The Supreme Court heard oral arguments on Wednesday in its first biosimilar case.  On a petition filed in Sandoz, Inc. v. Amgen, Inc., et al. No. Case No. 2015-1039, and a cross-petition filed in Amgen Inc., et al. v. Sandoz, Inc., Case No. 2015-1195, the Court was asked to interpret two provisions of the Biologics Price Competition and Innovation Act (“BPCIA”).  Parties submitting amici briefs are discussed in this earlier post.  A transcript of the oral argument is available here, and an audio recording of the oral argument will be available after conferences this afternoon here on the Supreme Court’s website.

The questions presented to the Court, as discussed in detail in our prior article, are: (1) whether a biosimilar applicant is required by the term “shall” in section (l)(2)(A) of the statute to provide the reference product sponsor with a copy of its biologics license application and related manufacturing information, and if the applicant fails to provide that information, whether a declaratory judgment action under section (l)(9)(C) and/or a patent-infringement action under 35 U.S.C. § 271(e)(2)(C)(ii) are the only remedies available to the reference product sponsor; and (2)  whether notice of commercial marketing can only be effective after approval by the Food and Drug Administration, and whether notice of commercial marketing set forth in section (l)(8)(A) of the BPCIA is a stand-alone provision that permits an injunction to delay commercial launch of all biosimilars by an additional 180 days after FDA approval.

Below at the Federal Circuit, the majority of a split-panel (Judge Lourie and Judge Chen) held that when an applicant fails to comply with the disclosure requirement of section (l)(2)(A), the BPCIA permits the filing of a declaratory judgment suit for patent infringement, and that such suits, pursuant to 42 U.S.C. § 262(l)(9) and 35 U.S.C. § 271(e), are the only remedies available.  In other words, the biosimilar applicant has the choice to opt-out of the “patent dance,” and the remedy provided to the reference product sponsor is the ability to file an immediate declaratory judgment action on any patent that claims the biological product or a use of the biological product.  The Federal Circuit’s majority decision also includes a footnote recognizing that while the language of (l)(9)(c) does not expressly include process patents, 35 U.S.C. § 271(e)(2)(C)(ii) does not exclude process patents and “allows the [reference product sponsor] to assert process patents, ‘if the [subsection (k)] applicant. . . fails to provide the application and information’ and ‘the purpose of [the subsection (k)] submission is to obtain approval . . . to engage in the commercial manufacture, use, or sale of a . . . biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.’ 35 U.S.C. § 271(e)(2).”

With respect to the second issue, a different majority of the panel (Judge Lourie and Judge Newman) held that the notice of commercial marketing under section (l)(8) is a “stand alone” provision of the statute that requires the biosimilar applicant to provide notice of commercial marketing after the product is “licensed,” meaning that such notice is only effective after FDA approval and is required regardless of whether there are outstanding patent infringement issues remaining at the time of the notice.  The Court reasoned that providing notice only after approval of a license allows the reference sponsor to definitively determine the patents involved and the scope of potential injunctive relief.  The result of that decision, however, is that approval of every biosimilar product is delayed an additional six months (180 days) beyond the 12 year exclusivity period provided by the BPCIA.  Judge Chen provided a strong well-reasoned dissent on this issue explaining why the extra six month “windfall” of exclusivity is improper and why the majority was wrong to interpret (l)(8) as a stand-alone requirement.

It is the opinion of this author that Judge Chen was correct on both issues. Prior to oral arguments, I expected that the Supreme Court would readily affirm the Federal Circuit’s decision that the BPCIA allows the applicant to elect not to disclose information pursuant to (l)(2)(A) and that it provides the only remedy available to the reference product sponsor in the form of an immediate declaratory judgement action on any patent.  I also expected the Supreme Court to reverse the Federal Circuit on the notice of commercial marketing issue and to allow the biosimilar applicant to provide notice at any time after its application is accepted for review by the FDA (and at least 180 days prior to the date of first commercial marketing).  The questions posed by the Court during oral argument make it difficult to predict if the actual outcome will match my expectations.

Although this was first case on the docket for the day, Chief Justice Roberts announced before arguments began that the Court had decided to grant each side five extra minutes. Counsel for Petitioner, Sandoz, argued first, followed by Counsel for the United States, then Counsel for Respondent and Cross-Petitioner, Amgen, concluding with rebuttal reserved by Sandoz.

