Initiatives to Increase Communication Between the USPTO and the FDA Concerning Pharmaceutical Patent Applications
President Biden, in July 2021, issued an Executive Order (“E.O.”) observing that “too often, patent and other laws have been misused to inhibit or delay — for years and even decades — competition from generic drugs and biosimilars, denying Americans access to lower-cost drugs.”1 The E.O. required the United States Patent and Trademark Office (USPTO) and the Food and Drug Administration (FDA) to coordinate efforts to address this perceived issue.
This OnPoint is intended to summarize the current state of play concerning these initiatives, particularly proposals to increase information flow from the FDA to the USPTO. The Administration and the biosimilar/generic industry are concerned that innovator sponsors of branded drugs are improperly obtaining patents after initial drug approval which would be undermined by information confidentially supplied to FDA by the innovators. The idea of these initiatives is that greater access to the FDA regulatory file would allow the USPTO to better identify and reject any such patent applications before issuance. The brand companies, however, point out that there is little evidence of any endemic problem in need of a drastic solution. The stakeholders are in conflict because FDA applications often include large amounts of trade secret information about the sponsors’ manufacturing processes, product characteristics, and formulation. Under the current regime, the FDA maintains this information as confidential. Disclosure to the USPTO risks public disclosure of this information, as the USPTO is required to make public any information relied upon by an examiner during prosecution.
FDA and USPTO Actions
In response to the E.O, in September 2021, the FDA wrote the USPTO and raised concerns with practices it referred to as “patent thickets,” “evergreening,” and “product hopping.”2 The letter described “patent thickets” as where a manufacturer obtains a large patent portfolio on a single product to dissuade competitors from entering the market by making market entry too costly or risky; “evergreening” as when a manufacturer obtains patents on “post-approval” or “secondary” changes to a previously approved drug such as new formulations, delivery systems, or manufacturing methods; and “product hopping” as when a brand manufacturer attempts to convert the market to a new, modified drug product that is covered by later-expiring patents.3
In response to the FDA’s letter, the USPTO invited the FDA to discuss and establish formal mechanisms to collaborate, and as a particular proposal, to better police the consistency in representations made by pharmaceutical patent applicants to the USPTO and FDA.4 The perception5 is that there is a pervasive problem where brand manufacturers are characterizing their inventions one way to the USPTO to secure patent issuance and making contradictory assertions to the FDA to smooth product approval. For example, some fear that an applicant is incentivized to emphasize the differences between their new product and existing products to meet the USPTO’s novelty and non-obviousness requirements, and then is incentivized to present facts and arguments stressing the similarity between their product and the very same existing products to convince the FDA the new product is safe.
An extreme example of this scenario recently reached the Federal Circuit in Belcher Pharma v. Hospira, Inc.6 In that case, Belcher’s Chief Science Officer (“CSO”) possessed knowledge of prior art acquired through the approval process with the FDA for an NDA. While substantively contributing to patent prosecution, the CSO did not disclose this prior art to the USPTO and made representations to the PTO that were inconsistent with statements made to the FDA. He expressly described the claimed pH range as “old” to the FDA but “critical” to the USPTO. The Federal Circuit upheld the district court’s decision finding the patent unenforceable due to inequitable conduct. This case is unusual in that the brand company was small and the CSO was unsophisticated. Major pharmaceutical companies with internal patent and regulatory professionals would argue they are better equipped to stay in compliance with their USPTO disclosure obligations.
Since the letters, the USPTO has issued several notices and requests for comments on topics related to the E.O., including two which address inconsistent statements made by applicants to different agencies: “Joint USPTO‒FDA Collaboration Initiatives,”7 and “Duties of Disclosure and Reasonable Inquiry During Examination, Reexamination, and Reissue, and for Proceedings Before the Patent Trial and Appeal Board.”8
The USPTO on the Applicant’s Duty to Disclose Contradictory Statements
In its July 2022 Notice on the Duties of Disclosure and Reasonable Inquiry (the “Notice”), the USPTO expressed its position that, under existing rules, a patent applicant is required to disclose any circumstance where “an earlier position taken in a submission to the USPTO or another Government agency was incorrect or inconsistent with other statements made by the party.”9 In particular, 37 CFR 1.56 (“Rule 56”) has long required that patent applicants (defined broadly as inventors, attorneys and anyone else involved in prosecution) disclose all information material to patentability, including inconsistent statements made to other agencies. The Notice describes means for fulfilling this duty during prosecution, during PTAB proceedings, and even after patent issuance. The Notice also lays out the significant penalties for non-compliance.
