The U.S. Court of Appeals for the Federal Circuit ruled that the manufacture, marketing, or sale of a medical device, which is used in the development of FDA regulatory submissions, but is not itself subject to the FDA premarket approval process, is not entitled to the protection of the Hatch-Waxman Act section 271(e)(1) safe harbor provision.  Proveris Scientific Corp. v. Innovasystems (07-1428).

Innova makes and sells a device known as the Optical Spray Analyzer (OSA).  The OSA itself is not subject to FDA approval.  It is, however, used in connection with FDA regulatory submissions.  In that setting, the device measures the physical parameters of aerosol sprays used in nasal spray drug delivery devices.

Proveris filed suit against Innova for infringing U.S. Pat. No. 6,785,400.  The ’400 patent is directed to a system and apparatus for characterizing aerosol sprays commonly used in various drug delivery devices, such as nasal spray pumps and inhalers.  According to the ’400 patent, spray characterization also plays an important role in the regulatory approval process of the Food and Drug Administration under the Federal Food, Drug, and Cosmetic Act (FDCA).

As part of its defense, Innova invoked the safe harbor provision of the so-called “safe harbor” provision of the Drug Price Competition and Patent Term Restoration Act of 1984, known as the “Hatch-Waxman Act.”  The safe harbor provision is codified at 35 U.S.C. § 271(e)(1), which states in relevant part:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

Innova argued that its allegedly infringing activities are immunized by the safe harbor provision because its OSA devices are used by third parties solely for the development and submission of information to the FDA.

After a district court found Innovasystems infringed the ‘400 patent, Innovasystems appealed arguing that the district court erred in ruling that the does not immunize its accused activity from infringement of the ’400 patent.

Under section 156, the Act seeks to eliminate de facto patent term reduction by providing patent term extension for those patents claiming a “product” subject to regulatory delays caused by the FDA premarket approval process.  The term “product” means a “drug product” and “[a]ny medical device, food additive, or color additive subject to regulation under the [FDCA.]”

Then, section 271(e)(1), provides a safe harbor that immunized competitors from infringement on account of making, using, offering to sell, or selling within the United States or importing into the United States a  “patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”  The basic idea behind this provision was to allow competitors to begin the regulatory approval process while the patent was still in force, followed by market entry immediately upon patent expiration.

Here, Innova argued that it is entitled to the benefit of the section 271(e)(1) safe harbor because it only offered to sell the OSA to pharmaceutical companies and the FDA and the OSA was used exclusively in applications for regulatory approval in accordance with the requirements of the FDCA.  Innova pushed the idea that “Congress wrote § 271(e)(1) extremely broadly” when it said that it was not an act of infringement to sell a “patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

Proveris countered that section 271(e)(1) extends only to the infringement of patents that claim “products” as that term is defined in section 156(f) and to other patented inventions that are inherent to the development of “products.”  The Federal Circuit sided with Proveris:

… Innova’s OSA device is not subject to FDA premarket approval.  Rather, FDA premarket approval is required only in the case of the aerosol drug delivery product whose spray plume characteristics the OSA measures.  In short, Innova is not a party seeking FDA approval for a product in order to enter the market to compete with patentees.  Because the OSA device is not subject to FDA premarket approval, and therefore faces no regulatory barriers to market entry upon patent expiration, Innova is not a party who, prior to enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the second distortion.  For this reason, we do not think Congress could have intended that the safe harbor of section 271(e)(1) apply to it.

… At the same time, because Innova’s OSA device also is not subject to a required FDCA approval process, it does not need the safe harbor protection afforded by 35 U.S.C. § 271(e)(1).

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