Good News in China – Faster Approval for Innovative New Drugs Is on the Way

For decades in China, patient access to overseas developed innovative drugs has been partially hampered by the requirement that data be supplied from clinical trials conducted in China (this after the innovator had already completed multiple phases of clinical trials in their country of origin).  Unfortunately, this requirement adds significantly to the time period for approval which can often take as long as eight years.  As a result, China’s Food and Drug Administration (CFDA) has a tremendous backlog of drug approval applications which, in June, stood at 6,000 (compared to a high of 22,000 in 2015).  As a result, between 2001 and 2016, regulators in developed markets approved 433 new drugs whereas China approved just over 100.   Taken together, all of this helps explain why a new drug often appears on the market in China anywhere from five to seven years later than in Europe or the U.S.

Earlier this month, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued a guideline that allows data from overseas clinical trials to be used directly in the innovative drug and medical device application process.  The guideline notes that companies looking to register innovative drugs or medical devices will need to provide clinical trial data related to any racial divergence relevant to the Chinese market.  Regardless, this change is significant and should considerably shorten the time period for approval of future drugs by several years.  However, one concern is that the guideline did not set a timetable for implementation.

The guideline also includes other measures to speed up approvals for clinically needed drugs and equipment, establish a compulsory licensing system and to make it easier for research institutions to conduct clinical trials.  Additionally, the Chinese government has said that it is also exploring a new system linking drug approvals to patent status (a patent linkage system). 

This announcement comes as China aims to boost its drug industry and shift from generic drugs towards more innovative medicines and medical equipment.  China has the second largest drug market next to the U.S.  The changes proposed by the guideline are intended to make China’s industry more competitive and help meet the clinical needs of its nearly 1.4 billion people, for whom high costs and access to health care are significant issues.

This post was written by Lisa Mueller.

BRIC Wall Blog Nominated for 2017 Best Legal Blog Contest

tei-bc-nominee-2017From a field of thousands of potential nominees, The BRIC Wall blog has been nominated for The Expert Institute’s 2017 Best Legal Blog Contest. The annual contest recognizes the “most exciting, entertaining, and informative legal blogs online today,” and the BRIC Wall Blog has been included as a leader in the Best AmLaw Blogs category.

Readers can vote for the BRIC Wall Blog to be named the 2017 Best Legal Blog Content winner! To vote, please click here.

Polls are open until Friday, November 3, 2017. Thank you for your support!



Understanding Bolar and Bolar-Like Exceptions in the U.S. and Abroad – Part 3– Mexico

This is part 3 in our multiple part series examining Bolar and Bolar-like exemptions in U.S. as well as in a number of foreign jurisdictions.   Part 1, the Bolar Exemption in the U.S., can be found here.  In Part 2, the Bolar Exemption in Canada can be found here.


In Mexico, no medicinal product for human use can be placed on the market unless it has been approved by the Federal Commission for Protection against Sanitary Risks (COFEPRIS).  Like the U.S., Mexico has a linkage system.  However, in Mexico, not only do the linkage regulations prevent medicinal product approvals in violation of patent rights but the regulations also establish a Bolar-like exemption for generic and biologic follow-on products (biocomparables). Accordingly, under certain conditions, the Bolar-like exemption allows pilot production and tests to be performed.  However, as will discussed in more detail below, the recent importation of considerably large amounts of active pharmaceutical ingredients (APIs) covered by Mexican patents for the purpose of conducting clinical trials has tested not only the scope of the exemption but also COFEPRIS and the Mexican Patent Office (which is known as the Mexican Institute of Industrial Property (IMPI)).

Exclusivity rights and the Bolar exemption

The Mexican Health Law and its Regulations set forth an abridged procedure for generics, as well as a recently enacted hybrid-procedure for biologic follow-on products (biocomparables). The Regulations establish a Bolar-like exemption for these products.  In Mexico, applications for approval of a generic or biocomparable product can be submitted at a certain time point prior to expiration of any innovator patents covering the product.  Specifically, this time period is three years prior to expiration for generic products and eight years prior for biologic follow-on products.  Under certain conditions, the exemption allows pilot production and tests to be performed.

Nevertheless, in contrast to European Law, Mexican domestic law is silent about providing a research and development exemption (RDE) for patent infringement.  As will be discussed further below, although COFEPRIS considers formulation patents when deciding whether to grant an application for marketing authorization, it recently approved the importation of a large (4 kg) quantity of API by a non-authorized party.

