Addressing the question of whether §271(e)(1) immunizes the manufacture, marketing or sale of a device used in the development of Food and Drug Administration (FDA) regulatory submissions, but is not itself subject to the FDA pre-market approval process, the Federal Circuit held that being subject to FDA pre-market approval is a prerequisite for invoking the safe harbor provided by §271(e)(1). Proveris Scientific Corp. v. Innovasystems, Inc., Case No. 07-1428 (Fed. Cir. Aug. 5, 2008) (Schall, A.).

Passed as part of the Hatch-Waxman Act, 35 U.S.C. §271(e)(1) provides a “safe harbor” from claims of patent infringement based on activities reasonably related to the pursuit of FDA approval of drug products. Proveris Scientific owns a patent directed to a system and apparatus for characterizing aerosol sprays used in drug delivery devices, such as nasal spray pumps and inhalers. Innovasystems makes and sells a device that, although not itself subject to FDA approval, is used in connection with FDA regulatory submissions as it measures the physical parameters of aerosol sprays used in nasal drug delivery devices. Proveris filed suit against Innovasystems, alleging infringement. Innovasystems invoked the safe harbor provision of §271(e)(1), arguing that its activities are immunized because its device is used solely for the development and submission of information to the FDA. At trial, the district court ruled as a matter of law that Innovasystems could not avail itself of §271(e)(1).

On appeal, the Federal Circuit relied heavily on the Supreme Court’s examination of the policy considerations leading to the enactment of the Hatch-Waxman Act in Eli Lilly. In Eli Lilly, the Supreme Court noted that §§ 156 and 271(e)(1) were enacted in order to eliminate two unintended distortions of the effective patent term resulting from pre-market approval required of certain products pursuant to the Federal Food, Drug and Cosmetic Act (FDCA). The first distortion was the reduction of effective patent life caused by the FDA pre-market approval process, while the second distortion was the de facto extension of effective patent life at the end of the patent term—also caused by the FDA pre-market approval process. While the first distortion adversely affected patentees, the Federal Circuit noted that the second distortion, which adversely affected those seeking FDA approval in order to enter the market to compete with patentees, was relevant to the case before it. In this regard, the Federal Circuit noted that, since Innovasystems’ device is not subject to FDA pre-market approval and therefore faces no regulatory barriers to market entry upon patent expiration, Innovasystems is not a party that, prior to enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the second distortion. For this reason, the Court concluded that Innovasystems cannot avail itself of the safe harbor of §271(e)(1). At the same time, the Court further noted that, because Proveris’ patented product is not subject to a required FDCA approval process, it is not eligible for the benefit of the patent term extension afforded by § 156(f). Thus, Proveris is not a party that, prior to enactment of the Act, could be said to have been adversely affected by the first distortion. Overall, the Court noted that its result achieves the same kind of symmetry achieved in Eli Lilly, where the Supreme Court spoke of its interpreting the phrase “patented invention” in §271(e)(1) to include all products listed in §156(f) as producing a “perfect ‘product’ fit” between the two provisions.