Increase in Use of Inter Partes Review

A recent study, titled The Generic Drug Industry Embraces a Faster, Cheaper Pathway for Challenging Patents, examined and evaluated the use of the Patent Trial and Appeal Board’s (PTAB) inter partes review (IPR) process to challenge pharmaceutical patents. Authors Jonathan J Darrow and Aaron Kesselheim of Harvard University and Reed F. Beall of the University of Calgary concluded that IPRs can “meaningfully contribute to ensuring that invalid patents do not block timely availability of generic drugs.”

An inter partes review is a proceeding administered by the Patent Trial Appeal Board in which the patentability of a claim is reviewed. IPRs are statutorily required to be completed within a year with the possibility of a six month extension for good cause. This process has become increasingly popular with generic drug companies in recent years.

As the study notes, during the period from September 2012 to April 2017, 362 IPRs were initiated, of which 117 are still pending. As of the date of publication, 89 of the challenges had been fully and finally decided and written decisions had been issued. 38 of these 89 decisions resulted in a finding of invalidity for all petitioned claims and seven resulted in a finding of invalidity for some of the petitioned claims. In light of the relative success petitioners have experienced with this process, its surging popularity is unsurprising.

As a mechanism aimed at ensuring the availability of generic drugs is not hindered by the presence of invalid patents, the IPR has been a boon to generic drug manufacturers. However, since most of the successful challenges brought through PTAB proceedings have been against patents which related to new formulas, and not to patents which related to active ingredients, this uptick in the use of the IPR has not concurrently been an unequivocal death knell for pharmaceutical rights. Often, active ingredient patents are among the most commercially significant to innovative pharmaceutical companies, and of the challenged patents examined in the study, only seven were categorized as active ingredient patents.

Speaking to Regulatory Focus, Jonathan J Darrow noted that generic drug companies “are most interested in going after large markets, where profit margins are high, and where the original patent on the active ingredient has expired. Follow-on patents, like those directed to formulations or methods of use, tend to be weaker and more likely to be invalidated.”

Darrow also suggested that “[g]eneric firms can also use IPR as a strategy device: Many IPRs are filed after generic firms have already been sued in court. The IPR filing can create a ‘second front’ that puts additional pressure on the brand name drug company to come to the settlement table. The legal standards in the patent office are also more challenger-favorable compared to the standards applied by a court.”