Joshua Harris is a Senior Vice President with responsibility for assessing and underwriting legal risk, focusing on patent and intellectual property matters. Prior to joining Burford, Mr. Harris was a litigator in Loeb & Loeb’s New York office, where he maintained a patent practice with a particular focus on pharmaceutical patent litigation and counseling.
What do you see as the most important trends happening now in pharma and biotech patent litigation?
Biotech and pharma technologies are often tremendously complex—think about antibodies, mRNA-based vaccines, methods for treating some of the most deleterious diseases. But even if the scientific language used to describe and claim inventions is complex, that language must still be accurate and precise in a patent. When defendants run up against truly ground-breaking pharma technology with no adequately invalidating prior art, defendants routinely look inwards at the patent itself to lodge validity challenges based on claim scope (that is, challenges under 35 USC 112), whether the patentee has fully and definitively described what is being claimed or enabled those of skill to make and use the invention.
These challenges strike at the core of the patent bargain: A time limited monopoly granted in exchange for full public disclosure of an invention. We’re seeing more of these 112 challenges having massive impact, and, when successful, wiping out billion-dollar jury verdicts (Juno v. Kite) and clearing the path for generic entry on blockbuster products (Biogen v. Mylan, Novartis v. HEC). And importantly, the Supreme Court is taking a keen interest here – in the past decade, of the few patent cases that have gotten to the Supreme Court (and even fewer pharma-related cases), a whopping three matters dealt with section 112: Nautilus v. Biosig (definiteness), Teva v. Sandoz (appellate standard for review of claim construction), and Amgen v. Sanofi (enablement). The courts seem to be carefully scrutinizing claims in the life science sectors to ensure patent owners are not claiming more than they are entitled to claim (Juno, Amgen) or claiming something they did not actually invent (Biogen, Novartis), especially when therapies relate to truly innovative improvements.
Is there a trend of pharma companies pre-emptively challenging patent validity before investing in R&D for a new product and getting it approved? If so, why?
Just over a decade old now, The America Invents Act ushered in new Patent Office challenges such as IPRs and PGRs, which allowed third parties such as competitors to challenge patents well before any potentially infringing commercial product is brought to market, or possibly even contemplated. Parties who would otherwise lack standing to seek declaratory judgments in district court can seek certainty in the Patent Office on a relatively fast timeline for a reasonable price. We’re seeing potential and prospective generic manufacturers and biosimilar applicants bring validity challenges in the Patent Office years before filing any application for product approval with the FDA – and in some cases even before meaningfully plowing resources into R&D. These manufacturers may not be willing to risk the high cost of research and development producing a copycat version, or near copy, or even improved version of already approved therapies if commercial activity will be delayed or stymied by future expensive and time-consuming patent litigation. Fast, early challenges to potentially blocking patents can clear the path of a manufacturer, adding certainty to the future value of R&D – successful early patent challenges can support ongoing or increased spend on R&D, and failed early patent challenges may dictate strategic changes to product characteristics and even abandonment of expensive, time consuming, and risky R&D.
In contrast, sometimes the furious rate of innovation outpaces the patent landscape. In the fascinating case of CRISPR, the Nobel Prize-winning gene editing technology, multiple companies with various competing patent rights have already seen hundreds of millions of dollars of investment even in the face of an uncertain patent landscape (involving interference proceedings) and yet not one single therapy has been approved by FDA. There’s a tremendous amount at stake for patent owners and product developers, both in terms of presently raising capital for research as well as generating approved therapies and resultant future revenues. This story continues to be written and so it remains to be seen whether licensing or litigation looms large on the horizon, and whether any dollars will exchange hands on agreeable terms or only after expensive, protracted litigation.
Is BigPharma changing how it thinks about legal finance? If so, how so?
BigPharma is thoroughly familiar with taking risk and reaping titanic rewards. Drug development is a capital-intensive and time-intensive endeavor and yet around 90% of drugs end up failing clinical trials. Still, sales and profits for the few clinically successful drugs can easily be colossal. Apart from top-selling drugs and top-grossing movies, where else does one use the term “blockbuster” with any meaningful frequency? But BigPharma’s access to funds from blockbuster drug sales and ability to pay for either elective or necessary patent litigation doesn’t automatically mean there’s a desire to do so. Despite a reputation for innovation in the therapeutic space, many BigPharma players are unimaginative when it comes to business operations and sluggish to implement even helpful changes.
