Federal Circuit Rules That Hatch-Waxman “Safe Harbor” is Quite Broad in Dispute Over Enoxaparin Method Patent

By Kurt R. Karst –      

We were eager to delve into the Federal Circuit’s recent 2-1 decision in Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc. (Docket Nos. 2012-1062, -1103, -1104) concernng the scope of the Hatch-Waxman “safe harbor” provision at 35 U.S.C. § 271(e)(1), particularly in light of the Court’s prior decision in Classen Immunotherapies v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011), which is on appeal to the U.S. Supreme Court (Docket No. 11-1078).  Although the 2012 London Olympics captured most of our attention over the weekend, we did find some time to look over the decision.  And we weren’t disappointed – at least insofar as the decision, and Chief Judge Randall Rader’s dissent, provided some legal entertainment.

The case involves a generic version of LOVENOX (enoxaparin), which FDA approved after addressing active ingredient sameness criteria (i.e., “standards for identity”) in a citizen petition response (see our previous post here), U.S. Patent No. 7,575,866 (“the ‘866 patent”) assigned to Momenta that generally relates “to methods for analyzing heterogeneous populations of sulfated polysaccharides” such as enoxaparin, and 35 U.S.C. § 271(e)(1), which states: 

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

Momenta sued Amphastar for patent infringement alleging that Amphastar infringed the ‘886 patent by manufacturing for commercial sale enoxaparin using the patented method.  Ultimately, the U.S. District Court for the District of Massachusetts granted Momenta a preliminary injunction and denied two emergency motions filed by Amphastar for relief from the preliminary injunction.  (Copies of those decisions are available here, here, and here.)  Among other things, the District Court ruled that Amphastar’s activity fell outside of the “safe harbor” provision at 35 U.S.C. § 271(e)(1), because:

although the safe harbor provision permits otherwise infringing activity that is conducted to obtain regulatory approval of a product, it does not permit a generic manufacturer to continue in that otherwise infringing activity after obtaining such approval. . . .  Here, the alleged infringing activity involves use of plaintiffs’ patented quality control testing methods on each commercial batch of enoxaparin that will be sold after FDA approval.  Thus, it is not exempted under § 271(e)(1).

In coming to its decision, the District Court relied on the U.S. Supreme Court’s decision in Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005), and on the Hatch-Waxman legislative history of 35 U.S.C. § 271(e)(1) quoted by the Federal Circuit in Classen; namely that:

[T]he only activity which will be permitted by the bill is a limited amount of testing so that generic manufacturers can establish the bioequivalency of a generic substitute . . . .  [T]he generic manufacturer is not permitted to market the patented drug during the life of the patent; all that the generic can do is test the drug for purposes of submitting data to the FDA for approval.  [H.R. Rep. No. 98–857, at 8 (1984)]

In Integra, the Supreme Court stated that the text of 35 U.S.C. § 271(e)(1) “makes clear that it provides a wide berth for the use of patented drugs in activities related to the federal regulatory process,” and that there is “no room in the statute for excluding certain information from the exemption on the basis of the phase of research in which it is developed or the particular submission in which it could be included.”  In Classen, which concerned whether a vaccine license holder was required to report to FDA certain adverse event information, the Federal Circuit held that 35 U.S.C. § 271(e)(1) “does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained.”

Amphastar appealed each of the District Court’s preliminary injunction decisions to the Federal Circuit and argued that the District Court improperly took a restrictive view of the “safe harbor” provision.  Momenta argued that the District Court’s decisions were correct and that, among other things, the Federal Circuit in its Classen decision previously ruled that 35 U.S.C. § 271(e)(1) does not apply to routine reports to FDA post-approval, such as the batch testing Amphastar carried out as a condition to ANDA approval of its generic LOVENOX.  (Copies of the Amphastar and Momenta Federal Circuit briefs are available here, here, and here.)

