Hatch-Waxman 201

For branded drugmakers, the development of a pharmaceutical product approved by the Food and Drug Administration (FDA) all but assures generic competition. As discussed during the first installment of our Hatch-Waxman series, “Hatch-Waxman 101,” disputes between branded and generic drugmakers are governed by the Hatch-Waxman Act, which attempts to strike a balance between the pharmaceutical industry's need to protect its innovations and the public's need for affordable drugs. But that balance is delicate, and Hatch-Waxman litigation is among the most complex and high-stakes legal endeavors most drugmakers will pursue.

Challenges to drug exclusivities

In Hatch-Waxman 101, we reviewed the exclusivities available to branded and generic drugmakers, including those for new chemical entities (NCEs), pediatric and orphan drugs, and first generic filers. Now in Hatch-Waxman 201, we address challenges patentees may face with other exclusivities that often arise in Hatch-Waxman litigation, including patent term adjustments, patent term extensions, and the 30-month stay.

Patent term adjustments and patent term extensions

By statute, patents are entitled to a term of 20 years from their earliest filing date. But under certain circumstances, that term may be adjusted beyond the 20-year period when there are delays at either the United States Patent and Trademark office (USPTO) or FDA. These adjustments or extensions to patent terms are designed to compensate patent owners for delays outside their control.

Patent term adjustment (PTA) under 35 U.S.C. § 154 may be assigned to a patent due to administrative delays by the USPTO. Those delays could be due to, for example, administrative backlogs, complex technology in the patent application, interferences, and secrecy orders. PTA can be added to any number of patents related to a drug product and depends only on prosecution at the USPTO. In contrast, patent term extension (PTE) under 35 U.S.C. § 156 may be assigned to a patent based on delays due to regulatory review at FDA that preclude commercial use or launch of a drug or device covered by the patent. PTE is available for a single patent claiming certain approved products (drugs, medical devices, food additives, etc.), methods of using the approved product, or methods of manufacturing the approved product. Unlike with PTA, the patent owner decides which patent to apply PTE to, and that decision requires careful consideration.

Challenges to PTA and PTE

Obviousness-type double patenting (OTDP) can become an issue for patents that are granted PTA or PTE. A judicially created doctrine, OTDP is designed to prevent unjust extension of a patent term beyond the statutory period. Patent claims may be rejected during prosecution for OTDP when the claims of a later-expiring patent are obvious variants of an earlier-expiring patent’s claims. One way to overcome an OTDP rejection is by filing a terminal disclaimer, which disclaims the later patent’s term so that it ends when the earlier patent’s term ends.

Several recent cases have arisen dealing with the interplay of PTA, PTE, and OTDP that can affect a patent owner’s decision to seek PTE.

An illustrative case is In re Cellect 81 F.4^th 1216, 1219 (Fed. Cir. 2023), in which Cellect sued Samsung alleging infringement of four patents, each of which had been granted PTA and shared the same priority date. In response, Samsung requested ex parte reexamination of the patents, arguing invalidity due to OTDP over a fifth patent in the same family as the group of four, but that had not received PTA and therefore expired before the four asserted patents. Id. at 1219–20. The examiner rejected all claims as unpatentable under OTDP because the four PTA patents were not patentably distinct from the fifth reference patent that had not received PTA. Id. Cellect appealed to the Federal Circuit and argued that, like PTE, the calculation for the expiration date of patents that have received PTA in an OTDP analysis should be the original expiration date rather than the date of the extension. Id. at 1221. The Federal Circuit disagreed, holding that PTE and PTA are different when it comes to OTDP. The court reasoned that OTDP for a patent that has received PTE is based on the expiration date (adjusted to a disclaimed date if a terminal disclaimer has been filed) before the PTE is added. Yet OTDP for a patent that has received PTA is based on the expiration date of the patent after PTA has been added, regardless of whether a terminal disclaimer is required or has been filed. Id. at 1229.

