Federal Judicial Center - Hot Topics in Patent Litigation

December 12, 2013
Post by Blog Staff

The Federal Judicial Center recently released a Webinar entitled “Hot Topics in Patent Litigation: Actavis, Hatch-Waxman and the Biosimilars Act.” The Webinar focused on recent developments in areas regarding enforcement of patents in the life science area, generic drugs, and generic biologics. The entire webinar is available here; the following are brief highlights:

Hatch-Waxman Patent Settlements: In its decision in Federal Trade Commission v. Actavis, the Supreme Court did not accept the FTC’s argument that “reverse pay settlements” are per se illegal. A “reverse pay settlement” exists when a patent owning brand-name drug company enters into a settlement agreement with a generic drug company in which the generic drug company agrees to refrain from entering the market and, instead, promotes the brand drug in return for a large monetary payment. The Supreme Court decided that a District Court, when faced with such a patent settlement, must weigh “traditional antitrust factors such as likely anticompetitive effects, redeeming virtues, market power, and potentially offsetting legal considerations present in the circumstances, such as here those related to patents.” Although the Court provided little guidance as to what would be “improper” under this test, such settlements are proper at least in instances where (1) the brand-name company pays the generic company the amount it would otherwise cost the brand-name company to litigate, and (2) the brand company pays for some concrete consideration, i.e. payment for creation of a marketing arm for the drug.

Biologics Price Competition and Innovation Act: The “Biosimilars” Act (BSA) was enacted by Congress in order to address a lack of legislation regarding FDA regulation of generic ‘biological products,” defined by the BSA to include any “virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein (except any chemically synthesized polypeptide), or analogous product, or arsphenamine or derivative of arsphenamine (or any other trivalent organic arsenic compound), applicable to the prevention, treatment, or cure of a disease or condition of human beings.” The BSA is distinguished from the Hatch-Waxman Act, which regulates generic drugs, in a number of important ways: (1) there no linkage between patents (infringement or litigation) and FDA approval under the BSA, (2) the BSA does not include a public patent listing process, (3) no category of patents is carved out under the BSA, and (4) the BSA does not include a 180-day exclusivity incentive. Despite these differences, the BSA and the Hatch-Waxman Act share the goal of encouraging innovation and experimentation in order to get a generic product to market in a reasonable amount of time while also respecting the intellectual property rights of those who develop the original product. The statute, enacted in 2010, has not yet to be fully realized as the FDA’s proposed regulations have not yet been implemented. The complexity of the BSA and the uncertainty of the FDA regulations make the future of the Act unclear.

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