Invasion of Patent Trolls into the Biotech Sector

    15/07/2015

    Troll

    The high tech sector has for many years been plagued by patent troll litigations.  Ever since the 1980s, rapid technological innovation has brought great wealth to the industry and it has incentivized certain companies to grab a share of the spoils by filing lawsuits.  However increasingly, patent trolls are invading the biotech and pharmaceutical market and a recent report from Steptoe&Johnson LLP law office highlights the need to recognize such threats.

    Patent trolls acquire patents with no intention of using or selling the underlying technology.  They usually have low operating costs because they do not manufacture anything and they do not have to ensure they are infringing on existing patents when filing.  Instead they aggressively target real businesses that file patents arguing patent infringement and earning money by settling legal action in or out of court.  Many of these plaintiffs are known as non-practicing entities (NPEs) and have now become publicly traded companies due to their cunning ability to make money.  Such companies often hide their identities behind shell companies and require defendants to sign non-disclosure agreements.

    Total NPE Defendants by Industry Sector:

    NPEs operate by filing a vague patent early on (e.g. adding a flash drive to a medical device) and waiting for the medical device industry to “catch up”, investing millions of dollars into the actual innovation.  Once the technology becomes marketed and profitable, the NPE sends out batches of infringement notices to the biggest company in the sector to demand licensing fees.  Companies with the biggest profit margins that are financially well endowed are the most popular targets.  Often it is cheaper for the accused company to settle the licensing fee out of court since prolonged litigation fees cost much more.  NPEs can file many different licensing fees this way and grow their companies quickly.

    According to Jay Nuttal, a managing partner of Steptoe&Johnson who wrote the report in In Vivo magazine, 90% of venture capital companies have been hit by patent troll licensing demands but only 13% of pharmaceutical and medical devices investors have received such letters.  However, while only 9 medical devices patent infringement cases were filed in 2009, 93 were filed in 2014.  This marks a rapid rise in such cases and the numbers are projected to increase even further in future years.  Part of the growth in cases can be explained by an increasing number of patents filed by medical device companies (a rise of 15%-20% over the past few years).  The other aspect is that when the plaintiff wins an infringement case they typically get rewarded between $15 to $16 million in damages.  Furthermore, NPEs have generally been successful in litigation cases, winning nearly 40% of medical device cases, as compared to 33% in all other industries.  This statistic has driven NPEs to construct patent portfolios for medical device technologies.  One company, named Intellectual Ventures, has an estimated 1000 individual patents filed across multiple categories.

    Medical Device and Service Patent Cases on the rise from 2009 to 2014:

    How do you protect your company from patent trolls?

    A list of offenders in life sciences litigation cases have been identified, including: Acacia Research Corp., WiLan Inc., Intellectual Ventures Inc., IPNav, My Health Inc. and DE Partners Golden Rule LLC.  There are certain measures one can take to avoid these patent trolls. Jay Nuttal gives a list of things a company can do:

    1. Know the landscape – do some research about which patents are held by which companies before submitting your first patent.  Foster collaboration with other companies to protect patents, perhaps by cross-licensing them.  Publish your innovations in peer reviewed journals before filing the patent to create prior art hurdles.

    2. Be an aggressive defendant – Make sure you quickly respond to a patent troll once you get letters demanding a licensing fee.  Make your claims early in your defence.

    3. Press your advantage – File an inter partes review (IPR) before the patent trial and appeal board to attack the validity of the patent troll’s licenses.  Have the patent office take another look at your patentability claims.  Educate the court about your technology.

    4. Do some research about the suspected patent troll – Did the plaintiff really own the patent? Has the same patent company previously filed claims before?  Has the plaintiff done due diligence to research facts about the patent in question before sending out their license demand letters? 

    5. Seek attorney’s fees – Build up your reputation as a strong defendant for your patent claims.  Hire strong lawyers to win cases and seek attorney fees from the plaintiff once you win the case.  This would strongly dis-incentivize future patent troll litigations.

     

    In March this year Congress passed a new bill called the STRONG Patents Act to discourage patent trolling.  This bill introduced steps to prevent abusive demand letters and to simplify the post-grant proceedings at the US Patent and Trademark Office.  It is hoped that this new act will limit the power of patent trolls in future, but only time will tell.

