Mark Benedict, Ph.D., Eli Loots, and Carolyn Favorito of Knobbe Martens Olson & Bear LLP write: Many patented vaccines generate the most money during the end of their patent term, after the vaccines have been widely distributed. This delayed "payday" may discourage companies from investing up front in patent prosecution. It is in a company's best interest, however, to manage patent prosecution so it maximizes the length of the final "payday" patent term. A variety of strategies allows the effective "transfer" of some of the "low value" time in the initial stages of vaccine development, to the "higher value" time after the vaccine has entered distribution. These include FDA related patent term extensions ("PTE"), USPTO related Patent Term Adjustment ("PTA"), filing provisional applications, and accelerating prosecution.
Patent Term Extentions
Vaccine companies can take advantage of PTE under the Hatch-Waxman Act, to "restore" some of the patent coverage lost during the FDA approval process. The maximum allowable restoration is five years, and the total patent term, including any restorations, must not exceed fourteen years following FDA approval. This additional term extension is available only if the patent issues before the vaccine has received FDA approval. The timing of these events should be managed by a company to its advantage.
Patent Term Adjustment
Unlike PTE, a patent applicant may obtain extensions based on PTA for a variety of USPTO-related administrative delays, such as for time lost appealing an examiner's decision at the Board of Patent Appeals and Interferences, which may amount to years of extensions. These PTA extensions are offset by the applicant's prosecution delays, e.g., taking extensions of time. Thus, an applicant's delay, even if made early in prosecution, can reduce or even eliminate potential patent term under this provision. While PTA only applies to patent applications filed after May 29, 2000, the past four years' data indicate that a growing number of patent applications qualify for an increased patent term. Specifically, from 2006 to 2009, the percentage of patents receiving some form of patent term extension rose from 64 percent to 76 percent. further, last year, a D.C. district court held that the USPTO has effectively been under calculating PTA for its applications, suggesting that many applications may be entitled to more PTA than previously indicated.
Postpone Patent Termination
In addition to optimizing PTE and PTA, one also can effectively postpone the termination of a patent's 20 year patent term by first filing a provisional application. Reserving the priority date of invention, while avoiding starting the clock for the twenty year patent term, enables vaccine companies to enjoy exclusivity during the generally more profitable end of the patent's life.
Accelerated Prosecution
For those with a head start on clinical trials and/or with a product nearing marketing approval from the FDA, accelerated prosecution can allow one to obtain an issued patent much faster to begin capturing market exclusivity (and perhaps qualify for PTE if timed appropriately). Options for accelerating prosecution approach include, procedures initiated by petition to the USPTO, such as filing a "Petition to Make Special" and/or requesting "Accelerated Examination," as well as careful prosecution management, such as responding quickly to outstanding office actions, and shepherding the application through the USPTO by strategic use of examiner interviews, and pursuing accelerated examination.
Synchronize Patent Filings
Effective patent exclusivity on a vaccine can also be extended by synchronizing new patent filings with on-going innovations. For example, improvements in the immunogen composition of matter, methods of immunization, vaccine formulations, etc., can result in staggered filings, with resultant staggered expiration dates—thereby effectively extending the franchise. These, and other, approaches allow a company to help match a patent's enforceability period with the market demand period to maximize the patent's potential value. Of course, other strategies may impact a company's particular needs.
It's heartening to see that some quarters are increasingly discussing the idea of varying patent types and terms, as one possible solution to the disparities often created by our current one-size-fits-all patent system. In the case of pharma and biotech patents, a longer patent term makes sense, whereas with computer-based technologies a shorter term is more logical. Moreover, a longer patent term for pharma products could help reduce drug costs. USPTO Director David Kappos has implemented quite a bit of flexibility and pragmatism in some of the new programs he's created, but he can't accomplish everything himself. It's time we encouraged a public discussion about the possible pros and cons of a multi-tiered patent system that could better benefit innovators, investors, and the general public.
http://www.washingtontimes.com/news/2010/may/25/patent-reform-misses-the-mark/
Posted by: patent litigation | October 18, 2010 at 05:41 PM