The 30-month stay

The 30-month stay gives branded drugmakers a prescribed amount of time to assert and resolve patent rights in court before FDA may approve a generic drug for sale in the United States. Within 20 days of receiving FDA acknowledgement of a generic drugmaker’s filing of an Abbreviated New Drug Application (ANDA) containing a Paragraph IV (PIV) certification to an Orange Book-listed patent, the generic must send a notice letter the New Drug Application (NDA) holder/patent owner regarding the PIV certification. The patent owner then has 45 days to file a patent infringement action, which triggers the 30-month stay. Once triggered, the stay begins from the date of receipt of the notice letter. The 30-month stay may be shortened if a District Court enters a judgment of invalidity or non-infringement, an appellate court reverses a District Court’s ruling that the patent is valid or infringed, or is effectively shortened when a post-grant challenge is brought at the USPTO and the stay is not tolled.

Orange Book listing considerations

The Orange Book is a key patent reference in Hatch-Waxman disputes. Patents may be listed in FDA’s Orange Book under 21 U.S.C. § 355(b)(1)(A)(viii) if they claim a drug substance, drug product, or method of using a drug for which a claim of patent infringement reasonably could be asserted. Patents claiming processes, packaging, metabolites, or intermediates may not be listed. FDA has clarified that a “drug product” for purposes of listing refers to the “finished dosage form,” which includes “metered aerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems.” It further explains that the key factor is whether the patent being submitted claims the finished dosage of the approved drug.¹

While these statutory categories sound straightforward, what qualifies under the statute has been the subject of recent litigation, particularly when it comes to patents claiming drug device products.

In Teva Branded Pharm. et al. v. Amneal Pharms. NY , No. 23-20964 (SRC), 2024 WL 2923018 (D.N.J. Jun. 10, 2024), Teva asserted five Orange Book-listed patents covering its ProAir® HFA (albuterol sulfate) inhaler against Amneal, who then asserted counterclaims arguing that the patents covering the inhaler should be delisted. Id. at *1. According to Amneal, the asserted patents did not claim the drug for which the application was submitted, nor were they directed to a drug product within the meaning of the statute. Id. at *5. The court first addressed Teva’s argument that the inhaler qualified as a “drug” under 21 USC § 321(g)(1), finding that the inhaler product falls within the statute’s broad definition of the term. Id. at *8. Next, the court addressed whether the patent claims the drug for which the applicant submitted the application. In construing the phrase “claims the drug for which the applicant submitted the application,” the court relied on In re Lantus, which defined the phrase to mean that the claims must at least mention the active ingredient or drug product for which the applicant submitted the application. Id. at *7.

Ultimately, the District Court found that because the inhaler patents did not claim or even mention albuterol sulfate or the drug product ProAir® HFA, the statutory requirement that the patent claim the drug for which the applicant submitted the application was not met. Id. at *7–9. In other words, the District Court held that while Teva’s inhaler product falls under the broad definition of “drug” as defined in 21 U.S.C. § 321(g)(1), the inhaler is not the drug for which Teva submitted its NDA.

On December 20, 2024, the Federal Circuit affirmed the District Court and clarified the standard for determining whether a patent is entitled to be listed in the Orange Book. Teva Branded Pharm. Prods. R&D, Inc. v. Amneal Pharms. of New York, LLC, No. 2024-1936, 2024 WL 5176737 (Fed. Cir. Dec. 20, 2024). As it did in the lower court, Teva argued that “a patent is listable if it claims any part of its NDA product.” Id. at *13. The Federal Circuit rejected this argument, reasoning that such an interpretation would clash with other provisions of FDA’s regulatory approval schemes and inappropriately blur the lines between what constitutes a “drug” versus a “device.” Id. The Federal Circuit emphasized that drugs and devices have distinct regulatory regimes and approval pathways. Id. What stood out to the Federal Circuit about whether the FDA considers a product a “drug” is the use of a specific term — the active ingredient. Id. at *14. “And it is the presence of this active ingredient that makes a product approvable as a drug.” Id.

With this focus on the differences between drugs and devices, the Federal Circuit concluded that a patent can be listed in the Orange Book if it claims at least the active ingredient and not only the device or part of a device merely related to the active ingredient:

To list a patent in the Orange Book, that patent must, among other things, claim the drug for which the applicant submitted the application and for which the application was approved. And to claim that drug, the patent must claim at least the active ingredient. Thus, patents claiming just the device components of the product approved in an NDA do not meet the listing requirement of claiming the drug for which the applicant submitted the application. Id. at *15.

