Merck & Co., Inc. v. Kessler, s. 96-1068

Citation80 F.3d 1543,38 USPQ2d 1347
Decision Date04 April 1996
Docket NumberNos. 96-1068,96-1105 and 96-1107,s. 96-1068
Parties, 38 U.S.P.Q.2d 1347 MERCK & CO., INC., and MSD Technology, L.P., Plaintiffs-Appellees, and Schering Corporation, Plaintiff-Appellee, and Bracco Diagnostics Inc. and Bracco International B.V., Plaintiffs-Appellees, and Hoffmann-La Roche Inc. and Syntex (U.S.A.) Inc., Plaintiffs-Appellees, and Organon, Inc., Plaintiff-Appellee, v. David A. KESSLER, M.D., Commissioner of Food and Drugs, and Bruce A. Lehman, Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, Defendants-Appellants, and Generic Pharmaceutical Industry Association, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Harris Weinstein, Covington & Burling, Washington, DC, argued for plaintiffs-appellees, Merck & Co., Inc. and MSD Technology, L.P. and plaintiff-appellee, Schering Corporation. With him on the brief were Paul J. Berman and Bruce N. Kuhlik. Also on the brief were John F. Lynch and Nicolas G. Barzoukas, Arnold, White & Durkee, Houston, Texas. Of counsel were Kevin J. McGough, Michael C. Sudol, Jr., Paul D. Matukaitis and Thomas W. Krause.

Donald O. Beers, Arnold & Porter, Washington, DC, argued for plaintiffs-appellees, Hoffmann-La Roche Inc. and Syntex (U.S.A.) Inc. With him on the brief was David E. Korn.

Christopher L. Cannon, Vice President, General Counsel, Bracco Diagnostics Inc., Plainsboro, New Jersey, was on the brief for plaintiffs-appellees, Bracco Diagnostics Inc. and Bracco International B.V. Also on the brief were Roger A. Clark, Edward J. Fitzpatrick and George P. Hoare, Jr., Roger & Wells, Washington, DC.

Wayne H. Matelski, Barbara S. Wahl and Eric B. Bruce, Arent Fox Kintner Plotkin & Kahn, Washington, DC, were on the brief for plaintiff-appellee, Organon Inc. John C. Hoyle, Attorney, Department of Justice, Washington, DC, argued for defendants-appellants. With him on the brief were Frank W. Hunger, Assistant Attorney General, Helen F. Fahey, United States Attorney and Douglas N. Letter, Attorney. Also on the brief were Nancy J. Linck, Solicitor, Al Drost, Deputy Solicitor and Scott A. Chambers, Associate Solicitor, Department of Commerce, Patent and Trademark Office, Arlington, Virginia, of counsel.

Alfred B. Engelberg, Greenwich, Connecticut, argued for defendant-appellant. With him on the brief were James F. Flug and Reuben B. Robertson, III, Ingersoll & Bloch, Chartered, Washington, DC.

Donald R. Stone, Gary L. Yingling and Hilda Kay Cross, McKenna & Cuneo, L.L.P., Washington, DC, were on the brief for Amici Curiae, National Pharmaceutical Alliance, Gray Panthers, and United Seniors Health Cooperative.

Cornish F. Hitchcock and Brian Wolfman, Public Citizen Litigation Group, Washington, DC, were on the brief for Amici Curiae, Public Citizen, National Council of Senior Citizens and National Consumers League.

Arthur Y. Tsien and David F. Weeda, Olsson, Frank & Weeda, P.C., Washington, DC, were on the brief for Amicus Curiae, National Association of Pharmaceutical Manufacturers.

Peter T. Cobrin, Cobrin, Gittes & Samuel, New York City, was on the brief for Amicus Curiae, Hovione Sociedade Quimica, S.A.

Robert A. Armitage and Michael A. Sanzo, Vinson & Elkins, L.L.P., Washington, DC, were on the brief for Amicus Curiae, Pharmaceutical Research and Manufacturers of America.

Before ARCHER, Chief Judge, NIES, Senior Circuit Judge, MICHEL, Circuit Judge.

NIES, Senior Circuit Judge.

These appeals raise the question of whether there are limitations to the application of a patent restoration extension, granted pursuant to the Hatch-Waxman Act (35 U.S.C. § 156), to the term of the patent calculated as 20 years from filing under the Uruguay Round Agreements Act (URAA) (35 U.S.C. § 154). The district court held that all patents in force on June 8, 1995, including patents in force only because of a Hatch-Waxman extension, were entitled to add the time of the Hatch-Waxman extension to the new term afforded by the URAA. We affirm-in-part and reverse-in-part.

I.

