Hatch-Waxman Safe Harbor Inapplicable To Research Tools

In a decision that will have far reaching implications for

drug and medical device development, the Court of Appeals for

the Federal Circuit held yesterday that the Hatch-Waxman safe

harbor of 35 U.S.C. § 271(e)(1) is inapplicable to

patented research tools that are not themselves subject to the

FDA review process. While the decision is good news for

the providers of research tools such as drug screening assays,

it will make drug and medical device development in the United

States costlier and more risky.

The case is

Proveris Scientific Corp. v. Innovasystems, Inc.

(.pdf) (No. 2007-1428), decided August 5, 2008. In

rejecting the § 271(e)(1) exemption, the court

reasoned that Congress must have intended that the safe harbor

protect only those entities adversely affected by the de facto

extension of patent life at the end of the patent term while

they await FDA approval for a product that is subject to

regulatory review. Unless the defendant is within the

category of entities for whom the safe harbor was intended to

provide relief, the court ruled, the exemption does not

apply. The defendant, Innovasystems, is now weighing its

further appellate options.

The Proveris decision departs from a line of

earlier cases holding that the safe harbor protects the

infringing use of any patented invention as long as the use is

"reasonably related to the development and submission of

information" in support of FDA approval of a new product

covered by the FDCA. The decision thus changes the focus

of § 271(e)(1) from whether the defendant's

infringing use of the patented invention is "reasonably

related" to developing the types of information relevant

to the FDA, to whether the patented invention itself is the

product on which the defendant intends to seek FDA

approval.

The court's decision appears to implicate the full

panoply of research tools used in drug discovery and

development, including monoclonal antibodies, cell lines,

membrane preparations, cDNA's and drug screening

assays. To the extent the safe harbor protection now

turns on whether the defendant is seeking FDA approval to

market the product that is the subject of the patent-in-suit,

the decision could produce anomalous results. For

example, the infringing use of a monoclonal antibody may be

outside the scope of the safe harbor if it is used only as a

research tool to isolate a subset of cells, but may fall within

the safe harbor if the same antibody becomes a candidate for a

therapeutic drug...

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