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The Real Fountain of Youth: How Old Drugs Get Covered By New Patents

Valarie B. Rosen, Class of 2003

Paper Submitted April 2003 In Fulfillment Of The Course Paper Requirement In Food And Drug Law (Winter 2003) And In Fulfillment Of The Third Year Writing Requirement


Until 1995, the term of a patent was 17 years from issue, with a possible extension of five years for delays in market entry related to the Food and Drug Administration drug approval process. Still, many pharmaceutical companies have obtained new patents towards the end of the original patent term for a particular drug. This paper looks at the types of patents that are used to prolong the period of exclusivity for a drug and how they effect entry of generic manufacturers into the market.

Last autumn, I heard the oral argument for Hanlin v. U.S. [1] . The government had mistakenly sent a lawyer’s (Mr. Hanlin’s) share of a reward in a Department of Veterans’ Affairs pension proceeding to the veteran Mr. Hanlin had represented before the DVA. Rather than sue the client, the lawyer sued the government for the money, which amounted to the princely sum of $7000. Mr. Hanlin’s lawyer had lost in front of the administrative law judge, lost in the Court of Claims, and was now in Boston, where the Federal Circuit had traveled to hear cases for a week. After telling Mr. Hanlin’s lawyer that he was going to lose but that he would win if he filed a new claim under a different theory, the court proceeded to ask the government’s lawyer why Uncle Sam couldn’t just pay the man already.

The suit was a waste of time and money. Three lawyers, two for the government, one for the hapless Mr. Hanlin, had prepared for an administrative hearing, a trial, and an appeal. Mr. Hanlin was likely only going to receive 66% of his $7000, far less than the government was going to spend to defend the case on principle.

The first case that morning was Warner-Lambert v. Apotex .[2] The stakes were far greater, but the result was about as certain when the argument was over. Warner-Lambert’s patent on a remedy for neurodegenerative disorders was expiring and it had obtained a new patent on use of the remedy to treat epilepsy. Now it was suing a potential generic competitor who had filed an ANDA to market the remedy with a label that only indicated neurodegenerative disorders. If Warner Lambert had performed clinical trials on the drug and demonstrated its efficacy against epilepsy to the FDA, it would have been entitled to a three year period of exclusivity under the Food, Drug, and Cosmetics Act.[3] Instead, it spent the money on litigation to try to get a 20 year patent term. Warner Lambert lost. But no one asked why it spent all the money on patent litigation instead of on research that might have benefited patients and informed doctors.

Drug companies spend lots of money developing new therapies that have revolutionized medicine and helped many patients that literally had no options before these drugs came on the market. The companies protect their intellectual property through a government-granted right to exclude, a patent. Today, as many patents expire and their subject matter enters the public domain, these same companies are patenting variations on the drugs that are designed to expand or maintain their market for the drugs and create barriers for generic drug makers. However, not all of these patents serve the policies of either the patent system or the drug regulation system.

This paper will provide a brief description of the regulation of drug development and marketing, a discussion of various legal principles which fail to prohibit the sequential acquisition of patents that appear to cover the same drug, and a survey of the types of patents that drug developers are using to protect their market share.

A Drug is Born

A drug begins its life as a compound in a test tube. Even for drugs based on naturally occurring substances, such as Taxol, derived from certain species of yew trees, the active ingredient must be isolated from the rest of the plant or fungus. The new drug is tested in vitro (e.g. , in a petri dish or setting outside of an animal) for a desired activity. Perhaps the drug kills or disrupts the metabolism of pathogens. It might interact with certain receptors on cells to modify their behavior. Or it might not. The vast majority of compounds that are tested for drug activity fail to exhibit any.

Once a compound is found to have a certain effect in vitro , it is administered to animals (i.e., in vivo testing). The animals are monitored not only for the therapeutic effects of the drug but also for side effects.[4] Is the drug a teratogen? Does it cause other diseases, e.g. , cancer or liver failure? Does it interrupt metabolism or modify the heart rate? Only after the drug successfully passes animal testing will the Food and Drug Administration (FDA) approve its administration to people.[5] Of course, the metabolism of a mouse, the most common laboratory animal, is very different from that of a human. For example, thalidomide does not cause birth defects in mice, only in people. While test results from primates might be a better indicator of how the drug will behave in a person, primates are expensive to obtain and to maintain.

The first human clinical trials are small scale safety trials. Healthy volunteers are administered the compound or a placebo to see how they react. Some of these volunteers may experience the plethora of woes that are recited at the end of televised drug advertisements - dizziness, dry mouth, nausea, headache, etc. Of course, some drugs have more extreme side effects, including liver damage or sexual side effects. The FDA will evaluate the risk and seriousness of side effects and weigh them against the possible benefits of the compound before allowing the it to come to market as a drug.[6]

Phase II and Phase III clinical trials test the efficacy of the drug in treating a specific indication. If the drug is shown to be safe and effective, the FDA will allow it to be prescribed by doctors.[7] While the labeling of the drug only recommends the compound for treatment of the indications tested in Phase II and Phase III, the doctor can prescribe it for other indications as well.[8] The drug company is able to conduct trials for additional indications and submit these to the FDA so it will approve addition of these indications to the labeling. Drug companies are also not permitted to market the drug for so-called “off-label” uses.[9] Thus, it is certainly possible that most variable dose oral contraceptives prevent acne; however, only Ortho-Tricyclen has been tested for this, and only it can be advertised by women cooking dinner in television commercials and talk about the joys of zit-free intimacy.

Once a drug has been approved by the FDA, the manufacturer is granted a five year period of exclusivity during which no other manufacturers will be able to enter the market.[10] But most drug manufacturers have a more powerful grant of exclusivity from the U.S. Patent and Trademark Office - a patent. Until 1995, inventors received a patent grant for 17 years following issuance of the patent. For applications filed after 1995, the patent term is 20 years after the filing date.[11] In addition, the PTO will grant up to an additional 5 years of patent term for inventors that show that they were not allowed to exploit their patent right because they were waiting for marketing approval from the FDA.[12]

Once the drug comes “off patent,” that is, the patent on the drug expires, other companies can also produce the drug. By this time, the drug is well known to practitioners and often to the general public, and the level of advertising required to get pharmacies to buy the product is much less than for the original product. These drugs are not advertised by their brand name but are called generic. However, the patent right includes the right to exclude others from making or using the subject matter of the claims. Thus, generic companies were originally not able to even begin developing and testing a generic alternative until the innovator’s drug came off patent. After that, the generic drug was subject to the time-consuming FDA approval process. Thus, the patent right of the drug company effectively resulted in exclusivity well beyond the 17-25 years granted by the government.[13]

The Hatch-Waxman act, passed in 1984, permitted a generic manufacturer to market a drug if it could show that the bioavailability of the generic product was the same as for the original product.[14] In addition, it added a provision to the patent statute, Title 35, indicating that the activities required to prepare an Abbreviated New Drug Application (ANDA), the submission to the FDA demonstrating bioequivalence, would not be considered infringement.[15] Of course, this does not only include testing but manufacture of the generic drug for testing and development of good manufacturing practices (GMPs) for the mass production of the drug.

The drug companies also received a benefit from Hatch-Waxman. The FDA created a registry where drug companies were required to list the patents that covered approved drugs, commonly known as the Orange List.[16] When a generic manufacturer filed an ANDA, it also had to certify that the drug has not been patented or that the patent has already expired, that the drug is patented but the generic drug will not enter the market until the patent expires, or that the drug is patented but the patent is either invalid or not infringed.[17] This last option is called a Paragraph IV certification because it appears in Section A(iv) of the statute. If a Paragraph IV certification is filed, the generic manufacturer also informs the patentee, who has 45 days to file suit against the generic manufacturer for infringement.[18]

Because the generic drug is not yet on the market, the patent has not really been infringed, but the patent statute establishes a cause of action for what is essentially constructive infringement so that a court can settle the rights of the generic and original manufacturers before the generic drug comes to market.[19] If the patentee files suit, the FDA is prohibited from approving the ANDA for 30 months or until a final determination of infringement or invalidity, whichever comes sooner.[20]

Hold it! The problems with the 30 month stay

At first glance, the 30 month stay might seem unnecessary. After all, if the generic drug does come to market, it will be very easy for the patentee to obtain a preliminary injunction against the generic manufacturer. If a patentee can show a likelihood of success, courts tend to presume irreparable harm, one of the four requirements for an injunction.[21] The policy of the 30 month stay does not only benefit the patentee but the FDA, which is relieved from the obligation to resolve patent conflicts as part of the drug approval process. One could argue that this prevents the generic manufacturer from entering the market and being subjected to treble damages in a lawsuit; however, this is not the FDA’s problem. Rather, it is a risk of entry that the generic manufacturer should be able to consider on its own.

If the patentee obtains additional patents after filing the lawsuit, it may add these to the Orange List. Currently, each additional patent, if added to the complaint, entitles the patentee to a new 30 month period of exclusivity. There is no need to spend time and money preparing arguments and evidence for a preliminary injunction hearing. In addition, the patentee does not need to demonstrate a likelihood of litigation success to get the 30 months of exclusivity. In contrast, if a court could determine at the preliminary injunction hearing that the generic drug probably does not infringe, no injunction would issue.

The availability of a lawsuit and a preliminary injunction also indicates that there is more benefit to a patentee from the Orange List than just the ability to clarify who has what patent rights before a generic drug comes to market. Generic manufacturers have to notify patentees that they have filed a Paragraph IV certification of non-infringement.[22] Thus, before the generic manufacturer receives approval of its ANDA, the patentee knows that a competitor is about to come on the market. The patentee thus has the opportunity to choose a forum for its lawsuit instead of being dragged into the court of the generic manufacturer’s choice. In addition, the patentee has the opportunity to list new patents on the Orange List and start stacking 30 month stays against the generic manufacturer.

In 2002, the Federal Trade Commission (FTC) conducted a study of ANDA’s that were filed with a Paragraph IV certification. It found eight instances between 1992 and 2000 where patentees had received an additional 30 month stay by listing additional patents after an ANDA was filed; six of these were between 1998 and 2000.[23] Four of these patents were litigated and ALL were found invalid or not infringed. Furthermore, the FTC found no instances where an generic drug had entered the market and then been found to infringe.[24] The FTC recommended that the Food, Drug, and Cosmetics Act (FDCA) be amended to permit only one 30 month stay.[25] The Senate passed such an bill in June 2002, but the House of Representatives failed to approve it.[26]

There are few checks to prevent patentees from postponing the entry of generic drugs on the market by putting additional patents on the Orange List. Neither the FDA nor the PTO polices additions to the Orange List, but the FDA is perfectly willing to enforce the 30 month stay. There is no private cause of action under the FDCA to remove a patent from the Orange List.[27] Thus, a private party must make a request to the FDA to institute proceedings to remove a patent. However, FDA rules only require the FDA to request that the patentee confirm that the patent really covers the drug on the Orange List.[28] The FDA’s refusal to do so is not subject to challenge by the third party.[29]

There are checks that a generic manufacturer can impose after the fact, but only if it is sued. The FTC argues that Noerr-Pennington rules should not immunize the patentee from antitrust liability for fraudulently placing a patent on the Orange List.[30] Listing is not petitioning under Noerr because the government does not evaluate the request. Moreover, there is no requirement that the patent be listed before the patentee can sue for infringement - the act of filing the ANDA creates a cause of action regardless of whether there is a Paragraph IV certification.[31]

There are two methods of fraudulently placing a patent on the Orange List. The first is to obtain the patent by fraud. There is long-standing precedent for imposing antitrust liability for enforcing a fraudulent patent.[32] The second is to place a patent on the Orange List by affirming that it covers a drug that is not actually within the scope of the patent claims. For example, the court found antitrust liability for Bristol Myers Squibb for listing a patent in the Orange List as claiming a drug that it had asserted was not covered by the claims during prosecution before the Patent Office.[33]

Part of the justification for the Orange List is to settle patent disputes before a generic drug enters the public domain. However, this policy is hardly served by the tacking on of additional 30 month stays of approval or by the FDA’s refusal to police the Orange List. Instead, this failure has led directly to litigation involving the FDA.[34] In addition, the Buspirone litigation, a consolidation of four patent cases, 22 antitrust claims, and assorted other claims, can also be argued to result from the FDA’s failure to substantively review the Orange List. I have not searched for other examples of large patent cases that could have been prevented by substantive action at FDA.

Further, the addition of 30 month stays for each new patent listed is not justified by either the subsequent history of the Hatch-Waxman Act or its original policy goals. As noted above, no patentee has prevailed in a claim for infringement of a patent listed on the Orange List after an ANDA was filed by a generic manufacturer. Further, the 30 month stay only starts if the patentee has already filed a lawsuit. Thus, the patentee and the generic manufacturer are already using discovery to uncover the facts concerning infringement of existing patents. The first 30 month stay will already provide the courts time to survey the claim scope of the patent and the potential for infringement. The FDA also noted that the first paragraph IV certification from a generic manufacturer provides sufficient notice to the NDA holder that another company is trying to enter the market.[35] The burden to the generic manufacturer and to patients who have to continue paying monopoly prices to the patentee are hardly justified by the need to settle patent rights before market entry, especially since the stay is not required to file a new lawsuit or to ask permission to add the new patent to an existing lawsuit.

The FDA, noting the large amount of major litigation and having received a request from the FTC to do something about what seemed to the FTC like abuse of the Orange List, issued a notice of proposed rulemaking in October of 2002.[36] The proposed rules would increase the detail of the disclosure required of NDA holders before listing a patent on the Orange List and only allow NDA holders to receive a single 30 month stay. The latter provision required a reinterpretation of the Hatch-Waxman Act by the FDA, which previously had interpreted the Act to permit multiple stays.[37] The limit to a single stay will certainly be challenged as unreasonable under Chevron. [38] Whether the FDA will prevail, especially given the failure of Congress to enact such a provision in legislation, is uncertain.

The proposed increased disclosure requirements are meant to ensure that patents listed on the Orange List actually cover the drug approved in the NDA. The FDA seems to assume that mislisting results from the paltriness of the current declaration used by patentees to certify that a patent covers an approved drug, not from the failure of the FDA to evaluate it.[39] The FDA proposes changing this declaration to require that the NDA holder or applicant to identify by number each claim that covers the active ingredient in the drug, the pharmaceutical composition of the drug, or the approved method of use of the drug.[40] The FDA believes that this will help resolve disputes over which claims are being infringed by a potential generic product. However, this may be overly optimistic. NDA holders will be unwilling to commit themselves to an interpretation of their patents that do not include the approved drug. NDA holders will therefore use the most generous reading of the claims in preparing the declaration, whether or not a court would construe the claims that broadly. On the other hand, NDA holders will certainly keep an eye on the new regulation (assuming it becomes a rule) when drafting claims for new applications.

When Is a Right to Exclude a Monopoly - A Digression on Antitrust

At first glance, the use of a second patent to extend the monopoly on a particular drug looks like monopolization. However, it is unclear that antitrust law has anything to say about this practice so long as the patent is properly obtained, listed, and enforced. If any of these conditions are not true, the full arsenal of antitrust law is available to attack the patentee.

In the drug industry, a patentee usually this a monopoly on the drug during the term of the patent. Technically, the patent statute only grants a right to exclude others from making, using, selling, importing, or offering to sell the subject matter of the invention.[41] Thus, any given patentee might still have to get permission from the holder of a dominating patent to practice its invention. For example, if Inventor Able has a patent on a device including parts A, B, and C, and Inventor Best discovers that the device works much better if part D is added, Best will not be able to sell devices including A, B, C, and D without getting a license from Able, who has the right to exclude others from selling A, B, and C, with or without D. Of course, if D is that good, then Able will buy Best out and Best will retire to the Caribbean.

