Interactions between Inter Partes Review and Hatch-Waxman Litigations

Abstract

Generic drug development in the United States is governed by the Hatch-Waxman Act (HWA), which sets forth the “patent linkage” system requiring resolution of patent disputes before a generic drug can be approved for marketing. The emergence of Inter Partes Review (IPR), an effective administrative proceeding to weed out low-quality patents, is believed by some to have endangered the HWA balance between brand-name and generic drug makers. Here we describe an empirical analysis profiling the influences of IPR on patent linkage. Our results indicate that fewer than 10% of the HWA-litigated patents are subject to parallel IPR challenges. Importantly, IPR yields a slightly higher claim invalidation rate but a much lower settlement rate than court litigations, which may not benefit generic drug makers. Furthermore, IPR is employed by non-first generic drug makers, presumably to break into the market occupied by brand-name and the first generic makers. Overall, IPR seems not to play a dominant role, but to serve strategic functions in HWA disputes.