Counsel for Sandoz opened by saying that “The Biosimilars Act created a comprehensive and self-contained scheme for the early resolution of patent disputes. Regardless of the actions an applicant or sponsor take along the way, the end result is the same, patent litigation.” She argued that “Courts should apply that comprehensive scheme as written. They shouldn’t look elsewhere for consequences.”

Justice Kennedy asked the first few questions of the day seeking clarification on the timing of FDA’s decision to approve a biosimilar product compared to the actual grant of a license, in light of the exclusivity provisions of the BPCIA.  Justice Sotomayor inquired how long it takes for the FDA to approve a biosimilar, and Justice Kennedy asked if the applicant was apprised of the approval prior expiration of the exclusivity.  He commented that it seems the “180 day notice has to run from the time that the product is licensed.”  Counsel for Sandoz responded that such a reading is foreclosed by the language of the statute because the only timing element of the statute is tied to the date of first commercial marketing, not licensure of the product.

Justice Breyer questioned how one could provide notice of commercial marketing without knowing what the final licensed product is, and noted that the FDA has a lot of “power over what is licensed.” Then, he clarified that “maybe that isn’t what notice means. Maybe it just means notice that you will commercially market X, or maybe it means some combination thereof.” Justice Breyer characterized this as a “crucial ambiguity” that has to do with arguments on both sides.  Justice Breyer suggested several times that perhaps agency rulemaking would help the Court, saying:

We are being asked to interpret very technical provisions that I find somewhat ambiguous and am operating in a field I know nothing about. But it’s going to have huge implications for the future. So why isn’t the way to go about this case to ask the agency to issue some regulations? Then when we see their interpretation, you all will be able to argue that their interpretation exceeds the statutory delegation. And by doing that, we would have a better picture.

Justice Breyer came back to the idea of agency rulemaking, which was a consistent theme of his questions and comments, throughout the argument.  Counsel for Sandoz explained that neither the FDA nor the PTO has rule-making authority to interpret the BPCIA, urging the Court that this is an issue of statutory interpretation.  Later, when counsel for the United States presented his arguments (in support of Sandoz), he affirmed that although FDA is involved in licensure, Congress separated the FDA from the patent litigation process provided by the BPCIA.  The Court asked counsel for the United States to confirm that neither the FDA nor the PTO had rulemaking authority, which he did, agreeing with Sandoz that the issues presented are ones of statutory interpretation.

Justice Sotomayor asked counsel for Sandoz to address the issue of how the reference product sponsor would know exactly what the biosimilar product will be and have enough information to form a good faith belief of infringement for purposes of litigation if the applicant, like Sandoz here, does not provide the reference product sponsor with access to the biosimilar application.  Counsel for Sandoz first pointed to the artificial act of infringement created by the statute and based solely on the filing of an application as evidence of Congress’ intent to allow litigation to proceed early — before product approval or licensure. Second, Sandoz’s counsel argued that because the reference product and the proposed biosimilar are “highly similar,” under the statute, the reference product sponsor would have “a good faith basis to bring suit on any patent that covers its own product or any patent that covers a use of its own product.”  Justice Roberts seemed skeptical of that argument, pointing out that the reference product and the biosimilar are not identical.

It was clear from the questions being asked that the Court was trying to understand both the litigation process and remedies that Congress envisioned under the BPCIA.  Justice Kagan asked counsel for Sandoz if the reference product sponsor would always sue if they have a valid patent. Justice Ginsberg asked counsel to explain the difference between the two phases of the litigation, phase I and phase II.

Justice Gorsuch questioned counsel for the United States about the position that a declaratory judgment suit is the exclusive remedy for failure to comply with the disclosure requirements of (l)(2), raising issues of preemption and potential inconsistencies under state and federal law.  Justice Roberts also expressed concern that “in terms of the preemption question, . . . it’s very hard to give a comprehensive answer to the questions presented without considering whether . . . [under] state law, you can get the same injunction. It’s really asking us to put together a puzzle where a big piece is missing.”  Counsel for the government explained that the questions being presented in the appeal rest entirely on federal law, and the state law claims were found moot.  He also noted that while strong arguments would exist in favor of preemption, the issue was not part of the appeal and had not been briefed, suggesting that the Court should simply decide is what’s required under the statute, leaving open any other questions of state law and preemption.

Justice Breyer raised concerns about whether allowing the applicant to provide notice of commercial marketing early in the process, for example the day after the application is accepted for review by the FDA (“day 2”), would upset the negotiation process envisioned by Congress under the statutory scheme.  Specifically, Justice Breyer noted that the statute sets up a “system, where you’ve put tremendous incentives on people to negotiate and to work it out in an orderly way,” and questioned whether “you can just gut it by simply filing your commercial notice on day 2?” At the end of his discourse with counsel for the government, Justice Breyer pointed to this question as another example of why he believes “this would work out a lot better if you could somehow get this to a rule making.”

