Editors’ Note: Although the BPCIA was enacted seven years ago, to date, only four biosimilar products have been approved by the FDA, and only two of those products are commercially available to patients in the United States – Sandoz’s Zarxio® (a filgrastim biosimilar to Amgen’s Neupogen®) and Celltrion and Hospira’s Inflectra® (an infliximab biosimilar to Janssen’s Remicade®) now marketed by Pfizer. Given the number of biologics license applications that have been filed using the BPCIA’s abbreviated approval pathway and the highly complex nature of the statute, the number of litigations also remains quite small. So far, district court litigation related to or arising under the BPCIA has been filed with respect to only seven reference products. This week, we begin a new series of articles that we are calling the “Litigation Spotlight.” The articles in this series will provide a summary of the factual background, legal issues, and current status of each biosimilar litigation, grouped by reference product. We will continue to provide updates as the cases continue.
Introduction and Background
The infliximab litigations demonstrate the complexities of the Biologics Price Competition and Innovation Act (the “BPCIA”) and the unanswered questions that remain on the statute’s procedural and substantive requirements. Perhaps just as importantly, the litigations demonstrate that all of the normal challenges present in a patent litigation remain. Indeed, in an Order issued in December 2014, Judge Crotty observed that “the pursuit of FDA approval for a biosimilar version of the rheumatoid arthritis treatment Remicade has triggered a lot of litigation.” As a result, it is critical to have counsel that is both experienced in tackling the normal hurdles of a patent litigation, but also willing and capable to delve into the biosimilar statute.
Infliximab is an Anti-Tumor Necrosis Factor (Anti-TNF) monoclonal antibody, approved in the United States for treating rheumatoid arthritis, ulcerative colitis, Crohn’s disease, ankylosing spondylitis, psoriatic arthritis, and plaque psoriasis. The antibody was developed by Centocor (a predecessor to Janssen Biotech, Inc. (“Janssen”)) and scientists at New York University (“NYU”). Janssen introduced infliximab to the U.S. market in 1998 under the brand name Remicade®. The product has been successful, with more than $6.9 billion in worldwide sales in 2016 alone.
Celltrion Healthcare Co. and Celltrion, Inc. (“Celltrion”) have introduced a biosimilar to Janssen’s Remicade®. Celltrion has partnered with Hospira, a subsidiary of Pfizer, to market and sell infliximab under the name Inflectra® in the United States. The U.S. regulatory process began with the submission of an Investigational New Drug application in October 2013, an abbreviated biologics license application in August 2014, and finally FDA approval on April 5, 2016. Inflectra® launched in the U.S. shortly thereafter, in November 2016.
The Early Declaratory Judgment Actions
Litigation over infliximab began with Celltrion and Hospira filing suits for declaratory judgment of non-infringement, invalidity, and unenforceability in 2014. Specifically, Celltrion filed suit in the United States District Court for the District of Massachusetts in March 2014 (Civ. No. 14-cv-11613), and the Southern District of New York (Civ. No. 14-cv-2256), while Hospira filed suit in August 2014 in the Southern District of New York (Civ. No. 14-cv-7059). Importantly, however, these suits were filed before Celltrion or Hospira had submitted an abbreviated biologics license application (“aBLA”) to the FDA, placing the suits outside the framework of the BPCIA and making them premature. Judge Crotty in the Southern District of New York dismissed the lawsuit there, explaining that Celltrion sought to “reap the benefits” of the BPCIA’s approval process while ignoring the dispute resolution procedures. Following the December 2014 Orders dismissing the New York lawsuits for a lack of jurisdiction, Celltrion voluntarily withdrew its Massachusetts lawsuit as well.
