Key Trends in PTAB’s 2021 Orange Book and Biologic Patent Study

Rothwell, Figg, Ernst & Manbeck, P.C.
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[author: Sheena]

The U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB) recently released an updated Orange Book patent/biologic patent study on August 11, 2021. This is the third report providing data on post-grant petitions filed against Orange Book and biologic patents released by the PTAB, and it covers AIA petitions filed between September 16, 2012 and June 30, 2021. The first study covering these topics was released on March 13, 2018, and the second on July 18, 2019.

The updated Orange Book patent/biologic patent study (“study”) identifies a petition as challenging an Orange Book-listed patent by cross-referencing the patents challenged in a PTAB petition with the U.S. Food and Drug Administration’s (FDA’s) electronic Orange Book database. This study classified biologic patents as any patents directed towards treating a disease or condition that was not listed in the Orange Book and any patents that potentially cover a Purple Book listed biological product.

Overall, the data from the 2021 PTAB Orange Book patent/biologic patent study shows that petitions challenging Orange Book and biologic patents remain only a small fraction of the overall number of petitions filed. Only 4% of AIA petitions during this time have challenged Orange Book patents, and 2% of petitions have challenged biologic patents. This statistic likely reflects the strength, or perceived strength, of these types of patents to potential challengers. It also reflects patent challengers’ preferences for a different forum due to the availability of special litigation procedures available under the Hatch-Waxman Act and Biologics Price Competition and Innovation Act (BPCIA) for Orange Book and biologics patents, respectively.

Trends Over Time

After the enactment of the AIA in 2013, the data from this study shows that the percentage of petitions challenging Orange Book and biologic patents peaked in fiscal year (FY) 2016 and FY 2017 and has been declining ever since. Interestingly, the study shows that the decline has been more pronounced for Orange Book patents than biologic patents. This trend may be due to the strength of the remaining Orange Book patents after the initial rush of challenges since the enactment of the AIA. The decline could also reflect the relatively lower institution rate and higher post-institution success rate for Orange Book patents, which, together, creates an unfavorable forum for challengers.

The institution rates for Orange Book and biologics patents have also declined. With respect to institution rates since September 2012, both Orange Book and biologic patents are currently slightly below average. Throughout the study period (starting from 2012 to Q3 of 2021), the average institution rate of patents in all technology areas is 64%, while the institution rate for Orange Book and biologics patents are at 62% and 55% respectively. In Q3 of FY 2021, the institution rate of Orange Book patents fell to an all-time low of 27% since FY 2013. While slightly higher than Orange Book patents, the institution rate for biologic patents also hit an all-time low of 33% since FY 2014.

Outcomes of AIA Petitions

After being instituted, Orange Book patents tend to fare better than biologic patents. From September 16, 2012 to June 30, 2021, only 15% of petitions filed against Orange Book patents resulted in all challenged claims being found unpatentable. In contrast, 21% of petitions filed against biologic patents resulted in a final written decision in which all challenged claims were found unpatentable. These differences may partially be due to the types of patents being challenged. Orange Book patents cover only drug compound, formulation, and method claims. See 21 C.F.R. § 314.53(b). In contrast, the definition of biologics set in this PTAB study is broader, and can include manufacturing practices, packaging, metabolites and intermediates. Overall, when challenged, 56% of Orange Book patent claims and 62% of biologic patent claims are either denied institution or held not patentable.

Another interesting statistic with regards to Orange Book and biologics patent trends is the low settlement rate. Compared to the overall settlement rate of 33% in FY 2021 according to PTAB’s AIA Trials FY 2021 Q3 round up, the Orange Book and biologic’s settlement rate of 23% and 18%, respectively, are very low. However, it is challenging to draw any definite conclusions from this statistic because it is difficult to find out whether the settlement for PTAB challenges tend to be more favorable to the challenger or patent owner.

Based on this data, it seems that the scales are currently tipped towards patent owners in PTAB proceedings. Notably, the number of petitions challenging both biologic and Orange Book patents have dropped since their peak in 2016 and 2017; the rate of institution has dropped for both types of patents; and there is a slight increase in the number of Orange Book and Biologics patents receiving a favorable final written decision.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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