Australia: Constant vigilance: innovator life sciences companies must remain alert to the threat posed by patent infringement exemptions lurking in the "safe harbour"

Life Sciences Spotlight (Asia Pacific)
Last Updated: 5 June 2013
Article by Lisa Haile, Nicholas Tyacke and Jaimie Wolbers

US and Australian patent laws include exceptions to patent infringement for regulatory and experimental activities, the boundaries of which are either in a state of flux or are currently untested. Innovator Life Sciences companies must ensure that the boundaries of these "safe harbour" exceptions are not expanded to encroach on their legitimate patent rights.

Since the 1980's, the patent laws in many jurisdictions have included infringement exceptions that have made it possible for generic pharmaceutical companies to engage in otherwise infringing activities to obtain regulatory approval of their products so that they are able to launch those products immediately on the expiration of patent protection for the associated innovator product. These exceptions were generally introduced as part of a bargain that also included patent term extensions for particular types of pharmaceutical patents.

In Australia, the amendments to the Patents Act 1990 introduced by the Intellectual Property Laws (Raising the Bar) Act 2012 have expanded the scope of patent infringement exemptions, while in the US recent case law has indicated that in the view of some Federal Circuit justices, the scope of the existing US exception is broader than many previously thought. The broadening of these exceptions has not been matched by a corresponding broadening of what was part of the original bargain for the introduction of these exceptions, the extension of term for particular types of patents. Innovator Life Sciences companies must maintain a vigilant watch to ensure that their legitimate patent rights are not unreasonably encroached upon as a result of these exceptions.

The United States

In August 2011, the United States Court of Appeals for the Federal Circuit (Federal Circuit) reviewed a case on patent eligibility that was on remand from the United States Supreme Court, directed to methods for optimising immunisation. The decision in this case, Classen Immunotherapies v. Biogen, held that the patent infringement exception under 35 U.S.C. § 271(e)(1) does not apply to information that may be routinely reported to the United States Food and Drug Administration (FDA), long after marketing approval has been obtained.

The Court was asked to consider the question of whether the Defendant's activities fell within the "safe harbour" provisions of 35U.S.C. § 271(e)(1). In particular, the activities included post-approval studies to determine whether immunisations with certain vaccines increase the incidence of type 1 diabetes.

The United States Congress passed the Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman Act) in 1984. The Hatch-Waxman Act included two important provisions for pharmaceutical manufacturers:

  1. A patent term extension to allow for the FDA approval timeline; and
  2. A generic drug development infringement exception or safe harbour.

35 U.S.C. § 271(e)(1) states that "[i]t shall not be an act of infringement to make, use, offer to sell, or sell within the United States ... a patented invention ... solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products." In this case, Classen claimed thatBiogen and GlaxoSmithKline (GSK) infringed its methods of immunisation patents by participating in post-approval studies "to evaluate suggested associations between childhood vaccinations ... and risk of developing type 1 diabetes; and to determine whether timing of vaccinations influencesrisk." Astheir defence,Biogen and GSK stated that they were protected from allegations of infringement under section 271. It was Classen's position that section 271 only applied to activities conducted to obtain approval of generic equivalents of patented inventions but not to activities that were performed post-FDA approval.

The Federal Circuit agreed with Classen, stating that section 271(e)(1) provides "an exception to the law of infringement in order to expedite development of information for regulatory approval of generic counterparts of patented products." The dissent in part set up the Court for the case to follow in the next year, when it noted that "the question is not whether Congress intended to protect preapproval activity – but whether the enacted legislation covers more than just pre-approval activity. The language Congress chose to enact and that was signed by the President is plain on its face. There is no 'pre-approval' limitation."

Turning the clock ahead one year, on August 3, 2012, the Federal Circuit issued a decision in Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc. extending the scope of the "safe harbour" under § 271(e)(1) to certain post-FDA approval activities. As noted above, the safe harbour is typically the time period during which drug development activities for the purpose of obtaining FDA approval are exempt from charges of patent infringement. Typically, the safe harbour period would conclude upon obtaining FDA approval.

