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While the Patent Trial and Appeal Board invalidates Orange Book-listed patents less than 20 percent of the time, it accepts 66 percent of petitions from generic drugmakers and takes no more than 12 months to reach decisions.
Recently released numbers from the Patent Trial and Appeal Board show that generic drugmakers who challenge Orange Book-listed patents can expect to have their day in administrative court. Success has proven harder to come by for drug patent challengers, but the PTAB process appears to be working effectively and efficiency for resolving disputes over the uniqueness, obviousness and validity of innovator product patents.
Recapping the PTAB Process for Orange Book Patent Challenges
The data on Orange Book patent challenges come from a March 13, 2018, Chat With the Chief presentation with the unwieldy title New PTAB Studies in AIA Proceedings: Expanded Panels and Trial Outcomes for Orange Book Listed Patents. Only the second part of that will interest most DrugPatentWatch readers.
Established by the 2011 America Invents Act, the PTAB began operating in mid-September 2012 for parties to inter partes, postgrant review and covered business method patent disputes who wished to avoid going to federal district court. Nearly all the drug patent cases submitted to the PTAB through the end of 2017 have concerned questions of whether a patent granted to a drug product covered a nonobvious or nonunique molecule, delivery system, or package. These are the subject of inter partes reviews.
A slide shown by Administrative Patent Judge Jason Repko during the presentation indicates that only one postgrant review petition has been submitted by a drugmaker. No covered business method reviews have been requested.
From Sept. 16, 2012 through Dec. 31, 2017, 389 (5 percent) of 7.168 petitions to PTAB have concerned Orange Book-listed patents. Seven percent of overall petitions concerned “miscellaneous bio/pharma” patents, or those listed in the FDA Purple Book.
The board “instituted” — began official reviews of — 318 petitions concerning Orange Book-listed patents. This represents a 66 percent acceptance rate, or just shy of two out of every three.
Multiple companies can file a joint petition, and more than one petition can be filed against the same patent or group of patents. Despite these possibilities, 85 percent of petitioners acted alone or in cooperation with only one other company. Similarly, 80 percent of challenged Orange Book-listed patents were the subject of just one or two petitions.
Generally, three administrative law judges form a panel to consider each petition. The panel has up to 12 months to issue a final written decision or close a case in some other manner. A single, one-day trial is held following extensive discussions with parties to the dispute.
Outcomes From PTAB Cases Over Drug Patents
The following table lists the result for each case concluded by the last day of 2017.
“Settled” means both parties agreed to a resolution before the PTAB panel issued a final written decision. “Denied institution” means the PTAB received the petition but did not schedule a full review and trial. In legalese, “joined” indicates that the matters brought up in a petition coincided with those being addressed by another current case and that both petitions were considered together.
The final category of “request for adverse judgment” describes situations in which the patent holder asked the PTAB to rule in favor of the petitioner. A defendant may do this when it determines that defending a patent would take more time, money and effort than it deems worthwhile. Alternately, a patent holder may not mind forfeiting one or more patents on an Orange Book-listed product as long as it retains other patents it considers more valuable.
The pie chart on the left shows how the PTAB ruled in the 82 cases for which it issued final written decisions. “All Claims Patentable” means the patent holder scored a complete victory. Note that two cases resulted in a finding that some claims were patentable. Such a finding probably prevents the patent challenger from immediately launching a competing product, but it may speed development of generics and set the stage for further patent challenges.
Counting each outcome involving a final written decision, settlement, case dismissal or denied petition, 83 percent of cases ended with every challenged Orange Book-listed patent being upheld. In other words, just 17 percent of challenges resulted in invalidating one or more patents on a drug product.
As the PTAB approaches it fifth anniversary, it has shown its willingness to entertain challenges to Orange Book-listed patents. While board panels rarely hand total victories to petitioning generic drugmakers, the guaranteed 12-month decision can make going through the PTAB an attractive alternative to a court battle with extensive discovery.