On April 17, 2019, several lawmakers from the Senate and House of Representatives released a bipartisan, bicameral framework for statutory reform of 35 U.S.C. § 101. The framework was released about two months after the revival of the Senate Judiciary Subcommittee on Intellectual Property. For the past several years, innovators, the Patent Office, and even judges on the Federal Circuit have raised concerns that Section 101 has become a runaway law for invalidating patents that reflect genuine advances in science and technology. The revival of the Senate subcommittee and the release of this framework indicate that Capitol Hill has heard, and is moving towards a response to, these concerns.
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Biologics Blog is a source of insights, information and analysis related to biologics, including the legal developments, trends and changing regulation that impact the biotechnology industry. Patterson Belknap represents biotechnology, pharmaceutical and healthcare companies in a broad range of patent litigation matters, including patent infringement cases, PTO trial proceedings, patent licensing and other contractual disputes. Our team includes highly experienced trial attorneys with extensive technical knowledge, many of whom have advanced scientific degrees and industry experience in fields such as molecular biology, biochemistry, chemistry, statistics and nuclear engineering.
On February 6, 2019, the Federal Circuit issued its latest opinion on patentable subject matter under 35 U.S.C. § 101 in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, No. 2017-2508, slip. Op. (Fed. Cir. Feb. 6, 2019). Judge Lourie wrote for the majority in this split decision, expressing some regret but affirming an order invalidating a diagnostic patent involving proteins. Judge Newman dissented, voicing a concern that § 101 jurisprudence has become counterproductive to the goals of patent law. Though unsurprising, the decision further narrows an already shrinking space for patents to diagnostic methods. It is unclear from this decision what diagnostic methods, if any, are safe from future § 101 challenges.
Federal Circuit Dismisses Momenta IPR Appeal for Lack of Standing and Mootness After Momenta Abandons Orencia® Biosimilar
Last week, the Federal Circuit issued its long-awaited opinion in Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., No. 2017-1694, slip op. (Fed. Cir. Feb. 7, 2019). While many had hoped the decision would provide clarity on whether a biosimilar maker who has not yet filed an aBLA has standing to appeal a PTAB decision upholding an innovator patent, the Federal Circuit instead dismissed the appeal for lack of standing and mootness based on post-appeal developments making it clear that Momenta had abandoned its efforts to develop the biosimilar in question. Nevertheless, Momenta is important in that it illustrates the continued risk to biosimilar makers of unappealable IPR decisions when they bring IPRs years before filing an aBLA.
On January 7, 2019, the United States Patent and Trademark Office (USPTO) published new guidance for patent examiners intended to address concerns expressed by Federal Circuit judges, industry stakeholders, and others about the perceived lack of predictability and clarity in determining subject matter eligibility under 35 U.S.C. § 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019). The guidance, which is intended for use by USPTO personnel in evaluating subject matter eligibility, “revises the procedures for determining whether a patent claim or patent application claim is directed to a judicial exception (laws of nature, natural phenomena, and abstract ideas).” Id. This new guidance represents an attempt by the USPTO to address “the legal uncertainty surrounding Section 101,” recognizing that “[m]any stakeholders, judges, inventors, and practitioners across the spectrum have argued that something needs to be done to increase clarity and consistency in how Section 101 is currently applied.” Id.
On December 22, 2018, the United States federal government entered a partial shutdown, which now enters its 19th day. If the shutdown continues through the weekend, it will be the longest federal government shutdown in U.S. history. While many federal offices and services are completely closed, agencies that impact biologics—including the FDA, the USPTO, and the Federal Judiciary—remain open in various capacities, at least for now. Nevertheless, if the shutdown continues, the biotech/pharmaceutical industry could begin to feel its effects.
Two cases decided by the Federal Circuit in 2018, Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, en banc rehearing denied, 890 F.3d 1354 and Berkheimer v. HP Inc., 881 F.3d 1360, en banc rehearing denied, 890 F.3d 1369, address what qualifies as patent-eligible subject matter under 35 U.S.C. § 101 and how courts should resolve that question. These cases expose divisions within the court on § 101 issues, however, and leave uncertainty in their wake. Many stakeholders, including judges, are therefore calling for guidance from the Supreme Court as to how to resolve such issues or seeking the aid of Congress.
Earlier this month, the President signed into law the Patient Right to Know Drug Prices Act (Public Law 115-263). The Act mainly focuses on eliminating so-called “gag clauses” that prevent pharmacists from telling patients when paying for a drug out of pocket is cheaper than paying through insurance. In addition, the Act amends the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) to require branded drug companies and biosimilar applicants to disclose settlement agreements relating to the “manufacture, marketing, or sale” of biosimilar products to the Federal Trade Commission (“FTC”) and U.S. Department of Justice (“DOJ”) for evaluation under the antitrust laws. The new legislation brings biosimilar litigation in line with ANDA litigation, for which the same disclosure requirements were already in place.
In Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., No. 17-1694 (Fed. Cir. argued Dec. 5, 2017), BMS challenges Momenta’s standing to appeal a PTAB decision upholding the validity of BMS’s patent relating to a formulation of Orencia® (abatacept) in an IPR brought by Momenta before having filed a biosimilar marketing application. The Federal Circuit is expected to decide whether a petitioner must have filed a marketing application in order to have Article III standing to appeal from an unfavorable PTAB decision. As months have passed without a decision, Momenta and BMS have both used the time to further press their case.
Earlier this month, AbbVie filed suit against Sandoz’s proposed biosimilar to AbbVie’s HUMIRA® (adalimumab). Invoking the Biosimilar Price Competition and Innovation Act (“BPCIA”), AbbVie asserts two patents protecting Humira, a fraction of the 84 patents AbbVie wished to litigate. Taking full advantage of the pre-litigation “patent dance,” Sandoz limited the number of patents-in-suit to just two. As this case illustrates, following the patent dance affords biosimilar makers considerable control and power over the scope of biosimilar lawsuits.
The Supreme Court of the US handed patent owners a significant victory in WesternGeco v ION by overturning the Federal Circuit’s bright-line rule prohibiting recovery of lost profits accrued overseas as a result of domestic patent infringement under § 271(f)(2) of the Patent Act.§ 271(f)(2) prohibits supplying components of a patented invention from the US with the intent that they be combined abroad.
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On July 20, 2018, FDA approved Pfizer’s biosimilar of Amgen’s Neupogen® (filgrastim). Pfizer’s product, Nivestym™, is the second biosimilar of Neupogen to be approved after Sandoz’s Zarxio®, the first approved biosimilar in the United States. Pfizer’s Nivestym gained approval for all eligible Neupogen indications.
Allergan’s attempt to shield its Restasis patents from inter partes review by assigning the patents to the Saint Regis Mohawk Tribe was rejected last week by a unanimous Federal Circuit panel. The Federal Circuit affirmed the PTAB’s February 2018 decision holding that tribal sovereign immunity does not bar IPRs.
On Friday, June 22, 2018, the Supreme Court issued its decision in WesternGeco LLC v. ION Geophysical Corporation, 585 U.S. ___, Slip. Op. No. 16-1011 (June 22, 2018), reversing the Federal Circuit and holding that WesternGeco’s award for lost foreign profits was a permissible application of the damages provision of the Patent Act, 35 U.S.C. § 284. Justice Thomas wrote the opinion for a seven-justice majority while Justice Gorsuch wrote a dissent joined by Justice Breyer.
Analytical studies to demonstrate that a biosimilar is highly similar to its reference product are central to the biosimilar development and approval process. For this reason, there have been calls from industry for more guidance from FDA on its expectations for evaluating and demonstrating analytical similarity.
As biosimilar litigation between Amgen, the maker of Enbrel® (etanercept), and Sandoz, the maker of biosimilar ErelziTM (etanercept-szzs) heads toward trial before Judge Claire Cecchi in the District of New Jersey, Sandoz is seeking to stave off Amgen’s infringement claims for three of the patents in suit by pointing to its recent amendment to the Erelzi label, which “carves out” certain treatment indications listed on the Enbrel reference label and, Sandoz argues, moots any claim that Erelzi infringes Amgen’s patents covering the use of etanercept to treat those conditions.
Two recent Federal Circuit decisions address when a party has standing to challenge the validity of a patent. Though the cases arose in different contexts, they both center on the question of what it means for a party to be facing an imminent and cognizable injury. In Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., 17-1487, the Federal Circuit upheld a party’s standing to appeal from a post-grant review where it was at risk of an infringement suit. In AIDS Healthcare Foundation v. Gilead Sciences, Inc. et al., 16-2475, however, the court reached the opposite conclusion and determined that the immediacy requirement to bring a declaratory judgment action was not met for a party that had an interest in purchasing generic drugs, but did not itself produce them.
Fourth Circuit Rules that Maryland’s Anti-Price Gouging Act for Off-Patent or Generic Drugs is Unconstitutional
The U.S. Court of Appeals for the Fourth Circuit last month handed manufacturers and wholesalers of off-patent drugs a victory by ruling that Maryland’s anti-price gouging act violates the U.S. Constitution’s dormant commerce clause. The legislation, like many others, was enacted in the wake of the Martin Shkreli case, where the former Turing Pharmaceutical CEO raised the price of a vital and old prescription drug by 5,000 percent. Although the Circuit sympathized with consumers affected by this type of conduct, it held, in a majority opinion written by Judge Stephanie Thacker, that Maryland overstepped its constitutional limits in seeking to compel manufacturers of off-patent or generic drugs to act in accordance with Maryland law outside of Maryland.