As more in house patent counsel explore and more CFOs come to understand the benefits of legal finance, we’ve observed BigPharma increasingly looking to Burford and others in the legal finance space to fund expensive and risky patent litigations. Some of the largest patent verdicts in recent memory have been in pharma cases and those billion-dollar verdicts were all zeroed out after protracted litigation. BigPharma enjoys having its cake and eating it too and legal finance helps unlock the value of key patent assets while minimizing or eliminating significant legal spend. That certainty is music to BigPharma’s legal and finance teams. After having conversations with some of the very same people at pharmaceutical companies, their perceptions have changed. Before the pandemic, they would say “we know what Burford does and we’re all set, thanks” and now they say, “we know what Burford does and we’d like to put it to work for us, thanks”.
What are some best practices for securing legal finance? What's particular to the pharma and biotech patent sectors?
Candor, clarity and comprehensiveness are key considerations. By the time a legal finance provider enters the picture, the funder is at an informational disadvantage and often working furiously to get up to speed. The finance provider hasn’t lived through patent prosecution like the patent owner, and it hasn’t developed theories of the case like litigation counsel. Anything that diminishes a funder’s understanding of a case will generally be perceived as risk and treated accordingly. When patent owners and counsel are candid about the strengths and weaknesses in a case, it allows us to form an unblinking portrait of the matter. The more information and bases covered at the beginning of diligence, the better – not just about classic subjects like patent validity and infringement and damages, but also detail about the invention and inventors, the infringers and competitive and therapeutic landscape and the history between the patent owner and infringer.
Commercial activity in the pharma and biotech sectors is heavily regulated, which presents patent owners and often patent litigators with unique situations compared to other industries. FDA approval of a product may limit an infringer’s ability or desire to revise a product to a non-infringing product. This may bode well for future infringement, but only if that product isn’t replaced entirely by some new improved therapy or alternative. Whether technically skilled patent attorney or not, the technology here can be complex, so describing it in a clear and precise manner helps legal finance providers better understand the issues involved. Inevitably, questions will arise over the course of diligence and generally the questions we raise are geared to help elicit thorough answers that allow us to better understand the risks and opportunities in the case.
5… top pharma or biotech inventions or discoveries that changed the world we live in?
The world is in a state of perpetual change and certain ideas and innovations have the power to profoundly affect vast numbers of lives. The great thing about inventions and discoveries is that they rarely happen in a vacuum, but instead build upon the knowledge and efforts that came before them. In the spirit of a “top five” list I’ve limited the data to five compelling points, though in the spirit of James Burke’s Connections these points weave a bit through time and space.
- The discovery of insulin, earning Frederick Banting and John Macleod a Nobel Prize in 1923, the determination of insulin’s composition and amino acid sequence, earning Frederick Sanger two Nobel Prizes, in 1958 and 1980; and insulin’s commercial scale manufacture by e-coli bacterium for use as a human therapy (thanks to Genentech, insulin became the first drug produced through recombinant DNA technology in 1982).
- The creation of the polio vaccine, which badass inventor Jonas Salk tested on himself; and creation of mRNA-based Covid vaccines, which gave our own bodies’ cells the cheat-code for mounting an effective immune response.
- Genetically modified crops (more than 95% of all soybeans and cotton planted in the US in 2022 were genetically engineered) and the gene-editing tool CRISPR that will generate vast opportunities in the coming years (earning Emmanuelle Charpentier and Jennifer Doudna a Nobel Prize in 2020).
- The development of the birth control pill for women, even if mainly intended for use in only a portion of people in society, access to oral contraception – and, lamentably, lack of access – has transformed society, and someday a birth control pill for men too, which will change the world again.
- Early humankind’s use of yeast and fermentation to create alcoholic beverages, and the discovery by Louis Pasteur, the eponymous hero of pasteurization, that killing harmful pathogens extends shelf life of foodstuffs, may very well be two of the most radical world-changing biotech inventions.