In the US, all parties with substantial rights must be named for plaintiffs to have statutory standing in patent infringement actions. Generally, a party with substantial rights will not have statutory standing if any co-owner is not named in the suit (AntennaSys, Inc v AQYR Techs, Inc, 976 F.3d 1374, 1378 (Fed Cir 2020)).
Those with less than all substantial rights in patents may need permission from the patentees to bring suit. Non-exclusive licensees need to bring suit with the licensor to have standing. However, exclusive licensees can establish standing alone (Aspex Eyewear, Inc v Miracle Optics, Inc, 434 F.3d 1336, 1340 (Fed Cir 2006)). The relevant licence does not need to be registered but the licensee must, at minimum, hold the exclusive right to sue. The Federal Circuit also requires joinder of any exclusive licensee, given that exclusive licensees are usually necessary parties in actions in equity (BASF Plant Sci, LP v Nuseed Americas Inc, 2017 WL 3573811, at *5 (D Del 17 August 2017)). Generally, courts will also join a patentee, either voluntarily or involuntarily, in any patent infringement suit brought by a party with fewer than all substantial patent rights (Lone Star Silicon Innovations LLC v Nanya Tech Corp, 925 F.3d 1225, 1238 (Fed Cir 2019)).
Those seeking freedom to operate (FTO) around another’s patents can file a declaratory judgment action. Federal courts have discretion as to whether to exercise jurisdiction over a declaratory judgment action under 28 USC Section 2201, even when the suit satisfies subject matter jurisdictional requirements (Wilton v Seven Falls Co, 515 US 277, 282 (1995)). The scope of this discretion is unclear, but the Federal Circuit has emphasised that there must be well-founded reasons to decline exercising jurisdiction over a declaratory judgment action (Mitek Sys, Inc v United Services Auto Ass’n, 34 F.4th 1334, 1347 (Fed Cir 2022)).
To establish standing in declaratory judgment actions:
There is no standing requirement for an inter partes review (IPR) before the Patent Trial and Appeal Board. However, there is a standing requirement to appeal a PTAB’s decision in an IPR. Specifically, parties appealing to the Federal Circuit must show (and maintain throughout the appeal):
Such standing may be lost if there is an intervening abandonment of the controversy, such as settlement (ModernaTx, Inc v Arbutus Biopharma Corp, 18 F.4th 1352, 1362 (Fed Cir 2021)). Therefore, a petitioner may not be able to challenge the PTAB’s decision – even if they could have at the outset of the petition.
Typically, the entities named in life sciences lawsuits are those that are named as sponsors of US Food and Drug Administration (FDA) filings such as New Drug Applications (NDAs), Abbreviated New Drug Applications (ANDAs), abbreviated Biologics Licence Applications (aBLAs), and Biologics Licence Applications (BLAs). In a typical Hatch-Waxman suit, for example, patentees will sue the entity that filed the ANDA.
Beyond this, determining which entities will be sued is fact-dependent. Entities such as suppliers, distributors and doctors are rarely sued in typical Hatch-Waxman or Biologics Price Competition and Innovation Act (BPCIA) actions because these actions often occur before the accused products are approved and distributed. Suppliers are more likely, for example, to be the subject of subpoenas for discovery where the accused product is not approved.
PIs are available in ANDA proceedings. Under the ANDA framework, a 30-month stay ensues if a brand product patent owner files an infringement suit against generics applicants within 45 days of receiving an ANDA notification (21 USC Section 355(j)(5)(B)). In addition, infringement by submitting an ANDA under Section 505(j) of the Federal Food, Drug and Cosmetic (FD&C) Act could result in a court-ordered delay of product approval until at least the expiration of the infringed patent under 35 USC Section 271(e)(4)(A).
Otherwise, PIs are ordered if the four-factor test is met. A plaintiff must establish that:
The Federal Circuit has held that “no one factor, taken individually, is necessarily dispositive” (Chrysler Motors Corp v Auto Body Panels of Ohio, Inc, 908 F.2d 951, 953 (Fed Cir 1990)). A strong showing of likelihood of success and irreparable harm can overcome a weaker showing, for example, on balance of hardship or adverse public interest.
Demonstrating a tendency that is somewhat peculiar to life sciences cases, a court may consider whether the accused product provides a patient population with a unique role that cannot be replaced (Hybritech Inc v Abbott Laboratories, 849 F.2d 1446, 1458 (Fed Cir 1988)). On the other hand, courts may also consider whether an ANDA filer’s launch will irreparably harm the market otherwise dominated by a brand product (Abbott Lab’ys v Sandoz, 544 F.3d 1341, 1361-62 (Fed Cir 2008)). Factors such as the impact on patient populations and changes in patentees’ market shares are considered even if the subject matter of the cases differs (eg, cases involving pharmaceutical products or medical devices). See, for example, Abbott, 544 F.3d at 1361-62 and Hologic, Inc v Senorx, Inc, 2008 WL 1860035 at *19 (ND Cal 25 April 2008).
