Last week, the Federal Circuit denied Sandoz’s petition for an en banc rehearing of its precedential July 1st panel decision upholding two of Immunex’s patents covering Enbrel®.

As explained in the petition, Immunex was the first to make etanercept, the tumor necrosis factor (TNF) receptor fusion protein that is the active ingredient in Enbrel® (used to treat chronic inflammatory diseases such as rheumatoid arthritis, ankylosing spondylitis, and psoriasis). Immunex launched Enbrel® in 1998 and its original patents shielded the drug from competition through 2019. At the same time, Hoffmann-La Roche Inc. (“Roche”) was also developing TNF receptor fusion proteins. When Roche filed its applications in 1995, the resulting patents still qualified for a term of 17 years from issuance. In 2004, Roche and Immunex entered into an exclusive license agreement giving Immunex the sole right to prosecute Roche’s applications, which were amended to cover etanercept and methods of making etanercept. The applications ultimately issued as the patents-in-suit, U.S. Patent Nos. 8,063,182 (“the ’182 Patent”) and 8,163,522 (“the ’522 Patent”), in 2011 and 2012, respectively. The ’182 Patent expires in November 2028 and the ’522 Patent expires in April 2029 – 10 and 15 years after the expiry of Immunex’s own patents covering Enbrel® (U.S. Patent Nos. 7,915,225 and 5,605,690), respectively.

After Sandoz filed an abbreviated Biologics License Application (“aBLA”) seeking approval to market Erelzi, a biosimilar of Enbrel®, Immunex filed suit for patent infringement. Sandoz stipulated to infringement, but argued that the patents-in-suit are invalid for obviousness-type double patenting (“OTDP”), asserting that they are “commonly owned” by Roche and Immunex, and that the new patents improperly extended Immunex’s protection for Enbrel®.

In its July 1, 2020 panel decision, the Federal Circuit affirmed a decision from the District of New Jersey, finding that Roche and Immunex did not “commonly own” the patents-in-suit, and thus Immunex’s patents could not serve as an OTDP reference against the Roche patents.  The issue ultimately came down to whether the agreement entered into by Roche and Immunex was a licensing agreement or an effective assignment of “all substantial rights.” Under the terms of the agreement, Immunex has the sole right to grant sublicenses, to make, have made, use, sell, offer for sale and import products covered by the patent family. But because the agreement accorded Roche a secondary right to sue for infringement if Immunex fails to do so (even though Immunex can convert the license into a formal assignment for a $50,000 payment), the panel found that Immunex doesn’t have “all substantial rights.” Therefore, the decision concluded that the patents are not commonly owned and the issue of OTDP isn’t triggered.

Sandoz’s petition for rehearing asked the following question:  “May a party… avoid becoming an effective owner under the all-substantial-rights test, and thereby evade double-patenting scrutiny, merely by leaving the nominal owner with a theoretical secondary right to sue, which the licensee can prevent from ever ripening by issuing a royalty-free sublicense?”

As the FDA approved Sandoz’s Erelzi in 2016, the company is eager to launch and is reportedly looking at its options for moving forward.  Presumably, those options include a petition for a writ of certiorari to the Supreme Court.  We will report on future developments.