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Federal Circuit Simplifies BPCIA Disputes by Finding State Remedies Preempted

December 20, 2017

Federal Circuit Simplifies BPCIA Disputes by Finding State Remedies Preempted

December 20, 2017

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The Amgen v. Sandoz battle continues to make new law regarding the Biologics Price Competition and Innovation Act (“BPCIA”), this time in a December 14th ruling from the Federal Circuit finding that “the BPCIA preempts state law remedies for an applicant’s failure to comply with § 262(l)(2)(A),” the initial information sharing requirement in the BPCIA’s patent dance. The Federal Circuit’s ruling heavily relies on Congress’ “carefully crafted” balancing of policy considerations in enacting the BPCIA. The ruling also simplifies future BPCIA disputes by bringing them out of “the shadow of 50 States’ tort regimes,” which could impose varying remedies for “violations” of the BPCIA.

The preemption issue came to the Federal Circuit on remand from the Supreme Court’s first opinion on the BPCIA in June 2017. There, the Supreme Court held that an injunction under federal law is not available to enforce participation in the patent dance laid out in 42 U.S.C. § 262(l)(2)(A). The Supreme Court remanded the case to the Federal Circuit to determine whether injunctive relief was available under California state law.

The Federal Circuit first held that Sandoz had not waived its preemption argument, and decided to address preemption—even though it was not argued to the district court—because it was an issue that “present[ed] significant questions of general impact or of great public concern.” (Slip Op. at 13.) Indeed, the Federal Circuit found that “[t]he issue of preemption is a significant question regarding the interpretation of the BPCIA.” (Id. at 14.)

The Federal Circuit then determined that the BPCIA preempted state remedies by means of both “field preemption” and “conflict preemption.”  With respect to “field preemption,” the Court noted that no presumption against preemption applied in this case because biosimilar patent litigation is “hardly a field in which the States have traditionally occupied.” (Id. at 18-19.) Patents are inherently federal in nature, and Congress has granted federal courts exclusive jurisdiction over such cases.  Moreover, the FDA has exclusive authority to license biosimilar products pursuant to the BPCIA.  With this starting point, the Court went on to hold that the BPCIA is a “comprehensive, carefully calibrated scheme of federal regulation” that is “so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.” (Id. at 20.) In so ruling, the Federal Circuit dismissed as irrelevant Amgen’s arguments that patent laws do not preempt all other state remedies because “[t]he field here is biosimilar patent litigation, not patent law generally.” (Id. at 21.)

With respect to “conflict preemption”, the Federal Circuit noted that Amgen’s state law claims “clash” with the BPCIA by allowing remedies not permitted under federal law, which “would interfere with the careful balance struck by Congress” when enacting the BPCIA. (Id. at 22-23.) Moreover, allowing state law to supplement the BPCIA “could dramatically increase the burdens on biosimilar applicants beyond those contemplated by Congress in enacting the BPCIA.” (Id.)

This decision resolves a loose end in the Supreme Court’s decision supporting the optional nature of the patent dance.  Barring a reversal by the Federal Circuit sitting en banc or the Supreme Court, biosimilar applicants can choose to forgo the patent dance provisions of the BPCIA and will not be forced to dance via either federal or state law. The option of forgoing the patent dance may come as a relief to some biosimilar applicants who may have been wary of participating in the dance following the Federal Circuit’s November opinion in Amgen v. Apotex holding that statements made during the patent dance are “party admissions” entitled to probative weight.

The underlying merits of the Amgen v. Sandoz dispute have also recently been decided. After years of litigation over Sandoz’s Neupogen® (filgrastim) and Neulasta® (pegfilgrastim) biosimilars, only one patent remained at issue – U.S. Patent No. 8,940,878 (“the ’878 patent”), directed to a process for purifying proteins. In a summary judgment opinion dated December 19, 2017, the Northern District of California found no literal infringement of the ’878 patent and no infringement under the doctrine of equivalents. In the words of the court, “the method claimed by the ’878 patent involves multiple steps and multiple solutions while Sandoz’s accused method involves only one continuous step and only one solution.” (Dec. 19, 2017 Opinion at 10.) The district court directed Sandoz to submit a proposed final judgment no later than January 5, 2018.

Authors: Jenny Shmuel, Tasha Francis

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.

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Jenny Shmuel, Ph.D. | Principal

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. Over the last several...