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October 2013 Term October/November 2013 RebalancingBulletin Pay-for-Delay: Why the Hatch-Waxman Act In This Issue Should Be Given More Weight in the Antitrust Analysis and Rebalancing Pay-for-Delay: What That Means for Reverse Payment Agreements An Antitrust Analysis of Reverse Payment By David Kurlander* Agreements ................1, 3-12 I. Introduction the battles regarding these agreements President’s Corner ...............2-3 li Lilly & Co., a $10.9 billion- have produced inconsistent results. A per-year pharmaceuticals giant, handful of circuit courts have upheld The Patent Pilot E created one of the best selling drugs the validity of these settlements Program: Reassignment when the agreement was confined to Rates and the Effect of in history – Prozac.1 In 2000, the Local Patent Rules .........13-19 drug alone accounted for roughly one the parameters of the patent, while quarter of the company’s revenue.2 A others have condemned reverse NYIPLA Amicus Brief in payments as an illegal restraint of CLS Bank Case Advocates year later, however, Lilly lost a legal 5 battle with a generic manufacturer trade. The United States Supreme for Clarification on Court, in a recent decision, held Patent-Eligible over the validity of the Prozac patent.3 Subject Matter ..............20-22 Seemingly overnight, the drug, which that reverse payments are subject to previously pulled in $2.6 billion per antitrust scrutiny under an approach Moving Up and that analyzes both the procompetitive Moving On ........................22 year, saw its quarterly sales drop sixty-six percent.4 and anticompetitive effects of the agreement.6 As an academic matter, October/November 2013 Recognizing the potentially IP Media Links ...............23-24 disastrous consequences of losing pay-for-delay agreements raise long- patents for blockbuster drugs, large standing debates about the proper Supreme Court 2013-2014 balance between patent rights and IP Case Preview ............26-28 pharmaceutical companies began 7 settling patent battles by making consumer access. Historian’s Corner ................29 large payments to potential generic rivals. In exchange, the generic II. Background Notable Trademark Trial manufacturers began to abandon A reverse payment settlement and Appeal Board Decisions ......................30-31 lawsuits that may have allowed involves three legal regimes – patent, the entry of generic drugs into the antitrust, and food and drug laws.8 On Voices from the market and increase competition the one hand, the patent system grants Presidents’ Forum..........32-35 in the health care industry. These innovators the right to exclude others agreements between brand-name from using the invention.9 This right to CLE Program Reviews & Meetings ......36-37 pharmaceutical companies and exclude ultimately minimizes the gap generic manufacturers, however, between the value of the invention and Board of Directors do not exclude the generic product the value that an inventor receives by Meeting Minutes ................38 entirely. Rather, they postpone allowing that inventor to charge a higher generic entry for an agreed-upon time price for use of the invention.10 The NYIPLA Calendar .................39 frame. Still, these so-called “pay-for- patent system, thus, incentivizes profit- New Members ......................40 delay” settlements have attracted the motivated individuals to develop new attention of antitrust enforcement technology and promotes technological authorities because of their potential progress.11 On the other hand, antitrust to hinder competition. In the courts, law functions to maximize consumer cont. on page 3 g The views expressed in the Bulletin are the views of the authors except where Board of Directors approval is expressly indicated. © Copyright 2013 The New York Intellectual Property Law Association, Inc. N Y I P L A Page N1 Y I www.NYIPLP L A October/November A.org 2013 November 2013 evelopment of innovative NYIPLA prod- volunteered to attend on behalf of the NYIPLA. ucts presents unique approaches to tradi- The goal was to educate law students about tionalD and emerging aspects of the law. In this membership benefits with the NYIPLA. It proved respect, we are grateful for the participation of to be a good interface for the Association with our members and other contributors to our on- future attorneys. going CLE programs, events, and publications. On October 10th, Meetings & Forums I am pleased to report that the early fall Committee Co-Chairs Colman Ragan and programs in September and October have Steven Lendaris hosted an event at New York proved to be quite successful. On September Law School concerning “Diverse Careers in 24th the Young Lawyers Committee, chaired IP law and Strategies for Achieving Success.” by Jonathan