' V.

PHARMACEUTICAL

PATENT LAW

John R* ThomasProfessor of Law

Georgetown University Law CenterWashington, DC

The Bureau of National Affairs, Inc., Washington, D.C.

Summary Table of Contents

Foreword viiPreface ixDetailed Table of Contents xii

I. Introduction1. Introduction to Pharmaceutical Patents 3

II. Patent Acquisition2. Patent Eligibility 293. Utility 504. Novelty 845. Nonobviousness 1436. The Patent Instrument 2027. Patent Acquisition Procedures 241

III. Marketing Approval Procedures8. Duration of Rights 2819. The FDA Drug Approval Process 302

10. The Orange Book 32711. Marketing Exclusivities 348

TV. Infringement12. Scope of Patent Rights 37713. Claim Interpretation and the Doctrine of Equivalents 455

14. Parallel Importation 49115. The Experimental Use Privilege 52216. Antitrust Considerations 569

xi

xii Summary Table of Contents

V. International and Comparative Aspects17. International and Comparative Patent Law 591

18. International and Comparative Data Protection Law 625

AppendixList of Documents Included on CD-ROM 641

Table of Cases 645Index 667

Detailed Table of Contents

Foreword vj jPreface j x

Summary Table of Contents xi

I. Introduction

1. Introduction to Pharmaceutical Patents 3I. The Drug Patent Debate 4II. Overview of the Patent Law 5III. Overview of the Marketing Approval Process 7IV. A Brief History of Pharmaceutical Patent Law and

Food and Drug Law 9A. Roche v. Bolar 9B. The Hatch-Waxman Act 12

1. The Statutory Experimental Use Exception 132. Abbreviated New Drug Applications 143. Certifications for Orange Book-Listed Patents . 154. Patent Infringement Proceedings 165. Patent Term Extension 176. Marketing Exclusivities 187. Generic Exclusivity 188. The Impact of the Hatch-Waxman Act 19

C. The Generic Animal Drug and Patent TermRestoration Act 19

D. The Prescription Drug User Fee Act 20E. The Uruguay Round Agreements Act of 1995 20F. The FDA Modernization Act 20G. The American Inventors Protection Act of 1999... 21H. The 2002 FTC Study 21I. The 2003 FDA Regulations 23J. The Medicare Prescription Drug and

Modernization Act of 2003 231. Single 30-Month Stay 232. Notice of Applications 243. Counterclaim for Patent De-Listing 244. Declaratory Judgment Actions 24

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xiv Detailed Table of Contents

5. Generic Exclusivity 246. Notice of Agreements 25

K. The Future 25

II. Patent Acquisition

2. Patent Eligibility 29I. Basic Concepts 29II. Product and Process Claims 30

A. Scientific Principles 31B. Products of Nature 32C. Living Inventions 35D. Process Claims for New Uses 37

III. Types of Pharmaceutical Patent Claims 38A. Drug Substances 38B. Formulations 39C. Chemical Intermediates 39D. Metabolites and Prodrugs 40E. Crystals and Polymorphs 41F. Isomers 42G. Salts 43H. Combination Therapies 44I. Methods of Using 44J. Methods of Making 46

IV. Methods of Medical Treatment 46

3. Utility 50I. Introduction 50II. Moral Utility 53III. Practical Utility 57IV. Practical Utility for Pharmaceutical Patents 60

A. Brenner v. Manson 60B. Leading Case Law of the Court of Customs and

Patent Appeals 63C. Leading Case Law of the Federal Circuit 65D. The 1995 PTO Utility Examination Guidelines . . . 66E. The 2001 PTO Utility Examination Guidelines . . . 68

V. Recurring Issues 70A. Safety and Efficacy Considerations 70B. Structural Similarity to Compounds With an

Established Utility 74C. In Vitro and In Vivo Tests 75D. Human Clinical Data 75E. Chemical Intermediates 76F. Inoperable Species Within a Genus 77G. Assertions of Multiple Utilities 78H. The Utility Requirement in Adversarial