Janssen Goes on the Offensive
Janssen and NYU (“Janssen”) made the next move, filing suit against Celltrion and Hospira (hereinafter, “Defendants”) in Massachusetts in March of 2015 (Civ. 15-cv-10698). The complaint alleged two types of claims. First, Janssen alleged that the Defendants violated the BPCIA by failing to provide, along with their aBLA, “such other information that describes the process or processes used to manufacture the biological product that is the subject of such application.” Janssen interpreted section (l)(2)(A) of the BPCIA to require the production of manufacturing information in addition to the applicant’s BLA. See 42 U.S.C. 262(l)(2)(A)(“the subsection (k) applicant— (A) shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application”). Janssen therefore alleged that the Defendants were not forthcoming with additional manufacturing information, thus frustrating its ability to identify all patents that could potentially be asserted against Defendants on its 3A list as part of the BPCIA’s contemplated exchange of patent information. In a separate BPCIA claim, Janssen further alleged that Celltrion’s notice of commercial marketing was premature. Section (l)(8)(A) of the BPCIA states that “[t]he subsection (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” See 42 U.S.C. 262(l)(8)(A). Janssen alleges that reference to a “licensed product” in this section of the BPCIA requires the applicant to obtain FDA approval (licensure) before it can provide an effective notice of commercial marketing. Specifically, because the Defendants did not yet have a licensed product, Janssen stated that they could not provide notice of an intent to market a licensed product. (This issue is currently the subject of a pending petition for certiorari and will be considered by the Supreme Court later this term). Ultimately, Janssen complained that the Defendants were not engaging in good faith negotiations, forcing Janssen to file a lawsuit that it believed was premature.
Second, Janssen alleged that the Defendants committed an act of infringement pursuant to 35 U.S.C. § 271(e)(2)(C)(i) by submitting its aBLA. Specifically, Plaintiffs alleged infringement based on U.S. Patent Nos. 6,284,471; 7,223,396; 5,807,715; 7,598,083; 6,900,056; and 6,773,600. (Several of these patents were voluntarily dismissed after additional discovery, and only two patents remain in active litigation—the ’471 patent and the ’083 patent.) The ’471 patent contains claims directed to the infliximab cA2 monoclonal antibody, and expires on September 4, 2018. The ’083 patent, by contrast, contains claims generally directed to cell culture media for use in growing biological products and expires on February 7, 2027.
Finally, on June 14, 2016, Janssen filed another lawsuit (Civ. No. 16-cv-11117) against the same parties asserting infringement of the ’083 patent based on alleged “actual acts of infringement.” That is, unlike the earlier filed action based on “technical” infringement, this lawsuit concerns alleged acts of actual infringement based on the production of cell culture media. Specifically, Janssen alleged that Celltrion’s agent and supplier (HyClone) manufactured a cell culture media in the United States in violation of the ’083 patent, and media was used to manufacture the infliximab product approved for sale in the United States. (Janssen also filed suit against the supplier, HyClone, in Utah (Civ. No. 16-cv-71), but that case has been stayed in light of the Massachusetts litigation.) According to publicly available information, the supplier had previously worked with Janssen’s predecessor, Centocor, and allegedly was given access to the confidential formulation for a cell culture media later allegedly claimed in the ’083 patent. Because of the substantial overlap between the two cases, the parties submitted a stipulation consolidating the two cases and bifurcating the issue damages.
The ’471 Patent and Invalidity
In February 2016, Defendants moved for summary judgment of invalidity of the ’471 patent based on obviousness type double patenting in view of several prior art references. In August 2016, the Court granted Celltrion’s motion for summary judgment of invalidity, further narrowing the issues in the case. The Court concluded that the ’471 patent was invalid for obviousness-type double patenting in view of U.S. Patent No. 6,790,444 based on the Federal Circuit’s decision in Gilead Sciences, Inc. v. Natco Pharma Limited, 753 F.3d 1208 (Fed. Cir. 2014). In Gilead, the Federal Circuit held that a later-issuing, earlier-expiring patent may act as a double-patenting reference for an earlier-issuing, later-expiring patent.
