Originally Published MX March/April 2005
GOVERNMENTAL & LEGAL AFFAIRS
Longer Life for Medical Device PatentsOwners of device patents now may obtain extended terms based on the first use of any approved device covered by a patent.
Marc S. Gross and Chandra Garry
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| Photo courtesy Edwards Lifesciences |
Patents directed to drugs or medical devices for which regulatory review is required prior to marketing may be extended for periods having reference to delays in the regulatory process. However, a recent court decision is likely to increase the length of time for which owners of medical device patents specifically, as distinct from drug patent holders, can extend (or restore) their patent terms.1 That is because, under the court's interpretation, owners of device patents may now choose to cite any previously approved device covered by a patent when seeking a patent term extension (PTE).
Before the court ruling, in the case referred to as Cardiac Pacemakers, it seemed that medical device patent owners, like drug patent owners, could seek a PTE only on the basis of the regulatory delay in obtaining FDA approval for the first device covered by the patent. But the length of regulatory delay for any of several different devices covered by the same patent may now receive consideration when a patent owner files for a term extension.
Cardiac Pacemakers establishes different rules for extending drug patent terms and for extending medical device patent terms under the so-called Hatch-Waxman Act.2,3 That act provides for the extension of patent terms in cases where the life of the patent is foreshortened by federal regulatory delay. One goal of the statute was to give medtech companies an incentive to innovate by restoring the portion of the patent term consumed by regulatory delay.
In Cardiac Pacemakers, the U.S. Court of Appeals for the Federal Circuit offers greater incentives to the medical device industry in that regard than are currently enjoyed by the drug industry under Hatch-Waxman.
This article explores the implications of the Cardiac Pacemakers decision for the medical device industry.
Relevance to Devices Only
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| Figure 1. Under the Hatch-Waxman Act, owners of drug patents may seek patent term extensions (PTEs) based only on regulatory delay in obtaining FDA approval of the first device covered by the patent (left). The recent court decision in Cardiac Pacemakers Inc. v. St. Jude Medical Inc. enables owners of medical device patents to choose among multiple approved devices covered by their patents when seeking a PTE (right). Photo of the Carpentier-Edwards Perimount Magna pericardial aortic heart valve courtesy Edwards Lifesciences (Irvine, CA). (click to enlarge) |
Prior to Cardiac Pacemakers, most legal decisions pertaining to PTEs involved drugs, not medical devices. In the absence of cases specifically dealing with PTEs for medtech devices, extensions of medtech device patents under the provisions of the Hatch-Waxman Act were previously determined by cases involving drug products.
In those cases involving drug patents, courts restricted eligibility for term extensions to the regulatory delay experienced in obtaining approval of the first drug product covered by the patent. Thus, no matter how many drugs covered by a single patent were ultimately approved, and regardless of the length of regulatory delay for each, restoration of the patent term was to be determined only by the delay incurred in securing approval of that first product.
In Cardiac Pacemakers the circuit court delivered a contrasting decision. It judged that, unlike owners of drug patents, owners of medical device patents should not be limited, in receiving PTEs, to compensation for time lost in delayed approval of only the initial commercial embodiment of a patented invention. Instead, owners of medical device patents may base their PTE applications on regulatory delays experienced even for later devices covered by an original patent. That is, in selecting the basis for a PTE application, manufacturers of approved medical devices are allowed to consider any of several related devices that may have been subject to varying degrees of regulatory delay.
The court reaffirmed that a drug PTE must be based on the initial FDA approval of the active ingredient in the patented product. Nevertheless, the court upheld the validity of a medical device PTE based on the regulatory delay encountered by a device that had been preceded in approval by two other products covered by the same patent. Accordingly, an owner of a medical device patent covering multiple approved devices may seek a PTE to compensate for delayed approval of a patented device even if another such device had been previously approved.
It is important to note that owners of drug patents and owners of medical device patents are both required, under the Hatch-Waxman Act, to file for any term extension within 60 days of FDA approval.
Case Facts and History
The legal action and judicial background leading to the circuit court's decision are worth a close look.
Cardiac Pacemakers Inc. (CPI; St. Paul, MN), a subsidiary of Guidant Corp. (Indianapolis), brought suit against St. Jude Medical Inc. (St. Paul, MN), alleging that the implantable cardiac defibrillators made by St. Jude infringed CPI's patents. CPI owns two patents, for both of which it had obtained term extensions.4,5
St. Jude argued that both of CPI's PTEs had been improperly obtained under the applicable provisions of the Hatch-Waxman Act. Importantly, neither PTE was based on FDA approval of the first-approved commercial device claimed in the patent.