With this new guidance from the Federal Circuit, patent holders will likely want to review the claims for listed and soon-to-be-listed Orange Book patents to consider whether their claims cover the active ingredient that is part of the drug substance or drug product for which applicants submitted their NDA.

Infringement issues every Hatch-Waxman litigant should know

Submitting an ANDA under § 505(j) of the Federal Food, Drug, and Cosmetics Act is an artificial act of infringement under 35 U.S.C. § 271(e)(2). Allegations of infringement under § 271(e)(2) are often based on showing that the proposed ANDA product will infringe a branded drugmaker’s patent if marketed. Once a generic drugmaker files an ANDA with a PIV certification and the patent owner files suit, the 30 month-stay begins. During the 30-month stay, FDA is prohibited from granting final approval of the ANDA until either the expiration of the Orange Book-listed patents or until a court determines whether they are infringed or invalid.

What a generic applicant asks for and receives approval to market in its ANDA is key for showing infringement. In Sunovion Pharms., Inc. v. Teva Pharms. USA, Inc., 731 F.3d 1271, 1278 (Fed. Cir. 2013), the court explained that “if a product that an ANDA application is asking the FDA to approve for sale falls within the scope of an issued patent, a judgment of infringement must necessarily ensue.” But if the ANDA specification does not resolve whether a claim limitation is met, then other information outside of the ANDA may be relevant to showing infringement. See Ferring B.V. v. Watson Labs. Inc., 764 F.3d 1401, 1409 ( Fed. Cir. 2014). Such information could include, for example, in vitro and in vivo data submitted to FDA; other tests or experiments; lab notebooks that were not submitted to FDA; and information in press releases, scientific publications, and patent applications. Courts determine whether they will consider such information and how much weight they will give it on a case-by-case basis.

The patentee bears the burden of proving infringement by a preponderance of the evidence. Various Federal Circuit cases have commented on how much evidence is required to meet this burden. Generally, the patentee is not required to show that the generic’s ANDA product will meet the claims “nine times out of 10,” but, instead, that the product will more likely than not infringe. Adams Respiratory Therapeutics v. Perrigo, 616 F.3d 1283, 1287 (Fed. Cir. 2010). The court has also established that “[i]t is well settled that an accused device that sometimes, but not always, embodies a claim nonetheless infringes.” Broadcom Corp. v. Emulex Corp., 732 F.3d 1325, 1333 (Fed. Cir. 2013) (cleaned up).

One instance where this issue comes up in Hatch-Waxman cases is in the context of claimed ranges. For example, there could be an instance where the patent at issue claims a drug that can be administered at various dose ranges (e.g., 10-100 mg). If the reference listed product and the proposed generic product are being approved for 50 mg doses, the patentee could demonstrate infringement by showing that 50 mg falls within the claimed 10-100 mg range. The patentee is not required to show that the ANDA product infringes the full scope of its claims.

While the infringement inquiry focuses on the language of the claims, in some cases a patentee may support its infringement arguments by comparing its own commercial embodiment of the claims to the accused ANDA product. To receive approval to market a product, a generic must show FDA that its ANDA product is bioequivalent to the reference product, and this requires comparing the generic product to the reference product. Patentees often point to bioequivalence studies as probative evidence of infringement but may do so only when the commercial embodiment at issue meets all of the claim limitations. See Adams Respiratory, 616 F.3d at 1289.

Induced infringement (35 U.S.C. § 271(b))

Induced infringement occurs where one party causes another party to commit the actual act of infringement. It often arises in the Hatch-Waxman context with respect to method of treatment claims. To prove induced infringement, the patentee must show three elements:

1. Knowledge of the patent
2. Knowledge of the induced acts that constitute patent infringement or willful blindness to them
3. Specific intent to encourage another’s infringement

A defendant’s belief in the invalidity of the patent at issue does not negate or rebut the defendant’s knowledge of or intent to cause infringement.

