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New Jersey business losses effort to invalidate patent

When businesses take the time, energy and risk of developing a new medical device, medication or other technology, the government rewards them. These rewards come in the form of intellectual property rights. Patents, in particular, give their owners the exclusive right to profit from any invention that is protected by a patent. However, New Jersey businesses should understand that patents can be difficult to maintain and may require vigorous protection from competitors.

Under certain circumstances, it may be possible for a New Jersey business to question the validity of a patent. By doing this, that business may be able to use the technology without the permission of the patent holder. In a recent court case, New Jersey based drug manufacturer Actavis Inc. was stopped from selling a generic version of a drug by a federal court. In the case, the company challenged the validity of a patent — held by Shire PIc — on the ulcerative colitis drug Lialda which had $400 million in sales last year.

According to Actavis, Shire’s 2004 patent did not sufficiently describe drug — specifically its controlled-release component. The court ultimately denied Actavis’s claims that the patent was defective after a five day trial. Therefore, the court blocked the company from selling a generic version of Lialda until 2020 when Shire’s patent expires.

This case shows how much can be at stake in an intellectual property suit. In this case, a business was trying to invalidate a patent for its own benefit while one company was trying to protect its $400 million patent. In either case, a complex legal case must be prepared. If the patent had been successfully challenged, Shire could have lost a lot of money.

Source: Bloomberg, “Rambus, Shire, Hospira, Viacom: Intellectual Property,” Victoria Slind-Flor, May 10, 2013

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