PATENT RIGHTS LOST FOR CANCER DRUG
Posted in / Patents / - on May 9, 2017
On May 1, 2017, the Federal Circuit Court of Appeals issued a decision in which
Helsinn Healthcare S.A. lost its patent rights to its drug for reducing chemotherapy-induced
nausea and vomiting. See Helsinn Healthcare S.A. v. Teva Pharmaceuticals
USA, Inc., Case Nos. 2016-1284, 2016-1787. The patented drug was sold under the
trade names Aloxi® and Akynzeo®. The drug will continue to be sold, but Helsinn
has lost its ability to protect its market share for its most significant source of income
in the United States.
Helsinn’s loss was the result of failing to file for patent protection on time. If
management had proper operating procedures in place for filing patent applications,
this crushing loss would never have happened. This is what you need to know to
avoid the same fate:
When should you file a patent application? The short answer is as soon as
possible. This usually means that the patent application should be filed as soon as
you have: (1) a specific formulation for your biologic or pharmaceutical compound;
and (2) you believe it is more likely than not that your formulation will work for its
If your invention is a machine or device, then the you should file your patent
application as soon as you have (1) identified the specific structural elements of your
invention that make it unique; and, (2) you believe it is more likely than not that your
invention will work for its intended purpose when built.
That is how it should work in an ideal world, but it does not always happen
that way because intelligent business people, scientists, and engineers make
assumptions about patent law that are extremely logical, but frequently wrong. This
has led to the loss of patent rights worth billions of dollars in the pharmaceutical
industry. For an inventor or company, the loss of patent rights can be devastating,
especially when it could have been avoided if the company had only known when to
file its patent application.
In the case of biomedical inventions, many companies assume that they do not
need to file for patent protection until they know the compound or medical device will
receive FDA approval. This is a huge mistake. The FDA’s mission is to ensure that
a drug or medical device has a statistically significant benefit, which is not
outweighed by safety risks.
The objective of the Patent Office is quite different from the FDA. The mission
of the Patent Office is to grant patents for new inventions that are likely to have some
usefulness. Determining whether an invention may have some usefulness does not
require a statistical analysis; anecdotal evidence of usefulness in a handful of patients
is sufficient to show usefulness for purposes of patentability. For some inventions,
test results in a laboratory are sufficient to know it will work in vivo. In the case of
some medical devices and machines, no testing is required because the mechanical
principles are clear to an experienced engineer from a review of the drawings of the
invention. The fact that the drug or device may not be completely safe is also not part
of the Patent Office’s analysis of usefulness.
Understanding the different missions of the FDA and Patent Office is critical
because waiting until FDA approval is obtained to file for patent protection is
virtually always fatal to patent rights. Once you know that the invention is likely to
work, then a one year clock starts to tick on your deadline for filing your patent
application. This is true even if you do not have statistical proof that the formulation
or device will work or proof that it is safe. The Court of Appeals in Helsinn defined
the test as knowing “that the invention works for its intended purpose ‘beyond a
probability of failure’ but not ‘beyond the possibility of failure.’” Only lawyers could
love such language. But the lesson learned from this language is that you should file
your patent application as soon as you believe your invention is likely to work even if
there are still reasons to doubt its final success.
Filing quickly is also important because the person who is first to file a patent
application for an invention is entitled to the patent (unless the invention was stolen
from the true inventor). In many cases, the problems in a particular industry are
well known, resulting in competing scientists and engineers coming up with similar
solutions. Since 2012, only the first to file will own the patent rights. This is reason
enough to file as soon as possible.
The other lesson from the Helsinn case is that management cannot enter into
licensing or marketing agreements with third parties before filing for patent
protection. It does not matter that these agreements are kept secret. It does not
matter that these agreements are dependent upon obtaining regulatory approval. It
does not matter that public sales of the drug or medical device may be years away.
The mere fact that you have entered into such an agreement starts a one year clock
ticking on filing your patent application. It is better to be safe by filing for patent
protection first before beginning any process to commercialize the product.
The bottom line: Review your standard operating procedures for filing for
patent protection to ensure that the devastating result in the Helsinn case does not happen to