Likewise, a drug may not be the only product that treats a particular condition. In that case, the patentee does not have a monopoly on the entire market for the drug, just for the drug itself. For example, Clarinex is only one of many allergy drugs on the market. On the other hand, there are many pioneering drugs that are the first and, so far, only treatments for a particular condition. Such drugs are not subject to a dominating patent.

Indeed, for a small market that is already being served by a patented product, there is no motivation for a drug company to develop a new drug. Even a patentee cannot charge a monopoly price if it has to compete with another drug. There are other markets that have the potential to provide much bigger profit shares and monopoly profits, and the drug company will put its efforts into developing new drugs for these markets. The profit margin is increased by the circumstances of the consumer - no treatment is not a viable option for diseases that kill or that prevent the patient from performing everyday activities. This raises the price that consumers would be willing to pay for the product, even in a competitive market. With a patent on the sole remedy, the drug company does not even have to compete with “no treatment.”

Filing a new patent application to maintain this monopoly qualifies as petitioning under Noerr-Pennington . The Patent Office does review patent applications before granting a patentee a new right to exclude, interposing government action between the petition and the monopoly.[42] There is nothing in the patent statute or the antitrust laws that says a patentee cannot file a patent application if it already has a big share in the market of the new product. Patent policy favors innovation, and antitrust policy generally frowns on punishing innovators for being innovative. Rather, it only holds them to a higher standard of conduct with respect to their competitors.[43] Thus, without misconduct on the part of the patentee, it is legally entitled to an extension of its right to exclude.

Listing the new patent on the Orange List may not exempt a patentee from charges of monopolization, however. As noted above, the FDA does not police Orange List submissions. At least one court has found that a patentee can be found liable for antitrust violations for placing a patent on the Orange List that did not belong there.[44] Still, to get a 30 month stay on the approval of a generic, the patentee has to file a lawsuit. If the lawsuit is legitimate, then its filing is considered a petition under Noerr-Pennington doctrine.[45]

If the lawsuit is not legitimate, there are plenty of tools that will punish the patentee. Knowingly prosecuting invalid claims is considered fraud on the Patent Office. A lawsuit to enforce claims against a product that the patentee knows they do not cover would be subject to sanctions under Rule 11. In addition, such a lawsuit might also be considered misuse of a government grant to increase the cost of entry to competitors. Such a lawsuit is not protected by Noerr-Pennington and may subject the patentee to antitrust liability.

The Court of Appeals for the Federal Circuit, which hears almost all appeals in cases concerning patents[46] , is reluctant to upset the legislative balance between the antitrust laws, embodied in the Sherman and Clayton Acts, and the patent statute.[47] Still, when a patentee wields the patent “as a sword to eviscerate competition unfairly, that owner may be found to have abused the grant and may become liable for AT violations when sufficient power in the relevant market is present.”[48] In general, the monopoly due to a patent results from skill and luck, not illegal conduct. Antitrust policy and law looks disfavorably on punishing the lucky or smart monopolist. After all, it is a goal of every business to increase its market share, and the courts do not want to punish business solely because they were successful. The Atari court recognized that the antitrust laws are not implicated when a “patented product is so successful that it creates its own economic market”[49] Likewise, obtaining a legitimate patent to maintain control of that market is not a violation of the antitrust laws.

Antitrust policy does provide several questions about the desirability of new patents. The compound that survives lab development and clinical testing to come to market is akin to the one or two frogs that result from teeming masses of eggs that were laid in the spring. An immense amount of money is wasted on the failures and is considered part of the cost of bringing a new drug to market. Thus, there is an incentive to drug manufacturers to develop variations on the known compound to maintain the monopoly profits and to increase the return on the money that was sunk into failed compounds. After all, it is easier to try and improve an old product than to develop a new one. It is also easier to market a new and improved version of a drug to an established network of doctors.

On the other hand, patients see real benefits from improvements to drugs that reduce the frequency with which they have to take pills or that result in reduced side effects. While there is no incentive for the drug manufacturer to develop such an improvement and patent it until the patent life of the original drug is close to expiring, one successful drug does not remove all the incentives to get develop other new drugs for other markets. The stock market will not smile on publicly traded companies that only rest on their laurels.

Furthermore, smaller manufacturers, including generic manufacturers, are also allowed to research improvements to patented drugs. In general, there is not a commercial experimental use exception to the patent laws.[50] However, Section 271(e)(1) of the Patent Statute permits companies to use patented products and techniques in preparation for filing an ANDA.[51] This includes all the activities required to actually develop a product. To qualify as an ANDA, the new product must have the same biological activity as the drug approved through the NDA process. However, there are a variety of changes to an active ingredient or pharmaceutical composition that a company can make and still argue to the FDA that the resulting product is therapeutically equivalent.[52]

Because of the added benefit to patients, antitrust policy should not be implicated if a drug manufacturer receives a new patent for an improvement to an old drug if generic manufacturers can still practice the subject matter of the expired patent. There is no fair way to say that the drug manufacturer’s competitors can research improvements but not the manufacturer itself. In addition, the new patent does not extend the old monopoly. The insurance companies that really pay for prescription drugs are sophisticated and will insist that pharmacies fill prescriptions for the improved drug with generic versions of the old drug if the improved drug does not provide added benefit for patients. This is an additional incentive to drug manufacturers to research improvements that are not only patentably distinct but that actually provide additional utility.[53]

Does the Patent Office Have Anything to Say?

The Patent Statute says that an inventor shall have a right to a patent on an invention.[54] Interpreting this statute, the courts created the principle of double patenting. A patentee is not entitled to obtain a second patent with claims that would be obvious in view of the claims of the original patent or that could have been made in the original patent.[55] If the claims were to issue in a second patent that expired later than the original, the patentee would essentially have extended the life of the first patent without actually developing anything patentable.

If the Patent Examiner rejects claims for double patenting, the Patent Office’s solution is to force the patentee to treat the two patents as a single patent. They will expire on the same day and they must be commonly owned. Before 1995, the simultaneous expiration requirement could shorten the life of a patent by several years because patent life was measured from the issue date.[56] Since the amendments from the Uruguay Round to the General Agreement on Trade and Tariffs (GATT) became law in 1995, there have not been not very many applications that would actually have a later expiration date than the patents over which they are rejected for double patenting. Under GATT, the expiration date of a patent is 20 years from its earliest priority date, regardless of the filing date.[57] Applications can claim an earlier priority date than their filing date for a variety of reasons.[58] Thus, if an application is rejected for double patenting over an earlier patent but claims the priority of that patent, the Patent Office will not shorten the patent life of the application.[59]

It is not impossible that an application that does not claim priority to an earlier-filed patent might be rejected for double patenting over that patent. In that case, the simultaneous expiration requirement might dramatically reduce the life of the patent. For example, if Inventor Able discovered improvement C’ after filing his original application, but C’ is obvious in view of the claims of the original application, then the patent on C’ will be required to expire on the same day as Able’s original patent, even though the application for C’ was filed later. Of course, the earlier filed application may also treated as ordinary prior art with respect to the later application depending on their respective filing dates.

I’m Calling My Lawyer! Is Litigation the Solution?

The courts have not hesitated to invalidate patents on a variety of grounds. A patent is required to provide sufficient written description to enable one skilled in the art to practice the subject matter of the invention. In addition, the inventor has to disclose the best mode of practicing the invention.[60] The claims must be novel and non-obvious.[61] These are the primary criteria that that the Patent Office uses in evaluating whether an application should be allowed to issue as a patent, but the courts have not hesitated to invalidate patents on all of these grounds.

In addition, the courts have invalidated patents for double patenting.[62] While the Patent Office will allow the patentee to have two patents with the same expiration date and common ownership instead of outright preventing the second patent from issuing, the courts are not nearly as forgiving.[63] For example, Eli Lilly obtained a patent, U.S. Patent No. 4,626,549 (“the serotonin uptake patent”), for the use of fluoxetine hydrochloride, the active agent in Prozac, for blocking serotonin uptake in the brain. Lilly’s patent for the fluoxetine HCl itself, U.S. Patent No. 4,194,009 (“the fluoxetine patent”), expired in 1994. The serotonin uptake patent would not expire until 2003, extending Lilly’s market exclusivity by 9 years.

However, Lilly also had a patent, No. 4,590,213 (“the anxiety patent”), for the administration of fluoxetine HCl to relieve anxiety. The court found that the serotonin uptake claim was obvious in view of the anxiety relief claim because everyone on both sides of the case agreed that fluoxetine HCl inhibited serotonin when administered to animals, including human animals. Thus, a claim that recited blocking serotonin was obvious in view of a claim that recited administering a drug that would act by blocking serotonin.[64] Even if the court had allowed Lilly to save the serotonin uptake patent by making it expire at the same time as the anxiety patent, Lilly would still have lost because the anxiety patent had expired.[65]

The courts have also developed the doctrine of patent misuse to prevent improper enforcement of patent rights. Misuse is related to antitrust doctrine and borrows several of its rules. Like antitrust doctrine, the courts use patent misuse doctrine to prevent anti-competitive uses of the patent. In addition, the courts do not want to diminish the incentives created by Congress in the patent statute or to punish a patentee for simply exploiting the results of its innovation and hard work.

The doctrine of patent misuse is applied to rein in a patentee who has “impermissibly broadened the physical or temporal scope of the patent grant with anticompetitive effect.”[66] In reality, per se patent misuse is limited to two cases - tying a patent license to purchase of a staple good and collection of royalties after expiration of the patent.[67] Otherwise, patent misuse is determined on a case by case basis using a rule of reason.[68] Patent misuse is an affirmative defense to an accusation of infringement; it does not invalidate the patent.[69] If a patentee engages in activities that constitute misuse, it cannot afterwards prevail in an infringement suit against the victim of those activities, even if there was actual infringement.

Congress has amended the patent statute in response to judicial decisions which it felt defined patent misuse too broadly. The statutory exceptions are 1) deriving revenue from activities that would constitute contributory infringement if done by another; 2) licensing or authorizing consent to do something that would be contributory infringement if done by another; 3) seeking to enforce patent rights; 4) refusing to license or use patent rights; and 5) tying, unless the patentee has market power.[70] Congress thus allowed the patentee to exploit the right to exclusivity but drew a line beyond which that exploitation starts to look like illegal exploitation of a monopoly.[71]

At first glance, the ability of a patentee to get a second patent on a modification to a drug and use that patent to continue its market dominance might appear to be patent misuse. Even if generic manufacturers start practicing the subject matter of the expired patent, they will not be able to compete with the new product. However, this is not illegal. First, as noted above, even if consumers are not sophisticated enough to compare the modified, patented product to the old, off-patent product, the insurance companies that actually pay for drugs are. In addition, the courts are unwilling to fault a patentee for exploiting the market share and brand recognition it gained through its patent as it markets new products. So long as the patentee does not actively prevent its competitors from entering the market for the off-patent product, the courts will be unwilling to intervene.[72] After all, it is not just the patent that allowed the patentee to gain market share and brand recognition, but the fact that the patentee had developed a product that consumers wanted to buy and use. This is just the type of innovation that the patent laws are meant to encourage.

How Did We Get Into This Mess, Anyway: How Litigation Starts

On October 15, 2002, I started the research for this paper by doing a Shepard’s Citation search on 35 U.S.C. § 271(e)(2)(A), the statute that authorizes patent infringement litigation after a company files an ANDA with a Paragraph IV certification. There were 78 case citations to 56 unique cases. The most surprising statistic to me was that only 34 of these cases involved more than one patent.[73] The remaining 22 lawsuits largely involved single patents that had issued much earlier and that would have expired relatively soon, allowing the generic to file an ANDA with a declaration that there was no existing patent and enter the market without litigation.[74]

In these 22 cases, the generic company thought it was worth the cost of litigation to attempt to enter the market earlier than it otherwise might have. The most common argument these companies could present was that the patent was invalid. Alternatively, they could argue that the patent did not cover the generic drug, even though the generic had the same therapeutic effects as the original drug. That there are any patent suits at all on unexpired patents indicates that the seemingly prohibitive cost of patent litigation is not a complete deterrent to companies challenging what they think are invalid patents. Of course, generic companies do their homework before filing an ANDA with a Paragraph IV certification and would not subject themselves to litigation if they did not think they had a good defense of either invalidity or no infringement. However, not all of these companies are successful.

There is a saying, “Build a better mousetrap, and the world will beat a path to your door.” However, if your neighbor builds a cheaper mousetrap, you are likely to lose market share. A patent is not sufficient to keep the world treading over your threshold; you have to be able to enforce it. Patent litigation is incredibly expensive, and many companies do not have the money to enforce a patent, rendering it merely a nice packet of paper sealed by Uncle Sam. Invalidating a patent is just as expensive. An invalid patent may create just as insurmountable a barrier for entry as a valid patent if potential competitors cannot sue the patentee to invalidate the patent.

While procedures exist in the Patent Office to invalidate patents without litigation, most patent attorneys are wary of entrusting such a decision to the same overworked patent examiners who issued the allegedly invalid patent in the first place. In addition, the third party attempting to invalidate the patent using Patent Office procedures does not have access to many of the tools, such as discovery and live expert testimony, that it would have as a plaintiff in a declaratory judgment or infringement action. The consequences of failure are great - the third party is estopped from asserting in litigation that the patent is invalid on the grounds argued in the Patent Office.[75]

Thus, it is encouraging to see so many generic companies subjecting themselves to lawsuits to challenge drug patents. In other fields, accused infringers often settle to avoid the costs of litigation even where a determined challenger might be able to convince a court that the Patent Office made a mistake.[76] The Patent Office is only the first guarantor that the rights granted to the patentee are deserved. Third parties have much better access to non-patent prior art such as journal articles and corporate technical publications. The third parties also have more time and resources and are more highly motivated. Third party litigation is a second line of defense against the enforcement of invalid patent claims, but it only works so long as the third parties are willing to litigate rather than settle.

The Patent Office is not an ineffective barrier to the issuance of invalid claims. While there is no duty on a patentee to perform a patentability search, the likelihood of an invalidity challenge provides patentees an incentive to search for prior art so that it may be considered by the Patent Office during ex parte prosecution. In addition, it is much easier to persuade an Examiner that claims are patentable in view of a particular publication than to make the same argument in front of a judge with an accused infringer presenting arguments to the contrary. The reward for the patentee is a presumption, during litigation, that the claims are valid over any reference considered by the Patent Office during prosecution of the patent.[77] A thorough search by the patentee improves the quality of the issued patent and ensures that the government is really promoting technological innovation in return for granting exclusivity.

And Just What Type of Innovation Might That Be?

The additional patents that cover drugs can be categorized in several ways. The way that GATT has changed the policy behind the issuance of multiple drug patents is illustrated by the distinction between patents that are related to one another by some kind of priority claim and those that are not. For example, two families of patents that cover various crystalline forms of paroxetine HCl, (Paxil, sold by SmithKline Beecham) are illustrated below.

Each group of patents linked by arrows is termed a family. The designation “USSN” indicates an abandoned application that may still be used to claim priority. The two families indicate groups of patents that are unrelated to each other. The patents in the left-hand family claim various crystalline forms of paroxetine HCl. The patents in the right hand family claim therapeutic uses of serotonin re-uptake blockers, including paroxetine and other chemicals.