    Interestingly, there are also companies which appear to be patent trolls but turn out to be genuine entrepreneurial startups that have failed.  Such companies, known as “Formerly Manufacturing Entities” (FMEs), can easily be confused with patent trolls because they also file license fee demands under NPEs.  In a recent case, Gene Reader LLC vs Agilent Technologies Inc, the plaintiffs (Agilent) filed a patent many years ago for a DNA microarray chip reader but was never able to bring the product to market.  Now that the technology has been licensed to Gene Reader, Agilent may have a viable claim to their patent because they put resources into the development of their technology.  This goes to show the complexity of spotting patent trolls from firms that have genuine patent claims.

    Reference:

    Patent Trolls in Biotech
    http://medcitynews.com/2015/03/patent-trolls-coming-life-sciences-industry-whats-next/

    http://www.steptoe.com/assets/htmldocuments/The%20Patent%20Trolls%20Are%20Coming...To%20Medtech.pdf

    Gene Reader LLC vs Agilent Technologies Inc
    http://holmansbiotechipblog.blogspot.com/2015/06/agilent-and-tecan-sued-for-infringement.html

    Formerly Manufacturing Entities
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2476556

    STRONG Patents Act
    http://www.mddionline.com/article/new-bill-meant-discourage-patent-trolls-03-04-15

    http://patentlyo.com/media/2015/03/STRONG-Patents-Act-of-2015.pdf

     

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      Direct-to-Consumer Genomic Testing - The Pros and Cons

    14/07/2015

    DTC

    DNA testing has emerged in recent years as a powerful diagnostic tool for physicians to use in the race to find better cures for intractable diseases.  The advantages of more precise diagnoses based on a patient’s underlying genotype and the ability to prescribe drugs tailored to an individual’s genetic makeup have made personal DNA testing an attractive new industry. Spurred on by government initiatives to enhance personalized medicine and technological innovations both in software and in molecular biology, there has been an unprecedented growth in DNA diagnostic companies all over the world.  One company, the Louisiana based Renaissance RX, was, until recently, tipped as a rising star in the pharmacogenomics sector.  

    Renaissance started out in 2012 as a small toxicology laboratory called UTC laboratories which took cheek swabs, and saliva for DNA analysis.  As the company grew, it started to enroll patients into a wide variety of studies, testing for an individual’s propensity to develop adverse reactions to pain killers and anti-clotting drugs.  The program was called “Diagnosing Adverse Drug Reactions Registry (DART)” and it made money by charging patients $75 to sequence every sample.  Renaissance aimed to enroll 250,000 patients for its studies and had garnered $130 million from Medicare as well as $55 million from a venture capitalist company TPG.  This allowed the company to grow its workforce to 800 people by 2014 and gather grant money from the New Orleans City Council to further expand its operations, as part of the region’s tech industry rejuvenation initiative.

    Signs that the company faced trouble emerged shortly after the TPG investment last year when Medicare withdrew its investment support following a routine review.  The DART study was stopped shortly afterwards causing a layoff of hundreds of employees.  While many physicians happily participated in the program, sending out multiple patient samples, one physician named Scott Wilson, discovered that Renaissance was engaging in fraudulent behavior, ignoring regulations.  According to Wilson,

    “[Renaissance Rx] generated revenue by and through each ‘swab’ it/they conducted within the context of the DART Study, including, without limitation, by and through the use of erroneous and/or fraudulent Codes on the eCRFs to fraudulently bill the conduct of the trials to Medicare/Medicaid,”

    Wilson found out that he was signed on as the Regional Principle Investigator for the DART study without his knowledge.  Furthermore, his signature was faked on thousands of additional patient samples illegally enrolled in the study and through this practice Renaissance may have earned an estimated $10 million on top of its regular revenue.  Wilson is suing Renaissance for misappropriation of his name and potential civil liability for the loss of his ability to practice medicine.  The case is due to be held at the United States District Court for the District of Rhode Island, where Wilson is registered as a physician.

