United States: Federal Circuit Suggests Solution To Patent Owner's Dilemma When Applicant For Biosimilar Product Refuses Discovery

Last Updated: August 21 2017
Article by Allen M. Sokal

In Amgen, Inc. v. Hospira, Inc., Appeal No. 2016-2179 (Fed. Cir. Aug. 10, 2017), the Federal Circuit suggested what an owner of a reference product suing an applicant for a biosimilar under the Biologics Price Competition and Innovation Act of 2009 (BPCIA) must do when the applicant refuses discovery that the patent owner needs to determine whether it has a good faith basis for suit. Neither the collateral order doctrine nor mandamus provides the solution.

Under the BPCIA, an applicant for a biosimilar product can piggyback on a reference biological product that FDA has approved by showing that "there are no clinically meaningful differences between the biological product and the reference product in terms of … safety, purity, and potency." Slip op. at 3 n.1 (citing 42 U.S.C. § 262(l)(2)(A)-(B)). Under the head-spinning statutory patent dance addressed by the Supreme Court in Sandoz, Inc. v. Amgen, Inc., 137 S. Ct. 1664 (2017), the applicant must, inter alia, provide the patent owner (the sponsor of the reference product) a copy of the application "and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application." Slip op. at 3 (citing 42 U.S.C. § 262(l)(2)(A)). Based on that information, the parties identify patents to be immediately litigated in a first phase of the litigation under paragraph (l)(3). Id.

Hospira filed an application seeking approval of a biosimilar of Amgen's approved biological product EPOGEN® and, as required, provided Amgen with a copy of its application. It refused to provide any additional information about the manufacturing process, contending that its application disclosed sufficient information. But its application did not disclose the composition of the cell-culture medium Hospira used to manufacture its biosimilar product, which precluded Amgen from determining whether its patents that claim processes for culturing cells used in manufacturing biological products would be infringed. Consequently, although Amgen identified two patents and ultimately sued Hospira for infringing them, it did not identify any cell-culture patents on its "list of patents for which [it] believe[d] a claim of patent infringement could reasonably be asserted." Slip op. at 5 (citing 42 U.S.C. § 262(l)(3)(A)).

Amgen therefore sought discovery on the composition of Hospira's cell-culture medium in the suit it had filed for infringement of two patents. But the cell-culture information that Amgen needed to determine whether it had a good faith basis for asserting its cell-culture patents was irrelevant to the patents in suit. The district court accordingly denied Amgen's motion to compel discovery. Amgen appealed from that interlocutory order, and Hospira moved to dismiss the appeal for a lack of jurisdiction. The Federal Circuit in turn asked the parties to brief "whether this court has jurisdiction pursuant to the collateral order doctrine or under the All Writs Act." Id. at 6.

Since the appeal was from an interlocutory order rather than a final judgment, the court considered whether it had jurisdiction under either of the two theories it asked the parties to brief. It concluded that it did not have jurisdiction under either the collateral order doctrine or the All Writs Act, and therefore dismissed the appeal. In doing so, however, it suggested a solution to Amgen's dilemma.

The court observed first that the collateral order doctrine is a narrow exception to the requirement for a final judgment that ends the litigation on the merits. Id. Under the collateral order doctrine, the interlocutory order "must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Id. (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978), and Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)). Although the order at issue satisfied the first two conditions, the court ruled that discovery rulings generally are reviewable on appeal from a final judgment and do not qualify for the collateral order doctrine. Slip op. at 7. Amgen argued that requiring it to wait until final judgment would defeat the statutory purpose of enabling immediate infringement litigation before FDA approval of the applicant's biological product, but the court reasoned that "there is no clear-cut statutory purpose that would be undermined by denying immediate appeal." Id. at 7-8.

As to mandamus under the All Writs Act, the court noted that such relief requires that the moving party "'have no other adequate means to attain the [desired] relief' and must demonstrate that its right to the writ's issuance is 'clear and indisputable.'" Id. at 8-9 (quoting Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367, 380-81 (2004)). Although the Federal Circuit purported to focus on whether Amgen had established a clear and indisputable right to relief, id. at 9, it instead considered whether there was any other avenue available to Amgen to obtain the desired process information under paragraph (l)(2)(A). It held that such an avenue did exist.

Specifically, the court ruled that Amgen could obtain the process information by suing on patents described in paragraph (l)(3) of the BPCIA, i.e., the "list of patents for which the sponsor believes a claim of patent infringement could reasonably be asserted … [against] a person … engaged in the making, using, selling, offering to sell, selling, or importing into the United States of the biological product that is the subject of" Hospira's application." Id. at 9-10 (quoting 42 U.S.C. § 262(l)(3)(A)(i)). The court added that Amgen "could also sue on a patent that 'could be identified' under paragraph (l)(3)." Id. at 10 (citing 35 U.S.C. § 271(e)(2)(C)(i) and (ii)). But the court noted that Amgen did not list any of its cell-culture patents, much less bring suit on any of them. Id.

Amgen maintained that it could not list its cell-culture patents under paragraph (l)(3)(A) unless it first had a good faith belief that Hospira would infringe those patents, which it could form only if it had the information it sought through discovery. Otherwise, according to Amgen, it could be subject to sanctions under Fed. R. Civ. P. 11 or antitrust liability. But the Federal Circuit responded that Amgen had misconstrued the statute. Listing the cell-culture patents could create no adverse consequences if done in good faith, even if mistaken. Once a sponsor lists a patent, the applicant is obligated to "provide … a detailed statement that describes on a claim by claim basis, the factual and legal basis of the opinion of the subsection (k) applicant that such patent is invalid, unenforceable, or will not be infringed." Slip op. at 12 (quoting 42 U.S.C. § 262(l)(3)(B)(ii)). And if the applicant still refuses to provide the required information, "the sponsor would have a reasonable basis for asserting a claim of patent infringement." Id.

Thus, although the Federal Circuit dismissed Amgen's appeal, it made clear that patent owners in Amgen's situation have a safe means to obtain the information they require from applicants for biosimilar products to determine whether a basis for suit exists.

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