Patent Reviews Gave Innovators Headaches In 2015; Will Relief Come This Year?

For innovator biopharma companies, 2015 brought a new threat to their patents with the growth of inter partes review (IPR) petitions.

Parties file these petitions with the Patent and Trademark Office’s Patent Trial and Appeal Board challenging the validity of patent claims. The proceeding offers generic manufacturers an advantage over Hatch-Waxman Act litigation as it requires a lower burden of proof and a broader standard for determining the meaning of patent claim terms.

Biosimilar sponsors are using it to try to knock out innovator patents before they file an application and thereby avoid the "patent dance" set up in the Biologics Price Competition and Innovation Act. And hedge fund manager Kyle Bass, the top filer in the sector, has sought to use the system to drive down a company’s stock price.

“The IPR process is creating enormous uncertainty,” says Tom DiLenge, general counsel and head of public policy for the Biotechnology Industry Organization. “We are concerned it will have a killing impact on the next generation of products. There won’t be effective market protection for anything that gets through the process. Companies won’t be willing to take risks.”

IN VIVO, a sibling publication of “The Pink Sheet,” provides an in-depth look at the IPR system and industry’s efforts to change its rules and remove drugs and biologics from the process (Also see "New Patent Battleground: Inter Partes Reviews Besiege Innovators" - In Vivo, 14 Dec, 2015.).

The article describes Novartis AG’s experience with IPR petitions challenging patents covering its Exelon Patch (rivastigmine) for Alzheimer’s disease and its multiple sclerosis drug Gilenya (fingolimod). The Patent Trial and Appeal Board (PTAB) issued final written decisions finding patent claims for both products to be unpatentable.

A growing number of biologics patents are also being challenged. At the end of December, Boehringer Ingelheim GMBH filed two petitions against AbbVie Biotechnology Ltd. challenging patent claims related to Humira (adalimumab). And Genzyme Corp. filed a petition against Genentech Inc. and City of Hope challenging the Cabilly patent covering recombinant DNA techniques to genetically engineer bacteria and other cells to produce immunoglobulins.

The coming year could see major changes in the IPR process. The House and Senate are expected to take up bills – the Innovation Act (H.R. 9) and the PATENT Act (S. 1137) – that include provisions to alter the system. For example, both bills would replace PTAB’s use of the “broadest reasonable interpretation” (BRI) standard in assessing the meaning of patent claim terms with the claim construction standard used by district courts, in which a claim term is given the meaning it would have “to a person of ordinary skill in the art at the time of the invention.”

The use of the BRI standard is one of the most egregious aspects of the IPR process for industry as it allows more prior art to be considered, thus increasing the chances that a decision will be issued against the patent owner.

The Supreme Court also may take up the issue if it grants a petition to review the Cuozzo Speed Technologies LLC case. The US Court of Appeals for the Federal Circuit ruled in support of the broadest reasonable interpretation of patent claims and found that the board’s decision whether or not to institute an IPR proceeding is unreviewable by the courts. BIO and the Pharmaceutical Research and Manufacturers of America have filed amicus briefs asking the Supreme Court to take up the case.