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Inter partes review: Benefits for innovators and generic challengers

Dana Lau and Robert S Schwartz of Fitzpatrick Cella Harper & Scinto consider the effects of new inter partes review and supplemental examination procedures in the United States

The Leahy-Smith America Invents Act of 2011 has brought many changes to the US patent system, including post-grant proceedings such as inter partes review (IPR) and supplemental examination, which provide new opportunities for both innovator and generic companies within the Hatch-Waxman (HW) framework. This article discusses those opportunities, and provides an update on one strategy in particular: the possibility of later abbreviated new drug application (ANDA) filers using IPR to force the loss of the first filer's 180-day exclusivity.

Hatch-Waxman background

Congress adopted the HW Act in 1984 to expedite and streamline approval and marketing of generic drugs. Typically, an innovator drug company (innovator) obtains patent protection for its approved drugs to ensure a period of patent exclusivity, and provides the Food and Drug Administration (FDA) with the patent number and expiration date of patents that cover the drug, which are listed in the FDA's Orange Book.

Under the HW regime, a generic drug manufacturer (generic) can challenge the innovator's patent exclusivity. A generic seeking marketing approval to make an equivalent of the innovator's drug typically files an ANDA with the FDA. If the generic wishes to challenge one or more Orange Book-listed patents, the ANDA will include a so-called paragraph iv certification against the relevant patent or patents. A paragraph iv certification, a statutory act of infringement, triggers the generic's obligation to notify the innovator of the ANDA and to provide a detailed statement of its basis for asserting patent invalidity or non-infringement. If the innovator sues the generic within 45 days, the FDA cannot grant final approval of the ANDA for 30 months. If the innovator wins the law suit, the patent exclusivity continues until the patent expires. A generic victory results in the ability to enter the marketplace without patent infringement liability. The HW framework provides an incentive to challenge listed patents by providing the first ANDA filer (first filer) with 180 days of marketing exclusivity during which any subsequently filed ANDA cannot be approved.

Inter partes review by generics

IPR is a new, expedited USPTO trial proceeding conducted by the Patent Trial and Appeal Board (PTAB). A third party may challenge the validity of issued patent claims based on publicly available prior art in an IPR. In the HW context, some generics have initiated IPR proceedings against an innovator's Orange Book-listed patents while a HW patent suit on those patents is pending in a federal district court. Thus, an innovator may find itself facing the same adversary in two different forums under different evidentiary standards.

IPR has the promise of providing a faster and less expensive alternative to district court patent litigation because the PTAB must issue a written decision within 12 months of the IPR being initiated, with a maximum six month extension for good cause. Only limited discovery is permitted, and the PTAB must consider the issues in the context of the broadest reasonable claim construction. A petitioner initiates an IPR by providing the USPTO with evidence that there is a reasonable likelihood of prevailing with respect to at least one challenged patent claim. The petitioner has the burden of proving unpatentability by a preponderance of evidence. A PTAB decision can be directly appealed to the Federal Circuit by either the patent owner or the petitioner. Other benefits to a generic challenging innovator patents in an IPR include being able to use the same prior art in a different forum with a lower burden of proof; cost reduction; the potential for prosecution history estoppel; and expedited review.

Some commentators have speculated that the strategic use of IPR challenges by later ANDA filers could cause the forfeiture of the first generic filer's 180-day exclusivity, and thereby allow the later ANDA filer to enter the market sooner. The first filer forfeits its exclusivity if, among other things, a later filer with tentative FDA approval obtains a final court decision of patent invalidity or non-infringement, from which no appeal can be taken and the first-filing generic does not begin commercial sales of its product within 75 days. More important, the final court decision may occur at a time when the first-filer is unwilling or unable to launch because, for example, it is blocked by another patent or the 30-month stay. Although it is unclear whether a ruling of invalidity by the PTAB might be considered a final court decision, such a ruling could potentially be affirmed by the Federal Circuit, leading to a judgment of patent invalidity in a concurrent district court litigation. In order for such a strategy to be effective, however, it is important to consider the timing of the IPR written decision and the subsequent appellate court judgment that can be taken to an ongoing district court litigation.

