Legislators in the mid 1980s recognized that the rigors of the FDA premarketing approval process were preventing generic pharmaceutical products from efficiently entering the market despite expiration of the underlying patents.
In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, also referred to as the Hatch-Waxman Act, primarily to balance incentives for pharmaceutical firms to make the investment to develop new drug applications through limited patent term extension provisions based on regulatory market delays, with additional provisions for generic drug companies to file abbreviated new drug applications to bring cheaper versions of drugs to market after patent expiration.
Section 271(e)(1) provides protection for generic drug competitors from precommercial sales infringement as long as their activities are “reasonably related to the development and submission of data under a Federal Law.”
By its language, however, § 271(e)(1) is not limited to entities seeking to produce generic drugs and has been invoked by innovator and generic drug and medical device entities seeking to use any third-party patented invention so long as the use is “reasonably related” to the development and submission of information for FDA approval.
Determining the extent of the safe harbor protection from patent infringement has been the source of much legal debate. It was initially understood that § 271(e)(1) was implemented to balance the patent term extension provided to patentees for regulatory approval delays under 35 U.S.C. § 156.
Extensions of patent term can be obtained for new drugs for human or animal use, new Class III medical devices, and new food or color additives. The Federal Circuit extended the safe-harbor protections of § 271(e)(1) to Class I and/or Class II medical devices, stating that the language of § 271(e)(1) makes no distinction among the different FDA classes of medical devices or drugs (AbTox v. Exitron).
The courts have also broadly interpreted which product development activities are reasonably related to FDA approval for the purposes of § 271(e)(1) protection. For example, the Federal Circuit held that merely demonstrating an implantable defibrillator at medical conferences was reasonably related to FDA approval, because it facilitated the selection of clinical trial investigators.
In 2005, the U.S. Supreme Court held that a reasonably related activity does not require the eventual submission of the information to FDA. Rather, it also includes preclinical activities to determine a composition’s mechanisms of action, pharmacokinetics and pharmacology, and findings of possible unfavorable and unintended side effects—all of which would be appropriate to include in a submission to the FDA.
The Federal Circuit stated in Proveris that Congress enacted the safe-harbor provision of the Hatch-Waxman Act to eliminate “two unintended distortions” of the effective patent term resulting from the regulatory approval process of the FDA under the Federal Food, Drug, and Cosmetic Act. The first was to extend the patent term of patents covering products subject to regulatory delays caused by the FDA approval process. The second was to insulate from infringement liability actions for purposes that are reasonably related to an FDA submission.
The court reasoned that equipment ancillary to the FDA’s approval process is not subject to the “two unintended distortions” contemplated by § 271(e)(1). Because the patent holder did not need FDA approval for its testing device, the patent holder faced no limitations to use its product at the start of the patent term. Likewise, the defendant’s accused device is also not subject to FDA approval, so any infringement by that device cannot be sheltered by § 271(e)(1).
Hence, the infringing device was not itself subject to FDA approval, but was used to perform tests during drug research and development for FDA approval. The Federal Circuit held that the safe-harbor provision applied only to products that themselves are subject to FDA premarket approval, which face the unintended distortions to an effective patent term.