Important Disclaimer Federal Circuit Denies Regulatory Safe Harbor Defense to Manufacturer of Research Tools August 19, 2008 On August 5, the U.S. Court of Appeals for the Federal Circuit affirmed a final judgment of the U.S. District Court for the District of Massachusetts that could have broad implications in the pharmaceutical, medical diagnostic, and medical device fields. As a result of the decision in this case, the patent safe harbor defense may not be available for patent infringement claims based on non-regulated research tools. The case, Proveris Scientific Corp. v. InnovaSystems, Inc., No. 2007-1428 (Fed. Cir. Aug. 5, 2008), involved a patent directed to a system and apparatus for characterizing aerosol sprays commonly used in drug delivery devices. The question before the Federal Circuit was whether the defendant, InnovaSystems, could defend a claim of patent infringement on the basis that the device it made and sold was used by purchasers for determining the spray characteristics of their regulated product in preparing their submissions under the Food, Drug and Cosmetic Act (FDCA) and, therefore, was not an act of infringement under the patent statute. Considering the views expressed in the opinion, it is our recommendation that the use of research tools be audited for compliance with the holding of this case. The Patent Safe Harbor Does Not Apply to Non-Regulated Devices Section 271(e)(1) is a safe harbor that immunizes a potential infringer from a claim of patent infringement for acts that are "reasonably related" to obtaining regulatory approval. This safe harbor was extended to cover medical devices in Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990). Over the years, the Federal Circuit and the U.S. Supreme Court have recognized a wide variety of activities that are reasonably related to regulatory approval and therefore within the safe harbor exception. In Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005), the Supreme Court interpreted reasonably related activities to include the generation of preclinical data that could be, but never are, submitted under the FDCA. The Court noted in Merck that the safe harbor was created with the enactment of the Hatch-Waxman Act to allow competitors to begin the regulatory approval process while a patent was still in force to avoid a de facto patent term extension that would otherwise occur if competitors were required to wait until expiration of the patent. Additionally, the Hatch-Waxman Act also provided for patent term extensions to eliminate a de facto patent term reduction that would occur as a result of the patent owner being required to obtain regulatory approval before entering the market. Proveris owned a patent that claimed a spray acquisition system used for characterizing aerosol sprays commonly used in drug delivery devices. Innova manufactured and sold an optical spray analyzer to pharmaceutical companies. Innova argued that use of its device by the purchaser was exclusively for obtaining information for submission under the FDCA. Moreover, Innova argued that the earlier Lilly and Merck cases supported its position that research tools should not be excluded from the safe harbor because use of research tools was reasonably related to the submission of information used for seeking regulatory approval. The Federal Circuit was not persuaded by Innova's argument. The court concluded that "Innova is not a party seeking FDA approval for a product in order to enter the market place to compete with patentees . . . and therefore faces no regulatory barriers to market entry upon patent expiration."1 Moreover, Proveris's patented product was not a product that required approval under the FDCA; therefore, no safe harbor could be invoked for its unauthorized use. Present and Future Implications If a company is using a patented device or process as a research tool for purposes of obtaining data in conjunction with a regulatory submission, that use may not be immunized under the patent safe harbor. If the research tool itself is subject to regulatory review, then its unauthorized use might fall within the patent safe harbor, particularly if the use is reasonably related to the development of information for submission to the FDA. The implications for the use of research tools to develop and test products for purposes of obtaining data to submit to a regulatory agency could be profound. Wilson Sonsini Goodrich & Rosati can help you determine whether your use of research tools presents a problem and adopt appropriate strategies to protect against such infringement attacks, especially in the pharmaceutical, medical diagnostic, and medical device fields. Wilson Sonsini Goodrich & Rosati's patents and innovation strategies practice is closely watching this evolving situation and will keep you apprised of the latest legal developments. If you have any questions, please feel free to contact Vern Norviel, Jeffrey Guise, Matt Langer, Peter Eng, Peter Munson, Anie Roche, or Esther Kepplinger.
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