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Recent decision reveals a new aspect associated with the shifts in patent litigation timelines produced by administrative patent validity trials at the USPTO.

Posted on December 23, 2015

An Indiana federal district court recently granted a litigation stay in Hatch-Waxman Act patent litigation, pending the outcome of an inter partes review.  The Court simultaneously signaled that a commensurate extension of the automatic 30 month delay in FDA approval for the generic would not be ordered.  The decision reveals a new aspect associated with the shifts in patent litigation timelines that have been produced by administrative patent validity trials at the USPTO. 

Eli Lilly is an exclusive licensee to several patents for an FDA approved prescription medication, sold under the brand name Effient, for reducing thrombotic cardiovascular events in patients to be treated by angioplasty for acute coronary syndrome.  Various generic medication manufacturers sought FDA approval to market generic versions of that medication under the Hatch-Waxman Act, using the faster, less expensive FDA approval process created by that statute – an Abbreviated New Drug Application or “ANDA” –for proposed generics shown to be equivalent to an already-approved reference listed drug.  Eli Lilly sued a dozen groups of those generics manufacturers for infringement based on the ANDAs. 

FDA approval of a generic prescription medication is automatically stayed for 30 months when patent infringement is asserted against the generic manufacturer.  If the FDA’s “Orange Book” lists patents for the brand name medication on which an ANDA is based, the generic manufacturer must certify that the proposed generic does not infringe those patents, and notify the brand name manufacturer of the pending ANDA.  Should the brand name manufacturer then sue for patent infringement, FDA approval of the generic is automatically delayed for 30 months.  This allows the court hearing the patent infringement complaint time to resolve the matter before the generic enters the market.

Since 2012, when new administrative procedures for challenging patent validity at the USPTO became available, courts have increasingly favored stays of pending patent litigation until the outcome of any concurrent USPTO proceeding is known.  Typically lasting only about 18 months, an inter partes review or similar proceeding can simplify patent litigation issues for the Court – at least by effectively eliminating the need to consider certain invalidity defenses, if not by altogether mooting the litigation through invalidation of the asserted patents. 

The recent litigation stay for Eli Lilly’s patent infringement claim followed a denial by just six months.  After some fifteen months of litigation, all but two of the generics groups filed inter partes review challenges to the patents asserted against them.  Their prompt motion for stay of the pending litigation based on those challenges was denied, without prejudice to reconsideration should the Patent Office actually order trials on the requested challenges.  Indeed, once the Patent Office ordered trials on the validity challenges, the Court held that “it is virtually undeniable that a stay followed by a PTO [review] will simplify the issues in the case and streamline the proceedings,” and ordered the litigation stay.

Of particular interest, however, is the Court’s analysis relating to the automatic 30 month delay of FDA approval for the generics.  The Court stated that the mere possibility of the patent infringement litigation remaining unresolved prior to the end of the 30 months did not warrant denial of the stay, since Eli Lilly could seek an injunction against the generics entering the market:

The fact that Plaintiffs cannot get final resolution of their case before the expiration of the 30- month stay is not a recognized prejudice that can overcome the strong showing for a stay in this case.  Plaintiffs will have ample opportunity to seek an injunction once the IPRs are finally concluded, which eliminates any alleged prejudice to Plaintiffs.

The Court also indicated that an extension of the 30 month delay for FDA approval for the generics would not be ordered by the Court based on the litigation stay:

Plaintiffs argue that if the Court grants Defendants’ request for a stay, the Court should order corresponding extension of the regulatory stay. . . .There is no law that justifies this request. The only basis that courts have relied on to extend the regulatory stay is the violation of the statutory requirement of 21 U.S.C. § 355(j)(5)(B)(iii) that a party has failed to reasonably cooperate in expediting the litigation. There is no basis to make such a finding in this case. Therefore, the Court declines Plaintiffs’ invitation to extend or toll the regulatory law stay.

This decision sharply highlights the manner in which expectations regarding patent litigation costs and timelines have been shifted by the mere availability of new administrative trials for patent validity at the USPTO.