Greenblum & Bernstein, P.L.C.
Recent News in Intellectual Property
In This Issue:
· Sandoz v. Amgen: Supreme Court Weighs in on Patent Dance and Commercial Marketing Notice Requirements
· Interference Decision in favor of Gilead Affirmed at the Court of Appeals for the Federal Circuit
· NIH Enforcement of Bayh-Dole Requirements on the Rise?
Walter Schlapkohl, Ph.D., Esq.
In Sandoz, Inc. v. Amgen, Inc. et al., 137 S. Ct. 1664 (2017), the Supreme Court recently tangoed with a case involving, among other things, injunctive relief arising from what is known as “the patent dance” of the Biologics Price Competition and Innovation Act (BPCIA). The Court also decided that the biosimilar applicant can determine when the music starts playing insofar as the biosimilar applicant may notify the reference product sponsor of its intent to commercialize the biologic before obtaining a license from FDA.
Sandoz sought approval to market Zarxio, a filgrastim biosimilar of Amgen’s approved Neupogen. One day after FDA accepted the application for review, Sandoz notified Amgen that it had submitted an application. At that time, Sandoz also notified Amgen that it would begin commercializing Zarxio immediately upon receiving FDA approval. When it came time for Sandoz to disclose to Amgen additional information required for the first phase of litigation, such as a copy of the FDA application and the manufacturing information for making the biosimilar, Sandoz said it would not do so. Sandoz instead stated its position that Amgen could sue for infringement immediately.
In response, Amgen sued Sandoz for patent infringement. Amgen also claimed that Sandoz engaged in “unlawful” conduct that violated California’s unfair competition law.
When the case arrived at the Supreme Court, three legal issues remained: 1) whether courts could issue an injunction to force the parties to exchange information as part of the patent dance, 2) whether notice of commercialization could only be provided after FDA licensed the biosimilar, and 3) whether the claim under California’s unfair competition law should remain.
Holding 1: Preliminary Injunctions for Failing to Engage in the Patent Dance Are Not Permitted.
The Supreme Court held that courts could not require a biosimilar applicant to engage in the patent dance. Rather, if the applicant refused to voluntarily participate, the only remedies available to courts were the declaratory judgments and declarations of infringement, validity, and enforceability identified in the statute.
Holding 2: Biosimilar Applicants Can Notify Sponsors of Commercialization Before Receiving a License.
The Court held that a biosimilar applicant may provide notice of commercial marketing to the reference product sponsor at any time before FDA’s decision to license the biosimilar. The Supreme Court’s holding in this regard means that biosimilar applicants need not wait for FDA approval of the biosimilar before forcing litigation of all the patents the sponsor could assert.
Holding 3: Claims under California’s unfair competition law will need to be resolved by lower courts.
Amgen alleged that Sandoz engaged in “unlawful” conduct when: 1) it failed to provide its application and manufacturing information, and 2) provided notice of commercial marketing before, rather than after, FDA licensed the biosimilar. Regarding the first claim, the Supreme Court remanded the case for further proceedings. However, because the Supreme Court held that notice could be provided before FDA approval, the second claim under California’s unfair competition act should likely be dismissed by lower courts.
--By Christopher L. Wright
Federal Circuit Affirms PTAB’s Judgment of Priority to Gilead in Interference with Idenix
On June 21, 2017, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed the Patent Trial and Appeal Board’s (PTAB) judgment of priority to Gilead Pharmasset LLC (“Gilead”) in an interference declared between an issued patent owned by Merck & Co.’s Idenix Pharmaceutical Inc. (“Idenix”) and a pending application owned by Gilead (Storer v. Clark, 860 F.3d 1340 (Fed. Cir. 2017).
The subject matter of the count of the interference was a method of treating a host infected with a hepatitis C virus, comprising administering an effective amount of a compound selected from a genus of nucleosides, and an embodiment of the count required a 2’-fluoro(“down”) 2’-methyl nucleoside.
To establish priority, Idenix relied on the disclosure of the provisional application from which priority was claimed for conception and constructive reduction to practice. After an analysis of the eight Wands factors, the PTAB found that at the time of filing the provisional application, a person skilled in the art would not have arrived at the claimed invention without undue experimentation. The PTAB thus held that Idenix’s provisional application was not enabling for the count of the interference, and entered judgment granting priority to Gilead. Idenix appealed the judgment.
The Federal Circuit concluded that substantial evidence supported the PTAB’s findings that the synthetic schemes in Idenix’s provisional application do not teach or suggest conversion of any precursor into the 2’F(down) structure, and that the Matsuda synthesis of a corresponding 2’-methyl(down), 2’-hydroxyl(up) structure (known in the prior art but not disclosed in the provisional application) would not have enabled a person of ordinary skill in the art to produce the target compounds without undue experimentation. The record before the PTAB showed sufficient variability and unpredictability to support the PTAB’s conclusion that Idenix’s provisional application did not enable the interference subject matter. Consequently, the Federal Circuit affirmed the PTAB’s decision.
--By Jeff Bousquet
Signals That NIH Enforcement of Bayh-Dole Act Reporting Requirements May Increase
The Bayh-Dole Act of 1980 significantly changed the landscape for institutions receiving federal funding from agencies such as the National Institute of Health (NIH). Prior to the Bayh-Dole Act, inventors receiving federal research funding were required to assign inventions made with such funding to the government. The Bayh-Dole Act allowed small businesses and non-profit organizations such as universities the ability to keep inventions made with federal funding. In exchange the inventor and the organization must comply with a certain reporting requirements.
For example, institutions that elect to retain ownership of their inventions must inform the funding agency of an invention within two months of disclosing it in writing in house. Institutions that retain title to the invention must also file for patent protection within one year of electing title. (The NIH makes exceptions in this regard for research tools including proteins, cell lines, etc.) Institutions must also make reasonable efforts to obtain a license for the invented product from small businesses and provide annual reports on the utilization of the invention, including date of first commercial sale or use and royalties received. Finally, all “substantial manufacturing” must be performed in the United States.
The NIH’s director of inventions and technology recently indicated that non-compliance with the Bayh-Dole requirements are getting more attention from the agencies that award federal research grants. Institutions failing to comply with the above requirements should watch out: the NIH has the option to halt funding to the entire institution for non-compliance.
Potential modifications to the Bayh-Dole scheme have also been discussed as part of the new White House administration, including revisions to allow the government to receive some return on investment from its funding support for biomedical research.
--By Walter Schlapkohl
 137 S. Ct. 1664, 1676 (2017).
 42 U.S.C. §262(l)(2)(A).
 Under 42 U.S.C. §262(l)(9)(C).
 137 S. Ct. 1664, 1678 (2017).
 Patent, Trademark & Copyright Journal, vol. 94, no. 2314, p. 389, June 2017 citing Ann M. Hammersla’s comments at the Health Care Compliance Association’s research compliance conference in Baltimore on June 5, 2017.