Replies to post #10156 on Momenta Pharmaceuticals, Inc. (MNTA)

[pollyvonwog]

Sounds like the SCOTUS should express a view then :)

[stockbettor]

Mouton, thanks for posting the SG brief. After reveiwing it this evening, I consider the chances that the SCt. will grant cert. in Classen to be close to nil. It will be interesting to see whether the Court asks the SG for its views after MNTA files its petition for cert. The SG left open the question of whether Amphastar's continuing use of MNTA's process patents to ensure batch-to-batch consistency is permitted under the HW exemption. But it is not clear, as imnot6 noted, what the answer is. Regardless of the SG's views, the SCt. might grant cert in any event because of the profound negative effect the Fed. Cir.'s opinion could have on manufacturing patents. I need to spend some more time (which is in short supply with some major year-end deadlines to meet)to go back over the Fed. Cir.'s and DC decisions in MNTA and the SCt.'s prior opinions on the HW exemption.

If it will help anyone, I did take a stab at formatting the portion of the SG's brief I consider key to MNTA's case to make it more readable, which I am reproducing below:

Extract from SG brief for Classen

The FDA may also require post-approval studies and clinical trials to determine whether, in light of new safety-related information, existing drugs should be withdrawn from the market or should carry different or more prominent warnings. See 21 U.S.C. 355(e) (authorizing Secretary to withdraw approval based on “new evidence” that drug is not safe for use); 21 U.S.C. 355(o)(4)(A) and (E) (Supp. V 2011) (authorizing Secretary to require “a labeling change as the Secretary deems appropriate to address” new safety information). Manufacturers have both business and legal incentives to respond voluntarily to reports of unexpected safety problems with their products. Those that undertake studies and clinical trials to investigate safety-related issues must file periodic reports with the FDA describing their investigations. 21 U.S.C. 355(o)(3)(E)(ii) (Supp. V 2011). But if the FDA becomes aware of new safety information indicating that a drug poses a serious risk to human *14 health, it may require the manufacturer to undertake post-approval studies and clinical trials if the manufacturer fails to do so voluntarily. 21 U.S.C. 355(o)(3)(A) (Supp. V2011); see 42 U.S.C. 262(a)(2)(D) (Supp. V 2011).

Since 2008, the FDA has used this authority to require 249 post-approval safety studies or clinical trials, based on new information or other reasons. See FDA, Post-market Requirements and Commitments, http://www.accessdata.fda.gov/scripts/cder/pmc/index.cf m (database last updated Nov. 2, 2012). Drug manufacturers voluntarily conduct post-approval scientific studies or clinical trials in other circumstances as well. For example, manufacturers conduct such studies in order to prepare “supplemental” new drug applications - applications for the FDA's approval to change the formulation, manufacturing method, or labeling of a drug. See 21 C.F.R. 314.70(b). Such applications are used when a manufacturer seeks the FDA's approval of a new indication of an already approved drug. The FDA evaluates such applications under the same standards that apply to a completely new drug. Thus, drug makers must justify the proposed label change by submitting data from clinical trials supporting the safety and effectiveness of the drug for the new indication. 21 U.S.C. 355(a) and (d); 21 C.F.R. 314.70(b)(3)(iv)-(v).

At any given time, a drug maker therefore may be conducting clinical trials for a drug and submitting the resulting information to the FDA, even though the FDA has previously approved the same drug to be marketed for a different medical indication. The FDCA thus unambiguously contemplates that drug manufacturers will conduct post-approval scientific studies or clinical trials for the purpose of developing*15 and submitting information about their products to the FDA. Such post-approval studies serve the same essential function in the federal regulatory process - ensuring the safety and effectiveness of the drugs consumed by the American public - as the pre-approval activities that the court of appeals recognized are shielded by Section 271(e)(1). When the post-approval development and submission of information to the FDA requires the use of a patented invention, Section 271(e)(1) insulates that research from liability for patent infringement.

b. The court of appeals identified nothing in the statutory text that would justify the court's categorical ruling to the contrary. Instead, it rested its interpretation principally on the legislative history of Section 271(e)(1). The court emphasized that the history is “replete with statements that the legislation concerns premarketing approval of generic drugs.” Pet. App. 27a; see id. at 27a-28a. That observation is true but is unsurprising. As this Court recognized in Eli Lilly, a principal object of the Hatch-Waxman Act was to eliminate “distortions” caused by the interaction of the patent laws with the requirement of FDA pre-marketing approval for generic drugs. 496 U.S. at 669. The legislative history of Section 271(e)(1) therefore focuses on the safe harbor's expected role in facilitating market entry by generic drug manufacturers. See, e.g., H.R. Rep. No. 857, 98th Cong., 2d Sess. 15 (1984). In addition, the purpose of the safe harbor is to immunize conduct that would otherwise constitute patent infringement. The practical value of Section 271(e)(1) therefore is likely to be greatest in the context of efforts by generic drug manufacturers to obtain FDA approval for generic *16 versions of other companies' patented drugs.

