Congress should wait for an upcoming Supreme Court ruling on the "doctrine of equivalents" before beginning serious work on re-drafting the Waxman/Hatch Act, Sen. Orrin Hatch (R-Utah) said.

"How the Supreme Court approaches patent law as it interprets the doctrine of equivalents in the upcoming Festo decision could end up having as great of an effect on the ultimate outcome of certain types of patent challenges," Hatch said at the Food & Drug Law Institute's educational conference April 16.

"I know that patent attorneys charged with drafting - and attacking - claims for drug and all other patents will watch Festo closely for any significant doctrinal changes in patent law - and so should all of us who contemplate changing the patent challenge provisions of Hatch/Waxman."

The Supreme Court heard oral arguments in Festo Corp. vs. Shoketsu Kinzoku Kogyo Kabushiki Co. Jan. 8. The court is considering a federal appeals court decision against Festo that restricts a patent holder's ability to assert infringement under the doctrine of equivalents.

The doctrine of equivalents allows patent holders to extend a patent's claim to products or processes that perform substantially the same function in substantially the same way to obtain the same result, even if they are not covered by the patent's literal language.

A Jan. 19, 2001 Boston federal court decision in favor of Amgen found that TKT/Aventis' gene activated EPO Dynepo infringes patents covering Amgen's Epogen , based in part on the doctrine of equivalents (¹ ¹ [A#00630050019], p. 26).

Hatch suggested that the outcome of the Festo case could have a more significant effect on industry than would technical changes to Waxman/Hatch.

"How the Supreme Court interprets the doctrine of equivalents in the upcoming Festo decision may end up having more effect on the ultimate outcome of pharmaceutical patent challenges than any tinkering with procedures will have," he maintained.

Hatch also urged Congress to wait for the Federal Trade Commission's report on patent settlements before moving on Waxman/Hatch reform, a suggestion he has made before (² Also see "Generic Reform Advocates See Reimport Bill As Model: Is Hatch Obstacle?" - Pink Sheet, 14 May, 2001., p. 18).

Generic reform has been receiving heightened congressional attention; hearings on the McCain/Schumer generic reform bill and more general generic drug issues are expected to be held in the Senate in April and early May (see ³ Also see "FTC To Testify On Generic Reform; Agency Report May Be “Months” Away" - Pink Sheet, 22 April, 2002. ).

Hatch characterized McCain/Schumer as a bill that addresses important but limited issues.

"Some will seek to define the debate around the important but relatively narrow set of issues outlined by the Schumer/McCain legislation. My preference would be more thorough discussion of pharmaceutical and regulatory approval," he said.

"Those who desire to amend the current laws must bear in mind the delicate balance of the 1984 law. I know: it was negotiated in my office over a lengthy period of 18 days, day and night, 18 hours a day."

Hatch continues to emphasize generic biologics as an issue that belongs in the discussion on Waxman/Hatch reform.

"I recognize that there are formidable scientific questions regarding the adoption of a fast track approval system for therapeutically equivalent biologics," he said.

"Nevertheless, I will continue to raise the question of whether Congress can or should enact and sustain over time a Medicare drug benefit in parallel with an FDA regulatory system that acts as a secondary patent by barring bioequivalent biological drugs."

Increasing the patent restoration period for FDA-approved products to 17 years should also be considered in the context of generic drug reform, Hatch suggested.

"As far as the reappraisal of Hatch/Waxman, I believe that it is worthwhile to consider the implications of the fact that the 1999 American Inventors Protection Act generally protects all patents to be restored to yield up to 17 years of patent life if there is undue delay at the [Patent & Trademark Office]," Hatch said. The 1999 act was sponsored by Sens. Hatch and Patrick Leahy (D-Vt.).

"Under the 1984 Hatch/Waxman law, patent term restoration and recognition of the lengthy FDA review is capped at 14 years," Hatch noted. "Why should time lost at PTO be treated differently than time lost at FDA?"

Hatch suggested that the debate on generic drug incentives be expanded to consider how incentives for different types of patent challenges should be crafted and whether a 180-day exclusivity incentive is necessary.

"I hope the discussion will go beyond issues like first to file, first to win, and rolling exclusivity, to consideration of whether patent invalidity and noninfringment should be treated the same," he said.

"The last hearing I chaired of the Senate Judiciary Committee before the Jeffords revolution concerned the antitrust implications of Hatch/Waxman," Hatch noted. "At that hearing, the FDA witness questioned whether the 180-day marketing exclusivity extension was even necessary anymore to encourage patent challenges."

Hatch made clear his continued opposition to eliminating the 30-month stay provision in Waxman/Hatch.

"Much of the current discussion about Hatch/Waxman reform focuses on a procedural manner: the operation of the statutory 30-month stay," Hatch noted.

He suggested that any change to that aspect of the law may have to be offset by changes to the so-called "Bolar Amendment," which allows generic companies to conduct research on patented products.

"I find it hard to discuss the 30-month stay outside the context of the Bolar Amendment, which gives generic drug firms - and only generic drug firms - a head start in using patented products while the patents are still in effect," Hatch said.

FDA Chief Counsel Daniel Troy pointed to repeated 30-month stays as the critical issue for FDA to address within the current law.

Troy held a "moot court" Jan. 30 to hear legal arguments from brand and generic sides on the technicalities of FDA's current interpretations of the Waxman/Hatch Act (⁴ Also see "FDA Waxman/Hatch “Moot Court” Will Examine Brand/Generic Legal Positions" - Pink Sheet, 21 January, 2002., p. 3).

"The main thing I took away from this session is that the primary dispute about the interpretation about the current law is...the question of the multiple 30-month stays," Troy said.

"It certainly seems that the main reason that the generics care about FDA's role in listing patents is because of a possibility of a second, third or fourth 30-month stay."

Troy identified late-filed citizen's petitions as another concern raised at the symposium, but noted that it would be difficult to eliminate that practice.

"I think that most people recognize that eliminating the right to file citizen's petitions would not really fix the problem. Issues could still be raised by letter or other form of submission," he said.

"As was conceded at the symposium, if the agency is presented with credible evidence that it is about to do something that is illegal or harmful to the public health, it's very hard to craft a rule to require that FDA go forward with that action no matter what."

Troy said that the agency does not hold up generic approvals automatically on receipt of a citizen's petition. "I can assure you that we do not hold up approvals of generic drugs merely because we receive a last-minute citizen's petition."

"We do make sure that there's a good answer to the issues raised in the citizen's petition before we act," he acknowledged. "But we do not always wait to write up those answers, particularly if they're scientific. We use sort of a triage method."

He suggested that companies that want to secure a more thorough review of their argument would be well advised to avoid submitting petitions late in the process.

"Last minute petitions are looked on kind of skeptically," Troy said. "So if you have a powerful argument, I would urge you to present it sooner rather than later, because it will have more credibility, it will be taken more seriously, and it will be given more careful review."

Waxman/Hatch Reform Should Await Pending Supreme Court Decision – Hatch

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