Prescription drugs and fast-track programs
Copyright: olivierl / 123RF Stock Photo

Expedited approval programs are referred to as fast-track programs.  The FDA created these programs for new drugs in 1992 under the Prescription Drug User Act (“PDUFA”) with the aim of meeting treatment needs for serious or life-threatening medical conditions more quickly.

What are the options?

  1. Fast-track designation is granted to a drug for a serious condition for an un-met need that will improve the survival or the day-to-day function of the patient.
  2. A breakthrough therapy is a drug that treats a serious condition and shows preliminary evidence that it is superior to a drug already on the market with clinically significant endpoints.
  3. Accelerated approval is granted to a drug that treats a serious condition using surrogate endpoints to show the benefit of the drug. A surrogate endpoint is one that demonstrates it is reasonably likely to predict a real clinical benefit. E.g. shrinking tumors=longer survival
  4. Priority review is granted to a drug that is highly effective, substantially eliminates adverse reactions that prevent treatment, is safe and effective in a new subpopulation and/or helps patients be more compliant with the drug regimen.

The specific meaning of each of these paths and the distinction among them can be confusing.  It is important to determine early in the beginning clinical stages if the drug might fit into either of these pathways. You need an advocate to describe to the FDA in detail how the drug may fit into one of these fast-track programs.

The advantages of being part of a fast-track program for your drug are the FDA accelerates the review of the drug and stays in close contact with the sponsor of the drug.   The FDA wants the product to be successful and is part of the review process early in the development. The Agency also has shortened timeframes within which it must respond to the applicant or sponsor. Of course, the economic advantages are obvious!

Is your company missing out on these options?


Jean W. Frydman is a partner in the firm’s Princeton office.

Navigating intellectual property protections and issues can be a complicated and challenging process for emerging companies. In the fast-paced start-up world, it is not unusual for IP concerns to take a backseat. But disciplined and proper IP management is critical to any emerging company. Strong IP rights can be used to impose a barrier to competition, generate a portfolio of assets that can be leveraged, and help increase the value of a business. Here are four essential steps to protecting and strengthening your IP assets.  :

Copyright: stuartburf / 123RF Stock Photo
Copyright: stuartburf / 123RF Stock Photo

1. Insist that developers assign all IP rights to your company

Anyone who creates IP for a company should be under a written obligation to assign the rights in such IP to the company. This includes employees, independent contractors, suppliers, other developers and even company founders. Often, companies assume that because they are paying for development work, they own the results of the development. However, this is usually not the case, especially with respect to independent contractors. When it comes to development, having a written agreement that details assignment obligations is always a wise approach.

2. File early for patent protection

Patent protection may not be a top priority for an emerging company during its early stages due to cost concerns or because an invention has not yet perfected. But often, it is the technology developed during the early stages that ultimately has the most value. A wait-and-see approach to patent filing carries with it certain risks. For example, in the United States, a patent application must be filed within one year from the first public disclosure (i.e., a non-confidential, enabling disclosure of an invention such as a public use of the invention, a sale of the invention, an offer to sell the invention, a journal article describing the invention, a trade show presentation or the like). In addition, the United States operates on a first-to-file basis, meaning that the first person to file a patent application has rights for protection of the invention. As such, waiting to file for patent protection risks someone else filing first.

3. File for patents before public disclosure—especially for foreign protection

Although the United States has a one year grace period during which a patent application can be filed after a public disclosure, the majority of countries outside of the United States do not have comparable grace periods. Unlike the United States, a public disclosure is considered a bar to patentability in these countries. If foreign patent protection is part of a company’s IP strategy, then it is important to file a patent application before a disclosure in order to preserve foreign rights.

4. Understand and comply with the terms of your open source software

Open source code is often an efficient and cost free solution for emerging companies. Although use of open source software may be free of monetary cost, it is not free of responsibility. As a general rule, users may not use or distribute software without a license from the owner. And this rule applies equally to open source software despite its being publicly available or available for free. Like commercial software, the use of open source software is usually governed by a license agreement that includes terms and conditions controlling use of the software.  It is critical to understand the license terms and also how conditions may apply to open source software usage. In addition, it is important for users to understand the terms of any viral open source software, especially if the open source software is being combined with or integrated into proprietary software. Failure to do so could lead to an obligation to make proprietary source code available under a similar license.