When counsel for Amgen began his argument he noted it was “tempting” to just stand up and give a “tutorial on this extremely complicated situation,” but indicated that instead his presentation would be guided by the Court’s earlier questions. The questioning, however, again began immediately.  Justice Sotomayor asked several questions about Amgen’s argument that notice must be given only after the product is approved by FDA and whether this would always force the phase II litigation to start after the reference product sponsor’s 12 year exclusivity period has expired. She also inquired whether Amgen assumes that the commercial launch has to be 12 ½ years rather than 12.

Justice Gorsuch and Justice Sotomayor both posed questions to counsel for Amgen about the remedies provided by the statute, even assuming that the Court agrees “shall” means “shall.”  Justice Breyer asked whether the Court should simply answer the question of whether shall means shall and just stop because the statute “doesn’t say that’s the only remedy or that there are others.”  Justice Roberts followed up with additional questions on preemption and how state law comes into play under the federal statute.  Counsel for Amgen argued that “California law is not incorporating into state law, federal remedies. It says it is a violation of our state law, fair commercial practices law, to violate a command of another sovereign’s law.”  He recognized however, that the remedy under state law was an injunction, not damages or anything else.

Justice Sotomayor then questioned whether, under Amgen’s theory of the case, state law would in effect “force a biosimilar to invoke Phase I” because in the event that the biosimilar applicant elects to opt out of any stage, the reference product sponsor could go to court under state law seeking to force compliance with an injunction.  This raises the question of whether the Court will ultimately deem it necessary to consider the issue of preemption as part of determining whether a declaratory judgment suit is an exclusive remedy.

The questions presented make it clear that the Court has a lot to consider before reaching a conclusion on the issues presented, and suggest that perhaps the decision could be broader in scope (if the Court deems it appropriate to addresses preemption) or narrower in scope (if the Court simply defines “shall” and stops) than many people anticipated.

The Supreme Court’s decision is expected to issue in June 2017.

FDA approved Samsung Bioepis’s Renflexis® (SB2, infliximab-abda) on Friday, April 21, 2017.  Renflexis® is the fifth biosimilar approved by the FDA and the second infliximab biosimilar to Janssen’s Remicade®.  Infliximab is an Anti-Tumor Necrosis Factor (Anti-TNF) monoclonal antibody approved in the U.S. for treating rheumatoid arthritis, ulcerative colitis, Crohn’s disease, ankylosing spondylitis, psoriatic arthritis, and plaque psoriasis.  FDA previously approved Celltrion’s Inflectra® (infliximab-dyyb), the first biosimilar to Remicade®, on April 5, 2016, and that product was launched in the United States in November 2016 under a marketing agreement with Pfizer.

Samsung Bioepis announced that the FDA had accepted its biologics license application for SB2, its infliximab biosimilar, in May 2016.  The company has publicly stated that when launched, marketing and distribution of Renflexis® will be handled by Merck in the United States.  Renflexis® is Samsung Bioepis’s first biosimilar approved by the FDA, but the product was approved earlier in South Korea (in December 2015), Europe (in May 2016), and Australia (in November 2015).

Genentech filed suit against Amgen this past February when a dispute arose between the parties during the first step of the “patent dance” for Amgen’s bevacizumab product (ABP 215), a proposed biosimilar to Genentech’s Avastin®.  Genentech accused Amgen of violating sections (l)(2)(A) and (l)(1)(c) of the Biologics Price Competition and Innovation Act (“BPCIA”), 42 U.S.C. § 262, as previously discussed in this post.

The lawsuit came to a swift end when the Court dismissed the Complaint for lack of subject matter jurisdiction, only two weeks after it was filed, in light of the Federal Circuit’s decision in Amgen v. Sandoz, 794 F.3d 1347 (Fed. Cir. 2015).[1] As we previously reported, Judge Sleet dismissed Genentech’s complaint without prejudice and expressly provided Genentech forty-five days, until April 14, 2017, to amend the Complaint to seek declaratory judgment of patent infringement.

Last week Genentech submitted a letter to the Court indicating that it will not be filing an amended Complaint prior to the expiration of the 45-day period provided by the Court’s Order.  In the letter to Judge Sleet, dated April 14, 2017, Genentech states that it believes it would be “more efficient for the Court and the parties to address both the patent merits and Amgen’s continued noncompliance with its statutory production obligations. . . . after the Supreme Court’s expected decision in June in Amgen v. Sandoz.”  Genentech also provided a Proposed Judgment dismissing the case and requested that the Court enter the Judgement.