Proceedings 79I. The Utility Requirement and Priority

Applications 81

Detailed Table of Contents xv4. Novelty g4

I. Introduction 34II. Anticipation 87

A. Genus and Species 88B. The Enablement Requirement 92

III. Inherency 93IV. The 35 U.S.C. § 102(b) Statutory Bar.'.'.'.'.'.'.'.'.'.'.'.".'' 99

A. "Public Use" Under 35 U.S.C. §102(b) 101B. "On Sale" Under 35 U.S.C. § 102(b) 104C. "In This Country" 108D. Experimental Use 110E. Patents 114F. Printed Publications 116

V. Abandonment Under 35 U.S.C. § 102(c) 117VI. Delayed U.S. Filing Under 35 U.S.C. §102(d) 118VII. Prior Invention Under 35 U.S.C. § 102(a) 120VIII. Prior Invention Under 35 U.S.C. §102(g) 123

A. Prior Art Under 35 U.S.C. § 102(g) 124B. Priority Under 35 U.S.C. §102(g) 125C. Inventive Activity in Foreign Countries 125D. Conception 127E. Reduction to Practice 128F. Diligence 130G. Corroboration 132H. Patent Award to the Second Inventor 133

IX. Disclosure in U.S. Patent Applications Under35 U.S.C. §102(e) 138

X. Derivation Under 35 U.S.C. §102(f) 141

5. Nonobviousness 143I. Introduction 144II. Prior Art for Nonobviousness 144

A. Analogous Arts 145B. 35 U.S.C. §103(c)(l) 147C. The CREATE Act 148

III. The Nonobviousness Inquiry 150A. The Historical Standard of Invention 150B. The Modern Standard of Nonobviousness 151C. The Person of Ordinary Skill in the Art 156D. The Prima Facie Case of Obviousness 158E. Motivation to Combine 159F. Disfavored Frameworks for Nonobviousness — 164

IV. The Secondary Considerations 167A. Commercial Success 168B. Copying 171

C. Licenses * 'D. Long-Felt NeedE. Praise and Skepticism

xvi Detailed Table of Contents

F. Prior Failures of Others 174G. Unexpected Results 175

V. Structural Similarities as Evidence of Obviousness.. 177A. Introduction 177B. Homologues 184

1. Adjacent Homologues 1842. Ring Expansion and Contraction 1863. Remote Homlogues 188

C. Isomers 1891. Structural Isomerism 189

a. Position Isomerism 189b. Tautomers 191c. Stereoisomers 192

2. Bioisomerism 194D. Esters 195

1. Prior Art Alcohols 1962. Prior Art Free Acids 197

E. Analogs 198VI. Product and Process Claims 198

6. The Patent Instrument 202I. Enablement 204

A. Basic Concepts 204B. Working and Prophetic Examples 206C. Exhibits and Biological Samples 208

II. Best Mode 208III. Written Description 212

A. New Matter 213B. Originally Filed Claims 216

IV. The Claims 218A. Basic Claim Drafting 219

1. The Preamble 2192. The Transition Phrase 2213. The Body 224

B. Claim Formats 2251. Dependent Claims 2262. Markush Claims 2273. Product-by-Process Claims 2284. Jepson Claims 2305. Functional Claims 2316. Skuballa Claims 2357. First Medical Use and Swiss-Style Claims 235

C. Definiteness 237

7. Patent Acquisition Procedures 241I. Fundamentals of Patent Prosecution 242

A. Preparation of Applications 242B. Provisional Applications 243C. Examination of Applications 244

Detailed Table of Contents xvu

D. Continuing Applications 246E. The Restriction Requirement and Divisional

Applications 246F. Publication of Applications 247G. Petition and Appeal 249H. Invention Secrecy Orders 250

