Case Name: Sandoz Inc. v. Amgen Inc., No. 2014-1693, 2014 U.S. App. LEXIS 22903 (Fed. Cir. Dec. 5, 2014) (Circuit Judges Dyk, Taranto, and Chen presiding; Opinion by Taranto, J.) (appeal from N.D. Cal, Chesney, J.) (A declaratory judgment action cannot be maintained when the alleged infringer has not filed a FDA application for a biosimilar product.)
Drug Product and Patent(s)-in-Suit: Enbrel® (etanercept); U.S. Pats. Nos. 8,063,182 (“the ’182 patent”) and 8,163,522 (“the ’522 patent”)
Nature of the Case and Issue(s) Presented: The issue here is whether an alleged infringer can file declaratory judgment action seeking a finding of non-infringement and/or invalidity of patents when the alleged infringer has not filed an application with the FDA. Enbrel is used to treat rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis and plaque psoriasis in adults. Etanercept is a dimeric fusion protein that is the active ingredient in Enbrel. The patents-in-suit claim the compound and pharmaceutically compositions of etanercept and methods of using host cells to create the proteins in etanercept.
In 2010, Sandoz began meeting with the FDA about seeking a biosimilar of Enbrel. At that time, Congress enacted the Biologics Price Competition and Innovation Act (“BPCIA”), which provided for biosimilars a framework analogous to the Hatch-Waxman provisions. In June 2013, Sandoz announced it was beginning a Phase III trial for its contemplated biosimilar product. The Phase III trial would extend into 2015, before which Sandoz could not file an application with the FDA. On the day it began its Phase III trial, Sandoz filed a declaratory judgment action seeking a determination of non-infringement and/or invalidity of the challenged patents.
The district court granted Amgen’s motion to dismiss the declaratory judgment complaint because no Article III controversy between the parties because Sandoz had not (at the time) submitted an application for the company’s biosimilar version of Enbrel. In addition, the district court ruled that the declaratory judgment action was barred by the BPCIA, which required information exchange before any lawsuit may be instituted. The Federal Circuit affirmed.
Why Amgen Prevailed: The Federal Circuit, while not creating a categorical rule, found that no immediate and real controversy existed when an alleged infringer has not filed an application with the FDA for approval of a biosimilar product.
The Federal Circuit first explained that several significant contingencies existed at the time the complaint was filed. Firstly, the Phase III trial was not completed. Thus, there was significant risk that the Phase III trial may not have been successful such that Sandoz would not have filed an application upon completion of the trial. Secondly, Sandoz could change the composition of the biosimilar product during the Phase III trial to create potential non-infringement positions of certain claims in the patents-in-suit. Simply alleging that Amgen owns patents covering Enbrel is not sufficient to demonstrate that potential infringement of the contemplated product exists. As such, the Federal Circuit found that a real and immediate controversy did not exist.
Lastly, Sandoz would not suffer any immediate harm by not having patent adjudication before filing the FDA application. Sandoz is more than one year away before being able to file the FDA application because it must complete the Phase III trial. Moreover, Sandoz did not allege that it was changing its actions or behaviors because no patent adjudication would occur.
The Federal Circuit specifically did not address the procedural ground of the BPCIA relied on by the district court because it did not find an immediate and real controversy.
