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European Biopharmaceutical Review
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Lee Caffin and Vandana Mamidanna at
Think IP Strategy highlight the importance of assessing current patents
before embarking on new drug development and clinical trials
The patent regime has always played a crucial role in the
research-driven pharmaceutical and biotechnology industries.
Notwithstanding variations in the drug type and therapeutic area, an
innovator company spends about $1 billion (£700 million) on each new
drug developed to market. Hence, it is important for any innovator drug
company to ensure that there are no blocking patents at each
developmental stage; this is essential before commencing expensive,
advanced clinical trials (1).
The drug industry has, in recent years, moved its research emphasis
away from primary care studies significantly and is much more focused
on therapeutic areas like oncology, CNS and anti-inflammatory
conditions. The potential for overlapping research and consequently
patent claims is inevitably higher as research converges. The genomic
revolution and the development of routine biotech assays, product
synthesis and development techniques have made targets – and the drug
molecules with affinity for such targets – readily accessible. The risk
of encroaching on third-party patents is therefore further elevated as
molecules are made and tested with increasing efficiency.
FREEDOM TO OPERATE 101
A freedom to operate (FTO) search and analysis is primarily intended to
identify potential barriers to product launch in a specific market. A
good assessment enables the company to assess clearly the patent
infringement risk and aid in the design of a country-by-country
strategy for the commercialisation of the drug product. It should,
however, be noted that there is an inherent uncertainty in any FTO
assessment as the analysis can never be up-to-date in the true sense
due to the time lag between patent filing and publication (18 months).
It is therefore recommended that the FTO review is updated periodically
to identify any relevant newly published patent applications. The
expeditious filing and publication of one’s own patent applications to
the potential drug product and its use, synthesis, formulation and
dosage regimen will provide some degree of comfort in ‘first to file’
countries. The inherent uncertainties in the present US ‘first to
invent’ system, however, tempers the advice that one can provide with
certainty regarding FTO. Defensive publications have also been used
historically to limit the risk of a third-party patent issuing covering
an aspect of the drug product being filed later. However, as a prior
art measure to anticipate any later filed patent applications, a
defensive publication may also inadvertently anticipate or make obvious
later related innovator inventions, and therefore one needs to
carefully assess the relative benefits of publishing versus filing a
provisional (priority) patent application.
WHEN TO SEARCH?
It is always prudent to conduct an FTO search and analysis in the early
stages of product development rather than to wait until the launch
stage. Depending on one’s view of the scope of the ‘safe harbour’
provisions under a country’s patent law, you should consider
identifying at the outset of a new project any broadly relevant
research tool patents, for example, covering assays, targets, antibody
types, processing techniques and so on. If such patents are identified,
it may be costeffective to negotiate a licence to use the patent,
rather than rely on ‘safe harbour’ or wait until a project has advanced
through proof-of-concept before approaching the patentee or seeking an
invalidity position.
Searches are conducted routinely to identify areas of high intensity
patents before any synthetic work is performed. A broad landscape
search may help scientists develop in areas of lower patent intensity
if, as is often the situation, there are various chemotype paths one
can follow. Also, as previously mentioned, as projects progress through
the various stages of development, it is important to keep the searches
up-to-date and in line with any modifications, for example to the
product form (such as salt or polymorph), the process used, the
formulation developed, the target indication or the route of
administration.
WHAT TO SEARCH FOR?
An FTO search seeks to identify granted patents and pending
applications which a company may risk infringing by commercialising a
drug product. A good search looks at all reasonably available sources,
including computerised databases and search engines that provide access
to patents worldwide. Biological sequence databases including both
nucleic acid and protein sequences are also available, as are patent
assignment databases, patent maintenance-fee records and so on. The key
here is to be able to define the subject matter of the search in the
most precise manner and then to build a good search strategy. It
becomes highly critical to capture the entire product in a search and
often requires a close interaction between the searcher, the patent
attorney and inventors to design a comprehensive search strategy.