Courts may issue preliminary injunctions (PIs) only after notice has been provided under FRCP 65. Alleged infringers can file evidence to oppose motions for PIs. The average timing from filing to a decision for a PI varies across districts – for instance, decisions take on average four-and-a-half months in the District of Delaware, 2.2 months in the Northern District of California, and 3.7 months in the Eastern District of Texas.
When an injunction is requested also depends on the type of action. Given that the “irreparable harm” factor considers the immediacy of the harm, PIs in ANDA actions are often filed after the expiration of the 30-month stay and approval of the accused product if there is evidence of potential imminent launch by the generic challenger.
aBLA applicants must provide notice to the sponsor 180 days before commercial marketing begins, but this notice may be provided after filing an aBLA — even before the applicant receives FDA approval to license its biosimilar (Sandoz Inc v Amgen Inc, 137 S Ct 1664, 1677 (2017)). However, this notice alone may not be sufficient to establish “immediacy” in harm. See Genentech, Inc v Amgen Inc, 2019 WL 3290167 at *2–3 (D Del 18 July 2019).
Unlike Hatch-Waxman actions, BPCIA actions involve different phases. The first phase ensues if the biosimilar applicant initiates the “patent dance” – ie, a statutory system established to facilitate information exchange between the applicant and patent owner before an action starts (42 USC Section 262(l)(2)). During the patent dance, parties identify which patents will be litigated as part of the first phase and which patents will be subject to dispute in the second phase in accordance with 42 USC Section 262(l)(3). The second phase starts after the reference product sponsor (RPS) receives the 180-day notice; at this point, the RPS can seek a PI to prohibit the manufacture or sale of the biosimilar (42 USC Section 262(l)(8)(B)). The RPS may assert any patents identified in the patent dance. However, if a PI is not granted at this time, the biosimilar can launch during litigation.
Protective letters are not filed in the US.
In the US, infringement and validity proceedings are generally not bifurcated, and they tend to be handled together. Sometimes, the issue of damages may be handled separately ‒ either upon application or by sua sponte order of a court.
It is possible to file patent actions while the Patent Office is conducting IPR. It is also possible to file for an IPR during the pendency of district court proceedings on patents. The cancellation of patents by IPR will render moot the parallel district court action (Dragon Intell Prop, LLC v Dish Network LLC, 956 F.3d 1358, 1361 (Fed Cir 2020)). As a result, district court cases are often ‒ although not always ‒ stayed if there is a parallel IPR proceeding.
In 2017, the Supreme Court made it more difficult to maintain a laches defence in patent infringement cases (SCA Hygiene Prods Aktiebolag v First Quality Baby Prods, LLC, 137 S Ct 954 (2017)). However, pursuant to 35 USC Section 286, a patentee may generally only reach back six years prior to the filing of the complaint for infringement damages.
Parties in patent proceedings are notified of the action by service. Service is governed by Federal Rules of Civil Procedure (FRCP) 4 and 5, as well as local rules of the district in which the case is filed.
Under FRCP 4(m), a defendant must be served within 90 days after the complaint is filed. Service can be delayed if service cannot be effected, and the remainder of the deadlines in the case do not run until service is effected. A party can waive formal service in return for an automatic extension on the deadline to answer the complaint (FRCP 4(d)).
The usual time to a final decision varies greatly by district. In the District of Delaware, for instance, termination by judgment takes an average of 35.2 months; however, it takes 27.6 months in the Eastern District of Texas.
A patent can only be asserted in an infringement action after it is granted.
The type of patent asserted varies by type of action. In Hatch-Waxman actions, process patents are not permitted to be listed in the Orange Book and are therefore typically not litigated. However, process patents (eg, process claims for manufacturing biosimilars) can be – and often are – litigated in BPCIA actions. Generally, in order to maintain an action for infringement of a process patent, the process must occur in the USA.
Regardless of patent type, the burden of proving infringement remains with the entity asserting the patent.
Pre-action discovery is generally not available. The closest alternative is asking for an order to depose someone to perpetuate their testimony under FRCP 27. This is a means to preserve evidence that may not be available later. Under FRCP 27(a)(4), a deposition to perpetuate testimony may be used under FRCP 32(a) in district court actions involving the same subject matter if the deposition is admissible. Such depositions are exceedingly rare.