Two sets of IPR proceedings illustrate these timing considerations: Apotex v Alcon Pharmaceuticals and Accord Healthcare USA v Eli Lilly & Company.

Alcon's Vigamox

Alcon obtained approval for Vigamox (moxifloxacin hydrochloride) on April 15 2003 for the treatment of bacterial conjunctivitis. Three patents are listed in the Orange Book covering the moxifloxacin hydrochloride product. Two of the listed patents, US 6,716,830 (the 830 patent) and US 7,671,070 (the 070 patent), give Alcon exclusivity until March 29 2020 (including six months of pediatric exclusivity). Teva was the first paragraph iv filer to challenge the 830 patent, and was timely sued by Alcon in 2006. The district court ruled that Teva's ANDA product infringed, and that Teva did not prove invalidity of the 830 patent. Teva filed a notice of appeal to the Federal Circuit in 2009, which was inactivated and then reactivated on July 25 2013. A decision from the Federal Circuit is expected in the Spring of 2014. If Teva prevails at the Federal Circuit, it could launch its product before the March 2020 expiration date.

Apotex, a later generic filer, received tentative approval for its own generic version of Vigamox on February 16 2012. Apotex filed a paragraph iv certification against the 830 and 070 patents and Alcon sued Apotex on July 20 2012. Trial is set for October 15 2013.

On October 4 2012, Apotex filed two IPR petitions challenging Alcon's 830 and 070 patent claims invalid as anticipated and obvious, using some of the invalidity arguments presented by Teva in the earlier Alcon v Teva litigation. On March 19 2013, the PTAB instituted the IPRs based on Apotex's obviousness challenges. The PTAB's written decisions are due March 19 2014 (or no later than September 19 2014, if a 6-month extension is obtained). If the PTAB holds the patents invalid, Apotex can seek an affirmation of the PTAB's holdings by the Federal Circuit, which can then be taken to the concurrent district court case against Apotex, and used as a basis for a motion to enter judgment and thereby trigger Teva's forfeiture of exclusivity.

However, based on the current schedules of the IPRs and district court cases, the PTAB will not issue a written decision prior to the October 2013 district court trial date. Therefore, it is unlikely that Apotex could use the IPR proceeding to force forfeiture of Teva's exclusivity.

Eli Lilly's Alimta

Eli Lilly received approval for Alimta (pemetrexed) in 2004 for the treatment of nonsquamous non-small cell lung cancer and, in combination with cisplatin, for the treatment of mesothelioma. Eli Lilly has two Orange Book-listed patents for Alimta, US 7,772,209 (the 209 patent) and US 5,344,932 (the 932 patent). The 209 patent provides exclusivity until May 24 2022 and the 932 patent, held not invalid and infringed by Teva in a prior district court law suit, provides exclusivity until Jan 24 2017. Eli Lilly sued first filer Teva for infringement of the 209 patent in 2010. Trial is set for August 19 2013. If Teva obtains a favourable decision, it may launch its pemetrexed product as early as 2017.

On January 20 2012, Eli Lilly sued later filer Accord Healthcare on the 209 patent. Trial is set for July 7 2014. On June 14 2013, Accord filed an IPR petition asserting that claims of the 209 patent were invalid for obviousness.

If the PTAB institutes the IPR (as of this writing the PTAB has not issued a decision on instituting an IPR), Accord will have the opportunity to contest patent validity both in district court and before the PTAB, as well as potentially trigger forfeiture of Teva's 180-day exclusivity. In view of the current timing of the IPR petition and the district court litigation, however, it seems that, like the situation for the Vigamox challenge, Accord will not be able to use the IPR proceedings to force forfeiture of Teva's 180-day exclusivity.