    In recent years, federal regulators have become increasingly worried about the lack of regulation of Direct-to-Consumer genomic testing.  Last year the Office of Inspector General for the Department of Health and Human Services stated that many laboratories could be committing fraud to recruit doctors and patients into DNA studies.  Companies often offer huge amounts of money enticing doctors to enroll patients on studies, rather than paying them the small amount necessary for reimbursement.  Part of the problem is that Medicare has not applied a stringent oversight on these companies as it went ahead in funding such operations.  Medicare should pay due diligence to where its funding goes because its function is to generally back proven treatments rather than experimental tests.  Another problem lies in the fast growth of genomic technology.  Contractors who work for Medicare cannot keep up with reviewing all the details within each company since their technology has evolved so rapidly and there are now so many of them.  At some time national guidelines must be set up by the FDA to promulgate rules for regulating testing at these facilities. 

    Interestingly, the FDA has taken initial steps towards this challenge.  Recently a company called 23andMe, one of the first consumer genome sequencing companies in the US, was banned by the FDA from offering customers general genetic disease diagnoses based on genomic information submissions using its health algorithm.  The FDA sent a warning letter in 2013 stating that 23andMe had failed to gain market clearance or approval to assure their tests were accurate.  On the other hand, the FDA granted authorization to the company this year to carry out specific Bloom Syndrome carrier reports.  This was the first direct-to-consumer genomic test that the FDA has ever approved through a regulatory framework.  According to Alberto Gutierrez, a director at the Center for Devices and Radiological Health of the FDA, “The FDA believes that in many circumstances it is not necessary for consumers to go through a licensed practitioner to have direct access to their personal genetic information”.

    While the promise of genetic testing holds great value for many diseases such as cancer, diabetes and Alzheimer’s disease, more work needs to be done by the regulatory authorities and by the federal government to ensure consumer protection.  It seems likely that DNA diagnostics kits may one day be sold and marketed as over-the-counter drugs given the ease with which they can be used.  Thus the same regulations will need to be applied to them for safety and efficacy.

    Reference:

    Renaissance Rx Lawsuit

    http://www.nytimes.com/2015/06/25/technology/genetic-testing-case-highlights-the-fields-hope-and-hype.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&_r=2

    http://www.washingtonexaminer.com/new-lawsuit-against-renaissance-rx-accuses-embattled-pharmacogenetics-firm-of-fraud-illegal-activity/article/feed/2176029

    http://louisianarecord.com/news/265834-former-ceo-of-multi-million-dollar-biotech-company-renaissance-rx-files-lawsuit-alleging-founder-reneged-on-partnership-promises

    http://louisianarecord.com/news/268335-new-lawsuit-against-renaissance-rx-accuses-embattled-pharmacogenetics-firm-of-fraud-illegal-activity

    23andMe

    https://www.23andme.com/

    Bloom Syndrome carrier reports

    http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm435003.htm

    Direct to Consumer Genomics Testing

    http://ghr.nlm.nih.gov/handbook/testing/directtoconsumer

    Obama’s Precision medicine initiative

    https://www.whitehouse.gov/the-press-office/2015/01/30/fact-sheet-president-obama-s-precision-medicine-initiative

     

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      The Supreme Court's Dilemma - Isolated Gene Patenting and Laws of Nature

    13/07/2015

    Laws of Nature

    A few years ago a company named Myriad Genetics filed 23 patents for breast cancer genes their scientists had isolated, known as BRCA1 and BRCA2.  Myriad offers a business to exclusively carry out diagnostic testing for the BRCA genes which would indicate a person's propensity for developing cancer. The patent would have given Myriad exclusive rights to charge a premium on breast cancer diagnosis and grow the company.  However, many people opposed this patent, citing issues of patent infringement and arguing that licenses would impinge restrictions on other diagnostic healthcare services. Groups such as the Association of Molecular Pathology (AMP) together with the University of Pennsylvania's Genetic Diagnostic Laboratory filed suit with the American Civil Liberties Union against Myriad's BRCA gene patent.

