“Chaos” Theory: Amgen’s SCOTUS Merits BriefMarch 14, 2017
On Friday, Amgen submitted its Opening and Response Brief at the Supreme Court in the matter of Sandoz v. Amgen, Nos. 15-1039, 15-1195. The brief addressed two major questions with respect to the BPCIA: when an applicant can provide 180-day notice of biosimilar marketing and whether the applicant is required to participate in BPCIA’s version of the patent dance. Amgen vehemently argues that notice is appropriate only after licensure and that participation in the patent dance is mandatory. Should the Court not agree with Amgen’s interpretation of the BPCIA, Amgen envisions “chaos” in the biosimilar world.
None of Amgen’s arguments here are new, as this matter was extensively litigated in the lower courts (see our previous coverage here, here, here, and here). Amgen argues that parties must participate in the patent dance for the statute to have its intended effect and that notice can come only after licensure to ensure time to efficiently enforce its patents. Amgen emphatically reasons that the proper result is obvious, as it both reflects the statute’s text and structure and it better promotes the statutes purpose.
Based on the text and structure of § 262(l)(8)(A), Amgen contends that the Federal Circuit correctly held that applicants provide post-licensure notice at least 180 days before marketing. Referring to a product that has already been “licensed” by FDA, Amgen argues that the statute’s text is clear that notice can be submitted only after licensure. But more important to Amgen’s “chaos” theory put forth in the brief, the structure of § 262(l)(8)(A) confirms that notice must be post-licensure. Section § 262(l) creates two phases of patent litigation: an immediate action for those patents appropriate for early litigation and a secondary action for all remaining patents and patents later acquired or licensed by the sponsor. According to Amgen, the marketing notice triggers the start of the second phase of litigation by lifting the bar on declaratory-judgment and preliminary injunction actions.
In the Response portion of the brief, Amgen argues that the patent dance is mandatory because there is no reason to deviate from the typical meaning of the word “shall.” Just because the statute explicitly contemplates an applicant’s noncompliance by permitting the sponsor to bring legal action for failure to comply does not indicate that the compliance with the statute is optional. This interpretation is consistent with the statutory purpose and legislative history of the BPCIA. Congress rejected a permissive statute in an earlier proposal of the BPCIA, but elected the mandatory language in the final version of the bill.
We raised questions in a previous post about the practicality of the patent dance under the BPCIA if it is indeed voluntary, and Amgen’s brief certainly emphasizes these concerns. Amgen argues that Sandoz’s interpretation of the BPCIA would require reference product sponsors to sue on every conceivable relevant patent in order to protect its patent rights. Without exchange of product information, the reference product sponsor has no way of knowing which patents are implicated. And if an applicant could choose not to provide required disclosures and refuse to provide 180 days’ notice of commercial marketing, the sponsor could only enforce its patent rights through emergency injunctive relief after licensure. Couched in its chaos theory, Amgen argues that Sandoz’s interpretation would negate the “process” that the BPCIA was intended to introduce. Instead, Amgen believes that reference product sponsors will just have to close their eyes and sue without any knowledge of actual infringement.