A blockbuster pharmaceutical product is often protected by layers of patents, grouped in different patent families and often having different expiration dates due to the differences in patent filing dates, patent term adjustments, and patent term extension. For a single product, there might be patents covering the active pharmaceutical ingredient (including different claims to impurities, combinations, salts, isomers, crystal forms); one or more methods of use (specific indications on the drug label, types of indications, “off label” uses, dosing and other aspects of the methods of administration, side effects, combination therapy, etc.); the formulation (and related PK/PD claims, dosage forms, packaging, etc.) A § 505(b)(2) NDA filer or an ANDA (“generic product”) filer can choose to challenge these Orange Book-listed patents by sending to the patent owner and NDA holder a “Paragraph IV” notice letter, which usually leads to a patent infringement lawsuit brought under 35 U.S.C. § 271(e)(2) by the brand company.
This article discusses the scenario when a brand company brings a § 271(e)(2) suit against a 505(b)(2) NDA or ANDA filer, but asserts only some, not all, of its patents that have been challenged. Can the patent challenger just sit back and do nothing if an OB patent is not asserted? But sitting back can be perilous. It is our experience that, if a pharmaceutical company took the trouble to obtain a patent and list it on the Orange Book, it intends to assert it. The brand company, however, has the choice of when to assert the patent. There are many reasons a brand company would refrain from asserting an OB patent at its first opportunity. In other words, from a subsequent/generic filer’s point of view, an unasserted OB patent should be viewed as a vicious but sleeping dog, not a dead one. Under the U.S. patent law, every new day is a new cause of action for infringement. A patentee does not waive its rights to assert infringement just because it did not sue right away. As long as a patent lives, “Be Prepared” should be the motto that guides the subsequent filer’s actions.
Blocking Patent
A typical situation arises when the brand company has compound patents that live for a few years and formulation patents that live much longer. Typically, the challenger will file a Para. III (no patent challenge) to the earlier compound patents but a Para. IV (patent challenge) to the formulation patents on the NCE-1 date. Upon receipt of the Para. IV notice letter, should the brand company sue now? Yes, it will obtain a litigation 42-month stay if it sues now, but what if the final approval of the challenger’s ANDA is already blocked by the compound patents for longer than 3.5 years? The brand company may want to wait until the competitor gets at least Tentative Approval or even final approval (after the last of the compound patents expires) before asserting a formulation patent. At least by TA or final approval, the formulation is fixed versus what it might have been at the time of the initial Para. IV notice letter. Further, the patentee may have pending applications that can be further amended to expand the formulation patent portfolio. The obvious disadvantage of waiting until later to sue is that the court may refuse to impose a preliminary injunction. The competitor may argue that had the patentee sued at the initial time on an initial Para. IV’ed patent, it would have earned an automatic injunction (the litigation stay) to vet out the patent litigation issues. Therefore, as the argument goes, suing later and requesting an injunction can be inequitable. The rationale for denying the later injunction may not apply, of course, for new patents that are issued and could not have been part of an initial suit.
Reissue Proceedings
Even if the patentee chooses not to sue right away upon receipt of the Para. IV notice letter, the patentee can investigate if a Reissue proceeding is appropriate. The notice letter may demonstrate some infirmities in the patent that might be cured in a Reissue proceeding. The patentee can use the Reissue to narrow the claims enough to cure the infirmities but still be broad enough to encompass the competitor’s product. Upon Reissuance, the brand company can list the patent in the Orange Book. Any pending ANDA applicant has to certify against it (even though it certified against the underlying now-surrendered patent). The ensuing lawsuit will not generate an automatic litigation 30-month stay, but the brand company may request a preliminary injunction. The Reissue can be the basis for a new lawsuit that can block the launch later on.