    This case was initially brought to the District Court in 2010 in which the plaintiffs (AMP) were of the position that isolated genes are "unpatentable products of nature" and that diagnostic claims or drug screening claims by Myriad are just describing the basic process of doing science.  Myriad argued in defense that the BRACA genes were man-made "isolated sequences" just like chemical compounds and that any isolated DNA sequences are rendered a different character from DNA present in the human body. To some extent, Myriad are correct. Current medical research has shown that genes in the human body are subject to epigenetic modifications which depend on the environment, lifestyle and situation the person is in. If the gene is isolated from the body and placed into a test tube, it would behave differently because it would not be subject to those epigenetic changes. In a laboratory, one could also modify isolated genes using chemicals to synthesize something analogous to epigenetic modifications in the body.

    However, the case by Myriad was rejected by the District Court who ruled that the existence of DNA in isolation does not alter its fundamental quality as existing in the body. Myriad appealed to the Federal Circuit Court and in 2011, the Federal Circuit overturned the District Court's decision.  In response, AMP petitioned for a writ of certiorari to the Supreme Court asking for a review of their case.  In 2013, Justice Clarence Thomas ruled that naturally occurring DNA could not be patent eligible unless it had been altered outside the body.  Furthermore, Myriad had not created any new innovative methods to isolate this DNA, nor had they altered the natural genetic code in any way to satisfy patent eligibility.  Thus, all the Supreme Court justices at the time ruled unanimously against Myriad's patent file.

    Differing public opinions

    The differences of opinion between the Federal Circuit Court, the District Court and the Supreme Court reflect the high level of contention over gene patenting technology in the general public.  Although over 2000 human genes have been patented in the US since AMP vs Myriad, many people believe that genes, passed along as traits from one generation to the next, should not be patentable because they are, in some sense, private property. Breast cancer advocates often argue that a successful patent on BRACA genes would give Myriad the sole power to dictate all scientific and medical uses of the gene. This would take away power from cancer patients to choose where and how they get diagnosed.  On the other hand, many argue that gene patenting would allow greater competition among genetic diagnostic companies, such as Myriad and this would spur economic growth. Use of the patent system would also help disseminate information to society within the bounds of the legal system, providing a better framework for future innovation. Furthermore, a ruling in support of patenting genetic disease diagnosis could fund investment incentives to improve personalized medicine, an initiative prioritized by the National Institutes of Health.  Interestingly when this case against Myriad was raised in Australia, the courts held in Myriad’s favor.

    The fact that the US Supreme Court, comprising judges from non-scientific backgrounds with relatively little knowledge about the latest discoveries in medical sciences are put through the test ruling on topics such as gene patenting, adds fuel to the controversy.  When Justice Thomas gave his decision for the AMP v Myriad Case he wrote that, "A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated…" However, he later wrote on the same judgment, "by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a nonnaturally occurring molecule…" His two sentences contradict one another, suggesting that isolated DNA claims could simultaneously cover naturally occurring and nonnaturally occurring molecules. Thus one is led to believe Justice Thomas does not truly understand what a gene is.  It is also conceivable that the Supreme Court is not familiar with the field of epigenetics which would add another layer of complexity to whether a naturally occurring gene can be patented when it is completely altered inside of the body!  Then again one can argue that having judges who do not have scientific training decide on legal issues concerning science is good practice since they can apply an unbiased opinion when making rulings.

    Whatever the public opinion may be on isolated gene patentability, one thing is for sure, more patents will be filed in the future as more discoveries are made about diseases caused by faulty genes. Thus the legislative issues of AMP vs Myriad are likely to remain at the forefront.

    How does this affect you?

    If you are a scientist planning to file patent on a new disease associated gene, you must familiarize yourself with AMP vs Myriad and with similar cases, such as Mayo vs Prometheus and the Australian court ruling on Myriad.

    Reference:

    AMP vs Myriad
    https://en.wikipedia.org/wiki/Association_for_Molecular_Pathology_v._Myriad_Genetics,_Inc.

    Myriad case in Australia
    http://www.genomicslawreport.com/index.php/category/badges/myriad-gene-patent-litigation/

    Mayo vs Prometheus
    https://en.wikipedia.org/wiki/Mayo_Collaborative_Services_v._Prometheus_Laboratories,_Inc.