Regulatory Data Exclusivity

Prior to 2008, Mexico’s domestic law was silent regarding Data Package Exclusivity (DPE) rights. However, in January 2008, the Mexican Health Regulations were amended with respect to generic medications.  Specifically, the amendments eliminated the requirement that a generic applicant prove the safety and efficacy of its products.  However, this provision was replaced with the requirement that a generic applicant prove the interchangeability of its products with those of the innovator in order for a marketing authorization (MA) to be granted.

Additionally in 2008, the Regulations were further amended to implement an abbreviated approval procedure for generic drugs based solely on bioequivalence and bioavailability studies.  However, these Regulations did not provide any provisions regarding non-reliance by a generic applicant on the MA holder’s data during the data exclusivity period as established in the international treaties such as NAFTA and TRIPS.

In Mexico, no specific legislation exists regarding regulatory exclusivity.  However, there are some provisions applicable to this issue in  the intellectual property (IP) law (IP Law), the Health Law Regulations, New Molecules Regulations and International Treaties enacted and/or ratified Mexico (e.g., such as NAFTA and TRIPS).  In fact, in 2012, COFEPRIS published an internal memorandum on its website providing guidelines on regulatory data exclusivity (RDE)  According to these guidelines (as well as a minimum term set by NAFTA), a MA holder has a five year exclusivity period during which its information cannot benefit or be used to support a third party application for registration of a generic drug.  It is important to note that the guidelines do not preclude generics from conducting their own clinical trials to obtain MA.

Although these guidelines show COFEPRIS’ willingness to protect RDE according to NAFTA and TRIPS, several concerns exist.  Some of these examples include: (i) the uncertainty regarding the legal status of an internal memorandum published on a website rather than in the Official Gazette; and (ii) the wording of the guidelines do not clearly address either RDE for biological products, registration of new formulations and indications, nor proceedings and measures to enforce and observe RDE.

Linkage System

The linkage system in Mexico is a system in place between COFEPRIS and IMPI.  The purpose of the linkage system is to prevent the granting of MAs to non-authorized third parties for products that would fall within the scope of the patents listed in the Linkage Gazette (Gazette).  The Gazette is a document published periodically (e.g., about every six months) by IMPI listing the patents covering medicinal products.

For many years, IMPI listed only patents covering small molecules.  However, in 2012, IMPI began listing patents covering pharmaceutical formulations.  The inclusion of formulation patents in the Gazette eliminated the need for patentees to spend time and money in legal challenges to include these patents in the Gazette while also expanding the application of the linkage system to more than just compound patents prevent.

Interestingly, the excitement of the inclusion of formulation patents in the Gazette was short lived because practically speaking, COFEPRIS only recognizes compound patents.  As a result, COFEPRIS has paid very little attention to formulation patents listed in the Gazette during the approval of follow-own products  Unfortunately, this has undermined the preventive aim of the system and as a result, presented issues for patentees monitoring their competitors for potential infringing activities and increased the number of linkage litigation cases.

The Importation of APIs

COFEPRIS is in charge of granting approval of imports of APIs, which is mandatory before Mexican Customs. However, neither the wording of the Bolar-like exemption nor the rules governing the importation of APIs clearly address the amount of API that can be imported by an applicant of a follow-ons product for the purposes of conducting the tests needed to obtain marketing approval.  IMPI nor COFEPRIS have published their opinion of whether the exemption allows for the importation of only small quantities of APIs for purposes of conducting the tests and trials necessary obtain a MA.  This has led to circumstances where unauthorized parties received approval from COFEPRIS to import large amounts (e.g., 4 kilograms) of patented APIs which were far beyond the small amounts necessary to conduct pilot production and testing.

In most instances, the approvals by COFEPRIS for importation of large amounts of patented APIs are for those APIs where the patents are close to expiry.  However, during the last four years, this trend has increased because parties manufacturing medicinal products in Mexico no longer have to have a facility physically located within Mexico.  The removal of this requirement has significantly changed the pharmaceutical business in Mexico.  Now, many small and medium foreign companies start their business in Mexico by:  (1) entering into partnerships with pharmaceutical companies already established in Mexico; and (2) introducing their products via brokers and distributors.

