Foley Hoag LLP

SUMMARY

In a decision that will have far reaching implications for drug and medical device development, the Court of Appeals for the Federal Circuit held yesterday that the Hatch-Waxman safe harbor of 35 U.S.C. § 271(e)(1) is inapplicable to patented research tools that are not themselves subject to the FDA review process. While the decision is good news for the providers of research tools such as drug screening assays, it will make drug and medical device development in the United States costlier and more risky.

SUMMARY

In recent months, the Massachusetts Legislature has been considering legislation to limit or ban certain marketing activities of pharmaceutical and medical device companies. On the last day of the legislative session, July 31, the House and Senate voted to accept the conference committee report concerning health care cost containment legislation, (Senate 2863.) This legislation includes the provision regulating gifts by pharmaceutical and medical device manufacturers to physicians.

SUMMARY

Global Bio-Chem Technology Group Company Limited (GBT), a Chinese biotechnology company, has prevailed in a patent litigation brought by Ajinomoto Co., Inc in the International Trade Commission.

A Foley Hoag patent litigation team, including Claire Laporte, DeAnn Smith, and Jeremy Younkin, invalidated the asserted claims of two US patents. The Administrative Law Judge of the International Trade Commission also found both patents unenforceable because Ajinomoto committed inequitable conduct.

The decision represents an important victory for the Chinese biotechnology industry. Li Weigang, Assistant General Manager of GBT, said, "We are pleased that the Administrative Law Judge has determined there was no violation of Section 337. This ruling maintains continued competition in the marketplace, which will benefit American consumers during this time of rising food prices."

The Washington, DC firm Adduci, Mastriani & Schaumberg LLP are co-counsel with Foley Hoag LLP. 

The full Press Release is available here.

SUMMARY

Understanding Medicare coverage and payment policy is critical to the successful launch of any new life sciences technology. Foley Hoag’s Medicare Coverage & Payment Practice provides regulatory and legislative advice to a broad array of leading life sciences companies, including:

• global pharmaceutical and biotechnology firms,
• trade associations,
• venture capital and investment funds,
• patient associations and advocacy groups, and
• early-stage companies.

SUMMARY

Foley Hoag’s Food and Drug Practice provides regulatory and legislative advice to leading biotechnology, pharmaceutical, medical device, and health care companies regulated by the Food and Drug Administration (FDA). Lawyers at Foley Hoag understand the critical regulations and policies affecting product development schedules, regulatory compliance, and timely product approvals. In representing clients, our lawyers work with senior agency managers, congressional staff, and Members of Congress to shape agency interpretations, clarify regulatory guidance, challenge adverse decisions, develop effective compliance plans, and enact legislation into law.

SUMMARY

Included in this Issue:

• A Market Perspective: Foster Hinshaw on 'B' Rounds - Opportunity in 'Gloom and Doom'

  In 2002, during the valley of the tech bubble burst, one of the most respected VC’s in the tech community said to me, "It’s all about survival, survival, survival – I don’t know if we will ever recover". Notwithstanding, the resiliency of our tech community proved its intrinsic value to the economy and there were some nice IPO’s and exits from companies that were incubating during the bubble years (including FAST, EqualLogic and Netezza). Today the news is similar: (a) zero IPOs in Q2 2008; (b) the financial sector is in a major, albeit predictably cyclical, reset; and worse (c) another 1970’s style energy crisis is on us. (continues...)

• Selected New England "Series B" and Later Round Transactions
• Terms of New England Series B and Later Rounds
• The Activity Level Summary

SUMMARY

In recent months, the Massachusetts Legislature has been considering legislation to limit or ban certain marketing activities of pharmaceutical and medical device companies. In April 2008, the Massachusetts Senate approved a proposal that would significantly restrict pharmaceutical marketing to physicians and health care facilities. This proposal was subsequently revised by the Massachusetts House on July 16, 2008. The progress and outcome of this marketing legislation is of significant importance to anyone involved in the Massachusetts biotechnology, health care, and drug and device sectors.

