Section 271(e)(1) of the Hatch Waxman Act allows competitors to begin the lengthy regulatory approval process while a patent is still in force. This facilitates the possibility of market entry immediately upon patent expiration. This Safe Harbor provision provides a defense to a charge of infringement if the otherwise-infringing activity is "reasonably related" to regulatory approval.
Specifically, § 271(e)(1) provides:
It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention…solely for uses reasonably related to the development and submission of information under a Federal Law which regulates the manufacture, use, or sale of drugs or veterinary biological products.
Over time, courts have held that the Safe Harbor provision applies to both drugs and devices. Courts have also expanded the scope of § 271(e)(1) to protect certain activities from infringement liability, ie, the use of the patented technology to include performing preclinical research on a drug even if that information is never submitted to the FDA as part of an approval application, testing batches after submission of a Biologics License Application ("BLA"), analyzing the effect of the scheduling of immunization, and testing the purity of commercial batches even after FDA approval.
On October 16, 2020, in Edwards Lifesciences v. Meril Life Sciences, the US District Court for the Northern District of California granted a motion for summary judgment of no infringement, finding that the Safe Harbor provision of § 271(e)(1) protects defendants’ use of a patented method of manufacture.
Navigating the contours of the Safe Harbor provision in view of this and other recent Federal Circuit decisions will be a complicated and uncertain process. Understanding the outer limits of the Safe Harbor provision is important, as infringing acts not protected by this defense to infringement liability can result in significant damage awards exceeding tens or hundreds of millions of dollars. In two recent decisions, the question of why the patented invention was made or used was key, exemplifying the fact-intensive approach courts take in determining the applicability of § 271(e)(1).
Amgen v. Hospira: An attempt to clarify the limits of Safe Harbor defense involving patented methods
In a case brought in the District Court of Delaware, Amgen alleged that Hospira infringed several patent claims over methods of manufacturing erythropoietin (EPO), a biologic drug used to treat anemia. Amgen Inc. v. Hospira, Inc., 336 F. Supp. 3d 333 (D. Del. 2018). Following trial, a jury issued a $70 million verdict for Amgen based in part on the conclusion that certain batches of Hospira’s EPO biosimilar product were not covered by the Safe Harbor provision due to evidence that these batches were developed for "commercial purpose" and not for uses reasonably related to submitting information to the FDA.
On appeal, Hospira challenged the district court’s Safe Harbor jury instructions for improperly focusing the jury on reasons why it manufactured each batch of EPO at issue, instead of how each batch was used or whether that use was reasonably related to developing information to support Hospira’s BLA. The Federal Circuit disagreed, holding that the jury instructions "properly articulated the legal principles underlying the Safe Harbor inquiry." Amgen Inc. v. Hospira, Inc., 944 F.3d 1327, 1338 (Fed. Cir. 2019). The court further emphasized that each accused activity must be evaluated separately. Id.
The court distinguished manufacturing drug batches required by the FDA and drug batches that would have a commercial use (eg, continued process verification) or post-approval commitments (eg, stability testing), where only the former are protected by the Safe Harbor provision. Id. This distinction brought new vitality into often overlooked process patents by suggesting that pre-commercialization activities could carry significant infringement liability.
Edwards Lifesciences v. Meril Life Sciences: Underlying purposes are not relevant to the Safe Harbor inquiry
In granting Meril’s motion for summary judgment of noninfringement, the district court rejected the notion that the Safe Harbor exemption does not apply to commercial purpose activities. Edwards Lifesciences Corp. v. Meril Life Sciences PVT. Ltd., No. 19-cv-06593 (N.D. Cal. October 16, 2020). The court held that if Meril’s acts were reasonably related to FDA approval, the Safe Harbor defense applies regardless of the purpose for the manufacture. Id.
Edwards claimed that Meril’s "Myval" transcatheter heart valve device was made abroad using Edward’s patented processes. Edwards alleged two acts of infringement: (1) Meril imported the accused device into the US in 2017 so the University of Washington (UW) could conduct pre-clinical cadaver studies; and (2) Meril imported and exhibited at least one accused device at a 2019 Transcatheter Cardiovascular Therapeutics (TCT) conference in San Francisco. During the time of alleged infringement, it was undisputed that Meril "had taken significant steps towards obtaining FDA approval." Id. at *9. Edwards argued that the Safe Harbor provision did not apply to these infringing acts because Meril had a commercial purpose when it brought the Myval samples to UW and the TCT conference (eg, to promote sales).
Meril countered by arguing: (1) its purported purpose was irrelevant to whether the accused use fell within the scope of Safe Harbor; and (2) even if relevant, Meril’s purpose in transporting samples into the US was to support further clinical trials to seek premarket approval from the FDA. Id. at *14.
Edwards cited Amgen to support its arguments that commercial intent can be probative of whether an activity is "reasonably related" to regulatory uses. Interpreting Amgen, the court held that the Federal Circuit affirmed "underlying purposes do not matter as long as [defendant] proved that the manufacture . . . was reasonably related to developing information for FDA submission (emphasis in original). Id. at *15. Thus, the court focused only on Meril’s alleged infringing acts of shipping the sample to UW and transporting the samples to the TCT conference. According to the court, both acts "fall squarely within the Safe Harbor:" Id. Transportation to UW was exempt because it generated preclinical data to support Meril’s clinical trials, and transportation to the TCT conference was exempt because Meril was "responsible for selecting qualified investigators and providing them with necessary information to conduct clinical testing." Because these acts were reasonably related to FDA activity, they fell within the Safe Harbor and there was no infringement.
Impact of the Edwards decision
While it is clear that courts will (or should) consider each act of infringement separately, the question of what impact the intent or motive behind such activities will have on the ultimate conclusion of whether the activity is exempt seems highly dependent on the court’s interpretation of Amgen.
Notwithstanding such uncertainty, life science companies should continue to invest in comprehensive patent strategies that protect not only the commercial product but also their manufacturing processes. Prudent companies are being vigilant in monitoring the activities of their competitors conducting studies or generating batches for stability, quality and control both before and after FDA approval. Ultimately, the purpose and the use of the product will factor into a court’s inquiry as to whether the use of the patented process is protected by the Safe Harbor. To learn more about the implications of this decision, please contact any of the authors.
 It was later learned during fact discovery that the accused device was never displayed at the conference due to technical issues.