Expansion of the Prior-User Rights Defense

Paul A. Calvo

May 1, 2012

11 Min Read

A common reaction to some patents directed to manufacturing processes (especially of biotherapeutics) is “How did they get a patent for that when we’ve been doing the same thing for years?” But the number of patents covering biotherapeutic production processes is steadily increasing along with the realization that upstream and downstream processing events provide a potentially abundant source of so-called “second-generation” patent protection for biologics, especially those facing biosimilar competition. Although some groups are prolific patent filers claiming a wide range of processes — from methods of culturing cells with a particular chemically defined media to methods for regenerating chromatography matrices — others choose to keep their manufacturing products and processes secret.

Until recent US patent reforms introduced by the Leahy–Smith America Invents Act (AIA) became law, many organizations keeping their processes secret ran the risk of being sued for patent infringement, even if they’d been using a patented process before the filing date of the third-party patent. However, a major change in patent law came into effect on 26 September 2011. The AIA now affords a defense to patent infringement if a party can prove a commercial prior use of a patented process.


The Prior-User Rights Defense

Initially instituted as part of the American Inventors Protection Act (AIPA) in 1999, the prior-user defense was once limited to business method patents. With passage of AIA, however, this defense was expanded to all technologies, covering “subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process” (1). The law defines a commercial use either in connection with an internal commercial use or an actual arm’s length sale or other commercial transfer of a useful end result of such a commercial use. Congress stated that the change to the existing law was a “narrow expansion of prior user rights [that] balances the interests of patent holders, including universities, against the legitimate concerns of businesses that want to avoid infringement suits relating to processes that they developed and used before another party acquiring related patents” (1). It is important to note that the prior-user defense is simply a defense. It is a safe harbor that protects a company wishing to use an invention or process in private; it is not a means for invalidating or challenging a patent.

The hope behind expansion of the prior-user defense is that it will help protect trade secret owners and other alleged infringers by providing them with some defense to claims of patent infringement. As such, keeping your invention secret (even as a trade secret) is not as risky a proposition as it was before passage of AIA. These expanded prior-user defense provisions became effective against any patent “issued on or after the date of enactment,” which was 16 September 2011 (1).

Trade Secrets

But what is a trade secret? Does a commercial process or article for manufacturing need to qualify as one to provide for a prior-user defense? In short, the answer is no. A process or article need not be maintained as a trade secret to provide the defense.

A trade secret can be defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (2). Unlike patents, trade secrets are protected without any type of registration; they require no procedural formalities. Consequently, a trade secret can be protected for an unlimited period.

However, there are some conditions for information to be considered (and maintained) a trade secret. They vary from country to country, but some general standards are referred to in Article 39 of the World Intellectual Property Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The information must be secret (not generally known among, or readily accessible to, circles that normally deal with the kind of information in question); it must have commercial value because it is secret; and it must have been subject to reasonable steps by its rightful holder to keep it secret (e.g., through confidentiality agreements) (3).

The topic of trade secrets and whether to file patents is becoming increasingly popular in the biotechnology field as biosimilars become a reality in the United States. With many originator biotherapeutics coming off patent in 2014–2018, increasing importance is being placed on secondary patent protection: patents covering manufacturing processes, formulations, and so on, rather than the compound itself or its use. Many originator companies could bypass filing for patent protection and the disclosure of their manufacturing processes to the public that comes with such filings, instead keeping some of their critical processes secret. Their rationale goes back to the old adage that for biotherapeutics, “the product is the process.”

A biologic product’s characteristics are closely tied to how it is made. Merely changing production of a glycoprotein from one cell line to another can have profound effects on many factors, such as glycosylation. So much more so than do small molecules, biosimilar makers will rely much more on production processes as a critical feature to producing reference biologics. Patents on processes require disclosure of detailed information that would make “copying” those processes (or designing around their patent claims) more easily accomplished. That leads to a desire to keep as much information as secret as possible to protect originator compounds (4).

Flexibility and Record-Keeping

The prior-user defense offers some advantages for biotechnology companies. It provides for greater flexibility for them to determine how best to protect their technology. Before passage of AIA, the prior-user defense was applicable only in a business-methods context, providing limited value for the biopharmaceutical industry. But now, the defense can apply to any subject matter. Companies can still patent inventions to place the world on notice that they have the rights to exclude others from using their technology. Or a company can choose to keep its invention or process secret and now have the added prior-user defense as a benefit. Unfortunately, there is no “one size fits all” approach that will suffice in every case — or even for the same kind of technology. The benefits and risks for patenting or maintaining technologies secret must be weighed by each company for each project.

Some people argue that the prior-user defense provides flexibility for companies with respect to cost. Their argument is that cost for a patent filing is m
uch greater than that associated with keeping a technology secret. However, the cost cannot be underestimated for systems that must be in place to ensure secrecy in the digital world we live in. Meticulous documentation and preservation showing prior commercial use through laboratory notebooks and chemistry, manufacturing, and controls (CMC) documents are of paramount importance.