However, there are pre-action exchanges in Hatch-Waxman and BPCIA cases.
In Hatch-Waxman actions, an ANDA holder challenging an Orange Book-listed patent is required to send a notice letter along with an offer of confidential access. This offer of confidential access defines the terms under which the ANDA holder is willing to provide access to their ANDA so the brand company can determine whether a lawsuit may be brought.
In BPCIA actions, aBLA holders can – but are not required to ‒ participate in the aforementioned patent dance governed by 42 USC Section 262 (Sandoz Inc v Amgen Inc, 137 S Ct 1664, 1675–76 (2017)). aBLA filers who do participate in the patent dance must provide their application and manufacturing information within 20 days of the FDA accepting their application for review (42 USC Section 262(l)(2)). The RPS then provides a list of patents they believe are infringed within 60 days of receipt of the applicant’s information under 42 USC Section 262(l)(3). The parties go on to exchange contentions on those patents to then settle on a final set of patents to litigate in BPCIA actions (42 USC Section 262(l)).
Search and seizure orders are not available in US patent litigation. Even in discovery, parties are not permitted to search for or remove materials in the same way that search and seizure orders are conducted in other contexts. Instead, parties must use discovery requests – such as interrogatories or requests for production – to obtain information.
However, it is possible to use pre-action discovery materials obtained in other jurisdictions – provided there is no restriction from the originator court on such use.
Declaratory relief is available both to life sciences patentees and patent challengers. Exemplary types of declaratory relief available in life sciences patent proceedings are:
In BPCIA actions, however, if an aBLA holder does not participate in the patent dance or fails to follow the patent dance disclosure requirements, they may not bring a declaratory judgment action against the RPS (42 USC Section 262(l)(9)).
If an accused infringer does not literally infringe, they may still infringe under the Doctrine of Equivalents (DoE), which is typically analysed as follows:
“The doctrine of equivalents must be applied to individual elements of the claim, not to the invention as a whole.” (Warner-Jenkinson Co, Inc v Hilton Davis Chem Co, 520 US 17, 29 (1997).)
Other considerations for DoE include the following.
There is no obligation, per se, to “clear the way” ahead of a new product launch. However, FTO analyses are often conducted before launches in the form of formal opinions from counsel, which are used by business persons to weigh whether to launch a product. Such formal opinions may be used later in litigation to defend against allegations of wilful infringement ‒ although such use will also result in waiver of attorney–client privilege.
It is common for courts to use expert evidence to determine infringement and validity issues, as well as occasionally during claim construction. The use of expert evidence may even be required in some contexts – for example, expert evidence is usually required for means-plus-function claims (Elcommerce.com, Inc v SAP AG, 745 F.3d 490, 506 (Fed Cir 2014)).
In the US, parties retain their own experts. Courts do not typically appoint experts. It is typical for each party to retain multiple experts across several disciplines in life sciences cases to address infringement and validity issues.
FRCP 26(a)(2) governs the disclosure requirements for expert testimony in advance of trial, including requirements for written reports. Opposing counsel may take an expert’s deposition and conduct oral cross-examination at trial. Expert testimony can be significant in decision-making, especially in Hatch-Waxman cases where a judge – rather than a jury ‒ decides the case. As such, experts are expected to be impartial and may be disqualified for having conflicts of interest.
In the US, experimental results from testing conducted by experts may be used to assess infringement and validity issues. Experts can conduct experiments to test whether the accused products embody the patented compositions or whether design-arounds are possible to avoid infringement. It is also fairly common for experts from each side to engage in a battle of experimental protocols.
Experts who conduct such experiments and wish to present the results as evidence must provide a written report that contains:
In the US, the scope of discovery is generally wide. Parties may obtain discovery for any non-privileged matter that is relevant to any party’s claim or defence and is proportional to the needs of the case, taking into consideration:
There are several discovery tools that may be used ‒ for example, requests for production of documents under FRCP 34 can be used to obtain documents or electronically stored information such as lab notebooks, emails, or data compilations. Document discovery is not limited by the type of document, but by the level of responsiveness to the discovery demand as supported by FRCP 26.
Parties may rely on interrogatories (FRCP 33) and requests for admission (FRCP 36), as well as individual and corporate fact witness depositions, in order to obtain discovery. Opposing parties may also take a testifying expert’s deposition pursuant to FRCP 26(b)(4)(A).
Certain districts have local rules that provide for exchange of contentions in which parties explain their theories of infringement and invalidity. Particular procedures for discovery tools (such as restrictions on the type or scope of discovery) may further vary depending on the district or judge.