Interestingly, the Notice highlights the existing ability of patent examiners to “require submission of information,” specifically including information submitted to the FDA in a situation where there is a concern over an applicant’s attempt to improperly extend patent term by applying for a manufacturing process claim despite an on-sale bar:
Therefore, when an examiner has a reasonable basis to conclude that an individual identified under 37 CFR 1.56(c) or any assignee has information that would aid in the examination of the application or treatment of some matter, the examiner may require submission of information that is not necessarily material to patentability. This requirement could include statements made or information submitted to other Government agencies such as the FDA. For example, when examining a claim directed to a process of manufacturing a particular drug product that was effectively filed more than one year after FDA approval of the drug product, an examiner may appropriately require an applicant to submit to the USPTO information submitted to the FDA (e.g., in a New Drug Application or Biologics License Application) on how the drug product was manufactured.10
The USPTO Notice also discusses the duty to make a reasonable inquiry into submissions made by the patent applicant to other Government agencies and documents it receives from Government agencies and submit anything material to the USPTO.11 Everyone involved in the patent application shares the duty, and the Notice expressly warns applicants not to try to game the system with studied ignorance:
Deliberate schemes or established practices to prevent 37 CFR 1.56(c) individuals from obtaining knowledge of material information is not acting in accordance with candor and good faith under 37 CFR 1.56(a). For example, walling off the patent prosecution practitioners from the attorneys seeking FDA approval, as a way to prevent material information from being exchanged between the practitioners and attorneys, is inappropriate.12
Responses from Biosimilars/Generics
Biosimilar and generic drug manufacturers have largely welcomed the Administration’s initiatives to promote speedier competition and product entry, including by increasing transparency into patent applicants’ communications with the FDA.
With respect to the issue of contradictory statements made to the various agencies, biosimilar/generic manufacturers have proposed significant increases in information sharing initiated by the USPTO (as opposed to the patent applicant). For example, biosimilar manufacturer Fresenius Kabi has suggested that the FDA should be available to answer patent examiners’ questions about technical details on pharmaceutical inventions; provide FDA guidance documents that can serve as prior art; conduct research on special problems or questions for the USPTO; and provide relevant extracts from the drug’s regulatory dossier such as product development reports.13 Fresenius did qualify that coordination could be limited to medicines that have already received FDA approval or to applications directed to ancillary features of the drug (glycosylation or impurity profiles, etc.) to limit the burden to the FDA, USPTO, and applicants.14
Regarding an applicant’s obligations to the PTO, Fresenius advocates that, anytime during examination, the patent applicant should be required to inform the USPTO if the FDA approves the drug (or its use) that is recited in the pending claims.15 Additionally, it proposes applicants should stipulate to the USPTO they have not made any statements inconsistent between both agencies.16 Lastly, Fresenius recommended the patent applicant be required to name an individual who has ensured consistency between statements made to the FDA and the USPTO.17
Responses from Innovators’ Industry Organizations
Brand pharmaceutical manufacturers and their trade organizations are generally of the view that current patent practices strike the appropriate balance to incentivize continuous product improvements while protecting the system’s integrity, and additional requirements such as those proposed are unnecessary and an inefficient use of government and private industry resources.
