-filers) who have no exclusivity to lose and who also hope to cause the first-filer to forfeit its 180-day exclusivity.

Second, the time scale for IPR and Hatch-Waxman litigation is similar, at least if the IPR is filed at about the same time a generic company sends its paragraph IV notice letter informing the brand company of the patent challenge. District courts generally schedule trials in the Hatch-Waxman context to ensure a decision within 30 months, while IPRs are mandated to take 18 months at PTAB, followed by another 12 months for a Federal Circuit decision. As a result, IPRs do not offer a significant advantage over Hatch-Waxman litigation with respect to time to decision. Moreover, one general advantage of post-issuance proceedings is that district courts will often stay the corresponding district court litigation. But where a generic drug company is involved, district courts rarely stay Hatch-Waxman litigation.  This is because the FDA will only wait 30 months before deciding whether to grant “final approval.”  If patent litigation does not proceed quickly, there is the possibility that a generic company may receive FDA approval and launch its product “at risk” while patent litigation is ongoing.  That is something courts try to avoid.

Third, IPRs are limited to printed publications, while generic defendants can bring other types of invalidity defenses at the district court, such as written description and enablement challenges, which may offer the better path to invalidity success against pharmaceutical patents. Although PGRs allow more defenses, they can only be brought against patents that issued within 9 months of the PGR’s filing date. It is uncommon to find newly issued patents listed in the FDA Orange Book, which lists certain types of patents covered by the branded drug product, although newly issued patents have been added to the Orange Book during some suits, and would thus be eligible for PGR.

Effective life sciences opportunities for IPR and PGR

IPRs and PGRs are more valuable for competing brand products that need to reference information used to approve prior branded drugs and for biological products covered by the Biologics Price Competition and Innovation Act (BPCIA). Some branded drugs, although new, use the same active pharmaceutical ingredient as a prior approved product and may be required to refer to data submitted by the sponsor of the prior branded product. New branded drugs of this type may be filed under Section 505(b)(2) of the federal Food, Drug, and Cosmetic Act, a process which is also known as the “paper” NDA. Neither branded drugs filed under 505(b)(2) nor biological products are eligible for 180-day exclusivity.

Further, given the extensive approval process for 505(b)(2) and BPCIA products and the longer time horizon for BPCIA litigation, their sponsors likely have evaluated the patent horizon early on and will file IPRs or PGRs well before sending the notice letters required to market these products. Thus, IPRs or PGRs can be completed well before litigation has even started, clearing the way and perhaps avoiding litigation entirely if all Orange Book listed patents or patents likely to be asserted in the BPCIA “patent dance” have been invalidated.

Like BPCIA and 505(b)(2) sponsors, generic drug applicants can also file IPRs long before litigation commences. For example, to ensure that they can still get 180-day exclusivity, generic companies can leave a few patents in the Orange Book unchallenged in an IPR proceeding, and then use the remaining patents as a basis for a paragraph IV patent challenge, which would still allow them to gain exclusivity if they defeat the challenged patents in district court litigation. But the incentives often do not line up for a generic company to challenge Orange Book patents early, especially since it is not possible for a company to know whether it will be the first-filer or a subsequent filer so early in the process.

In sum, the unique statutory framework of Hatch-Waxman litigation requires both patent owners and challengers to carefully consider the potential implications PGR and IPR have on current or anticipated litigation, including the interplay between the 180-day exclusivity and the 30-month stay of generic entry.