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Advantages and disadvantages of concurrent post-grant oppositions in ANDA litigation

November 09, 2011

The new PTO post-grant oppositions will not replace district court litigation, and will not be suitable in every action, but they will often be effectively used by generics as parallel, auxiliary proceedings in ANDA litigation. A paragraph IV first filer will not be able to avoid litigation by filing an opposition, but can advantageously use a concurrent PTO proceeding in a number of creative ways, procedurally and substantively, particularly in cases involving multiple first paragraph IV filers. I plan to explore these strategy issues in detail in future posts.

The 180-day exclusivity granted to successful paragraph IV first filers and 30-month stay of FDA approval available to patent owners are the engines driving ANDA litigation, and generic manufacturers may well benefit from the new post-grant proceedings with respect to both. An ANDA first paragraph IV filer who is sued can raise its prior art defenses in the PTO at a very early stage of the litigation (or even before filing its paragraph IV), and can reasonably expect to have a final administrative determination (or a Federal Circuit decision) before the close of discovery in many district courts, at a fraction of the litigation cost.

If the asserted claims are found invalid, they will be canceled from the patent, and the district court will enter judgment in favor of the defendant. Under these circumstances, the first filer will obtain 180-day exclusivity, because it has successfully maintained its paragraph IV challenge. If the district court enters judgment of invalidity prior to the 30-month stay date, the FDA can approve the ANDA without delay.

The estoppel effects of the post-grant proceedings will be a critical consideration in determining an effective strategy, but the estoppel effects of inter partes review are limited. Inter-partes review can only be based on printed publication and patent prior art, so the estoppel consequences of an adverse PTO decision would be limited to certain novelty or obviousness defenses. If an ANDA applicant is not able to establish that asserted claims are anticipated or obvious at the PTO, with the benefit of a favorable preponderance of the evidence burden, and the broadest reasonable construction of the claims, how likely is it that the generic will prevail on the same grounds in district court? How much will it cost to find out, over the course of discovery, Markman proceedings, and at least summary judgment?

The latest PTO data on inter partes reexamination state that of all requests filed, 71% were known to be in litigation. Almost all of the requests were granted (95%) and among all of the inter partes reexamination certificates issued, only 13% confirmed all of the challenged claims. In 44% of the actions, all claims were canceled, and in 43% the original claims were narrowed in the proceedings. By contrast, in general patent infringement litigation (not limited to ANDA cases) over the last 6 years, patent claims were sustained in about 60% of decided cases involving anticipation and obviousness defenses. By any measure, the PTO is a favorable forum for defendants compared with district courts, for patents that are involved in concurrent litigation and inter partes reexamination proceedings.

Post-grant review can be based on almost any invalidity argument that could be raised in district court, so the estoppel consequences of an adverse final decision would be severe. In each case it will be essential to consider the likelihood of prevailing on the defendant’s one or two best defenses in the PTO, versus the probability of success on other potentially barred defenses in district court, based on such factors as the importance of broad discovery and the general likelihood of prevailing on specific defenses. Once again, if the challenger is not able to prevail on its best defense in the PTO, it would be hazardous to expect success on secondary defenses at trial. Based on my experience in interferences, I would not expect most post-grant proceedings to proceed to final decision, and without a final adverse decision, there is no estoppel on any ground.