The patents in the left-hand family were all filed after GATT and will expire on the same day, in this case, May 19, 2015.[78] Except for U.S. Patent No. 5,789,449, the patents in the right-hand family were all filed before GATT. Each of these patents will expire the greater of 20 years from filing or 17 years after its issue date, with 5,589,512, the penultimate patent in the family, expiring in 2014. However, 5,789,449 will expire 20 years after its earliest priority date, in 2009, significantly earlier.

The Patent Office policy of only issuing one patent for one invention occasionally forces a patent applicant to split a patent application into multiple applications, each having its own filing and issue date but a common priority date. Before GATT, each of these patents would expire 17 years after issuance. Thus, by delaying filing of the additional applications, a patentee could extend the period of exclusivity by several years. For a modern drug, even if one application is subdivided and issued as several patents, each patent will expire on the same day. For modern drugs, then, the only category of additional patents that can add time to the period of exclusivity are patents that are not related by a common priority claim. For this reason, the analysis below concentrates on unrelated patents.

Another way to categorize additional patents covering a drug is by their function. In reviewing groups of patents, these patents fell in the following categories

  1. A metabolite of an existing drug
  2. A new therapeutic function for an existing drug
  3. Improvements to composition or other features of drug
  4. An extended release version of an existing drug
  5. A different crystalline polymorph of an existing active ingredient
  6. A new method of producing an existing drug
  7. The method by which the active ingredient of an existing drug acts.[79]

In general, if the new patent does not prevent a manufacturer from producing a generic version of the original drug, then the new patent only helps the patentee continue exploiting the market created by the drug. If the primary policy consideration is to allow the patent to truly enter the public domain upon expiration but continue to allow all manufacturers to develop new products based on the original drug, the generic manufacturer’s ability to enter the market is sufficient to justify the issuance of a new patent.

Getting drugs into the public domain is not the only policy implicated by the relationship between a new patent and an expired patent. Not all patents create benefits for patients. For example, a patent on an isolated crystal structure is not an improvement on a patent for a mixture of two crystal structures where the second crystal structure is inactive. If there was no harm to the patient from the original product, the new product provides no benefit except perhaps a marginally smaller pill to swallow.

Merck’s policy on new drug patents is that an improvement on an off-patent drug should provide an actual patient benefit.[80] Many improvements, for example, extended release versions of certain drugs, provide tremendous quality of life benefits for patients. Given the vast amounts of money that go into developing a drug or an improved drug product and getting FDA approval for it, public policy would demand that this money actually make people’s lives better. The primary incentives to a company for this are reputational, not financial. It is good public relations to produce new drug products that can improve human health. While new remedies look good to stockholders, so do new patents. On the other hand, the term of exclusivity, and the resulting financial benefits, granted with a patent does not vary depending on the benefit to the public. Indeed, while all patents are required to be useful, the standard for utility is extremely low.[81] There is no requirement that a variation on a product be better than the product, only that it be new.

A requirement that a drug improvement patent meet a certain benefit standard also creates counter-incentives to research. Before the improvement is made, it is not known what the benefits will be. For example, until two crystalline forms of a drug are tested separately, it may not be known which form is active and whether the inactive form causes any side effects. The added cost of uncertainty imposed by a benefit standard may reduce the amount of resources companies put into certain lines of research. Those lines of research for which it is known a priori that there will be absolutely no benefit to the patient are unlikely to be pursued whether there is a benefit standard or not.

A government-set quantum of benefit could create too great a disincentive to perform research that might have benefited patients in an unexpected way. A policy that reduced governmental interference in the research developments of private companies would allow market forces to provide the appropriate incentives for research directions. That is not to say that the government could not tweak those market forces in other ways, for example, by providing tax benefits for specific types of research.

Education can help counter the massive advertising machine. My doctor just sent me a letter telling me that there are an awful lot of brand name allergy medicines out there, but that there is a generic, over-the-counter product that is cheaper and that works the same way. The cost savings is not only the cost savings of the prescription itself but the savings from not having to pay the co-payment for a doctor’s appointment and not having to take time off work to go to the doctor.

Televised public service announcements could accomplish the same thing. Public education, sponsored by the government or by others, can help consumers decide whether to insist on brand name (usually patented) products or to save money on a generic (usually unpatented) substitute. For example, the massive marketing surrounding Prilosec (“The Purple Pill”) and then Nexium (also a purple pill) leads patients to call their doctors insisting that the purple pill they just saw on television will cure their chronic heartburn. The doctors do not have enough time to argue with the patient that some other product in some other color will work just as well, especially if the patient is on the phone and not in the office, and will provide the prescription. After all, it is not as if Prilosec won’t help, and the doctor has other patients to see.[82] Advertising that educates consumers about the alternatives can reduce the impact of the purple pill pushers.

Insurance companies can also help remedy the information imbalance by requiring pharmacies to use the generic, off-patent drug instead of the flashy new pill. Still, this is only a small incentive to drug companies to put research funds into other projects. The market power provided by a patent and the ability to market a new and improved product to consumers are a powerful incentive to the drug manufacturer to produce the new product. In addition, if the drug receives OTC (over the counter) status, the price difference between the branded drug and the generic will be the only incentive to consumers to purchase the generic. Given the brand strength of Robitussin, Sudafed, and Bayer Aspirin, this is not much of an incentive.

In evaluating the policy implications of how drug companies extend patent life, I will use the criterion of whether the new patent allows the off-patent drug to enter the public domain. A patent is an exchange between the patentee and the government. In exchange for teaching the public how to make and use the invention, the patentee receives the right to exclude others from doing so for a limited period of time. At the end of the time, the patentee should not be able to prevent the subject matter of the patent from going into the public domain.

Technically, a patent that claims the exact same thing as a previous patent should not be allowed to issue for a variety of reasons, including lack of novelty. However, because the criteria for what the FDA considers a “new” drug and what the Patent Office considers a new invention are not the same, there is an area where these two categories do not intersect, where the Patent Office might consider something new that the FDA regards as the same product as was previously approved through an NDA. While such a patent would not prevent a generic from entering the market, the patentee would be able to list the new patent on the Orange List and trigger the 30 month stay, delaying entry of the generic product. Alternatively, the new patent might dominate the old patent, that is, it might have claims that encompass those of the old patent, completely blocking entry of generic products.

Digestion is not Invention: Patenting Metabolites of a Patented Compound

Schering Corporation was issued U.S. Patent No. 4,282,233 (“the Claritin patent”), claiming loratidine, the main ingredient in Claritin. The patent application was filed in 1981, and the patent ordinarily would have expired in 1998. However, the patent was filed in 1980, and, under the statute passed to bring U.S. law in conformance with GATT, patents that were still “alive” when GATT became U.S. law were allowed to expire according to the new standard if it provided a longer patent life.[83] For the Claritin patent, 20 years from filing would provide a longer patent life than 17 years from issuance, and the expiration date was pushed to 2000. However, Hatch-Waxman provides a patent term extension of up to 5 years for patent life “wasted” by delays in the drug approval process.[84] Schering-Plough applied for an extension of time and received two years. The Claritin patent expired last year.[85]

In 1987, Schering was issued U.S. Patent No. 4,659,716 (“the Clarinex patent”), claiming desloratidine, marketed as Clarinex. The patent will expire in 2004. In the laboratory, desloratidine is produced by substituting a hydrogen for an acid group on the loratidine molecule.[86] Schering listed the Clarinex patent on the Orange List under the Claritin entry. A group of generic manufacturers had submitted ANDAs certifying that they would not enter the market until the Claritin patent expired. They filed Paragraph IV certifications after learning of the Clarinex patent and challenged its validity after they were sued.[87]

The Clarinex patent includes claims to a pharmaceutical composition including desloratidine and the desloratidine itself. Of course, just because the body finds a way to make a particular chemical does not mean that the same chemical is neither novel nor non-obvious when those bodies figure out a way to make it in a test tube. However, the parties in the lawsuit decided that the compound claims of the Clarinex patent included the active ingredient when formed in the body.

For a patentee, this would seem to be a terrific argument. Even if the generic manufacturers sold generic Claritin, their customers would produce the metabolite, the active ingredient of Clarinex. Thus, the generic manufacturers could be sued for contributory infringement. However, this would essentially extend the patent life of the Claritin patent and violate the policy I set out above. Once Claritin passed into the public domain, generic drug manufacturers should be able to sell it without being sued.

For the defendants, this was a fantastic argument. The active ingredient in Clarinex was produced by all the volunteers who were administered real Claritin and not a placebo during the clinical trials. The administration of the active ingredient in Claritin was described in the Claritin patent, which issued more than a year before the filing date of the Clarinex patent. The court agreed with the defendants that the compound claims of the Clarinex patent were inherent in the Claritin patent.

The patent statute says in part, “A person shall be entitled to a patent unless the invention was...described in a printed publication in this or a foreign country or in public use .... more than one year prior to the date of the application for patent...”[88] The doctrine of inherent anticipation says that you do not need to know that you have been using or publishing the invention to come under the purview of Section 102(b).[89] Rather, the publication just has to be sufficient to show that the invention is a natural result of its teachings. The court found that the claims to the active ingredient in Clarinex (though not the pharmaceutical formulation) were anticipated.[90]

The facts in the Prilosec litigation are similar. Astra-Zeneca listed a patent claiming an in vivo metabolite of omeprazole, the active ingredient in Prilosec, and tried to assert it against potential generic manufacturers who wanted to produce a generic version of Prilosec when its patent expired in 2001. The district court judge declined to invalidate the claims to the metabolite, which claims would not expire until 2005. Instead, the judge construed the claims not to include in vivo formation of the metabolite. This allowed the generic manufacturers to come to market without destroying Astra-Zeneca’s patent right.[91] Regardless of how the generic is allowed to come onto the market, the policy of allowing the generic onto the market is followed.

The pharmaceutical claims in the Clarinex patent were not challenged. It can be argued that this patent does no one except for Schering’s shareholders any good. After all, the active ingredient is already produced in the body upon administration of Claritin. Still, the patent allows generic companies to produce Claritin. What is not as clear is whether these generic versions will be substituted for Clarinex, now that Claritin has been approved for over-the-counter sales. While generic Claritin is a different chemical than Clarinex, the FDA considers them bioequivalents. Thus, insurance companies should be able to pressure pharmacies to substitute generic versions of Claritin in prescriptions for Clarinex.

This does not answer the question of why Schering was able to get a patent on a pharmaceutical composition for a metabolite of a known chemical. As the district court in the Prilosec litigation observed, "by claiming patent protection for sulphenamides formed in vivo after the oral administration of omeprazole, [the patentee] has  merely attempted to patent the unpatentable -- 'a scientific explanation for the prior art's functioning.'"[92] Moreover, the Clarinex claim was for a metabolite, not a mixture of the metabolite with a binder to form a tablet.

A naturally occurring chemical in its natural state is not patentable. Isolate that chemical, dress it up in a pretty frock, or identify a binder that can be used to form it into a pill, and Uncle Sam will give you a patent on the isolated, dressed up chemical.[93] The amount of mental or technical effort required to isolate the chemical or identify the binder is typically not a factor affecting patentability. The policy balance that would be required to identify some “quantum” of inventiveness was rejected in favor of an obviousness standard when the modern patent statute was drafted over 50 years ago.[94] However, this does not mean that the Patent Office is prohibited from making the same evaluation of inherency that the courts have made to prevent drug metabolites from keeping generic versions of the original drug off the market.

And It Will Also Cure The Common Cold: Patenting An Old Drug For Use With New Indications

Part A - FDA Labeling

The FDA requires that an NDA be filed with a specific set of indications, situations where the drug has been tested and for which uses the drug will be approved. These indications are the only ones that are described on the packaging for the drug and that the manufacturer may mention in its advertising.[95] To add an indication, the manufacturer must conduct a new set of clinical trials to prove the efficacy of the drug with respect to the new indication. However, there is nothing to prevent a manufacturer from conducting small trials for new indications and allowing their results to be circulated widely. Physicians learn about the trials and prescribe drugs for indications that are not indicated on the labeling, so-called “off-label” uses.

The FDA does not want to interfere in the practice of medicine by physicians and therefore does not regulate off-label uses of drugs. The drugs have already been tested for safety; thus, off-label uses should do no harm to the patient’s health. The patient’s wallet and that of the insurer, on the other hand, can be greatly affected if these drugs do not actually work for the particular off-label indication.

Part B - What Constitutes Infringement

The patent statute defines several causes of actions related to infringement. Direct infringement occurs when a third party makes, uses, sells, imports, or offers for sale a patented device.[96] These devices can be employed for a variety of uses, some of which may also be patented. The third party selling the device to a customer who uses it to perform a patented method does not infringe the method patent. However, if the third party promotes the infringing method and attempts to exploit the patented method to increase its sales, it can be found liable for inducing infringement.[97]

For example, the Acme company may sell tooters. These tooters can be used to warn oncoming automobiles, start rockslides, and express joy at athletic events. Acme has a competitor, Big Corporation, that has a patent for the use of tooters for tooting one’s own horn. Some of Acme’s customers use tooters for this purpose. Big Corporation is unlikely to sue the customers because there are a LOT of them, and none of them have enough money to make a lawsuit worth while. In addition, Big Corporation would alienate a lot of customers for its other products, including beepers and ringers, if it were to sue consumers. However, so long as Acme is not trying to increase its tooter sales by touting their usefulness for personal horn tooting, Big Corporation cannot sue Acme for inducing its customers to infringe.

Part A and Part B Collide: Warner-Lambert and Gabapentin

I described the Warner-Lambert case at the beginning of this paper. The FDA has only approved Warner-Lambert’s drug gabapentin, marketed as Neurontin, for treatment of epilepsy, which indication was covered by U.S. Patent No. 4,087,544 (“the epilepsy patent”). However, three-quarters of the prescriptions written for gabapentin are for indications other than epilepsy.[98] Further research by Warner-Lambert indicated that gabapentin might have some use against neurodegenerative diseases such as Lou Gehrig’s Disease and Alzheimer’s Disease.[99] These diseases condemn patients and their families to incredible ordeals - it is no wonder that doctors flocked to prescribe gabapentin for neurodegenerative disorders.

Warner-Lambert obtained U.S. Patent No. 5,084,479 (“the neurodegenerative disease patent”) for the use of gabapentin in the treatment of neurodegenerative disorders. Thus, Warner Lambert has a patent for a treatment that the FDA will not allow anyone to tout in their marketing materials, not even Warner Lambert.[100] If Warner-Lambert can enforce the neurodegenerative disease patent against any generic entrant, it can extend the monopoly on gabapentin from 2000, when the epilepsy patent expired, until at least 2010.[101]

Warner-Lambert lost in both the district and appeals courts because the FDA rules prohibit Apotex from marketing gabapentin for neurodegenerative disorders. The district court interpreted this to mean that there was no way Apotex would contribute to infringement of the neurodegenerative disease patent. On the other hand, Apotex does not need to advertise the use of gabapentin for neurodegenerative diseases to its customers. Gabapentin is only available by prescription, and the prescribing physicians already know about the studies showing its usefulness for neurodegenerative disorders. Furthermore, the pharmacies that fill the prescriptions for gabapentin do not know the indication for which it has been prescribed. If a physician prescribes Neurontin, the pharmacy will substitute generic gabapentin. Thus, Apotex does not need to promote off-label uses of gabapentin to reap the benefits of off-label prescriptions.

