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The Ramifications of Leaving the Patent Dance Floor

August 3, 2017

The Ramifications of Leaving the Patent Dance Floor

August 3, 2017

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While the Supreme Court held in Amgen v. Sandoz that biosimilar applicants cannot be forced with a federal injunction to provide a copy of their biosimilar application (aBLA) and manufacturing information to the reference product sponsor (RPS) pursuant to § 262(l)(2)(A) of the BPCIA, questions remain regarding the enforceability of the other provisions of the patent dance and the ramifications for skipping them.  These questions arise when the biosimilar applicant has seemingly chosen to engage in the dance.  Recently, several biosimilar applicants have begun testing the boundaries of the patent dance by providing portions of the aBLA and manufacturing information, but “waiving” the additional requirements of the patent dance.

For example, in the Immunex v. Sandoz case involving a biosimilar of Enbrel®, after the biosimilar application was accepted for review by the FDA, Sandoz kicked off the patent dance by providing Immunex with information pursuant to § 262(l)(2)(A).  After Immunex provided Sandoz with a list of patents that Immunex believed could be reasonably asserted pursuant to § 262(l)(3)(A), Sandoz responded by “agreeing” to immediate litigation on Immunex’s list of patents.  In other words, Sandoz waived its right to receive a statement by Immunex pursuant to § 262(l)(3)(C) and declared negotiations pursuant to § 262(l)(4) and (5) were unnecessary.  Sandoz then insisted Immunex file suit within 30 days or the penalty for an untimely suit would be that damages were limited to reasonable royalties based on 35 U.S.C. § 271(e)(6), which limits a patentee’s damages for infringement of a patent identified under 42 U.S.C. §§ 262(l)(4) and (5)(B) to a reasonable royalty if the infringement suit is filed more than 30 days after the end of the “patent dance” information exchange process prescribed by the BPCIA.  Immunex filed its suit against Sandoz in the District of New Jersey within 30 days.

Hospira behaved similarly in its suit with Amgen involving a biosimilar of Epogen®.  Hospira provided its biosimilar application to Amgen within the 20-day statutory window of § 262(l)(2)(A) and Amgen provided a list of patents that could be asserted. Instead of providing its patent list and detailed statement as required under § 262(l)(3)(B)(i) and (ii), Hospira agreed that every patent Amgen listed would be the subject of the first wave of litigation. Amgen filed its suit against Hospira in the District of Delaware before expiration of the 30 day window required under the statute.

While previous cases failed to shed light on the ramifications for skipping parts of the patent dance, at least one court has weighed in on the issue.  In the dispute between Janssen and Celltrion involving a biosimilar of Remicade®, Celltrion short-circuited the patent dance by skipping the negotiation steps of § 262(l)(4)(A) and (5).  After Janssen served its patent list, Celltrion provided a detailed statement in response, and agreed that all of the patents identified by Janssen would be the subject of the first wave of litigation.  In the course of its litigation with Janssen, Celltrion moved to dismiss the complaint for lack of standing based on Janssen’s alleged failure to add a necessary party. To guide settlement negotiations, the court sought to clarify whether Janssen would be prevented from seeking lost profits damages under the BPCIA pursuant to § 271(e)(6)(B) in the event the action was dismissed and Janssen was forced to refile the complaint to correct standing.  The court found that the ordinary meaning of the term “shall,” as used throughout §§ 262(l)(4) and (5), indicates a mandatory directive. Thus, Celltrion must have either engaged in good faith negotiations or, failing that, in the dispute resolution procedure for Celltrion to be able to limit Janssen’s damages to a reasonable royalty. The court held that only the list of patents that emerge from the properly completed BPCIA “are potentially subject to the reasonable royalty damages limitation.”  In other words, the 30 day time limit for Janssen to file suit, or have its damages limited to a reasonably royalty, was never triggered because Celltrion failed to complete the patent dance.

The Janssen case suggests that one possible consequence for parties that choose to participate in the patent dance, but skip a few stanzas of the dance, is that 35 U.S.C. §271(e)(6) will not limit damages to a reasonable royalty for any proven infringement if a first wave infringement suit is not timely filed.  It remains to be seen what additional ramifications may result from completing only parts of the patent dance. Consequences may include, for example, state court remedies for an RPS engaging in “unlawful” behavior or the RPS not being limited on the number of patents that could be part of the first wave of litigation under the BPCIA. Lack of good faith participation in the dance may also be considered as part of a Court’s analysis in determining injunctive relief, as noted in the Supreme Court’s footnote in Amgen v. Sandoz.

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...