There are several defences available in infringement actions.
Patent invalidity can be proven through multiple statutory avenues, such as:
Other doctrines that are judicially created, such as obviousness-type double patenting (where patent claims at issue are obvious variants of claims from a commonly owned reference patent), may also be raised. For a patent that has received patent-term adjustment (PTA) for delay by the PTO during prosecution, obviousness-type double patenting analysis must be based on the expiration date of the patent after the addition of the PTA (In re: Cellect, LLC, 81 F.4th 1216, 1226 (Fed Cir 2023)). Equitable doctrines may also render patents unenforceable as follows.
Another defence to accusations of patent infringement is prior use by the accused infringer, governed by 35 USC Section 273. It applies to subject matter that consists of a process, machine, manufacture, or composition of matter in which:
However, establishing prior use under Section 273(g) is insufficient in itself to establish anticipation or obviousness.
Patent proceedings can be stayed pending the outcomes of other proceedings before the US Patent Trial and Appeal Board (PTAB), including interferences, post-grant review, IPRs, and ex parte re-examination. Courts can grant motions to stay pending conclusion of a USPTO re-examination (Ethicon, Inc v Quigg, 849 F.2d 1422, 1426–27 (Fed Cir 1998)).
District courts typically balance three factors in making stay determinations:
Courts consider the outcomes of parallel proceedings for decisions to stay infringement and validity proceedings. Stays are justified when the outcomes of re-examinations would assist the court in determining patent issues (In re: Cygnus Telecomms Tech, LLC, Pat Litig, 385 F Supp 2d 1022, 1023 (ND Cal 2005)).
Pursuant to 28 USC Section 1659, district courts must stay district court litigation at the request of any respondent to an International Trade Commission (ITC) proceeding until a final decision, so long as the request is made within 30 days of the district court action’s filing or after a party is named as a respondent in the ITC proceeding.
When IPR proceedings result in a final written decision, 35 USC Section 315(e)(2) precludes petitioners from raising invalidity grounds in a parallel district court litigation that they raised or reasonably could have raised during that inter partes review (California Inst of Tech v Broadcom Ltd, 25 F.4th 976, 989 (Fed Cir 2022)). ITC decisions have no preclusive effect on district courts but may have persuasive value (Texas Instruments Inc v Cypress Semiconductor Corp, 90 F.3d 1558, 1569 (Fed Cir 1996)).
Patents can be amended during litigation. Certificates of correction arising from the USPTO’s mistake are governed by 35 USC Section 254. For more substantive changes to patent claims, one can file a request for reexamination (37 CFR Section 1.510) or reissuance (35 USC Section 251) of an application.
An application for reissuance of a patent that enlarges the scope of the claims of the original patent must be filed within two years of the original patent being granted (35 USC Section 251(d)). Otherwise, new matter cannot be introduced, and claims can only be narrowed (35 USC Section 251). Patents may also be amended during IPR proceedings upon motion by the patentee.
Requests for re-examination can be filed at any time (35 USC Section 302). However, if a patent is involved in an ex parte or inter partes re-examination or becomes involved in litigation, the director of the USPTO can decide whether to suspend the ex parte (37 CFR Section 1.565) or inter partes re-examination proceeding (37 CFR Section 1.987).
Patentees may also seek certificates of correction, for instance, to correct mistakes. However, the Federal Circuit has held in one case, which involved a certificate of correction from the USPTO over an issued claim that was missing a limitation, that a “certificate of correction is only effective for causes of action arising after it was issued”. (H-W Tech, LC v Overstock.com, Inc, 758 F.3d 1329, 1334 (Fed Cir 2014).)
In the US, recent court decisions have made forum shopping substantially more difficult. As in any US case, courts must have personal jurisdiction over defendants. Patent litigation has the same common-law principles and procedural rules as other types of civil litigation (SCA Hygiene Products Aktiebolag v First Quality Baby Products, LLC, 137 S Ct 954, 964 (2017)). Defendants must have minimum contacts with a forum state for personal jurisdiction to apply (Int’l Shoe Co v Washington, 326 US 310, 316 (1945)). Courts also analyse whether application of personal jurisdiction comports with due process by deciding whether:
In addition to establishing personal jurisdiction, patentees must also satisfy the venue requirement. For the purposes of identifying a proper venue, patent infringement actions may be brought where the defendant either:
Hatch-Waxman cases are typically tried before Federal District court judges. However, Hatch-Waxman cases may be tried before a jury if the accused product has been approved and has been launched at risk, thereby having harmed patentee(s). BPCIA litigation may proceed before a jury on request.
