The Rarely Used Exception to the First Permitted Commercial Marketing/Use PTE Criterion

By Kurt R. Karst –   

[We interrupt this blog posting to bring you some breaking news . . . . For those of you following the battle over generic COZAAR/HYZAAR 180-day exclusivity, we updated our April 5th post with information on a D.C. Circuit decision. . . .   Now back to our regularly scheduled post . . . .]

As applied to drugs, the Patent Term Extension (“PTE”) statute at 35 U.S.C. § 156(a) provides that the term of a patent claiming the drug (or a use of the drug or a method of manufacturing a drug) shall be extended from the original expiration date of the patent if: (1) the term of the patent has not expired; (2) the patent has not been previously extended; (3) the PTE application is submitted to the Patent and Trademark Office (“PTO”) by the owner of record within 60 days of NDA approval; (4) the product, use, or method of manufacturing claimed has been subject to a “regulatory review period” before it is commercially marketed; and (5) the NDA is the first permitted commercial marketing or use of the drug product.  The fifth criterion, however, is subject to an exception (35 U.S.C. § 156(a)(5)(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 period is the first permitted commercial marketing or use of a product manufactured under the process claimed in the patent . . . .

This provision underwent significant change during the Hatch-Waxman legislative process (more than 25 years ago).  It was introduced by Representative Henry Waxman (D-CA) as an amendment to H.R. 3605 (the precursor legislation to the Hatch-Waxman Amendments) and included the “first permitted commercial marketing or use” exception for patents concerning recombinant DNA products; however, the amendment also distinguished between method of manufacturing patents that do and do not claim products primarily manufactured using recombinant DNA technology and added several provisos to obtain a PTE for a process patent. 

Specifically, the legislation provided that with respect to the conditions for a PTE applicable to product, method of use, and process patents:

[W]ith one exception, the approved product must have been approved for commercial marketing for the first time.  The exception involves an approved product made under a patented process which primarily uses recombinant DNA technology.  Such an approved product could have received its second approval for commercial marketing, but it must be the first time a product made by the claimed process has been approved. 

H.Rep. No. 98-857, Part I, 98th Cong., 2nd Session, at 38 (1984).  This exception was added “because this innovative, new technique [(i.e., recombinant DNA technology)] is being employed to improve already approved drugs.” 

With respect to the conditions for a PTE applicable to process patents (as opposed to product and method of use patents), however, the legislation differentiated between certain types of process patents.  As explained in the House Report:

[A] process patent, which does not primarily utilize recombinant DNA in the manufacture of the approved product, [may be] extended if two conditions are met:  First, there can not be any issued product patent which claims the approved product or any issued use patent which claims a method of using the approved product for any known therapeutic use.  And, second, there can not be an earlier issued process patent, which does not primarily utilize recombinant DNA and which claims a method of manufacturing the approved product . . . .

[A] process patent, which primarily utilizes recombinant DNA in the manufacture of the approved product, [may be] extended if several conditions are met.  First, the holder of the process patent can not hold a product patent claiming the approved product or a use patent claiming a method of using the approved product.  Second, there can not be an ownership or control interest, either directly or indirectly, between the holder of the process patent and the holder of any product patent claiming the approved product or the holder of any use patent claiming a method of using the approved product.  Third, there can not be any earlier issued process patent which claims a method of manufacturing the approved product by primarily utilizing recombinant technology.

The language in H.R. 3605 differentiating between certain types of process patents was subsequently removed at the PTO’s request by an amendment introduced by Rep. Waxman after the bill was voted out of the U.S. House of Representatives Energy and Commerce Committee.  H.R. 3605 was passed by the U.S. House of Representative with PTE provisions in the form enacted under the Hatch-Waxman Amendments.  See 130 Cong. Rec. H9131-32 (daily ed. Sept. 6, 1984) (statement of Rep. Waxman) (“The one change involves the rules about which patents can be extended.  Under this amendment, the patent holder would be allowed to select the patent to be extended.  Under the bill, the first issued patent would have automatically been extended.”).  The U.S. Senate incorporated H.R. 3605 as an amendment to S. 1538, which became Pub. L. No. 98-417 (the Hatch-Waxman Amendments).  The PTE provisions in H.R. 3605 mirrored previous legislation introduced in the U.S. Senate (e.g., S. 2926). 

Although 35 U.S.C. § 156(a)(5)(B) has been in effect for more than 25 years and remains a viable path to extend a process patent for an approved product that primarily uses recombinant DNA in its manufacture, it has been used very rarely.  In fact, to our knowledge, it has been used only once!  In June 2004, the PTO extended U.S. Patent No. 5,156,957 (“the ‘957 patent”) covering GONAL-F (follitropin alfa) on the basis of 35 U.S.C. § 156(a)(5)(B). 

FDA approved GONAL-F, a recombinant product, under NDA No. 20-378 on September 29, 1997.  Correspondence from the PTO notes that although follitropin was previously approved for commercial use or sale in HUMEGON, PREGONAL, and REPRONEX, which “all contain the active ingredient menotropins (which is naturally occuring and a combination of follicle simulating [sic] hormone (FSH) and luteinizing hormone (LH)),” and in FERTINEX (urofollitropin), the ‘957 patent is eligible for a PTE:

U.S. Patent No. 5,156,957 claims a method of manufacturing a product, GONAL-F, which primarily uses recombinant DNA technology.  As a result, the '957 patent is eligible for extension if the approval of GONAL-F was the first permitted commercial marketing or use of a product manufactured using the recombinant DNA techniques claimed in the patent.  Follitropin alpha/beta, as made by the process claimed in the patent, has not been shown to have been previously approved. 

Moreover, the PTO found that the ‘957 patent was eligible for a PTE notwithstanding the September 29, 1997 approval of another recombinant follitropin product, FOLLISTIM (recombinant follitropin beta), which is the subject of a pending PTE aplication:

The product FOLLISTIM (recombinant follitropin beta)(Organon) was also approved on September 29, 1997, but this date is the same date, not before, the date of approval of GONAL-F.  Thus, the contemporaneous approval of FOLLISTIM, albeit a recombinant DNA product, does not preclude patent term extension based upon the regulatory review period of GONAL-F and the '957 patent is considered to be eligible for extension.

Thus, the PTE for the GONAL-F ‘957 patent not only represents the first (and presumably only) use of 35 U.S.C. § 156(a)(5)(B), but is also a precursor to the PTO’s interpretation of the PTE statute that multiple PTEs are available when two products are approved on the same first day, which we previously discussed (here and here).