PATENT INFRINGEMENT RULES MAY HELP IMPORTATION OPPONENTS

In the fight against pharmaceutical importation, drugmakers might want to consider filing lawsuits on the grounds the practice infringes their patents, an intellectual property (IP) attorney said, noting firms have yet to take this legal approach.

Under the U.S. patent statute, selling or importing an American-made product into the U.S. that was initially sold overseas constitutes infringement, according to Kenneth Herman, a partner with the Fish & Neave IP Group of Ropes & Gray.

A number of players could be vulnerable to legal action under this statute, Herman told a session at the Biotechnology Industry Organization's annual conference in Philadelphia. These include firms both directly and indirectly involved in the importation of the infringing products. "U.S. law prevents not just direct infringement but contributory infringement and inducement to infringe," Herman said. "So the middlemen can be also sued for infringement."

Other parties that could be in the legal cross-hairs for patent infringement include state and local government groups. While federal law prevents firms from suing states directly, state officials that promote or operate importation programs may be sued for injunctive relief, he said. "If the state official is encouraging an illegal act -- patent infringement -- you could bring an action against the state official," Herman said, adding not all state agencies are immune from lawsuits, and city and local governments are not protected.

Drug firms considering this legal approach should be aware there are exceptions to the U.S. patent statutes that could be exploited by Rx importers, Herman noted. Exceptions include the concept of "patent exhaustion," which occurs when a firm sells a product to a company within the U.S. At that point, the purchaser can resell the product in the U.S. free of patent rights, he explained.

Meanwhile, a number of Rx importation bills under consideration in Congress would change the patent statutes in fundamental ways, Herman said. This includes legislation that would create patent exhaustion in the U.S. for a sale that took place anywhere in the world. If this provision passes, it would give rise to litigation, he said, including on grounds the sale violated the U.S. Constitution because it was a taking of property without due process.