This still leads to the question of whether the pharmacists are contributing to infringement by substituting generic gabapentin for Neurontin without asking what indications are being addressed. The pharmacy does not have the marketing defense that the generic manufacturer does - for a given patient, the use either infringes or it does not.[102] It seems unreasonable to demand that the pharmacy call the prescribing physician to ask why the prescription was made every time it fills a prescription for gabapentin. The patent statute does not ask whether it would be reasonable to force an infringer to halt its infringing activities, however. The best option for the pharmacists may be to request that physicians mark gabapentin prescriptions with the patient’s disease or symptions. The physicians may be loath to disclose this information and expose themselves to second guessing, especially in view of recent clinical studies concerning gabapentin.

No drug company is going to sue a physician because companies are not in the business of suing their customers. Likewise, even large pharmacy chains with deep pockets are unlikely to be sued, since the drug manufacturers would like to maintain a friendly relations to promote sales of their over-the-counter drugs.

The most likely defendants in an inducement suit are insurance companies that enforce policies of generic substitution and those states that require substitution of generic drugs where available. State requirements to substitute generic drugs raise an interesting federalism question in the context of Warner-Lambert -type cases. A state is not permitted under the Supremacy Clause from enacting a statute that facially contradicts a federal statute or whose effect is to “penalize or discourage conduct that federal law specifically seeks to encourage,” and the federal courts may invalidate such statutes.[103] A state statute that requires substitution appears to conflict with the patent statute to the extent that pharmacists are required to substitute a generic drug to treat a disorder that is recited in a method-of-use claim.

Of course, substitution statutes do not require substitution where it infringes a patent. Federal courts, wary of tramping over the ability of states to pass legislation, are likely to construe substitution statutes just this way. Compliance is simple with respect to a composition patent because no generic can be marketed. On the other hand, mere statutory construction does not solve the difficulties of the pharmacists in attempting to fill prescriptions without violating method-of-use patents. A court probably lacks the power to force a state to enact a statute to fix this problem.[104] In addition, the states cannot be accused of inducement where it is actually possible to comply with both the state and federal statutes. Unless the state is running the pharmacies, a patentee has no other options for injunctive relief with respect to a state. Unfortunately for the patentee, it may not sue the state for damages, either.[105]

We Don’t Care Why It Works So Long As It Works - Allergan

The question of inducement is brought a little closer to the generic manufacturer in the case of Allergan, Inc. v. Alcon Labs .[106] The drug brimonidine is not patented. Allergan holds U.S. Patents No. 5,856,329, 6,194,415, and 6,248,741, which claim methods of treating, inhibiting, or preventing neural injury using brimonidine, marketed as Alphagan. Traditionally, it was thought that high pressure within the eye (“intraocular pressure”) caused glaucoma.[107] Allergan demonstrated that brimonidine reduced intraocular pressure and filed an NDA. Allergan was granted an automatic 5 year period of exclusivity in marketing brimonidine and an additional 6 months, expiring in 2002, for testing its efficacy and safety in children.[108] Allergan’s patents will all expire in 2015.

Alcon filed an ANDA to market brimonidine for treatment of intraocular pressure, and Allergan sued, alleging direct and inducing infringement. The court found no direct infringement because the ANDA was for use in treating intraocular pressure, not treating ocular neural injury. The court also spent several pages explaining why Allergan’s inducement claim was not ripe because the drug was not being sold.[109] The court did not say that Alcon would not be inducing infringement once it came to market.

The argument that Alcon will be inducing infringement once it enters the market is even stronger than in Warner-Lambert . Alcon and Allergan will both be marketing a drug for the treatment of glaucoma. Alcon will tout its ability to reduce intraocular pressure, and Allergan will tout its ability to prevent injury to the optic nerve. Still, a physician trying to treat or prevent glaucoma only has one place to turn - brimonidine. Alcon can advertise that its product prevents glaucoma. The only difference between Allergan and Alcon’s marketing is the scientific theory each company uses to back up its claim. However, a physician does not care why brimonidine works, only that it works. That the theory that Alcon has been discounted will not prevent a physician from prescribing it.

The district court questions whether Allergan’s patents are properly listed in the Orange List, and thus whether a prescription for brimonidine to treat glaucoma is actually an off-label prescription.[110] The question is whether the indication is considered the prevention of glaucoma or the reduction of intraocular pressure. However, the only harm thought to be caused by elevated intraocular pressure is glaucoma.

The district court also notes that if Allergan were successful in an inducement claim, “[I]t would be able to effectively monopolize the market on all manufacture and use of brimonidine even though it admittedly can have no patent on the manufacture of brimonidine, and only has a patent on one of many uses for the drug.”[111] This is merely policy, however, and if there are no non-infringing uses, then Allergan could very well be entitled to its monopoly unless Congress amends the Hatch-Waxman Act. However, extending the doctrines of contributory infringement to inducing infringement could very well provide a doctrinal hook to bring the law in line with the policy.

The Federal Circuit Splits

The Federal Circuit decision in Allergan came out in late March and is notable for including three opinions.[112] The per curiam decision was accompanied by two opinions, one signed by two members of the panel, one by the remaining member, concurring in the judgment and complaining that the precedent set out by Warner-Lambert was incorrect. The two concurrences both feel that the Warner-Lambert panel misread the patent statute in construing 35 U.S.C. § 271(e)(2) not to include a cause of action for inducing infringement. After all, it is not impossible for a generic manufacturer to induce infringement for a non-FDA approved use, it is just not permitted under the FDA rules. In Warner-Lambert , there was no evidence of inducement.[113] On the other hand, Allergan had submitted evidence that Alcon was touting brimonidine’s neuroprotective properties.[114]

The decision in Warner-Lambert , assuming the Federal Circuit does not hear it in banc and overturn it, and remand the case for a new summary judgment hearing, does not preclude a patentee from pursuing a case for inducing infringement against a patent holder. It only prevents that suit from being filed under 35 U.S.C. § 271(e)(2) before the ANDA is granted and the generic enters the market. If the generic manufacturer promotes the patented use, it can be sued under 35 U.S.C. §271(b) after it enters the market and there has been an actual act of infringement.[115] Thus, Warner-Lambert only curtails the types of patents that patentees can enforce prior to the entry of a generic. The differences between the Warner-Lambert and Allergan panels may very well be explained by the lack of evidence of inducement presented in the former case. Without any hint of actual inducement, Warner-Lambert was forced to argue that the mere marketing of the drug would induce infringement. This is clearly contrary to the policy of allowing generic entrants once the original patent expires, and the panel ruled accordingly. With some evidence of inducement in the Allergan case, the panel was able to describe the type of evidence that a patentee could introduce to show inducement in a suit under 35 U.S.C. §271(e)(2) (based on the filing of an ANDA).

Under this reading of both cases, Warner-Lambert may very well frustrate the balance set up by the Hatch-Waxman Act by precluding pre-market lawsuits concerning certain patents. As described by Judge Schall,

The ANDA applicant would benefit by challenging the scope of a patentee’s rights before the patent expires and before the applicant has invested in production and manufacturing facilities in reliance on its approved ANDA. The patentee, in turn, would profit by enforcing its patent rights before a generic drug manufacturer has moved into the market as a competitor.[116]

In these cases, the benefit described by Judge Schall is attenuated because the ANDA applicant is investing in facilities to enter the market created by the expiration of the original patent. The only consequence for a generic manufacturer that loses a suit after entry is the requirement to curtail the amount of manufacturing as it withdraws from the infringing market; the generic drug can still be sold in the off-patent market. On the other hand, it may be that any preliminary injunction issuing in such a case would encompass all sales, not just the advertising and other inducing activities.

NEW AND IMPROVED!: Improved Compositions of Existing Drugs

Zantac, once the world’s best selling drug, has changed the lives of millions of people around the world, not least the shareholders of Glaxo Wellcome, which produces it.[117] Glaxo owns numerous patents that cover ranitidine, the active ingredient in Zantac, in various forms, including U.S. Patents Nos. 4,585,790 (“the ‘790 patent”) and 5,068,249 (“the ‘249 patent”), which cover an aqueous formulation for oral administration. The syrup extends the market for Zantac to children and many adults who cannot swallow pills.

Glaxo originally started developing an oral syrup formulation of Zantac using the ‘790 patent, which recited a syrup having a specific pH at which the shelf life was maximized.[118] However, Glaxo researchers eventually discovered that the formulation was susceptible to microbial contamination. Investigating materials to eliminate the contamination, Glaxo scientists discovered that ethanol not only killed the microbe but increased the stability of the syrup without changing the pH.[119] Glaxo obtained the ‘249 patent on this formulation.

Because no drug was ever marketed using the formulation of the original ‘790 patent, this example might appear not to come under the theme explored by this paper, the extension of patent life on a particular drug by obtaining an additional patent. However, the original patents on Zantac issued in the 1970’s and have now expired. The ‘790 patent will not expire until 2009. Still, in theory, generic companies can produce versions of Zantac according to the original patents (the reality is discussed below). Furthermore, the syrup provides a benefit to patients, who would not otherwise have access to the drug.

There are other ways to make an oral syrup formulation of ranitidine besides those described in the ‘249 patent. Glaxo sued Pharmadyne for producing an oral syrup formulation of ranitidine using propylene glycol instead of ethanol.[120] However, Glaxo was able to convince the court that propylene glycol was a functional equivalent of ethanol, and Pharmadyne was found to infringe under the doctrine of equivalents.[121]

The doctrine of equivalents is an equitable doctrine designed by the courts to prevent potential infringers from evading a patent by making trivial changes to the invention.[122] This would appear to reward a patentee for sloppy patent drafting by extending the scope of the claims beyond what the patentee originally tried to claim. Furthermore, this reduces the ability of a competitor to determine how to “design around” a patent, to produce a modified product or method that achieves the same goal without infringing the claims. However, the Supreme Court has continually reaffirmed the validity of the doctrine.[123]

In the drug field, there are very few ways to modify a product to produce a variation on a drug that actually has therapeutic effects. As noted above, the owner of a drug patent essentially has a monopoly, not just a right to exclude, because there are generally very few other compounds that will have the same pharmacological effects.[124] Thus, one might propose that the scope of equivalents be limited to extend the scope of the monopoly and promote competition. The courts have generally not taken this approach.[125] Instead, the Pharamdyne court considered several factors outlined by the Warner-Jenkinson Court in essentially determining the degree of inventiveness of Pharmadyne’s modification to Glaxo’s formulation.[126] This follows one of the policies of the patent statute, that the presence of a patent should instigate competitors to make new products that do not infringe on the patent. Some of these new products will be improvements on the patented product, thus furthering technological innovation.

Other Drug Improvements

Abbott Laboratories produces an anesthetic inhalant, sevoflurane, which it markets as Ultane. This product is covered by U.S. Patent No. 5,990,176 (“the Ultane patent”). In addition, Abbott has developed a poly(ethylene napthalate) (PEN) container for sevoflurane that is non-reactive with the compound and also prevents vapor transmission out of the container. The container is covered by U.S. Patent No. 6,074,688 (“the container patent”). Traditionally, sevoflurane was stored in glass containers, but the sevoflurane etched the glass, increasing the already substantial risk of breakage.[127]

The benefit to patients and the convenience to doctors from the second patent is clear. Moreover, generic companies can use other containers to store sevoflurane; Baxter had filed an ANDA stating that it wanted to sell sevoflurane in aluminum containers.[128] While the risk of etching is the same, evidently this etching does not pose a risk to patients. In addition, the ‘688 patent will expire in only a year after the ‘176 patent, in 2018. Thus, Abbott has not significantly extended its period of exclusivity by obtaining the second patent. This may be an example of competitive pressures leading Abbott to not wait for the end of its “first” period of exclusivity to develop improvements that would extend its market dominance through an additional patent. Less cynically, Abbott may have recognized a potential problem with its product and decided to develop a solution.

Another example of improvements to a drug that provide benefits to patients is described in Bayer AG v. Elan Pharm. Research Corp. [129] Bayer’s patent 4,892,741 (the ‘741 patent) describes a family of high blood pressure medications (including nifedipine, marketed as Adalat CC) and a pharmaceutical composition that results in a particular release profile.[130] The examples describe crystals of the drug with a mean particle size of 5 or 10 micrometers. U.S. Patent No. 5,264,446 (“the ‘446 patent”) discloses a solid pharmaceutical composition in which the crystallites have a specific surface area between 0.5 and 6 m2 /g but only includes claims for particles having a specific surface area between 1 and 4 m2 /g.

The increase in specific surface area increases the solubility of the drug in the bloodstream without reducing its bioavailability, providing a real benefit for patients.[131] Furthermore, generic manufacturers can produce a drug that avoids either patent by using crystals that have a specific surface area lying outside the scope of the claims of the ‘446 patent. For example, Elan’s ANDA was for a composition including nifedipine crystals having a specific surface area of at least 5 m2 /g. Both the district court and the Federal Circuit found that this did not infringe the ‘446 patent.[132]

It Keeps Going And Going and Going: Extended Release Versions

Extended release versions of drugs can bring tremendous benefits to patients. By reducing the number of times in a day that a patient can take a drug late or forget a dose entirely, extended release delivery systems increase patient compliance with physician instructions. In addition, they improve the lifestyle of the patient by reducing the disruptions to his/her day caused by the need to interrupt ongoing activities to find some water and an opportunity to take the drug. In addition, many drugs are not released into the body at an even rate. Rather, there is a spike in serum levels of the drug shortly after ingestion, followed by a gradual tapering off. Extended release versions deliver sustained doses of a drug to a patient.

Extended release formulations both allow generic versions of the drug to be marketed and provide additional benefits to patients in return for a new period of exclusivity. However, the desire to prolong the patent life and the market advantage may lead a patentee to delay development and marketing of an extended release formulation of a patented drug to manipulate the period of exclusivity. There is an incentive that cuts the other way, however. A competitor can develop an extended release version under the guise of preparing materials for an ANDA.[133] If the competitor receives a patent first, then the company that developed the original drug will not be able to exploit the “second” period of exclusivity.

The benefit that the extended release version provides to new patients severely decreases the market for the original version of the drug. This reduces the incentive for generic companies to market the original drug once it goes off patent. As a result, generic manufacturers have attempted to market extended release versions. While this might seem like patent infringement, so far, the patentees are losing in court.

The claims for extended release versions of drugs are typically for specific formulations. The claims in SmithKline Beecham’s patent for the extended release version of bupropion HCl recite a specific binder, hydroxypropyl methyl cellulose (HPMC).[134] There are other ways to make an extended release version of bupropion HCl, and Excel Pharmaceuticals did so by mixing the drug with poly(vinyl alcohol) (PVA). The district court found that this did not infringe. Why the patentee (first SmithKline, now Glaxo SmithKline) lost provides some insight into the patent process for chemicals.

It is clear that Excel’s use of PVA does not infringe literally. The court also found that there was no infringement under the doctrine of equivalents.[135] The claims did not recite a binder when the application was filed. The Examiner found that HPMC was necessary to the functioning of the claimed pharmaceutical composition, and the applicant, Burroughs Wellcome, amended the claim to recite HPMC instead of challenging the Examiner.[136] The court found that this was an amendment narrowing the claim for the reasons related to patentability. In addition, the court found that the claims could have been drafted to include hydrogel-forming polymers instead of the specific hydrogel forming polymer HPMC. Thus, the scope of equivalents of the claims would not be able to encompass all hydrogel-forming polymers, just HPMC.[137]

SmithKline/Glaxo was equally tripped up by a patent examiner in the Eon litigation. After the issuance of U.S. Patent No. 4,687,660, Burroughs Wellcome decided to file a reissue application to attempt to broaden the claims.[138] The examiner rejected claims for a controlled release composition of bupropion HCl having specific dissolution parameters as not supported by the specification. The written description requirement of 35 U.S.C. § 112 requires that the subject matter of the claims be described in the originally filed application. In making the rejection, the examiner, trying to be helpful, pointed out dissolution parameters in the specification that had not been incorporated into a claim.[139] A patent prosecutor ignores such a gift at her peril, and the language was duly presented verbatim in what became claim 7 of the issued patent.

