Biosimilar Remedies Not Limited Without Full Patent Dance

by Foley & Lardner LLP
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The judge presiding over the pending biosimilar litigation between Janssen and Celltrion/Hospira has issued guidance regarding the ramifications of a potential standing defect. Judge Wolf opined that Janssen’s biosimilar remedies would not be limited to a reasonable royalty under 35 USC § 271(e)(6) if it turns out that Janssen lacks standing for failure to join all owners of the patents-in-suit, and must file a new suit. He announced his guidance at hearings on February 23-24, and in a written Memorandum and Order issued March 2.

The Remicade® Biosimilar Litigation

As discussed in this article, Janssen initially sued Celltrion and Hospira in March 2015 for violations of the Biologics Price Competition and Innovation Act (BPCIA) relating to Celltrion and Hospira’s abbreviated Biologic License Application (aBLA) for infliximab (a proposed biosimilar version of Janssen’s Remicade® product). Janssen brought a second infringement action against Celltrion and Hospira in June 2016, alleging actual infringement after defendants commenced manufacture. Both cases are pending before Judge Wolf in the U.S. District Court for the District of Massachusetts. The cases were scheduled for trial on February 13, 2017, but the trial was postponed after defendants questioned Janssen’s standing.

Section 271(e)(6)’s Limitation On Biosimilar Remedies

Although standing can be cured by filing a new suit, Celltrion and Hospira argued that Janssen’s remedies in a new suit would be limited to a reasonable royalty under § 271(e)(6):

(6)
(A) Subparagraph (B) applies, in lieu of paragraph (4), in the case of a patent—
(i) that is identified, as applicable, in the list of patents described in section 351(l)(4) of the Public Health Service Act or the lists of patents described in section 351(l)(5)(B) of such Act with respect to a biological product; and
(ii) for which an action for infringement of the patent with respect to the biological product—
(I) was brought after the expiration of the 30-day period described in subparagraph (A) or (B), as applicable, of section 351(l)(6) of such Act; or
(II) was brought before the expiration of the 30-day period described in subclause (I), but which was dismissed without prejudice or was not prosecuted to judgment in good faith.

(B) In an action for infringement of a patent described in subparagraph (A), the sole and exclusive remedy that may be granted by a court, upon a finding that the making, using, offering to sell, selling, or importation into the United States of the biological product that is the subject of the action infringed the patent, shall be a reasonable royalty. ….

While the language of the statute is complicated, Celltrion and Hospira relied on the premise that a reasonable royalty is the only remedy for infringement when an infringement action is brought “after the expiration of the 30-day period described in subparagraph (A) or (B), as applicable, of [42 USC § 262(l)(6)].”

Was § 271(e)(6) Triggered?

35 USC § 271(e)(6) refers to the lists of patents described in §§ 351(l)(4) and 351(l)(5)(B) of the Public Health Service Act (codified at 42 U.S.C. §§ 262(l)(4) and 262(l)(5)(B)), which are the “patent lists” that culminate from the “patent dance” procedures of the BPCIA. According to Janssen, however, Celltrion refused to complete the “patent dance” by failing to provide information regarding its manufacturing process and attempting to “moot” certain steps of the dance by consenting to Janssen’s proposed patent list.

In his guidance to the parties, Judge Wolf found that a reasonable fact-finder could not conclude that Celltrion had completed the “patent dance” in good faith. As such, Janssen’s remedies in a new suit (if necessary) would not be limited to a reasonable royalty under § 271(e)(6):

The court construes the term “shall” in §§262 (l)(4) and (5) to mean that the alleged infringer must comply with each step of the BPCIA process in order to limit the patentee to a reasonable royalty if it does not sue within 30 days of the end of that process. ….

It is only the list of patents that emerge from the properly completed BPCIA procedure that are potentially subject to the reasonable royalty damages limitation. On the present record, it could not be found that the six patents originally subject to litigation in this case emerged from a properly completed statutory process.

With this guidance, Judge Wolf ordered the parties to confer regarding the possibility of settlement by March 17.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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