March 1, 2011 (Vol. 31, No. 5)

Companies Seeking Patent Term Extensions Need to Be Mindful of Short Filing Timelines

Patents can have a huge impact on business profitability and R&D decisions. Consequently, the term of a patent is critical. Avenues exist under statute to extend a patent term under certain circumstances, including patent term extension (PTE) under 35 U.S.C. § 156. Patentees may apply for PTE for patents directed to certain products including drugs, biologics, and medical devices that go through an FDA regulatory approval process before marketing.

One may recover a maximum of five years (where total term cannot exceed 14 years from FDA approval date) to compensate for patent term lost while the product undergoes the FDA investigation period and approval process.

In recent years, many have discussed when exactly a patentee must request a PTE from the USPTO. Under § 156(d)(1), a patentee must submit a PTE application “within the sixty-day period beginning on the date the product received permission” to commercially market or use the product. The USPTO determines the timeliness of the application. If a patentee misses the 60-day deadline, they miss the opportunity for PTE, which can have significant consequences.

Many believe PTE deadline provisions present a significant trap for the unwary. Such a trap panned out in Medicines Company v. Kappos. Here, PTE would extend the expiration of a patent from March 2010 to December 2014. Nearly four years of PTE is significant, especially for a blockbuster drug earning big dollars every day in the absence of generic products in the market.

In this particular case, the FDA faxed an approval letter to Medicines Company relating to Angiomax® on Friday, December 15, 2000, at 6:17 p.m. Medicines Company filed its PTE application on February 14, 2001. The USPTO rejected the application as untimely. Medicines Company argued that because the FDA sent its letter after hours on a Friday, the 60-day time period began on the next business day, i.e., Monday, December 18, 2000, thereby rendering the PTE application timely filed.

After years of back and forth, the USPTO issued a decision in 2007, again finding the PTE application untimely. Previously, when applying the 60-day deadline, the USPTO started the count on the first day after the FDA approval date. In 2007, however, the USPTO stated it would begin counting the FDA approval date itself as one of the 60 days. The USPTO likewise rejected the “business day” interpretation, and concluded Medicines Company filed its PTE application two days late.

The company eventually filed suit in 2010. The U.S. District Court of Eastern District of Virginia determined that the proper interpretation of § 156(d)(1) was a business day construction. The district judge explained that this interpretation “is consistent with the remedial nature of § 156(d)(1) by limiting the unnecessary and arbitrary loss of property rights,” as well as the “notice function” of the statute. Thus, nearly 10 years after filing its PTE application, Medicines Company achieved a favorable result.

This may not be the end of it, however. Although the government did not appeal, APP Pharmaceuticals (APP), an amicus curiae party, filed a Motion to Intervene on August 19, 2010. The district court denied APP’s motion in September, and APP appealed to the Federal Circuit.

By brief, Medicines Company argued that the court should deny APP’s appeal for lack of standing, or in the alternative, bifurcate APP’s appeal regarding intervention and stay its appeal on the merits. By Order on February 2, 2011, the Federal Circuit denied Medicines Company’s motions, potentially leaving issues up for grabs.

To date, no other patentees who have filed an “untimely” PTE application by one to three days have successfully taken advantage of Medicines Company. This decision could be used as evidence in a dispute regarding timeliness of a PTE application filing, especially as it relates to a business day interpretation, or even “the remedial nature of § 156(d)(1).” At least one judge wished to avoid “unnecessary and arbitrary loss of property rights” based on a procedural formality.

Genetics & IVF Institute (GIVF) filed suit in the Eastern District of Virginia on September 1, 2010, regarding an application for an “interim” PTE relating to a medical device still undergoing FDA regulatory approval. Section 156(d)(5)(A) provides that a patentee may apply for an initial interim PTE for up to one year while a product is undergoing FDA review if the patentee “reasonably expects” that the FDA review period “may extend beyond the expiration of the patent term in effect.”

A patentee also may apply for up to four subsequent one-year interim PTEs. Under § 156(d)(5)(C), each subsequent application “shall be made during the period beginning 60 days before, and ending 30 days before, the expiration of the preceding interim extension.”

GIVF filed a petition with the USPTO for an extension of time to file an application for a second interim PTE. The 30-day period for filing the second interim application ended on July 6, 2010. GIVF filed its petition on July 27, 2010, arguing that the USPTO had discretion to authorize the request under federal rules. GIVF stated that “with the exception of mild tardiness,” its application satisfied all statutory criteria. Thus, “the time window under § 156(d)(5)(C) is simply a matter of procedure.” The USPTO denied the petition, stating it did not have discretion to act. In its court case, GIVF argues, among other things, that the USPTO ignores Medicines Company “in which this Court definitively held that all provisions of a remedial statute, in particular those involving timing, should be construed liberally.”

It remains to be seen what the district court (or Federal Circuit) will do with such cases, or what exactly the USPTO will do going forward when considering close-call situations.

Jacqueline Wright Bonilla, Ph.D.

Legislative Efforts

Medicines Company also engaged in lobbying efforts for remedial legislation. In 2006 and 2007, it pursued legislation granting the USPTO discretion to consider PTE applications filed unintentionally late. While gaining some traction, efforts ultimately stalled. In 2008, lawmakers proposed that if an applicant files a request for acceptance no later than five business days after the 60-day period expires, the USPTO may accept an unintentionally late PTE application filed no later than three days after the 60-day period expires. The patentee must pay a hefty fee ($65 million in the case of Medicines Company), however, for the PTE to go into effect.

Medicines Company again lobbied for, and lawmakers proposed, similar legislation in 2009 and 2010. The latest version, introduced in May 2010, again died without passage. To move forward in 2011, lawmakers will need to introduce fresh legislation.

With Medicines Company’s potential win in court, it is not clear who, if anyone, will continue to push for such legislation going forward. That said, there are likely to be others who have fallen, or will fall, into the trap that ensnared Medicines Company.

Time periods for filing PTE applications are short and specific. Without meticulous attention, patentees can easily miscalculate, misinterpret, or miss filing deadlines. In light of the potential value of a PTE, those seeking market approval will want to encourage regulatory and patent representatives to communicate regularly.

Understanding the ease of potential misstep, it is helpful to those preparing PTE applications to be aware of relevant regulatory activity, and begin preparing a PTE application before a deadline clock starts ticking.

Jacqueline Wright Bonilla, Ph.D.([email protected]), is a partner at Foley & Lardner and a member of the firm’s chemical, biotechnology & pharmaceutical, intellectual property litigation and appellate practices.

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