The FD&C Act holds that it “shall be an act of infringement to submit” an ANDA under Section 505(j) or a “paper” NDA as described in Section 505(b)(2) for a drug (or its use), which is claimed in a patent, if the purpose of the submission “is to obtain approval... to engage in the commercial manufacture, use, or sale of a drug... claimed in a patent or the use of which is claimed in a patent” before the patent’s expiration (35 USC Section 271(e)(2)). Some courts have thus held that submission of the application is itself an act of technical infringement sufficient to establish jurisdiction for initiating an action.
Under the Hatch-Waxman framework, suits can be brought before the accused product has been approved or marketed. Given that an actual accused product may not exist at the time of suit, infringement inquiry under Section 271(e)(2) considers “whether the probable ANDA product would infringe once it is made, used or sold” (Par Pharm, Inc v Eagle Pharms, Inc, 44 F.4th 1379, 1383 (Fed Cir 2022)).
If the FDA specification of the generic challenger defines the accused product in a manner that clearly resolves the question of infringement, then the specification controls the inquiry. If a specification does not full resolve the question of infringement “clearly and directly”, courts may consider “other relevant evidence, such as data or samples the ANDA filer has submitted to the FDA”.
A drug applicant may exclude a patented use from its label by submitting its proposed label to the FDA and “carving out” those methods of use which are claimed in patents (GlaxoSmithKline LLC v Teva Pharms USA, Inc, 7 F.4th 1320, 1327 (Fed Cir 2021); see 21 USC Section 355(j)(2)(A)(viii)).
An applicant may also be liable for induced or contributory infringement under 35 USC Section 271(b) and (c). To show induced infringement, a plaintiff must demonstrate that “the alleged infringer’s actions induced infringing acts and that [they] knew or should have known [their] actions would induce actual infringements” (GlaxoSmithKline LLC v Teva Pharms USA, Inc, 7 F.4th 1320, 1327 (Fed Cir 2021)).
An ANDA applicant may be liable for contributory infringement if it sells or offers to sell a material or apparatus for use in a patented combination or process where the ANDA product is a material part of the patented invention and has no substantial non-infringing uses. (See BTG Int’l Ltd v Amneal Pharms LLC, 352 F Supp 3d 352, 399 (D NJ 2018).)
An ANDA applicant’s launch prior to conclusion of Hatch-Waxman litigation is sometimes referred to as an “at-risk” launch. In such cases, the applicant may be liable under 35 USC Section 271(a).
The FD&C Act and the Code of Federal Regulations set out the following categories of exclusivities available to pharmaceutical product applicants, with varying lengths and protections.
The Hatch-Waxman Act contains a safe harbour provision providing that it “shall not be an act of infringement to make, use, offer to sell, or sell... a patented invention... solely for uses reasonably related to the development and submission of information under a federal law [that] regulates the manufacture, use, or sale of drugs” (35 USC Section 271(e)(1)). Such protection extends to not only drug products but also to medical devices and food or colour additives (Eli Lilly & Co v Medtronic, Inc, 496 US 661 (1990)).
However, only allegedly infringing activities subject to FDA pre-market approval that are “reasonably related” to submission of information qualify (Proveris Sci Corp v Innovasystems, Inc, 536 F.3d 1256, 1265–66 (Fed Cir 2008)). Such use includes not only preclinical studies but may also extend to scenarios where no data is actually submitted to the FDA (Merck KGaA v Integra Lifesciences I, Ltd, 545 US 193, 205–08 (2005)).
In the US, The Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book) provides a list of all approved prescription drug products with therapeutic equivalence evaluations, as well as patents identified by the drug sponsors as covering those products. It is updated with an Annual Edition and monthly Cumulative Supplement.
When seeking approval of a drug product, an ANDA applicant must certify to the FDA – for each patent listed in the Orange Book for that drug ‒ a statement that:
If the applicant certifies that the patent will not be infringed or is invalid, the applicant must also give notice of such paragraph IV certification to the patent owner and the holder of an approved application under 21 USC Section 355(b) for a drug that is claimed by the patent (21 USC Section 355(j)(2)(B)). However, an ANDA applicant need not provide certifications for method-of-use patents claiming a use that the ANDA application does not seek approval to use (AstraZeneca Pharms LP v Apotex Corp, 669 F.3d 1370, 1374 (Fed Cir 2012)).