The Court also granted summary judgment of invalidity based on obviousness type double patenting in view of U.S. Patent Nos. 5,656,272 and 5,698,195, two patents that also descended from the same parent application as the ’471 patent. The decision involved three subsidiary determinations. First, the Court concluded that the Plaintiffs were not subject to the § 121 safe harbor provision; second, the court found that the one-way test for obviousness applied (as opposed to the two-way test); and third, the court found that even if the two-way test did apply, the ’471 was still invalid. With respect to the first determination, the Court found that even though the ’471 patent had been re-labeled as a divisional in an ongoing reexamination, that amendment was not final. Moreover, the Court concluded it did not have the power to re-label the ’471 patent as a divisional. Next, the Court concluded that the one-way test for obviousness applied. That is, the only question was whether the ’471 patent claims were obvious in view of the reference patent. Janssen argued that an exception to this rule applied, the so-called “two-way” test, which also considers whether the reference claims would be obvious. The “two-way” test applies where the “PTO is solely responsible for the delay in causing the second-filed application to issue prior to the first.” The two-way test is designed to allow for a “later-filed improvement patent” that issues before the earlier filed basic patent. The Court found that the one way test applied, and Janssen conceded that under the one way test, the patents were invalid. Finally, the Court concluded that even if the two-way test applied, the claims were still invalid.
While Janssen lost the summary judgment motions regarding the ’471 patent’s validity, it was Celltrion that pushed for entry of a final judgment pursuant to Federal Rule of Civil Procedure 54(b). The Court recognized that Janssen had a “financial incentive to try to delay the appeal,” but concluded that the BPCIA’s “primary purpose” was to “expedite patent litigation” in order to maximize certainty. Interestingly, the Court used Janssen’s own press announcement that it intended to appeal the ruling in support of the Rule 54(b) certification. Therefore, the Court ultimately granted certification for immediate appeal.
The ’083 Patent and Infringement
The parties also dispute whether the Defendants infringe the only remaining patent in the district court litigation—the ’083 patent. The Court and the parties sometimes refer to the ’083 patent as the “soup patent” because it is not directed to the infliximab antibody itself. Rather, the patent is generally directed to a cell culture media that can be used to produce antibodies. Moreover, a third party, HyClone, is the entity that is alleged to actually manufacture the cell culture media. Finally, that cell culture is created in the U.S., sent to Korea, and then allegedly used to create infliximab that is (and will be) sent back to the U.S. as the final product.
Nonetheless, Janssen contends that the Defendants infringe the ’083 Patent, both directly and indirectly through inducement, points which Defendants dispute. Janssen’s claim for direct infringement is premised on the theory that Defendants direct and control HyClone and/or that HyClone acts as Defendants’ agent in creating the cell culture. Defendants moved for summary judgment of non-infringement, but the Court denied the motion with respect to Celltrion at an oral hearing in December. This infringement theory therefore appears to be one to be determined at trial.
The Parties Proceed Toward Trial – But Standing Gets in the Way
With only the ’083 patent remaining, the parties proceeded towards a trial that was scheduled to begin in February 2017. However, after issues were raised at a scheduling conference in January 2017, the Court issued an order instructing the parties to submit briefing to address the appropriate measure of damages and the Plaintiffs’ right to a permanent injunction if defendants are found to infringe the ’083. Then, in a brief filed on January 25, 2017, Defendants argued for the first time that the Plaintiffs did not have standing because they had failed to join all of the co-owners of the ’083 patent to the action, which Defendants alleged would require a dismissal for lack of subject matter jurisdiction. After further briefing and oral argument, the court found that the issue of standing raised serious questions concerning the court’s jurisdiction that required the postponement of trial to permit briefing on a motion to dismiss for lack of jurisdiction and possibly additional limited discovery.
While a lack of standing would be problematic in any case, this was particularly concerning in a case arising under BPCIA. This is because, “[s]ection 271 (e)(6) limits a patentee’s damages to a reasonable royalty if it proves infringement of a patent identified under 42 U.S.C. §§262(1)(4) and (5)(B) in a suit filed more than 30 days after the end of the process prescribed by the BPCIA.” Defendants argued that because the “patent dance” had been completed more than 30 days prior to January 2017, any new lawsuit would necessarily be limited to a reasonable royalty. On the other hand, Janssen alleges that because Defendants refused to complete the negotiation process, the 30-day period under the BPCIA never began.
