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More Orange Book Patents Are Surviving the ‘Death Squad’

PTAB Trends: More Orange Book Patents Are Surviving the ‘Death Squad’

“[I]t seems that the pendulum is swinging again in favor of Orange Ebook patent house owners. The variety of petitions difficult these patents has slowed because the excessive charges seen within the 2015 and 2016 fiscal years. The speed of establishment denials of Orange Guide patents has risen significantly…”

Since its inception, the Patent Trial and Attraction Board (PTAB) has been a frequent venue for patent challenges within the pharmaceutical and biotechnology industries. By the top of the U.S. Patent and Trademark Workplace’s (USPTO’s) 2018 fiscal yr, patents in these fields have been focused in almost 10% of all petitions for inter partes evaluate (IPR), totaling roughly 900 particular person petitions. Of those 900 petitions, roughly 5% challenged patents listed within the FDA’s Orange E-book for permitted drug merchandise. The remaining petitions challenged biologic medicine (1.three%) and different biologic-, biotechnology-, or pharmaceutical-related patents (three.5%). Many of those petitions have finally resulted within the cancellation of all challenged claims, together with these of a big variety of Orange Guide patents. Based mostly on the PTAB’s preliminary excessive fee of declare cancellation in pharma and different areas, critics of the PTAB have been fast to deem it a patent “demise squad.” Does the PTAB nonetheless deserve the “demise squad” label in terms of Orange Guide patents? On this article, we look at the charges of problem, establishment, and last written determination outcomes for patents listed within the Orange Ebook, from the PTAB’s inception by means of the top of its 2018 fiscal yr.

Evaluation

For our evaluation, we subdivided challenged patents into classes based mostly on how they have been listed within the Orange Guide. About 15% of challenged patents have been compound patents, 38% have been formulation patents, and 48% have been technique of remedy patents. The charges at which these classes of patents have been challenged can’t be defined by their Orange Ebook itemizing charges alone. For comparability, from 2014 by means of the top of the 2018 fiscal yr, Orange Ebook listed patents comprised 21% compound patents, 44% formulation patents, and 35% technique of remedy patents—i.e., in PTAB challenges, compound and formulation patents have been underrepresented, whereas technique of remedy patents have been overrepresented. Patent challengers might understand technique of remedy claims as extra vulnerable to anticipation and obviousness challenges in comparison with compound and formulation patents, making them extra engaging targets for problem. This concept is probably borne out by the comparatively larger establishment charges for technique of remedy claims, as mentioned additional under. Technique of remedy patents may additionally be focused over compound patents as a result of they’re typically filed later within the drug improvement course of and subsequently expire later.

Submit-grant challenges to Orange E-book patents obtained off to a comparatively sluggish begin. Solely 10 petitions on Orange Guide patents have been filed in 2013 and 32 in 2014. Then, there was a surge of petitions over the 2015 fiscal yr (132 petitions), and this excessive degree was maintained in 2016 (127 petitions). Petitions declined within the 2017 fiscal yr (76 petitions) and once more dipped barely in 2018 (67 petitions).

The surge in petitions in 2015 and 2016 was largely attributable to the numerous variety of challenges (37 petitions) filed by hedge funds throughout that interval. The downward development noticed in 2017 and 2018 could possibly be defined by monetary pressures on the generic pharmaceutical business or reactions to developments in establishment or last written choice charges, that are mentioned additional under. A lower in Orange E-book patent district courtroom filings was additionally seen in 2018 (knowledge from Lex Machina).

The overwhelming majority (greater than 90%) of Orange E-book patents challenged in IPRs are additionally concerned in district courtroom litigation. And since settlement charges, notably on the pre-institution stage, are a lot decrease for Orange Guide patents (three%) than for IPRs general (13%), and litigation stays are unusual, Orange Ebook patent house owners should sometimes defend their patents in each proceedings concurrently.

Establishment Determination Outcomes for Orange Ebook Patents

Most petitions to evaluation Orange E-book patents are instituted: two-thirds (66%) of those petitions have been instituted on at the very least one floor by means of the top of the 2018 fiscal yr. (This 66% establishment fee is considerably decrease than the 74% establishment fee for all IPRs.) Breaking down this knowledge by patent sort, compound patents and formulation patents have been the least more likely to be instituted on no less than one floor (66% and 61% of petitions, respectively), whereas technique of remedy patents have been the most probably to be instituted (72% of petitions).

Whereas PTAB evaluations could also be instituted until the patent proprietor exhibits a big procedural or substantive deficiency with the petition, resembling failure to determine the prior artwork standing of a reference (e.g., IPR2014-01126, Paper 22 at 13), failure to deal with a declare factor (e.g., IPR2016-01461, Paper 9 at 10-11), or technical errors (e.g., IPR2014-01329, Paper 33 at 14-15), our outcomes recommend that the declare sort may impression the probability of acquiring an establishment denial.

