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Patent Term Matters. Term and Scope AIPLA 14 May 2009. Patent Term Matters. James J. Kelley Ass’t General Patent Counsel Eli Lilly and Company Indianapolis, Indiana 46285 [email protected] Vicki G. Norton Partner Duane Morris LLP San Diego, CA 92101-8285 [email protected]

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Patent term matters

Patent Term Matters

Term and Scope

AIPLA

14 May 2009


Patent term matters1

Patent Term Matters

James J. Kelley

Ass’t General Patent Counsel

Eli Lilly and Company

Indianapolis, Indiana 46285

[email protected]

Vicki G. Norton

Partner

Duane Morris LLP

San Diego, CA 92101-8285

[email protected]

Jeffrey P. Kushan

Partner

Sidley Austin Brown & Wood

Washington, D.C. 20005

[email protected]

Pamela Politis

Patent Attorney

Endo Pharmaceuticals

Chadds Ford, PA 19317

[email protected]

AIPLA Chemical and Biotechnology Sections


Motivation for this session

Motivation for This Session

  • Conference Speakers

    • “PTE = ½ day/day during testing phase + 1 day/day during review phase (≤5, ≤14)”

  • Due diligence observations

    • premature filings

    • protracted, non-strategic prosecution

      • RCEs, CIPs, TDs, extensions, late submissions

      • final rejections, not ready for appeal

      • pursuit of “scope”

      • no apparent concern about term

  • How does pursuit of “scope” potentially jeopardize >14-year effective patent term for drugs?

AIPLA Chemical and Biotechnology Sections


How much does term matter

How Much Does Term Matter?

  • One extra day of exclusivity for a $1B/year drug is $2.75 million.

  • Decisions that may affect patent term must be made carefully.

    • Example:

      • direct non-provisional US filing vs.

      • PCT followed 18 months later by US national filing

    • NPV for $1B/year drug – up to ~$150 million.1

2assuming 8% discount rate, 9-month difference in patent term (18 months ÷ 2), and complete loss of market at

end of term

AIPLA Chemical and Biotechnology Sections


Agenda

Agenda

Discussion Starters

Jeff Kushan – PTA

Jim Kelley – PTE and PTA

Vicki Norton - Scope: Enemy of Term? The Impact of Recent Decisions

Pam Politis – Strategy Questions

Panel and Audience Discussion

Questions May be Asked at Any Time

AIPLA Chemical and Biotechnology Sections


35 u s c pte provisions

35 U.S.C. PTE Provisions

  • PTE is applied after PTA - § 156 (a)

  • PTE accrues only after patent issues - § 156 (c)

  • Lack of diligence deduction; ½ day per day; 14-year limit - § 156 (c)

  • Regulatory review period = testing phase plus review phase - § 156 (g)(1)(B)(i) and (ii), resp.

  • 5-year limit - § 156 (g)(6)(A)

AIPLA Chemical and Biotechnology Sections


Pte ptr

PTE = PTR

  • Drug Price Competition and Patent Term Restoration Act

  • Must “lose” patent term before it can be “restored.”

  • PTE “credits”

    • Regulatory review period minus any time during which there was lack of diligence;

    • ½ day per day from when the patent has issued and an IND has become effective until a complete NDA is submitted,

      plus

    • 1 day per day from when the patent has issued and the NDA is complete until the NDA is approved,

  • Total patent term restored ≤ 5 yrs

  • Total period of Effective Patent Term (EPT) ≤ 14 yrs

AIPLA Chemical and Biotechnology Sections


Effective patent term ept

Effective Patent Term (EPT)

PTE “Credits”

½ day per day

1 day per day

EPT (≤14 years)

P

PTE (≤5 years)

D

T

R

Expiry of

17- or 20-year term

Patent Term Starts

IND

Effective

Patent

Issues

NDA

Complete

NDA Approved

Patent Expires

Inputs:P = time from beginning of patent term to patent issue (“pending phase”)

D = time from beginning of patent term until IND effective date (“delay”)

T = time from IND effective date until NDA complete (“testing phase”)

R = time from NDA acceptance until NDA approval (“review phase”)

Output:EPT = time from NDA approval until patent expires

AIPLA Chemical and Biotechnology Sections


Effective patent term ept1

Effective Patent Term (EPT)

PTE “Credits”

½ day per day

1 day per day

EPT (≤14 years)

P

PTE (≤5 years)

D

T

R

Patent

Issues

IND

Effective

Expiry of

17- or 20-year term

Patent Term Starts

NDA

Complete

NDA Approved

Patent Expires

Inputs:P = time from beginning of patent term to patent issue (“pending phase”)