Changes in the ANDA
Sometimes the unasserted patents do not change, but the ANDA application does. In this scenario, the ANDA filer must be well advised of the OB patents, even when they were not asserted, and conduct a careful analysis on potential infringement issues before it changes anything in the ANDA. A change in the ANDA relating to, for example, a supplier of API, a supplier of an excipient (for example, the coating of a tablet), the method of manufacturing, and the standard and assay methods for impurities, may lead to a change in the infringement analysis. FDA has regulations relating to major changes to the ANDA that might require new Para. IV certifications and notice letters. Label changes may also implicate the infringement analysis. It is critical that a § 505(b)(2) NDA or ANDA filer’s R&D and regulatory affairs personnel keep the legal team updated with proposed changes to formulations and the label prior to actually making them. In the recent GSK v. Teva case, for example, Teva was not initially sued on a method-of-treatment patent, but a change in the Indications section of Teva’s ANDA gave the brand company more ammunition. The lawsuit brought by GSK several years after Teva’s product launch led to a jury verdict of $234 million.
Litigation Tactics
When numerous patents are listed in the Orange Book for a product, and the brand company has received Para. IV notice letters from several ANDA filers, the brand company can choose to assert different sets of patents against each ANDA filer as a litigation tactic. When multiple ANDA filers simultaneously challenge the same set of OB patents, a common scenario when the brand product is an NCE, the ANDA filers tend to form a joint defense group and share the costs. However, if a different set of patents are asserted against each one of these challengers, the formation of the joint defense group would be more complicated. Such a group would in effect obligate a particular ANDA filer to spend time and money to challenge patents that are not asserted against it.
Market Conditions
Suppose two ANDA filers challenged the same set of API crystal form patents, but only one of these filers has a non-infringement position on these patents? The other ANDA filer based its challenge on the grounds of invalidity alone. Now suppose that the brand company determines that it does not want to fight the non-infringing ANDA filer on these patents, and settles for a launch date that is earlier than the patent expiry. Depending on the timing of the litigation, the lawsuit against the second ANDA filer may conclude later than the launch date in the settlement agreement. In this scenario, the market would have already been “genericized” when the lawsuit with the second ANDA filer concludes, so the brand company may decide to save the crystal form patent, and sue the second ANDA filer years later, after it has launched its product. The brand company can seek “lost profit” damages many times higher than the revenue the second ANDA filer has received. In the GSK v. Teva case, for example, a jury determined GSK’s “lost profit” to be more than $234 million while Teva’s entire revenue from this ANDA product was only a few millions of dollars.
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A sleeping dog is just that—sleeping, but not dead. It can wake up, and it bites back. It needs to be dealt with. The question then becomes, if a § 505(b)(2) or ANDA filer does not want to worry about an unasserted OB patent, and it wants “certainty,” wouldn’t it make sense to challenge the “sleeping dog” by a counterclaim of non-infringement, invalidity, or a patent office PTAB proceeding? Unfortunately, the answer is “not necessarily.” The strategy should be case-by-case, and there is no universal answer to this. In some cases, a pursuit of “certainty” can backfire, spectacularly. One recent example is the Novartis fingolimod cases. Novartis initially did not assert its later-issued dosing regimen method of use patent against the ANDA filers. Not letting the sleeping dog lie, two ANDA filers filed IPR petitions in an apparent attempt to achieve certainty. Lo and behold, the PTAB ruled against the challengers. The “dog” woke up, and Novartis asserted the now “gold plated” patent in court, and won. This likely extended the market exclusivity of the brand drug by a few years; and extended the drug product long after the expected genericization date.
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As we see, a § 505(b)(2) NDA filer or an ANDA filer dealing with a “sleeping dog” must be well advised in patent law, and navigate safely through the potential patent thicket. Upadhye Tang LLP deals with asserted and unasserted patents regularly. The firm represents both 505(b)(2) and ANDA sponsors in strategy counseling and litigation. Contact Yixin Tang at yixin@ipfdalaw.com or 312-598-2611 for more information.
