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January 19, 2007
Terminal Disclaimer & Extension
Merck
owns
4,797,413, a CIP of a CIP of a CIP, terminally disclaimed at the end of
June, 2004, but granted a three-and-a-half year extension by the USPTO because
it took the FDA almost six years to okay Merck's dorzolamide (trade name:
Trusopt), the drug for glaucoma treatment claimed by the patent. Merck
claims the extension rides on the tail of the terminal disclaimer, extending the
patent to the end of 2007. Hi-Tech Pharmaceutical wants to market a generic
version, and says there is no tail to a terminal disclaimer, at least in this
instance. A New Jersey district court ruling favored Merck; a ruling Hi-Tech
appealed. No appeals court decision yet, but the murky intersection between terminal
disclaimer and patent extension may be plowed clear as a result.
Terminal disclaimers limit patent term to its parent when the claimed technology is related enough to be considered obvious by the PTO. Patent term extensions are routinely granted for drug patents when the FDA fiddles in the approval process. The 1984 Hatch-Waxman Act concocted the sweetheart deal for drug patent extensions.
Steven Hird at Greenberg Traurig thinks this sleeper case will have a big bang. "If the Federal Circuit sides with the appellant Hi-Tech, Merck could be faced with the loss of over three years of patent exclusivity for products having combined net U.S. sales of $92 million in the third quarter of 2006 alone."
A ruling against Merck could have some domino effect throughout the pharmaceutical industry. Merck's CIP strategy is a common one for drug patents, arguably the most common lucrative patented technology, though high roller awards and settlements in other technologies, mostly computer related, snatch headlines more often.
The appeals court heard oral arguments last month. Reportedly, the judges' questions revealed uncertainty about statutory interpretation. "The judges saw the problem. The statutes say nothing about the combination of patent rules, and it didn't appear to be a slam-dunk case one way or another. They were definitely struggling," says Hird.
Hird: "It's a funny case because everybody thought that terminally disclaimed patents could definitely get extensions, but Hi-Tech has suggested that the PTO doesn't have the authority to do so because it's not in the patent statutes." Hi-Tech argued that Merck caused the problem by getting two patents to the same invention, then claiming, despite the terminal disclaimer required for allowance, that the later patent remain enforceable after the earlier one expired. "The fact that Merck might have received an enforceable extension does not provide a valid reason for this court to overturn settled law to thereby relieve Merck from the adverse consequences of its action," said Hi-Tech.
Merck says it's copasetic, that Hi-Tech is flying in the face of the Hatch-Waxman Act, patent law, and 20 years of USPTO regulations. "The text of [U.S. Code] and terminal disclaimers do not support Hi-Tech's meritless argument."
We'll find out soon the merit of precedent in the matter.
Sources: IP Law 360 (subscription only), Market Wire
Posted by Patent Hawk at January 19, 2007 12:04 AM | Case Law