The court invalidated the reissued claim for lack of enablement.[140] The enablement requirement of 35 U.S.C 112 requires that the patent provide sufficient written description to enable one skilled in the art to practice the subject matter of the claims.[141] Because chemistry and biology are unpredictable sciences, it is not obvious from a single example of a molecule whether similar or dissimilar chemical formulations will behave in the same manner in a test tube or in the body.[142] The Eon court stated that the examples only showed one formulation for a pill with the claimed dissolution parameters, yet the claim included all such pills. Thus, one skilled in the art would have had to engage in extensive experimentation beyond the techniques disclosed in the patent to practice the claimed invention.[143] The balance between the patentee’s need for a broad claim to catch infringers and the requirement that a claim be narrow enough to reflect the teachings of the written description of the patent is a delicate matter.

In the Andrx case, the court interpreted a claim to have a narrower scope to save it from a possible written description violation.[144] There are several grades of HPMC that are used in pharmaceuticals. A high grade, slow dissolving HPMC is used for controlled release formulations. A lower grade version is used as a quick-dissolving coating on pills.[145] The district court agreed with Andrx that the claims of the HPMC patent (see above) would be too broad if they included the quick-release grade of HPMC in addition to the release controlling version. After all, the claims of the HPMC patent all recite a controlled release formulation of a drug and list HPMC as the sole binder. As a result, the court decided that the binder must confer the controlled release properties of the claimed invention.[146] Andrx, which was using the lower grade version of HPMC, was allowed to continue marketing its product. Thus, even though the extended release version could provide real benefits to patients and the patent did not prevent generic companies from marketing the older version of bupropion HCl, Glaxo was not able to create an exclusive market for extended release versions of Wellbutrin through a patent.

Diamond v. Graphite - Changes in the Crystalline Structure of Compounds

There are three phases of matter: solid, liquid, and gas. But that simple triumverate hides an immense diversity of solid phases. Imagine a stack of oranges in the supermarket. The oranges are stacked in layers, with each layer snugged into the interstices of the layer underneath. A stack of cans might be different, with each can stacked directly on the can beneath. Still, one can envision a stack of cans in which each can rests over the space created by four neighboring cans. A stack of oranges in which each orange was stacked directly on top of the orange in the previous layer would not be stable, but both alternatives for stacking the cans are perfectly reasonable.

Likewise, the molecules in drugs may be stacked in crystals in more than one way. As one might expect, drug companies identified different manufacturing methods that result in different arrangements of molecules in a crystalline (ordered) solid and have patented the various crystalline arrangements, or polymorphs.

In addition, many drugs incorporate water, hydrochloric acid, or other solvents into their crystal structure to form solvates. The added molecules can be arranged about the drug molecules in different ratios depending on their arrangement. More than one solvent may be incorporated into the crystal lattice. For example, hydrochlorates may also be hydrates having various ratios of water molecules to the drug-hydrochlorate complex.

The Paxil Family

SmithKline Beecham has an extended family of patents on various forms of paroxetine, marketed as the antidepressant Paxil.[147] Many of these patents claim additional indications for the use of paroxetine or its mechanism of action. Some of the claims at issue in the Geneva case are for various crystalline forms of the compound, listed below.[148]

Patent No.
Paroxetine Structure Recited
Expiration Year
paroxetine HCl hemihydrate (Form Z)
paroxetine HCl anhydrate (Form C)
paroxetine HCl anhydrate (Form A)
paroxetine methanesulfonate

The Form C and Form A patents share a written description, which also discloses Forms B and Form D, all of which, according to the patents, may be used to treat a multitude of psychiatric disorders. The Orange List includes all of these patents under the same entry.

The Geneva case has not yet been decided, but some of the policy implications of the paroxetine family of patents are quite interesting. Whether all the forms of paroxetine are equally effective from a pharmaceutical standpoint, SmithKline Beecham feels that they are all equal under the guidelines set by the FDA. Recent evidence suggests that while various forms of paroxetine may be psychologically effective, they may have different side effects in different patients.[149] The patents do not discuss this, and I was unable to find any further references to this in the Medline database, a collection of biological and medical abstracts. In addition, some forms of paroxetine may be more stable in storage.[150]

As SmithKline (now Glaxo) gradually patents all the alternate methods and forms of paroxetine, it leaves the generic manufacturers free to sell only the original, not-yet-optimized product, Form Z, in 2006. SmithKline has additional patents for the use of paroxetine in any form to treat additional indications, but Warner-Lambert suggests that these will not be a barrier to marketing generic Form Z.[151] If the new forms of paroxetine have different side effects, then the various patents provide a choice for physicians and benefits for patients. When a patient has an adverse reaction to one form of paroxetine, another may be substituted to optimize the side effects without changing the psychological benefits for the patient.

Zantac Redux

Ranitidine has two different crystalline forms (e.g. , stacking patterns), one of which, Form 2, is a lot easier to produce on an industrial scale than Form 1.[152] Still, your stomach does not know the difference, and your heartburn will respond just as well to Form 1 as Form 2. Novopharm attempted to enter the market with a generic version of Form 1 when the its patent, U.S. Patent No. 4,128,658, expired in 1997.[153]

The Federal Circuit found that a product containing only Form 1 could not infringe a patent on Form 2.[154] In a way, this decision was easy. If Form 1 and Form 2 were the same molecule, Glaxo would not have been able to get different patents for each. It is clear that once a patent expires, its subject matter passes into the public domain. The Federal Circuit bypasses the question of whether a mixture of Form 1 and Form 2 would infringe the Form 2 patent.[155]

The district court hearing Glaxo’s suit against generic manufacturer Boehringer Ingelheim did not have that luxury.[156] Like Novopharm, Boehringer Ingelheim wanted to produce a generic version of Zantac using Form 1 ranitidine. However, Boehringer’s quality control procedures could only detect more than 4% Form 2 in its product.[157] Glaxo argued that a product with 4% ranitidine would infringe the Form 2 patent, and the court almost agreed, but put the burden on Glaxo to show that Boehringer’s product actually included any Form 2 ranitidine.[158]

In the Novopharm litigation, the district court heard expert testimony that the methods outlined in the Form 1 patent did not reproducibly produce significant amounts of Form 2. As a result, the Federal Circuit determined that the claims of the Form 2 patent were not limited to pure Form 2.[159]

If small amounts of Form 2 might conceivably be made by the process of the Form 1 patent, then the winner is the party with the burden of persuasion. Traditional principles of civil procedure of course dictate that the plaintiff has this burden, but a variety of rules occasionally shift this burden to the defendant. In Boehringer , Glaxo argued that Boehringer’s ANDA, which included the quality control limit, showed that it would infringe the Form 2 patent. The court disagreed.[160] In effect, it held that filing an ANDA with a paragraph IV certification only provides a cause of action under the patent statute, not a presumption of infringement. The patentee is still required to show that the marketing of the defendant’s drug product will infringe.

This provides a tremendous advantage to generic companies and moves the balance of power between patentees and generic companies closer to the original balance set up by the patent statute. Allowing a company to sue based on an allegation of future infringement was a concession to the drug manufacturers in return for the “safe harbor” of 35 U.S.C. § 271(e)(1), which allows a generic manufacturer to engage in any activity related to the generation of an ANDA, even that which infringes a patent. Turning the cause of action into a presumption tilts the balance too far towards the patentee. As the district judge in Novopharm pointed out, it is impossible for a defendant to prove that its product contains no Form 2.[161] In such a case, a presumption of infringement translates into an instant win for the patentee. This would effectively extend the patentee’s period of exclusivity beyond the expiration of the first patent and prevent the entry of generic manufacturers into the market.

Not being a court, I do not have the feeling of dread that led both the Federal Circuit and the Connecticut District Court to drop like a hot potato the question of how much Form 2 in a mixture leads to infringement of the Form 2 patent. Even ignorance of the answer will not stop me from discussing it. Claim 8 of the Form 2 patent recites “A pharmaceutical composition in the form of a powder comprising Form 2 ranitidine hydrochloride as defined in claim 2 together with at least one inert pharmaceutically acceptable carrier or diluent.”[162] Claim 2 includes a description of the x-ray diffraction pattern and the infrared absorption spectrum of Form 2.

The key word in claim 8 is “comprising.” In the U.S., this is considered an “open” claim term, meaning the claimed invention “does not exclude additional, unrecited elements or method steps.”[163] Claim 8 thus recites a powder comprising Form 2 ranitidine HCl, an acceptable carrier, and anything else that one might want to add, so long as the resulting product could still be characterized as a pharmaceutical composition. The patent law does not require that an infringing product have a specific proportion of the elements in an open claim with respect to the other elements the infringer might have added. Legally, then, the Form 2/Form 1 ratio could be vanishingly small.

How small “vanishingly” is can be determined in two ways. If a defendant found that the methods of the Form 1 patent always resulted in a certain tiny percent of Form 2, then, according to the reasoning of the Federal Circuit in Novopharm , that tiny percent would be the “magic” number.[164] Another rationale is the doctrine of reverse equivalents. This little used bullet in the defense lawyer’s arsenal argues that, where a product literally infringes a claim, but the product itself is so different from the claimed invention that the claim should not be said to read on the product, there is no infringement.[165]

According to the latter argument, the generic manufacturer would have to persuade a court that a pill containing less than a certain amount of Form 2 is essentially Form 1. The “magic” number may still be the amount resulting from the methods of the Form 1 patent or from a different method that is intended to produce or purify Form 1 from a mixture. A court will still have to evaluate the data and make an equitable evaluation of what the number will be. Factors that might be considered by the court will include the limits of detection and the amount of contamination resulting from various techniques as used by skilled artisans, not just the generic manufacturer, which may have an incentive to produce a “contaminated” product. Still, the number should be large enough that a manufacturer that is honestly trying to produce a non-infringing product using traditional manufacturing methods is able to enter the market.

Judge Posner proposed several constructions of a similar claim in SmithKline v. Apotex , in which the claim at issue recited “crystalline paroxetine hydrochloride hemihydrate,” the active ingredient in Paxil.[166] Apotex was trying to market a generic verion of Paxil using paroxetine hydrochloride anhydrate , which was the subject of an expired patent.[167] Judge Posner outlined four possible claim constructions:

  1. a single crystallite of the hemihydrate mixed in with anything else[168]
  2. a commercially significant amount of hemihydrate mixed in with anything else[169]
  3. in a mixture, the amount of hemihydrate that could have been detected when the patent issued
  4. in a mixture, the amount of hemihydrate that could be detected today.[170]

SmithKline was unable to reliably detect any hemihydrate in Apotex’s product, so the discussion of the last three alternatives was purely hypothetical. The second alternative reflects sound law and economics policy but is not backed up by case law. Judge Posner found the fourth possibility indefinite because the claim would become broader in scope over time as detection techniques improve.[171]

The first construction most clearly reflects the interpretation given to “open” claims. However, in this particular case, the first interpretation also renders it impossible to produce a non-infringing product. As it turns out, once a new polymorph is discovered, the later discovered polymorph, e.g. , the hemihydrate, almost inevitably contaminates production of the earlier polymorph, e.g. , the anhydrate.[172] Thus, the discovery of the hemihydrate rendered it impossible to practice the expired anhydrate patent without infringing the hemihydrate patent. Judge Posner found this quite unfair and said that the patent would be invalid with that construction, and, if he was wrong about the construction, that SmithKline could not possibly be damaged by infringement that resulted from the presence of the hemihydrate as an impurity.[173]

Judge Posner’s description provides a lucid description of the policy problems when a patentee creates a patent that renders practice of a prior patent impossible. Traditional standards of claim interpretation run contrary to the traditional patent policy of a limited term of exclusivity. The question will not be settled until the Federal Circuit hears the appeal. Stay tuned.

Wait a Moment - Doesn’t The FDA Think These Polymorphs Are The Same?

The FDA’s primary concern with polymorphs is that the different crystalline forms (including different crystalline arrangements and different degrees of solvation) are therapeutically equivalent. The FDA allows different polymorphs to be treated as if they have the same active ingredient. Currently, that requires a showing that the polymorphs have the same solubility and bioavailability.[174] Thus, one can market a polymorph (e.g. , Form 2) instead of the original compound for which the NDA was filed (e.g. , Form 1) without having to submit a new NDA so long as the patient’s body could not tell the difference. On the other hand, if the FDA thinks these are the same material, one might argue that the PTO should act accordingly.

The standards that the FDA and the PTO use to evaluate drugs are different, however. The PTO does not care if two compounds have the same biological activity in the body. If an inventor had to manipulate a material in some way to produce product B, the fact that the product has the same biological effect as product A contributes to its utility. The existence of two equivalent products also benefits consumers by allowing a company to get around the patent on product A by producing product B. This is essentially what Novopharm is trying to do.[175]

On the other hand, if a polymorph is different in some pharmacokinetic way, simply listing it in the Orange List is bad for consumers in two ways. To ensure the safety and efficacy of the new (and different) polymorph, it should be subject to its own approval process and not grandfathered under the original NDA. In addition, generic drug manufacturers should not be subject to suit under the patent covering the new polymorph (and a 30 month stay) if they are making a patentably distinct compound. The Novopharm litigation demonstrates that, even if a defendant is not making the patented compound, Rule 11 and the doctrine of patent misuse are not enough to prevent a generic company from being sued when it produces a compound that is supposedly covered by an expired patent, not a new patent on a polymorph of the compound. Indeed, even though SmithKline lost to Apotex in the district court, it actually scored a temporary victory by keeping Apotex off the market for an additional thirty months.[176]

One Drug, Many Pathways: Multiple Methods of Making a Drug

Hoffman-La Roche makes an anti-clotting agent called ticlopidine HCl, marketed as Ticlid.[177] Only one patent is listed in the Orange List, U.S. Patent No. 4,591,592 (“the Ticlid patent”), which expires in 2003. The Ticlid patent observes that ticlopidine HCl is a known compound but describes ways of stabilizing it by adding an acid to the pharmaceutical formulation.[178] Hoffman has six other patents claiming different methods of making ticlopidine HCl.[179] The last of these patents expires in 2013. The method patents turned out not to be enough to prevent other companies from entering the market because there were yet other methods of making the compound. Thus, the method patents failed to extend the life of the Ticlid patent. Indeed, even the Ticlid patent itself has failed to keep generic manufacturers off the market - there seem to be other ways to stabilize the active ingredient to the satisfaction of the FDA.

Method of manufacture patents are probably not a good strategy for extending the life of a patent. A drug does not arrive on the planet without a method of making it in bulk. New methods may be developed later, but the patent on the first method is likely to expire sometime before the expiration of the later patents, allowing generic manufacturers to enter the market. Even if the new methods are more efficient, the added efficiency probably does not reduce costs so much as to make the old method unprofitable. However, suppose that there is only one way of making a particular drug. It would still be difficult today to extend the patent life of the drug by delaying the patent on the method. The drug patent has to enable one skilled in the art to make and use the invention and thus must include the method. Even if separate patents, each having the same priority date and specification, were to issue claiming the drug and the method of making the drug, they would each expire 20 years after the priority date.

