UPDATE: The stop-gap spending bill has been revised to remove the provision discussed herein. However, life sciences companies should nonetheless take note of efforts by congress to enact patent-related reforms such as this.
On December 17, 2024, Congress presented a short-term funding bill that, if passed, would prevent a partial government shut down and fund the government through March 14, 2025.[1] On top of additional spending for disaster relief, the draft funding bill includes a more than 500-page health care package with a short section that may raise the eyebrows of everyone working at life sciences and pharmaceutical companies. Specifically, Section 904, which outlines amendments to 35 U.S. § 271(e) and would impose a limit on the number of patents that can be asserted in litigation over approval of biosimilars under Section of 351(k)[2] of the Public Health Service Act. The proposed legislation would restrict innovators in the biologics space (referred to herein as “reference product sponsors”) to asserting “not more than 20 patents” in litigation against applicants for approval of a biosimilar under Section of 351(k) of the Public Health Service Act (referred to herein as “subsection (k) applicants”).[3] There is some complexity around the “20-patent limit” under the proposed amendments, and this article explains which patents would be covered under that limit, which would not be covered, and how the limit may be modified by the courts.
Covered Patents
The patents covered under the new 20-patent limit must satisfy each of the following criteria:
- Claim the biological product or a method or product used in the manufacture of the biological product;
- Be disclosed by the reference product sponsor to the subsection (k) applicant as a patent the reference product sponsor believes covers making, using, offering to sell, or importing into the United States the biological product;[4] and
- Have an actual filing date of more than four years after the date the reference product is approved or include a claim to a method of manufacturing process that is not used by the reference product sponsor.
Notably, patents directed to a method for using the product in therapy, diagnosis, or prophylaxis, such as an indication or method of treatment or other condition of use,[5] would not be included in the 20-patent limit.
Increases to the Limit
The proposed statutory language outlines the ways a court can increase the number of patents that the reference product sponsor can assert against the subsection (k) applicant.
If a request to increase is made without undue delay, and if the interests of justice require or good cause is shown, the court:
- Shall increase the number of patents that the reference product sponsor can assert if the subsection (k) applicant fails to provide enough information in the subsection (k) application to enable the reference product sponsor to form a reasonable belief as to if an infringement claim could reasonably be asserted, and
May increase the number of patents that the reference product sponsor can assert: if there is a material change in the product or subsection (k) application, if the patent would have issued ahead of the effective date of the biosimilar application approval but for patent office delay, or for other reasons deemed to be good cause by the court.
The limit is also not imposed if the subsection (k) applicant has not completed all necessary disclosures related to patents covering the biological product. The necessary actions are described under paragraphs (2)(A), (3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) of § 351(l) of the Public Health Service Act and are intended to ensure both parties exchange necessary information regarding the subsection (k) biological product, patents covering the biological product, and potential infringement of the patents.
Implications
As drafted, the amendments to 35 U.S. § 271(e) would limit the number of patents that innovators of biologics will be able to assert in infringement suits against biosimilar applicants. The impact of this legislation would be felt most directly by life sciences companies with large patent portfolios for their approved biologics. The 20-patent limit would be a relief for biosimilar applicants, who sometimes face upwards of that number of patents at least in the initial stages of litigation before that number is whittled down. However, the law’s impact would be blunted by the substantial limitations on which patents are subject to the restrictions. First, only patents filed after approval of the product will likely be subject to the limit. Second, courts are given wide discretion to increase the limits beyond 20 patents. Accordingly, even if this change to 35 U.S. § 271(e) is enacted via this bill or some other future bill, life sciences companies should not be deterred from pursuing additional patent protection for biological products based on this legislation.
While there remains uncertainty regarding the ultimate fate of this bill, there is unlikely to be serious debate about these patent-related provisions before passage. The deadline for Congress to enact a funding bill to avoid a government shutdown is Friday, December 20, 2024, at midnight.
[3] Section 904(a)(2) (emphasis added).
[4] Patents described in paragraph (3)(A) of § 351(l) of the Public Health Service Act, including newly issued or licensed patents under paragraph (7) of § 351(l).
[] Section (B)(i) of the amendment to 35 U.S. § 271(e) provides that covered patents include those “that claim the biological product … (or a use of that product) or a method or product used in the manufacture of such biological product.” (emphasis added). Despite this reference to “or use of that product,” section (E)(ii) explicitly states that the provisions of the law “shall not apply with respect to any patent that claims, with respect to a biological product, a method for using that product in therapy, diagnosis, or prophylaxis, such as an indication or method of treatment or other condition of use.”