Three other groups of IPR petitions have been filed on Orange Book-listed patents by later generics: Amneal Pharmaceuticals, IPR2013-00368, IPR2013-00371 and IPR2013-00372, against patents owned by Supernus Pharmaceuticals and covering Galderma Laboratory's Oracea; Apotex, IPR2013-428, IPR2013-00429 and IPR2013-00430, against patents covering Alcon Research's Travatan; and Ranbaxy Laboratories, IPR2013-00024, against patents covering ViiV Healthcare's Lexiva. The PTAB has yet to institute IPRs in the first two sets of cases. As more data becomes available, it will become clearer whether IPRs can be used by later filers to force forfeiture of first-filer exclusivity.

Supplemental examination

Supplemental examination is a procedure available to patent owners that provides an opportunity to identify and correct potential problems in issued patents. While all patent deficiencies challenges (such as enablement, anticipation, obviousness, and indefiniteness) can be addressed, perhaps its most intriguing use concerns correction of a patentee's alleged inequitable conduct (that is, an intentional nondisclosure or misrepresentation of material information to the USPTO) during prosecution.

Upon request by a patent owner, the USPTO is required, within three months, to conduct supplemental examination to make a determination as to whether submitted information raises a substantial new question of patentability. If the threshold is reached, an ex parte reexamination is then ordered. If not, the USPTO closes the matter and issues a supplemental examination certificate listing the information and noting that it did not raise a substantial new question of patentability.

Issuance of such a certificate means that the patent "shall not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent" (35 USC section 257). In effect, the patent cannot be held unenforceable based on prior art considered by the USPTO in the supplemental examination, even if that prior art was not previously considered during prosecution.

There are, however, limits to its use. The request must occur before an inequitable conduct defence is pled, with particularity either in a civil action or in the generic's paragraph iv notice letter. Also, the protection will not apply unless both the request for supplemental examination and any resulting reexamination are concluded before the civil action is brought.

While patent owners can potentially use supplemental examination to strengthen an issued patent, the risks of doing so need to be carefully considered, particularly the risk that the USPTO could order a reexamination that results in a narrower claim scope or cancellation of claims. In addition, the patent owner cannot file a patent owner statement, which is permitted under normal reexamination practice.

Despite these risks, patent owners should consider undertaking due diligence of their portfolios to identify Orange Book listed-patents whose claims could be potentially strengthened by a supplemental examination.

Strategic benefits

Although post-grant proceedings have only recently come into effect, they hold potential strategic benefits for both innovators and generic challengers in the HW context. Those potential benefits should become clearer as more data becomes available.

Dana Lau

Dana Lau (PhD) focuses her practice on patent litigation, particularly in the area of pharmaceutical arts. She also has experience in pre-suit investigations, non-infringement and validity opinions, and patent prosecution. Her technical experience includes antibodies, transgenic animal models, medical devices and therapeutics for the treatment of rheumatoid arthritis, epilepsy, attention deficit hyperactivity disorder, age-related macular degeneration, colorectal cancer, fibromyalgia, diabetes, kidney disease and acid reflux.

Dana received her PhD in 2000 from the department of molecular and cell biology at the University of California, Berkeley. She has published in peer-reviewed journals in the fields of immunology, cell biology, gene therapy, and vision science.

Robert S Schwartz

Robert Schwartz (PhD) focuses his practice on biotechnology and pharmaceutical patent litigation, technical advising, and patentability and non-infringement opinions. Robert's primary focus is in the areas of biotechnology, particularly protein biochemistry, cell biology, molecular biology, genomics, proteomics, vitamin and nutritional supplements and the chemical arts. Some of the technologies he has worked with include nucleotide prodrugs, enzyme inhibitors, cell growth factors, receptor antagonists, DNA sequencing and vaccines.

While in law school Robert was an editor of the Pace Law Review. Prior to becoming an attorney, he was an associate professor of medicine at the Albert Einstein College of Medicine, New York, and a staff scientist at the Children's Hospital Oakland Research Institute (CHORI), where he was a principal investigator of grant-funded biomedical research in areas including hereditary anemias, malaria and diabetes.

Robert was listed in Legal 500 2007, and "considered excellent because of his sheer depth of technical knowledge, quick thought processes, keen analytical skills, great memory of details of the matter, and an ability to listen to concerns and meet them".


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