Mack on Narrowing 271(e)(1) Safe Harbor In Proveris Scientific v. Innovasystems
In Proveris Scientific Corporation v. Innovasystems, Inc., 2008 U.S. App. LEXIS 16492 (Fed. Cir. Aug. 5, 2008), the United States Court of Appeals for the Federal Circuit affirmed that a device, which itself is not subject to approval of the Food and Drug Administration (FDA) but which is used in connection with FDA regulatory submissions, is not entitled to the protection of the Hatch-Waxman Act safe harbor provision. In this commentary, Olga V. Mack, a patent litigator at the Palo Alto office of Wilson Sonsini Goodrich & Rosati, analyzes Proveris and discusses the narrowed scope of the Act’s safe harbor. She writes:
The Federal Circuit explained that Congress enacted two related provisions in the Hatch-Waxman Act § 156 and § 271(e)(1) to eliminate two unintended distortions of the effective patent term resulting from the pre-market approval required for certain products by the Federal Food, Drug, and Cosmetic Act (FDCA). First, § 156 aims to eliminate the de facto patent term redaction for inventors/patentees claiming a product subject to FDAs regulatory delays. Second, safe harbor § 271(e)(1) prevents the de facto extension of the patent term by immunizing competitors (e.g., generic drug companies) from infringing the patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law. While the Court discussed both §§ 156 and 271(e)(1) because they achieve the same kind of fit, or symmetry, the Court and this commentary focus on the scope of § 271(e)(1).
Moreover, relying on the legislative history, precedent, and statute construction, the Federal Circuit delineated the following two § 271(e)(1) phrases: patented invention and reasonably related. The construction of these phrases while providing some certainty to patent practitioners and litigators, still probably fails to reconcile the holding in this case with the precedent.
In concluding that § 271(e)(1) safe harbor does not apply to a device that itself is not subject to the FDA approval, the Court examined § 271(e)(1) in light of the overall statutory structure and underlying policy (e.g., eliminating the two unintended distortions of the effective patent term resulting from the pre-market approval required under the FDCA).
The following observations, which certainly provide some guidance to patent practitioners, were instrumental in the Court reaching the conclusion that the party that asserted § 271(e)(1) safe harbor defense in this case is not within the category of entities for whom the safe harbor provision was designed to provide relief:
(a) The patented device at issue is not subject to FDA pre-market approval.
(b) The party that asserted § 271(e)(1) safe harbor defense is not a party seeking FDA approval for a product in order to enter the market to compete with patentees.
(c) The party that asserted § 271(e)(1) safe harbor defense faces no regulatory barriers to market entry upon patent expiration.
(d) The party that asserted § 271(e)(1) safe harbor defense is not adversely affected by the second distortion of de facto extension of the patent term discussed above.
(e) The party against which § 271(e)(1) safe harbor defense was asserted is not a patentee who would have been faced with a reduction of effective patent life caused by the FDA approval process and is not eligible for the § 156(f) term extension.