SUMMARY

Three recent Massachusetts Supreme Judicial Court (“SJC”) decisions have clarified two areas of uncertainty relative to the Massachusetts Comprehensive Permit Statute, Mass. Gen. Laws Chapter 40B. The SJC has provided much-needed guidance as to (1) when municipalities can challenge Subsidized Housing Inventory (SHI) calculations, and (2) when developers are entitled to challenge comprehensive permit conditions. These decisions are of importance to anyone involved in the development, financing, or permitting of affordable housing projects in Massachusetts.

In two related cases decided on May 27, 2008, the SJC ruled that a municipality must exhaust its administrative remedies before bringing a court action contesting the Department of Housing and Community Development (DHCD)’s calculation of the municipality’s SHI. In the third case, decided on June 10, 2008, the SJC ruled that developers cannot successfully challenge conditions attached by local zoning boards to comprehensive permits unless they can demonstrate that those conditions render the proposed project uneconomic.

SUMMARY

Contents

1. Exposure to Liability in the Hiring Process

2. Failure to Adequately Document Terms and Conditions of Employment

3. Misclassification Issues
    - Employee or Independent Contractor
    - Exempt or Non-exempt

4. Failure to Comply with Wage Payment Laws

5. Inadequate Protection of Intellectual Property

SUMMARY

According to a study by PricewaterhouseCoopers and the National Venture Capital Association, venture capital (VC) investing hit a five-year high in 2006, with $25.5 billion invested. Notably, the Life Sciences sector, which includes biotechnology and medical devices, accounted for 28% of VC money invested, the largest investment sector in 2006.

As Life Sciences venture capital investing has risen, the biotechnology industry has become increasingly dependent on such funding. This is particularly true for start-up companies that cannot rely on revenue from marketed biologics to fund their research and development pipeline. To cover the nearly $1 billion capital investment required to bring a biologic drug to market (from discovery through clinical trials and FDA approval), early-stage companies rely on VC investing. Investing in emerging companies, however, is risky for a venture capitalist: only 1 in 10 drugs discovered actually makes it to market, and despite the more than $50 billion spent on biotech drugs in 2006, the great majority of early-stage companies never reach the point of net profitability.

SUMMARY

Legislative and regulatory matters are critically important for life sciences companies. The lawyers in Foley Hoag’s Government Strategies Practice have extensive experience in the development and implementation of legislation and regulations affecting the biotechnology, pharmaceutical, medical device, and health care provider industries. The regulatory environment can pose significant burdens to life sciences companies, but intelligent strategic advocacy in Congress and before federal regulatory agencies can also open up new markets and opportunities for innovative products. Lawyers at Foley Hoag work directly with Congressional staff and federal agencies, including the Food and Drug Administration (FDA) and the Centers for Medicare & Medicaid Services (CMS), on a variety of matters relating to the life sciences.

Focuses include:

• Biotechnology, Pharmaceuticals and Medical Devices
• Legislative
• Coverage and Reimbursement
• Food and Drug
• Bioterrorism and Pandemic Preparedness

SUMMARY

Preface:

Patenting generally offers a superior means for legally protecting most inventions, particularly since:

• copyright, when available, does not provide a broad scope of protection; and
• the ability to effectively protect an invention as a trade secret is in constant jeopardy, due to publication or oral disclosure.

Unfortunately, the patenting process can be complicated, time-intensive and costly. However, costs can often be minimized and opportunities for establishing value in products and technology maximized if scientists and business professionals with an understanding of the patenting process are actively involved throughout.

This publication was prepared to provide an overview of patenting, particularly as it pertains to innovative technologies such as biotechnology and information technology.

SUMMARY

On June 16, 2008, Massachusetts Governor Deval Patrick signed into law legislation (.pdf) that provides a total of $1 billion over the next ten years to support the development of the life sciences industry in Massachusetts. The legislation, commonly known as the Life Sciences Initiative (LSI), is designed to stimulate research, development, manufacturing, and commercialization in the life sciences sector and, ultimately, to increase employment and associated tax revenues. To achieve these goals, the LSI significantly expands the activities of the recently created Massachusetts Life Sciences Center (LSC) by dramatically increasing the funding available for capital expenditures, grant programs and other incentives. The LSI also establishes an aggressive set of tax incentives that include a broad array of refundable and other types of tax credits. 

