What Patent Owners Should Consider in Filing for a Patent Term Extension

The Hatch-Waxman Act tried to address two distortions in patent terms. The first distortion favored the patent holder: Generic firms had to wait until after a patent expired to seek regulatory approval for their version of a product, giving the patent holder a de facto period of market exclusivity beyond the patent life. This is no longer true.The second distortion hampered the patent holder. The length of time needed for the process of seeking marketing approval from the FDA effectively detracted from the term of any existing patent covering the product.The Act addressed the second distortion by providing a patent term extension for up to five years to offset marketing time lost due to the approval process. To obtain a patent term extension, the patent owner must file an application within 60 days of the first approval of the product for commercial marketing or use.This application process, while cheaper and easier than that for the original patent application, is still fairly costly. Moreover, only one extension may be granted per product, and a patent may be extended only once, even if it covers more than one regulated product. Therefore, if more than one patent is eligible for extension, it is important to select the patent carefully.Here are some key considerations in that decision:

1. Eligibility of the patent for a patent term extension (under 35 U.S.C. § 156):
   
   
   • The patent must claim a product, a method of using a product, or a method of manufacturing a product.
     
     
   • The patent for which an extension is requested must not have expired before the application for extension is filed.
     
     
   • The patent must not have been previously extended under 35 U.S.C. § 156.
   
   
   If a company has an approved product that can serve as the basis for an extension application, and has more than one eligible patent, how should it select the patent on which to file for extension? The following factors should be considered:
   
   
2. The ability of the patent to withstand a patent challenge based on validity or unenforceability in a patent suit.
   
   
3. The difficulty a competitor would have in avoiding the patent by designing around the claims. For example, a patent to a method of synthesizing an API may not be the best candidate for an extension if there are commercially viable alternative routes of synthesis.
   
   
4. The length of time the patent will be in force, and the impact of the patent issue date on the length of the potential extension.

Regarding this last factor, the issue dates of the patents should be considered. The length of the patent term extension is based upon the length of the regulatory review period that occurred after issuance of the patent. If a patent did not issue until after approval of the product, the extension would be zero days. For a patent that issues after the regulatory approval period has started, the extension would be calculated based only on the period that occurs after the patent issues.In many cases, obtaining the extension for the patent which has the latest natural expiration date is preferable. However, the term of the patent, with the extension, must not exceed 14 years from the date the drug was approved. Therefore, if the extension were long enough to make the patent expire more than 14 years from the approval date of the drug, the length of the extension would be cut back to the 14-year date. In addition, the length of the potential extension may be countered by the other factors mentioned above, such as ability of the patent to withstand a patent challenge.This area of law is relatively undeveloped, and the strength of a given patent and the ease with which a competitor may design around it may not be clear initially. Therefore, filing multiple applications for extension — i.e., applications for more than one patent—may be advantageous. Only one application would be granted. But since it takes a few years for the U.S. Patent and Trademark Office to evaluate an extension application and ask the applicant to choose one, the patent owner could delay the choice for years. When it became necessary to choose one of the applications, the law may have developed to favor one patent over another, or the strength of the patents relative to each other may be clearer.