With respect to the first of its issued patents, CPI had obtained a term extension on the basis of delays in obtaining regulatory approval for one of its defibrillators covered by the patent, notwithstanding the fact that a different model covered by the patent had previously been approved and marketed by the company. The PTE that CPI had obtained for the second patent was based on the delayed approval of another of its defibrillator models, notwithstanding the prior FDA approval of two third-party devices that were licensed under the patent in question.
The lower court had approved both PTEs irrespective of the previous approvals of related devices, concluding that "Congress chose a relatively simple solution of one patent extension per patent, one patent extension per product, and one product per patent extension, while giving patent holders in most cases the choice in matching up products and the patents for which they seek extensions."6 It thus indicated that whether a PTE was based on the first- or a later-approved form of the patented device was irrelevant.
In reaching its conclusion, this court relied both on a specific difference between the statutory language governing PTEs for medical devices and that covering other patented inventions, and on the legislative history of the Hatch-Waxman Act.
An earlier version of the bill that later became the act had included a provision that would have limited the grant of a PTE to the very first product approved, that is, to a patent that "does not claim another product . . . which product received permission for commercial marketing . . . before the filing of an application for extension."7 But Congress excluded this provision from the final legislation. In Cardiac Pacemakers, the lower court stated that the requirement eliminated during the legislative process should not be implied by the courts, and cited a critical difference between certain sections of the statute in distinguishing the way medical device PTEs would be treated from the treatment of drug PTEs.6
On appeal, only the term extension for the patent covering licensed third-party devices that had been approved and marketed prior to the CPI device was in issue. The appellate court nevertheless affirmed the decision of the lower court, basing its ruling on the statutory language of Hatch-Waxman and the act's legislative history. The act refers only to patented products, not to parties who may have obtained approval of such products. Therefore, it appears that a PTE may be sought for any device approved by FDA and covered by a particular patent regardless of who, using the patented invention, may have received the first approval for a device covered by the patent.
The Court's Interpretation
The Court of Appeals for the Federal Circuit based its decision in Cardiac Pacemakers on an interpretation of the same section of Hatch-Waxman that the lower court relied on, agreeing that "the close parallels between the two provisions serve to highlight the difference."8 The act states:
(a) The term of a patent which claims a product, a method of using a product, or a method of manufacturing a product shall be extended in accordance with this section from the original expiration date of the patent . . . if . . . (5)(A) except as provided in subparagraph (B) or (C), the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred; [or] (B) in the case of a patent which claims a method of manufacturing the product which primarily uses recombinant DNA technology in the manufacture of the product, the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of a product manufactured under the process claimed in the patent.9
Subsection (5)(A) applies to all products for which a PTE is sought and refers to "the product" approved. Subsection (5)(B) deals specifically with methods of making recombinant DNA products and states that a PTE will be extended to "a product" approved.
Distinguishing between the terms used in the act, the lower court held that "the product" in (5)(A) means any approved product covered by the patent, while "a product" in (5)(B) limits application to the first approved use of any product made by the recombinant technique covered by the patent. The court stated that "where Congress includes particular language in one section of a statute but omits it in another section of the same act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. The circuit court affirmed the lower court's statutory interpretation of these provisions.
Further, the higher court agreed with CPI's argument that the correct application of the statutory language is that "when various devices, all requiring separate regulatory approval, are covered by the same patent, it suffices that the particular device on which the application for extension is based is covered by the patent and is subject to regulatory review, and that only one extension per patent is available."10
Conclusion
The decision in Cardiac Pacemakers should promote innovation in the medical device industry. For instance, patent owners now have a greater incentive to license their patent. They retain control over PTE decisions and may license patented technology to others without fear that they will be bound to base a term extension application on whatever device is approved first as a result of the licensee's activity. Further, owners of medical device patents may obtain term extensions even if they or third parties have previously obtained approval of other devices covered by the patents.
The PTE will become an additional bargaining chip in licensing agreements, as the selection of the product for which an extension will be sought rests with the patent owner. Such agreements may be transformed to reflect the patent owner's option to seek term extensions for any approved patented device. Parties may choose to negotiate agreement terms based on the potential length of the regulatory delay. Another possibility is that the licensee might seek a commitment from the patent owner to pursue a PTE for a particular device then being developed by the licensee.
In sum, the legal decision in Cardiac Pacemakers should significantly improve the likelihood of medical device patent owners to obtain desired term extensions.
References
Marc S. Gross is of counsel and Chandra Garry is an associate in the law firm of Darby & Darby PC (New York City).
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