D = time from beginning of patent term until IND effective date (“delay”)

T = time from IND effective date until NDA complete (“testing phase”)

R = time from NDA acceptance until NDA approval (“review phase”)

Output:EPT = time from NDA approval until patent expires

AIPLA Chemical and Biotechnology Sections


Effective patent term ept2

Effective Patent Term (EPT)

PTE “Credits”

½ day per day

1 day per day

EPT (≤14 years)

P

D < 0

PTE (≤5 years)

T

R

IND

Effective

Patent Term Starts

Patent

Issues

Expiry of

17- or 20-year term

NDA

Complete

NDA Approved

Patent Expires

Inputs:P = time from beginning of patent term to patent issue (“pending phase”)

D = time from beginning of patent term until IND effective date (“delay”)

T = time from IND effective date until NDA complete (“testing phase”)

R = time from NDA acceptance until NDA approval (“review phase”)

Output:EPT = time from NDA approval until patent expires

AIPLA Chemical and Biotechnology Sections


Attorney influence over ept variables

Attorney Influence Over EPT Variables

  • No control: T, R

  • Some influence: D– time between start of patent term and start testing phase

  • Most influence: P – time to issue patent

P

EPT

D

T

R

Patent Term Starts

IND

Effective

Patent

Issues

NDA

Complete

NDA Approved

Patent Expires

AIPLA Chemical and Biotechnology Sections


Survey

Survey

  • 48 human drugs that qualified for PTE (no devices or animal products)

  • Sources

    • USPTO site

    • US patents

    • Federal Register

  • AIPLA Chemical and Biotechnology Sections


    Survey results averages

    Survey Results – Averages

    P = time from beginning of patent term to patent issue (“pending phase”)

    D = time from beginning of patent term until IND effective date (“delay”)

    T = time from IND effective date until NDA complete (“testing phase”)

    R = time from NDA acceptance until NDA approval (“review phase”)

    EPT = effective patent term, i.e., time from NDA approval until patent expires

    AIPLA Chemical and Biotechnology Sections


    Survey results ranges

    Survey Results – Ranges

    P = time from beginning of patent term to patent issue (“pending phase”)

    D = time from beginning of patent term until IND effective date (“delay”)

    T = time from IND effective date until NDA complete (“testing phase”)

    R = time from NDA acceptance until NDA approval (“review phase”)

    EPT = effective patent term, i.e., time from NDA approval until patent expires

    AIPLA Chemical and Biotechnology Sections


    An ept mountain pte only

    An EPT “Mountain” – PTE Only

    AIPLA Chemical and Biotechnology Sections


    Topographical view

    Topographical View

    AIPLA Chemical and Biotechnology Sections


    Patent term matters

    AIPLA Chemical and Biotechnology Sections


    Ept observations

    EPT Observations

    • The longer the testing (T), the smaller the “plateau.”

    • Longer prosecution (P) and greater delay (D) lower likelihood for 14 years.

    • Length of prosecution (P) has least effect when D=0, that is, when patent term starts at the same time that clinical testing starts.

    • Length of review (R) has little to no effect when T = 4-6 years, but longer review (R) lowers likelihood for 14 years when T = 8-10 years.

    AIPLA Chemical and Biotechnology Sections


    Pte summary

    PTE Summary

    • Must have a patent before PTE “credits” accrue – therefore want to issue sooner than later.

    • Realizing this will affect drafting, filing, and prosecuting strategies:

      • Longer prosecution => less EPT

      • Earlier patent filing => less EPT

    • Longer development time => less EPT

    • If short development times (<~4-5 years), then less concern about prosecution time.

    AIPLA Chemical and Biotechnology Sections


    Pte and pta

    PTE and PTA

    § 156 (c) The term … shall be extended by the time equal to the regulatory review period for the approved product which period occurs after the date the patent is issued, except that- …

    (3) if the

    periodremaining in the term of a patent after the date of the approval of the approved product …

    when added to the

    regulatory review period as revised under paragraphs (1) and (2)

    exceeds fourteen years,

    the period of extension shall be reduced so that

    the total of both such periods does not exceed fourteen years;

    AIPLA Chemical and Biotechnology Sections


    156 c 3 154 b 156 a

    156(c)(3), 154(b), 156(a)

    EPT (≤14 years)

    PTA

    PTE (≤5 years)

    Expiry of

    17- or 20-year term

    Patent Term Starts

    IND

    Effective

    Patent

    Issues

    NDA

    Complete

    NDA Approved

    Patent Expires

    156(c)(3) if the period remaining in the term of a patent after the date of the approval of the approved product … when added to the regulatory review period as revised under paragraphs (1) and (2) exceeds fourteen years, the period of extension shall be reduced so that the total of both such periods does not exceed fourteen years