Before the next business day, Amgen submitted a responsive letter to the Court advising Judge Sleet that “Genentech failed to inform the Court in its April 14 letter that it elected to provide its disclosure under § 262(l)(3)(A) and continue with the “patent dance” instead of amending its Complaint within the 45 day window it requested.” According to Amgen’s April 16, 2017 letter, Genentech provided its section 3A patent list (see 42 U.S.C. § 262(l)(3)(A)) on March 24, 2017, and  “the parties are moving through the ‘patent dance’ as contemplated under the BPCIA.”  Amgen further suggested that in light of the Court’s prior order of dismissal on March 1, 2017, “there is nothing left for the Court to do and it need not entertain Genentech’s request to again dismiss this action.”  Yesterday, on April 19, 2017, Judge Sleet issued an oral order indicating that the court agrees with Amgen’s position set forth in its April 16 letter, and the Court declined to enter the proposed judgment provided with Genentech’s April 14 letter.

In view of Genentech’s decision not to amend its Complaint and the subsequent Court Order, the case is completed.   But, we can expect to see a new patent infringement case after the parties complete the patent dance, if not before.  We will continue to provide updates on any future litigation over bevacizumab.

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[1] In Amgen v. Sandoz, the majority of a split panel of the Federal Circuit held that when an applicant fails to comply with the disclosure requirement of section (l)(2)(A), the BPCIA permits the filing of a declaratory judgment suit for patent infringement, and that such suits, pursuant to 42 U.S.C. § 262(l)(9) and 35 U.S.C. § 271(e), are the only remedies available.  The Federal Circuit’s majority decision recognizes that “the BPCIA has no other provision that grants a procedural right to compel compliance with the disclosure requirement of paragraph (l)(2)(A).” However, that decision is currently on appeal to the Supreme Court, and a decision from the high court is expected early this summer as discussed in this post.

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.[1]  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.[2]

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.

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[1]   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.

[2] 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.

As we previously reported in this post, the Supreme Court granted certiorari in its first biosimilar case on Sandoz’s petition in Sandoz, Inc. v. Amgen, Inc., et al., Case No. 2015-1039 and on Amgen’s cross-petition in Amgen Inc., et al. v. Sandoz, Inc., Case No. 2015-1195.  On January 25, 2017, the Supreme Court issued a briefing schedule and briefing for the consolidated cases is now completed.

Sandoz filed its opening brief on the merits in 15-1039 on February 10, 2017, and several industry organizations, trade associations, and pharmaceutical companies filed amici curiae briefs in support of Sandoz on February 17, 2017, including: Adello Biologics LLC; Apotex Inc. and Apotex Corp.; Coherus Biosciences, Inc.; Mylan, Inc.; AARP and AARP Foundation; Citizens Against Government Waste, The UAW Retiree Medical Benefits Trust, The National Health Law Program, and The Coalition to Protect Patient Choice; America’s Health Insurance Plans; The Biosimilars Council; Pharmaceutical Care Management Association, National Association of Chain Drug Stores, and Healthcare Supply Chain Association. The Solicitor General filed an amicus brief on behalf of the United States in support of Sandoz and also filed a motion seeking leave to participate in the oral argument.

Amgen filed its consolidated opening brief on the merits in case 15-1195 and responsive brief on the merits in 15-1039 on March 17, 2017.  AbbeVie Inc., Janssen Biotech, Inc., The Biotechnology Innovation Association, Eleven Professors (who teach and write on patent law and policy), and Genentech, Inc. each filed an amici brief in support of Amgen.

Sandoz filed its consolidated response in 15-1195 and reply in case 15-1039 on March 31, 2017.  Today, Amgen submitted its reply brief in 15-1195 to complete all of the briefing in the case. Oral argument is scheduled for Wednesday, April 26, 2017.

As we previously reported, Sanofi-Aventis U.S. LLC, Genzyme Corporation, and Regeneron Pharmaceuticals, Inc. filed a Declaratory Judgment Complaint against Amgen, Inc. and Immunex Corporation in the United States District Court for the District of Massachusetts on March 20, 2017, preemptively seeking a determination that Sanofi and Regeneron’s Dupixent® (dupilumab) product does not infringe U.S. Patent No. 8,679,487 (“the ’487 patent”).  Sanofi and Regeneron also filed a petition for inter partes review of the ’487 patent with the Patent Trial and Appeal Board just a few days later, as we reported here.  The FDA approved Dupixent on March 28, 2017.