    IPWatchdog
    http://www.ipwatchdog.com/2015/05/31/naked-emperors-a-supreme-court-patent-tale/id=58110/

    NIH Grant funding priorities
    http://grants.nih.gov/grants/funding/challenge_award/high_priority_topics.pdf

     

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      The Dark Web, An Unlimited Resource for Unregulated Drugs

    12/07/2015

    Deep Web

    The illegal drug market is worth up to $300 billion a year, and much of it can now be found online in the "dark web", "dark net" or the "deep web".  Naturally, this is now a source of contention for federal law enforcement and the FDA will have to play a game of "catch-up" in the coming years in order to regulate this new uncharted territory.

    What is the Dark web?
    99 percent of the internet is the dark web, none of which is indexed by major search engines such as Google and Yahoo.  Users can join the Tor network, or use the Deep Web Harvester to access data online without the possibility of government or commercial surveillance.  Websites on the dark web do not rely on cookies to track users so people can access sites and set up websites anonymously. 

    Diagram explaining the Dark Web:

    Dark Web 1

    This can be a good thing and a bad thing. For lawyers, journalists and researchers, the dark web can provide a wealth of metadata about virtually any subject or person, all of which can be searched with a guarantee of freedom and privacy. Lawyers gathering information for evidence in litigation cases can find a host of resources leading to unpublished court cases and documents that could help them win legal battles.  On the other hand, criminals can use the dark web for a vast variety of illegal activities, including the marketing of weapons and drugs.  Worse still, payments for all items are done through Bitcoins, an online peer-to-peer currency which is mostly untraceable.

    In 2013 the FBI and the Department of Justice shut down Silk Road, the biggest online distributor of illegal drugs. The mastermind behind the website, Ross Ulbricht (also known as Dread Pirate Roberts) has now been sentenced to life in prison.  As soon as the original Silk Road was taken off, Silk Road 2.0 and other sites emerged to take its place and since then there has been a huge increase in online underground drug markets.  For example, Evolution Market Place became a major drug distributor after Silk Road and gained notoriety when it suddenly vanished in March this year, taking away $15 million in Bitcoin payments from customers.

    Drug listings on illegal websites since 2013:

    Dark Web 2

    Agora is the biggest underground drug retail website as of today (owning 82% of that market), with its own rumors of scams beginning to take hold.  Digital Citizens' Alliance, which monitors illicit online markets, reported that as of April 2015, up to 4 major dark web drug-market websites, including Agora, Nucleus, Black Bank Bitcone and Alphabay, have listed over 43,000 illegal drugs.

    Supply and demand
    The continued growth of underground online drug markets, even after the shutdown of the original Silk Road, is suggestive of an inexorable demand for unregulated drugs.  Of all the items being sold on the dark web, drugs occupy the largest proportion.

    Data analysis of the Dark Web:

    Dark Web Usage

    While some users of these websites are indeed addicts looking for a faster way to acquire risky medication away from street dealers, many online buyers simply cannot afford medical insurance, or are genuine patients trying to buy therapeutic drugs at a hugely discounted price.  Online dealers often sell drugs that originate from the same pharmaceutical companies as those found in an ordinary pharmacy or hospital but at prices that are not competitive on the legal market by industry standards.  There are also terminally ill patients who cannot gain access to the drugs they want before FDA approval.  Often such patients desperately seek drugs that do not qualify for treatment INDs, expedited development designations or drugs that have been approved in other countries that have yet to gain approval in the US.  What is most remarkable about the system of buying drugs on the dark web is that customers can leave feedback anonymously about the seller and rate them out of 5.  According to The Telegraph in the UK, “Over the course of three months, around 120,000 pieces of feedback were left on Silk Road 2.0… and on average, “buyers left a score of 4.85.” This leads one to believe that most people who bought drugs on the website were actually very happy with the results and that they would continue to use such services. The power of choosing drug products lies completely in the hands of the buyer rather than the drug manufacturer, the regulatory agency or the government.  Of course if the consumer were to experience adverse reactions brought along by fraudulent, ineffective drugs they would not be protected by US laws.