Although chemical structure searches are fairly straightforward,
searching for relevant patents in the biotechnology area presents a
unique problem since a biotech product may be covered by multiple
technology platforms and research tools. It is also problematic to
devise a comprehensive search strategy to cover formulation
developments, since excipients are often named differently and there
are many patents which claim the function of the excipient or
formulation, for example by its time to maximum plasma levels or its
dissolution profile.
IDENTIFYING PROBLEMATIC PATENTS
Following the FTO search and initial analysis to weed out clearly
irrelevant search ‘hits’, the searcher, or more usually the patent
attorney, will look to further narrow the set of patents requiring a
full analysis. At this stage of the FTO analysis one asks oneself: do
any of the third-party patent claims literally cover, or could they,
under the Doctrine of Equivalents, cover the technology used or
contemplated? If the answer is yes, then further detailed analysis is
required to confirm where the patents with problematic claims are still
in force, and consider if a workaround would be possible or if an
invalidity analysis should be conducted. Such a tiered approach is
often the most effective way of conducting the FTO review. For a
product which may be launched worldwide, it is clearly important to
understand the global FTO position and to recognise the complexity of
the analysis that arises from individual country jurisdictional
differences, the dynamic nature of the country patent laws and so on.
There are additional challenges when patent applications are identified
with broad claims, as is often the situation. One cannot simply ignore
the reality that patents may issue from any such application, and at a
minimum the applications need to be tracked in their prosecution.
Managing risks from thirdparty pending applications is discussed in a
later section.
As emerging markets become even more of a focus for drug companies,
there is an increasing need to consider the FTO landscape in countries
such as China, India, Russia and Brazil. Large companies can use their
local internal network to identify any particular local patent issues,
for example Chinese-only patents. Alternatively, companies may hire a
preferred local counsel to keep a watch on areas of interest or
specific patents that may be a potential issue.
DEALING WITH PROBLEMATIC PATENTS
To design a good FTO strategy requires careful business and legal
considerations to balance potential risks with anticipated benefits.
The FTO strategy considers all options and then decides on the approach
that best fits the goals of the company and its tolerance for risks.
The factors that determine this include, among others, the nature of
technology, organisational goals, available licensing opportunities,
validity position of the patent and jurisdiction. Again it’s best to
have a step-wise approach to arrive at an optimum solution to deal with
a given patent situation. This may simply include waiting until the
patent expires or, alternatively, steering research, or making changes
to the product or process in order to avoid infringement risks. If
redesigning to clearly avoid infringement is not a viable option, other
alternatives such as licensing the blocking patent, obtaining an
invalidity opinion or seeking to invalidate the patent through a Patent
Office opposition or re-examination, or litigating in the courts may be
considered.
Licensing implies obtaining an authorisation from the patent holder to
use the patented technology on stipulated terms for an agreed period of
time. In some cases, it may be the optimal path to clear the
commercialisation of a new technology or product. However, in the
biotechnology field for example, licensing may become an unprofitable
option if the product is covered by multiple patents owned by multiple
parties, thus leading to a royalty stacking scenario. A strategy used
by device and IT companies is to patent in the thirdparty ‘space’ and
look to develop intellectual property (IP) bargaining chips if a
problematic patent arises. This is a strategy that may become more
prevalent in the biotech and small molecule area.
If a licensing or a workaround strategy is unavailable or not
cost-effective, senior management will need clear guidance on the risks
and implications of continuing to develop a product towards the
marketplace if covered by a third-party patent. The risk of being
successfully sued and either blocked from the market by an injunction
or paying a significant royalty to the patent holder can only be
assessed following a thorough review of the relevant patent claims for
validity. This will in turn require a detailed analysis of the patent
prosecution and the art cited. Inevitably, further searches will need
to be performed to seek out additional prior art that may impinge on
the validity of the relevant patent claims. The prosecution history may
also identify other issues that may limit the ability to assert claims,
such as written description, enablement and best mode (35U.S.C 112)
issues or inequitable conduct in the US. It is worth noting that in Ariad Pharmaceuticals, Inc v Eli Lilly & Co, the CACF in an en bancdecision confirmed the Written Description requirement as separate from
Enablement, also stating that when an applicant simply claims a desired
result, he must demonstrate that he has invented species sufficient to
support a claim to the functionally-defined genus (2). It is reasonable
to assume that this decision will be referenced extensively in
subsequent biotech and small molecule patent cases to attempt to limit
claims to what the patentee ‘possessed’ as his invention at the time of
filing.
