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—By Kirsten Johnson and Les Bookoff, Bookoff McAndrews PLLC

The Gray Sheet, New York (January 1, 2015, 11:00 AM ET) — Clearing government regulations to commercialize a medical device can be an arduous and lengthy process. When clinical trials are involved, companies can spend as long as 5 to 10 years to gain approval from FDA and invest $100 million or more to bring a device to market. Patents are key to recouping these costs by preventing others from copying successful products. 

Yet, until device companies gain approval to market the device, their patent rights are far less useful. By the time a product is launched, competitors may be poised to make a move. U.S. patent law provides a mechanism to compensate patent owners for the delays associated with FDA regulation through patent term extension (PTE).

Why PTE?

Patents covering medical devices are often the most valuable towards the end of patent term – after refining the product design, clearing regulatory hurdles, and cultivating a strong customer base. The leverage of patent protection can be of enormous benefit.

One of the best known examples in the pharmaceutical field is Pfizer Inc.’s cholesterol drug Lipitor, which remained under patent via PTE until late 2011. In the artificial heart valve market, estimated at $500 million per year and growing, Edwards Lifesciences Corp. and Medtronic Inc. recently settled protracted litigation involving an Edwards patent extended under PTE, where Medtronic agreed to pay more than $1 billion.

Which Device Patents are Eligible?

PTE compensates patent owners for the amount of patent term consumed by regulatory review. This includes the time spent gathering safety and efficacy data in clinical trials to submit to FDA (“testing phase”), as well as the time required for FDA to make its determination on an application for marketing approval (“approval phase”). The U.S. Patent and Trademark Office (USPTO) seeks input from FDA to determine the nature and duration of the delay.

Only devices subject to FDA’s PMA process are eligible for PTE. FDA approval of these high-risk, class III devices typically requires patient data collected from clinical trials lasting a year or more. Devices designated to lower-risk class I and II categories are typically subject to less time-consuming pre-market preparation and review. Companies should seek FDA guidance for the proper product classification.

Also, only one patent may be extended per FDA-approved product, and that patent can only benefit from one PTE term. Because companies often have multiple patents covering different features and uses of their medical devices, various factors should be taken into account when deciding which patent to extend. These factors include the scope of protection afforded by each patent, their expiration dates, the difficulty in proving infringement, and any issues that may bear on the validity of the patents. Patent owners are allowed to file multiple PTE applications for an approved product (one application per patent covering that product) and later choose from among the granted applications which patent to extend.

There is no requirement that PTE correspond to the first FDA-approved device covered by the patent. For example, a licensee who gains FDA approval before the patent owner does not prevent the patent owner from extending the term of the patent based on a later-approved device (unless the licensee applied first with the patent owner’s authorization).

How to Apply

The PTE application must be filed in the USPTO by a registered patent practitioner. The application requirements include identifying the patent and the FDA-approved product that it covers, indicating which claims cover the product, and providing evidence that the marketing applicant was diligent in collecting data and working with FDA throughout the regulatory review period. The patent owner may file the application or appoint an authorized agent to act on its behalf. For example, the agent may be the marketing applicant (if different from the patent owner), an exclusive licensee, or another interested party.

Timing is Important!

Timing is one of the most important considerations in applying for PTE. The application must be filed within 60 days of FDA approval. This is a hard deadline. Missing the opportunity to extend patent protection of a valuable product can cost a company considerable revenue.

In some cases, a patent may be set to expire before FDA completes its review of a PMA application. For patents nearing expiration, it’s possible to extend the patent term by one-year increments (up to a total of five years) by filing an application for “interim PTE.” The interim PTE application has the same substantive requirements as the normal PTE application, except for the need to show FDA approval. Once again, timing is important. The interim PTE application must be filed from six months to 15 days before the patent is set to expire. Within 60 days of FDA approval of the product, the interim PTE application must be converted into a normal PTE application by providing USPTO with the approval information.

Scope of Patent Protection

Patents may receive up to five years of PTE due to regulatory delay at FDA. Patent term also may be extended due to examination delay at USPTO in a process called patent term adjustment (PTA). The PTE and PTA terms are additive, such that the ultimate expiration date of a patent will include the full amount of each.

In general, a patent owner has the right to exclude others from making, using, selling, offering for sale, and/or importing the invention protected by the patent during its term. There is no difference in these rights during the PTA-extended portion of the term and the regular (unextended) patent term.

However, while the patent as a whole is extended by PTE, the protection afforded during the PTE-extended period is tied to the scope of FDA approval. A patent claiming an FDA-approved product is effectively limited to the approved uses for that product. For example, it would not constitute infringement to use the product to treat patients outside the scope of FDA approval during the PTE portion of patent term (although this could run afoul of other federal regulations). Similarly, a patent claiming methods of use or methods of manufacture can only be used to protect those associated with the FDA-approved product.

Tips for Applying for PTE

Robust patent protection for devices that must undergo clinical trials may help to ease the cost concerns of bringing those devices to market. To maximize the term and value of patents, device companies should be mindful of which products the patents cover so that those eligible for PTE are flagged as soon as possible. Regular communication between regulatory counsel and patent counsel is important to meet filing deadlines triggered by FDA approval or patent expiration. Detailed records of FDA materials are also important for supporting the PTE application. In particular, it may be helpful to keep a running log of all correspondence with FDA during the regulatory review period. Finally, when deciding which patent to extend, the claims of that patent should be carefully reviewed in light of the specific terms of FDA approval.

By keeping in mind the option to extend patent term, companies can maximize their return when investing in innovative products and maintain an edge over late-coming competitors.

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws.  This article reflects only the opinion of the authors and is not attributable to Bookoff McAndrews, PLLC, or the firm’s clients.

© 2014 Informa Business Information, Inc., an Informa Company.