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How to Best Protect Patents on New Synthetic Processes and Intermediates in United States: Understanding “Material Change” exception

Here I present another Practice Pointer series, useful for Indian API manufacturers (or to that matter for any country) who are innovating and patenting new and economical processes and novel intermediates thereof and want to capitalize on US Market. The Article will discuss the infringement under the United States Process Patent Legislation and judicial decisions with particular focus on the “material change” clause post which brief practice pointer would be discussed to best protect and enforce the US process patents.

What is “Material Change” exception?

§ 271(g) of the Process Patent Amendment Act (PPAA) of United States says,

“Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale or use of the product occurs during the term of such process patent…….

A product which is made by a patented process will, for purposes of this title, not be considered to be so made after –

(1) it is materially changed by subsequent processes; or

(2) it becomes a trivial and nonessential component of another product”.

Thus § 271(g) provides that it is an infringement of a process patent if a product made outside of United States by using the patented process is imported into the United States unless the product made by the patented process is “materially changed” by subsequent processes or it becomes a trivial and nonessential component of another product.

Legislative History of the statute

Now, with respect to § 271(g), whether a change is ‘material’ is a finding of fact based upon the circumstances of the case. For example, there may be a material change to the product in a strictly chemical sense but that change may be immaterial or trivial in the overall process for producing the API product. The legislative history of this statute has provided a two-pronged test wherein:

(1) “If the only way to have arrived at “Y” (the final product) is to have used the patented process at some step, for example, producing “X” as an intermediate, Y is infringing”.

(2) “If there is more than one way to have arrived at “Y”, but the patented process is the only commercially viable way to have done so, Y is infringing”.

“If there are commercially viable non-infringing processes to have arrived at “X”, the connection between the patented process for producing the intermediate “X” and the final product “Y”, is broken, and Y would be a non-infringing product having satisfied both phases of the test.”

“The patented process may be for the process of preparing a DNA molecule comprising a specific genetic sequence…. Even if a different organism was created by this biotech procedure, if it would not have been possible or commercially viable to make the different organism and product expressed therefrom but for the patented process, the [polypeptide] product will be considered to have been made by the patented process.”

US Courts interpretation of the Statue

There are two landmark CAFC Opinions interpreting the “materially changed” defense which are important to discuss here before we present a few of the practice pointers for getting the best patent protection for API processes and intermediates in the US.

One of these cases is Bio-Technology General v. Genentech. Genentech Corporation obtained a US Patent claiming a plasmid coding for its hGH product. An Israeli generic manufacture Bio-Technology General (BTG) used the plasmid outside the US to make the human growth hormone product and then imported the finished product into the US. BTG argued that it did not import the plasmid but a polypeptide (hGH) produced using the plasmid. Relying on the legislative history of the statute as discussed above (last para of the preceding section), the Court concluded that the plasmid was an “essential part” of the process to make the polypeptide and thus infringed a patent on the plasmid.

The second case is Eli Lilly v. American Cyanamid where American Cyanamid made a Cephalosporin Antibiotic, Ceflacor outside of US using the patented process patented vide US 4,160,085 (‘085 Patent) for preparing an intermediate (Compound 6) used in the process of making Ceflacor. The process used to prepare the cefaclor was a nine-step process and the patented process was used in the fifth step which produced an intermediate (Compound 6). In denying Eli Lilly’s request for a preliminary injunction, the court agreed that Eli Lilly’s patented process constituted the fifth step of the process for preparing Cefaclor, but considered the Compound 6 produced in step five of the overall process was “materially changed” by the subsequent process steps. The Federal Circuit first noted that the patented process had been used outside of the US to prepare the Cefaclor. However, since there are commercially viable non-infringing processes to produce Cefaclor the patent in suit was not a “bottleneck”.The Federal Circuit then noted the differences in the Chemical structures of the two Cephem compounds, that is Compound 6 and Ceflacor. The court also pointed out the differences between the biological properties and the uses of the two compounds- the Compound 6 has no antibiotic activity and can be used as an intermediate to prepare a variety of Cephem compounds while the Cefaclor has high antibiotic activity. The Federal Circuit concluded, based on the differences between the compounds, that the cefaclor that was imported into the US was materially changed from the intermediate and thus no infringement would be found.

Practice Pointers

Below can be some of the keys takeaways for the API manufactures for best protection/enforcement of the Patented process and intermediates in the US:

1. Economic Advantage of the patented process over other alternatives if any:

Generally, the APIs can be made by more than one synthetic route. This is an important aspect as the legislative history as well as the courts’ interpretation suggests that the alleged imported product made by using the patented process would infringe if the patented process is the only commercially viable process to make the said product. Proving the “only commercially viable process” and the economic advantage of the process over other processes would become all the more important in case the final product is a generic product as it is likely that there would be a number of synthetic routes would be available. The commercial viability and the economic significance can be proved by a number of factors, including for example, less expensive reagents, requiring less purification of the resulting crude API, or using less toxic solvents, among other factors.

2. Patentability of the process and intermediate including Skillful Claim Drafting

The patentable process should at least synthesize a unique intermediate product which can be proven to be an essential component in synthesizing the final product.

The Patent has to be drafted in such a way as to give the best possible protection through the claims. For example, in Eli Lily case as discussed above, Eli Lily in its ‘085 Patent failed to show the infringement claim against American Cyanamid for using an intermediate for producing Cefaclor; Eli Lily had only a “method of producing an intermediate” claim, not a “method of producing a product from intermediate” claim and “an intermediate compound itself” claim. One never knows what the verdict could be had these claims been included.

The process claim(s) thus should be drafted very skillfully. The claim for a simple synthesis process can be drafted for example:

1. A process for the preparation of “Y”, comprising the steps of:

a. reacting a compound of Formula __-with a compound of Formula ___ in presence of __, to give “X”, and [e.g. a process step preparing an intermediate “X” ]

b. reacting “X”, as obtained in step (a), with a compound of Formula __ in presence of __, to give “Y”. [e.g. a process step preparing a final product “Y” from “X”]

Further, we can include a claim only on the intermediate compound itself. For example, simply as: A compound “X” and/or including a claim for stronger protection which can be like, “A compound “X” for use as an intermediate in the preparation of “Y”. these ways, this claim will give better protection in case someone makes this intermediate by circumventing the claim 1


US Market has been and is one of the most sought after markets for Indian API manufactures. who has been developing novel processes/intermediates for the manufacture of important APIs and patenting in the US? However only patenting is not enough, it is how well the patent is protected and enforced against the infringers to reap out the best benefits from the US market. Thus the understanding the US Process Patent Legislation and the judicial decisions on the “material change” exception is essential.

About the Author:

Meenakshi Khurana, Patent Specialist at Khurana & Khurana and can be reached at: [email protected]

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