On July 1, 2013, COFEPRIS published amendments to their guidelines in the Official Gazette, regarding the importation of APIs.  Specifically, the amendments stated that with respect the importation of Tadalafil, Sildenafil, Raloxifeno and Clembuterol, applicants had to provide the details of the clients being supplied these APIs as well as justify the total amount of API being imported based on the number of clients.

Patent Enforcement

The IP Law entitles a patentee to prevent the importation and manufacture of patented subject matter by non-authorized parties.  Although the IP Law provides an experimental exemption, this exemption applies only to scientific research that has absolutely no commercial purposes whatsoever.  Therefore, the experimental exemption would not apply for a generic company seeking to apply for a MA.

The IP Law also provides for interim injunctions for alleged patent infringement.  Additionally, at the border, a database managed by Mexican Customs in coordination with IMPI has been created.  This database is populated with the registered trademarks of owners that are interested in the surveillance of their IP rights throughout the forty-nine customs checkpoints that are distributed in boundaries, seaports, bus and train stations and airports.

With respect to medicines, pharmaceutical substances, chemicals and APIs, the activities and efforts of the Customs Office are primarily focused and limited to detecting prohibited drugs and narcotics.  After detecting any such prohibited drugs and narcotics, the next step involves enforcing the IP protection with the borders for patents, particularly those that protection pharmaceutical products.  Since June 2012, Mexican Customs has collaborated to detect and seize APIs grounded in border measures granted by IMPI to IP right holders.

Current Situation

IMPI has applied the Bolar-like exception with some flaws in its interpretation and scope (Note:  In Mexico, patent enforcement occurs before IMPI at the first stage).  For example, IMPI adopted the criteria that if the importation of patented products was conducted by brokers or third parties different from the manufacturer of the drugs in Mexico, the Bolar-like exemption does not apply (as a defense) and thus, ther will be a finding of patent infringement.  In contrast, if the importation is conducted by the manufacturer, the Bolar-like exemption applies and there will be no finding of patent infringement.  In both situations, the amount of the imported product is disregarded by IMPI.  As a result, this gives more weight to the activity of the importer rather than the final destination of the imported product.  Currently, these cases are under debate at the Mexican Supreme Court (assuming that the Mexican Supreme Court affirms their discretion to review the case).

In conclusion, there have not been any changes in the regulations involving the Bolar-like exemption in Mexico.  The few cases in which the Bolar-like exemption has been litigated have some flaws in terms of the understanding of the facts and applicable procedural rules (for example, IMPI determined that the burden was on the plaintiff in a patent infringement action to prove that the amount of patented product exceeded amount needed to obtain regulatory approval.  Such a determination is clearly contrary to the procedural rule that the Bolar-like exception is a defense, and as such, must be proven by the defendant and not the plaintiff.  It will be interesting to see how the Mexican Supreme Court decides this issue.

Conclusions and Recommendations

There are several areas that can be improved in the Mexican legal framework to grant legal certainty to both innovators and applicants of follow-on products.  These include, for example:

  • That COFEPRIS use and observe the patent Linkage Gazette when it is deciding whether or not to approve the importation of APIs. .
  • That COFEPRIS establish standards for small amounts of APIs need to adequately comply with the regulatory tests needed for a MA for follow-on products, and deny imports for quantities outside these amounts.
  • That COFEPRIS require importers to declare the destination of the eventual imported products.
  • That IMPI clearly establish as appropriate, the differences between the experimental use and the Bolar-like exception.
  • That IMPI be careful when, on a case-by-case basis, it reviews whether there is an adequate amount of API being imported for tests necessary to support a generic MA application. In some instances, even a small amount of an API may represent the manufacturing of thousands of infringing products (which may end in the grey and black market.).
  • That Customs take advantage of the information contained in the Gazette to detect and stop substances that could enter the country in violation of any patents.
  • Renegotiations of NAFTA will likely impact the IP and regulatory legal frame in Mexico. It is expected that the new NAFTA will raise the IP protection available in Mexico and will cause Mexico to review it entire IP system thus impacting patentability subject matter, linkage regulation, the Bolar-like exception and data package exclusivity for chemicals and biologics.

Please continue to watch the BRIC Wall Blog for updates on the Bolar-like exemption in Mexico.

This post was written by Lisa Mueller and Alejandro Luna of Olivares.

