Pharmaceutical firms continuing to grapple with unpredictability in their pipeline and pricing pressures are increasingly turning to a more diversified and differentiated product portfolio. Patent protection remains critical to protecting investments in differentiated assets and pharmaceutical firms of all stripes continue to prosecute intellectual property around their innovations.
These include multinational players with a long history of marketing products in both the traditional innovator and generic sectors, as well as smaller nimble competitors with research and development expertise driving incremental innovation through the introduction of specialty offerings, complex generics, biosimilars and 505(b)(2) products.
This has led to growing diversification in the number and types of companies that appear as both a plaintiff asserting intellectual property and as a defendant who is defending against infringement claims. (See, e.g., Shilpa Pharma Inc. v. Novartis Pharms. Corp. (D. Del. filed April 20, 2021)). This growing trend requires heightened sensitivity around the treatment of patents in litigation.
While parties generally will get new opportunities to argue for or against the infringement, validity and enforceability of certain patents in different litigations—positions that a litigant has taken in the past or is taking concurrently in other matters—can come back to haunt them.
For instance, there are examples of parties being held to positions held in past cases on issues relevant to patent invalidity under doctrines like issue preclusion.
Even if a litigant is not formally held to a past position through the operation of legal theories such as estoppel, however, there can be a risk to credibility if an advocate is forced to take a position on a patent issue that is in tension with past related arguments to another court or government agency.
Thus, parties with diverse pipelines need to approach any individual litigation with a company-wide perspective. For instance, when defending allegations of patent infringement through the assertion of an invalidity defense, parties must be careful not to take overbroad positions regarding the innovative value of certain patents that might jeopardize the viability of company-owned IP assets covering similar kinds of technology.
While, in theory, this is a logical approach, it is often difficult to implement in practice when competing interests across the organization are at play. It is often not entirely clear which is of more value to the company—for example, prevailing on a defense that may allow for commercialization of a new asset or maximizing the enforceability of IP on an existing product that is facing unique competitive pressures.
Experienced counsel can help identify and navigate these judgment calls along with the prudent development of internal systems to help different parts of the organization coordinate and communicate with one another when these issues arise.
Rules of General Applicability
While each individual situation will differ, there are likely to be at least a few rules of general applicability. To the extent your company relies upon a particular product for a significant portion of its revenue, ensuring that any patents covering that product remain strong litigation assets will likely be a top priority.
Thus, counsel would be well advised to avoid arguments in patent litigation on less important products that might conflict with positions the company may need to take in future litigation on patents covering a large revenue product. At a minimum, in litigation involving a smaller product or pipeline asset, counsel typically will want to express potentially problematic litigation position in a way that is explicitly tied to the unique facts of that individual case.
This type of contention holds less risk as it avoids overbroad statements that are more difficult to distinguish, if necessary, in later litigation. For example, a company with important IP assets in the pharmaceutical formulation arts appearing as a defendant will likely want to ensure that any invalidity positions related to formulation patents are tied to the active ingredient at issue if possible.
Where There Is No Priority Asset
Usually, in situations where there is no clear answer as to what product or asset to give priority, counsel can craft litigation positions tied to the individual facts of each case that allow for effective advocacy while avoiding any potential risks to the company’s existing patents on related technology.
Continued diversification and differentiation likely will put a premium on counsel with experience litigating as both a patent owner plaintiff and accused infringer defendant. This experience allows for a broader and deeper perspective in developing litigation strategy that advances a client’s interests across its entire pipeline.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Daryl Wiesen is chair of Goodwin’s IP Litigation group and focuses on patent litigation and advising clients in patent portfolio development. He also has experience in other technologies, including biotechnology and medical devices.
John Bennett is a partner in Goodwin’s IP Litigation group. He has nearly 20 years of first-chair trial experience in high-stakes disputes involving intellectual property and complex technology. He represents plaintiffs and defendants in IP cases related to the life sciences.