Life Sciences Legal Insights

Five Things to Think About Before Saying "I Do" to a Corporate Partner

By: Jake Handy

In today’s market, odds are that a life sciences company will end up with a corporate partner at some point in its development.

These relationships are often compared to marriages, and the parties usually enter into them with the same high expectations of living happily ever after that couples do. But in reality, partnerships between biotechnology and pharmaceutical companies are often characterized by years of “marriage counseling” while both sides try to sort out their various expectations.

California Supreme Court to Hear Cipro "Pay-For-Delay" Case

By: Ewa Davison, David Tellekson

The California Supreme Court will review the legality of so-called “pay-for-delay” settlements, whereby brand-name pharmaceutical manufacturers pay other companies to delay release of a generic version of a patented drug. Although the California Supreme Court will be making its determination under state law, a decision finding all such agreements illegal would have a national impact.

The “pay-for-delay” agreement at issue here settled a patent infringement lawsuit filed by Bayer AG and its subsidiary after Barr Laboratories, Inc., sought to market a generic version of the antibiotic ciprofloxacin hydrochloride, commonly known as Cipro. Under the terms of the 1997 agreement, Barr agreed not to market a generic version of Cipro until after expiration of U.S. Patent No. 4,670,444, in return for which Bayer paid Barr almost $400 million. The ’444 patent, which claims the ciprofloxacin hydrochloride molecule, expired in 2003.

USPTO Regulations Could Impose Steep Fees on Patent Reexamination

By: Michael Shuster

Today the USPTO published in the Federal Register its proposed rulemaking with regard to implementation of the America Invents Act (AIA). The proposed rules cover Inter Partes Review, Post-Grant Review, and a plethora of other AIA implementation issues. Interested parties have 60 days to comment on the proposed rules. Links to the Federal Register entries can be found on the USPTO website.

While these proceedings will provide litigation alternatives, they are also costly and could put additional strain on the USPTO. The fees associated with these proceedings are based on estimates by the American Intellectual Property Law Association, but the amounts may be misleading, as the agency did not define what goes into the preparation, and the complexity of proceedings can depend on what invalidity arguments are at issue, the amount of prior art and other factors.

From our perspective, it would be better to propose a range of costs than a number that could be too low in some instances or too high in other instances. However, the fees are still far below the cost of litigation. For a cash-constrained company, these proceedings give them options to challenge a patent without taking on the burden of full-blown litigation. Even if a company has the means to take on litigation, these proceedings allow it to strategically plan when it should opt for litigation and when it should counter with less costly post-grant and inter partes reviews.

While the USPTO fees may seem steep to many companies, the procedures do provide more options when contesting a patent. The proposed system provides companies with more tools available to challenge patents that they believe lack validity and more flexibility with respect to matching the appropriate proceeding with their business strategy.