After Years of Waiting, Your or Your Competitor’s Patent Application May Quickly Issue in Brazil. Are You Ready?

The Instituto Nacional da Propriedade Industrial (INPI), also known as the Brazilian Patent and Trademark Office (BRPTO), may soon automatically grant approximately 231,000 currently pending patent applications in an effort to reduce the backlog of unexamined patent applications that have plagued the office for years.  As many of our readers know, the backlog of unexamined applications has resulted in pendency periods on average of at least ten (10) years.  Although expedited examination is available for green technologies, oil and gas technologies (under the patent prosecution highway (PPH), limited pharmaceutical applications, and when an Applicant can demonstrate clear infringement, these measures have failed to put a significant dent in the existing backlog.

In July 2017, the Brazilian government stated that it was considering an emergency measure authorizing INPI to automatically grant approximately 231,000 pending patent applications by 2020.  More information on this measure can be found at the following links:  here, here and here.  Although the announcement of this “automatic” grant has been highly controversial, INPI has implied that it has few, if any other options for dealing with the current backlog. Interestingly, some examiners are threatening to go on strike against the measure.

The emergency measure involves a simplified examination procedure in which INPI would automatically grant any unexamined applications that do not have any outstanding annuity payments due and do not have pre-grant submissions filed by parties against the granting of the patent.  Pharmaceutical applications or divisional applications where the parent application has not yet been examined, are excluded from the measure.

Proposed rules for implementing the new measure were available for public comment until August 31, 2017.  Interestingly, during recent meetings, INPI has suggested that proposals made by local associations that add complexity to the process, such as the possibility of amending claims prior to grant or requesting substantive examination after grant, will likely be disregarded.

While the exact details and the timing of implementation of the measure are unknown, now is the time for Applicants with pending non-pharmaceutical or (certain) divisional applications to be developing a strategy to take advantage of the measure while minimizing any potential risks.  For example, Applicants with products having a short product life span should consider taking full advantage of this emergency measure.

The measure as currently drafted contains an “opt-out” clause in which an Applicant may, within 90 days, request that an application not be automatically granted but instead be subject to regular, substantive examination.  Applicants should strongly consider using the “opt-out” option for applications covering very important inventions and/or if the claims as originally filed do not provide the desired coverage (especially since INPI is likely to disregard any amendments made after the application was filed).  Moreover, Applicants should examine applications of competitors since the measure provides the opportunity for third parties to prevent the automatic granting of an application by the submission of pre-grant submissions with briefs and accompanying prior art.  These pre-grant submissions must be filed before the emergency measure comes into effect.  Moreover, there is no cost for filing the brief before INPI.  .

Please continue to watch the BRIC Wall Blog for updates on the emergency measure for eliminating the backlog of patent applications in INPI.

This post was written by Lisa Mueller and Roberto Rodrigues of Licks Attorneys

Understanding Bolar and Bolar-Like Exceptions in the U.S. and Abroad – Part 2 – Canada

This is part 2 in our multiple part series examining Bolar and Bolar-like exemptions in U.S. as well as in a number of foreign jurisdictions.  Part 1, the Bolar Exemption in the U.S., can be found here.

Exemptions to Patent Infringement for Research under Canadian law

Canada provides both a statutory and common law exemption to patent infringement.

Statutory exemption

The statutory exemption to patent infringement is found in Section 55.2(1) of the Canadian Patent Act which states that:

It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product.

Generally, Section 55.2(1) pertains to activities “reasonably” related to the development and submission of information required by a regulatory body (such as Health Canada, which is similar to the U.S. FDA).  As in the U.S., the information does not necessarily have to be actually submitted to the regulator.  While this provision relates to regulatory approval for inventions in any area of technology (not just pharmaceuticals), much of the case law has evolved in the pharmaceutical area involving generic drugs.  However, a recent Federal Circuit decision in Eurocopter v. Bell Helicopter Textron Canada Ltee, 2012 FC 112, aff’d 2013 FCA 219 (Eurocopter), involving Canadian Patent 2,207,787 for a skid-type helicopter landing gear, considered Section 55.2(1) to be potentially applicable in a mechanical device case involving two competitors developing helicopter landing gear.  However, the defendant’s (Bell’s) argument failed because the evidence showed that its landing gear was used for commercial purposes in addition to regulatory testing.  Finally, it is also important to note that Section 55.2(1) relates to information that may be required by a regulatory body not only in Canada, but anywhere in the world.