II. Other PTO Proceedings 250A. Interferences 250B. Protests 252C. Citation of Prior Art 253D. Public Use Proceedings 253

III. Post-Grant Proceedings 254A. Certificates of Correction 254B. Disclaimers 254C. Reissue 255D. Reexamination 257

1. Ex Parte Reexamination 2582. Inter Partes Reexamination 260

E. Intervening Rights 261IV. Abuses of Patent Acquisition Procedures 262

A. Double Patenting 2621. Basic Principles 2622. Double Patenting and the Restriction

Requirement 2653. Two-Way Double Patenting 266

B. Inequitable Conduct 268C. Misjoinder or Nonjoinder of Inventors 273D. Prosecution Laches 275

III. Marketing Approval Procedures

8. Duration of Rights 281I. Fundamentals of Patent Term 281II. Maintenance Fees 283HI. The Patent Term Guarantee Act 283IV. Specialized Legislation 283V. The Hatch-Waxman Act 284

A. Eligible Patents 2851. Drug Products 2852. Combination Therapies 2893. Metabolites 2904. Medical Devices 29J

B. Application for Term Extension Z9d1. Time Limit for Filing 2932. Identity of the Applicant 2943. Contents : f£4 Review of the Application

Detailed Table of Contents

5. Interim Extensions 2976. Strategic Considerations 298

C. Period of Extension 298D. Limitation Upon Scope of Rights 299

9. The FDA Drug Approval Process 302I. Marketing Approval for Innovative Drugs 302

A. Preclinical Investigations 303B. Investigational New Drug Applications 304

1. Phase I Investigations 3042. Phase II Investigations 3053. Phase III Investigations 3054. Treatment INDs 3055. Screening INDs 306

C. New Drug Applications 306D. Postmarketing Surveillance/Phase IV

Investigations 307II. Marketing Approval for Generic Drugs 307

A. FDA Practices Prior to Hatch-Waxman 308B. Abbreviated New Drug Applications 309C. Section 505(b)(2) Applications 311D. Patent Certifications 313E. Section viii Statements 314F. Thirty-Month Stay of Marketing Approval 317

1. Multiple 30-Month Stays 3182. Judicial Modification of the 30-Month Period... 321

III. Antibiotics 324

10. The Orange Book 327I. Overview of the Orange Book 327II. Patents Appropriate for Orange Book Listing 329

A. The Hatch-Waxman Act 329B. FDA Regulations 333

1. General Rules 3332. Polymorph Patents 3363. Product-by-Process Patents 337

C. Third-Party Patents 337III. The Timing of Patent Listings 339IV. Orange Book Listing Disputes 340

A. The Role of the FDA 341B. Delisting Litigation 342

1. Pre-2003 Standards 3422. The Medicare Act 345

C. FTC Enforcement 346

11. Marketing Exclusivities 348I. Marketing Exclusivity Concepts 348II. New Chemical Entity Exclusivity 349III. New Clinical Study Exclusivity 352

Detailed Table of Contents xix

IV. Generic Marketing Exclusivity 354A. Basic Concepts 354B. Pre-Medicare Act Standards . . . . . . . . . . . . . . . . . . . ' . ' ' 356

1. Entitlement 3562. Timing of Notice 3593. Commencement of the 180-Day Period... . . . . . . 3594. Separate Exclusivities for Distinct Dosages

and Strengths 3615. Patent-by-Patent Approach 3626. Relationship to Pediatric Exclusivity 3637. Transferability 364

C. Standards Under the Medicare Act 3641. Entitlement 3642. Forfeiture 3653. Timing of Notice 3664. Commencement of the 180-Day Period 3665. Product-by-Product Approach 366

D. Unresolved Issues 3671. Authorized Generics 3672. Award of Exclusivity for Judgments of

Noninfringement 369V. Pediatric Marketing Exclusivity 369VI. Orphan Drug Marketing Exclusivity 371

