Senator Hatch Proposes PTAB Exception for Orange & Purple Book Patents

As explained earlier this week in a study by my partner Filko Prugo, Orange & Purple Book patents fare no worse at the PTAB than in the courts. That said, some believe that the ability to challenge such patents in a faster, cheaper expert forum upsets the balance of power in the existing drug innovator landscape.

Today, Senator Orrin Hatch (R-UT), the Chairman of the Senate Republican High-Tech Task Force and co-author of the Hatch-Waxman Act, filed an amendment in the Senate Judiciary Committee to in his words “restore the careful balance the Hatch-Waxman Act struck to incentivize generic drug development.” Senator Hatch’s amendment, the Hatch-Waxman Integrity Act of 2018, is argued to prevent alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design. It is also argued to ensure that brand-name and generic manufacturers alike have the proper incentives to develop life-saving medications.The press release accompanying the bill explains:

[T]he availability of an alternative path to challenge patents, known as inter partes review (IPR), has threatened to upend the careful Hatch-Waxman balance. IPR, which was created primarily in response to the problem of patent trolling, is a faster, cheaper way to challenge patent validity than traditional litigation. Although IPR has proved enormously beneficial to the tech community, it has had the unintended consequence in the drug development space of enabling companies to put added litigation pressure on drug innovators above and beyond what Hatch-Waxman already provides and to bring a follow-on challenge to a drug patent even after losing in Hatch-Waxman litigation. These results have altered the playing field in ways that run counter to Hatch-Waxman’s intended purpose.

The bill itself, (here) provides that a generic manufacturer wishing to challenge a brand-name drug patent to choose between Hatch-Waxman litigation, which affords certain advantages such as being able to rely on the drug innovator’s safety and efficacy studies for FDA approval, and IPR, which is cheaper and faster than Hatch-Waxman litigation but does not provide the advantages of a streamlined generic approval process. Senator Hatch’s amendment would preserve Hatch-Waxman as the standard path for generic manufacturers to challenge brand patents, while keeping IPR as an option where other interests come into play. It would not have any impact on the use of IPR by the tech community.

The bill also includes a provision to prevent use of IPR in furtherance of a short sale strategy (a practice that has long since crashed and burned)