The Federal Circuit first sought to ascertain the scope of 35 U.S.C. § 271(e)(1) and focused on the the passage in the “safe harbor” provision stating “solely for uses reasonably related to the development and submission of information under a federal law.”  According to the Court:

Congress could not have been clearer in its choice of words: as long as the use of the patented invention is solely for uses “reasonably related” to developing and submitting information pursuant to “a Federal law” regulating the manufacture, use, or sale of drugs, it is not “an act of infringement.” . . .  Limiting the scope of 35 U.S.C. § 271(e)(1) to just the submission of information pursuant to the [FDC Act] generally, or to the ANDA provision of the [FDC Act] in specific, would read words into the statute in violation of the express language chosen by Congress.

Moreover, while the statute does include a limitation – that the use must be “for uses reasonably related to the development and submission” – the term “reasonably related,” says the Court, citing and quoting Integra, “does not mean that the use of the patented invention must necessarily result in submission of information to the FDA.”   Rather, “[a]s long as the accused infringer has a reasonable basis for believing that use of the patented invention might yield information that would be appropriate to include in a submission to the FDA, that use is ‘reasonably related’ to the ‘development and submission of information’ . . . .”  (internal quotations omitted).

(Although this question is perhaps best reserved for another day, given the Federal Circuit’s broad reading of the “safe harbor” provision, would the Court perhaps include in its interpretation of 35 U.S.C. § 271(e)(1) information related to a biosimilar application under PHS Act § 351(k)?)  

Noting that the information Amphastar produced was not actually submitted to FDA, but rather is retained by the company, the Federal Circuit next addressed whether such information can nevertheless be “submitted” for purposes of 35 U.S.C. § 271(e)(1).  And the court said “yes,” stating:

We think that the requirement to maintain records for FDA inspection satisfies the requirement that the uses be reasonably related to the development and submission of information to the FDA. . . .  The fact that the FDA does not in most cases actually inspect the records does not change the fact that they are for the “development and submission of information under a Federal law.”

Then came the big issue: whether Amphastar’s submissions are within the 35 U.S.C. § 271(e)(1) “safe harbor.”  Here again, the Federal Circuit said “yes” (because they are required “submissions”), and in doing so addressed the Classen decision:

This case . . . fits well within Classen because the information submitted is necessary both to the continued approval of the ANDA and to the ability to market the generic drug.  Here, the submissions are not “routine submissions” to the FDA, but instead are submissions that are required to maintain FDA approval. . . .

Under a proper construction of 35 U.S.C. § 271(e)(1), the fact that Amphastar’s testing is carried out to “satisfy the FDA’s requirements” means it falls within the scope of the safe harbor, even though the activity is carried out after approval.  Unlike Classen, where the allegedly infringing activity “may” have eventually led to an FDA submission, there is no dispute in this case that Amphastar’s allegedly infringing activities are carried out to “satisfy the FDA’s requirements.”  The district court’s interpretation of § 271(e)(1) was erroneous.  Under the correct construction, Momenta cannot establish a likelihood of success on infringement and the preliminary injunction must be vacated.

The Federal Circuit also disagreed with Momenta’s argument that Amphastar’s testing is not protected under 35 U.S.C. § 271(e)(1) because there are non-infringing alternatives available that are endorsed by FDA. 

Chief Judge Rader, who hesitantly noted that he was present through the Hatch-Waxman legislative process (see here), lodged a blistering 29-page dissent that begins and ends with the conclusion that Amphastar is a trespasser.  In between, Chief Judge Rader provides a history of 35 U.S.C. § 271(e)(1), saying that the provision “won approval because it was limited in time, quantity, and type,” and that the majority opinion runs counter to legislative intent and significantly expands the scope of the provision.  According to Chief Judge Rader:

This new interpretation would allow almost all activity by pharmaceutical companies to constitute “submission” and therefore justify a free license to trespass.  The FDA can inspect records of any drug manufacturer and seller.  See 21 U.S.C. § 374.  Thus, the drug manufacturer need only make a record, which could potentially be inspected by the FDA, and then any activity could satisfy this new meaning of “submission.”

Moreover, says Chief Judge Rader, the majority decision cannot be reconciled with the Federal Circuit’s Classen decision, and the “decision should instead request the entire court to resolve the issue en banc.”  Although we’ve made such predictions before and they did not pan out (to our surprise), this Federal Circuit decision seems destined to further appeal.