Commercialization and Patent Infringement

Commercialization and Patent Infringement
Terry K.Tullis,JD, MBA
May 4, 2013
SABPA 8th Annual Biomedical Forum
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©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved.© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2
1. What is a patent?
2. Why do you need patents to
commercialize your product?
3. FDA related patent issues

3© 2013 Knobbe, Martens, Olson & Bear, LLP all rights reserved.
• Public invention disclosure in exchange for an exclusivity period
• An issued patent gives the owner the right to stop others from:
– making
– using
– selling
– offering to sell
– importing
the patented invention in that country.
• But - an issued Patent does not necessarily give the patent owner
the right to make, use or sell the invention

Example patent claim
• Claim 1: A drug composition, comprising:
– Agent A;
– Agent B;
– Agent C; and
– Agent D (your improvement).
• Competitor can sue you if they own any of A, B, or C.
• You can sue if Competitor makes, uses, sells, offers to sell, or
imports all of A+B+C, and D.

Requirements to get a Patent
• No requirement to develop any product or prototype
• Full disclosure of invention
– Enable ordinary person in the field to make the
invention
– Describe the “best mode” of making the invention
• The invention - as claimed - must be
– Novel
– Not Obvious over “Prior Art”

What is Prior Art? (simplified)
• Prior publication, knowledge or use of the
invention by others
• Any patent or article published more than one
year before the filing date of the application
• Any public use or offer to sell the invention in the
U.S. more than one year before the filing date of
the application

Steps To Get a Patent
• Prior Art Search
• Prepare patent application – carefully craft claims
• File Patent Application with Patent Office
• Patent Application Publishes (18 mos. after filing)
• Examination
• Argue with Examiner
• Appeal (if necessary)
• Gain Allowance, Pay Issue Fee
• Patent Granted
• Pay Maintenance Fees
REPEAT

International Patent Protection
• No “world-wide” patent
• File within one year of U.S. Priority date
• Expensive to file and prosecute
• Priority must be before any public disclosure

PCT (International) Patent Application
• Prepare and file single application, with claims
• Secures option to pursue patent protection in all PCT
member countries (over 100), including U.S. and China
(but not Taiwan)
• Can hold national phase prosecution for up to 30 months
• Obtain non-binding preliminary examination
• Can be filed instead of a U.S. Patent Application or within
1 year of U.S. filing date.
• Cost: about $5000 – 8000 in filing fees

Patent Protection in China (and elsewhere)
• Use foreign patents as a tool to enter foreign markets
• Seek patent protection where products are made, used
or sold
• Patents must be filed before public disclosure
• Costs can be high
• Medical methods are not patentable outside of the U.S.
and Australia
• Consider enforcement challenges

2. Why do you need patents to commercialize your product?
• Patents protect your investment
– Protect your market and secure financing
• 94% of venture-backed start-ups own patent or application
(average 25 patents & applications)
• Branded drugs: Millions in revenue for each day of
exclusivity
– Defensive purposes
– Leverage in deals

13
Seek Patents That Block Competitive Alternatives
Commercial Product
Patent Relevant
Scope Market

Survey competitive patent landscape
• Look for freedom to operate or patent clearance obstacles early
on to avoid pitfalls
– Assess patentability
– Assess risk (“freedom to operate”)
– Identify competitors and their patent claims, and potential
design around
– Work with your patent counsel to understand the patent
roadblocks to commercialization
• Delay can be a costly mistake!
It’s not just about what you have, it’s about what they have

4. Coordinating Patents with Regulatory Issues
• ANDA Generic Drug litigation
• Safe Harbor 271(e) exceptions to infringement for
clinical trials
• Biologics Price Competition and Innovation Act
• Patent Term Extension to Coordinate with FDA
Approval
• Consistency with 510k submissions

Generic Drug Litigation and Exclusivity
• Clinical Trials: Investigational New Drug application (IND)
• Market “branded” drugs: New Drug Application (NDA)
approvals, patents listed in the Orange Book
• Generics: Abbreviated New Drug Application (ANDA)
– Hatch-Waxman Act and patents: the first drug manufacturer to
• successfully challenge FDA-listed patent and market an
approved generic, or
• prevail in litigation establishing the patent is invalid or not
infringed
is rewarded with 180 days of generic marketing exclusivity

Allergan, Inc. v. Sandoz Inc. (Fed. Cir. May 2, 2013)
• Appeal court finds 3 of 4 patents for COMBIGAN ophthalmic
glaucoma drug treatment are “nonobvious”
• Generic drug waits until last patent expires in 2022

Safe Harbor 271(e): generic drug experiments
• Exceptions to infringement for uses reasonably related to the
development and submission of information under a Federal law
which regulates the manufacture, use, or sale of drugs.
– Experimenting for generic FDA approval
– Dissemination of data developed for FDA approval
– Use of patented compounds in preclinical studies that were
not included in FDA submission
• Once generic ANDA is filed, action is considered “infringement”

Biosimilars – approval short cut for biologics
Abbreviated approval for ‘biological products’ that are highly
similar (i.e., biosimilar) to or interchangeable with an FDA-licensed
reference biological product.
– Biological products therapies used to treat health conditions e.g.,
vaccines, blood and blood components, gene therapies, tissues, and
proteins (except any chemically synthesized polypeptide).
• Generally are made from human and/or animal materials rather than
chemical process.
• Cell lines not identical: only similar.
– A biosimilar
• Highly similar to an approved biological product
• No clinically meaningful differences in terms of the safety, purity, and
potency.

Biologics – examples
Figure shared under Creative Commons license from Pharmaceuticals 2012, 5(12), 1393-1408; doi:10.3390/ph5121393
http://www.mdpi.com/1424-8247/5/12/1393

• Biosimilar approval application may not be submitted until four
years after the date the reference product was first FDA licensed
• The filing of a biosimilar application constitutes an artificial act of
patent infringement that confers jurisdiction on the federal courts.
Biosimilar Basics
Hatch-Waxman Biosimilars
Exclusivity First-filer has the
potential to have 180 days
exclusivity
Up to 42 months exclusivity but
only if biosimilar is determined
to be interchangeable
Determining
Patent Coverage
for Reference
Product
Orange Book No Orange Book equivalent
Statutorily required pre-
litigation exchange of patent
information
Stay of FDA
Approval
Automatic 30-month stay
before generic can enter
market absent a court
decision
No automatic stay,however,the
biosimilar application cannot
be approved until 12 years after
first licensure of the reference
product

Patent Term Extension
• Hatch Waxman Act (1984): PTE to compensate for
potential delays in FDA approval, available only for:
– new drug, antibiotic drug, or human biological
product
– new animal drug, veterinary biological product
– new medical device Class 3 pre-market approval
(PMA) (not Class 1 or 2 abbreviated 510k)
• Get up to 5 more years patent term based on FDA
approval timing (must file within 60 days)

Patent Term Extension examples
• http://www.uspto.gov/patents/resources/terms/index.jsp

Statements about Predicate Devices
• Consider implications of declaring similarity to
predicate devices
• Patentability
• Infringement

26
Conclusion: Patent Pitfalls
1. Failing to appreciate the value of IP to your business
2. Misunderstanding the rights conferred by a patent
3. Ignoring your competition
4. Protecting a product instead of a market space
5. Ignoring overlap and interactions with regulatory
agencies

Thank you. Terry.Tullis@knobbe.com
(949) 760-0404

Commercialization and Patent Infringement

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