Trade organizations like the Biotechnology Innovation Organization (BIO) and the Pharmaceutical Research and Manufactures of America (PhRMA) have cautioned against adopting some of the proposals advanced by biosimilars/generics and the USPTO.18 For example, PhRMA raised that initiatives directed solely towards biopharmaceutical patents would conflict with the legislative intent of Congress in establishing AIA proceedings and could be contrary to U.S. obligations under the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).19 The brands further assert that the systemic problems alleged by the Administration and the biosimilar/generic industry are overstated and do not require dramatic changes to the system. BIO and PhRMA note that a patent challenger may obtain materials submitted to the FDA via district court discovery.20 Disclosure in this manner presents less risk of public disclosure of the brand’s trade secrets as disclosure to the USPTO due to commonly issued protective orders. According to BIO and PhRMA, despite the generics’ long-standing access to brands’ FDA submissions, there has not been a significant number of cases where invalidating prior art or inconsistent statements discovered in regulatory submissions have established any inequitable conduct.21 Moreover, they highlighted that the FDA and USPTO have differing standards that govern their communications and goals. Specifically, an invention may be non-obvious under the USPTO’s standards for patentability but may nevertheless provide a predictable and reliable, safe and efficacious outcome in support of a new drug application or biologics license application.22 Given the different standards, in many cases identifying statements that are materially contradictory is not straightforward. Recognizing the availability of FDA communications via litigation, the biosimilar/generic manufacturers response is that leaving them to uncover contradictory statements in litigation is unfair and insufficient because of the expenses of litigation and the potential delay it may cause to market entry of competitive drug products.
The brand organizations argue that the proposed requirements are not necessary because the USPTO’s duty to disclose is sufficient to deter and police applicants’ contradictory statements.23 The brands, however, may differ in some regard with the USPTO on how the current requirements apply. In the Notice and a recent webinar,24 the USPTO highlighted that applicants are under a duty of disclosure and reasonable inquiry under 37 C.F.R. 1.56 and 11.18, respectively, to disclose and inquire about material information related to communications to the FDA.25 Rule 56 defines “material” information if “it establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim”; or “it refutes, or is inconsistent with, a position the applicant takes (i) opposing an argument of unpatentability relied on by the Office, or (ii) asserting an argument of patentability.”26 Rule 11.18 requires that applicants’ statements to the USPTO be made “to the best of the party’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances.” The USPTO has taken the position “[applicants] should ensure that the statements made to the USPTO and other Government agencies, or any statements made on their behalf to other Government agencies regarding the claimed subject matter, are consistent.” By contrast, BIO has argued that it would be contrary to Federal Circuit law if the USPTO suggested that a reasonable inquiry may require reviewing FDA submissions without “notice of the existence of material information and based solely on the mere possibility that material information may exist.”27
As to USPTO-initiated information requests, BIO has asserted that there are already mechanisms that allow the PTO and FDA to request and share information under 21 U.S.C. § 372(c) and (d).28 BIO and PhRMA further highlighted confidentiality concerns on how FDA materials would be considered by the USPTO examiners and made part of the record.29 While the rules governing the USPTO’s treatment of information designated by an applicant as a confidential trade secret are somewhat byzantine, the general notion is that any information relied upon by an examiner, e.g., material prior art or contradictory statements, or evidence of commercial success, will be published in the patent’s prosecution history.30
On the flip side, PhRMA noted that the statutory scheme limits what information the FDA is allowed to disclose to other agencies.31 To implement Exemption 4 of the Freedom of Information Act, the Federal Trade Secrets Act, and section 301(j) of the Federal Food, Drug, and Cosmetic Act, the FDA has regulations in place that protect the confidentiality of proprietary information submitted to the agency.32 PhRMA also highlighted that there would need to be procedures in place to only provide information that would be material to patentability. Overzealous public disclosure in patent prosecution histories, particularly where any putatively material statement is distinct from the sponsor’s trade secrets, would be unnecessarily harmful to the sponsor.
Lastly, BIO argued that using a patent owner’s statement made to the FDA would create a new legal ground for unpatentability under Sections 102 and 103 of the Patent Act for statements that were confidentially provided to a Government agency.33
Under current rules, the FDA is limited on what information it can share with the USPTO. Both patent applicants/brand manufacturers and biosimilars/generics need to keep a weather eye towards legislation and rule-making that may alter the traffic of this information.
Ultimately, the onus under Rule 56 is on inventors, patent practitioners, and every other person substantively involved in prosecution to disclose material information previously submitted to the FDA and other agencies. Faced with the potential risk of unpatentability, or patent unenforceability, as well as unwanted publication of materials submitted to the FDA, patent applicants should judiciously vet the statements made to both agencies. And despite the reluctance to reveal trade secret information during patent prosecution, patent applicants will need to be mindful of the evolving duty of disclosure encompassing regulatory information.
1Exec. Order No. 14036, 3 C.F.R. 14036 (2022).
