Comments from in-house and private practice pharma counsel
Analysis of USPTO data
Insight into generic pharma PTAB strategy
The decrease in Patent Trial and Appeal Board petitions challenging Orange Book patents may be partly due to the downsides of the proceedings for generics companies, say sources.
The USPTO released a study finding that America Invents Act (AIA) challenges to patents listed in the Orange Book, the Food and Drug Administration’s official register of drugs, had stayed below 2% of all petitions since FY 2020. In 2021, the figure was even as low as 0.4%.
This was a significant drop since FY 2016, when Orange Book petitions were 7.5% of the overall share.
The number of AIA petitions challenging biologics also went down after 2017, but the figures were steadier.
These filings could be low because of general pharma market trends.
Don Mizerk, partner at law firm Husch Blackwell in Chicago who represents generics companies, notes that there were 857 Abbreviated New Drug Applications (those for the approval of generic drugs) filed in FY 2022. As there were 1,044 filed in 2018, the drop could explain why there were fewer PTAB challenges too.
“It just makes it a little bit harder for there to be a target for a PTAB proceeding,” Mizerk says.
Generic strategy
But filings may have also been low because the PTAB isn’t always the best forum for generics companies up against innovators.
Generics firms can also go head-to-head with innovators in district courts, in which they can make non-infringement arguments instead of just invalidity claims.
Sources point out that a generic drug manufacturer that is found not to have infringed a patent in district court can secure the right to get on the market. And if such a company doesn’t invalidate the patents, it could be the only generic drug manufacturer on the market.
But one that does invalidate a patent opens the door for everyone to come in.
Mizerk at Husch Blackwell says he filed and prevailed on a PTAB petition related to a prescription cream but it allowed his client’s competitors to also launch their products.
“Some people think you’ll get a settlement that will be more favourable, but if it doesn’t settle, you’re just opening the door for everyone to come in. My client bore the entire cost of that proceeding, only for it to have benefitted everybody. We provided that public service in that context.”
There’s also the cost of going to the board.
Mizerk notes that PTAB petitions have a high filing fee and require parties to have all the expert evidence prepared up front.
“In litigation, things are more spread out,” he says.
That said, not everyone wants to avoid the PTAB.
A senior counsel at a generics company in the US says he still uses inter partes reviews (IPRs) and values these proceedings.
“I don’t have a good answer as to why these numbers have dipped. But maybe there’s a bit more of a refinement from companies as to how to use IPRs, and they’ve been a little bit more selective,” he says.
The senior counsel notes that there’s also often parallel district court litigation when generics companies file IPRs, and that practice has received a lot of scrutiny.
“A lot of people have concerns about this. They don’t want to see us as double dipping. There’s been a lot of pushback on that aspect of it. You’re not going to get a double dip – that’s pretty clear now.”
When to file
Given these concerns, it can be good for generics companies to think carefully about when to file PTAB proceedings.
The senior counsel at the generics company says it might make more sense to file IPRs when challengers have a strong obviousness or novelty argument on complex issues.
“Generally, it’s going to be harder to prevail in district court on obviousness, particularly when you’re talking about a really complex area of science,” he says, noting that the administrative patent judges are often better suited to evaluate technical arguments than district court judges.
And sometimes the risks of using the board are better than the risks of not doing so.
Oren Langer, managing partner at law firm Robins Kaplan in New York who frequently advises generics, says: “If you’re a generic filer, you want to get to the market. Even if you have to share it with five other companies, zero is worse than that share.”
He adds: “The PTAB still offers a more-likely-than-not opportunity that you can take an Orange Book-listed patent and invalidate it.”
Innovator insight
Innovator companies can make use of IPRs and post-grant reviews (PGRs), which are another type of PTAB proceeding that can be filed within nine months of a patent’s issuance or reissuance.
Corey Salsberg, global head of IP affairs at pharma company Novartis in Washington DC, says these can be useful in disputes between innovator companies.
This is especially true because innovators can’t file proceedings through the Biologics Price Competition and Innovation Act (BPCIA) or the Hatch-Waxman Act.
“If someone files a patent in a space in which you’re operating, you want to make sure you’re accounting for those intellectual property rights. In some cases, you might file an IPR or a PGR to clear the way for your own innovative work.”
He argues, however, that IPRs aren’t particularly well-suited to the biopharma industry.
Salsberg says IPRs are supposed to be an efficient alternative to district court litigation, but that generics companies have used them to duplicate proceedings.
He says the Hatch-Waxman Act and the BPCIA already offer an efficient way for generics or biosimilars to hash out patent issues with innovator or originator biologics companies.
“These were specifically designed to be their own efficient, balanced and specialised litigation systems, with benefits over regular litigation for both generics and innovators.
“By confirming once again how rarely IPRs are used, these statistics show they’re not very useful tools, at least not useful for the purpose for which IPR was designed,” Salsberg adds.
It’s unclear, however, whether the lower challenge rate at the PTAB is good news for innovators.
Adam Samansky, member at Mintz in Boston, says it doesn’t really matter where a patent gets challenged if it’s strong – because it should hold up.
“If it’s a poor-quality patent, then it’s acceptable to challenge before the PTAB or a district court. So, I don’t know whether the lower challenge rate is good or bad. I think it just is.”
Market trends
It’s also unclear whether these numbers will remain low.
Tom Irving, partner at the Marbury Law Group in Virginia who advises innovators, says there seems to be a higher standard for written description and enablement now that the US Supreme Court rejected Juno v Kite (November 2022) and ruled in Sanofi’s favour in Amgen v Sanofi (May 2023).
This could lead to more petitioners challenging patents for a lack of written description and enablement, Irving says.
“As people digest Amgen v Sanofi and Juno v Kite, things may be picking back up. That may encourage people to file PGRs. It will be interesting to see the next report,” he says.
The figures could also change depending on broader pharma market trends.
The senior counsel at the generics company says his firm is starting to see more ANDA filings, and adds: “It will be interesting to see in the next couple years. You might start to see the IPR number tick back up.”
But even if there are more opportunities to file, counsel at generics companies will have to decide whether the benefits of filing at the PTAB are worth the downsides. They, and we, await next year’s update.
