A utility patent confers the right to exclude others from making, using, offering to sell, or selling an invention in the United States. The patent term measures the time period in which a patent holder may exercise patent rights. During a patent's exclusivity period, the patent owner(s) may capitalize on the patent in a variety of ways including manufacturing, marketing, licensing, or selling an invention. The longer the patent term, the more profit may be derived from the patent without competing acts of other parties for the same invention.
Present patent laws consist of four forms of patent extension. The first and least common form of extension arises when Congress enacts private legislation. The second form commonly called an adjustment is governed by 35 U.S.C. § 154. Section 154 may be evoked to extend a patent term for delays within the U.S. Patent and Trademark Office (USPTO) during patent prosecution. A third form of patent term extension comes from the Uruguay Rounds Agreements Act enacted in 1994. This Act amended 35 U.S.C. § 154 so that patents filed on or after June 8, 1995 have a patent term of twenty years from the date they are filed. Previously, patents had a seventeen-year term from the date they issued. However, design patents still only have a fourteen-year term from the date of patent grant. According to Section 154(c), all patents (other than design patents) that were in force on June 8, 1995, or that issued on an application that was filed before June 8, 1995, have a term that is the greater of the twenty years from filing or seventeen years from issue.
The fourth form of patent extension commonly called a patent term restoration was created in 1984 when Congress passed the Drug Price Competition and Patent Restoration Act also known as the Hatch-Waxman Act. The Act added Section 156 to the Patent Act permitting patent term extension for patents on products (or processes for making or using the same) that are human drug products, medical devices, food additives, and color additives subject to regulation under the Federal Food, Drug and Cosmetic Act. The Act restores a portion of the patent term during which the patentee is unable to sell or market a product while awaiting government approval, such as the Food and Drug Administration's (FDA) review of a prescription drug. In 1988, the Generic Animal Drug and Patent Term Restoration Act in 1988 added animal drug and veterinary biological products to the list of products eligible for a term extension.
The Principal Benefit
Many businesses may be able to benefit from a patent term extension if they had to obtain regulatory approval for a drug or medical device. The extension offsets some of the delay required during agency approval of the drug, device, or process. Many patented products or processes may not be marketed in interstate commerce while an agency such as the FDA reviews the safety and efficacy of an application. The patent term extension allows the patent owner to capture economic benefits associated with an invention that could not be obtained during the agency review. Thus with an extension, some lost market time is made up and the patent remains enforceable for the product or process that was submitted to the government agency.
There are limitations that restrict the availability and length of a patent term extended under the Hatch-Waxman Act. First, the product must be the subject of a regulatory review period before its commercial marketing or use. Second, only one restoration period can be sought. A restoration period cannot be obtained for agency review of a subsequently approved drug covered by the same patent whose marketing also is delayed for reasons of FDA procedures; such term extension would not cover the subsequent drug.
Third, an applicant for patent extension must file the request with the USPTO within 60 days of product approval by the agency. The restoration period is calculated by the USPTO using the regulatory review period as the basis for a patent extension. The review period is generally limited to the testing and approval phases of review. By way of example, the regulatory review period for a prescription drug would start upon the filing of an Investigational New Drug Application (IND), include the submission of the marketing application (New Drug Application or NDA) and end after approval of the marketing application. Each phase of the regulatory review period is reduced by any time when the applicant fails to act with due diligence. The restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed fourteen years following agency approval. For example, if an approved drug product was eligible for the maximum five-year extension but had a ten-year original term remaining at the end of the regulatory review period, then only four of the five years could be counted towards the extension. 35 U.S.C. § 156 contains more complicated provisions that may reduce the eligible extension period.
Throughout regulatory review, the applicant must act with due diligence. An FDA finding of lack of due diligence may reduce the eligible time for a patent restoration. After the FDA calculates the regulatory review period, it is published so that a third party may challenge the application for patent term extension. Any person may file a due diligence petition with the FDA within 180 days after the publication of the review period and allege that the patent extension applicant did not act with due diligence during the regulatory review period. Information regarding the filing, format, and content of petitions, applicant's response to petition and standard of due diligence is available in the Patent Term Restoration regulations 21 C.F.R. PART 60, Due Diligence Petitions. Any person may also request within 60 days after the publication of FDA's due diligence determination that FDA conduct an informal hearing on the due diligence determination. Information regarding the request for a hearing, notice of hearing, hearing procedures, and administrative decision is available in the Patent Term Restoration Regulations 21 C.F.R. PART 60, Due Diligence Hearings. For those who are anxious to practice an invention that has a patent term extension, the extension might seem to bar practicing the entire invention until the extension expires. That might not be the case because the patent term extension is limited only to the product or process that was the subject of an agency approval. The restoration period does not extend to all products encompassed by the patent claims, but only to the product on which the extension was based. Merck & Co., Inc. v. Kessler, 80 F.3d 1543 ,1547 (Fed. Cir. 1996), 38 USPQ2d 1347, 1349. In other words, the patent may contain claims that are not extended by the Act and practicing those claims after the original patent term expires may not constitute infringement. The USPTO lists patents which have been extended under Section 156 of the statute on its website.
Patent term extensions under the Hatch-Waxman Act may be available to businesses that lose the opportunity to market and sell an invention during the regulatory review process. Use of patent term extension not only enables a company to recoup an investment in technology which matures into a patent, but also to offset the cost and delay in obtaining profits held up by regulatory review processes. The scope of any extension is limited to the product or process that is the subject of agency review. This means that during an extension period of the patent term, competitors may practice claims of the invention that were not the subject of the regulatory review process. Close examination of the agency review process and a patent's claims are necessary to evaluate the scope of a Hatch-Waxman extension under Section 156 of the Patent Act.