BIOPHARMAS EXPLORE STRATEGIC USES OF PATENT CHALLENGE PROCESS

 

Biopharma attorneys are still critical of the process for challenging existing patents, but some are trying to use it strategically.

This is a theme that spanned two sessions at the BIO IP Counsels Committee Conference that I covered for Bloomberg BNA in Savannah, Ga., recently. Challenging the validity of issued patents can either increase or slow down the availability of new medicines and can affect the viability of biopharmaceutical companies, participants said.

The America Invents Act created the inter partes review (IPR) process to allow third-party challenges to issued patents on the grounds that the claims were anticipated or rendered obvious by prior patents or publications. Since the process went into effect in 2013, biopharma companies have criticized the IPR process. It either forces the patent owner to settle the IPR dispute, or generally results in the patent, which the Patent and Trademark Office approved, being invalidated, according to some analyses. Sometimes the challengers have been out-of-industry groups like hedge funds, which, the industry has argued, are misusing the process for the purpose of making money.

James Harrington, senior vice president and chief intellectual property counsel for Dublin-based Shire Pharmaceuticals, noted that the Patent Trial and Appeal Board has issued only eight precedential opinions—“which makes it easier for them to do anything they want”—and disagreed with the PTAB’s statements that the patents it has invalidated have been weak ones. “I would argue that they are the strongest patents, the ones we have worked on the most, the ones that are being commercially challenged,” Harrington said.

But some biopharma attorneys noted that the industry is beginning to use the IPR process strategically. My story on this session is here.

Saurabh Vishnubhakat, associate professor of law at Texas A&M University, said, based on a study he co-authored, 30 percent of the petitioners are not using the process in the standard way—trying to invalidate the patent they have been sued for infringing or asking for a declaratory judgment of noninfringement in federal court. Instead, they are filing an IPR petition as part of a strategic preemptive strike against an issued patent as they consider entering the market as competitors and as a way of gaining an advantage they may pursue in a few years. They may also join the petitions of others who are challenging the same or related patents.

Siegmund “Sige” Gutman, a partner and chair of the life sciences patent practice of Proskauer Rose LLP in New York, said the trend will lead to an uptick in nonstandard petitioners. “It will be valuable to have a record that could be leveraged later. As companies become more comfortable with the IPR [process], their involvement will increase, and nonstandard petitioners may eclipse the standard,” he said.

And so, some biopharma patent owners are no longer just reacting to the IPR process but are proactively exploring it.

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