Common law exemption

Under the common law exemption, an experimental user who does not have a license to a patent but is conducting bona fide experiments with the patented invention is not considered to be an infringer.  Examples of bona fide experiments that have been held not to constitute an infringement include making a patented substance, not for profit, but to establish that quality product could be manufactured according to the description disclosed in a patent.

The seminal case involving the common law exemption to patent infringement is the Supreme Court decision in Micro Chemicals Ltd. v. Smith Kline & French Inter-American Corp. (1971), 2 C.P.R. (2d) 193 (SCC) (Micro Chemicals).  In March 1965, Micro Chemicals Ltd. (Micro) applied to the Commissioner of Patents under Section 41(3) of the Canadian Patent Act for a compulsory license to make and sell the antipsychotic drug trifluoperazine under Canadian Patent No. 612204 (the ‘204 patent) owned by Smith Kline & French Inter-American Corp. (Smith Kline).  On June 21, 1966, Micro was granted a non-exclusive license to carry out the patented process in Canada in its own establishment for the purpose of preparing and selling the drug product.  In May 1968, Smith Kline brought an action against Micro alleging patent infringement of the ‘204 patent from and after January 10, 1961.  The alleged infringements were broken down into four periods:

  1. Actions of Micro prior to March 25, 1965 (before the date of the application for the compulsory license) during which Micro confirmed that it could satisfactorily produce the product on a commercial basis using the patented process;
  2. Actions of Micro between November 1, 1965 and January 22, 1966, during which experimental batches were prepared;
  3. Actions of Micro (and two other defendants) between January 25, 1966 and June 21, 1966, consisting of transfers of the material from Micro to Gryphon Laboratories Ltd. (Gryphon) and the manufacture of tablets by Gryphon and the activities of another laboratory (Paul Maney Laboratories (Paul Maney)); and
  4. Actions of Micro, Gryphon and Paul Maney (collectively, the Defendants) between June 21, 1966 and February 3, 1967.

The lower court found that Micro’s activities prior to January 22, 1966 constituted an infringement because they were not carried out for the purpose of improving the process but instead to enable Micro to produce the product commercially as soon as the license could be obtained.  The Supreme Court reversed holding that Micro’s activities during this period did not constitute infringement.  Specifically, the Court stated on pages 518-519 that:

I will now deal with the appeal in the infringement action.  Walsh J. in his judgment, being of the view that the alleged infringements broke down into four periods, dealt with the four periods accordingly.  He saw the period prior to March 25, 1965, as differing form the period between November 1, 1965, and January 22, 1966, and dealt with these two periods separately.  I am unable to see any difference in principle in what was done between these two periods.  It is significant that Walsh J. found that the small amount of trifluoperazine produced prior to January 22, 1966, was put in bottles and kept for Micro and never entered into commerce and no damage was suffered by respondent and no profits made by Micro, but nevertheless he found that there had been an infringement.  In my view he was in error in holding as he did that an experimental user without a license in the course of bona fide experiments with a patented article is in law and infringer (emphasis added).

Cases involving the Statutory Exemption

Similar to the U.S., a broad interpretation of the statutory exemption has been adopted by the Canadian courts as illustrated in the decision of the Federal Court in the patent infringement action between Merck and AstraZeneca v. Apotex, 2006 FC 524 (Merck).  The Merck case involved Canadian Patent No. 1,275,350 (the ‘350 patent) covering the drug lisinopril.   Although Apotex admitted infringement, it raised four defenses involving certain quantities of the product.  Although the Court rejected several of the defenses, some activities exempted in view of section 55.2(1) of the Patent Act.

Specifically, the Court found that quantities of lisinopril used by Apotex for purposes of obtaining regulatory approval were exempt, including those that had not been referenced in the submissions but were reasonably related to that purpose. Additionally, the Court found that material routinely taken by Apotex as samples from incoming raw material and of finished products stored in the event that they were required for future reference by the government, were also exempt.

Finally, the Court found that Apotex’s use of lisinopril in ongoing research and development in pursuit of alternative formulations and techniques for making tablets fell within the “fair dealing” exemption to patent infringement (an apparent reference to the common law exemption, since Canada has not statutory exemption for “fair dealing”).  However, the Court noted that, “…once the user had proceeded beyond the experimental and testing phase and has taken steps to manufacture, promote and sell the product, the fair dealing exception no longer applies”.