The rise within the fee of establishment denials is sweet information for patent house owners. Though preliminary denial charges have been low, they rose considerably in 2018, approaching 60%. Patent house owners are watching rigorously to see whether or not this development holds, and whether or not it alerts that the PTAB is turning into friendlier to Orange Ebook patents or that patent protection methods are enhancing (or each).

Ultimate Written Determination Outcomes for Orange Ebook Patents

Of all petitions directed to Orange Ebook patents that reached the ultimate written choice stage, the PTAB discovered at the very least one instituted declare patentable in 59% of the instances—a a lot greater fee than for petitions usually (44% of instances). However there has additionally been a profound distinction between the charges of patent survival throughout the totally different Orange Guide patent varieties. No less than one instituted declare survived in 80% of proceedings regarding compound patents. Against this, at the least one declare of the formulation and technique of remedy patents survived in 66% and 48% of proceedings, respectively. Compound patents held up a lot better than Orange Guide patents general. Formulation patents fared a bit higher than common, and technique of remedy patents have been the least more likely to survive the ultimate written determination stage with a minimum of one declare intact.

In contrast to the numerous change in establishment charges over time, the speed of Orange E-book petitions with no less than one declare surviving the ultimate written determination stage has remained comparatively fixed, at round 60%, and has been slowly growing since 2016.

Evaluation of IPR Selections on the Federal Circuit and Selections on Remand

We additionally reviewed the outcomes on attraction and remand of all IPR selections (not solely directed to Orange Guide patents). In its evaluation of IPR selections, the Federal Circuit has affirmed each situation in almost three-quarters of instances, displaying substantial deference to the PTAB’s conclusions. The Federal Circuit reversed or vacated half or all the PTAB’s selections in about 10% and 13% of instances, respectively, and didn’t attain a choice on the deserves within the remaining instances. When remanded from the Federal Circuit, the PTAB stored its unique opinion unchanged in additional than 80% of instances. Thus, appeals and remands haven’t been a really profitable technique for altering the PTAB’s preliminary willpower.

Conclusion

Based mostly on our evaluation, it seems that the pendulum is swinging again in favor of Orange Ebook patent house owners. The variety of petitions difficult these patents has slowed because the excessive charges seen within the 2015 and 2016 fiscal years. The speed of establishment denials of Orange Guide patents has risen significantly, and there was a sluggish however regular improve within the variety of Orange Guide patents surviving the ultimate written choice, though success charges range notably amongst patents claiming compounds, formulations, and strategies of remedy within the Orange E-book. It stays to be seen whether or not these developments proceed by means of 2019.

Methodology

Appreciable effort was made to determine all petitions regarding patents that at the moment are or have been listed within the Orange Guide. We compiled month-to-month variations of the Orange Guide from 2014 by way of October 2018 (present model obtainable right here). Orange Guide listed patents have been subclassified by sort in response to the “Drug Substance” and “Drug Product” flags and Use Codes listed within the Orange E-book. Patents with a “Drug Substance” flag have been thought-about to be compound patents. Patents with a “Drug Product” however no “Drug Substance” flag have been thought-about to be formulation patents. Lastly, patents with a Use Code however no “Drug Substance” or “Drug Product” flag have been thought-about to be technique of use patents.

Joined petitions have been counted individually for functions of analyzing the petition submitting and establishment charges, and collectively for the aim of analyzing ultimate written choice outcomes. Until in any other case reported, the info introduced was analyzed via the top of the USPTO’s 2018 fiscal yr, which was September 30, 2018.

In evaluating outcomes on the establishment and remaining written determination stage, we seemed solely at instances the place the Board issued a choice; we didn’t embrace instances the place the events settled, the Petitioner deserted its problem, or the Patent Proprietor disclaimed all claims.

 

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Christina Schwarz

Christina Schwarz

is a associate at Venable Fitzpatrick. She is a pharmaceutical and biotechnology patent litigator with expertise in all features of pharmaceutical litigation on the federal district courts and the Courtroom of Appeals for the Federal Circuit, and contested proceedings earlier than the Patent Trial and Attraction Board.

For extra info, or to contact Christina, please go to her Agency Profile Web page.

Christina Schwarz

Laura Fishwick

is an affiliate within the Mental Property Litigation Apply Group at Venable Fitzpatrick. Her apply spans complicated patent litigation and post-grant proceedings earlier than the Patent Trial and Attraction Board, with a give attention to the chemical and pharmaceutical arts.

For extra info or to contact Laura, please go to her Agency Profile Web page.

Christina Schwarz

Becky Stephenson

is a regulation clerk within the Mental Property Litigation Follow Group at Venable Fitzpatrick. She has expertise with post-grant proceedings earlier than the Patent Trial and Attraction Board, with an emphasis on the chemical and pharmaceutical arts.

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