CTGT transactions: Beware of ripples in the safe harbor

Research tools, cell lines, and other technologies, many of which are patented, are useful for, but separate from, the product or therapy being developed. When the question of third-party patent rights is raised with respect to such patented technologies, many partners dismiss the concern on the ground that the development of the product or therapy is being conducted in support of a Biologics License Application (BLA) to FDA, and therefore is immune from an infringement lawsuit pursuant to the development safe harbor.

Indeed, in the United States, 35 USC § 271(e)(1) expressly exempts from an infringement suit certain otherwise infringing acts, so long as they are conducted solely for uses reasonably related to the development and submission of information under a Federal law that regulates the manufacture, use, or sale of drugs or biological products.

Similar exemptions exist under the laws of many other jurisdictions. Historically, this safe harbor, also known as the “Bolar exemption,” has been broadly construed in the U.S. However, as recent case law indicates, where a patented research tool – such as a cultured host cell useful in the manufacture of a gene therapy product or a fluorescent protein – is itself not subject to FDA premarket approval, the safe harbor may not apply.

As additional patented research tools become available, developers of CTGT products would be prudent to include any potential development technologies as part of their freedom-to-operate analysis moving forward. And in development collaboration arrangements, companies should ensure that their partners engaged in development work have secured the appropriate licenses for the conduct of such development activities.

Authored by Cullen Taylor and Anishiya Abrol.

This article is the fifth in our 2022 series, “Trends in Cell, Tissue, and Gene Therapies,” which aims to help you stay informed about the broad array of legal and regulatory issues affecting companies operating in the regenerative medicine space. From clinical studies, to obtaining patents, to scaling up manufacturing, our global team will discuss novel issues arising in all parts of the world, including unique deal-making, litigation, and inspections concerns for CTGT companies. Ensure you are subscribed to Hogan Lovells Engage to receive these new insights weekly!