The Uruguay Rounds Agreements Act, which became effective on June 8, 1995, changed the patent term in the United States. Before June 8, 1995, patents typically had 17 years of patent life from the date the patent was issued. Patents granted after the June 8, 1995 date have a 20-year patent life from the date of the first filing of the patent application. However, the effective patent term is frequently less than 20 years because patents are often obtained before products are actually marketed.

Many factors influence the length of the effective patent term, including the requirements in the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act that certain products receive FDA approval before marketing. New human drug products generally must undergo extensive testing in animals and humans to show that the drugs are both safe and effective before FDA will approve the product for marketing. Consequently, in order to stimulate product development and innovation, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984, usually referred to as the Hatch-Waxman Act. This Act extends patent life to compensate patent holders for marketing time lost while developing the product and awaiting government approval. The Hatch-Waxman Act created a program whereby patent holders whose patents claim a human drug product, medical device, food additive or color additive could recoup some of the lost patent time.

The statute was designed to promote generics while leaving intact a financial incentive for research and development. It contains provisions to both foster competition and increase patent strength. The Hatch-Waxman Act provides incentives to support the development of generic versions of off-patent drugs and permit patent owners to recover time lost during FDA approval. It allows generics to win FDA marketing approval by submitting bioequivalence studies (as opposed to clinical data, which is costlier to compile). It also grants a period of additional marketing exclusivity to make up for the time a patented pipeline drug remains in development. This extension cannot exceed five years, and it is in addition to the 20 years exclusivity granted by the issuance of a patent. Another provision of the Hatch-Waxman grants a 30-month stay to drug companies that file suit against generic manufactures that challenge their patents.

As a result of the Hatch-Waxman Act, applications for permission to market generic versions of drugs, filed as Abbreviated New Drug Applications (ANDAs), must include a certification as to one of the following:

1. that no patent information was filed by the original innovator of the drug;

2. that the patent has expired;

3. the date on which the patent expires; or

4. that the patent is invalid or will not be infringed.

Copyright 2010 LexisNexis, a division of Reed Elsevier Inc.