A safe harbor for drugs made offshore: the Federal Circuit renders the Bolar Amendment available in [section] 337 actions in Amgen v. U.S. International Trade Commission.

Author:Sheehan, Teige P.

    In April 2009 the U.S. Court of Appeals for the Federal Circuit rendered an important decision regarding U.S. patent holders' ability to block the importation of pharmaceuticals made overseas. (1) The case addressed a complex interaction of laws pertaining to the infringement of pharmaceutical-related patents and international trade regulation, and held that the International Trade Commission ("ITC" or "Commission") must determine whether the importation it is investigating, at the behest of a patent holder, is being done in pursuit of Food and Drug Administration ("FDA") approval of a pharmaceutical, before taking remedial action. (2)

    This paper discusses the decision in light of the legislation, legislative history, administrative action, and case law that shaped it. Part II discusses the Bolar Amendment of the Hatch-Waxman Act, a provision of patent law that exempts from patent infringement liability conduct done in pursuit of FDA approval of a pharmaceutical. In Part III, the role of the ITC in enforcing patent protection, as an alternative or adjunct to litigation in federal courts, is presented. Part IV discusses the Process Patent Amendments Act of 1988, which established patent infringement liability for the importation of the products of U.S. patents, subject to several safe-harbor provisions. In Part V, Federal Circuit precedent pertaining to the applicability of the safe harbor provisions of the Process Patent Amendments Act of 1988 to ITC actions, which set the stage for the controversy in Amgen III, is presented. Finally, in Part VI, Amgen III, as well as additional pending federal litigation, is discussed. In conclusion, Part VII articulates the current state of patent law as it pertains to importation and the pharmaceutical industry, in light of Amgen III. A suggestion is made that the decision in Amgen III is in keeping with recent Supreme Court precedent that the extraterritorial reach of U.S. patent law is limited absent express congressional intent.


    The Drug Price Competition and Patent Term Restoration Act of 1984, (3) also known as the Hatch-Waxman Act, was enacted to serve dual purposes in fostering patent protection for pharmaceuticals. (4) One purpose it served was to extend the term of patent protection afforded by the Patent Act for developers of new drugs. (5) Generally, the term of a patent's protection terminates twenty years from the date on which the application for it was filed. (6) Because a patent might not issue until several years after the application for it was filed, due to the time it takes the U.S. Patent and Trademark Office ("PTO") to examine a patent application, there is typically a period of market exclusivity from the time a patent issues to the time its term expires of between seventeen and twenty years. (7)

    Prior to the Hatch-Waxman Act, however, the actual period of market exclusivity for pharmaceuticals corresponded to a period of less than seventeen years. (8) Before entering the market, pharmaceuticals must undergo regulatory review for efficacy and safety by the Food and Drug Administration, which typically is not completed by the time a patent on the drug issues. (9) As a result, newly-patented pharmaceuticals generally do not enter the market until substantially more than three years after the filing of a patent application, meaning they are afforded less than the approximately seventeen-year term enjoyed by other patentees. (10) The Hatch-Waxman Act was intended to remedy this disparity by extending the term of pharmaceutical patent protection in accordance with the delay in market entry attributable to FDA review. (11)

    A second function of the Hatch-Waxman Act was to expedite the development and entry into the marketplace of generic pharmaceuticals. (12) As with original pharmaceuticals, the period of regulatory approval of generic drugs by the FDA delayed their entry into the market, typically until several years after the expiration of the terms of the original pharmaceuticals upon which they were based. (13) The reason for this delay was that manufacture and testing of a generic--required for FDA review--constituted infringement if performed before the expiration of the original's patent. (14) Thus, there was an artifactual extension of the period of market exclusivity for original drugs after the expiration of their patents while FDA approval of generics was pending. (15) Although, to some degree, this artifactual period compensated patentees of original drugs for their delay in market exclusivity attributable their initial FDA approval period, the net result was a delay in the availability of more affordable generics to consumers. (16)

