A Second Lawsuit Tests the BPCIA Biosimilars “Patent Dance” Waters

April 1, 2014

By Kurt R. Karst –       

Earlier this week, Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”) filed a Complaint for Declaratory Judgment in the U.S. District Court for the District of Massachusetts seeking a judgment with respect to certain patents allegedly covering Janssen Biotech, Inc.’s (“Janssen’s”) biological product REMICADE.  The Complaint marks the beginning of the second lawsuit that will undoubetedly bring into play the complex patent resolution provisions added to the PHS Act by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  The BPCIA created a pathway for the submission and approval of biosimilar versions of brand-name reference products under a so-called Section 351(k) application. 

In November 2013, in Sandoz, Inc. v. Amgen, Inc. and Hoffman-La Roche, Inc., the U.S. District Court for the Northern District of California granted Amgen Inc.’s and Hoffmann-La Roche Inc.’s Motion to Dismiss a June 2013 Complaint for Declaratory Judgment and Patent Invalidity and Non-infringement concerning two patents Roche licensed to Amgen that purportedly cover Amgen’s biological product ENBREL (etanercept).  According to the district court, “Sandoz does not contend, and cannot contend, it has complied with its obligations under [PHS Act §§ 351(l)(2)-(6)], because . . . it has not, to date, filed an application with the FDA.”  The reference to PHS Act §§ 351(l)(2)-(6) is to the BPCIA’s multi-step “patent dance” procedures: Step 1 – Transmission of Biosimilar Application; Step 2 – Reference Product Sponsor’s Paragraph 3(A) Patent List; Step 3 – Biosimilar Applicant’s Paragraph 3(B) Patent List; Step 4 – Reference Product Sponsor’s Response; Step 5 – Patent Resolution Negotiations; Step 6 – Patent Resolution If No Agreement; and Step 7 – Filing of the Patent Infringement Action. 

As we previously reported, Sandoz appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit (Docket No. 14-1693).  In March, Sandoz filed its Opening Brief in the appeal.  According to Sandoz, the district court’s decision “completely deprives federal courts of jurisdiction over any declaratory judgment action implicating a biosimilar product until after the FDA had already approved the product—a serious error that undermines the BPCIA’s stated purpose of advancing competition for biologic drugs.”  Moreover, says Sandoz, the court’s belief that it lacked jurisdiction because Amgen did not specifically threaten to sue Sandoz for patent infringement is directly contrary to the U.S. Supreme Court’s holding in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), which the district court did not cite in its decision.  Sandoz continues in its brief with some interesting arguments and thoughts:

The district court’s contrary ruling defies both the plain text and very purpose of the BPCIA.  The BPCIA contains no provision depriving courts of jurisdiction to resolve patent disputes where jurisdiction already existed, as here, before an FDA filing.  While the BPCIA does contain certain limitations on declaratory judgment actions after a biosimilar application is submitted, those limitations do not apply to Sandoz’s complaint, which was filed before any FDA application.  The district court was not at liberty to impose a jurisdictional bar that does not exist in the statute’s text, and its decision to create such a bar—without briefing on the issue, no less—was pure error.

The district court compounded this error by misinterpreting the BPCIA’s provisions.  According to the district court, “neither a reference product sponsor, such as Amgen, nor an applicant, such as Sandoz, may file a lawsuit unless and until they have engaged in a series of statutorily-mandated exchanges of information.”  But those patent exchanges serve only as a prelude for an action for a patent owner’s infringement lawsuit under § 271(e)(2)(C), not a declaratory judgment.  The statute allows either party to file for declaratory judgment once a biosimilar applicant gives notice of its intention to market its product.  Thus, even if the BPCIA applied, as the district court found, its provisions would expressly permit Sandoz’s action here because Sandoz provided Amgen notice of its intention to commercially market its product before bringing this case. . . . 

The district court’s judgment also seriously disrupts the exclusivity structure of the BPCIA.  According to the statute, the biosimilar applicant must give at least six months’ notice before launching its product.  If a biosimilar applicant is forbidden from providing this notice before its approval—as the district court now holds—then applicants will be forbidden from launching biosimilar products until six months after obtaining final FDA authority to do so, in all cases, and regardless of any existing patent coverage or the expiry of the 12-year data exclusivity period.  The court’s erroneous construction thereby guarantees every biosimilar product must uselessly wait to launch for six months after the FDA provides formal approval to launch, creating an extra-statutory period of product exclusivity that Congress never intended in drafting the BPCIA. [(Emphasis in original; internal citation omitted.)]

We won’t be surprised if we see some of these same arguments made in the new Celltrion case, which we assume also involves a product that will be the subject of a Section 351(k) biosimilar application. 

Celltrion’s product REMSIMA, which is reportedly approved in 47 countries and is pending approval in another 23 countries, is intended as a biosimilar version of REMICADE.  REMICADE is a blockbuster product that FDA first approved in August 1998 under BLA No. 103772.  It is currently approved for treating myriad diseases and conditions: rheumatoid arthritis, ulcerative colitis, Crohn’s disease, ankylosing spondylitis, psoriatic arthritis, and plaque psoriasis. 

According to Celltrion, the company “intends to apply for marketing approval of Remsima® in the United States during the first half of 2014,” and expects FDA approval “by early 2015 (assuming the approval process is not hindered by interference from Janssen or its affiliates).”  That means Celltrion is very close to submiting a Section 351(k) biosimilar application to FDA.  Indeed, the company says that it has “scheduled a final meeting with the FDA to discuss the format and content of Celltrion’s regulatory application.”

To clear the patent thicket and a path to marketing its biosimilar version of REMICADE, Celltrion says that it is necessary to obtain a declaratory judgment that certain patents applicable to REMICADE – U.S. Patent Nos. 5,919,452, 6,284,471, and 7,223,396 – are invalid and unenforceable.  According to Celltrion:

Janssen and its predecessors originally applied for patents relating to Remicade® in 1991, and obtained its first patent in 1997.  Under U.S. law, Janssen’s period of permissible patent protection should have already ended.  However, Janssen and its predecessors are trying to improperly extend its monopoly after its initial patents expired.  Janssen holds at least three U.S. patents. . . that will purportedly cover Remicade® beyond 2014. . . .  Celltrion is informed and believes that Janssen and its predecessors and affiliates have engaged in manipulative and deceptive practices before the U.S. Patent & Trademark Office to improperly extend the length of its patent monopoly for Remicade®, and to obtain patents the Patent Office never would have issued had it known all material facts.

Why initiate litigation now instead of after the filing of a Section 351(k) biosimilar application?  According to Celltrion:

Because Celltrion expects to face patent infringement allegations from Janssen, Celltrion wants to start the adjudicative process regarding the invalidity and unenforceability of Janssen’s patents.  This will enable Celltrion to immediately avail itself of the processes available in the federal judiciary to discover information relating to Janssen’s patents, to learn Janssen’s claim constructions and infringement contentions, and to present issues speedily for adjudication and test the validity and enforceability of Janssen’s patents.

And if Celltrion is unable to challenge the patents now, what then?  According to the company, it “would delay Celltrion’s access to the judicial system for about 10‐12 months (and perhaps even longer),” which “could force Celltrion into a difficult choice between (a) launching Remsima® without the benefit of discoverable information regarding Janssen’s patents and legal positions, or (b) not launching Remsima® at the earliest opportunity and waiting for a delayed legal process to play out.”  

We’re keeping a close eye on both the Sandoz and Celltrion cases because the decisions in these cases will undoubetedly set the stage for the implementation (and success or failure) of the BPCIA for years to come.