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Post-Grant Oppositions and ¶ IV Certifications in ANDA Litigation

December 28, 2011

The post-grant opposition proceedings created by the America Invents Act, used in parallel with litigation under the Hatch-Waxman Act, will alter the timetable that has favored branded manufacturers, and can preserve the first ¶ IV filer’s right to 180-day market exclusivity without the necessity of a district court adjudication of invalidity or noninfringement.

Generic drug makers who file ANDAs are required to make a certification with respect to each patent listed in the Orange Book by the NDA holder that allegedly covers the approved drug. The generic may maintain under ¶ IV that the listed patent is invalid, unenforceable, or not infringed by the proposed generic drug described in the ANDA. An ANDA applicant who is first to file a ¶ IV challenge obtains 180-day market exclusivity, if it successfully maintains the ¶ IV. Alternatively, a certification under ¶ III states that the proposed generic drug will not be commercially marketed until the expiration of a listed patent.

If the generic applicant serves a ¶ IV statement, the patent owner has 45 days to file suit for infringement, and obtain an automatic 30-month stay of FDA approval. At the expiration of the 30-month period, the FDA can approve the ANDA without further delay. If the district court enters judgment in favor of the ANDA applicant within the 30-month stay period, the FDA may approve the ANDA immediately.

A number of statutory limitations restrict generics’ ability to challenge patents owned by branded manufacturers. An ANDA cannot be filed until four years after approval of a new drug by the FDA, and if a ¶ IV certification results in an infringement action, issues of invalidity generally cannot be resolved prior to summary judgment, after pretrial discovery is completed. The patent owner may forgo suit, and in this case the generic can seek a declaratory judgment of invalidity or noninfringement, subject to establishing an actual case or controversy, which is not certain, except for the likelihood of an appeal on jurisdictional issues. Even if the ANDA applicant establishes in district court that the asserted claims are invalid or not infringed, and launches the ANDA product at risk, the chance remains that the Federal Circuit will reverse the district court judgment.

As a result, an ANDA applicant who files a ¶ IV certification is generally faced with a 30-month delay of FDA approval, and frequently a still longer delay in obtaining a final judgment of invalidity or noninfringement.

The post-grant opposition proceedings created by the America Invents Act will alter the timetable that has favored branded manufacturers by delaying challenges by ANDA applicants to patents listed in the Orange Book, and by staying FDA approval after infringement litigation is commenced.

Most significantly, an ANDA applicant will be able to file a petition for inter partes review at any time after nine months from the date a patent issues, under § 311(c)(1). Where the basis of invalidity asserted in a paragraph IV notice is anticipation or obviousness based on prior art publications, the ANDA applicant can launch a preemptive attack on validity before filing an ANDA, and obtain a final USPTO decision that is normally expected within one year of instituting inter partes review. If a follow-on patent is granted to the branded manufacturer, an ANDA applicant can seek post-grant review immediately, without waiting for the patent to be listed in the Orange Book, under § 321(c). An ANDA applicant can also challenge blocking patents that are not listed in the Orange Book, but that could later be asserted against commercial products.

Timing of the opposition will be a critical factor in the parallel opposition strategy. The USPTO will issue regulations establishing the time period for a patentee to respond to a petition for post-grant review, and the deadline for a USPTO decision on the petition. An ANDA applicant who contemplates filing a ¶ IV certification will be able to raise many, but not all, potential defenses in a post-grant proceeding before filing the ANDA. For example, if the USPTO is required to decide whether to institute an opposition within 5 months after a petition is filed, the ANDA applicant can file its request with the USPTO and obtain an initial administrative determination on issues of patentability (i.e., by the decision to institute the opposition) just prior to the 4-year ANDA filing date. A final determination of invalidity, including a decision by the Federal Circuit, could reasonably be expected within the 30-month stay period.

It will often be to the ANDA applicant’s advantage to pursue an opposition that will not be finally decided until after the filing of an ANDA, with respect to Orange Book listed patents, in order to qualify for 180-day exclusivity. In this event, the ANDA applicant will also be required to file a certification with respect to each patent listed in the Orange Book, and a ¶ IV filing is likely to lead to an infringement action and an initial 30-month stay of FDA approval. The USPTO opposition would be a concurrent, parallel action raising at least some of the same defenses that are presented in the infringement action. As shown in the chart, an opposition could be timed to obtain a final USPTO decision prior to filing an ANDA, with an appeal to the Federal Circuit providing the opponent with an opportunity to secure a final judicial decision early in litigation.

One restriction on the use of inter partes review, as indicated in the chart, is that a petition cannot be filed more than one year after the petitioner is served with an infringement complaint under § 315(b), imposing a litigation time bar to inter partes review.

If the USPTO final decision holds that all challenged claims are invalid, they will be canceled from the patent under § 318(b) (inter partes review) or § 328(b) (post-grant review). If no patent claims survive the opposition, there will be no claims for the district court to adjudicate, and the ANDA applicant will have “successfully maintained” its ¶ IV challenge when the court dismisses the infringement action.

Post-grant oppositions will be front-loaded, and will often require testimony from fact and expert witnesses in support of the initial petition. The schedule for USPTO decision will be rapid and unrelenting, with few opportunities to correct errors for either party. The advantage of obtaining an initial administrative determination of likely invalidity, prior to filing a ¶ IV certification, will often justify the initial costs of preparing a petition for post-grant opposition.

The decision to pursue a USPTO opposition should be based on a thorough evaluation of prior art and other defenses, because the opponent will forfeit any other defense that is either actually raised, or could have been raised in the opposition, under the estoppel that is imposed in both inter partes review and post-grant review.