How Things Work: Claiming the Mechanism of Action of a Drug

We have already seen two examples of this. In the first, Eli Lilly was unable to enforce a patent on a serotonin inhibitor because it already had a patent on a compound which happened to be a serotonin inhibitor.[180] In the second, Allergan was unable to enforce a patent for a method of preventing injury to the optic nerve against a company who was inducing physicians to reduce intraocular pressure with the same drug .

The policy in both these cases is the same. The second patent would have extended the monopoly over the original drug and prevented generic manufacturers from entering the market. Just because the true mechanism of action was discovered well after the original drug patent issued did not entitle these manufacturers to a period of exclusivity in the original patent beyond the period permitted by the statute. At the end of the period of exclusivity, both the company and the government have fulfilled their ends of the bargain - full disclosure in return for a statutory exclusivity period. Once the drug patent expires, the patentee should not be able to prevent other companies from practicing the subject matter of the expired claims.

Geneva v. Glaxo SmithKline

The family tree, below, of the patents in this lawsuit resembles something out of the Wars of the Roses. [181] “USSN” indicates abandoned patent applications.

The English and Irish priority claims of the patents are not included in the table. The earlier patents (4,xxx,xxx) all issued in 1985 and expired in 2002, one year after the last of the later patents (6,xxx,xxx) issued. Both the later issued patents and earlier issued patents claim priority to the same 1975 application, even though some of these patents did not issue until after the turn of the century. All of the patents are entitled to a term of 17 years from issuance except for the starred patents, which are subject to terminal disclaimers. Still, the disclaimer is probably with respect to their sister patent, 6,031,093, which issued about the same time. The truncation of the patent term is thus only a matter of months.

The 6,xxx,xxx patents will not expire until 2018. That three different generic manufacturers came forward with declaratory judgment actions is hardly surprising. The later patents would have essentially stacked a second full patent term on top of Glaxo’s first patent term. In addition, the ‘720 patent recites a method of inhibiting bacterial beta-lactamase with clavulanic acid.[182] The later patents all recite pharmaceutical compositions containing clavulanic acid; some of the patents recite that the clavulanic acid inhibits beta-lactamase. These patents conflict directly with the policy proposed by this paper, that a later-issued patent should not prevent generic manufacturers from practicing the subject matter of an expired patent covering the same drug. It is impossible to inhibit beta-lactamase with clavulanic acid without administering a pharmaceutical composition containing clavulanic acid.

The court invalidated all of the later issued patents at the summary judgment stage, finding them to be “obvious variations” of the ‘720 patent.[183] But the court did not stop there. As it turned out, there were also two commonly owned but unrelated patents, 4,367,175 (“the clavulanate patent”)and 4,441,609 (“the ratio patent”), claiming a clavulanate salt and a particular ratio of clavulanic acid and amoxycillin, respectively. The ratio patent also disclosed, but did not recite, mixtures of clavulanate salts with mold-derived antibiotics.

The court found the ‘552 patent invalid for double patenting in view of the ratio patent.[184] The ‘552 recites use of a “synergistically effective amount of clavulanic acid,” and the court found that the ratios described in the specification as “synergistically effective” were within the range recited in the ratio patent.[185] The same analysis was used to invalidate the ‘352 patent, whose claims included the same phrase.[186]

The court employs a similar theory to invalidate the ‘720 for double patenting in view of the clavulanate patent. The ‘720 patent recites a method of inhibiting beta-lactamase by administering an effective amount of a clavulanic acid salt. The scope of this claim includes the salts described in the clavulanate patent. One of the policies behind the principle of double patenting is that the patentee should not be able to get a separate patent on claims that could have been presented in an earlier patent with an earlier expiration date. The court is critical of what it sees as Glaxo’s “an attempt to place a new face on clavulanic acid so that more patent protection can be attained.”[187]

The court may be confused as to the relationship between double patenting and anticipation, but it is dead on as to the policy behind the double patenting rules, and it is not happy with Glaxo (“GSK has had its full term of patent protection...and may not have more than the statutorily prescribed limit.”).[188] Each patent that was invalidated claimed a method of using or a pharmaceutical composition of a compound for which the use and the pharmaceutical composition were known, just not claimed. The court frowned on Glaxo’s attempt to extend the life of a composition by later claiming the thing the composition has been doing all along.

And Then There Were Two - A Generic Company Gets Its Own Patents

The case of aaiPharma provides a unique twist on the above discussion. aaiPharma is a generic manufacturer that produces omeprazole (Prilosec). In developing a generic product, it obtained three patents claiming, among other things, a pharmaceutical composition having a specific ratio of two isomers of the omeprazole molecule. aaiPharma believed that it would be necessary for generic manufacturers to use the techniques and products described by its patents to produce generic omeprazole and said so in several newspaper articles.[189] Dr. Reddy’s Laboratories (Dr. Reddy) was preparing a generic omeprazole product and filed a declaratory judgment action asserting noninfringement and invalidity.

That action is still pending. Nonetheless, it raises two interesting issues. The first is how AstraZeneca, the NDA holder, was able to produce a reasonable drug without the techniques that aaiPharma now says is necessary. If AstraZeneca did not use the patented methods to produce omeprazole, then the generic manufacturers should be able to use the same techniques to manufacture a generic product.[190] If the patented methods are essential, then AstraZeneca must have been using them, making the subject matter of the aaiPharma patents known or, at the very least, inherent. Additional suits challenging the validity of the aaiPharma patents are pending in New York.[191] The inevitability of using aaiPharma’s patented techniques will be an issue in all three cases.

Dr. Reddy also asserted state law unfair competition claims in its complaint. Dr. Reddy alleged that it had provided a sample of its generic product to aaiPharma, that aaiPharma violated an agreement it had with Dr. Reddy in testing the product to try to find a way to keep Dr. Reddy out of the market and shared the test results with AstraZeneca, which turned the data over to the FDA and asserted that Dr. Reddy’s product was not bioequivalent to Prilosec. The FDA then required Dr. Reddy to perform additional testing, which both delayed and increased the cost of its product launch.[192]

Similar collaborations between innovators and potential generic manufacturers have drawn the attention of the FTC and Congress. The arrangement aaiPharma appears to have had with AstraZeneca is only one such arrangement. The FTC is more concerned with agreements between the first generic manufacturer, which is entitled to a 180 day exclusivity period, and the patentee. The entitlement to the exclusivity period does not start the clock, but no one else can enter the market until the 180 day period runs. Patentees had been paying generic manufacturers to postpone market entry and maintain their market dominance. The FTC challenged this practice as a violation of the antitrust laws and is urging Congress to require that patentees and generic manufacturers disclose settlements to the FTC so it can evaluate them for antitrust problems.[193]

The practice challenged by the FTC is clearly anticompetitive; paying a company to stay out of a market is illegal market allocation.[194] The practice aaiPharma was accused of presents a less straightforward question.[195] The end result of aaiPharma’s actions was that the FDA required more testing of Dr. Reddy’s product. It can be argued that this benefits consumers because generic drug products need to be true bioequivalents of the patentee’s product. However, just because consumers are protected does not mean that aaiPharma was justified in its actions. Consumer benefits are not an automatic excuse for anti-competitive behavior.[196] Consumers are also protected when there is competition in a market that lowers prices for expensive drugs. A court could very well decide that it is not for aaiPharma to decide which consumer benefit is more important.

Heads I Win, Tails You Lose: aaiPharma and Eli Lilly

aaiPharma also has a patent, U.S. Patent No. 6,258,853, on a polymorph of Eli Lilly’s blockbuster drug Prozac. aaiPharma attempted to have Eli Lilly list the patent in the Orange Book so that it could reap the benefits of the 30 month stay. When Lilly refused, aaiPharma sued the FDA to have the patent listed. In a parallel to the Mylan case, the court found that there is no private cause of action against the FDA for failure to list patents on the Orange List.[197] The court found that the Hatch Waxman act requires that the patent be listed if it actually covers the drug.[198] It also found that neither Lilly nor the FDA could be forced to list the patent.[199]

The Fourth Circuit did observe that third party manufacturers are just as entitled to the 30 month stay as NDA holders. However, it also pointed out that the harm to the public from a refusal to list was less “obviously threatening.”[200] To the extent that the 30 month stay delays marketing of generic products more than a preliminary injunction issued as part of infringement litigation, consumers actually benefit from Lilly’s refusal to list. The only benefit from an Orange Book listing of aaiPharma’s patent would be to aaiPharma. In some situations, however, consumers can benefit from third party patents.

In some markets besides the pharmaceutical market, different companies get patents on their modifications and improvements to inventions. They can use these patents to increase their market share or as leverage to execute cross-license agreements. The Orange List increases the anticompetitive effects of a patent without necessarily promoting additional technological improvements that would benefit consumers. The failure to allow third parties to list or delist patents further distorts the incentives that Congress created for other fields. By providing additional leverage to the NDA holder that is not available to third parties, the inability of third parties to influence Orange Book listings also reduces the incentive to third parties to investigate and patent drug improvements. The development of a market for licenses in addition to a market for generic versions of the original off-patent drug would expand the supply of a particular drug beyond the generic version of the original drug and the NDA holder’s newly patented product to a pool of improved versions. This would increase both the size and the quality of the supply available to consumers.


There are two themes of this story that are benefiting consumers immensely. I have given short shrift to the immense benefits that these drugs have provided for patients. Prilosec and Nexium may be incredibly expensive. They have also literally changed the lives of many of the patients for whom they have been prescribed. For those of us who grew up with two choices of antihistamine, the current plethora of choices has transformed the spring from a season of tissues to a season of tulips. The incentives for companies to develop new drugs are not removed by the incentives to improve drugs once they are established.

Furthermore, there is a group of companies that are willing and able to challenge what it sees as invalid patents. The amounts of money at stake are sufficient for generic manufacturers to bring litigation to challenge invalid patents. In many areas, small companies may not have the wherewithal to challenge an unfairly granted patent, or the amount of money at stake may not be great enough to justify the expenses of a lawsuit. The willingness of generic manufacturers to sue provides backup to the Patent Office and ensures that consumers do not pay monopoly prices on drugs that should not have been patented.

Still, there are consequences of the interaction of the Patent Statute and the Hatch-Waxman Act that are detrimental to consumers. The ability to list new patents on the Orange List for chemical entities that the Patent Office considers patentably distinct from the originally patented drug forces generic manufacturers to make paragraph IV certifications where they would have been able to simply enter the market after expiry of the original patents. This permits drug manufacturers to file lawsuits to delay entry of the generic drugs for the duration of the 30 month stay. Even if the drug manufacturer eventually loses the lawsuit, the delay in generic entry increases the cost of the drug for consumers for an extra 2½ years.

While the proposed FDA listing regulations, which require patentees to identify the claims in patents that cover a particular drug, may reduce the number of lawsuits, it will not eliminate them entirely. If a patentee has a reasonable basis to bring a suit based on an ANDA, it presumably also has a reasonable basis to say that a particular (old) drug is included in the scope of a new claim.

In the meantime, my standard, that a new patent is contrary to neither patent nor drug policy if it allows a generic to enter the market, does not address the economic impact of the new patent. The money that is spent on litigation, even if the generic prevails, is money that is not spent to bring new drugs or drug improvements to the market. The money spent on advertising, while it educates consumers, creates information imbalances that increases drug expenditures by driving consumers to expensive, patented products. That some drug improvements do improve patient’s lives and that new drugs continue to enter the market indicate that the incentives created by the patent and drug approval regimes do provide consumer benefit. This benefit could be further optimized, but it is unclear whether the mechanism for this lies inside or outside the Patent Office and the FDA.

Appendix A

Relationship between patents [201]
Metabolite of Existing Drug
Schering Corp. v. Geneva Pharms., Inc. , 2002 U.S. Dist. LEXIS 14587 (D.N.J. Aug. 8, 2002)

In re Omeprazole Patent Litig ., 2001 U.S. Dist. LEXIS 7103 (S.D.N.Y. May 31, 2001)

Mylan Pharms., Inc. v. Thompson , 268 F.3d 1323 (Fed. Cir. 2001) (listing case, not infringement case)

Watson Pharms. v. Henney , 194 F.Supp.2d 442 (D. Md. 2001) (listing case, not infringement case)
New Therapeutic Function
Warner-Lambert Co. v. Apotex Corp. , 316 F.3d 1348, 1353 (Fed. Cir. 2003)

Allergan, Inc. v. Alcon Laboratories, Inc. , No. 02-1449 (Fed. Cir. March 28, 2003) (Fed. Cir. BBS)

Imperial Chemical Industries, PLC v. Danbury Pharmacal, Inc. , 777 F. Supp. 330 (D. Del. 1991)

Burroughs Wellcome Co. v. Barr Lab. , 40 F.3d 1223 (Fed. Cir. 1994)

Sanofi-Synthelabo v. Apotex Inc. , 2002 U.S. Dist. LEXIS 15345 (S.D.N.Y. Aug. 14, 2002)

Merck & Co., Inc. v. Barr Labs., Inc ., 179 F.Supp.2d 268 (D. Del. 2002)
Improvements to Composition or other Features
Abbott Labs. v. Baxter Pharm. Prods. , 2002 U.S. Dist. LEXIS 5478 (N.D. Ill. Mar. 26, 2002) (improved container)

Bayer AG v. Elan Pharm. Research Corp. , 212 F.3d 1241, (Fed Cir 2000) (specific surface area)

Glaxo Wellcome v. Pharmadyne Corp ., 32 F. Supp. 2d 265 (D. Md. 1998) (improved solvent)

Abbott Labs. v. TorPharm, Inc. , 300 F.3d 1367 (Fed. Cir. 2002) (different numbers of oligomers, but later patent subject to terminal disclaimer)

Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc. , 231 F.3d 1339 (Fed. Cir. 2000)

Merck & Co., Inc. v. Barr Labs., Inc ., 179 F.Supp.2d 268 (D. Del. 2002) (composition)

Mutual Pharm. Co. v. Hoechst Marion Roussel, Inc. , 1997 U.S. Dist. LEXIS 20038, (E.D. Pa. Dec. 17, 1997)
Extended Release Versions
Merck & Co. v. Mylan Pharms., Inc. , 190 F.3d 1335 (Fed. Cir. 1999)

SmithKline Beecham Corp. v. Excel Pharms., Inc ., 214 F. Supp. 2d 581 (E.D. Va. 2002)

Glaxo Wellcome v. Andrx Pharms ., 190 F. Supp. 2d 1354 (S.D. Fla. 2002)

Glaxo Wellcome Inc. v. Eon Labs Mfg. , 2002 U.S. Dist. LEXIS 14950 (S.D.N.Y. Aug. 13, 2002)

Andrx Pharms. v. Biovail Corp ., 276 F.3d 1368 (Fed. Cir. 2002)

Merck & Co., Inc. v. Barr Labs., Inc. , 179 F.Supp.2d 268 (D. Del. 2002)
Changes in Crystalline Structure
Glaxo Inc. v. Boehringer Ingelheim Corp ., 954 F. Supp. 469 (D. Conn. 1996)

Glaxo Inc. v. Novopharm Ltd ., 110 F.3d 1562 (Fed. Cir. 1997)

SmithKline Beecham Corp. v. Geneva Pharm., Inc ., 2001 U.S. Dist. LEXIS 17434 (E.D. Pa. Sept. 28, 2001)

Abbott Lab. v. Zenith Lab. , 934 F. Supp. 925 (N.D. Ill. 1995)

aaiPharma, Inc. v. Thompson , 296 F.3d 227 (4th Cir. 2002) (listing case)

