EIP Corporate Training
You need to know
You need to know
Big pharmaceutical companies play a crucial role in advancing healthcare by conducting research and developing new drugs and therapies. Their investments in research and development (R&D) have led to the discovery of life-saving treatments for a wide range of diseases and conditions, improving the quality of life for millions of people worldwide.
To do this in the United States, pharmaceutical companies must achieve two things: FDA approval, so they can bring their drugs to market, and patent protection from the USPTO, so they can have exclusivity in the market and recover the billions of dollars they’ve invested in R&D.
To achieve either of these goals, drug companies face a dilemma. Why? Well, even though the entities they’re seeking approvals from (FDA and USPTO) are both US government organizations, the objectives of these organizations are different. This creates a temptation on the part of pharmaceutical companies to take a different approach with respect to information disclosures for each.
When applying for FDA approval, the goal of a drug company is to get approval as rapidly as possible so they can get their drug into the marketplace. This goal is made easier if the pharmaceutical company can show the FDA that their drug is not much different than drugs that are already known throughout the world and that have been previously approved by the FDA; the exact opposite of what drug companies need to do when applying for a patent at the USPTO. When seeking patent protection for a new drug, the pharma company must demonstrate that the world has never seen anything like it before. Simply, if a drug is not new and innovative, the USPTO will not issue a patent.
Thus, the dilemma. Drug companies have a clear incentive to give the FDA all kinds of prior publications that show they’ve got nothing new, and they are equally incentivized to refrain from disclosing those same publications to the USPTO. The problem is that everyone associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the USPTO. This includes a duty to disclose all known information that’s material to patentability. This duty is so serious that a patent will not be granted on an application where the duty of disclosure was violated through bad faith or intentional misconduct. If bad faith or intentional misconduct are discovered afterward, a granted patent can be invalidated.
The duty of candor and good faith with the USPTO can be impacted by FDA disclosures. If a company submits articles or other publications to the FDA which would be relevant to patentability, they must also submit them to the USPTO. For example, if a pharma company submits prior publications to the FDA that show a drug was already known, they must also submit these to the patent office to be used in connection with the prosecution of their patent application.
Just ask Belcher Pharmaceuticals. In 2021, the US Court of Appeals for the Federal Circuit showcased the importance of being consistent in disclosures of information to the FDA and USPTO in the case of Belcher Pharmaceuticals, LLC. v. Hospira, Inc. In that case, Belcher’s patent was rendered unenforceable because of inequitable conduct. More specifically, the Federal Circuit Court determined that Belcher intentionally withheld material information from the patent office that it did submit to the FDA. With the loss of patent rights because of the inequitable conduct by Belcher’s employees, Belcher lost a massive competitive advantage in that they can no longer prevent competitors from copying their invention. This means lost revenues.
To avoid having patents invalidated because of inconsistencies in disclosures made to the FDA and the USPTO, savvy companies typically do two things. First, they provide enterprise IP training to ensure that members of new product development teams and regulatory groups are generally knowledgeable about these patent risks. Second, they establish high communication between these two groups and the IP department in connection with disclosures related to patent applications. In other words, pharmaceutical companies need to be sure that they have a process in place to inform the IP department about documents disclosed to the FDA which contain information that is material to patentability.