Historically, most records were paper documents generated locally and controlled by just a few workers. But workers at all levels within a modern company can create records anywhere in the world and at any time of day. Now terms such as data, record, and document have much broader definitions. The digital world has brought with it a dizzying array of media including emails, optical storage, and voice recordings, as well as mobile devices such as laptop computers, thumb drives, and smart phones (5). There are additional hurdles involved in 21 CFR 11 compliance. Moreover, associated challenges in maintaining a trade secret include

  • constantly upgrading and monitoring equipment and software

  • ongoing training of electronic security (information technology, IT) staff and recruitment of new and more specialized employees

  • increase physical security, internal monitoring, and policies

  • difficulty in correlating electronic security investment with overall company business (5).

Legal fees associated with patent infringement cases often reach millions of dollars, but such fees are generally proportional to the importance of an invention to a company. Because a granted patent provides an enforceable right to exclude others from copying your process, it can also serve as the basis for generating a revenue stream for your company — if you identify a process by which others may license it. Perhaps the most famous example of such a significant revenue-generating technology comes from the Genentech Cabilly patents directed to methods of producing recombinant antibodies (6, 7).


The AIA does limit to the new prior-user rights defense. This defense is personal. Therefore, it cannot be licensed, assigned, or transferred other than in connection with an assignment or transfer of an entire business that holds rights to the defense (8). And the defense is limited to those geographic sites where an invention was used before the critical date.

A further provision provides for an explicit exception to the defense for patents owned by or assigned to universities or their affiliated technology-transfer organizations. This last provision was enacted in response to concerns among the higher education community that prior-user rights might impair their ability to license patents on “upstream” research results (9). The goal of this exemption was to increase the potential for licensing of patents owned by universities that can be adapted for commercial purposes. The exemption has its own exception, however, in that it does not apply if “the subject matter of the claimed invention could not have been undertaken using funds provided by the Federal government.”

Of great importance to biotechnology companies, the AIA expands the category of qualifying commercial use to include periods of regulatory review: “any period specified in section 156(g)” (10). That includes submission of an investigational new drug (IND) application for clinical trials or a new drug application (NDA) to the FDA for market approval (Section 5(c)(1) or noncommercial use by nonprofit research laboratories (Section 5(c)(2) (10). So in the context of biotherapeutic production, if the same chemically defined medium is used during development through the IND or NDA stage as during production of the FDA-approved biologic drug, then that medium could be protected under a prior-user defense. Similarly, if a method to regenerate an ion-exchange resin is identified during development and later retained, then it could be protected as well.

One question remains, however: What will be the effect to a company’s ability to raise a prior-user defense when changes have been made to a method? Will even a minor change nullify the company’s ability to raise this defense, or will minor variations be allowed as long as they fall within the scope of what is considered to be routine optimization? An answer will no doubt come from challenges in the courts over the coming years. What is clear, however, is that to best position themselves for taking advantage of all available avenues available, biotechnology companies will need to preserve dated and witnessed documents that establish their earliest dates of technology use with details of all relevant processes. And the question of whether to file for patent protection or maintain a process secret will need to be made case by case.

About the Author

Author Details
Paul A. Calvo, PhD, is a director at the intellectual property specialty law firm of Sterne, Kessler, Goldstein & Fox PLLC, 1100 New York Avenue NW, Washington, DC 20005; 1- 202-772-8846; [email protected], www.skgf.com. This article is for general information purposes and is not intended to be and should not be taken as legal advice. The views expressed herein are the author’s alone and should not be attributed to the firm or its clients.


1.) 2011. Leahy–Smith America Invents Act.

2.) American Law Institute 1965.Restatement of the Law, Second, Torts (second edition, revised and enlarged), American Law Institute Publishers, St. Paul:1977.

3.) How Are Trade Secrets Protected?, World Intellectual Property Organization, Geneva.

4.) Lehr, B.Shhh! My Bioproduction Processes Are Secret Big Red Biotech Blog.

5.) Jaiya, GS. 2008.Protecting Trade Secrets: Challenges in the Digital Environment, World Intellectual Property Organization, Geneva.

6.) Cabilly, S. 1989. Recombinant Immunoglobulin Preparations.

7.) Cabilly, S. 2001. Methods of Producing Immunoglobulins, Vectors and Transformed Host Cells for Use Therein.

8.) Leahy–Smith America Invents Act.

9.) Report to Congress:7.

10.) Noonan, KE 2011.AIA Overview: Prior User Rights Defense Patent Docs.

11.) Linek, E. A 2004. Brief History of Trade Secret Law, Part 1. BioProcess Int. 2:20-23.

12.) Linek, E. A 2004. Brief History of Trade Secret Law, Part 2. BioProcess Int. 2:20-26.

13.) Restaino, LG. 2006. Understanding Your Patent Portfolio: Reducing Risk Through Due Diligence. BioProcess Int. 4:12-16.

14.) Restaino, LG. 2007. Commercializing Intellectual Property: Knowledge Truly Is Power. BioProcess Int. 5:16-20.

15.) Restaino, LG. 2005. Perspectives on Successful Biotechnology Licensing: Part 1, The Basics. BioProcess Int. 3:28-30.

16.) Restaino, LG. 2005. Perspectives on Successful Biotechnology Licensing: Part 2, Main Elements of a Biotechnology License Agreement. BioProcess Int. 3:26-28.

17.) Restaino, LG. 2005. Perspectives on Successful Biotechnology Licensing: Part 3, Licensing Strategies. BioProcess Int. 3:12-14.

18.) Winer, GS. 2009. Patents, Politics, and Polypeptides. BioProcess Int. 7:10-15.

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