Interestingly, with respect to the common law exemption, the Court disagreed with Merck’s arguments that the exemption defined in Micro Chemicals no longer applied after Canada’s compulsory licensing regime was repealed, stating that:

I reject this assertion that the Micro Chemicals exception is limited and only applies as an adjunct to the grant of compulsory licenses…In my analysis, all that is required is that the infringing product was made merely by way of bona fide experiment, and not with the intention of selling and making use of the product in the commercial market.

Recent Court decisions in Canada make it clear that the use and status of any experimental samples must be carefully documented in the event it later becomes necessary to establish that the samples were not destined for commerce (and perhaps were destroyed).  For example, in Apotex Inc. v. Sanofi-Aventis, 2013 FCA 186, Apotex was unable to produce records showing the destruction of disputed lots of the drug clopidogrel that it had developed for regulatory purposes.  Due to this lack of evidence, the Court held that Apotex had not demonstrated that the experimental and statutory exemption applied to those lots.  In contrast, in Teva Canada Ltd. and Apotex v. Novartis AG, 2013 FC 141 (Teva), Apotex presented evidence of careful documentation of all of its test imatinib while also providing to the Court an undertaking that any inventory of imatinib remaining after completion of the regulatory process would be destroyed.  In Teva, although the leftover (or inventory) imatinib was not covered under the broad interpretation of Section 55.2(1), it could be retained subject to the undertaking that it would be destroyed once the product reached its expiration date.

We are not aware of any cases in Canada involving Section 55.2(1) in the context of alleged infringement by innovative drug development or involving the use of patented research tools.  Although there is some uncertainty in this area, Section 55.2(1) should have some applicability in these areas given the Federal Circuit’s recent decision in Eurocopter.

Continue to watch the BRIC Wall Blog for updates on statutory and common law exemptions to patent infringement in Canada.

This post was written by Lisa Mueller and Noel Courage of Bereskin & Parr LLP


Understanding Bolar and Bolar-Like Exceptions in the U.S. and Abroad – Part 1

This is part 1 of our multiple part series examining Bolar and Bolar-like exemptions in U.S. as well as in a number of foreign jurisdictions.

U.S. Bolar Exemption

For most patented products in the U.S., on the day a “blocking” patent expires, a competitor can begin selling what was, up until that point, an otherwise infringing product.  However, for a long time, with respect to pharmaceuticals, this simply was not the case. Because the marketing of pharmaceuticals is strictly regulated by the U.S. Food and Drug Administration (FDA), a drug developer is required to comply with various statutes, regulations, guidelines and requirements before marketing approval is awarded.  It was well known that the marketing approval process is a long, arduous process that takes several years.

Additionally, U.S. law provides a very narrow research or experimental use exemption with respected to patented inventions.  The exemption is so narrow that it is limited to actions performed for “amusement, to satisfy idle curiosity or for strictly philosophical inquiry”.  Madey v. Duke University, 307 F.3d 1351 (Fed. Cir. 2002).  In addition, in 1984, the Federal Circuit decided Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858 (Fed. Cir. 1984), holding that a manufacturer could not begin the testing needed to obtain regulatory approval of a drug without infringing blocking patents.  Unfortunately, the Roche decision further delayed the entry of generic drugs into the marketplace by delaying the availability of generic drugs by allowing a patentee to maintain market exclusivity for a period of time after its blocking patent(s) expired.

In response to the Roche decision, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. No. 98-417, 98 Stat. 1585 (codified as amended at 35 U.S.C. §§ 156 and 271(e)), which is often referred to as the “Hatch-Waxman Act”.  The Hatch-Waxman Act overruled Roche and created the Section 271(e)(1), which is often referred to as the “Safe Harbor” or “Bolar” exemption.  The Safe Harbor insulates certain activities from patent infringement.  Specifically, Section 271(e)(1) reads:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

It is important to note that the Safe Harbor is not limited to generic only products.  It is applicable to branded pharmaceuticals, medical devices, biologics and biosimiliars.