    AIPLA Chemical and Biotechnology Sections


    Incorrect interpretation of 156 c 3

    Incorrect Interpretation of 156(c)(3)

    EPT (≤14 years)

    PTA

    PTE (≤5 years)

    Expiry of

    17- or 20-year term

    Patent Term Starts

    IND

    Effective

    Patent

    Issues

    NDA

    Complete

    NDA Approved

    Patent Expires

    156(c)(3) if the period remaining in the term of a patent after the date of the approval of the approved product … when added to the regulatory review period as revised under paragraphs (1) and (2) exceeds fourteen years, the period of extension shall be reduced so that the total of both such periods does not exceed fourteen years

    AIPLA Chemical and Biotechnology Sections


    Pte and pta1

    PTE and PTA

    • Does the 14-year limit apply to both PTE and PTA?

      • Statutory language seems clear – No.

      • But, will the USPTO take a different interpretation, as in Wyeth?

      • No cases yet.

      • Some could be in process now.

    AIPLA Chemical and Biotechnology Sections


    Pte and pta2

    PTE and PTA

    • PTA vs.PTE

    • PTE

      • want to issue sooner, to start accruing “credit” sooner

      • only ½ day per day during testing phase

    • PTE

      • want to issue later, but without incurring deductions

      • 1 day per day

    AIPLA Chemical and Biotechnology Sections


    Pte and pta3

    PTE and PTA

    • Poor correlation between pendency and PTA – see Patently-O blog, March 14, 2008

    • Average PTA = ~1.1 years over-all

      • Longer for pharma & biotech patents covering products? Longer for such patents that receive PTE?

    • No data yet (Wyeth and other cases)

    • No patents that obtained PTE also obtained PTA, yet

      • PTE data are very delayed (2-3 years from approval)

      • Only 2 patents in survey were filed after May 29, 2000 and neither qualified for any PTA.

    AIPLA Chemical and Biotechnology Sections


    Pte and pta summary

    PTE and PTA Summary

    • PTA will extend PTE-extended patent term beyond 14 years.

      • But, will USPTO take a different view?

    • Must be very careful not to lose PTA after lengthy prosecution

      • e.g., lost appeal, RCE, TD

      • could jeopardize both PTE and PTA

    AIPLA Chemical and Biotechnology Sections


    Back up slides

    Back up Slides

    AIPLA Chemical and Biotechnology Sections


    Pte and pta4

    PTE and PTA

    35 U.S.C. § 156 (a) The term of a patent … shall be extended … from the original expiration date of the patent, which shall include any patent term adjustment granted under section 154(b) if ….

    AIPLA Chemical and Biotechnology Sections


    Requirement for patent issue

    Requirement for Patent Issue

    35 U.S.C. § 156 (c) The term of a patent eligible for extension under subsection (a) shall be extended by the time equal to the regulatory review period for the approved product which period occurs after the date the patent is issued, except that-

    AIPLA Chemical and Biotechnology Sections


    Deductions partial credit 14 year limit

    Deductions, Partial Credit, 14-year Limit

    35 U.S.C. § 156 (c) …

    (1) each period of the regulatory review period shall be reduced by any period [in which diligence was not exercised];

    (2) after any reduction required by paragraph (1), the period of extension shall include only one-half of the time [described in 35 U.S.C. § 156 (g)(1)(B)(i) – i.e., from IND to NDA];

    (3) if the period remaining in the term of a patent after the date of the approval … exceeds fourteen years, the period of extension shall be reduced so that the total of both such periods does not exceed fourteen years

    AIPLA Chemical and Biotechnology Sections


    Regulatory review period

    “Regulatory Review Period”

    35 U.S.C § 156 (g) For purposes of this section, the term "regulatory review period" has the following meanings: …

    (1)(B) The regulatory review period for a new drug, antibiotic drug, or human biological product is the sum of –

    • (i) the period beginning on the date [an IND] became effective … and ending on the date an [NDA] was initially submitted, and

    • (ii) the period beginning on the date the [NDA]was initially submitted and ending on the date such [NDA] was approved.

    AIPLA Chemical and Biotechnology Sections


    5 year limit

    5-year limit

    35 U.S.C. § 156 (g)(6) A period determined under any of the preceding paragraphs is subject to the following limitations:

    (A) …, the period of extension determined on the basis of the regulatory review period … may not exceed five years.

    AIPLA Chemical and Biotechnology Sections


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