In the US, grant of marketing authorisation for pharmaceutical products is linked with patent status but only with regard to those patents listed in the Orange Book that:
Applicants may “carve out” certain methods of use from approval, thereby potentially avoiding method-of-use patents. As discussed further earlier, 505(b)(2) and 505(j) applicants must file certain certifications as to these patents. One such paragraph IV certification serves as notice to any patent owners ‒ and holders of approved applications of drugs claimed by the patent – that the NDA filer alleges the related patents will not be infringed or are invalid.
The recipient of the paragraph IV certification has 45 days after receiving notice to file an action “for infringement of the patent that is the subject of the certification” (21 USC Sections 355(c)(3) and 355(j)(5)(B)). If such action is brought, approval of the NDA will become effective only after expiration of a 30-month period or upon a judicial decision that the patent is invalid or not infringed (21 USC Section 355(c)(3) and 355(j)(5)(B)).
Biologic applicants operate under a different framework from ANDA applicants, with the former governed by the BPCIA. The BPCIA amended the Patent Act to provide that it “shall be an act of infringement to submit... an application seeking approval of a biological product” with regard to patents that are or could be identified pursuant to Section 351(l)(3) of the Public Health Service Act (21 USC Section 271(e)(2)(C)).
If the applicant engages in the patent dance, the parties will negotiate a list of patents that are subject to immediate litigation. Only listed patents at this stage are subject to a declaratory action of infringement, validity or enforceability until the applicant provides notice to the patent owner that it will begin commercial marketing of the biosimilar in not less than 180 days (42 USC Section 262(l)(9)(A)). Although an aBLA applicant cannot be forced to engage in the patent dance (Amgen Inc v Sandoz Inc, 137 S Ct 1664 (2017)), failure to do so bars the applicant from initiating a declaratory judgment action ‒ whereas the patent owner may immediately bring a declaratory judgment action for any patent claiming the biosimilar (42 USC Section 262(l)(9)(C)).
The BPCIA provides the following exclusivities for applicants.
The safe harbour provision of 35 USC Section 271(e)(1) also shelters activities of biosimilar applicants conducted solely for the purpose of developing and submitting information under federal law.
The FDA maintains the Purple Book, or List of Licensed Biological Products, which contains biological products regulated by the Center for Drug Evaluation and Research. This includes not only reference products but also licensed biosimilars. The Purple Book includes the date of licensing for the product, the date of expiration for exclusivity periods, and certain patent information.
However, the Purple Book differs from the Orange Book in that BLA holders are only required to submit to the FDA the patent lists that they serve on biosimilar applicants during the patent dance (within 30 days of providing the biosimilar applicant with the list). The FDA updates the Purple Book every 30 days (42 USC Section 262(k)(9)(A)).
As noted earlier, biosimilar applicants can choose whether to participate in the patent dance. If they choose to participate, biosimilar applicants must provide the patent owner a copy of their aBLA within 20 days of the FDA accepting the application. Thereafter, the patent owner and applicant negotiate what patents can be immediately asserted and which, if any, the RPS would be willing to license (42 USC Section 262(l)). This includes exchanging statements detailing ‒ on a claim-by-claim basis – each party’s positions regarding invalidity, enforceability and infringement for each patent.
Unlike the Hatch-Waxman Act, the BPCIA:
Under the Hatch-Waxman framework, patent term extension (PTE) is available for patents claiming drug products ‒ and methods of use or manufacture of drug products – that are subject to regulatory review before commercial marketing or use (35 USC Section 156(a)). In order to obtain PTE, the holder must submit an application for extension within 60 days of receiving permission from the FDA to market the product.
The PTE determination is made by the FDA and USPTO together. The FDA is responsible for initially calculating the length of the regulatory review for the product, which is published in the Federal Register (35 USC Section 156(d)(2)(A)(ii)). After a chance for comment by interested parties, the USPTO calculates the final PTE length, which is capped at five years (35 USC Section 156(g)(6)(A)). Only one patent on a product can be extended for the same regulatory review period (35 USC Section 156(c)(4)).
Although biologics are also eligible for PTE, the rules applicable for granting PTE are less settled. This is due at least to the fact that biologics can present a difficult question of what is the relevant “active ingredient”.
Paediatric exclusivity extensions exist for both small molecule drugs under the Hatch-Waxman framework and biologics under the BPCIA. Paediatric exclusivity under either is granted where a sponsor has submitted paediatric studies on the active moiety in their drug product – in response to a written request from the FDA – and confers on the applicant an additional six months of exclusivity for drug products containing the moiety (21 USC Section 355a and 42 USC Section 262(m)).
In the US, a PI may be granted before or during trial – or even pending appeal.
FRCP 65 dictates that a court may issue a PI only if the movant provides a bond sufficient to pay the costs and damages sustained by any party found to have been wrongfully enjoined as determined by the court.