    How does this affect drug patents and FDA regulation?
    A lot of potential exists for criminals to tap into the illegal drug market, selling drugs without NDA approval.  It would not be surprising if most of the drugs being sold on the Tor network have already violated patent protection laws in the US.  A slew of legislation concerning cyber information and privacy has been passed in the last few years under the jurisdiction of the Federal Trade Commission.  Some of these include the Fair Credit Reporting Act and Protecting Cyber Networks Act, which provide a process for the pubic to voluntarily share cyber data that could be threatening to national security.  However, I have searched high and low on the (visible!) web but have not come across any Federal statutes or FDA regulations for guidances regarding underground online drug markets. In order to reach a balance between the prohibition of illegal narcotics and the availability of affordable, lifesaving, unapproved prescription drugs for terminally ill patients, Congress should grant FDA some authority over the regulation of dark web drug markets.  There are several ways this can be done.  For example, just as the Protecting Cyber Networks Act enables collaboration between the Departments of Justice, Commerce, Treasury, Energy and the Office of the Director of National Intelligence, a new act could be legislated to enable collaboration between the FDA and the aforementioned government agencies, increasing vigilance on cyber drug regulation.  Another way would be to increase the online surveillance resources at the FDA specifically to target fraudulent drugs on the dark web.  In light of the ever-changing landscape of the modern internet as a global market place, the FDA will have to work more closely with organizations such as the Center for Safe Internet Pharmacies and the Digital Citizens' Alliance to ensure patient safety and public education are held to the highest standards.

    What can you do?
    The arena for regulating underground drug markets on the internet is ripe for new legislation.  Find out the latest news and public education materials from the Center for Safe Internet Pharmacies and Alliance for Safe Pharmacies about ordering drugs safely online.  You can monitor and report suspicious activity to the Federal Trade Commission in underground drug markets by joining the Tor network – it is free.

    Reference:

    The Dark Web:

    http://www.economist.com/blogs/graphicdetail/2015/05/daily-chart-13

    http://www.economist.com/news/business/21647977-webs-two-largest-drug-markets-go-down-panicking-dealers-and-buyers-net-closes

    http://www.makeuseof.com/tag/journey-into-the-hidden-web-a-guide-for-new-researchers/

    https://www.cryptocoinsnews.com/unstoppable-evolution-dark-net/

    Horizon Documentary:

    https://www.youtube.com/watch?v=qXajND7BQzk

    Buyer and Seller feedback on the Dark Web:

    http://www.telegraph.co.uk/technology/internet/11466413/What-dark-net-drug-buyers-say-about-their-dealers.html

    Center for Safe Internet Pharmacies:

    http://www.safemedsonline.org/2014/07/rogue-online-drug-marketplaces-pose-dangers-consumers/

    Cybersecurity legislation:

    http://www.crainsdetroit.com/article/20150618/BLOG109/150619855/cybersecurity-legislation-requires-consolidation

     

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      Cheating around the Hatch-Waxman Act and an Unlikely Solution to the Problem

    11/07/2015

    Gaming Hatch-Waxman

    What is Hatch-Waxman?

    The Hatch-Waxman Amendment of 1984 was originally issued by Congress to speed up the approval of generic drugs through Abbrieviated NDAs (ANDAs).  The intent of Congress for this act was to promote pioneering research in the development of new drugs and to bring down the cost of competing generic drugs on the market.  A generic manufacturer who can establish that a new drug has bioequivalence to a previously approved drug can speed through the approval process with an ANDA.  They can “piggyback” on studies previously submitted in the NDA by the original brand drug company. Companies who apply for the ANDA must make four certifications regarding the patent that applies to the drug in question as required by Hatch-Waxman:

    (i) No such patent information has been submitted to the FDA

    (ii) The patent has expired

    (iii) The patent is set to expire on a certain date

    (iv) The patent is in valid or will not be infringed by the drug covered in the ANDA

    When a generic drug manufacturer successfully files an ANDA, they gain a 180-day exclusivity period and a 30-month stay of FDA approval pending any subsequent litigation.  This reward is given only to the first generic manufacturer to file the ANDA so any subsequent generic manufacturers would not be allowed onto the market at all.

    The Gaming Problem

    Paragraph IV certifications are a source of much legal contention.  Every time a generic drug manufacturer files an ANDA under the paragraph IV certification, the owner of the original branded drug patent can institute infringement proceedings.  However, because no other generic manufacturers would be entitled to file an ANDA after the first company filed it, patent owners often settle the dispute with a large sum of money to the first generic drug manufacturer.  The result is that the generic manufacturer agrees not to enter the market and gets a handsome “reverse payment”, while the brand drug manufacturer gains monopoly (or sometimes an oligopoly) of the market to satisfy their company shareholders.  Thus, the original intent of the Hatch-Waxman act to speed up generic drug marketing has been subverted.  This has become an increasingly frequent occurrence in the industry and is not likely to go away soon.