2Letter from Janet Woodcock, M.D., Acting Comm’r of Food and Drugs, U.S. Food & Drug Administration, to Andrew Hirshfield, Performing the Functions and Duties of the Under Sec’y of Com. for Intell. Prop. and Dir. of the USPTO, USPTO (Sept. 10, 2021), https://www.fda.gov/media/152086/download, https://www.uspto.gov/sites/default/files/documents/EO14036-FDALettertoPTO.pdf.
3See also, Congressional Research Service, Drug Pricing and Pharmaceutical Patenting Practices (CRS Report No. R46221)(Feb. 11, 2020) https://sgp.fas.org/crs/misc/R46221.pdf.
4Letter from Katherine K. Vidal, Under Sec’y of Com. for Intell. Prop. and Dir. of the USPTO, USPTO, to Robert M. Califf, M.D., Commissioner, FDA (Jul. 06, 2022) https://www.uspto.gov/sites/default/files/documents/PTO-FDA-nextsteps-7-6-2022.pdf.
5This issue had been previously raised by Senators Leahy and Tillis in a September 2021 Letter to the USPTO, requesting that the Office “take steps to reduce patent applicants making inappropriate conflicting statements in submissions to the [USPTO] and other federal agencies.”
6Belcher vs. Hospira, 11 F.4th 1345, 1351 (Fed. Cir. 2021).
7Joint USPTO-FDA Collaboration Initiatives; Notice of Public Listening Session and Request for Comments, 87 Fed. Reg. 67019 (Nov. 7, 2022).
8Duties of Disclosure and Reasonable Inquiry During Examination, Reexamination, and Reissue, and for Proceedings Before the Patent Trial and Appeal Board, 87 Fed. Reg. 45764 (Jul. 29, 2022).
10Id. at 45766.
11Id. at 45765‒66.
12Id. at 45767.
13Fresenius Kabi, Comment Letter on Joint USPTO-FDA Collaboration Initiatives at 4‒6 (Jan. 16, 2023) hereinafter “Fresenius I.”
15Fresenius Kabi, Comment Letter on USPTO Initiatives to Ensure the Robustness and Reliability of Patent Rights (Jan. 30, 2023).
18Pharmaceutical Research and Manufacturers of America, Comment Letter on Joint USPTO-FDA Collaboration Initiatives (Feb. 06, 2023) hereinafter “PhRMA;” Biotechnology Innovation Organization, Comment Letter on Joint USPTO-FDA Collaboration Initiatives (Feb. 05, 2023) hereinafter “BIO.”
19PhRMA at 20. But see, 87 Fed. Reg. at 67021 (not limiting required disclosures from only the FDA).
20PhRMA at 13; BIO at 10.
21PhRMA at 14; BIO at 8.
22BIO at 10.
23PhRMA at 9; BIO at 8‒9.
24USPTO Panel Discussion: Duty of Disclosure and Duty of Reasonable Inquiry, USPTO (Feb. 23, 2023) https://www.uspto.gov/about-us/events/uspto-host-virtual-panel-discussion-duty-disclosure-and-duty-reasonable-inquiry.
2587 Fed. Reg. at 45765‒66 (citing 37 C.F.R. §1.56(c) to identify which individuals have a duty to disclose material information and citing 37 C.F.R. §1.4(d)(4)(i) to identify which parties have a duty of reasonable inquiry).
2637 C.F.R. §1.56(b).
27BIO at 11‒12 (citing Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1385 (Fed. Cir. 2001), Frazier v. Roessel Cine Photo Tech, Inc., 417 F.3d 1230, 1238 (Fed. Cir. 2005)).
28BIO at 8.
29BIO at 10; PhRMA at 14‒15.
30See 37 C.F.R. § 1.59 (describing scope and process for expungement); Manual of Patent Examining Procedure (MPEP) § 724.02 (describing that a petition to expunge will be denied if materials are found to be material to patentability under USPTO’s standard); MPEP § 724.03 (information favorable to patentability such as secondary considerations of nonobviousness will be published).
31PhRMA at 14‒16.
32See 21 C.F.R. Part 20; FDCA § 301(j); 18 U.S.C. § 1905; 5 U.S.C. § 552; see generally 39 Fed. Reg. 44602 (Dec. 24, 1974).
33BIO at 10.