This is the fourth article in our five-part series on PTE.

When applying for a patent term extension (PTE), due diligence matters. If an applicant did not act with due diligence during the testing phase or the approval phase, the time during which it failed to do so will be deducted from the PTE.¹ But there has been little guidance on what constitutes due diligence or on the use of due diligence petitions to challenge PTE determinations. Because due diligence is critical in PTE decisions:

• Applicants should consult with patent and regulatory counsel to ensure that the due diligence standard has been met.

In the context of the regulatory review period used to calculate a PTE award, “due diligence” is defined as the degree of attention, continuous directed effort, and timeliness that may reasonably be expected from, and are ordinarily exercised by, a person during a regulatory review period.² FDA considers all relevant factors, including the amount of time between approval of the investigational exemption and the start of a clinical trial and the amount of time required to conduct a clinical trial.³ Other factors may include:

1. The length of regulatory review periods for comparable products, where appropriate
2. Compliance or failure to comply with FDA requirements, including prescribed laws and regulations
3. Time solely attributable to FDA action as part of its regulatory review of the marketing application
4. Independent action by federal, state or local governments that interrupts testing, submission of data or other required activities
5. Unavailability of any key person involved in the applicant’s activities during regulatory review
6. Physical destruction of essential testing facilities or essential data
7. Delay caused by financial considerations
8. Implementation or failure to implement ordinary and necessary measures to minimize delay.⁴

FDA ultimately determines the regulatory review period and publishes its initial finding in the Federal Register. Within 180 days of publication, any person may challenge the determination by alleging that the applicant for PTE did not act with due diligence in seeking FDA approval of the product during the regulatory review period.⁵ The “due diligence petition” must claim that the applicant did not act with due diligence during some part of the regulatory review period and must include sufficient facts to merit an FDA investigation into the applicant’s due diligence.⁶

Within 90 days of receiving the petition, FDA will either deny the petition or investigate to determine whether the applicant acted with due diligence. It will then publish its determination in the Federal Register.⁷ If any person is not satisfied with FDA’s due diligence determination, he or she may request, no later than 60 days after the determination was published, that FDA conduct an informal hearing on the due diligence determination.⁸ The requesting party, the petitioner (if different) and the applicant all may participate in the hearing, but the requesting party bears the burden of proof.⁹

To date, it appears that only four due diligence petitions have even been filed, and only one was actually decided by FDA. The four petitions are (1) the Sapien Transcatheter Heart Valve (2012; withdrawn), (2) Mifeprex® (2002; rendered moot), (3) Nexium® (2001; withdrawn), and (4) Lopressor® OROS® (1991; denied). A description of each is below:

• The law firm Sterne Kessler Goldstein & Fox challenged Edwards Lifesciences AG’s PTE application for its heart valve device, the Sapien Transcatheter Heart Valve. It alleged that Edwards unreasonably delayed FDA approval of the Sapien device in three ways: (1) suspending or delaying its clinical trials; (2) making major design modifications that were unnecessary and unduly delayed marketing approval; and (3) requesting at least 15 separate time extensions to provide additional information to FDA, all related to the design change. Sterne withdrew its petition before FDA could review it, and Edwards eventually received a 1,420-day PTE.
• Corcept Therapeutics Inc. filed a due diligence petition alleging that the Population Council did not act with due diligence during the regulatory review period of Mifeprex (mifepristone). Corcept contended that the applicant unreasonably delayed FDA approval for more than four years because it could not secure an adequate manufacturing source between the initial 1996 approvable letter and its final approval in 2000. FDA rendered the due diligence petition moot in light of its decision to reduce the regulatory review period under Corcept’s request for revision of the period.
• Dr. Reddy’s claimed that AstraZeneca did not act with due diligence during the regulatory review period of Nexium (esomeprazole). In response, AstraZeneca said that FDA should dismiss the petition because it raised an issue of eligibility for PTE, not a failure to act with due diligence. Dr. Reddy’s withdrew the petition before any FDA ruling.
• Ciba-Geigy Corp. alleged that Aktiebolaget Hassle did not act with due diligence during the regulatory review period of Lopressor OROS. Ciba-Geigy contended that the applicant, Hassle, was not entitled to seek PTE because there was no agency relationship between the two parties with respect to Lopressor OROS. In other words, Hassle could not have acted with due diligence because neither it nor its agent played any role in the development of Lopressor OROS. FDA denied the petition, stating that it failed to allege laxity in the pursuit of marketing approval, which is under the auspices of FDA. Rather, the petition alleged that Hassle was not entitled to obtain PTE, which is under the auspices of the USPTO.

Innovators should consult with both patent and regulatory counsel to ensure that the innovator is acting with the necessary due diligence during both the testing and approval phases for their products, and they should explore ways to address possible delays in development with the least likely impact on PTE awards.

Endnotes

¹ See 35 U.S.C. § 156(c)(1).

² See 35 U.S.C. § 156(d)(3).

³ See 21 C.F.R. § 60.36(a).

⁴ See Proposed Patent Term Restoration Regulations, Proposed Rule, 51 Fed. Reg. 25338 (July 11, 1986). These eight additional factors were part of the original proposed rule, but they were ultimately excluded by FDA from the final rule. In promulgating the final rule, FDA emphasized that “these types of events are not exhaustive but rather are intended only to provide potential due diligence petitioners with some idea of the types of events FDA will consider in its due diligence determinations.” 53 Fed. Reg. 7289 (Mar. 7, 1988).

⁵ See 21 C.F.R. § 60.30(a).

⁶ See 21 C.F.R. § 60.30(c)-(d).

⁷ See 21 C.F.R. § 60.34(a).

⁸ See 21 C.F.R. § 60.40.

⁹ See 21 C.F.R. §§ 60.42, 60.44, 60.46.