SUMMARY

Established in December 1980 by the partners of law firm Foley Hoag, The Foley Hoag Foundation is a private foundation that seeks to combat racism, especially among youth, in the City of Boston. The Foundation awards grants to organizations working to improve the racial climate in Boston by addressing issues of diversity and racism. Grantee organizations achieve their goals through a variety of means, including arts and cultural activities, youth leadership and recreational programs. Other grantees provide advocacy assistance, enabling individuals to confront racism through legal or political action. Some grantee organizations work to prepare young children to live in the reality of a multicultural society, others engage teens, and a few target a primarily adult constituency.

The Foley Hoag Foundation was the first—and remains the only— foundation to focus exclusively on the improvement of race relations in Boston. The trustees are fortunate to have the unqualified endorsement of Foley Hoag, which has provided an enormous amount of financial, administrative and moral support.

SUMMARY

Included in this Issue:

• A Market Perspective: Axel Bichara on the State of the Technology Industry

  Technology innovation has been accelerating during the last centuries and will continue to do so. Innovation helps drive entrepreneurship and new business opportunities. That’s good news for entrepreneurs and early-stage investors in the US where the state of innovation andentrepreneurship continue to be exceptional. There are plenty of excellent startup opportunities. The funding environment for start-ups will remain strong, with an abundance of capital from both VC and private investors. (continues...)

• New England First Round Transactions

SUMMARY

Until now, most small tax-exempt organizations, defined as those with gross receipts of $25,000 or less per year, have not been required to file an annual information return with the Internal Revenue Service (the “IRS”). 

However, small tax-exempt organizations must now file an annual electronic information return – the Form 990-N, also known as the e-Postcard. This requirement covers all tax periods beginning after December 31, 2006. The e-Postcard must be filed no later than the 15th day of the 5th month following the end of the organization’s tax year. For example, an organization whose tax year ends December 31 must submit the e-Postcard by the following May 15.

SUMMARY

The Prescription Drug Marketing Act was enacted in 1988 to establish, among other things, a system for tracking drugs through the manufacturing and marketing processes. implementing regulations regarding these pedigree provisions for prescription drugs have been delayed for years. The Food and Drug Administration has issued it’s own stay on implementation, and a recent lawsuit by prescription drug distributors over the scope of the pedigree requirements has contributed to the delay as well.

The resulting lack of clear of federal criteria for prescription drug pedigrees has created an opportunity for states to pass their own pedigree laws, leading to a patchwork of diverse, often conflicting, state standards. Prescription drug distributors find it increasingly difficult to comply with the multitude of state laws, thus the time is ripe for federal action to create uniform pedigree requirements.

SUMMARY

While marking products to indicate that they are patented is necessary to maximize your patent rights, a recent case highlights the importance of marking the products accurately.

SUMMARY

"Crossing the Chasm: A New Health System for the 21st Century" has been cited thousands of times in the effort to bring transformational change to the American healthcare system. Published by the Institute of Medicine in 2001, the report describes a “chasm” between the circumstances of today and the possibilities of the future.

SUMMARY

Health Canada released a draft guidance this week which would allow approval of “subsequent entry biologics” (SEB) based on an abbreviated complement of clinical data, provided the SEB is shown to be “similar” to a reference, approved biologic product.[1] While the U.S. continues to heatedly debate legislation which would create a pathway for abbreviated approval of biosimilars, or follow-on biologics, by the U.S. Food and Drug Administration (FDA), Canada is advancing its implementation of such a pathway with the release of the SEB draft guidance. The European Union has permitted approval of biosimilar products since 2005.

Like FDA guidance documents in the U.S., Health Canada guidance documents do not have the force of law in Canada. However, the draft guidance indicates that the Canadian Food and Drug Regulations will be amended to provide “a comprehensive legal basis” for the regulation of SEBs and that in the interim, the draft guidance will provide a flexible SEB regulatory framework. The Canadian Minister of Health also plans to publish additional guidance documents that will further elaborate information and data requirements for specific classes of SEBs. Public comments on the SEB draft guidance are due April 16.