Returning fire, Immunex filed a separate Complaint in the United States District Court for the Central District of California on April 5, 2017, accusing Sanofi, Genzyme, and Regeneron of infringing the ’487 patent.  Yesterday, Immunex filed a motion seeking to dismiss the Complaint in the Massachusetts case, or in the alternative, to transfer the case to the Central District of California where Immunex’s later-filed case is now pending.

Amgen and Immunex argue in the motion to dismiss that the Massachusetts court lacks subject matter jurisdiction over Amgen (because Immunex is the sole owner of the ’487 patent and Amgen, the parent company, has no rights in the patent).  They further argue that the Complaint should be dismissed because neither Immunex nor Amgen are subject to personal jurisdiction in Massachusetts, and because the venue is improper in Massachusetts.

Alternatively, even if the Massachusetts court determines that it has sufficient jurisdiction and proper venue, Amgen and Immunex seek to transfer the Massachusetts litigation to the Central District of California, which they allege is the more proper forum, and to have the case consolidated with Immunex’s later-filed litigation.   The California case is Civ. No. 17-cv-02613 and has been assigned to Judge Otero.

The filing of a second litigation and the related motion to dismiss or transfer creates a battle over which court will hear the patent infringement case.   We will continue to provide updates as the litigation continues.

On March 31, 2017, Celltrion, Inc. (“Celltrion”) filed three new petition for inter partes review (“IPR”) of two additional patents related to Genentech and Biogen’s Rituxan® (rituximab).  Two of the petitions challenge claims of U.S. Patent No. 7,682,612 (“the ’612 patent”) and the other seeks review of all nine claims of U.S. Patent No.8,206,711 (“the ’711 patent”).  The proceedings are IPR2017-01227 and IPR2017-01230 (both involving the ’612 patent) and IPR2017-01229 (involving the ‘711 patent). The real parties-in-interest identified for Petitioner are Celltrion, Inc., Celltrion Healthcare Co. Ltd., and Teva Pharmaceuticals International GmbH.

Rituximab is an anti-CD20 monoclonal antibody approved for the treatment of non-Hodgkin’s lymphoma, chronic lyphocytic leukemia, rheumatoid arthritis, granulomatosis with polyangitis, and microscopic polyangitis.

The challenged claims of the ’612 patent are directed to methods of treating chronic lymphocytic leukemia (“CLL”) by administering an anti-CD20 antibody to the patient in an amount effective to treat the chronic lymphocytic leukemia, wherein the method does not include treatment with a radiolabeled anti-CD20 antibody (referred to as “single agent” claims).  The challenged claims of the ’711 patent are directed to methods of treating CLL by administering an effective amount of rituximab to the patient at a dosage of 500 mg/m, either alone or in combination with another chemotherapeutic agent.

Earlier this year, the PTAB instituted trial proceedings in IPR2016-01614 based on Celltrion’s petition for review of U.S. Patent No. 7,820,161, which is also related to rituximab (as we reported here).  Last week, Pfizer, Inc. (“Pfizer”) also filed a petition seeking IPR review of the ’161 patent and requested that its case be joined with IPR2016-01614 as discussed in this post.

Celltrion currently has petitions pending for review of three other patents related to rituximab as reported here, and the PTAB denied Celltrion’s petition related to U.S. Patent No. 7,976,838 as reported here.  As discussed in our earlier posts, Boehringer Ingelheim and Celltrion had previously filed petitions at the PTAB for patents related to this same product that were voluntarily dismissed in 2015. A complete list of IPRs related to rituximab and other proposed biosimilars can be found in RFEM’s IPR Dashboard.

Pfizer, Inc. (“Pfizer”) filed a new petition with the Patent Trial and Appeal Board (“PTAB”) on March 24, 2017, for inter partes review (“IPR”) of U.S. Patent No. 7,820,161 (“the ’161 patent”) related to Biogen’s and Genentech’s Rituxan® (rituximab).  The challenged claims of the ’161 patent are directed to a method for treating rheumatoid arthritis by administering more than one intravenous dose of a therapeutically effective amount of rituximab and administering methotrexate.

Rituximab is an anti-CD20 monoclonal antibody approved for the treatment of non-Hodgkin’s lymphoma, chronic lyphocytic leukemia, rheumatoid arthritis, granulomatosis with polyangitis, and microscopic polyangitis.

