Recently, the Federal Circuit had the opportunity to issue its first decision relating to biosimilars patent litigation and the Biologics Price Competition and Innovation Act of 2009 (BPCIA) procedures. Instead, the court affirmed that, at this time, no controversy existed between the parties and left the biosimilar provider with no resolution to its fear of patent infringement litigation until the filing of a biosimilar application for Food and Drug Administration approval. The case, Sandoz v. Amgen, No. 3:13-cv-02904 MMC (Fed. Cir. Dec. 5, 2014), began when Sandoz brought suit against Amgen in the District Court of the Northern District of California (Sandoz v. Amgen, 2013 WL 6000069, No. C-13-2904 MMC (N.D. Cal. Nov. 12, 2013)). Amgen is the exclusive licensee of patents covering etanercept, the active ingredient in the FDA-approved product Enbrel®. Sandoz had conducted early clinical trials to test a biological product similar to etanercept, and prior to filing a biosimilar application for FDA approval, Sandoz sought a declaratory judgment for invalidity and noninfringement of the patents covering etanercept.
The BPCIA outlines the procedure for FDA approval of biological products that are similar to a previously approved biologic therapeutic (a reference product). The biosimilars procedure is much newer and very different from the Hatch-Waxman Act procedures for generic drugs. The BPCIA’s approval pathway requires an exchange of patent information between the biosimilar applicant and the sponsor of the reference product. The patent exchange is a complex multistep procedure, which, because the procedure is just now beginning to be used by companies, has many unanswered questions in its usage. The BPCIA provides that only after the patent information exchanges are completed may either party file suit.
The district court dismissed Sandoz's suit under two theories. The first theory, under the Declaratory Judgment Act, found that Sandoz failed to establish a "case or controversy" as required to obtain declaratory relief. Similar to the patent litigation triggered by the filing of a generic drug application under the Hatch-Waxman Act, the district court's second theory was that neither party could institute patent litigation until the BPCIA patent exchange procedures were completed in the filing of a biosimilar's FDA application. The district court disagreed with Sandoz's argument that the BPCIA permitted filing a declaratory judgment action upon a biosimilar manufacturer's notice of commercial marketing. The district court found that Sandoz could not give such notice because that notice must be given to the sponsor not later than 180 days before the date of the first commercial marketing, and the Sandoz product was not at that point of development. Under the district court's interpretation of the BPCIA, the BPCIA only allows for patent litigation after the BPCIA procedures are completed.
The Federal Circuit affirmed the district court's dismissal of Sandoz's suit based solely on the finding that Sandoz failed to establish a case or controversy because no patent infringement has yet occurred—Sandoz is currently in Phase III trials and has not yet filed a biosimilar application for FDA approval. The Federal Circuit failed to make any findings about the district court's interpretation of the BPCIA, and its restriction to particular steps in the procedure for patent litigation. The Federal Circuit found Sandoz failed to present a controversy of sufficient "immediacy and reality" as it was still uncertain whether Sandoz's product would eventually be marketed, and Sandoz had not shown it would suffer immediate and substantial adverse impact from not obtaining a patent judgment.
The Federal Circuit’s choice to avoid the district court's interpretation of the BPCIA leaves biosimilar manufacturers wondering when or how they can challenge the validity of a patent that may pose freedom to operate issues for the biosimilar under development. Under the Federal Circuit finding, a biosimilar manufacturer can operate under the BPCIA procedures until patent litigation is instituted. Alternatively, a biosimilar manufacturer may utilize a post-grant proceeding under the United States Patent and Trademark Office (USPTO) procedures. For example, one can file a petition for ex parte reexamination, for Inter Partes Review, or for Post-Grant Review, depending upon the patent and the claims at issue. These USPTO procedures have limitations in that there may be estoppel issues created for any later litigation actions, as well as the limited number of grounds that can be raised in some post-grant proceedings compared to those allowed for district court litigation.
Under the current legal interpretations, absent an immediate case or controversy between the parties, when and how a party can challenge the validity of a patent before making substantial research investments prior to filing for FDA approval remains governed by the BPCIA procedures, and for those parties that seek a different pathway, post-grant proceedings may be the new battleground in the biosimilar world.
