patent term matters

Patent Term Matters

Term and ScopeAIPLA

14 May 2009

Patent Term Matters

James J. KelleyAss’t General Patent CounselEli Lilly and CompanyIndianapolis, Indiana [email protected]

Jeffrey P. KushanPartnerSidley Austin Brown & WoodWashington, D.C. [email protected]

Vicki G. NortonPartnerDuane Morris LLPSan Diego, CA [email protected]

Pamela PolitisPatent AttorneyEndo PharmaceuticalsChadds Ford, PA [email protected]

14 May 2009 2AIPLA Chemical and Biotechnology Sections

mailto:[email protected]




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?


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


Agenda

Discussion StartersJeff Kushan – PTAJim Kelley – PTE and PTAVicki Norton - Scope: Enemy of Term? The Impact of Recent DecisionsPam Politis – Strategy Questions

Panel and Audience DiscussionQuestions May be Asked at Any Time

14 May 2009 AIPLA Chemical and Biotechnology Sections 5

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)


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


Effective Patent Term (EPT)

Patent Term Starts

IND Effective

NDA Complete

D T

P

Patent Issues

R

NDA Approved

EPT (≤14 years)

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

PTE “Credits”½ day

per day1 day

per day

Expiry of 17- or 20-year term

PTE (≤5 years)



Patent Term Starts

IND Effective

NDA Complete

D T

P

Patent Issues

R

NDA Approved

EPT (≤14 years)




per day1 day

per day


Patent Expires


PTE (≤5 years)


Patent Term Starts

IND Effective

NDA Complete

D < 0T

P

Patent Issues

R

NDA Approved

EPT (≤14 years)




per day1 day

per day


Patent Expires


PTE (≤5 years)

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

Patent Term Starts

IND Effective

NDA Complete

D T

P

Patent Issues

R

NDA Approved

EPT

Patent Expires


Survey

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

• Sources– USPTO site– US patents– Federal Register

Approval Year Number in Survey

1996 1

2000 1

2001 3

2002 3

2003 6

2004 6

2005 5

2006 14

2007 9


Survey Results – AveragesP D T R EPT

17-year (18) 5.9 5.9 5.5 0.9 12.820-year (30) 4.8 2.4 5.9 1.1 12.9Biotech (18) 6.1 3.7 5.3 1.3 13.2

Small Mol. (30) 4.7 3.6 6.0 0.9 12.6Total (48) 5.2 3.6 5.7 1.1 12.8


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

Survey Results – RangesP D T R EPT

Minimum 1.5 -13.3 2.6 0.3 7.71st quartile 3.1 1.8 4.0 0.5 12.22nd quartile 4.6 3.0 5.5 0.8 14.03rd quartile 7.4 6.2 6.6 1.2 14.0Maximum 12.4 10.4 20 3.0 14.0


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

An EPT “Mountain” – PTE Only


Topographical View


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.


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.


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


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

Patent Term Starts

IND Effective

NDA Complete

Patent Issues

NDA Approved

Patent Expires


PTE (≤5 years)


PTA

EPT (≤14 years)

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

Incorrect Interpretation of 156(c)(3)

Patent Term Starts

IND Effective

NDA Complete

Patent Issues

NDA Approved

EPT (≤14 years)

Patent Expires


PTE (≤5 years)


PTA

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

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.


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


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.


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


Back up Slides


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 ….


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-


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


“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.


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.


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