Two statutes are at issue in this case. The Drug, Price Competition and Patent Term Restoration Act, codified in part at 35 U.S.C. § 156 1, (also known as the Hatch-Waxman Act), provides generally for a limited extension of the term of a patent, inter alia, for a drug as to which marketing was held up during the patent term by the process of obtaining Food and Drug Administration (FDA) approval (hereinafter "restoration extension"). Each of the drug patents in suit received a two-year RESTORATION extension at a time when the term of the patent was 17 years from date of issuance. The second statute is the URAA, 35 U.S.C. § 154 (1995), which provides an alternative calculation of the term for patents in force on June 8, 1995, namely, 20 years from filing of the patent application. For patents that were prosecuted to issuance in less than three years, URAA effects an extension of its term, that is, the difference between 17 years from issuance and 20 years from filing. Each of the patents in suit was in force on June 8, 1995.

The first of these statutes, the Hatch-Waxman Act, which passed in 1984, eliminated the pre-1984 requirement that a company seeking to market a generic version of a patented drug had to conduct its own testing program. Instead, the Hatch-Waxman Act permits the generic producer of the fully tested drug to rely on the safety and efficacy data of a prior applicant, frequently the holder of a patent on the product. 21 U.S.C. § 355(j)(7)(B); H.R.Rep. No. 857, 98th Cong.2d Sess. Pt. 1, at 16-17 (1984). Thus, the marketing of generic versions of an FDA-approved drug is expedited. In exchange Another overall limitation is that the term of the patent may be given only one RESTORATION extension. Id. at § 156(a)(2). If the term of the patent has received such an extension, the patent may not be given another restoration extension even for another drug covered by the patent whose marketing also is delayed by reasons of FDA procedures. Finally, the restoration period of the patent does not extend to all products protected by the patent but only to the product on which the extension was based. Id. at § 156(b)(1). A restoration extension is made known to the public by the issuance of a certificate by the PTO stating the number of days that the term is extended. Id. at § 156(e)(1); 37 C.F.R. § 1.780.

                the Hatch-Waxman Act provides the holders of patents on approved patented products with an extended term of protection under the patent to compensate for the delay in obtaining FDA approval.   This restoration period does not recover the full time lost from the patent term due to FDA's premarket approval process but merely "ameliorates the loss incurred when patent terms tick away while the patented product is awaiting [FDA's] regulatory approval for marketing."  Unimed, Inc. v. Quigg, 888 F.2d 826, 829, 12 USPQ2d 1644, 1647 (Fed.Cir.1989).   Regardless of the time so lost, if a patent was issued and testing began before the 1984 enactment of the Hatch-Waxman Act, the total extension period may not exceed two years, 35 U.S.C. § 156(g)(6)(C);  otherwise the restoration period is limited to no more than five years.   Id. at § 156(g)(6)(B).   Further, the effective patent term including the restoration period may not exceed 14 years following FDA approval of the new drug.   Id. at § 156(c)(3)
                

The FDA has major administrative responsibilities under the Hatch-Waxman Act. A generic drug manufacturer is not guilty of infringement by filing an application for approval of marketing (an ANDA) if the generic company does not seek approval to engage in the commercial manufacture, use, or sale of the drug before the expiration of the patent. On the other hand, a patent owner is entitled to notice, and it is an act of infringement for purposes of a declaratory judgment action, for a generic manufacturer to file an ANDA for use prior to the patent expiration date on the basis of alleged invalidity or noninfringement of the patent. The statute requires the FDA to publish the expiration date, and a patent owner must be given notice by the applicant of an ANDA seeking use before the expiration of the patent. 2

The second statute, the URAA, was enacted in 1994. The purpose of the URAA was not to extend patent terms, although it has that effect in some cases, but to harmonize the term provision of United States patent law with that of our leading trading partners which grant a patent term of 20 years from the date of filing of the patent application. Prior to June 8, 1995, U.S. patents had an expiration date under 35 U.S.C. § 154 measured as 17 years from the date the patent issued, except where terminal disclaimers were filed. Amended section 154(a) now reads:

Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States or, if the application contains a specific reference to an earlier filed application or applications under section 120, 121, or 365(c) of this title, from the date on which the earliest such application was filed.

35 U.S.C. § 154(a)(2) (1994).

For certain patents which were issued and for pending applications which were filed prior to June 8, 1995, a transitional provision preserves a guaranteed 17-year term, if it is longer than 20 years from filing, by the following provision:

The term of a patent that is in force on or that results from an application filed before the date that is 6 months after the date of the enactment of the Uruguay Id. at § 154(c)(1). Patents in the section 154(c)(1) category thus are entitled to keep or to enjoy the 17-year term...

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