The Court provided guidance on the issue of damages in a March 3, 2017 Order. The Court concluded that “on the present record,” it could not conclude that Celltrion had engaged in good faith negotiations under the BPCIA sufficient to trigger the reasonable royalty limitation. Therefore, Janssen would not be limited to a reasonable royalty. In the same Order, the Court found that Janssen could recover lost profits from sales of Inflectra sold in the United States made from “the infringing media powders in the United States.” Therefore, despite the fact that Inflectra itself was manufactured in Korea, because the allegedly infringing cell culture media was produced in the U.S., Plaintiffs could recover lost profits for sales of Inflectra made using that allegedly infringing cell culture.
A Summary of Where Things Stand (Pun Intended)
The District Court Litigation
Trial in the district court trial has been postponed until after the parties briefing on the issue of whether Plaintiffs lacked standing to bring suit on the ’083 patent. Defendants have raised two arguments—first, that one of the named inventors did not assign his rights in the patent to Janssen in the first place; and second, that the other named inventors actually assigned their rights to the entire Johnson & Johnson family of companies, and not just the Janssen corporate entity. This dispute has also resulted in new discovery surrounding standing, as well as disputes regarding the extent of this discovery. The Court has entered a notice setting a hearing on the issue for June 21, 2017.
Assuming the case proceeds to trial, there are still a myriad of disputes to be decided. Plaintiffs are alleging infringement solely under the doctrine of equivalents, and Defendants challenge its application, both on the law and the facts. In addition, although HyClone manufactured the allegedly infringing cell culture, Janssen contends that Celltrion is directly liable for infringement because Celltrion directs and controls HyClone, and/or HyClone acted as Celltrion’s agent. Again, Defendants dispute these allegations. Finally, Janssen contends that Defendants have induced infringement, and Defendants again disagree. Defendants, in turn, contend that the ’083 patent is invalid as obvious and invalid for lacking a sufficient written description.
In addition to its claims for “traditional” infringement, Janssen is also pursuing claims that Defendants failed to comply with the provisions of the BPCIA. Defendants have responded that any claim for “artificial infringement” is moot in light of the Federal Circuit’s holding in Amgen that there is no private right of action to enforce BPCIA’s so-called “patent dance.” Defendants also argue that this issue is moot in any event based on the actual allegation of infringement. Finally, the parties disagree as to whether Janssen would be entitled to an injunction.
The Invalidity Appeal
The district court’s summary judgment determinations with respect to the ’471 patent were appealed, and the parties are currently briefing the dispute in the Federal Circuit (Case No. 17-1120). At this time, Janssen’s reply brief is due on April 20, 2017, and oral argument will presumably be scheduled sometime thereafter.
The Ex Parte Reexamination Appeal
As noted above, while the district court litigation was ongoing, the ’471 was undergoing ex parte reexamination. Ultimately, the PTAB issued a decision affirming a rejection for obviousness-type double patenting, and that decision was appealed to the Federal Circuit as well (Case No. 17-1257). The Federal Circuit has designated this appeal as a “companion” case to the summary judgment ruling, meaning the cases will be assigned to the same merits panel for oral argument. Briefing is scheduled to be completed by April 24, 2017.
We will continue to keep you apprised of further developments.
 For the sake of completeness, we further note that Janssen provided a list of patents to Defendants pursuant to Section 3A of the BPCIA. After receiving the 3A list, Defendants informed Janssen that they “agree” to Janssen’s list of patents, in their view, making the further exchange of information or negotiations unnecessary. Defendants’ provided a detailed statement to Janssen and asserted that Janssen was required to file suit within 30 days of receipt of the detailed statement. Janssen disputed Defendants’ interpretation but filed suit.
 At the time Janssen filed its first Complaint, the ‘471 patent was undergoing ex parte reexamination at the PTO. The proceeding had been underway for 2 years and the claims stood finally rejected. On November 14, 2016, the Patent Trial and Appeal Board (“PTAB”) issued a decision affirming a USPTO examiner’s final rejection of the claims of the ’471 patent for obviousness-type double patenting in an ex parte reexamination. Janssen had moved to stay the district proceeding as it relates to the ’471 patent pending that appeal, which was denied. The appeal of the PTAB decision has been assigned Fed. Cir. Appeal No.17-1257 and designated as a related case to the appeal of the summary judgment decision on the ’471 patent. Briefing on the appeal of the reexam decision will be completed on April 24, 2017. Oral argument has not yet been scheduled.