With Briefing Nearly Complete, Folks Get Set to Hunker Down for High-Stakes Rulings in Challenges to BPCIA Biosimilars “Patent Dance” Procedures

July 10, 2014

By Kurt R. Karst –   

Earlier this year we posted on two pending lawsuits brought by potential biosimilar applicants challenging the the so-called “patent dance” 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 (both “highly similar” and interchangeable) versions of brand-name reference products under a Section 351(k) application.  The first case was brought by Sandoz Inc. (“Sandoz”), which has appealed to the U.S. Court of Appeals for the Federal Circuit (Docket No. 14-1693) a November 2013 decision from the U.S. District Court for the Northern District of California granting Amgen Inc.’s (“Amgen’s”) and Hoffmann-La Roche Inc.’s (“Roche’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) (see our previous post here).  The second case was brought by Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”), which 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 (infliximab) (see our previous post here).  Both cases are moving steadily towards resolution, though an appeal is likely in both no matter how the courts rule.  (A third case – also involving  infliximab and a Celltrion Complaint for Declaratory Judgment – was filed in the U.S. District Court for the Southern District of New York against The Kennedy Trust for Rheumatology Research, which holds third-party patents – here, here, and here – that allegedly cover infliximab.)  

When we last left off with the Sandoz case, the company had filed its opening brief with the Federal Circuit, saying, among other thinge, that the district court’s decision undermines the BPCIA’s purpose of advancing competition for biologic products because that 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.”  The district court dismissed the case after ruling that Sandoz was subject to, but had not satisfied, any of the BPCIA’s limitations on declaratory judgment, and that Sandoz had not presented a case or controversy.

A couple of months later, Amgen and Roche shot back with a 95-page filing arguing, among other things, that it is Sandoz’s interpretation of the law would eviscerate the statutory biosimilars patent dance framework:

Sandoz argues that the BPCIA’s patent provisions limit declaratory judgment actions only after (1) a biosimilar applicant has submitted a subsection (k) application to the FDA, (2) the FDA has accepted that application for review, and 20 days thereafter (3) the applicant “fails to provide” the application and additional manufacturing information to the RPS.  Until such “failure” has occurred, Sandoz argues, the patent provisions of the BPCIA do not limit the prospective biosimilar applicant’s ability to bring biosimilar-related declaratory judgment patent actions that would otherwise be restricted under the BPCIA.  Sandoz’s construction, however, eviscerates the statutory framework, is inconsistent with the BPCIA’s cross-referencing within the PHSA and between it and the DJ Act, furthers no logical public policy, undermines orderly access to the courts, and invites gamesmanship. [(Emphasis in original.)]

Most recently, Sandoz filed its reply brief hammering home the company’s points that the BPCIA is not the exclusive mechanism for resolving patent disputes involving biological products, and that the BPCIA in no way bars the company’s Complaint for Declaratory Judgment:

[T]he BPCIA creates one potential mechanism to resolve patent disputes, by amending 35 U.S.C. § 271(e) to create a new infringement action based on the “artificial” activity of parties exchanging patent contentions.  However, nothing in the BPCIA says that a § 271(e) action is the only way to resolving biologic patent disputes.  The BPCIA does not purport to deprive federal courts of jurisdiction where it would otherwise exist under the Patent Laws, such as for declaratory judgments filed under §§ 271(a)-(c).

By their express terms, the BPCIA’s sole limitations on a declaratory judgment remedy apply after a subsection (k) application is filed, and then, only “if” a subsection (k) applicant first “fails” to cooperate in prescribed informational exchanges, 42 U.S.C. §§ 262(l)(9)(B)-(C), or does not identify particular patents on a final list, § (l)(9)(A).  Sandoz is not a “subsection (k)” applicant; it has not “failed” to comply with any obligations; and thus, no provision of the BPCIA bars Sandoz’s Complaint. [(Emphasis in original.)]

To our knowledge, a date for Oral Argument as not yet been set in the case, though Sandoz has pressed the Federal Circuit to schedule Oral Argument as soon as possible.

Moving on to the Celltrion case and Celltrion’s REMSIMA biosimilar version of REMICADE, Janssen not surprisingly filed a Motion to Dismiss Celltrion’s Declaratory Judgment Complaint for lack of subject matter jurisdiction.  Alternatively, Janssen asks the district court to decline to exercise declaratory judgment jurisdiction on the basis that to proceed would be inconsistent with the BPCIA.  Mirroring some of the arguments in the Sandoz case, Janssen says:

Under the law, if Celltrion had already filed its biosimilar application it would be statutorily barred from bringing the instant declaratory judgment action.  Instead, Celltrion filed this suit prematurely – before filing its biosimilar application – in an attempt to avoid the patent resolution procedures of the BPCIA.  There is no justification for permitting Celltrion to avail itself of the biosimilar approval pathway in the BPCIA while at the same time skirting the patent resolution procedures.

Celltrion, in the company’s opposition brief filed earlier this week, vigorously defends its position, saying that the case is ripe based on the U.S. Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), and the “totality of the circumstances:”  “In this case, all the circumstances weigh in favor of jurisdiction.  They include Celltrion’s substantial preparation to market Remsima; the fact that Remsima’s formula is fixed and will not change in any way relevant to the three disputed patents; Janssen’s aggressive efforts to defend its patents and oppose Remsima; and Janssen’s repeated refusal to grant licenses to Celltrion.”

As to whether or not the district court should exercise declaratory judgment jurisdiction, Celltrion says that doing so would be an abuse of discretion:

First, Janssen’s proposal proceeds from a false premise.  The BPCIA’s information- exchange process is not an alternative to litigation or a “dispute resolution” process Celltrion is trying to end-run. . . . It is a dispute preparation process designed to facilitate and culminate in litigation.  Dismissing this case because Celltrion and Janssen have not yet engaged in that process will not keep the dispute out of court; it will only delay the time when a court resolves it.

Second, forcing Celltrion and Janssen to engage in the information-exchange process before adjudicating their patent dispute would serve no purpose.  Celltrion already has identified the three disputed patents, and if Janssen thinks there are more, it can file counterclaims alleging infringement of them.  The only consequence of dismissal would be to extend Janssen’s exclusivity for Remicade by the time it would take to complete the information-exchange process.  That would turn the process on its head.  Congress designed it to provide certainty and to ripen unripe disputes so that a court can adjudicate them in a timely fashion without practically extend-ing the 12-year exclusivity term.  Here, Celltrion’s dispute is already ripe, and Janssen’s 12-year term has already expired. The Court should reject Janssen’s effort to mis-use a tool for promoting competition as a weapon to delay it.

Third, Janssen’s argument rests on an invalid policy premise.  In drafting the BPCIA, Congress addressed declaratory-judgment actions between biologics manufacturers and decided to bar only a subset—those filed after the information-exchange process begins but before it ends.  Dissatisfied with Congress’s policy choice, Janssen asks the Court to bar declaratory-judgment actions between biologics manufacturers filed before the information-exchange process even begins. T his Court cannot use its discretion under the Declaratory Judgment Act in a way that rejects Congress’s deliberate policy choice. [(Emphasis in original; citations omitted.)]

Regardless of how the district court rules in the Celltrion case, it seems destined to go up to the Federal Circuit.  But timing will be everything.  If the Federal Circuit rules first in the Sandoz case, then we might have different appellants and appellees.