ARE YOUR PATENT RIGHTS DYING TOO YOUNG?
TOO MANY MEDICAL DEVICE PATENTS DIE BEFORE THEIR TIME
Your company has worked hard to make your first orthopedic device a commercial success. Overcoming numerous technological obstacles and addressing the FDA’s concerns took years of hard work. Once it was finally approved by the FDA, your company still plowed a good percentage of the profits from that first device back into research and development to expand your line of products, each one innovative in its own right.
Last week, you began working on product planning for the next five years. That is when one your staffers reminded you that your patent for your first product is going to expire in just four years. It does not seem fair. For years after the patent was granted, you could not use the patent because you were still waiting for FDA approval.
You know as soon as the patent expires, there will be a several copy-cat devices on the market driving down your pricing. You created the market for the product, and now others will be profiting from your huge investment. You think there should be a law that adds time to the patent caused by the FDA’s delay in getting the product approved.You have heard that drug companies extend the life of their patents. You read in a trade paper that the patent for Viagra was extended by over nine months, Singulair for allergies by over 14 months, and Meridia for weight loss by five years. Your invention is just as important to public health. Each additional month of patent protection would add significantly to your company’s return on its substantial investment in the product.
ADD YEARS TO THE LIFE OF YOUR PATENTS
The good news is that many of the provisions for extending the life of a patent for drugs also apply to medical devices such as orthopedic inventions. The law is called the Hatch-Waxman Act, enacted in 1984. The bad news is orthopedic manufacturers rarely take advantage of the rules allowing for extension of the life of their patents.
According to United States Patent Office records, only six extensions have ever been granted for orthopedic patents. But these extensions added significantly to the life of the patents: 5 years, 4.8 years, 4.1 years, 2.3 years, 2 years, and 2 years, respectively. With extensions like these, the potential additional profits at stake are clearly huge.
There is no way to know the reason the patent extension rules are so under-utilized by orthopedic manufacturers since there are no studies available giving reasons why patent owners do not take advantage of the law. It may be mere ignorance. Or it may be that the delays in obtaining FDA approval are not long enough for some orthopedic devices to qualify for an extension.
But whatever the reason, it is likely that some manufacturers are allowing their patents to expire long before they should. To make sure your company is not one of them, there are some basic rules you should keep in mind:
THE GENERAL RULES FOR ADDING LIFE TO YOUR MEDICAL DEVICE PATENTS
The rules for determining the length of the life extension for your patent are complex. For that reason, the details are beyond the scope of this article. But considering the importance of the issue to your bottom line, you should have at least a general understanding of how the life extensions work.
Essentially, any patent starts life with an expiration date equal to twenty years from the filing date; not from the issue date. If the Patent Office causes unreasonable delays in issuing your patent, it will automatically add time on when the patent issues.
The time added to your patent caused by delays attributable to the FDA approval process is essentially equal to 50% of the duration of the FDA application process. This includes the time for clinical trials, but does not include delays attributed to the patent owner’s own failure to be diligent in moving the process forward. If the time added on to the patent would cause the patent to have a life after the date of FDA approval to be more than fourteen years, then the extension is reduced so that the patent expires after 14 years from FDA approval.
How do you know if your patent qualifies for a life extension? Generally, if the FDA review process for your product (including the time required for clinical testing) lasts longer than three and a half years after your patent is granted, then it is likely that you are eligible for time to be added to the life of your patent. This estimate is based on the assumption that it takes approximately two and a half years for your patent to issue from the date you first filed your patent application. If it takes longer in your case to obtain your patent, you may qualify for an extension of the life of your patent even if the FDA approval process is shorter than three and a half years.
THERE IS ONLY A 60 DAY WINDOW IN WHICH TO BREATHE ADDED LIFE INTO YOUR PATENTS
The most important rule of all is that the request for an extension must be filed with the Patent Office within sixty days of FDA approval of the product. Therefore, whoever is handling the FDA approval process must be communicating with your patent counsel. Medical device manufacturers get a break on the sixty day rule that drug makers do not. For drug manufacturers, sixty days starts with the FDA’s approval of the first application for approval of the drug. This means approval of any analogs after the approval of the first drug covered by the patent cannot be used as a basis for an extension.
Fortunately, manufacturers of medical devices such as orthopedics are allowed to augment the life of their patents based upon any delay caused by FDA review of any product covered by the patent, even if it is not the first product approved by the FDA. But you can only base the extension request on one FDA approval. As a practical matter, it is usually the first approval process that takes the longest thereby providing the longest life extension and maximizing additional monopoly profits. So it remains very important to calendar the 60 days from the date of your very first FDA approval and not rely upon subsequent approvals to add time on to your patent.
Patent extensions can add millions of dollars to the bottom line by delaying the inevitable loss of market share and price erosion when the patent expires. Therefore, it should be standard operating procedure at your company to make sure those responsible for FDA approval and patent protection communicate with each other on a regular basis to ensure that your patent rights do not die too young.