New coronavirus-related disruptions to federal courts are causing attorneys’ concerns about meeting tight deadlines unique to generic drug patent disputes.
Under the Hatch-Waxman Act, a patent infringement lawsuit by a brand company typically triggers a 30-month stay on federal approval of generic drugs.
Many judges create drug patent trial schedules to allow the cases to be completed within that time frame, attorneys said. But those schedules are under pressure with courts limiting access and attorneys cutting back on travel.
Stay expirations open the door for the generic product to be approved by the U.S. Food and Drug Administration and potentially launch in the U.S. market. There is also a concern brand companies could have trouble accessing the courts to ask for an injunction to block sales.
The disruptions have “put an extra level of stress on these drug patent cases to figure out how to get things done in the timeframe,” Bruce Wexler, the global co-chair of the intellectual property practice at Paul Hastings LLP, said.
Bumping Against Deadline
Courts around the U.S. have limited access to help fight the spread of the coronavirus, in some places calling off trials and in-person hearings.
The restrictions on travel and social contact are testing attorneys as they try to accomplish ordinary tasks like collecting documents and deposing witnesses. Litigators are increasingly relying on remote conferencing.
“That makes dealing with deadlines in federal courts difficult,” Janet Linn, an IP litigator at Tarter Krinsky & Drogin LLP, said.
The District of Delaware, the busiest district for patent cases, temporarily closed its Wilmington courthouse last week after an attorney who made an appearance there tested positive for Covid-19. Judges in the district continue to try to avoid having parties travel from out-of-town but can hold hearings and bench trials “in the exercise of their sound discretion,” according to a court order.
Similar measures have been taken in New Jersey, another popular venue for Hatch-Waxman cases.
“The longer that this goes, where courts are not functioning as they normally would, the more it will be a concern,” Latham & Watkins LLP partner Adam Perlman said.
Additional court suspensions or broader delays increase the likelihood of cases bumping up against the 30-month stay deadline, Jonathan Davies, a partner at Cooley LLP, said.
Brand name drug makers aren’t going to accept simply allowing the 30-month window to come and go, Wexler said. “Something’s going to have to be done.”
Courts can extend the stay on regulatory approval when one side hasn’t cooperated in moving along the litigation. That wouldn’t seem to apply in the coronavirus situation, attorneys said.
Any delay “is not really the fault of any party,” Perlman said. “It’s the fault of an unprecedented health situation.”
Judges could still encourage the two sides to come up with a solution, which could involve compressing the schedule, Gregory Morris, leader of the life sciences IP litigation practice group at Honigman LLP, said.
“It could also involve the parties agreeing to maintain the status quo for a reasonable amount of time after the 30-month stay of FDA approval expires to allow the court time to issue a decision,” Morris said in an email.
Both sides have incentives to reach an agreement for the generic to not launch when the 30-month stay ends, attorneys say.
A product launch before a patent decision has risks for the generic maker, including that it could be on the hook for the brand company’s lost profits if a judge later finds infringement. In some cases, such a judgment could be more than the generic company’s own profits.
Perlman said litigators for brand companies facing the expiration of stays in the next several months should start thinking about potential issues now. If there could be an problem, they should talk with the generic side and “think about how to get it in front of a judge so there can be a plan,” he said.
“I think brand companies would likely be amenable to all kinds of creative ways to ensure that their rights aren’t prejudiced during this time because of the health situation,” Perlman said.