Emerging Impact of Inter Partes Review on Hatch Waxman Litigation - A Primer

Hatch-Waxman Litigation in a Nutshell

Hatch-Waxman litigation refers to pharmaceutical patent litigation between a brand drug manufacturer and a generic drug manufacturer under the Hatch-Waxman Act (“Act”). The Act was enacted to facilitate generic drug entry into the market while encouraging pioneer drug development. This is achieved by providing carefully balanced statutory incentives, such as a five-year data exclusivity to the brand firm and a 180-day market exclusivity to the first generic firm, and procedures for approval and marketing of generic drugs.

The Act also provides a mechanism for solving patent disputes between the brand and generic drug manufacturers. When a generic manufacturer wants to market a generic version of a brand drug, it files an Abbreviated New Drug Application (“ANDA”) to the FDA. When submitting an ANDA, the generic firm often makes a Paragraph IV Certification that each patent that claims the brand drug or use of the brand drug for which the generic applicant is seeking approval is invalid or will not be infringed by the manufacture, use, or sale of the generic drug. Filing a Paragraph IV Certification is deemed an act of patent infringement. If the patent holder/brand firm files a timely infringement suit in a district court, the FDA will stay the ANDA for 30 months while the district court resolves the patent dispute.

Key Differences between IPR and District Court Proceedings Make IPR a Popular Choice for Challengers

Inter Partes Review (“IPR”), which became available in September 2012, offers an alternative to district court proceedings to challenge the validity of a patent. Anyone except the patent owner can file an IPR petition with the Patent Trial and Appeal Board (“PTAB”). PTAB has six months upon filing the petition to determine whether to institute review. If instituted, PTAB generally has twelve months to conclude the review.

For a party wishing to challenge the validity of a patent, IPRs have become an increasingly popular tool over district court proceedings for several reasons. First, PTAB applies a preponderance of the evidence standard, which is lower than the clear and convincing standard that district courts apply. Second, PTAB permits limited discovery, which would substantially reduce litigation costs. Third, an IPR will generally conclude within twelve months after institution, which is shorter than the average district court proceedings. Fourth, IPR proceedings are before specialized patent judges with technical backgrounds, while district court cases are before judges who are generalists and may not be familiar with patent law or the technology and juries which are comprised of lay people. Fifth, PTAB’s unpatentability determination is binding.[1] Finally, IPRs have a very high institution rate[2] and very few reviewed claims survive.[3]

Other differences are significant in determining whether to proceed with IPR petitions. First, validity challenges in IPR are limited to the statutory grounds under 35 U.S.C. §§ 102 and 103 and the references are limited to patents and printed publications. Second, PTAB uses the “broadest reasonable construction” standard while the district courts use the “ordinary and customary meaning” standard. Third, once PTAB renders a final written decision, the IPR petitioner may not re-challenge patentability before the Patent Office, a district court, or ITC with respect to any challenged claim on any ground that was “raised or reasonably could have been raised” in the IPR. (A detailed analysis of estoppel effects can be found here.)

More Pharmaceutical Patents Are Challenged in IPR Proceedings

Although most IPR petitions to date have involved patents relating to computer/electrical technology, more and more IPR petitions have been filed challenging biological/pharmaceutical patents. Below is a table showing the number of IPR petitions filed in 2012, 2013, and the first eight months of 2014.[4]


In June 2014, PTAB issued its first final written decisions concerning pharmaceutical-related patents. PTAB found all 58 of the challenged claims unpatentable. This may be a welcome sign for generic drug firms to utilize IPRs to challenge the brand drug firms’ patents.

Emerging Issues for Concurrently Litigating Brand Drug Patents before the District Court and PTAB

Using IPRs to challenge brand drug patents in the context of Hatch-Waxman litigation, however, may disrupt the carefully balanced statutory framework underlying the Act. For example, it may deprive the brand drug firm of its right to litigate in a district court because district courts may stay proceedings pending an IPR. Further, it is unclear how an IPR would affect the 30-month ANDA stay if PTAB reaches a final written decision invalidating the patent(s) before the district court or if the district court cannot conclude the case within a 30-month period after the proceedings have been stayed due to an IPR.

These issues will hopefully be resolved as more IPR decisions are issued on patents involved in parallel Hatch-Waxman litigation. I will follow up with cases where the generic drug firms pursue IPRs during Hatch-Waxman litigation and provide strategic considerations and advices for best practice in Hatch-Waxman litigation in future postings.



[1] Fresenius USA, Inc. v. Baxter Int'l, Inc., 721 F.3d 1330, 1332 (Fed. Cir. 2013) cert. denied, 134 S. Ct. 2295 (2014).

[2] According to the United States Patent and Trademark Office statistics, 87% of IPR petitions were instituted in fiscal year 2013 and 76% were instituted from the beginning of fiscal year 2014 to August 28, 2014. AIA Progress (as of August 28, 2014), available at http://www.uspto.gov/ip/boards/bpai/stats/082814_aia_stat_graph.pdf (last visited September 3, 2014).

[3] See In Rare Feat, 2 Patents Emerge Unscathed From AIA Reviews, Law360, April 15, 2014, available at http://www.law360.com/articles/528526/in-rare-feat-2-patents-emerge-unscathed-from-aia-reviews?article_related_content=1 (last visited September 3, 2014).

[4] Data compiled by author using Docket Navigator.