A court may issue a PI only on actual notice to the adverse party – by personal service or otherwise – of the injunction, such that the patent owner gives the defendant sufficient advance notice in order to allow the accused infringer to prepare and present its defence.
If a court issues an injunction, enforcement is administered via its contempt authority. A party could move for contempt to sanction the party who fails to comply with the court order. Typical contempt sanctions include a monetary fine or fee-shifting.
A permanent injunction is a court order requiring a person to do or cease doing a specific action that is issued as a final judgment in a case. Unlike PIs, permanent injunctions generally do not require bonds. In ANDA actions, upon a finding of infringement, courts are required to order a permanent injunction such that the effective date of approval is not earlier than the patent expiration date (35 USC Section 271(e)(4)). Likewise, upon a finding of infringement by an aBLA applicant, a court must order a permanent injunction prohibiting any further infringement of the patent until expiration of the infringed patent.
If an ANDA is approved and the drug is already on the market, an injunction could be obtained under a four-factor test showing:
A permanent injunction is ordinarily effective upon issue and, if not stayed, also effective pending appeal. When a party decides to appeal an issued injunction, a court also have the power to grant a stay.
In the US, monetary damages and injunctions are not mutually exclusive – for example, a court may award monetary damages for past infringing acts, while issuing injunctions to prevent future infringement. However, in ANDA actions, monetary damages may be awarded only after the infringer launches at risk.
For certain pharmaceutical products, the public interest factor for injunctive relief could be especially important. A patent owner may argue for an injunction based on safety concerns, for example. An accused infringer, on the other hand, may argue that the court should not issue an injunction that takes life-saving drugs off the market if they cannot be substituted by another product.
Under 35 USC Section 284, courts shall award the patent owner damages adequate to compensate for the infringement but in no event less than a reasonable royalty, together with interest and costs fixed by the court.
Two main types of damage awards are reasonable royalties and lost profits. A reasonable royalty is an estimation of the royalty that a licensee would pay for the rights to the claimed invention in a hypothetical negotiation. Lost profits are profits that a patent owner would have made if an infringer had not infringed. Damage awards may encompass both lost profits and a reasonable royalty.
To obtain lost profits, a patent owner must show that there is a reasonable probability that but, for the infringement, the patent owner would have made the infringer’s sales. One useful, but non-exclusive, method to establish the entitlement to lost profits is the Panduit test, which requires a patent owner to establish (Rite-Hite Corp v Kelley Co, 56 F.3d 1538, 1545 (Fed Cir 1995) (en banc)):
Determination of reasonable royalties could be based on established royalty rates, a hypothetical negotiation, or an analytical approach. Established royalty rates must come from pre-infringement licence agreements on comparable technology. In the absence of established royalty rates, a court may consider a hypothetical negotiation between a willing licensor and licensee to fix a royalty rate. A determination of the royalty stemming from a hypothetical negotiation is often made by assessing certain factors set forth in Georgia-Pacific Corp v US Plywood Corp, 318 F Supp 1116, 1120 (SD NY 1970). A district court may also use an analytical approach ‒ obtaining the reasonable royalty by subtracting the industry standard profit margin from infringer’s actual profit margin.
35 USC Section 284 gives district courts discretion to award enhanced damages against infringers in egregious cases. This can include an award of treble damages for wilful infringement. Courts may also award pre-judgment interest on the compensatory portion of the damages award under this section, and post-judgment interest of the entire award under FRCP 37.
35 USCA Section 286 limits the recovery of damages for past infringement to six years from the filing of the claim of infringement. Generally, there is no infringement liability for activities before a patent issues. However, provisional damages may begin after the publication date of the patent application if (35 USCA Section 154(d)):
In jury trials, a district court has discretion to try damage-related issues together with – or separate from – other issues. As to the execution of judgment on damages, proceedings to enforce it are stayed for 30 days after its entry, unless the court orders otherwise (FRCP 62(a)).
If an accused infringer is wrongfully enjoined, the relief to the injured party is typically limited to the terms of the bond.
A party does not need to be the patent owner to claim damages in a patent litigation – for example, a party with all substantial rights to a patent may also claim damages against an infringer.
In the pharmaceutical industry, no monetary damage would result from filing an ANDA paragraph IV certification before commercial marketing. And the BPCIA limits a patent owner’s damages to a reasonable royalty if an infringement suit is untimely filed. Patent owners can only seek PIs after receiving notice of commercial marketing. In both ANDA and BPCIA litigations, a company may decide to launch at risk, thereby making monetary damages possible if it is later found to have infringed a patent.
