Merck Prevails in Patent Term Extension Case at Federal Circuit

By Aaron Barkoff
McAndrews, Held & Malloy, Ltd.

Mar 29, 2007

Merck & Co. v. Hi-Tech Pharmacal, No. 06-1401 (Fed. Cir. 2007)

The U.S. Court of Appeals for the Federal Circuit held today that a patent term extension under 35 USC 156 may be applied to a patent that is subject to a terminal disclaimer under 35 USC 253, handing a victory to Merck in its battle with Hi-Tech Pharmacal over generic Trusopt (dorzolamide HCl opthalmic solution). Hi-Tech had argued that Merck's patent on Trusopt expired in 2004 because a patent term extension on the patent was invalid.

As we reported last month, a loss for Merck in this case would have had drastic effects on pharmaceutical companies and patent owners, since the Patent Office has routinely granted patent term extensions on patents that are subject to a terminal disclaimer. Brand-name drug companies would have lost years of patent protection on some of their best-selling drugs if the Federal Circuit had decided that a terminal disclaimer precludes a patent term extension.

Section 156 was enacted as part of the Hatch-Waxman Act in 1984 to allow restoration of part of a pharmaceutical patent's term "lost" due to lengthy FDA review of a new drug application. Section 253, on the other hand, applies to all kinds of patent applications--not only those relating to pharmaceuticals--and allows the filing of a terminal disclaimer to overcome "obviousness-type double patenting" rejections made by the Patent Office.

In reaching its decision today, the Federal Circuit properly recognized that "the language of Section 156 is unambiguous and fulfills a purpose unrelated to and not in conflict with that of Section 253." The court observed: (1) according to Section 156, a patent term "shall be extended" if five enumerated conditions, none of which concern terminal disclaimers, are met; (2) the legislative history is consistent with the mandatory language of the statute; and (3) Section 154 excludes patents in which a terminal disclaimer has been filed from the benefit of a term adjustment for PTO delays, but Section 156 contains no such exclusion for patents eligible for term extensions for FDA delays, which further supports the court's interpretation of Section 156.

Additionally, the court explained why Section 156 and Section 253 are compatible:

The purpose of the terminal disclaimer--to prevent extension of patent term for subject matter that would have been obvious over an earlier filed patent--remains fulfilled by virtue of the fact that the date from which any Hatch-Waxman extension is computed is the terminally disclaimed date. At the same time, the purpose of the patent term extension--to restore some of the patent term lost due to regulatory review--is also satisfied.

Hi-Tech will now have to wait until at least April 28, 2008, when Merck's patent expires, before it can launch its generic version of Trusopt.