If good invalidity arguments are available, depending on the particular
jurisdiction, the type of arguments available, the stage of product
development, the patent status and other legal and economic
consideration, one can contemplate a pre-emptive strike on the patent
using invalidity procedures at the Patent Office level, namely
re-examination and opposition. An alternative but much more expensive
option is to seek to revoke the patent in a court setting where such
pre-emptive action is available before an infringement suit is filed by
the patentee. It is, however, pertinent to note that invalidity is a
complex question of law and fact, and predicting the outcome of a
potential invalidity suit is difficult in all but the most clear-cut of
situations, such as where the claims are anticipated by a fully enabled
prior art reference. Although the Federal Circuit in In re Seagate Technology, LLCrejected the affirmative obligation to obtain opinion of counsel to
avoid a charge of wilful infringement, as was required under previous
precedent law, a positive freedom to operate opinion may help in
limiting damages generally if the courts ultimately find for the
patentee, especially in situations where a claim has been laid of
inducing infringement (3).
Pending patent applications pose a particular problem when one is
seeking to communicate the level of risk to FTO to senior management.
They are often filed with broad claims with no realistic prospect of
issuing with such scope. The patentee may limit claims during
prosecution, thereby removing the immediate FTO issue, but may, and
often will, file a continuation or divisional application seeking to
recapture aspects of the invention ‘carved out’ from the parent
application. One may simply place a watch on the prosecution
development, including a watch on the filing of any continuation or
divisional application. However, some jurisdictions allow for the
filing of third-party observations during patent prosecution (for
example the European Patent Office), which may help to confine the
scope of the resulting patent(s) if good art can be cited. There is an
added benefit in that such art referenced overseas will need to be
brought by the patentee to the attention of the US Examiner
investigating the corresponding US case, unless the art is merely
cumulative to that already available to him/her. Another tactic is to
publish as a smokescreen. Clearly if a patentee with pending claims is
aware that such claims will potentially implicate a third-party
development activity, the patentee will do everything in their power to
obtain issued claims which cover the activity. A smokescreen
publication strategy, for example on active compounds from an
alternative series to those of real interest, may lead the patentee to
assume that broad claims are not worth fighting for and only seek
issuance of claims of real interest to the patentee.
References
- Adams CP, Brantner VV, Spending on New Drug Development, Health Econ 19: pp130-141, February 2010
- Ariad Pharmaceuticals, Inc v Eli Lilly & Co (Federal Circuit 2010)
- In re Seagate Technology, LLC, 497 F.3d 1360 (Federal Circuit 2007)
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Lee Caffin is an expert in intellectual property strategy, particularly in the life sciences arena. His particular expertise lies in licensing and lifecycle management, including generic defence strategies. Lee has worked for major global companies, including Abbott, where he held the positions of Division Vice President of Global IP Strategy and Global Head of Pharmaceutical Patents. He was responsible for developing the in-house IP departments at Aventis and Takeda from the ground up and has mentored many US and European Patent Attorneys. As European Patents Head at Takeda Pharmaceuticals, Lee managed all aspects of building a new European Patent Department in London.
Vandana Mamidanna is an experienced IP lawyer and patent attorney based in Mumbai and Hyderabad, India. Vandana has extensive experience in pharmaceutical and intellectual property law, and holds a Bachelors degree in Pharmaceutical Technology, a law degree from Mumbai University and a Masters of Law from George Washington University. She has managed various portfolios in the Intellectual Property, Regulatory Affairs, Project Management and Business Development sector within several large Indian and multinational pharmaceutical companies. Vandana maintains a keen interest in the latest developments in IP and has lectured in cyber law, legal information systems and intellectual property, and holds several academic positions.
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