An InHouse Perspective

1
An In-House Perspective

• Avoiding Pitfalls in Settling Pharmaceutical
  Patent Disputes
• Hatch-Waxman Litigation
• Patricia Clarke Lukens
• Johnson Johnson

2
Patent Settlements Generally

• Broad range of business terms available
• Accused infringer takes a license
• Exclusive/sole licensee v. Non-exclusive
• Royalty-bearing v. royalty-free
• Market entry on a date certain or uninterrupted
  market presence
• Other consideration cross-license, other
  business dealings
• Admissions of infringement and/or validity
• Dismissal with or without prejudice
• Driven by myriad business considerations and case
  developments

3
Hatch-Waxman Settlements

• FTC and FDA have a significant post-settlement
  role, affecting the negotiations although not
  present at the table
• Legal landscape particularly unsettled
• Few cases, few bright line rules to follow

4
Hatch-Waxman Settlements

• Safe Harbor of apportioning remaining patent
  life
• How realistic for a patent with 10 or 15 years to
  expiration?
• Payment of royalty

5
Hatch-Waxman Settlements

• Something of Value means what exactly?
• Reverse cash payment is the obvious case
• How to bridge the settlement gap if transferring
  something of value is prohibited?

6
Hatch-Waxman Settlements

• Form of Dismissal of Suit
• For multiple ANDA suits, admission of validity
  and infringement
• Uncertainty surrounding first filers exclusivity
• Uncertainty surrounding any filers approval
  status
• Part of the court order, or in a separate
  settlement agreement

7
Protecting the Patentees Rights

• Obtain a written legal opinion that patent is
  valid and enforceable and the litigation to
  enforce it (and list it in the Orange Book) was
  reasonable
• Walk-away provisions in settlement agreement
• Dismissal/withdrawal of lawsuit without prejudice
  
• Agreement to abandon settlement and reinstate
  lawsuit upon FTC action
• Effect on generic companys approval or
  exclusivity
• Cooperation provisions to address FTC questions

8
Settlement Drivers

• Complex business decision not a mere proxy for
  merits of the patent suit
• Readiness of next generation products
• Readiness on authorized generic
• Avoidance of litigation costs