The proceeding is IPR2017-01115. The only real party-in-interest identified for Petitioner is Pfizer, Inc.  Pfizer reported in January that its proposed biosimilar rituximab (PF 05280586) is in Phase 3 development.  Earlier this month, the PTAB instituted an IPR for certain claims of the ’161 patent on a petition filed by Celltrion (as we reported here), and Pfizer has requested that its petition be joined with that proceeding.

Celltrion currently has petitions pending for review of three other patents related to rituximab as reported here, and the PTAB denied Celltrion’s petition related to U.S. Patent No. 7,976,838 as reported here.  Boehringer Ingelheim and Celltrion had previously filed petitions at the PTAB for patents related to this same product that were voluntarily dismissed in 2015. A complete list of IPRs related to rituximab and other proposed biosimilars can be found in RFEM’s IPR Dashboard.

We will continue to provide updates as these cases progress.

We reported last week that Sanofi-Aventis U.S. LLC, Genzyme Corporation, and Regeneron Pharmaceuticals, Inc. had filed suit in Massachusetts seeking a declaratory judgment that their Dupixent® (dupilumab) product does not infringe Amgen’s U.S. Patent No. 8,679,487 (“the ’487 patent”).  The litigation was filed on March 20, 2017.  In a one-two punch combination, Sanofi and Regeneron filed a petition for inter partes review (“IPR”) of the ‘487 patent with the Patent Trial and Appeal Board (“PTAB”) just three days later on March 23, 2017, and before any substantive activity occurred in the litigation.

The proceeding is IPR2017-01129.  The real parties-in-interest for Petitioner are the same three plaintiffs in the litigation, Sanofi-Aventis U.S. LLC, Genzyme Corp. and Regeneron Pharmaceuticals, Inc.  The ‘487 patent, entitled “Anti-interleukin-4 receptor antibodies,” issued on March 25, 2014, with a total of 17 claims.  Claim 1, the only independent claim, is directed to “an isolated human antibody that competes with a reference antibody for binding to human interleukin-4 (IL-4) receptor.”  The ’487 patent is assigned to Immunex Corporation (“Immunex”), which was acquired by Amgen in 2002.

Dupilumab is a monoclonal antibody intended to inhibit signaling of interleukin-4 (IL-4) and interleukin-13 (IL-13), two key cytokines believed to be the drivers of type 2 helper T-cell (Th2)-mediated inflammation.

As previously reported, Regeneron submitted a biologics license application (“BLA”) for dupilumab to the FDA on July 29, 2016, seeking approval of the product for the treatment of moderate to severe atopic dermatitis in adults.  Atopic dermatitis, the most common form of eczema, is a chronic inflammatory skin disease.  FDA accepted the application for review in September 2016 and granted the dupilumab application priority status, reducing the target goal for approval from the standard ten months after acceptance to just six months.  The PDUFA (FDA goal) date for the dupilumab application was March 29, 2017.  FDA met the target date, granting approval for dupilumab on Tuesday, one day ahead of schedule. Sanofi and Regeneron announced that the product will be available to patients in the U.S. this week.

Amgen’s Amgevita, an adalimumab biosimilar to AbbVie’s Humira®, received approval from the European Commission on March 23, 2017.  Adalimumab is a TNF (tumor necrosis factor) inhibitor that binds to TNF-alpha (TNF-α) preventing it from activating TNF receptors, which cause the inflammatory reactions associated with autoimmune diseases.

Amgevita received approval in all available indications, including the treatment of certain inflammatory diseases in adults, such as moderate-to-severe rheumatoid arthritis; psoriatic arthritis; severe active ankylosing spondylitis (AS); severe axial spondyloarthritis without radiographic evidence of AS; moderate-to-severe chronic plaque psoriasis; moderate-to-severe hidradenitis suppurativa; non-infectious intermediate, posterior and panuveitis; moderate-to-severe Crohn’s disease; and moderate-to-severe ulcerative colitis. According to the announcement, the European Commission also approved Amgevita for the treatment of certain pediatric inflammatory diseases, including moderate-to-severe Crohn’s disease (ages six and older); severe chronic plaque psoriasis (ages four and older); enthesitis-related arthritis (ages six and older); and polyarticular juvenile idiopathic arthritis (ages two and older).

The approval of Amgevita is the first approved biosimilar for Amgen in Europe. Amgen’s adalimumab biosimilar was approved by the FDA in September 2016, and is sold in the United States under the name Amjevita (adalimumab-atto).