Archive for the 'Patents' Category

Myriad Ruling Will Undermine Global Biotech investment But All Is Not Lost

Guest blog written by Adrian Tombling, partner and patent attorney at Withers & Rogers LLP.

The US Supreme Court ruling in the so-called ‘Myriad case’ regarding the patentability of human genes will undermine global biotech investment but all is not lost. Judge Thomas, in Association for Molecular Pathology v. Myriad Genetics, effectively tightened the rules on the patentability of human genes, finding that all naturally occurring gene sequences, even when isolated in the laboratory, are not patentable. In future, only non-naturally occurring gene sequences (e.g., sequences that have been modified or entirely created in the laboratory), will be patentable, and therefore, attract investment from biotech companies. Read more »

Drug Development: To Sue or Not to sue?

Guest blog written by Dr Nicholas Jones, partner and patent attorney at Withers & Rogers LLP.

While it may not happen often, clinical trials can sometimes be halted by patent disputes, leading to costly delays in bringing new drugs to market. At last, the UK Government has decided to do something about this in a bid to make UK patent law more consistent with that in some other parts of the world. Read more »

Patent Settlements Become More Risky

Pharmaceutical companies can anticipate more costly, drawn-out patent litigation in the wake of the June 17 US Supreme Court decision, which creates great uncertainty about the grounds for negotiating settlements in patent cases. In ruling that “pay-for-delay” arrangements could violate the antitrust laws, and that the Federal Trade Commission (FTC) has the right to challenge these deals, the majority undermined years of patent case law and sent the issue back to the lower courts to decide.

The decision was not a complete victory for the FTC, in that it stopped short of declaring reverse payment agreements as per se illegal. Instead, the Justices instructed the lower courts to apply a “rule of reason” to these cases, and not the “quick look” approach employed by the Circuit Court case under review.

The ruling in FTC v. Actavis supports the long-held contention of FTC officials and consumer activists that brand-generic patent settlements maintain market exclusivity for brand name drugs, reducing competition and raising costs for consumers and health care systems. Both innovator and generic firms have insisted that these settlements actually permit generic products to come to market earlier than under costly, drawn-out court battles over patent rights. That argument was supported in an April 2012 ruling from the US Court of Appeals, which found that an arrangement that allows generic competition earlier than patent expiration did not violate antitrust laws. The dissenting opinion from Chief Justice John Roberts, which was joined by Justices Antonin Scalia and Clarence Thomas, echoes the earlier Court ruling and also raises concerns about linking antitrust law and patent issues and weakening patent protections for innovators.

However, a 5-3 majority led by Justice Stephen Breyer held that the FTC and other government and private parties have the right to pursue reverse payment arrangements as violations of antitrust laws. Breyer, joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan, expressed concerns that reverse payment settlements have an adverse effect on competition. At the same time, though, the majority failed to provide guidance on how to structure patent settlements so that they do comply with antitrust policy.

The ruling is expected to encourage the private plaintiffs’ bar to bring new lawsuits challenging brand-generic patent settlements of all kinds, setting the stage for years of uncertainty in challenging and defending patents on all sides. “It’s going to be a nightmare,” predicted Arent Fox attorney Wayne Matelski, as District Courts struggle to decide what “rule of reason” means in these complex cases.

While companies may be more reluctant to settle future lawsuits, they may face legal challenges to earlier settlements, and new arguments against cases currently before the courts. More plaintiffs may enter the fray, as seen in recent actions by chain drugstores. These cases will require decisions from judges on whether a settlement is illegal primarily due to the size of a reverse payment, or to other services and arrangements with a generic firm. The courts also will have to weigh the strength of a patent and the merits of a patent suit and what extraneous financial factors might lead a generic competitor to seek a settlement.

Although the FTC claimed the ruling a “significant victory,” many legal authorities questioned whether the decision would promote competition and lower drug costs. It remains to be seen if generic drug makers will become more aggressive in challenging patents in order to speed copycat products to market, or if brand firms become more determined to protect intellectual property rights, despite the high cost of litigation.

Congress gets off the hook, for now, as it’s likely to drop efforts to enact FTC-backed legislation to limit reverse-payment settlements. Yet, the issue could end up before the Supreme Court again if lower courts continue to produce divergent rulings on these cases, as they have done over the last decade.