Patent Challenges Upsetting Hatch-Waxman Act, Hatch Says

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By Malathi Nayak

Sen. Orrin G. Hatch called on Congress Oct. 20 to explore how certain patent validity challenges at the Patent and Trademark Office are affecting an older mechanism for resolving drug-related patent disputes.

The Hatch-Waxman Act of 1984, which bears the Utah Republican’s name, provides a legal framework for generic drug market approval and the resolution of related patent disputes. Hatch cited a friction between that framework and inter partes reviews, administrative proceedings at the Patent and Trademark Office that allow parties to challenge patent validity. The latter process was created under the America Invents Act of 2011.

Hatch, speaking at the at the American Intellectual Property Law Association’s annual meeting in Washington, said that IPR proceedings running parallel to Hatch-Waxman patent disputes in court can result in conflicting decisions.

“I think we need to examine IPR’s effect on the Hatch Waxman branded-generic balance,” Hatch said. “If reforms to IPR are needed to preserve that balance, we should think carefully about how best to make those reforms.”

Patent Litigation Delay

The Hatch-Waxman Act created the current streamlined process for generic drug approval, established certain market and patent exclusivity periods for both branded and generic drug companies, and created a specific patent litigation process. For instance, under Hatch-Waxman, the Food and Drug Administration will not grant a generic company final approval of its product for 30 months after it has been sued by a branded drug company for patent infringement.

Some commentators have said that stays granted in the IPR process can delay Hatch-Waxman litigation and “frustrate the intent of the provision by drawing out litigation for more than 30 months,” Hatch said.

The standard for enhanced damages in patent litigation, patent eligibility, the availability of laches defense are other issues Congress should look into, Hatch said. Laches defense lets defendants claim they have been harmed by an unreasonable delay in the time taken by a petitioner to file a lawsuit.

Hatch said that he supported the creation of the IPR process to help address how some patent holding entities or so-called “patent trolls” were consistently filing lawsuits, including businesses and universities, in the hopes of making money through settlements. Such entities do not make and sell products but acquire patents to make money form threatening to sue others for patent infringement, he said.

Hatch also said Congress should address “reverse trolling” by parties seeking to extort money from patent holders by threatening to file PTO patent challenges against them.

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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