Focusing Only On Active Ingredient Patents Ignores Case Law Success Rates: Formulation & Method-Of-Use Patents Provide Significant Protection For Medicines

Previously published in BNA Pharmaceutical Law & Industry Report

In pharmaceutical litigation conventional wisdom teaches practitioners to focus on active ingredient patents over other types of patents that cover, for example, formulations and methods of use. A review of Federal Circuit and district court decision success rates1 reveals formulation and method-of-use patents account for one-third of brand name successes against generic companies in Federal Circuit decisions and nearly one-half of brand name successes in the district courts. In other words, focusing on active ingredients only ignores almost half of a brand name company's chance for success.

While active ingredient patents are the most likely to survive validity and infringement challenges, relying solely on these patents has significant disadvantages for patent owners. Active ingredient claims cannot always reflect the innovative advantages of a pharmaceutical product, such as a new use for a known substance or a formulation that enables delivery of a known drug into the body at desired rates and amounts. Also, formulations and methods of use may be developed after the active ingredient and therefore be entitled to patents that expire later than the active ingredient patent.

Further improvements to formulations or methods of use may provide additional and extended patent protection for a brand name company. On the other hand, while a generic company may need to exhaust resources to develop a non-infringing formulation, it may have a better chance of invalidating patents that claim subject matter other than an active ingredient. Generic manufacturers may under certain circumstances also avoid method-of-use patents by limiting the indications for which they seek to market their product.

Brand Name v. Generic Success Rates

Since KSR the Federal Circuit and district courts issued final decisions on the merits2 involving 63 pharmaceutical products. The Federal Circuit issued decisions on 38 of these products. The Federal Circuit decisions are evenly split: the brand name company prevailed on 18 out of 38 products and the generic prevailed on 20 out of 38 products.3

District court decisions were also closely divided, with brand name companies having a marginally better success rate than in the Federal Circuit. Post-KSR, district courts issued final decisions on the merits for 54 pharmaceutical products.- Brand name companies prevailed on 29 products and generic challengers prevailed on 25 products.5 Table 1 summarizes the results.

Pharmaceutical patents may be categorized as claiming (1) drug substances or active ingredients; (2) pharmaceutical formulations or compositions; and (3) methods of use;6 or a combination thereof. As expected, active ingredient patents provide the most effective protection for brand name companies, but ''other'' patents, namely formulation and method-of-use patents, provide significant protection.

Federal Circuit Results

The Federal Circuit issued decisions on the merits for 16 pharmaceutical products that were protected by active ingredient patent claims.7 The Court ruled in favor of the brand name company on 12 products and in favor of the generic challenger on 4 products – a 75% success rate for the patentee. Of the 4 generic successes, 2 were based on non-infringement and 2 on invalidity or unenforceability.

The active ingredient patents can be further divided into sub-groups: claims for new active ingredients or molecules, and claims for specific forms of an active ingredient such as polymorphs, isomers, or salts. New molecules provided the best results for brand name companies while generic manufacturers were more successful designing a non-infringing product or invalidating the narrower active ingredient claims (polymorphs, isomers, salts). In the active ingredient category, 4 generic successes involved polymorphs, isomers, or salts.

The other 22 products considered by the Federal Circuit after KSR were protected by formulation or method-of-use claims, or both, but were not protected by active ingredient claims. Out of 14 products that were protected by formulation patents, the brand name prevailed on only 3 – a 21% success rate.8 The 11 generic victories were split between non-infringement (6 products) and invalidity/unenforceability (5 products). Formulation patents can also be divided into subcategories, including formulations for oral administration, injectable or other liquid formulations, combinations that contain more than one active ingredient, and formulations that allow delivery of an active ingredient at a particular rate or to a certain area of the body. Interestingly, formulation patents relating to liquid pharmaceutical products (e.g., injectables, sprays, drops) were more difficult for generic challengers to overcome.

Finally, when considering only method-of-use claims, the Federal Circuit ruled favorably for the brand name on 2 out of 7 products – a 29% success rate. All generic successes on method-of-use claims were based on invalidity/unenforceability. And, the brand name prevailed on 1 product that was covered by both formulation and method-of-use claims. Table 2 summarizes the results.

Overall brand name companies had a 75% success rate in cases that involved active ingredient claims versus a 29% success rate on products that had only formulation and/or method-of-use claims. Although cases involving non-active ingredient claims were more challenging, they accounted for 6 out of 18 brand name companies' successes in the Federal Circuit. Chart 1A illustrates the 18 products where the Federal Circuit ruled in favor of the brand name company, grouped by the type of patent claims considered by the Court. Chart 1B illustrates the 20 generic company wins at the Federal Circuit.

Chart 1A shows that active ingredient patents account for two-thirds of successful patent cases for brand name companies, while the other categories (formulation and method-of-use patents that do not have active ingredient claims) account for one-third of all successful patent cases. Viewing the Federal Circuit decisions in this manner shows that patents other than active ingredient patents have value to brand name companies. On the other hand, Chart 1B demonstrates that the chances of success for a generic company increase significantly when active ingredient patents are not at issue.

District Court Results

The district courts issued decisions on the merits in favor of the brand name company for 15 out of 20 products that were primarily protected by active ingredient patents10 – a 75% success rate for brand name companies. The 5 generic successes were split: 3 non-infringement decisions and 2 invalidity/unenforceability decisions. Similar to the Federal Circuit results, brand name companies fared better with new molecule active ingredient claims than with narrower claims relating to polymorphs, isomers, or salts. Cases that related to polymorph, isomer, or salt patents accounted for 3 of the generic companies' 5 successes. In the remaining 2 cases, the Federal Circuit reversed.

Brand name companies achieved higher success rates for formulation patents and method-of-use patents at the district court level than at the Federal Circuit. The brand name prevailed in 7 out of 16 formulation patent cases – a 44% success rate. Out of the 9 generic successes, 5 were...