Last week, the Supreme Court upheld the constitutionality of inter partes review (IPR), as expected by most observers. However, it was the Court’s decision in a second IPR-related case that will have an immediate impact on patent practitioners. In SAS Institute Inc. v. Iancu, the Supreme Court, in a 5-4 decision, held that the PTO’s practice of “partial review”—instituting an IPR on some but not all claims challenged in a petition for IPR—is inconsistent with the text of the AIA. The decision will lead to immediate consequences, not the least of which is a major increase in the number of claims tried before the PTAB.
In a highly anticipated ruling, the Supreme Court upheld the constitutionality of inter partes review proceedings. Justice Thomas, writing for the seven-member majority in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, held that the Patent Trial and Appeal Board could reconsider and cancel patent claims through inter partes review without violating Article III or the Seventh Amendment of the Constitution.
In WesternGeco v. ION Geophysical Corp., the Supreme Court Weighs the Availability of Foreign Damages for U.S. Patent Infringement
On Monday, April 16, 2018, the Supreme Court heard oral argument in WesternGeco LLC, v. ION Geophysical Corporation, No. 16-1011, a case with broad implications for patent holders that sell products abroad. The case addresses whether lost profits accrued outside of the United States can be recovered for patent infringement occurring domestically. In the decision below, 791 F.3d 1340 (Fed. Cir. 2015), the Federal Circuit adopted a per se bar to recovery of such foreign damages, even when domestic patent infringement is established and proximately caused. Although WesternGeco involves infringement under 35 U.S.C.§ 271(f) – which prohibits the supply of components of a patented invention in the U.S. with the intent that they be combined abroad – in its argument in support of the petitioner, the Solicitor General framed the question more broadly as whether lost profits accrued outside of the United States can be recovered for any domestic act of patent infringement under § 271. Four key takeaways from the oral argument are discussed below.
Win or Go Home? Standing to Appeal PTAB Decisions Upholding Patentability to the Federal Circuit Before Submitting a Biosimilar Marketing Application
Biosimilar developers have been aggressive in filing petitions for inter partes reviews (IPRs) of biologics patents before the Patent Trial and Appeal Board (PTAB), many of them preceding the filing of a marketing application. Such early IPRs are attractive to biosimilar makers, because they provide a chance to challenge innovator patents years before the biosimilar maker files a marketing application with FDA. Since a petitioner need not have Article III case-or-controversy standing to bring an IPR, the remoteness and uncertainty of future infringement in such circumstances does not preclude these early IPRs. Under settled precedent, however, a biosimilar maker must have Article III standing to seek a Federal Circuit appeal if the PTAB issues a final decision upholding the challenged patent. A decision expected from the Federal Circuit this quarter in Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., No. 17-1694 (Fed. Cir. argued Dec. 5, 2017) will address how and when a biosimilar maker can establish that standing.
On March 6, 2018, the U.S. Food and Drug Administration (“FDA”) authorized, with special controls, the first direct-to-consumer test to detect the presence of genetic mutations in the BRCA1 and BRCA2 genes (“BRCA genes”). The test, offered by the personal genomics company 23andMe, analyzes DNA from a consumer’s self-collected saliva sample for three mutations in the BRCA genes. Mutations in the BRCA genes are associated with an increased risk of developing breast and ovarian cancer in women, and breast and prostate cancer in men. However, the test only detects a small fraction of the more than 1,000 known mutations in the BRCA genes. The three mutations that the test does identify are most prevalent in people of Ashkenazi Jewish descent and are rarely present in individuals of other ethnic groups.
In a highly anticipated decision on the Saint Regis Mohawk Tribe’s motion to terminate inter partes review proceedings, the Patent Trial and Appeal Board rejected tribal sovereign immunity to IPRs. The PTAB’s decision also raised doubts about the effectiveness of assignments even in cases where the sovereign assignee has immunity but the assignor effectively still owns the patent. The portion of the decision broadly holding that tribal sovereign immunity does not apply to IPRs came as a surprise to some commentators, who observed that the PTAB could have reached the same result on narrower grounds. Following on the heels of the PTAB’s December 2017 University of Minnesota decision holding that a sovereign waives immunity to IPRs when it asserts the patent at issue in district court, Saint Regis Mohawk Tribe deals another blow for patentees seeking to avoid IPRs with sovereign immunity.