In the more recent case, both Momenta and Amphastar commercially marketed generic versions of Lovenox (enoxaparin), which the FDA approved. The key issue in Momenta was Amphastar's alleged infringement of Momenta's patented manufacturing method relating to testing the purity and strength of enoxaparin, using quality control processesrequired to be carried out for each commercial batch of enoxaparin sold, after FDA approval.

The FederalCircuit first analysed the provision in the safe harbour section stating "solely for uses reasonably related to the development and submission of information under a federal law." The provision includes the language that the Federal law relates to "regulating the manufacture, use, or sale of drugs". The Federal Circuit held that the post-approval activities, which were necessary for Amphastar "to continue manufacturing and marketing enoxaparin," were exempt under the safe harbour because they generated information for submission to the FDA.

The Federal Circuit also examined the fact that Amphastar collected information but did not actually submit it to the FDA; concluding that since the information was gathered as part of a requirement by the FDA to maintain records for FDA inspection, the activity was "reasonably related to the development and submission of information to the FDA". The Federal Circuit also determined that the information gathered wasrequired to "maintain" FDA approval. Thus, Amphastar's allegedly infringing post-approval activities were found by the Federal Circuit to fall within the safe harbour of section 271.

At this point, the only thing that is clear is that the two decisions, Classen and Momenta, leave the question of the boundaries of the safe harbour provision difficult to reconcile. In January 2013, the US Supreme Court denied GSK's certiorari petition in Classen, while in March 2013, Momenta and Sandoz filed a certiorari petition for SupremeCourt review of the Federal Circuit's Momenta decision. Should the Supreme Court choose to hear this case, the questionsraised in the two decisions may be ultimately resolved. The final delineation of the safe harbour boundaries will impact on the patent rights of innovator Life Sciences companies operating in the US.

Australia

Australia's Patents Act was amended in late 2006 to include section 119A. This section provides an exception to conduct that would otherwise infringe a pharmaceutical patent if the patented invention is being exploited solely for purposes connected with obtaining registration with the Therapeutic Goods Administration on the Australian Register of Therapeutic Goods (ARTG). It also permits the conduct in relation to obtaining similar regulatory approval for goods intended for therapeutic use under the law of a foreign country.

Effective 15 February 2012, the Raising the Bar Act 2012 added sections 119B and 119C to the Patents Act. The former introduced an infringement exception for acts done solely for purposes connected with obtaining approval required by law to exploit a product, method or process other than for pharmaceutical products, while the latter introduced an exception for acts done for experimental purposes relating to the subject matter of the invention. The introduction of these exceptions was not accompanied by a broadening of the extension of term provisions.

None of these provisions, including section 119A which has now been in force for over six years, has been the subject of judicial interpretation as to their scope. It thus remains to be determined how Australian courts would treat the post-approval activities addressed in the Classen and Momenta cases.

However, it is notable that section 119A (and 119B) appears narrower in scope than U.S. section 271. The Australian provision refers to activities done solely for purposes connected with "obtaining" regulatory approval as opposed to the US provision which relates to the submission of information under a Federal law regulating manufacture, use or sale of drugs. It would appear unlikely that the post-approval activities discussed in the Classen case, such as studies into the incidence of type 1 Diabetes, and the post-approval activities in the Momenta case, which were to maintain regulatory approval, would fall within the scope of Australia's s 119A.

Conclusion

As discussed above, the scope of the primary patent infringement exception in the United States is currently in a state of flux, with a number of Federal Circuit justices indicating that the scope of that exception is broader than many previously thought; extending to post-regulatory approval activities. In Australia, patent infringement exceptions have also seen recent expansion by way of the legislature introducing new exceptions rather than the judiciary reinterpreting existing exceptions. Although the scope of Australia's patent infringement exceptions has yet to receive judicial consideration, it appears unlikely that they would extend to the post-approval activity in the majority of cases. Nevertheless, the expansion of the scope of patent infringement exceptions in each jurisdiction has not been matched by an expansion in the scope of patent term provisions. It thus remains important for innovator Life Sciences companies to maintain a vigilant watch to ensure that their legitimate patent rights are not unreasonably encroached upon as a result of these exceptions.

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.


DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com

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