Navigating the Murky Waters of the Hatch-Waxman ‘Safe Harbor’
In this article for New York Law Journal, partners Jeanna Wacker and Tasha Francis Gerasimow and summer associate Annie Chan discuss the Hatch-Waxman "safe harbor" provision.
The Hatch-Waxman “safe harbor” is a valuable tool for companies looking to develop FDA-regulated products based on existing patented inventions. But the boundaries surrounding the safe harbor are not always so clear. Here, we’ll dive into the statutes and recent case law surrounding the provision to shed some light on its contours.
What is the safe harbor provision?
The safe harbor provision, codified in 35 U.S.C. §271(e)(1), was introduced in 1984 as part of the Hatch-Waxman Act. It provides:
“It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention […] solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”
Courts have interpreted the purpose of the safe harbor provision as correcting an “unintended distortion” in the effective patent term of certain products due to FDA pre-approval requirements. Eli Lilly and Co. v. Medtronic, 496 U.S. 661, 671 (1990) (Eli Lilly). Prior to the Hatch-Waxman Act, it would be an act of infringement to manufacture, use or sell a patented invention, including for the purpose of conducting the research or testing required for FDA approval. As a result, competitors would have to wait until the patent term expired before initiating the regulatory process, which could take several more years. This resulted in a “de facto extension of effective patent life at the end of the patent term” which the safe harbor provision was designed to correct. REGENXBIO v. Sarepta Therapeutics, No. CV 20-1226-RGA, 2022 WL 609141, at *2 (D. Del. Jan. 4, (2022) (REGENXBIO)
What does the safe harbor protect?
The Supreme Court has stated that the safe harbor provision provides a “wide berth” for the use of patented drugs in activities related to regulatory approval. Merck KGaA v. Integra Life Sciences I, Ltd., 545 U.S. 193, 202 (2005) (Merck I). However, there are two key phrases in the provision which have been subject to significant debate. The first is the definition of “patented invention” and the second is the scope of “reasonably related uses.”
What is a “patented invention”? At first glance, the term “patented invention” seems to cover any patented invention that could be used in activities relating to FDA approval. However, it’s not quite so simple. In early cases invoking the safe harbor provision, there was some confusion as to whether the term “patented invention” included only drugs, or also other products subject to regulatory approval. This debate was cleared up in Eli Lilly, where the Supreme Court held that the phrase “patented invention” includes drugs, but also medical devices, food additives, and color additives.
A second point of contention revolves around whether the use of patented “research tools” used in activities necessary for FDA approval are protected under the safe harbor. “Research tools” refers to the “tools that scientists use in laboratory including cell lines, monoclonal antibodies, […] methods, laboratory equipment and machines.” Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334, 1347 n.3 (Fed. Cir. 2007) (Merck II).
The Federal Circuit examined the scope of protection for research tools in Proveris Sci. v. Innovasystems, 536 F.3d 1256 (Fed. Cir. 2008) (Proveris). The key question was whether Innova’s sale of allegedly infringing Optical Spray Analyzers (a “research tool”) to third parties solely for the development and submission of information to the FDA was covered under the safe harbor provision. The court held that it was not, reasoning that “because the OSA device is not subject to FDA premarket approval, […] Innova is not a party who, prior to the enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the [distortion that the safe harbor provision was designed to address].” Id. at 1265.
Other courts have since reached the same decision, finding research tools excluded from the safe harbor exemption. For example, PSN Illinois v. Abbott Lab’ys, No. 09 C 5879, 2011 WL 4442825 (N.D. Ill. Sept. 20, 2011), found that “only ‘patented inventions’ for which regulatory approval is required fall within the scope of the safe harbor exemption.” Similarly, in Allele Biotechnology & Pharms. v. Pfizer, No. 20-CV-01958-H-AGS, 2021 WL 1749903 (S.D. Cal. May 4, 2021), the court found that the use of a patented probe to evaluate COVID-19 neutralizing antibody levels was not protected because the probe itself was not subject to FDA premarket approval, although it was used in the development of FDA regulatory submissions relating to the COVID-19 vaccine. The court in REGENXBIO also adopted this reasoning, holding that Sarepta’s use of patented cultured hosts cells to make rAAV gene therapy products was not protected by the safe harbor.