    Thus, through a provision commonly known as the Bolar Amendment, (17) the Hatch-Waxman Act also exempted from infringement otherwise infringing activities of the makers of generic drugs undertaken with the intention of seeking FDA approval. (18) In its current form, 35 U.S.C. [section] 271(e)(1) states:

    It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) sole]y for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. (19) This exemption allowed manufacturers of generic drugs to begin seeking FDA approval of their products during the term of the original drug's patents, such that they could enter the market sooner. (20)

    The Supreme Court mandated an expansive construction of the "reasonably related to the development and submission" language of this statute in Merck KGaA v. Integra Lifesciences I, Ltd.(21) In that case, the holder of several patents pertaining to a particular amino acid sequence sued a competitor for infringement. (22) The alleged infringer had provided materials covered by those patents to a collaborating researcher, who had identified a possible therapeutic use for the materials in the treatment of angiogenesis, and performed tests of its "efficacy, specificity, and toxicity ... as [an] angiogenesis inhibitor[], and evaluated [its] mechanism of action and pharmacokinetics in animals." (23)

    The alleged infringer argued that these acts were exempted from infringement by the Bolar Amendment because they were performed with the intention of confirming the compound's usefulness as a therapeutic treatment and ultimately for submission to the FDA for approval. (24) The patentee disagreed, arguing that preclinical data pertinent for FDA review of drugs need only concern the safety of the drug in humans, and that "preclinical studies related to a drug's efficacy, mechanism of action, pharmacokinetics, and pharmacology are not reasonably included in [a drug application with the FDA], and are therefore outside the scope of the exemption." (25) The Supreme Court disagreed with the patentee, holding that when a drug manufacturer believes a compound to have pharmaceutical utility "and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA, that use is 'reasonably related' to the 'development and submission of information"' to the FDA. (26)

    In Eli Lilly & Co. v. Medtronic, Inc., the Supreme Court held that [section] 271(e)(1) applied not only to pharmaceuticals but to medical devices as well. (27) In that case, the holder of patents on ventricular defibrillators sued a competitor who was marketing and testing an allegedly infringing implantable cardiac defibrillator. (28) The alleged infringer, in defense, argued that its actions were exempt from infringement under [section] 271(e)(1). (29) The patent holder disagreed, arguing that, because [section] 271(e)(1) refers to activities undertaken in seeking federal approval for "drugs," not devices, the alleged infringer's uses of the defibrillators did not qualify for the exemption. (30) The Court ruled for the alleged infringer, concluding that because the FDA operates, in the words of the statute, under "a Federal law which regulates the manufacture, use, or sale of drugs," and FDA approval is required for marketing medical devices such as the alleged infringer's defibrillator, the [section] 271(e)(1) exemption is not limited to uses of pharmaceuticals but includes uses of medical devices as well. (31)

    The Court of Appeals for the Federal Circuit has also held that [section] 271(e)(1) exempts activity from infringement even if it not undertaken with the subjective purpose of submitting information to the FDA, provided that, objectively, the activity is "reasonably related to obtaining FDA approval." (32) In AbTox, Inc. v. Exitron Corp., the holder of a patent for sterilizing medical instruments sued a competitor for infringement. (33) The competitor had performed tests on its own, allegedly infringing the patent on the sterilizer, and although the data produced by the tests were such as would be required in seeking FDA approval for the medical device, the competitor had not yet sought FDA approval. (34) Rather, the patentee argued that the actual purpose of the tests was to create a market for the technology by demonstrating its effectiveness to potential purchasers, thereby taking the tests out of the [section] 271(e)(1) exemption. (35) The court held for the competitor, concluding that "[a]s long as ... activity is reasonably related to obtaining FDA approval ... intent or alternative uses are irrelevant to ... qualification to invoke the section 271(e)(1) shield." (36)

    Thus, the...

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