Under the American Rule, each party in a litigation pays its own attorney’s fees, unless the case is considered “exceptional” (35 USC Section 285). District courts have discretion to award reasonable attorney fees to the prevailing party in exceptional cases. An exceptional case is one that stands out from others with regard to:
Not all legal costs can be shifted in a patent case. Even where attorney fees are shifted, for example, experts’ fees generally still may not be shifted (Finjan, Inc v Juniper Networks, Inc, 2021 WL 3140716, at *5 (ND Cal 26 July 2021)).
In the US, there are equitable doctrines that sanction patent owners’ conduct in bad faith as follows:
In the US, trade marks are protected by both statutory and common law. Trade mark disputes are not commonly adjudicated in the same action as patent disputes. In addition to exclusiveness, trade marks also provide other benefits to life sciences and pharmaceutical products by:
Non-traditional trade marks, such as the colour of the drug, may provide additional protection. Since these non-traditional marks are not inherently distinctive, secondary meanings are usually required. Another concern regarding these non-traditional trade marks is that they may be deemed functional, which renders the marks not fit for trade mark protection.
Copyright issues are uncommon in life sciences and pharmaceutical cases. In a lawsuit where copyright was at issue, for example, the Second Circuit held that the ANDA filer could not be liable for copyright infringement for copying verbatim the text used in the SmithKline users’ guide because the labelling requirement under the Hatch-Waxman Act trumped the copyright concern (SmithKline Beecham Consumer Healthcare, LP v Watson Pharm, Inc, 211 F.3d 21, 29 (2d Cir 2000)).
A trade secret typically consists of (at least minimally) novel and commercially valuable information that is valuable because of its secrecy. Trade secrets disputes are not commonly adjudicated in the same action as patent disputes in the life sciences and pharma sector, but may occasionally be adjudicated in the ITC.
Parties to patent actions have a right to appeal, although the timing of such appeal varies as follows.
Under 28 USC Section 1292, interlocutory appeals may be filed before the final decision.
The Federal Circuit has nationwide and exclusive jurisdiction in a variety of subject areas, including patents, trade marks, and international trade. This means that the Federal Circuit handles all federal district court appeals regarding patent cases. The Federal Circuit also reviews certain administrative agency decisions, including those from the PTAB, TTAB and ITC.
The Federal Circuit’s work begins after the Clerk’s Office dockets a new appeal or petition and assigns a docket number. The parties to the cases prepare and file written briefs to present their arguments. The appeal is then randomly assigned to a panel comprising three randomly selected judges. There may be oral arguments, in which each side is typically allotted 15 minutes for argument. Parties may seek review of a Federal Circuit decision in the US Supreme Court.
Generally, US district courts have broad discretion to streamline cases before them. Many district courts have local rules and, more specifically, patent rules. Such rules may govern claim construction proceedings, exchange of infringement and invalidity contentions, and procedures for pre-trial and trial exchanges.
US forums other than district courts (eg, the PTAB, TTAB and ITC) are also relevant to the pharmaceutical industry.
The PTAB generally conducts hearings such as IPR proceedings, hears appeals from adverse examiner decisions in patent applications and re-examination proceedings, and renders decisions in interferences.
The TTAB handles appeals involving applications to register marks, appeals from expungement or re-examination proceedings involving registrations, and trial cases of various types involving applications or registrations.
The ITC investigates and makes determinations in proceedings involving imports claimed to injure a domestic industry or violate US IP rights.
Although court actions are more popular in the US compared with many other jurisdictions, there are other mechanisms for resolving disagreements between parties. Such ADR proceedings may result in faster and less expensive resolutions.
In mediations, for example, a neutral mediator may be used to discuss potential settlements. The mediator generally helps parties assess their legal positions. Even if parties do not reach an agreement, the mediation process facilitates exchange of information.
Although a mediation is normally not binding, an arbitration usually resolves the case on the merits. In an arbitration, parties present evidence and argue their positions before a neutral arbitrator. The procedural and evidentiary rules are usually set according to an arbitration agreement. If an arbitration is binding, for example, a party may not be able to reject the arbitration decision.
The Federal Trade Commission pays particular attention to settlements in life sciences litigation, and certain state laws may furthermore restrict the scope and content of settlements between such parties. NDA applicants are not permitted to “pay for delay” of generic drug entry, for example (FTC v Actavis, Inc, 570 US 136, 140 (2013)). Avoiding uncertainties and litigation costs, however, is permissible. Antitrust liabilities may also attach to patent misuse, inequitable conduct, and product hopping.