 

These days, patent infringement lawsuits are increasingly being filed by “patent trolls,” entities that buy up vague and overly broad patents and send out demand letters asking for money in exchange of not being sued.  Many patent trolls specifically target start-up companies.

More than a year after the Senate defeated a bill aimed at curbing patent troll lawsuits, another bill recently emerged in the House referred to as the “Innovation Act.”  A copy of this bill can be found via the Library of Congress.

The Innovation Act is designed to weed out patent troll lawsuits by requiring courts to determine the validity of the patent at the early stages of the case.  The Innovation Act also imposes greater pleading requirements in a Complaint requiring the patent owner to identify:  i) each patent allegedly infringed; ii) each patent claim allegedly infringed; and iii) each product that the patent owner alleges is infringed, among other things.

On June 11, 2015, the bill was passed by the House Judiciary Committee.  Many people believe that the prospects for Congress passing this bill is improved this year due to a “super-coalition” of supporters, known as the United for Patent Reform coalition, consisting of technology and social media companies, such as Google, Adobe Systems and Facebook, as well as retailers like Macy’s, restaurant and hotel trade groups and start-ups and small businesses through trade groups.  A listing of the members of this coalition  can be found here.

While the bill, if passed, may curb some patent troll lawsuits, the bill should not be viewed as immunizing a start-up from a patent infringement lawsuit.  In fact, there is no absolute way of avoiding such a lawsuit.  However, there are steps a start-up can take to mitigate risks.  A good start is to obtain patents covering the start-up’s technology.  By doing so, the start-up can beat others to the punch by being the first to secure rights on its own technology.  Patents may also incentivize venture capital firms to provide investment in the start-up because the patents may provide some assurances to the venture capital firm that the start-up has rights on its technology.

Jianming Jimmy Hao, Ph.D. writes:

A patent battle between University of California and MIT has casted clouds over the ownership of the CRISPR gene-editing technology potentially worth billions of dollars.  Bio-pharma companies, investors, and researchers should use caution when navigating the complex intellectual property landscape.

The CRISPR gene-editing technology has created intense excitement in the community of bio-pharma and venture capital industry.  It is believed that this technology will transform our ability to edit the genomes of all living organisms, including humans. “CRISPR is absolutely huge. It’s incredibly powerful and it has many applications, from agriculture to potential gene therapy in humans,” said Craig Mello of the University of Massachusetts, who shared the 2006 Nobel Prize for medicine for discovery of RNA interference.  See the New York Times

While venture capital funds and biotech-pharmaceutical companies are pouring money into companies developing CRISPR technology (see, e.g., FierceBiotech), University of California and MIT are entering into a fight for control of what could be hugely lucrative intellectual property rights to the technology.  On April 15, 2014, the USPTO awarded the first CRISPR-related patent (US 8697359) to a group led by Dr. Feng Zhang at the Broad Institute of MIT and Harvard University.  Since then a group of inventors led by Dr. Jennifer Doundna at University of California, Berkeley, who also filed their own patent applications, have submitted thousands of pages of documents to the USPTO challenging the patent.  If the USPTO accepts the UC Berkeley group’s challenge, a so-called “interference” proceeding will be initiated to prove which group invented the claimed technology first.

Had any of the two groups filed their patent application after March 16, 2013, there would be no such  fight as after that date the US patent system changed to a “first-to-file” system.  Before that date, however, the US patent system was a “first-to-invent” system and, under that system, whoever invented a claimed technology first is entitled to the patent right.  In this CRISPR fight, the UC Berkeley group actually filed their patent application about seven months earlier than the MIT group.  Yet, the latter group secured a patent first as they took advantage of a so-called “fast track” practice, which allowed them to jump the queue at the USPTO.  Despite the timing differences, both groups’ applications are assessed under the old system and the “interference” proceeding can be used to decide who invented what first.