    Inter Partes Review (IPR) of pharmaceutical patents

    Inter Partes Review (IPR) was introduced by the America Invents Act (AIA) of 2012 as a counterpart to post-grant review at the US Patent and Trademark Office.  Both IPR and post-grant review are procedures used to challenge the validity of patent claims.  IPR was initiated as a way to challenge new patents after the 9-month eligibility window of post-grant review expired – ie. IPRs can be used for any patents filed after 2012.  As of the last year 32 IPRs have already been filed concerning Hatch-Waxman litigations by generic manufacturers.  Most IPRs are filed challenging the licenses to pharmaceutical composition, formulations and methods of treatment.

    On the face of it, IPRs have added another layer of complexity in the effort to bringing generics drugs to market efficiently.  Last week, several Senators voted against a new bill called the Protecting American Talent and Entrepreneurship Act (PATENT Act), which contains requirements concerning IPRs.  Senators Chuck Grassley, Chuck Schumer and John Coryn stated concerns that the language of new IPR rules would enable companies to game the Hatch-Waxman act.  This comes on the back of challenges like Kyle Bass, who have petitioned the use of IPRs to invalidate drug patent claims as a way to short company stocks.

    Why IPRs could in fact be a solution to gaming Hatch-Waxman

    There are some who argue that IPRs do not make it difficult for generic drugs to enter the market.  In fact a successful IPR on a pharmaceutical patent would render it invalid, enabling other generic manufacturers to immediately enter the market.  It would also make it impossible for generic manufacturers to sue the federal district court whenever they dispute a patent claim.  This would place a roadblock on the system of “reverse payments” through Hatch-Waxman litigations.  Thus, in a way, the IPR process would be detrimental for generic manufacturers who are looking for a quick way to make money through the court system – one wonders whether some Senators who are concerned with the new IPR rules are in fact protecting the monopoly held by drug companies within their constituents.  Never the less, instituting IPRs would pave the way around the dysfunctional Hatch-Waxman Act for generic drugs to become competitive in the market, bringing prices to more affordable levels for consumers.

    What can you do?

    If you are planning to become a generic drug manufacturer and file your first ANDA today, it is essential you recognize the pitfalls in legal proceedings that can affect your drug approval.  The best way to avoid delays in getting your generic drug to the market is to fully understand the latest bills affecting patent issues. Please refer to the PATENT Act for more information.  From the perspective of a consumer or a patient seeking the cheapest drugs it is essential you place pressure on the government.  Write letters to your state’s Senator and Congressmen to ask for amendments to the Hatch-Waxman Act and to the IPR procedure to prevent companies from gaming the system.  You should also reach out to the Public Patent Advisory Committee of the USPTO and aim to attend their monthly public meetings online or in Alexandria VA.

    Reference:

    Gene Quinn, IPWatchdog; Senators mistaken, IPRs do not frustrate Hatch-Waxman. June 4 2015
    http://www.ipwatchdog.com/2015/06/04/senators-mistaken-iprs-do-not-frustrate-hatch-waxman/id=58397/

    Gene Quinn, IPWatchdog; Patent abuse or genius? Is Kyle Bass abusing the patent system? April 8 2015.
    http://www.ipwatchdog.com/2015/04/08/is-kyle-bass-abusing-the-patent-system/id=56613/

    Christopher Noyes, Law360, New York; When Inter Partes Review Meets Hatch-Waxman Patents. September 09, 2014
    http://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/Law360-when-inter-partes-review-meets-hatch-waxman-patents-9Sep14.pdf

    Fish and Richardson; Inter Partes Review
    http://fishpostgrant.com/inter-partes-review/

    The PATENT Act 2015
    https://www.eff.org/document/patent-act

     

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Nano-symposium

The Brain Initiative

Two more online courses done

Fellowship Awarded

One week

Shriners Fellowship

PVA Fellowship

SfN Itinerary

Online Course Certificates

Systems Biology