Social Distancing and Quarantine Shut Down Patent Cases
The Effect on Hatch-Waxman Act Stays as Coronavirus Concerns Create Court Delays
As more and more of the American population becomes subject to mandated quarantines and curfews, the new orders have had an unforeseen effect on patent cases involving generic and patented prescription drugs. The Hatch-Waxman Act entitles certain drug patent owners a 30-month stay in which the FDA won’t grant final approval of a generic drug after a lawsuit if filed.
Patent Cases Affected as Courts Shut Down Due to Coronavirus Concerns
Currently, courts all around the United States have been shut down due to restrictions on travel and social gatherings. As a result, many cases struggling to continue have required attorneys to collect documents and depose witnesses remotely. While remote conferencing has been able to fill some of the void, many attorneys have complained that the restrictions prompted by the global pandemic have made meeting federal court deadlines difficult if not next to impossible.
In addition to difficulties related to interstate travel, the District of Delaware, currently the busiest district for patent cases, was specifically shut down after an attorney appearing there was flagged as testing positive for the coronavirus. While courts are allowed to conduct hearings and bench trials in the alternative, many courts are reluctant to substitute such proceedings despite having clear discretion to do so.
Court Docket Delays and Hatch-Waxman Act 30-Month Stay
The Hatch-Waxman Act, which triggers a thirty-month stay on federal approval of generic drugs, has put attorneys up against a particularly difficult deadline to meet because court dockets and schedules are so delayed. The Hatch-Waxman Act has historically not posed a problem to the concerned parties as judges generally create patent trial schedules that fit comfortably within that time frame.
But as there has been no word from the federal government regarding whether they will automatically extend the patent stays, many prescription drug companies are worried that the expiration of the thirty-month stays granted by the Hatchman-Waxman Act will open the door to generic product substitutes to be approved by the Food and Drug Administration before the patent lawsuits can even be heard in court.
Will Government Intervene to Extend Hatch-Waxman Stays Due to Coronavirus Pandemic?
As prescription drug companies have deep pockets and clearly vested interest in not allowing generic substitutes to be approved by the U.S. Food and Drug Administration, many experts in the field expect that these companies will act to either have the Hatch-Waxman stays extended or alternatively lobby for the delay of the U.S. Food and Drug Administration’s approval of generic drugs.
Unfortunately, under the current framework, there is no judicial power related to global pandemics that would allow for judges to grant such extensions. Instead, courts can only extend the stay on regulatory approval if it is obvious that one of the litigating parties is not cooperating in the progression of the litigation at hand. As such, because the delay is being caused by a global pandemic impacting both parties equally, the courts do not have the proper judicial power to grant such extensions.
Legal Considerations for Parties Involved in Hatch-Waxman Act Stay
In the meantime, with the absence of federal oversight, litigating parties can still pursue alternative solutions. For example, the litigating parties may privately agree to not conduct or seek further action in the lawsuit until the legal landscape returns to normal. Because either party could be found to be liable for patent infringement once the courts return to their regular schedules, despite the delays, both parties have incentive to not rely on the expiration of the stay as a signal for the generic substitute to launch.
Overall, despite whatever the litigating parties decide amongst themselves, experts in the field stress that counsel for both sides should begin considering alternatives now.
Key Takeaways on Coronavirus Pandemic Effects on Hatch-Waxman Act Patent Cases
The global pandemic of coronavirus has had unforeseen effects on patent drug lawsuits. As courts have closed down due to the coronavirus, litigation involving generic and patented prescription drugs face new challenges that include:
the potential expiration of Hatch-Waxman stays;
the inability to conduct depositions and document collection on site;
the inability to argue the lawsuit in court; and
the potential approval of generic drug substitutes before the related patent infringement case is heard.
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