An opposing view emerged in Teva Pharms. USA v. Sandoz, No. 09 CIV. 10112 KBP, 2013 WL 3732867 (S.D.N.Y. July 16, 2013) where the court held that the use of patented molecular markers and methods which were not themselves subject to FDA approval but were used as “research tools” in the development of FDA submissions for their generic glatiramer acetate products were covered under the safe harbor. In coming to this conclusion, the court read Proveris as being limited to the facts of that case—where the defendant is actively commercializing the infringing product. Id. at *8.
Given this backdrop, entities should be aware that research tools used during the development of FDA-approval do not automatically qualify for safe harbor protection, though the specific facts of the case may allow for some protection.
What are “reasonably related uses”? Generally, courts have found that an activity is “reasonably related” to federal regulatory activities if “an accused manufacturer has a reasonable basis for believing that a device may work to achieve a particular result, and uses the device in research that, if successful, would be appropriate to include in a submission to the FDA.” Edwards Lifesciences v. Meril Life Scis. PVT. Ltd., No. 19-CV-06593-HSG, 2020 WL 6118533, at *4 (N.D. Cal. Oct. 16, 2020)
Courts have found activities reasonably related to federal regulatory activities regardless of the phase of research, including preclinical studies. However, “basic scientific research, performed without the intent to develop a particular drug or a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce” has been found to not be reasonably related. For example, in Isis Pharms. v. Santaris Pharma A/S, No. 3:11-CV-2214-GPC-KSC, 2014 WL 794811 (S.D. Cal. Feb. 27, 2014), the court held that Santaris’ use of patented methods to identify targets or screen molecules for activity (using antisense technology) were not protected because Santaris had not shown “a reasonable basis for believing” that the antisense compounds in its libraries would have a particular biological effect through a particular biological process.” Id. at *12.
At the other end of the regulatory timeline, courts have held that the safe harbor can cover certain post-FDA approval activities. In two cases involving Classen Immunotherapies, the Federal Circuit held that the safe harbor provision does not apply to “routine” post-approval submissions to the FDA (Classen Immunotherapies v. Biogen IDEC, 659 F.3d 1057, 1070 (Fed. Cir. 2011) (Classen I)) but does apply to “non-routine” activities conducted to satisfy specific FDA requirements (Classen Immunotherapies v. Elan Pharms., 786 F.3d 892, 897 (Fed. Cir. 2015) (Classen II)). For example, in Classen II, the use of a patented method in research submitted to the FDA to obtain a labeling change was protected by the safe harbor. In contrast, “routine” quality control testing was not protected in Momenta Pharms. v. Teva Pharms. U.S.A., 809 F.3d 610 (Fed. Cir. 2015).
Who is eligible?
Another open question around the safe harbor provision is whether it extends to third parties that are not the entity seeking FDA approval. In Shire v. Amneal Pharm., 802 F. 3d 1301 (Fed. Cir. 2015), the safe harbor was found to protect third parties supplying the active pharmaceutical ingredient to generic filers developing products for FDA approval. On the other hand, you may recall that the Federal Circuit in Proveris had denied protection for a third party supplying a research tool to be used for the development and submission of information to the FDA. A reasonable conclusion to draw from these cases is that the protection may depend on whether the product supplied qualifies as a “patented invention.” Thus, ambiguity remains for CROS and other third parties that may seek to utilize the safe harbor provisions.
How and where can it be used?
In Amgen v. Int’l Trade Comm., 565 F.3d 846 (Fed. Cir. 2009), the Federal Circuit confirmed that the safe harbor provision applies not only to district court infringement proceedings but also to ITC proceedings relating to infringement of process and product patents. The provision offers an affirmative defense: Even if a plaintiff is able to establish infringement apart from the safe harbor, the defendant can defeat this by introducing evidence showing that the safe harbor applies. Allele Biotechnology & Pharms. v. Pfizer, No. 20-CV-01958-H-AGS, 2021 WL 1749903 (S.D. Cal. May 4, 2021).
Conclusion
The safe harbor provisions remain a robust defense for patent infringement allegations, but the boundaries of the defense are still being actively litigated and defined. Thus, parties seeking to use or defeat such a defense are advised to critically analyze the facts of their case in light of these open questions surrounding the safe harbor protections.