The Safe Harbor has been interpreted broadly by U.S. courts and, as a result, exempts a wide variety of activities having an ultimate commercial benefit provided that the conduct is reasonably related to gaining information relevant to the FDA approval process.  The U.S. Supreme Court opined on the Safe Harbor in Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).  In this decision, the Court held that the text of Section 271(e)(1) extended to all uses of patented inventions that are reasonably related to the submission of any information to the FDA.  As a result, the Safe Harbor includes preclinical studies of patented compounds that are appropriate for submission in the regulatory process.  Moreover, the Court stated that under certain conditions, the exemption could include:  (1) experimentation on drugs that were not ultimately the subject of FDA submission; or (2) the use of patented compounds in experiments that were not ultimately submitted to the FDA.  Additionally, in a series of decisions subsequent to Merck, the Federal Circuit held that the Safe Harbor can exempt both pre- and post-approval activity.  However, in Momenta Pharms., Inc. v. Teva Pharms. USA Inc., 809 F.3d 610 (Fed. Cir. 2015), cert. denied sub nom. Amphastar Pharms., Inc. v. Momenta Pharms., Inc., 137 S. Ct. 68 (2016), the Court stressed that the Safe Harbor was directed to seeking FDA approval and would only cover limited types of post-approval conduct that are truly required by FDA:

The routine record retention requirements associated with testing and other aspects of the commercial production process contrast with non-routine submissions that may occur both pre- and post-approval, such as the submission of investigational new drug applications (“INDs”), new drug applications (“NDAs”), supplemental NDAs, or other post-approval research results….The routine quality control testing of each batch of generic enoxaparin as part of the post approval, commercial production process is therefore not “reasonably related to the development and submission of information” to the FDA, and it was clearly erroneous to conclude otherwise.

Under Momenta, any type of quality control testing that is a “habitual” or “regular” part of the production process and not related to obtaining FDA approval is not likely be exempt.

Examples of activities which may fall under the Safe Harbor (provided that there is clear link between such activities and efforts to obtain regulatory approval) include:  supplying active ingredients, stockpiling drug inventory, preclinical studies, submitting regulatory data to a foreign agency where the data was submitted or is going to be submitted to the FDA, using research tools, using FDA data to prepare a patent application, using a patented product to develop an alternative FDA-approved manufacturing process , etc.   Examples of activities that have been found by U.S. courts not to fall under the Safe Harbor include:  manufacturing patented products in the U.S. for shipment to foreign regulatory authorities, use of product for foreign clinical trials where no indication that results would be submitted to the FDA and basic research.

Finally, under U.S. law, it should be understood that the Safe Harbor is an affirmative defense and the defendant has the burden of establishing and proving the defense during litigation.  As a result, a party seeking to rely on the Safe Harbor should keep detailed records regarding its “infringing” conduct to establish the Safe Harbor.

This post was written by Lisa Mueller.

Essential Diagnostics Lists to be Developed by WHO

On June 6, 2017, the 20th World Health Organization (WHO) Model List of Essential Medicines was published containing several important additions.  One important addition was the recommendation by the Expert Committee on the Selection of Essential Medicines (Committee) that WHO develop an Essential Diagnostics List (EDL).  Based on this recommendation, WHO has begun to lay the ground for the preparation of such a list which will contribute to Universal Health Coverage.

The EDL is intended to provide evidence-based guidance to countries to create their own national lists of essential diagnostic tests and tools.  According to the WHO, essential medicines lists have been successful in facilitating access to treatment and promoting affordable prices, especially in low-resourced countries, by prioritizing the most important medicines that countries need to make available to their populations.  It is believed that the EDL will provide the similar benefits for diagnostics, such as providing improved patient care, greater capacity to diagnose diseases during outbreaks, increased affordability of tests, improved regulation and quality of diagnostic tests and the strengthening of capabilities of national laboratories.

According to the Committee, diagnostic tests are essential not only to diagnose disease or subpopulations of patients for which certain medicines may be indicated, but also to monitor the effectiveness or toxicity of drugs. Moreover, diagnostic tests are often very important in the prognosis of disease.  The Committee recommended that the EDL list focus initially on in vitro diagnostics for tuberculosis, malaria, HIV and Hepatitis B and C but should be expanded as quickly as possible to other important conditions such as antimicrobials and non-communicable diseases.

The WHO is creating a Strategic Advisory Group of Experts on In Vitro Diagnostics (SAGE IVD) to advise WHO on global policies and the development of the EDL.

Please continue to watch the BRIC Wall Blog for updates on the Essential Diagnostics List.

This post was written by Lisa Mueller.