TV. Infringement

12. Scope of Patent Rights 377I. Basic Concepts 378

A. Direct Infringement 378B. Indirect Infringement 380

1. Active Inducement 3812. Contributory Infringement 3823. Deepsouth and 35 U.S.C. §271(f) 3844. Bioconversion as Infringement 385

C. Process Patents 3861. The Process Patent Amendments Act 3862. Screening Methods 389

D. Government Infringers 3911. The Federal Government 3922. The Bayh-Dole Act 3953. State and Local Governments 397

II. Infringement Under the Hatch-Waxman Act 399A. Patent Implications of ANDAs and

Section 505(b)(2) Applications 399B Notification of a Paragraph IV Certification 401C. Offers of Confidential Access .. •••••••••••. 401D Biobatch Data Versus the ANDA Specification.... 402E Generic Submissions for Unapproved Uses 404

xx Detailed Table of Contents

III. Patent Litigation 407A. Subject Matter Jurisdiction 407B. Supplemental Jurisdiction 408C. Personal Jurisdiction 409

1. General Principles 4092. Implications of the Hatch-Waxman Act 410

D. Venue 411E. Declaratory Judgment 412

1. General Principles 4122. Declaratory Judgment Actions in the

Hatch-Waxman Framework 415F. The Availability of Jury Trials Under the

Hatch-Waxman Act 421IV. Infringement Defenses 423

A. Invalidity and Unenforceability 423B. Issue Preclusion 424C. Laches and Estoppel 425D. Licenses 426

1. Basic Concepts 4262. Licensee and Assignor Estoppel 4293. Implied Licenses 4324. Shop Rights 434

V. Remedies 435A. General Principles 435

1. Injunctions 4362. Compensatory Damages 436

a. Reasonable Royalties 437b. Lost Profits 438

i. "But For" Causation 439ii. Proximate Causation 442iii. The Entire Market Value Rule 443

3. Marking 4454. Provisional Rights 4455. Enhanced Damages 446

B. Remedies Under the Hatch-Waxman Act 4491. Remedies Available for Infringing Generic

Applications 4492. Generic Filings as Willful Infringements 449

C. Implications of Generic Market Entry DuringPatent Litigation 451

13. Claim Interpretation and the Doctrine of Equivalents 455I. Claim Interpretation 455

A. Basic Concepts 455B. Markman v. Westview Instruments 456C. Canons of Claim Construction 458D. Dictionaries, the Specification, and the Phillips

Case 462

Detailed Table of Contents xxi

II. The Doctrine of Equivalents 464A. Basic Concepts 4^4

1. Graver Tank and the Function-Way-ResuitStandard 464

2. Warner-Jenkinson and the InsubstantialDifferences Standard 467

3. Functional Equivalents 469B. Limitations on the Doctrine of Equivalents 470

1. The All Elements Rule 4712. Prior Art Limitations 4753. Prosecution History Estoppel 4794. The Public Dedication Doctrine 485

C. The Reverse Doctrine of Equivalents 489

14. Parallel Importation 491I. Introduction 491II. FDA Practices With Respect to Importing

Prescription Drugs 493A. The Prescription Drug Marketing Act of 1987 493B. The MEDS Act of 2000 495C. The Medicare Modernization Act of 2003 496D. Reform Proposals in the 108th Congress 497

1. Registration of Commercial Participants 4982. FDA Approval Status 4983. Eligible Exporting Countries 4994. Imports for Personal Use 5005. The Pedigree Rule 5016. Packaging Requirements 5017. Commingling 5018. Internet Pharmacies 5029. Sales and Pricing Restrictions 50210. Formulation Changes 50311. Reform Prospects in the 109th Congress 503

III. Patent Implications of Parallel Importation 503A. The Exhaustion Doctrine 503B. International Exhaustion 504C. Reform Proposals 5 0 7