The prescribing information (“label”) that will accompany a generic’s ANDA product if approved is key to showing induced infringement in Hatch-Waxman litigation. The “pertinent question” in determining induced infringement is whether the generic drugmaker “instructs users to perform the patented method.” AstraZeneca v. Apotex, 633 F.3d 1042, 1060 (Fed. Cir. 2010). If so, the proposed label may show evidence of specific intent to induce infringement. See id. Examples of such evidence can include statements in the label that “encourage, recommend, or promote infringement.” Takeda Pharms USA, Inc. v. West-Ward Pharm. Corp., 785 F.3d 625, 631 (Fed. Cir. 2015); Vanda Pharms. Inc. v. Roxane Labs Inc., 203 F. Supp. 3d 412, 434 (D. Del. 2016).

While the label is key, it does not necessarily need to mirror the asserted claims verbatim. In AstraZeneca LP v. Apotex Inc., 633 F.3d 1042, 1061 (Fed. Cir. 2010), reh’g en banc denied (Jan. 31, 2011), the court found inducement even though the label at issue lacked explicit commands because the label’s downward titration instructions necessarily led some users to engage in once-daily dosing. In Braintree Labs., Inc. v. Breckenridge Pharmaceutical, Inc., 688 Fed. Appx. 905, 909 (Fed. Cir. 2017), the court found that a proposed ANDA label for “colon cleansing” induced infringement of claims directed to “inducing purgation” because inducing purgation was not a distinct use of the proposed product, but rather the means by which the approved indication achieves a result.

Whether the language of the generic’s label is instructive or permissive can affect a patentee’s ability to show specific intent to induce infringement. For example, in HZNP Medicines LLC, Horizon Pharma USA, Inc. v. Actavis Laboratories UT, Inc., 940 F.3d 680, 702 (Fed. Cir. 2019), the claim at issue required the three steps of (1) applying the drug to the skin; (2) waiting for the skin to dry; and (3) applying sunscreen, insect repellent, or a second topical medication. The proposed generic label instructed patients only to perform the first step, with the second two steps being optional. The court concluded that a plaintiff relying solely on a proposed generic label advising a patient to take infringing steps under certain conditions did not prove specific intent.

Contributory infringement (35 U.S.C. § 271(c))

Contributory infringement occurs where a party supplies components of a patented invention knowing that the components will be used to infringe a patent. Under 35 U.S.C. § 271(c), “[w]hoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.” Branded and generic drugmakers often fight over the “substantial noninfringing” use requirement. The questions that typically arise are (1) when is a use a noninfringing use, and (2) how much use must there be to be considered a substantial noninfringing use?

Generally, a “substantial noninfringing use” is one that is “not unusual, farfetched, illusory, impractical, occasional, aberrant, or experimental.” Vita–Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1327 (Fed. Cir. 2009). Off-label uses are not substantial noninfringing uses. Eli Lilly & Co. v. Actavis Elizabeth LLC, 435 F.App'x 917, 927 (Fed. Cir. 2011). Unsurprisingly, whether a noninfringing use is “substantial” depends upon the facts of the case. For example, courts have found that ~20% use is substantial (Sanofi v. Glenmark Pharms. Inc., USA, 204 F. Supp. 3d 665, 685 (D. Del. 2016), aff'd sub nom. Sanofi v. Watson Lab'ys Inc., 875 F.3d 636 (Fed. Cir. 2017)); ~5% use is substantial (Amarin Pharma, Inc. v. W.-Ward Pharms. Int'l Ltd., 407 F. Supp. 3d 1103, 1113 (D. Nev. 2019); and ~29% use is not substantial (Eli Lilly, 435 F.App’x at 927). While there is little clear guidance on when a noninfringing use is substantial, litigants can consider certain information when making that assessment, including prescription and use data, surveys, and experts.

The Federal Circuit in H. Lundbeck A/S et al. v. Lupin Ltd. et al., 87 F.4th 1361, 1368 (Fed. Cir. 2023) addressed many of these issues, reaffirming that “the use…claimed in the patent” under 35 U.S.C. § 271(e)(2)(A) must be the use for which an applicant is seeking marketing approval, and thus, there is no separate act of infringement of a drug for just “any use” of the drug. Carve-outs (or “skinny labels”) that remove the indications covered by a patent remain viable avenues for supporting a finding of non-infringement of method of treatment patents but may be overcome by additional evidence of intent or lack of substantial non-infringing use. For contributory infringement, “substantial non-infringing uses” refers to uses that do not infringe the patent in question, not other unasserted patents. Id. at 1373.

