Courts have begun to shape the contours of the Biologics Price Competition and Innovation Act (“BPCIA”) and the progress of biosimilar litigation, but the use of declaratory judgment actions by biosimilar manufacturers remains a hotly contested issue. A biosimilar manufacturer may be motivated to file a declaratory judgment action to clear uncertainty related to a patent portfolio, to move litigation along when the reference product sponsor is dragging its feet, and/or to obtain a more favorable forum. But when is the declaratory judgment path available to a biosimilar manufacturer?
Back in 2014, biosimilar manufacturers tried—and failed—to bring actions under the Declaratory Judgment Act very early in the biosimilar development process. For example, in 2014, Sandoz sought a declaration of invalidity, unenforceability, or non-infringement of patents covering Amgen’s Enbrel® biologic drug. See Sandoz Inc. v. Amgen Inc., 773 F.3d 1274 (Fed. Cir. 2014). Sandoz filed its complaint the same day that it began a Phase III trial for its Enbrel® biosimilar, before filing its abbreviated biologic license application (“aBLA”) with the FDA. In holding that Sandoz lacked Article III standing to sue under the Declaratory Judgment Act, the Federal Circuit found no “case or controversy” because, among other reasons, there was too much uncertainty: perhaps Sandoz would not file an aBLA at all, or perhaps Sandoz would modify its proposed product. Sandoz’s case lacked the “immediacy and reality” required for a declaratory judgment plaintiff to have standing, despite the large resources that Sandoz was investing in developing its biosimilar. Biosimilar maker Celltrion’s 2014 declaratory judgment suit seeking to invalidate patents covering Remicade® (before Celltrion filed its aBLA) met a similar fate. See Celltrion Healthcare Co., Ltd. v. Kennedy Trust for Rheumatology Research, 2014 WL 6765996 (S.D.N.Y. 2014) (dismissing for lack of subject matter jurisdiction).
While these early forays seeking declaratory judgment actions prior to aBLA filing were unsuccessful, biosimilar manufacturers have recently begun trying again — this time after aBLA filing, but before completing the BPCIA’s patent dance. Biosimilar manufacturers bringing these declaratory judgment actions are relying on the Supreme Court’s June 2017 ruling in Sandoz v. Amgen, which explained the two phases of litigation under the BPCIA and noted that the second phase of litigation starts with a biosimilar manufacturer’s notice of commercial marketing, at which point “either party may sue for declaratory relief.” (Emphasis in original.) The Supreme Court also clarified that a biosimilar manufacturer could give notice of commercial marketing before obtaining a license from the FDA.
At least three new declaratory judgment suits have followed on the heels of the Supreme Court’s Sandoz opinion. Amgen, seeking to market a biosimilar of Avastin®, was the first party to bring such an action. Amgen filed its aBLA on January 4, 2017, and triggered the BPCIA’s patent dance by sharing a copy of its application with Genentech. Following the requisite disclosures relating to validity and infringement, the parties attempted to negotiate a set of patents to litigate under the first wave of litigation. However, instead of completing the negotiation steps, Amgen provided notice of commercial marketing and initiated a declaratory judgment suit in the Central District of California on all patents listed on Genentech’s 3(A) list. Amgen stated that it was forced to take this action “to remove the cloud of uncertainty flowing from Genentech’s inconsistent and changing positions during the BPCIA exchange and negotiations.” (Amgen v. Genentech, C.A. 17-7349-GW, Dkt. 56 at 3.)
Following Amgen’s lead, on January 11, 2018, Celltrion brought two declaratory judgment suits against Genentech in the Northern District of California related to patents covering Herceptin® and Truxima®. (See C.A. 3:18-cv-00276; C.A. 3:18-cv-00274.) Like Amgen, Celltrion started the patent dance and participated in the information and contention exchanges. At some undisclosed point, Celltrion provided notice of commercial marketing. Then, instead of completing the patent dance, Celltrion immediately brought a declaratory judgment suit after obtaining Genentech’s allegedly deficient 3(C) statement regarding validity and infringement.
So far, only the Amgen court has weighed in on the propriety of bringing declaratory judgment suits under these facts. In a set of opinions dated January 11, 2018 and February 2, 2018, the court granted Genentech’s motion to dismiss Amgen’s suit, declining declaratory judgment jurisdiction under its discretion. In so doing, the Central District of California found that the second wave of patent litigation (triggered by notice of commercial marketing) should occur only after the completion of the first wave of patent litigation (triggered by the completion of the patent dance, which did not happen as of the time of Amgen’s declaratory judgment suit). The court strongly disfavored Amgen’s tactic, stating that “[a]llowing an applicant to side-step the BPCIA’s exchange and negotiation requirements and bring suit on any patent simply by filing its notice of commercial marketing would effectively vitiate the BPCIA’s provisions” and “[i]f the statute was interpreted as Amgen suggests, an applicant could estimate its time to receive FDA approval, file its notice of commercial marketing approximately 180 days before the approval date, and promptly file a declaratory judgment action without regard for the other patent information exchange requirements of the BPCIA.”
As of now, Genentech has not responded or filed an answer to Celltrion’s declaratory judgment complaints, and it remains to be seen whether the Northern District of California will follow the lead of the Central District of California. Until this issue is firmly decided, BPCIA litigants will likely continue to test the bounds of declaratory judgment suits in the BPCIA context. For example, biosimilar manufacturers may argue that their ability to unilaterally bring a declaratory judgment suit in the middle of the patent dance encourages reference product sponsors to participate in good faith in the BPCIA patent dance requirements. Reference product sponsors may counter that such declaratory judgment suits allow biosimilar manufacturers to obtain valuable information from the reference product sponsors (e.g., validity and infringement positions) while still allowing the biosimilar manufacturers to opt in and out of the patent dance. And beyond the issue of bringing declaratory judgment actions mid-patent dance, many other questions remain. For example, how will reference product sponsors and courts react to declaratory judgment suits brought by biosimilar manufacturers who choose to forgo the patent dance, instead providing notice of commercial marketing and bringing suit immediately after aBLA filing?
We will continue to monitor declaratory judgment suits in the BPCIA context and provide updates on these critical questions.
Authors: Dr. Tasha Francis, Dr. Jenny Shmuel, and Brendan Murphy
The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.
Jenny Shmuel, Ph.D., represents clients on a range of intellectual property matters, with an emphasis on medical device and pharmaceutical technologies. She has extensive experience in pre-suit diligence, case management, expert and fact discovery, and brief writing, and has examined and cross-examined witnesses at trial.
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