Auerbach, Michael Bullerman and Panelists Tom Meloro, NYIPLA Immediate Past Lauren Nowierski, held the first of a bi-monthly President, of Willkie Farr & Gallagher LLP; Young Lawyers Roundtable on legal writing. John Resek of Resek, Liang and Frank LLP; Panelists Paul A. Bondor of Desmarais LLP and and Michael Chang of Kenyon & Kenyon LLP Henry C. Dinger of Goodwin Procter LLP were discussed how young lawyers can effectively extremely informative in reviewing briefs and communicate with partners and clients and how providing suggestions as an assistance to young to navigate their career paths in a marketplace lawyers desiring to become more persuasive and with diverse opportunities for intellectual property compelling legal writers. lawyers. The program was successful and nicely Board Member Jessica L. Copeland coordi- coordinated by the Co-Chairs, working diligently nated a September 26th CLE Program directed with the panel to satisfy the needs of the attendees. to Intellectual Property Considerations for Soft- On October 17th, the Corporate Committee ware and Mobile Apps at Hodgson Russ LLP’s under Co-Chair Frank Sedlarcik conducted an office in New York City. Panelists were Jeanine in-house counsel mixer with interaction between Ray-Yarletts of IBM Corporation and Al Cutaia NYIPLA corporate members and prospective and Rob Fluskey from Hodgson Russ LLP. A members about the benefits of NYIPLA mem- significant turnout of attendees was present for bership and possible improvements in program- this excellent program. ming to satisfy specific needs. Feedback on the On October 9, 2013, we held the first Presi- programming was positive, and there is definite dents’ Forum. The topic was “What to do about interest in repeating the event. NPEs: Do We Risk Throwing The Baby Out On October 29th the Young Lawyers Com- With The Bath Water?” The goal was to promote mittee hosted a program entitled, “Life as a Young an in-depth, high-level discussion among leaders IP Associate - Managing the Non-Legal Aspects in the field. We were fortunate to have Honor- of Your Practice,” at Crowell & Moring LLP, able Paul R. Michel, Retired Chief Judge for the which targeted another segment of the profession. Court of Appeals for the Federal Circuit; Hugh Hoffmann & Baron, LLP hosted a continuing legal Hansen, Professor of IP Law at Fordham Uni- education program on November 7th entitled, versity School of Law; Alexander I. Poltorak, “Understanding Recent Changes in Patent Law Chairman and CEO of General Patent Corpo- and Their Effect on Litigation,” on Long Island ration; William H. Sorrell, Attorney General of to continue our efforts to geographically expand Vermont; and Marian Underweiser, Counsel, IP NYIPLA activities. Law Strategy & Policy of IBM, as discussion Clearly the CLE programs were diverse, PRESIDENT’S CORNER leaders. NYIPLA Past Presidents interesting, and well received. In the Marylee Jenkins and Melvin Gar- coming months, we look forward ner facilitated a town-hall style to a similar success in providing discussion that was spirited and informational and educational informative. Many thanks to Doro- services to the intellectual property thy Auth, Annemarie Hassett, and law profession. Matt McFarlane, who spearheaded Meanwhile, plans for the winter the event supported by a number of and spring events are well under other NYIPLA past presidents. way. In particular, with regard to the The Association participated 2014 NYIPLA Judges Dinner, we are in an event, also on October 9th, pleased to report that Judge Gregory called “Meet the Bar Associa- M. Sleet, Chief Judge of the United tions.” Young Lawyers Committee States District Court for the District member Gary Yen of Kenyon & of Delaware, has agreed to accept the Kenyon LLP and a staff member 2014 NYIPLA Outstanding Public from the NYIPLA Executive Office Service Award. Judge Sleet’s public cont. on page 3 N Y I P L A Page 2 www.NYIPL A.org cont. from page 2 - President’s Corner service record is second to none, and, as a native New A further article of interest being published is entitled, Yorker, he is a friend and supporter of the NYIPLA. “The Patent Pilot Program: Reassignment Rates and the Finally, I would like to comment on some of the Effect of Local Patent Rules.” This article by Ron Vogel excellent components of the present Bulletin, which I discusses the Patent Pilot Program, the variation in the urge members and recipients of this publication to peruse. reassignment rates and the absence of a statistically sig- For instance, we are publishing the Honorable William C. nificant correlation between the adoption of local patent Conner Writing Competition First Place Winner’s article rules and an increase in a district’s caseload. Also included by David Kurlander, a third-year
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