Going forward, this legal battle could take several years to settle and either party may end up with significantly limited patent protection or even walk away empty-handed.  Meanwhile, more and more patent applications have been filed in the field.  As of May 26, 2015, there are about 787 published PCT applications (including some filed by Fox Rothschild for its clients) that are related to CRISPR.  As more funds are pouring in, companies, investors, and researchers should use caution in their licensing, investing, collaboration, and R&D activities in connection with the technology and related intellectual property landscape.


Jianming Jimmy Hao, Ph.D. is an associate in Fox Rothschild’s Princeton office.

David Magagna writes:

For all of the optimism in recent years regarding worldwide innovation and advancements in technology across all industries, would it surprise you to learn that total global patent volume increased by a meager 3% in 2014?  Or that this 3% growth rate represents the worst patent volume growth rate since 2009, one year removed from the worst global recession since the Great Depression?

Copyright: kentoh / 123RF Stock Photo
Copyright: kentoh / 123RF Stock Photo

2014’s stunted growth in patent volume did not confine itself to one specific industry, as many traditional innovators, such as semiconductors, aerospace and defense, struggled to produce new patents.  In fact, in 2014 semiconductors and aerospace and defense saw their patent volume plummet by 5% and 1%, respectively.

Not all of 2014’s innovation and patent news disappointed, however, as life sciences posted strong results.  The pharmaceutical and biotech industries in particular saw patent growth rate increases of 12% and 7%, respectively.  Many economic and business experts, such as Deloitte Consulting LLP, anticipate that this strong growth in life sciences will continue into the near future due to the fact that today’s current global economic environment displays several factors necessary for life science success and innovation, at least with respect to the U.S.  According to Deloitte’s 2014 Global Life Sciences Report, these factors include a growing U.S. GDP, an aging country population, and increasing levels of federal and state government spending in the life sciences arena.  Look for the life sciences industry to post another successful year in patent growth – and investment – for 2015 and beyond.


David Magagna is a summer associate in Fox Rothschild’s Warrington, PA office.

On January 13, 2015, a bipartisan group of Senate lawmakers announced legislation to repeal a tax on medical devices, which was implemented to partially fund the Patient Protection and Affordable Care Act (PPACA). The repeal was authored by Finance Committee Chairman Orrin Hatch (R-Utah) and currently boasts 28 co-sponsors.

35522251_lSince January 2013, the PPACA has required manufacturers of medical devices to pay a 2.3% excise tax on the medical products they sell. Products subject to the tax include hardware used in joint replacements and cardiology products such as pacemakers.

The proposed Senate Bill (the Medical Device Access and Innovation Protection Act, S. 149), would eliminate the tax and refund all manufacturer payments since its inception. The proposed legislation comes shortly after the introduction of a similar House bill. The House bill has enough support to pass, according to the Advanced Medical Technology Association and has already won 261 co-sponsors, including many Democrats.

In announcing the repeal, Senator Hatch stressed the negative impact of the tax on innovation and job growth. He expressed concern over increasing the cost of life-saving medical devices—a cost that would ultimately be passed to patients. Senator Amy Klobuchar (D-Minn.), in advance of 2013’s nonbinding Senate resolution against the tax, argued the tax would put exporters of medical devices at a competitive disadvantage in the global economy.

President Obama’s veto threat has softened since the midterm elections. In a 2012 statement of administration policy, the President vowed to veto a repeal of the tax. He characterized the tax as a fair cost to the medical device industry for the benefits of the PPACA, which he predicted would add 30 million potential consumers of medical devices. Recently, however, the President has stated he will consider any ideas GOP leaders present to him, including repeal.

According to the Congressional Research Service (CRS), excise taxes, such as the medical device tax, are typically reserved for specific goals, such as discouraging undesirable activities (for example, taxes on tobacco products), or for raising funds associated closely with government spending (for example, gasoline taxes financing highway construction). CRS economist Jane G. Gravelle, the author of a November report on the medical device tax, stated:

“These [excise tax] justifications do not apply, other than weakly, to the medical device case.”

Rather, the main motivation for the tax is the revenue itself, which is difficult to justify from an economic standpoint and may hinder the prospects of startup and emerging medical device companies.