Using real-world facts in Hatch-Waxman litigation

Success in Hatch-Waxman litigation often requires telling a compelling story. To begin, one can set the stage by describing the state of the art, the problem to be solved, the patients who are in need, and what others tried before you. Next, one can describe the trials and tribulations of the invention – what the scientists tried, how long it took, and any “eureka” moments. Round out the story by highlighting the product’s success, including economic success, industry recognition, and positive outcomes for patients. It is also important to carefully consider who will tell the story. Typically, the most credible fact witnesses include inventors, persons of ordinary skill in the art, and a CEO or other public-facing company representative. Expert witnesses may be technical (e.g., chemistry, formulation, PK/PD, clinical) or economic and can be instrumental in not only proving your case but helping reaffirm the facts surrounding the invention story.

Facts from your story can also support the validity of your claims, particularly as objective indicia of non-obviousness. Such indicia can include:

• Unexpected results
• Long-felt need
• Teaching away
• Commercial success
• Failure of others
• Skepticism
• Industry praise
• Licensing
• Copying

Case law further supports the importance of real-world facts. Objective indicia of non-obviousness are “part of the whole obviousness analysis, not just an afterthought.” Leo Pharm. Prod., Ltd. v. Rea, 726 F.3d 1346, 1357 (Fed. Cir. 2013). “As [the Federal Circuit] has repeatedly explained, this evidence is not just a cumulative or confirmatory part of the obviousness calculus but constitutes independent evidence of nonobviousness.” Ortho McNeil Pharm., Inc. v. Mylan Lab'ys, Inc., 520 F.3d 1358, 1365 (Fed. Cir. 2008).

To use real-word facts in Hatch-Waxman litigation, a “[n]exus must exist between the evidence and the merits of the claimed invention.” Novartis AG v. Torrent Pharms., Ltd., 853 F.3d 1316, 1330 (Fed. Cir. 2017) (internal quotation omitted). A nexus is presumed when the patentee shows that the asserted objective evidence is tied to a specific product and that product “is the invention disclosed and claimed in the patent.” J.T. Eaton & Co. v. Atl. Paste & Glue Co., 106 F.3d 1563, 1571 (Fed. Cir. 1997). Yet that presumption is rebuttable when the objective evidence is due to extraneous factors other than the patented invention. See Therasense, Inc. v. Becton, Dickinson and Co., 593 F.3d 1289, 1299 (Fed. Cir. 2010), reh'g en banc granted, opinion vacated on inequitable conduct, 374 Fed. Appx. 35 (Fed. Cir. 2010) and opinion reinstated in relevant part, 649 F.3d 1276 (Fed. Cir. 2011) (ruling presumption of nexus did not apply where patentee’s device covered by two patents, one was the prior art patent that allegedly rendered the challenged patents claims invalid, and the patentee failed to show that the commercial success was due to the patented feature of the challenged patent).

The existence of a blocking patent can cause courts to discount objective evidence of non-obviousness, especially evidence used to show commercial success, failure of others, and long-felt need. In Acorda Therapeutics, Inc. v. Roxane Laboratories, Inc., 903 F.3d 1310, 1337-42 (Fed. Cir. 2018), the court explained that “the magnitude of the diminution in incentive in any context—in particular, whether it was great enough to have actually deterred activity that otherwise would have occurred—is a fact-specific inquiry.” But blocking patents are not necessarily conclusory evidence that innovation was deterred in the blocked space. Courts may also consider other factors when determining whether a blocking patent has stifled innovation in the relevant field. Patentees have several avenues for curing the effects of blocking patents, including by showing that others’ activities were protected by the safe harbor. However, the safe harbor may not automatically cure such defects. Janssen Pharms., Inc. v. Teva Pharms. USA, Inc., 97 F.4th 915, 936 (Fed. Cir. 2024) (“The ability to avoid infringement liability for conduct related to preparing FDA submissions does not end the inquiry into the potential deterrence associated with the risk of market entry preclusion once those submissions are complete.”).

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