Zenith Laboratories, Inc. v. Bristol-Myers Squibb Co. , 1991 U.S. Dist. LEXIS 18463 (D.N.J. Dec. 12, 1991)

SmithKline Beecham Corp. v. Apotex Corp ., No. 98 C 3952 (N.D. Ill. Mar. 3, 2003)
Multiple Methods of Producing Drug
Hoffman-La Roche Inc. v. Genpharm Inc. , 2000 U.S. Dist. LEXIS 8128 (D.N.J. May 3, 2000)

Dr Reddy’s Laboratories, Ltd. v. aaiPharma, Inc. , 2002 U.S. Dist. LEXIS 17287 (S.D.N.Y. Sept. 19, 2002)

Merck & Co., Inc. v. Barr Labs., Inc ., 179 F.Supp.2d 268 (D. Del. 2002)
Mechanism of Action as New Use
SmithKline Beecham Corp. v. Geneva Pharm., Inc. , 2001 U.S. Dist. LEXIS 17434 (E.D. Pa. Sept. 28, 2001)

Eli Lilly v. Barr Laboratories, Inc ., 251 F.3d 955 (Fed. Cir. 2001), reh’g and reh’g en banc denied (July 18, 2001)

Merck & Co., Inc. v. Barr Labs., Inc ., 179 F.Supp.2d 268 (D. Del. 2002)

Allergan, Inc. v. Alcon Laboratories, Inc ., No. 02-1449 (Fed. Cir. March 28, 2003) (Fed. Cir. BBS)

Appendix B

List of Cases Citing a Single Patent

3M v. Barr Labs. , 139 F. Supp. 2d 1109, 2001 U.S. Dist. LEXIS 8795 (D. Minn. 2001)

Bayer AG v. Biovail Corp. , 279 F.3d 1340, 2002 U.S. App. LEXIS 1925, 61 U.S.P.Q.2d (BNA) 1675 (Fed. Cir. 2002)

Bayer AG v. Schein Pharm. , 2000 U.S. Dist. LEXIS 20718 (D.N.J. Feb. 23, 2000)

Ben Venue Labs. Inc. v. Novartis Pharm. Corp. , 146 F. Supp. 2d 572, 2001 U.S. Dist. LEXIS 7015, 61 U.S.P.Q.2d (BNA) 1405 (D.N.J. 2001)

Bio-Technology Gen. Corp. v. Duramed Pharm., Inc. (Re: Bio-Technology) , 174 F. Supp. 2d 229, 2001 U.S. Dist. LEXIS 20078 (D.N.J. 2001)

Biovail Corp. v. Mylan Labs., Inc. , 2002 U.S. Dist. LEXIS 6726 (N.D. W. Va. Mar. 22, 2002) (antitrust case)

Bristol-Myers Squibb Co. v. Ben Venue Lab. , 90 F. Supp. 2d 540, 2000 U.S. Dist. LEXIS 3533 (D.N.J. 2000)

Bristol-Myers Squibb Co. v. Immunex Corp. , 86 F. Supp. 2d 447, 2000 U.S. Dist. LEXIS 2150 (D.N.J. 2000) (two patents related as parent and continuation)

Bristol-Myers Squibb Co. v. IVAX Corp. , 77 F. Supp. 2d 606, 2000 U.S. Dist. LEXIS 36, 2000-1 Trade Cas. (CCH) P72757 (D.N.J. 2000)

Bristol-Myers Squibb Co. v. Royce Lab. , 69 F.3d 1130 (Fed. Cir. 1995)

Eli Lilly & Co. v. Zenith Goldline Pharms., Inc. , 2001 U.S. Dist. LEXIS 18361 (S.D. Ind. Oct. 12, 2001)

Glaxo, Inc. v. Genpharm Pharmaceuticals, Inc. , 796 F. Supp. 872, 1992 U.S. Dist. LEXIS 9459 (E.D.N.C. 1992)

Hoechst Marion Roussel, Inc. v. Par Pharm. , 1996 U.S. Dist. LEXIS 11371, 39 U.S.P.Q.2d (BNA) 1363 (D.N.J. Mar. 14, 1996)

In re '639 Patent Litig. , 154 F. Supp. 2d 157, 2001 U.S. Dist. LEXIS 12593 (D. Mass. 2001)

Key Pharms. v. Hercon Lab. Corp. , 981 F. Supp. 299, 1997 U.S. Dist. LEXIS 16046 (D. Del. 1997)

Mead Johnson & Co. v. Barr Lab., Inc. , 38 F. Supp. 2d 289, 1999 U.S. Dist. LEXIS 2546 (S.D.N.Y. 1999)

Pfizer Inc. v. Novopharm Ltd. , 2001 U.S. Dist. LEXIS 7171 (N.D. Ill. May 2, 2001)

Pfizer, Inc. v. Elan Pharmaceutical Research Corp. , 812 F. Supp. 1352, 1993 U.S. Dist. LEXIS 1685, 27 U.S.P.Q.2d (BNA) 1161 (D. Del. 1993)

Pharmacia & Upjohn Co. v. Mylan Pharms. , 5 F. Supp. 2d 399, 1998 U.S. Dist. LEXIS 6627, 46 U.S.P.Q.2d (BNA) 1831 (N.D. W. Va. 1998)

Upjohn Co. v. Mova Pharm. Corp. , 31 F. Supp. 2d 211, 1998 U.S. Dist. LEXIS 19179, 48 U.S.P.Q.2d (BNA) 1357 (D.P.R. 1998)

Zeneca Ltd. v. Mylan Pharms. , 968 F. Supp. 268, 1997 U.S. Dist. LEXIS 9017 (W.D. Pa. 1997)

Zeneca Ltd. v. Pharmachemie B.V. , 37 F. Supp. 2d 85, 1999 U.S. Dist. LEXIS 2951 (D. Mass. 1999)

[1] Hanlin v. U.S., 316 F.3d 1325 (Fed. Cir. 2003).

[2] Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003).

[3] 21 U.S.C.A. § 355(c)(3)(D)(iii) (1995).


[5] Id.

[6] Id. at 516.

[7] Id.

[8] Id. at 620.

[9] Id. at 454, citing 21 C.F.R. § 202.1(6)(i) (1969).

[10] 21 U.S.C.A. § 355(c)(3)(D)(i) (1995).

[11] 35 U.S.C. § 154(a)(2), (c)(1) (2000).

[12] 35 U.S.C. § 156 (2000). There are exceptions to these general rules of how to calculate patent term, but I will outline these as necessary.

[13] See GENERIC DRUG ENTRY PRIOR TO PATENT EXPIRATION: AN FTC STUDY (2002) at 4 (hereinafter, “FTC Study”).

[14] 21 U.S.C.A. § 355(j)(2)(A)(iv) (1995).

[15] 35 U.S.C. 271(e)(1) (2000), see also Amgen, Inc. v. Hoechst Marion Roussell, Inc., 3 F.Supp.2d 104 (D.Mass. 1998).

[16] 21 U.S.C.A. § 355(j)(6)(A) (1995). The Orange List actually includes a list of all FDA approved drugs, not just patented drugs.

[17] 21 U.S.C.A. § 355(b)(2)(A) (1995).

[18] 21 U.S.C.A. § 355(b)(2)(C) (1995).

[19] 35 U.S.C. § 271(e)(2) (2000).

[20] 21 U.S.C.A. § 355(b)(2)(C) (1995).

[21] Reebok Int'l v. J. Baker, Inc., 32 F.3d 1552, 1556 (Fed. Cir., 1994).

[22] 21 U.S.C.A. § 355(b)(2)(B) (1995).

[23] FTC Study at iii-iv.

[24] Id.

[25] Id. at ii.

[26] S. 812, 107th Cong. (2002).

[27] Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001).

[28] Id. at 1327, citing 27 C.F.R. § 314.53(f) (2001).

[29] Thompson , 268 F.3d 1323.

[30] FTC Study at 45. See Eastern R.R. Presidents Conf. v. Noerr Motor Freight, 365 U.S. 127 (1961).

[31] Id. , citing In re Buspirone Patent Litigation/In re Buspirone Antitrust Litigation, 185 F.Supp.2d 363 (S.D.N.Y 2002) (hereinafter, Buspirone ).

[32] Walker Process Equipment, Inc. v. Food Machinery and Chemical Corp., 382 U.S. 172 (1965).

[33] Buspirone , 185 F.Supp.2d 363. The original patent, which was about to expire, claimed the composition of buspirone HCl. The patent whose listing on the Orange List led to the Buspirone case claims a metabolite of buspirone HCl, not buspirone itself. The court notes that claims covering buspirone HCl were deleted during prosecution of the later patent. Id . at 374.

[34] See Thompson , 268 F.3d 1323; Watson v. Henney, 194 F.Supp.2d 442 (D. Md. 2001).

[35] Applications for FDA Approval to Market a New Drug: Patent Listing Requirements and Application of 30-Month Stays on Approval of Abbreviated New Drug Applications Certifying that a Patent Claiming a Drug is Invalid or Will Not be Infringed, 67 Fed. Reg. 65,448 (proposed October 24, 2002) (hereinafter, FDA Notice).

[36] Id . at 65,449, citing FTC Study at v and A39-45.

[37] Id. at 65,454-65,456.

[38] Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, reh’g. denied 468 U.S. 1227 (1984).

[39] The declaration reads “The undersigned declares that Patent No. covers the formulation, composition, and/or method of use of (name of drug product). This product is (currently approved under section 505 of the Federal Food, Drug and Cosmetic Act ) [or] (the subject of this application for which approval is being sought ). 21 C.F.R. §314.53(c)(2)(i) (2001), (emphasis in original).

[40] FDA Notice, 67 Fed. Reg. at 65,454.

[41] 35 U.S.C. § 271(a) (2000).

[42] Einer Elhauge, Making Sense of Antitrust Petitioning Immunity , 80 CAL. L. REV. 1177 (1992); See also Buspirone, 185 F.Supp.2d 363, 370 (S.D.N.Y. 2002).

[43] See U.S. v. United Shoe Machinery Corp., 110 F.Supp. 295 (D. Mass. 1953), aff’d per curiam , 347 U.S. 521 (1954).

[44] Buspirone, 185 F.Supp.2d 363.

[45] Professional Real Estate Investors v. Columbia Pictures Industries, 508 U.S. 49 (1993).

[46] The Federal Circuit hears patent claims brought according the “well-pleaded complaint” rule. Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002).

[47] Atari Games Corp. v. Nintendo of America, Inc. , 897 F.2d 1572 (Fed. Cir. 1990).

[48] Id.

[49] Id. at 1576.

[50] Madey v. Duke University, 307 F.3d 751 (Fed. Cir. 2002).

[51] 35 U.S.C. § 271(e)(1) (2000).

[52] Some of these are described below.

[53] I am grateful to Ken Frasier of the General Counsel’s Office at Merck for pointing this out to me.

[54] 35 U.S.C. § 101 (2000).

[55] In re Longi, 759 F.2d 887 (Fed.Cir.1985).

[56] See 35 U.S.C. § 154(c)(1) (2000).

[57] 35 U.S.C. § 154(a)(2) (2000).

[58] For example, a U.S. patent application using the same text as an earlier filed U.S. application may claim the priority date of the earlier-filed application under 35 U.S.C. § 120. The priority claim sets the qualification date for other references that may be used to demonstrate that the claims are not patentable. References dated after the priority date are not considered prior art.

[59] The Patent Office will still require that the application and the patent be commonly owned to prevent an infringer from being sued by two parties for the same act.

[60] 35 U.S.C. § 112 (2000).

[61] 35 U.S.C. §§ 102, 103 (2000).

[62] Eli Lilly v. Barr Laboratories, Inc., 251 F.3d 955 (Fed. Cir. 2001), reh’g and reh’g en banc denied (2001).

[63] Lilly , 251 F.3d at 968, note 5 (“A patent owner cannot avoid double patenting by disclaiming the earlier patent.”). A disclaimer is a statement by a patentee that it will not enforce a patent. In this case, Lilly would have disclaimed the portion of the patent term of the serotonin uptake patent that was after the expiration date of the anxiety patent.

[64] Lilly , 251 F.3d at 969-971. The doctrine describing this analysis is inherent anticipation and is discussed below.

[65] Lilly , 251 F.3d at 958. Lilly actually disclaimed the anxiety patent, essentially publicly announcing that it would not enforce the patent. Id.

[66] Windsurfing Int’l, Inc v. AMF Inc., 782 F.2d 995 (Fed. Cir. 1986).

[67] Virginia Panel Corp. v. MAC Panel Corp., 133 F.3d 860 (Fed. Cir. 1997).

[68] Id. at 869.

[69] Windsurfing , 782 F.2d 995.

[70] 35 U.S.C. § 271(d) (2000).

[71] See International Salt Co. v. U.S., 332 U.S. 392 (1947) (describing illegal tying in the antitrust context).

[72] See Atari Games Corp. v. Nintendo of America, Inc. , 897 F.2d 1572 (Fed. Cir. 1990).

[73] These cases are listed and categorized in Appendix A.

[74] These cases are listed in Appendix B.

[75] The procedure is called reexamination and is described in 35 U.S.C. § 301, et. seq. (2000).

[76] See Seth Shulman, Going After Mom and Pop , TECHNOLOGY REVIEW, Mar. 2003, at 75.

[77] 35 U.S.C. § 282 (2000).

[78] Actually, the patents will expire earlier if the maintenance fees required by 35 U.S.C. § 41(b) are not paid. However, it is a fair guess to say that the fees will be paid so long as the patent claims hold up in court.

[79] The cases from the 2002 search are listed by category in Appendix A. Not all of these cases have been decided on the merits.

[80] See note 48, supra.

[81] See, e.g. , U.S. Patent No. 5,443,036 (issued August 22, 1995) (reciting a method of exercising a cat using a laser pointer).

[82] Neil Swidey, The Costly Case of the Purple Pill , BOSTON GLOBE MAGAZINE , November 17, 2002.

[83] 35 U.S.C. § 154(c) (2000).

[84] 35 U.S.C. § 156 (2000).

[85] The Schering court notes that Schering received an additional 6 months extension but does not say why. Schering Corp. v. Geneva Pharms., Inc., 2002 U.S. Dist. LEXIS 14587 at *4, (D.N.J. Aug. 8, 2002).

[86] It is produced that way in the body as well, which is why Schering lost its lawsuit against Geneva. But I am giving away the punchline.

[87] Id. at *8.

[88] 35 U.S.C. § 102(b) (2000).

[89] Schering , 2002 U.S. Dist. LEXIS 14587 at *20, citing Continental Can Co. USA v. Monsanto Co., 948 F.2d 1264 (Fed. Cir. 1991).

[90] Id.

[91] In re Omeprazole Patent Litig., 2001 U.S. Dist. LEXIS 7103 (S.D.N.Y. May 31, 2001).

[92] Id. at *12, citing Atlas  Powder Co. v. Ireco, Inc., 190 F.3d 1342, 1347 (Fed. Cir. 1999).

[93] The standard for what is patentable includes “anything under the sun made by man.” Diamond v Chakrabarty, 447 U.S. 303, 309 (1980).

[94] See 35 U.S.C. § 103 (2000).

[95] See 21 U.S.C.A. §§ 321(n), 352(f) (1995).

[96] 35 U.S.C. § 271(a) (2000).

[97] 35 U.S.C. § 271(b) (2000).

[98] Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1353 (Fed. Cir. 2003).