D. Potential Legal Issues 5 0 8

1. The Takings Clause 5°82. State and Local Governments 5133. The TRIPS Agreement 5154. Free Trade Agreements 5165. Label Licenses 5 2 0

15. The Experimental Use Privilege • •• ••I. The Common Law Experimental Use Privilege 524

A Origins of the Experimental Use Privilege 524B. Cases Upholding the Privilege . 5J*>C. Experimental Use as a Matter of Remedies 529

xxii Detailed Table of Contents

D. Cases Rejecting the Experimental Use Privilege.. 530E. The Common Law Experimental Use Privilege

in Pharmaceutical Cases 536F. The Common Law Experimental Use Privilege

in Academic Settings 537G. Experimental Use Policy 541

II. The Statutory Experimental Use Privilege 545A. Introduction to 35 U.S.C. §271(e)(l) 545

1. Roche v. Bolar 5462. The Hatch-Waxman Act 5483. Basic Analytical Framework 550

B. Application of 35 U.S.C. §271(e)(l) 5551. Manufacture 5552. Preclinical Trials 5563. Clinical Trials 5574. Other Product Testing 5585. Sales 5586. Displays and Demonstrations 5597. Publications and Promotions 5608. Foreign Patenting and Regulatory Approval.. 5619. Medical Devices 56210. Research Tools 566

16. Antitrust Considerations 569I. Introduction 569II. Notice of Patent Settlements 571III. Judicial Treatment of Reverse Payment Settlements. 572

A. Per Se Illegality 573B. Rule of Reason 575C. Sui Generis Analysis 578D. Concluding Observations 584

V. International and Comparative Aspects

17. International and Comparative Patent Law 591I. The Paris Convention 593

A. National Treatment 593B. Independence of Patents 593C. International Priority 594D. Benefits of Paris Convention Priority 595E. Limitations of the Paris Convention 598

II. The Patent Cooperation Treaty 598III. Foreign Filing Licenses 600IV. Regional Agreements 601

A. NAFTA 601B. Other Regional Agreements 602

V. The TRIPS Agreement 603A. National Treatment and Most-Favored-Nation

Status 603

Detailed Table of Contentsxxm

B. Minimum Standards of Protection 604C. Compulsory Licenses 605

1. TRIPS Agreement Article 31 6052. The Doha Declaration '.. 606

D. Other Provisions 607E. Effective Dates 608

1. Pipeline Protection 6092. Exclusive Marketing Rights 610

F. Dispute Settlement 6101. India Pharmaceutical Products 6112. Canada Pharmaceutical Products 613

G. Debate on the TRIPS Agreement 615VI. Free Trade Agreements 615

A. Patent Term Restoration 616B. Data Exclusivity 616C. Confidential Status of Experimental Data 617D. Accelerated Generic Marketing Approval 617E. Experimental Use Privilege 618F. Parallel Importation 618G. Implications 618

VII. Comparative Patent Law 619A. Deferred Examination 619B. Experimental Use Privilege 620C. Grace Period 621D. Methods of Medical Treatment 622E. Oppositions 622F. Patent Validity as an Infringement Defense 623G. Priority Principle 623H. Publication of Pending Applications 624I. Scope of Patent Protection 624

18. International and Comparative Data Protection Law 625I. International Data Protection Standards 627

A. The TRIPS Agreement 6271. Basic Principles 6272. Eligible Data 6283. Protection Against Unfair Commercial Use . . . . 6294. Protection Against Disclosure 632

B. Free Trade Agreements 633II. Comparative Data Protection Law 635

A. The European Union 6351. Introduction 6352 The Pre-2005 6/10 Formula o6b3. 2005 and Beyond: The 8+2+1 Formula 6374. Orphan Drugs '••":'••; /• f on5 The Proposed Pediatric Testing Incentive 639

B. Japan 6 3 9

xxiv Detailed Table of Contents

Appendix

List of Documents Included on CD-ROM 641

Table of Cases 645Index 667