By contrast, because a brand-name manufacturer's performance of additional studies on its own approved drug is less likely to spawn allegations of patent infringement, the question whether such conduct falls within the safe harbor may have less practical significance. As this Court also recognized in Eli Lilly, however, “It is not the law that a statute can have no effects which are not explicitly mentioned in its legislative history.” 496 U.S. at 669 n.2 (citation omitted). Indeed, as the dissent below observed, “[n]one of the legislative history cited by the majority *** speak[s] to the question at issue here - whether the statute as enacted also covers post-approval activities.” Pet. App. 55a. On that question, “[t]he language Congress chose to enact and that was signed into law by the President is plain on its face. There is no ‘pre-approval’ limitation.” Ibid. And “it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.” Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 79 (1998).

c. Although the court of appeals grounded its holding in the legislative history rather than in the statutory text, respondent focuses (Br. in Opp. 9-10) on the statutory term “solely” in defending the court of appeals' limitation of the safe harbor provision to pre-approval activities. In respondent's view, once a drug maker has obtained the FDA's approval to market a drug, any post-approval scientific study concerning that drug cannot be “solely” for purposes related to the development and submission of information to the FDA because the drug maker is also engaged in the ordinary commercial distribution of the drug. That *17 argument rests on a misinterpretation of the safe harbor provision. Section 271(e)(1) states that “t shall not be an act of infringement to make, use, offer to sell, or sell *** a patented invention *** solely for uses reasonably related to the development and submission of information” under federal laws regulating drugs. 35 U.S.C. 271(e)(1). The word “solely” indicates that, in applying the safe harbor, the court should focus on the particular “use[]” that is alleged to be an “act of infringement.” A particular “use[]” may be “reasonably related to the development and submission of information,” and therefore may fall within the safe harbor, even if it serves other purposes as well. Thus, a researcher's use of a patented invention in conducting an experiment reasonably related to the development and submission of information to the FDA is protected by Section 271(e)(1), even if that experiment also advances other commercial objectives, such as product development. See Abtox, Inc. v. Exitron Corp., 122 F.3d 1019, 1030 (Fed. Cir. 1997).

By contrast, if a defendant makes multiple “uses” of a patented invention (e.g., by selling a patented drug commercially while simultaneously administering it to research subjects during a controlled study), one “use []” may provide a basis for infringement liability even though the other falls within the safe harbor. See p. 18, infra. 2012 WL 6206566 (U.S.). In the pre-approval context, determining whether a defendant's use of a patented invention in drug development research was “solely for uses reasonably related to the development and submission of information” to the FDA will normally be a straightforward inquiry.

In the post-approval context, that inquiry*18 may be substantially more difficult because the drug maker simultaneously may be engaged in the ordinary commercial manufacture and sale of the product in question. In such circumstances, a more nuanced analysis is required. A drug maker's use of a patented invention in routine commercial activity is not immune from infringement liability merely because, for example, the company may periodically report adverse reactions to the FDA. See 21 C.F.R. 314.80 and 600.80. That is because the ordinary commercial exploitation of a patented invention is not “reasonably related to the development and submission of information” for the FDA, even if such exploitation sometimes generates information useful to the FDA. That conclusion is reinforced by the ordinary meaning of the statutory term “development,” which implies more than merely the collection of information incidental to commercial transactions.

In some cases, however, post-approval research activities will fall squarely within the ambit of Section 271(e)(1). If the FDA has approved a drug for acne, for example, and its manufacturer separately conducts a clinical trial of the same drug as a treatment for melanoma, the clinical trial (but not the routine sales of the drug for acne treatment) will be protected under the plain terms of the statute. Likewise, if the FDA directs a manufacturer to conduct a clinical trial of a blood pressure drug to determine whether a different dosing regimen would mitigate dangerous side effects of which the agency recently became aware, see 21 U.S.C. 355(o)(3)(A) (Supp. V 2011), that research will be protected from infringement claims by Section 271(e)(1). *19 3.

Although the court of appeals erred in its interpretation of Section 271(e)(1), this Court's review is not warranted. The Federal Circuit has subsequently interpreted the opinion below narrowly in a manner that will cabin the adverse impact of that decision. It is unclear, moreover, whether Section 271(e)(1) applies to patented research methods like those at issue here. Finally, notwithstanding its cramped understanding of the safe harbor, the court of appeals reached the correct result in this case.

a. Although the decision below appeared seriously to misconstrue Section 271(e)(1), the Federal Circuit has since clarified that its ruling in this case does not limit application of the safe harbor provision to pre-approval activities relating to the marketing of generic drugs. After the Court invited the Solicitor General to express the views of the United States in this case, the court of appeals recognized that “the plain language of [Section 271(e)(1)] is not restricted to pre-approval activities.” Momenta, 686 F.3d at 1358-1359; see id. at 1359 (“[P]ost-approval studies that are ‘reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs' fall within the scope of the [Section] 271(e)(1) safe harbor.”).

The court of appeals explained that its decision in this case “did not turn” on any “artificial distinction” between pre- and post-approval activities. Id. at 1358. Instead, that decision held only that Section 271(e)(1)'s safe harbor “does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained.” Id. at 1357-1358 (quoting Pet. App. 27a). *20 The Momenta court's interpretation of the opinion below is not the most natural reading. Nevertheless, the Federal Circuit has authoritatively construed its earlier decision and has held, as a matter of controlling circuit precedent, that Section 271(e)(1) is not limited to pre-approval activities for generic drugs. See Momenta, 686 F.3d at 1358-1359 (“[T]he plain language of the statute is not restricted to pre-approval activities.”); id. at 1355; see also 2012-1062 Docket entry No. 86 (Fed. Cir. Nov. 20, 2012) (denying petition for rehearing en banc). The court of appeals has thus correctly recognized that, if “the use of the patented invention is done to generate information that will be submitted pursuant to a relevant federal law, that use falls within the safe harbor.” Momenta, 686 F.3d at 1360.[FN4] Accordingly, no practical reason remains for this Court's intervention. FN4.

The Momenta court additionally held that, for purposes of Section 271(e)(1), information may be deemed “submitted” to FDA if it is preserved in records that FDA regulations require a drug manufacturer to make available for inspection by FDA on request. See 686 F.3d at 1357. We express no view on the correctness of that conclusion or of the court of appeals' ultimate disposition of Momenta.