Data Show Rise in Rx Drug Challenges at Patent Office

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By Dana A. Elfin

Dec. 2 — Patents on pharmaceutical products are increasingly being challenged through inter partes review proceedings at the U.S. Patent and Trademark Office, with 165 such challenges filed in fiscal year 2015 alone, according to data recently made public by the PTO.

Contrasting the 2015 data with data from prior fiscal years reveals that these pharmaceutical patent challenges have grown by leaps and bounds since post-grant review proceedings became available in September 2012, with just three filed in 2012, 44 in fiscal year 2013, and 91 in fiscal year 2014.

IPRs, a type of post-grant review proceeding, were established under the America Invents Act of 2011 to allow third-party challenges of patents at the PTO.

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PLIR graph 12/03/15

“We are seeing an increased use of IPRs in the pharmaceutical space,” Brian W. Nolan, an intellectual property attorney at Mayer Brown LLP in New York, told Bloomberg BNA Dec. 1.

Biotechnology Patents Challenged Too

The IPR avenue for patent challenges is being used not only to challenge traditional small molecule patents, but is increasingly being used by biotechnology companies in the biopharmaceutical space, Nolan said.

“Innovators are using it more,” Nolan said. Biotech companies seeking to market different antibodies or antigens that target the same antigen or pathway to treat a particular disease may use the post-grant process to clear a competitor's patents, he said. These proceedings may offer a company an avenue to remove impediments to marketing its own product, Nolan said, and may allow for earlier market entry and an ability to establish itself in the market.

“It's another tactic that's going to have to be considered with regard to life sciences patents,” Nolan said, especially as innovators continue to seek footholds in the growing biosimilars market.

“It's becoming more and more prevalent,” Nolan said, adding that pharmaceutical companies are going to need to take proactive steps to insulate their intellectual property against these vulnerabilities.”

And while the PTO's statistics show that pharmaceutical product patents are more likely to survive IPR challenges than other patents, particularly when compared to high tech patents, they still carry substantial risk of having some or all of their claims being invalidated through the process, Nolan said.

Changes Could Make IPRs Less Attractive

Meanwhile, there may be changes in the offing that could stem the growth of these types of post-grant proceedings before the PTO's Patent Trial and Appeal Board (PTAB) by making them less attractive to challengers than they are now.

Currently, in IPR proceedings, the PTAB gives claim terms their broadest reasonable interpretation, making it easier to invalidate a patent than in district court litigation. In addition, in IPR proceedings, unlike in district court, patents aren't presumed valid, and the evidentiary standard required to invalidate a patent in an IPR is lower than in district court.

In an IPR proceeding, a challenger only has to prove that the “preponderance of the evidence” shows that the patent is invalid. In district court, “clear and convincing” evidence is required to invalidate a patent.

The PTO's proposed changes to the rules for PTAB proceedings include a pilot program that changes the number of judges making board decisions (207 PTD 207, 10/27/15(90 PTCJ 3628, 10/30/15).

Congress is also proposing changes, with multiple bills pending in both houses of Congress. Four bills are currently in play, although most of the attention is focused on the Innovation Act (H.R. 9) in the House, and the Patent Act (S. 1137) in the Senate. And both the Innovation Act and the Patent Act would change the claim construction review standard at the PTAB from the “broadest reasonable interpretation” to the standard used in district courts that is less likely to find a patent invalid (174 PTD, 9/9/15)(90 PTCJ 3116, 9/11/15). But it's far from certain that either the House or the Senate will act any time soon on any of the bills, especially as the 2016 presidential election draws closer.

The U.S. Supreme Court also may wind up weighing in on how the America Invents Act's post-grant proceedings are supposed to be run, if it decides to take up a petition filed by Cuozzo Speed Technologies LLC Oct. 6 (195 PTD, 10/8/15)(90 PTCJ 3484, 10/16/15). That petition seeks review of a decision that the Patent and Trademark Office made in interpreting the AIA.

The PTO data were first made public Oct. 30 by Janet Gongola, senior adviser at the Office of the Under Secretary and Director at the PTO. Gorgola presented the data at a joint Mayer Brown and Seton Hall University School of Law symposium on emerging issues affecting the life sciences industry in Newark, N.J.

To contact the reporter on this story: Dana A. Elfin in Washington at delfin@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

The data compiled by the USPTO can be found at http://src.bna.com/bjz.