It has always been assumed the answer is "yes." Now the Federal Circuit will answer the question directly in Merck v. Hi-Tech Pharma., which concerns Hi-Tech's ANDAs for generic versions of Merck's Trusopt and Cosopt prescription eye drops. The case was argued in December and a decision could come at any time.
Merck owns U.S. Patent No. 4,797,413, covering dorzolamide, the active ingredient in Trusopt and Cosopt. The '413 patent issued from a continuation-in-part application that claims priority from Merck's U.S. Patent No. 4,677,115. During prosecution of the '413 patent, the patent examiner rejected the claims for "obviousness-type double patenting," explaining that the claims were not patentably distinct from those of the earlier issued '115 patent because they "include position isomers and adjacent homologs to the previously allowed prior art compounds which are obvious variations in view thereof." To overcome the rejection, Merck filed a terminal disclaimer, disclaiming "the terminal part of any patent granted on [the application] which would extend beyond the expiration date of U.S. patent 4,677,115, that is, June 30, 2004."
The FDA approved Merck's NDA for Trusopt in 1994, after several years of FDA regulatory review. Due to the lengthy review process, the FDA granted Merck a patent term extension under 35 USC 156, thereby extending the term of the '413 patent to April 28, 2008. Section 156 was enacted as part of the Hatch-Waxman Act (it is the "Patent Term Restoration" part) in a trade between innovator and generic drug companies: innovators could obtain patent term extensions and generic drug companies could develop their drug products before patent expiration. Under Section 156, NDA holders may choose one patent for patent term extension per approved drug. Presumably, Merck sought an extension of the '413 patent rather than the '115 patent because its claims are stronger.
After Hi-Tech filed ANDAs for generic versions of Trusopt and Cosopt, Merck sued Hi-Tech for infringement of the '413 patent. As its only defense, Hi-Tech asserted that the patent term extension on the '413 patent was invalid due to the terminal disclaimer that Merck voluntarily filed on the patent. On April 25, 2006, the district court entered final judgment on the pleadings in Merck's favor and enjoined Hi-Tech from selling generic dorzolamide products until the '413 patent expires. Hi-Tech promptly appealed to the Federal Circuit, presenting the following issue for review:
Whether a terminal disclaimer voluntarily filed to avoid double patenting, as a matter of law, precludes or disclaims the right to a patent extension under 35 USC 156 that would permit the disclaimed patent to be enforced after expiration of the earlier patent that gave rise to the disclaimer.
According to Hi-Tech, "[t]his case arises solely because the PTO regulation implementing 35 USC 156 added words to the statute which are not there." Thus, the arguments in the appeal center on the proper statutory interpretation of Section 156. Hi-Tech argues that the district court misinterpreted Section 156 as overturning settled law on the irrevocable nature of terminal disclaimers. Merck argues, on the other hand, that the structure, legislative history, and "twenty years of consistent PTO interpretation of Section 156" support the district court's "plain language construction" of the statute that allowed the patent term extension on the '413 patent to stand. Thanks to the attorneys who argued the case, links to the briefs are provided below.
A decision in favor of Hi-Tech would have far-reaching consequences. Many of the most valuable patents owned by innovator drug companies would lose years off their terms, potentially costing billions of dollars in lost revenue. Innovator drug companies routinely file for patent term extensions, and terminal disclaimers are quite common simply due to the nature of pharmaceutical patenting.
LINKS TO APPEAL BRIEFS: