While the Patent Trial and Appeal Board (PTAB) has not been friendly to patent owners, to put it mildly, the PTAB has not been inhospitable to pharma patent owners according to a report issued in mid-June by BiologicsHQ, a searchable database of drugs, patents, and companies involved in PTAB inter partes review (IPR) proceedings developed by attorneys at Fitzpatrick, Cella, Harper & Scinto. The BiologicsHQ report shows a much different story in terms of drug patents facing IPR challenges at the PTAB. The report looks at a combination of data sources, including the Orange Book, Center for Drug Evaluation and Research (CDER) listed biologics and statistics on America Invents Act (AIA) trials published by the PTAB. The BiologicsHQ report draws the conclusion that, despite widespread concerns about the PTAB operating as a patent death squad in IPRs, “such concern is not justified for drug patents.”
According to the March 2017 IPR statistics issued by the PTAB, 53 percent of IPRs resolved as of March 31, 2017 were instituted; the rest were either denied institution or reached some other resolution prior to the institution decision. 35 percent of all resolved IPRs resulted in final written decisions and 23 percent led to findings of all claims unpatentable. Only 7 percent of all resolved IPRs led to final written decisions finding that no claim was unpatentable, and 5 percent led to mixed claim findings.
By contrast, drug patents fare better under PTAB scrutiny in terms of having claims upheld. Of the 4,563 resolved IPRs, BiologicsHQ reports that 222 petitions (5 percent) involved patents covering drugs listed in the Orange Book. Focusing on just the IPRs involving Orange Book patents, 44 percent were instituted and 38 percent reached a final written decision, but only 16 percent led to final written decisions where all claims were found unpatentable. No instituted claim was found unpatentable in 50 percent of final written decisions (19 percent of the total number of resolved Orange Book IPRs).
CDER-listed biologic drug patents also survive PTAB challenges better than patents not directed to pharmaceutical drugs, although the number of resolved challenges is quite small by comparison. By March 31, 2017, BiologicsHQ reports that a total of 29 resolved IPR petitions involved patents covering CDER-listed biologics. 41 percent of those petitions were instituted and 28 percent reached final written decisions. 17 percent of all resolved CDER-listed biologic drug IPRs led to final written decisions of all claims unpatentable, and 10 percent led to final written decisions of no claims unpatentable.
In terms of settlements, the BiologicsHQ data indicates that 21 percent of all IPRs involving CDER-listed biologics were settled prior to institution; this accounts for all settlements in IPRs involving CDER-listed biologics. 17 percent of all Orange Book IPRs settled, 12 percent prior to institution and 5 percent after. For all technologies, 30 percent of all resolved IPRs reached settlements, but only 17 percent were settled prior to institution.
When comparing final written decisions among all IPRs, IPRs relating to Orange Book patents, and IPRs relating to CDER-listed biologic drug patents, Orange Book and CDER-listed biologic drug patents are more likely to escape with all claims intact. For all resolved IPRs, 23 percent led to final written decisions of all claims unpatentable. That’s a higher percentage than the 16 percent of Orange Book IPRs, and 17 percent of CDER-listed biologic drug IPRs that led to final written decisions where all claims are unpatentable. The 7 percent of all IPRs that led to final written decisions of no claims unpatentable is less than the 10 percent of CDER-listed biologic drug IPRs, and the 19 percent of Orange Book IPRs, that met the same fate.
Finally, the BiologicsHQ report looks at the result of determinations made by the PTAB alone, weeding out settlements or other terminations resulting as a decision between the two parties. When looking at all technologies, 41 percent of the IPRs terminated as a result of a PTAB determination resulted in at least some claims remaining patentable. This includes institution denials as well as final written decisions of no claims unpatentable or mixed claim findings. Overall, 58 percent of IPRs involving drug patents resolved by the PTAB resulted in some claims remaining patentable: 60 percent for Orange Book IPRs and 45 percent for CDER-listed biologic IPRs.
There could be multiple factors in play as regards to why drug patents seem to fare better at the PTAB compared to all other technologies according to Robert Schwartz, partner at Fitzpatrick. He indicated that patent claims covering pharmaceuticals might be more carefully drafted or there may be more opportunities for patent owners to demonstrate nonobviousness through evidence of superior unexpected results. “It has a lot to do with the fact that pharmaceutical technologies in general are more complicated than other technologies,” Schwartz said.
Schwartz said that a lower rate of trial institution for Orange Book and CDER-listed biologic patent IPRs might be a contributing factor as to why more of those patents survive with at least some claims intact. “The name of the game is trying not to get instituted,” Schwartz said. “Once you’re instituted, your chance of having claims survive gets worse.” That wasn’t to say that a decision to institute necessarily leads to claims being invalidated, he added. “In many cases, they’ll institute a trial if evidence on both sides makes it difficult to have a clear winner. The PTAB will give each side an opportunity to flesh out their arguments.”
Given that statistics on institution decisions published by the PTAB often paint a misleading picture as to the number of challenged claims which are eventually invalidated, it’s possible that a larger percentage of Orange Book and CDER-listed biologic patent claims are being invalidated than the BiologicsHQ report suggests, because each petition is counted separately even if there are multiple challenges to the same patent with different outcomes. April Breyer, an associate at Fitzpatrick and one of the authors of the BiologicsHQ report, noted that the reason the BiologicsHQ team based their data on the PTAB statistics is that they wanted to do an apples-to-apples comparison with what was being reported by the agency.
Breyer noted that a lot of legwork was involved in compiling this data including reading each petition to find Orange Book patents and identify petitions related to biologics. “Nobody has taken the USPTO statistics for all technologies and broken out petitions like we have specifically for drug patents,” Corinne Atton, an associate at Fitzpatrick and the co-author of the report said. In addition to the recent report, BiologicsHQ also provides a searchable online database regarding CDER-listed biologic drug patent challenges at the PTAB. As trends appear, a statistics page on BiologicsHQ collates and reports on those trends, providing metrics that may be useful for making strategic determinations.