[99] See, eg . Welty, et al ., Potential treatment of amyotrophic lateral sclerosis with gabapentin: a hypothesis , 29 ANN. PHARMACOTHER. 1164 (1995).

[100] This paper is not about off-label uses of drugs, but it is important to note the dismal prospects of FDA approval of gabapentin for use against ALS in the face of a failed phase III trial. Miller, et al ., Phase III randomized trial of gabapentin in patients with amyotrophic lateral sclerosis, 56 NEUROLOGY 843 (2001); See also Brigell, et al., ALS defeats gabapentin: reflections on another failed treatment, 57 NEUROLOGY 1524 (2001). The jury is still out on gabapentin’s effectiveness against Parkinson’s Disease. See Faulkner, et al ., Gabapentin for the treatment of tremor , 37 ANN. PHARMACOTHER . 282 (2003); Warner-Lambert , 316 F.3d at 1365, note 8.

[101] This is the way the question was presented in the oral argument. The Orange List entry for gabapentin further includes U.S. Patent No. 6,054,482, which does not expire until 2017.

[102] An infringer does not have to know that s/he is infringing to be liable. 35 U.S.C. § 271 (2000).

[103] LAWRENCE H. TRIBE, AMERICAN CONSTITUTIONAL LAW § 6-28 at 1172, § 6-29 at 1182-1184 (3rd ed. 2000).

[104] See Missouri v. Jenkins, 495 U.S. 33 (1990) (holding that a federal district court could not force a state to enact a tax).

[105] College Sav. Bank v. Florida Prepaid Postsecondary Educ., 527 U.S. 666 (1999), indicating that the 11th amendment prohibition on lawsuits for damages against the states applies to suits under the patent statute.

[106] 200 F.Supp.2d 1219 (C.D. Cal. 2002).

[107] Id. at 1221.

[108] Id. at 1222-1223; See 21 U.S.C.A. §§355(c)(3)(D)(2) (1995).

[109] Id. at 1233.

[110] See id. at 1230, note 9, citing 21 C.F.R. § 314.53(b) ("for patents that claim a method of use, the applicant shall submit information only on those patents that claim indications or other conditions of use of a pending or approved [new drug] application.").

[111] Id. at 1233, note 14.

[112] Allergan, Inc. v. Alcon Laboratories, Inc., No. 02-1449 (Fed. Cir. March 28, 2003) (Fed. Cir. BBS).

[113] Id . at 25-26 (J. Schall, concurring in the judgment).

[114] Id. at 11, note 5.

[115] Id. at 28 (J. Schall, concurring in the judgment).

[116] Id. at 27 (J. Schall, concurring in the judgment).

[117] Glaxo Wellcome v. Pharmadyne Corp., 32 F.Supp.2d 265, 269 (D. Md. 1998).

[118] Id . at 273-274.

[119] Id . at 277-278.

[120] Id. at 283.

[121] Id . at 287; see also Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 607 (1950) (holding that a product infringes under the doctrine of equivalents if it performs the same function in the same way to achieve the same result).

[122] Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997).

[123] See Festo Corp. v. Shoketsu Kinzoku Kogyu Kabushiki Co., 122 S.Ct. 1831 (2002).

[124] Zantac is actually an exception to this. Zantac is one of four so-called H2 antagonists. The others are marketed at Tagamet (SmithKline Beecham, now part of Glaxo), Pepcid (Merck), and Axid (Eli Lilly). Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc. , 231 F.3d 1339, 1342 (Fed. Cir. 2000).

[125] Festo , 122 S.Ct. 1831.

[126] “In the context of this case, additional factors that need to be considered under the doctrine include: 1) whether persons skilled in the art knew that propylene glycol was interchangeable with ethanol; 2) whether there is substantial evidence that Pharmadyne simply copied the '249 patent; 3) whether there is evidence of independent development by Pharmadyne; and 4) whether Pharmadyne designed around the '249 patent.” Pharmadyne , 32 F.Supp.2d at 284.

[127] U.S. Patent No. 6,074,688 (issued June 13, 2000). See column 1, lines 18-22.

[128] See Abbott Labs. v. Baxter Pharm. Prods., 2002 U.S. Dist. LEXIS 5478 at 113 133 143 173 183 193 223 233 243 253 283 303 313 323 333 343 363 383 393 403 413 453 493 513 523 533 553 563 583 593 613 623 633 643 653 663 673 693 703 713 723 73 733 753 763 783 793 803 83 93 (N.D. Ill. Mar. 26, 2002).

[129] 212 F.3d 1241 (Fed Cir 2000).

[130] A coating provides an initial quick release of the drug, followed by sustained release from the core of the pill. U.S. Patent No. 4,892,741 (issued January 9, 1990).

[131] Bayer , 212 F.3d at 1245.

[132] Id. at 1252. The courts’ reasoning in this case is similar to that in Pharmadyne. The amendment of the claims to decrease the range was found to prevent Bayer from asserting a that crystals with a specific surface area greater than 4 m2 /g were within the scope of equivalents of the claims.

[133] See 35 U.S.C. § 271(e)(1) (2000) (creating a safe harbor from infringement for acts related to the preparation of an ANDA).

[134] U.S. Patent No. 5,427,798 (issued June 27, 1995) (“the HPMC patent”). Bupriopion HCl is marketed as the antidepressant Wellbutrin and the anti-smoking aid Zyban.

[135] SmithKline Beecham Corp. v. Excel Pharmaceuticals, Inc., 214 F.Supp.2d 581 (E.D. Va. 2002).

[136] Id. at *13. Glaxo merged with Burroughs Wellcome after the patent issued.

[137] Id . at 31, citing Festo Corp. v. Shoketsu Kinzoku Kogyu Kabushiki Co., 122 S.Ct. 1831 (2002); see also Merck & Co., Inc. v. Mylan Pharms., Inc., 190 F.3d 1335 (Fed. Cir. 1999).

[138] Glaxo Wellcome Inc. v. Eon Labs Mfg., 2002 U.S. Dist. LEXIS 14950 (S.D.N.Y. Aug. 13, 2002). A broadening reissue may be filed within two years of the issuance of the patent. 35 U.S.C. § 251 (2000). There are protections for prior users of the technology who find themselves infringing the broader claims. 35 U.S.C. 252.

[139] Id. at *4.

[140] See U.S. Patent No. RE 33,994 (issued Jul. 14, 1992).

[141] Eon, 2002 U.S. Dist. LEXIS 14950 at *17. This is the benefit to the public from a patent. In return for a temporary monopoly, the patentee teaches the world how to practice the invention.

[142] In re Vaeck, 947 F.2d 488, 493, note 20 (Fed. Cir. 1991).

[143] Eon, 2002 U.S. Dist. LEXIS 14950 at *16,17; See United States v. Teletronics, Inc., 857 F.2d 778 (Fed. Cir. 1988), cert. denied 490 U.S. 1046 (1989) (“The amount of experimentation required for a skilled artisan to practice the subject matter of a patent should not be “unduly extensive”).

[144] Glaxo Wellcome, Inc. v. Andrx Pharmaceuticals, 190 F.Supp.2d 1354 (S.D. Fla. 2002).

[145] Id. at 1360.

[146] Id. at 1364-1365.

[147] Paxil is the drug used for the explanation of patent term, supra. SmithKline, now Glaxo SmithKline, has over 100 patent applications on various polymorphs of Paxil. SmithKline Beecham Corp. v. Apotex Corp., No. 98 C 3952 (N.D. Ill. Mar. 3, 2003), slip op at 19.

[148] See SmithKline Beecham Corp. v. Geneva Pharm., Inc., 2001 U.S. Dist. LEXIS 17434 (E.D. Pa. Sept. 28, 2001).

[149] See Vergouwen, et al ., Adverse effects after switching to a different generic form of paroxetine: paroxetine mesylate instead of paroxetine HCl hemihydrate , 146 NED. TIJDSCHR. GENEESKD. 811 ( 2002).

[150] See U.S. Patent No. 6,113,944 (issued Sept. 5, 2000), disclosing a method of making paroxetine such that the pills do not turn pink over time.

[151] Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1353, note 1 (Fed. Cir. 2003); U.S. Patent No. 5,789,449 (issued Aug. 4, 1998); 6,121,291 (issued Sept. 19, 2000).

[152] U.S. Patent No. 4,672,133 (issued June 9, 1987) (“the Form 2 patent”).

[153] Glaxo Inc. v. Novopharm Ltd., 110 F.3d 1562 (Fed. Cir. 1997). The Form 2 patent expired in 2002.

[154] Id.

[155] See id. at 1566, note 1.

[156] Glaxo, Inc. v. Boehringer Ingelheim Corp., 954 F. Supp. 469 (D. Conn. 1996).

[157] Id. at 473.

[158] Id. at 474. In footnote 7, the court declined to determine how much Form 2 Glaxo would have to find to prove infringement. Id.

[159] Novopharm, 110 F.3d at 1565-1566.

[160] Boehringer, 954 F. Supp. at 474-475.

[161] Id. at 474, citing Glaxo Inc. v. Novopharm Limited, 931 F.Supp. 1280 (E.D.N.C.1996), aff’d. on other grounds , Novopharm , 110 F.3d 1562.

[162] U.S. Patent No. 4,521,431, column 8, lines 1-4.

[163] Manual of Patent Examination and Procedure Section 2111.03 (August, 2001).

[164] See Novopharm , 110 F.3d 1562.

[165] See SRI International v. Matsushita Elec. Corp., 775 F.2d 1107 (Fed. Cir. 1985) (in banc).

[166] SmithKline Beecham Corp. v. Apotex Corp., No. 98 C 3952 (N.D. Ill, Mar. 3, 2003), slip op. at 22; U.S. Patent No. 4,721,723 (issued Jan. 26, 1988). Judge Posner was sitting in the district court by designation. Because Judge Posner is a circuit judge, this may be the only patent case he ever hears. He made the most of it, outlining four different claim constructions, under only one of which Apotex might infringe, except that the patent would be invalid, two affirmative defenses, and several theories under which Apotex would not have any liability even if the patent were valid and infringed.

[167] U.S. Patent No. 4,007,196 (issued Feb. 8, 1977).

[168] SmithKline v. Apotex, slip op . at 23.

[169] Id. at 28.

[170] Id. at 33.

[171] Id. at 34.

[172] The case includes a description of this admittedly weird phenomenon starting at page 11.

[173] See id. at 64.

[174] See FDA Notice, 67 Fed. Reg. at 65448, 65452.

[175] See Glaxo Inc. v. Novopharm Ltd., 110 F.3d 1562 (Fed. Cir. 1997).

[176] See SmithKline v. Apotex , No. 98 C 3952 (N.D. Ill, Mar. 3, 2003), discussed supra.

[177] Hoffman-La Roche Inc. v. Genpharm Inc., 2000 U.S. Dist. LEXIS 8128 (D.N.J. May 3, 2000).

[178] U.S. Patent No. 4,591,592 (issued May 27, 1986).

[179] See U.S. Patent No. 4,906,756 (issued Mar. 6, 1990); U.S. Patent No. 4,997,945 (issued Mar. 5, 1991); U.S. Patent No. 5,068,360 (issued Nov. 26, 1991); U.S. Patent No. 5,191,090 (issued Mar. 2, 1993); U.S. Patent No. 5,342,953 (issued Aug. 30, 1994); U.S. Patent No. 5,516,910 (issued May 14, 1996).

[180] Eli Lilly v. Barr Laboratories, Inc., 251 F.3d 955 (Fed. Cir. 2001), reh’g and reh’g en banc denied ( July 18, 2001).

[181] See id. at 959 (“After its filing, the [parent] application engendered a progeny of divisional applications, continuation applications, and patents that rivals the Hapsburg legacy.”). Additional Paxil families and patents have already turned up in several other examples in this paper (patent families and polymorphs), supra.

[182] Beta-lactamase is produced by bacteria and reduces the effectiveness of the penicillin family of antibiotics. The ‘352 and ‘552 patents recite combinations of clavulanic acid with amoxycillin and penicillin, respectively.

[183] Geneva Pharmaceuticals, Inc. v Glaxo SmithKline PLC, 2002 WL 1802991 at 113 133 143 173 183 193 223 233 243 253 283 303 313 323 333 343 363 383 393 403 413 453 493 513 523 533 553 563 583 593 613 623 633 643 653 663 673 693 703 713 723 73 733 753 763 783 793 803 83 93 (E.D.Va. filed July 19, 2002).

[184] Id. at *8. It also found the ‘552 patent obvious and anticipated by the ratio patent under the doctrine of inherent anticipation. This belt and suspenders approach would be unnecessary except that the court includes no discussion of why the ratio patent is qualified as “102 art” or “103 art” even though its filing date, 1978, is after the priority date, 1974, of the ‘552 patent. See 35 U.S.C. § 102. This might actually be the case - the ‘552 is only entitled to the priority date to the extent that the claims are supported by the priority applications - but the court should have addressed it. See note 57, supra . The double patenting analysis does not depend on relative filing dates in the same manner. T. Juneau and J. Goldberg, Eli Lilly v. Barr Labs: Is a New Use of an Old Compound no Longer Patentable? 85 JPTOS 91 (2003).

[185] Geneva , 2002 WL 1802991 at *7.

[186] Id. at *9.

[187] Id. at *11.

[188] Id. at *13.

[189] Dr Reddy’s Laboratories, Ltd. v. aaiPharma, Inc., 2002 U.S. Dist. LEXIS 17287 at 108 118 138 158 188 218 228 238 248 258 278 288 348 358 368 378 38 398 408 438 448 458 468 488 508 518 528 598 608 618 628 638 658 668 688 718 768 778 788 798 88 98 (S.D.N.Y. Sept. 19, 2002).

[190] This assumes that the generic manufacturers are able to develop a manufacturing method. While the AstraZeneca patents are required to tell others how to make and use omeprazole, they are not required to tell a manufacturer how to make commercial quantities of the drug. See 35 U.S.C. § 112 (2000).

[191] Dr. Reddy’s, 2002 U.S. Dist. LEXIS 17287 at *13.

[192] Id. at *39.

[193] FTC study at vii.

[194] See Palmer v BRG of Georgia, 498 U.S. 46 (1990).

[195] Indeed, Dr. Reddy asserted state law tort and unfair competition claims, not federal antitrust claims.

[196] See U.S. v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940); National Collegiate Athletic Assn. v. Board of Regents of the Univ. of Oklahoma, 468 U.S. 85 (1984).

[197] aaiPharma, Inc. v. Thompson, 296 F.3d 227 (4th Cir. 2002); see Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001).

[198] aaiPharma. 296 F.3d at 235, 236, citing 21 U.S.C. § 355(c)(2).

[199] aaiPharma. 296 F.3d 227; see also Andrx Pharm., Inc. v. Biovail Corp. , 276 F.3d 1368 (Fed.Cir.2002) (finding that a third party cannot sue an NDA holder to delist a patent from the Orange Book).

[200] aaiPharma, 296 F.3d at 236. Indeed, the court had very little sympathy for aaiPharma. aaiPharma did not have a generic version of Prozac ready to market when it brought its case. The court says in a footnote, “The record does not disclose the reasons for aaiPharma's avid interest in securing the thirty-month stay. We decline to speculate about aaiPharma's motives as they are not material to the resolution of this case.” Id . at 233, note 3.

[201] The cases listed here include all the cases involving multiple patents from my 1992 search and a few extras I picked up along the way. A few cases are listed in multiple categories, either because there were more than two patents involved in the case or because the relationship between the patents fell in several categories. See note 77, supra.