In conventional scenarios where generics are being developed and FDA submitted, the application of SS 271 (e)(1) is fairly straightforward. Its application is less clear, however, when economic factors, such as revenue generated from a partnership agreement, are involved. This article examines the impact of financial arrangements, such as revenue from a collaboration agreement, on the SS271(e)(1) defence. It is supported by U.S. Supreme Court case law and Federal Courts.
Merck KGaA v. Integra Lifesciences I, Ltd.,545 U.S.193 (2005), is a fundamental case where the Supreme Court clarified bounds for the SS271(e)(1) exception. The Supreme Court ruled that the safe harbor exclusion applies to all preclinical studies which are “reasonably” related to the development of information and its submission to FDA. This is regardless of whether or not the studies in question end up being included in the FDA submission. The financial arrangements in this case were not at issue. However, the Court’s broad interpretation opened the door for a broader range of activities to be considered as being covered by the safe harbour.
The Supreme Court has not addressed the impact that revenue from a partnership agreement could have on a party’s SS271(e).(1) defense, but the Federal Circuit’s decision in Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc., a case decided by the Federal Circuit, 686 F.3d. 1348 (Fed. Cir. Cir.
In Minutea the Court held post-approval actions aimed at maintaining FDA authorization do not fall under the safe harbor provision of SS 271. This is true even if the activities are “reasonably” related to the creation and submission of FDA information. This was because these activities were not for regulatory compliance but rather business purposes, and therefore did not qualify under the safe harbour provision. If we apply this logic to the collaboration agreements, a court may find that revenue-generating activity that is not directly related to obtaining FDA approval or maintaining FDA approval and instead serves primarily commercial goals falls outside of the SS271(e).
In Classen Immunotherapies, Inc. Cir. Cir.
Case No.: Isis Pharmaceuticals, Inc., v. Santaris Pharma A/S Corp. 1:11-cv-01104-RGA (D. Del. It is also interesting to note that 2014 was published. Isis Pharmaceuticals, Inc. sued Santaris Pharma A/S Corp. for patent infringement in 2011. The main argument centered around the application SS 271 (e)(1) Safe Harbor provision. Santaris was the defendant and engaged in drug development and discovery activities using its Locked Nucleic Acid technology (LNA). Isis claimed several of these activities violated their patents, and that Isis would receive significant upfront payments and milestone payments as well as royalties in exchange for providing access the infringing technologies.
Santaris responded with a motion for dismissal and argued that its activities were protected by the SS 271 (e) (1) safe harbor provision because they were’reasonably connected’ to the submission and development of information to FDA. Santaris’s activities were conducted under collaboration agreements and generated revenue. This was a unique aspect in this case. The Delaware District Court reviewed the allegations made by Santaris. It was determined that Santaris did not have a “reasonably” related set of activities to those submitted to FDA. The District Court denied the motion and said that Santaris’ argument was exactly what was warned about in Merck 1 – taking a position that views safe harbor as “globally embracing[] all experimental activities that, at some point, though attenuated may lead to FDA approval processes.”
The Isis Pharmaceuticals, Inc. Santaris Pharma A/S Corp case highlights that revenue from collaboration agreements may not automatically exclude the applicability of the SS 271(e)(1) defense. The case illustrates that revenue from agreements of collaboration may not exclude the application of the SS 271.e.1) defense. The distinction is based on how much revenue-generating activity is directly and principally involved in the production of data for FDA submission as opposed to being merely routine business or post approval activities.
The Supreme Court is yet to give a definitive answer. However, Federal Circuit caselaw suggests that revenue generated from a collaboration contract can have a significant impact on the SS271(e).(1) defense. This depends on whether these activities are “reasonably connected” to information development and submission to FDA as opposed to primarily being commercial, or the main source of income for an organization. If a court finds that the activities are primarily commercial and not directly related to regulatory compliance, then they will likely not be covered by the safe harbor provision.
The debate about the scope of the SS271(e)(1) exclusion highlights the importance of clearly defining business and regulatory boundaries when entering into collaboration agreements within the pharmaceutical industry. The article stresses the importance of careful legal planning to preserve the SS271(e)(1) defence if needed. The legal landscape for claims of patent infringement and defenses are dynamic and may change in the future as Supreme Court or Federal Circuit Courts clarify these issues.
The post Impact of Revenue From a Collaboration Agreement On the 271(e),(1) Defense in Patent Infringement Laws first appeared on Attorney at Law Magazine.