A recent ruling by the U.S. Court of Appeals for the Federal Circuit has provided an apparent loophole for manufacturers to avoid infringement liability for conducting patented manufacturing quality control steps offshore. On November 10, the Federal Circuit in Momenta Pharmaceuticals, Inc. v. Teva Pharmaceuticals, Inc. ruled that routine quality control testing of drugs as part of a post-approval, commercial production process is not protected by the Hatch-Waxman safe harbor provision of 35 U.S.C. § 271(e)(1) for information developed for submission to the U.S. Food and Drug Administration (FDA). However, the Federal Circuit also limited infringement for importation of products made by a patented process in the U.S. under 35 U.S.C. § 271(g) to the actual “making” of a product, ruling that section 271(g) does not extend its reach to methods of testing a final product or intermediate substance to ensure that the intended product or substance has, in fact, been made.
Momenta Pharmaceuticals and Sandoz (collectively, Momenta) became the first company to market a generic version of enoxaparin, an anticoagulant. Momenta is also the assignee of U.S. Patent No. 7,575,886 (the ’886 patent), which claims a process used to ensure that each batch of generic enoxaparin meets certain quality standards.
Teva Pharmaceuticals (Teva) and Amphastar Pharmaceuticals (Amphastar), two competing generic drug manufacturers, sought to enter the enoxaparin market. Teva did not manufacture enoxaparin itself, but sourced the product from an Italian company that manufactured, analyzed, tested, packaged and labeled Teva’s generic version of enoxaparin, which Teva then imported into the United States. Amphastar, unlike Teva, manufactured its enoxaparin product within the United States.
Momenta sued both Teva and Amphastar for infringement of the ’886 patent, alleging that they marketed or intended to market an enoxaparin product that was manufactured using a process covered by the ’886 patent. Momenta argued that its patented method was used to select and separate batches of intermediate drug substance that conform to United States Pharmacopeia Convention requirements for enoxaparin from batches that do not, and that selected batches were then used to make the finished drug product.
The district court granted summary judgment of non-infringement in favor of Teva and Amphastar, finding that Teva’s and Amphastar’s conduct fell within the infringement safe harbor provided by section 271(e)(1), which states that it is not infringement for a party to use a patented invention “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.” The district court also found that Teva’s and Amphastar’s sales in the United States did not constitute infringement under section 271(g), which prohibits selling within the United States a product made by a process patented in the United States, reasoning that the patented process related to quality control release testing was not a method of making enoxaparin.
On appeal, the Federal Circuit first addressed whether Teva’s and Amphastar’s enoxaparin products were “made by” Momenta’s patented process within the meaning of section 271(g). Concluding that they were not, the Federal Circuit distinguished between the actual making of a product and the methods of testing a final product or intermediate substance to ensure that the intended product or substance has, in fact, been made. The Federal Circuit explained that the ordinary meaning of “made” as used in section 271(g) means “manufacture,” and extends to the creation or transformation of a product, such as by synthesizing, combining components, or giving raw materials new properties. However, “making” does not extend to testing to determine whether an already synthesized drug substance possesses existing qualities or properties. Because Momenta’s patented process related to quality control release testing and not a method of making enoxaparin, Teva’s and Amphastar’s enoxaparin products were not “made by” Momenta’s patented process within the meaning of section 271(g).
The Federal Circuit then addressed whether the section 271(e)(1) safe harbor shielded Amphastar from an infringement action under 35 U.S.C. § 271(a). Section 271(e)(1) provides that it is not infringement for a party to use a patented invention 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. However, section 271(e)(1) does not apply to information that may be routinely reported to the FDA long after marketing approval has been obtained. Holding that the section 271(e)(1) safe harbor did not shield Amphastar, the Federal Circuit characterized Amphastar’s post-approval, commercial production process that included quality control testing of each batch of generic enoxaparin as “routine” and thus not eligible for safe harbor protection. The Federal Circuit reasoned that finding Amphastar’s commercial use of Momenta’s patented method as falling within the safe harbor of section 271(e)(1) would result in manifest injustice and that no precedent, save a prior decision involving the same parties, extended immunity under section 271(e)(1) to encompass activities related to ongoing commercial manufacture and sale.
In a dissenting opinion, Judge Dyk disagreed with the majority’s conclusion that a patent related to quality control testing cannot be infringed under section 271(g). Judge Dyk opined that the ’886 patent is not utilized to identify the product to be made, but rather is used in the manufacturing process, because the quality control process of the ’886 patent is an intermediate step to determine which batches of putative enoxaparin must be discarded and which batches may be incorporated into the final drug product. Judge Dyk also cautioned that limiting “made” in section 271(g) to “the creation or transformation of a product, such as by synthesizing, combining components, or giving raw materials new properties,” would lead to anomalous results. For example, patents on purification or quality control methods, which may be integral to the regulatory or commercial viability of a product, but which do not create or transform a product, combine components, or confer new properties, could be freely infringed simply by outsourcing those processes abroad. Judge Dyk concluded that Congress could not have intended to create this loophole when it sought to protect process patent owners from foreign competitors using U.S. manufacturing processes abroad.
The Federal Circuit’s decision in Momenta provides guidance to pharmaceutical companies operating within the Hatch-Waxman framework. Pharmaceutical companies should consider outsourcing manufacturing to avoid liability under section 271(g) where there is a risk of a competitor having a quality control process patent. Companies should also be aware that routine quality control testing of generic drugs as part of a post-approval, commercial production process is not protected by the section 271(e)(1) safe harbor provision.