Scrub-a-Dub-Dub: FTC is Cleansing the Orange Book of Device Patents

June 14, 2024By Sara W. Koblitz

As we have noted for the last year or so, the FTC has been on a mission to clean up the Orange Book by removing what it deems to be “improper” patents.  The FTC has put out policy statements, challenged patent listings, tapped Congress, appeared on talk shows, and filed amicus briefs all in the span of the last 8 months.  It seems like all that work is paying off.  Though some drug companies have been reluctant to delist certain patents from the Orange Book, the District Court of New Jersey just ordered Teva to delist 5 of its patents that it deemed improperly listed.  And on X (R.I.P. Twitter), the FTC is taking credit for that.

As we explained back in March, Teva had initiated Hatch-Waxman pre-launch patent litigation against Amneal for infringement of 5 Orange Book-listed patents reading on the device constituent (a metered dose inhaler) of Teva’s combination product ProAir HFA.  Amneal, in turn, filed a counterclaim against Teva seeking a declaratory judgment of non-infringement and invalidity of all 5 patents, removal of those patents from the Orange Book, and relief from allegedly anticompetitive conduct in violation of state and federal antitrust laws.  FTC, deep in its foray into the Orange Book, filed an Amicus Brief in the case arguing that the patents do not claim any FDA-approved drug.  In the brief, FTC took the position that “In the FTC’s view, device patents that do not mention any drug in their claims do not meet the statutory criteria for Orange Book listing, and a device patent that is improperly listed in the Orange Book must be delisted” (emphasis added).

On June 10, 2024, the District Court of New Jersey issued its Opinion in the case, finding that Teva’s patents were improperly listed.  First, the Court dealt with the antitrust issue that Teva raised in a Motion to Dismiss.  Teva had argued that the alleged conduct—improper Orange Book listing and sham litigation—do not support an antitrust claim and consequently asked the Court to dismiss Amneal’s antitrust counterclaim.  Citing to a 2004 Supreme Court case, Verizon Commc’ns., Inc. v. Law Offs. of Trinko, LLP, 540 U.S. 398 (2004), Teva argued that Amneal has no cause of action under antitrust law because the Hatch-Waxman Amendments impose a new statutory duty on a company to cooperate with competitors and established a remedy for breach of that obligation.  The Court disagreed, stating that “Teva has not demonstrated that the Orange Book listing provisions at issue comprise a regulatory structure designed to deter and remedy anticompetitive harm.”  Not finding convincing any of Teva’s other arguments to dismiss the antitrust claims—and finding the FTC brief persuasive—the Court denied Teva’s Motion to Dismiss the antitrust claims.

Now, to the part we’ve all been waiting for: the Court determined that Teva’s patents covering only the inhaler component of ProAir HFA “are not properly listed in the Orange Book as a matter of law” (emphasis added).  More specifically, the Court concluded that “the Inhaler Patents do not claim the drug for which the applicant submitted the application” (emphasis added).  Though the Court acknowledged that the definition of the term “drug” is broad enough to include the ProAir HFA inhaler, the Court found that “this broad statutory definition of drug does not suffice to establish the Inhaler Patents claim the drug for which Teva submitted its application . . . .”  (emphasis added).  In other words, because FDA identified the drug “for which the applicant submitted the NDA” as “albuterol sulfate HFA Inhalation Aerosol,” albuterol sulfate must be claimed in the patent to be listable.  The Court supported this position by relying on the First Circuit’s Opinion in a case involving the listing of a device component patent (the patent claimed only the drive mechanism of an injector pen).

The Court addressed Teva’s valid argument that the Inhaler Patents are drug product patents and thus listable.  While the relevant regulation defines “drug product” as the “finished dosage form,” which theoretically includes the delivery device, the Court again falls back on the wording in 21 C.F.R. § 314.53(b)(1) that drug product patents may be listed if they claim the “drug product . . . that is described in the pending or approved NDA” (emphasis added).  According to the Court, the Inhaler Patents do not claim the finished dosage form that is the subject of the approved ProAir HFA NDA, which presumably the Court is interpreting to require the inclusion of the drug substance.  Given that the term “finished dosage form” is defined as “tablet, capsule, or solution, that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients,” and FDA has stated that dosage forms include prefilled drug delivery systems like ProAir HFA, one could argue that an inhaler-specific patent covers part of the finished dosage form that is integral to the product and thus should be listed.  But FTC has been fighting hard against that position and likely will continue to do so.  Again, the FTC has been clear that only patents that actually include the drug substance should be listed.

Teva has noticed its appeal of the delisting decision.  We’re confident that FTC will file another amicus brief at the appellate court, which doesn’t bode well for the future of listing device patents in the Orange Book, as the District Court makes clear that the FTC’s position is compelling. We’re looking forward to seeing what the Third Circuit has to say.

UPDATE: On Thursday, June 13th, U.S. District Judge Stanley Chesler ordered a 30-day stay of his earlier ruling, reportedly saying that he wanted the matter to reach the appellate court in the most orderly way possible.

Categories: Hatch-Waxman