The Hatch Waxmann Act and Integra Case

There are two competing policy interests in patent law: 1) an inventor's interest to have exclusive rights to his or her invention that is developed by spending lot of time, money and effort, and 2) the interest of the public to benefit from the progress of knowledge and technology. The US Congress enacted the Hatch-Waxman Act of 1984 to balance these competing interests in the pharmaceutical area. There are three principal components of the Act: a) patent term extension, b) Abbreviated New Drug Application (ANDA) filing and c) a research exemption.

a) The Act provides potential five-year patent term extension for new drugs approved by the US Food and Drug Administration (FDA, Washington, DC, USA) to compensate for time lost in the FDA-approval process.

b) ANDA filing, permits generic drug manufacturers to incorporate the safety and efficacy data from an approved product, saving generic manufacturers from the extensive clinical trial period required for new drugs.

c) The research exemption from infringement is provided in Section 271(e)(1) of Title 35 of the United States Code, which states, in part, that "[i]t 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". This was intended to allow potential competitors to enter the market immediately upon expiration of the patent, protecting against an artificial extension of patent monopolies beyond the expiration of the patent, for activities related to obtaining FDA approval. All necessary FDA-approval procedures could be completed before the patent expires, allowing the product to be launched as soon as possible after the expiration of the patent.

The Hatch-Waxman Act sought to ensure that a patent did not de facto extend past the expiration of the patent term because a generic competitor could not enter the market without regulatory approval. Thus, the Hatch-Waxman Act permitted generic competitors to conduct experiments in advance of patent expiration, as long as those activities were reasonably related to securing regulatory approval.  Thus the competitor need not wait until expiration of the patent to conduct experiments for regulatory approval.  Also, the Hatch-Waxman Act permits the ANDA filing. The potential experiments needed to obtain normal regulatory approval would be more extensive, time consuming and expensive, further extending the patent monopoly and raising the barrier to market entry than an ANDA filing.

On June 6, 2003, in a 2-1 decision, the Federal Circuit in Integra Lifesciences I, Ltd. v. Merck kGaA, 2003 WL21299492 (Fed. Cir. June 6, 2003), in an opinion by Judge Rader with Judge Newman dissenting, significantly limited the scope of § 271(e)(1) to exempt from infringement only those activities “reasonably related” to generating information that would be submitted to the FDA. The court held that the use of research tools to identify drug candidates that might later require FDA approval was not exempt from infringement. The court acknowledged that the Hatch-Waxman Act had two key purposes: (1) to restore to pharmaceutical patents a portion of the expired patent term to compensate for delays in regulatory approval; and (2) to overrule the Bolar decision, so that competitors could conduct experiments in advance of patent expiration such that introduction of generic drugs would not be unnecessarily delayed. Despite its emphasis on generic drugs, the court noted that all clinical trials were exempt under § 271(e)(1).

In analyzing the specific facts in Integra, the court noted that the experiments-at-issue did not generate information for submission to the FDA, but were screening activities conducted to identify drug candidates for further testing. In refusing to hold those activities exempt, the court emphasized that the “safe harbor” exemption applies “solely” to activities which generate information for submission to the FDA. In this case, the work sponsored by Merck was considered by the court to be “only general biomedical research to identify new pharmaceutical compounds” and that “the FDA has no interest in the hunt for drugs that may or may not later undergo clinical testing for FDA approval.” Thus, the court held that the experimental work sponsored by Merck in this case was not “solely for uses reasonably related” to testing for submission to the FDA.

Pharmaceutical and biotech companies now face the possibility of being pursued for infringement of patented research tools used in the early stages of drug discovery, presenting several significant risks.  On the other hand, the Federal Circuit's decision provides discovery companies with new competitive ammunition.  It is now clear that research tool patents can be asserted to block competitors from using their innovative research methods. Additionally, companies that have developed their own portfolios of patented research tools can further leverage them as a revenue-generating asset.

Merck appealed to Supreme Court to review Hatch-Waxman Safe Harbor Patent Case. In January 2005, the Supreme Court granted certiorari in the case and will hear the appeal on April 20.
 (http://www.supremecourtus.gov/qp/03-01237qp.pdf)

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Temozolomide
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Pfizer Patent Invalidated

Ranbaxy Pharmaceuticals, Inc. (RPI), a wholly owned subsidiary of Ranbaxy Laboratories Ltd (Ranbaxy), today announced that it successfully invalidated claims 1-3 (all claims sought to be invalidated) of Austrian Patent No. AT E 207 896 as anticipated by, and as lacking inventive step over, respectively, a Pfizer-owned published patent application and a Pfizer owned patent, as reflected by a decision released by the Austrian Patent Office. The global market for Atorvastatin in year 2004 was $ 12 billion.

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ZOFRAN(R)
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Endometriosis
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Intraocular Lens
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Micafungin Sodium
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