In Sandoz Inc. v. Amgen Inc., the Federal Circuit upheld the district court decision dismissing Sandoz’s declaratory judgment action for lack of jurisdiction. This is the first Federal Circuit decision relating to a possible “biosimilar” product and the Biologics Price Competition and Innovation Act of 2009 (BPCIA) (codified principally at 42 U.S.C. § 262), and the court was careful to steer clear of the biosimilars statute.

The patents at issue are U.S. Patent Nos. 8,063,182 and 8,163,522, which are exclusively licensed to Amgen. The patents cover Amgen’s Enbrel® (etanercept) product. Enbrel® (etanercept) is used to treat moderate to severe rheumatoid arthritis. Enbrel® (etanercept) was approved as a “biological product” under 42 USC § 262(i) for the treatment of rheumatoid arthritis. Sandoz is developing its own etanercept product for which it plans to seek approval under the “biosimilars” provisions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA). The BPCIA creates a biosimilars scheme akin to what Hatch-Waxman does with small molecule generics. In particular – like Hatch-Waxman – BPCIA creates a paper-cause-of-action such that filing an FDA biosimilarity application is considered a form of patent infringement. Important to this decision, Sandoz had not filed a biosimilars application with the FDA when it brought this declaratory judgment action. Thus, while the BPCIA includes a statutory framework, or “Patent Dance,” for resolving patent disputes between a biosimilar applicant and reference product sponsor, this case was not brought under that statute, 42 USC § 262(l).

According to the Federal Circuit decision, Sandoz filed its complaint on the same day that it began a Phase III clinical trial of its etanercept product. Amgen moved to dismiss the complaint, asserting that the court lacked jurisdiction because there was “no immediate, real controversy between the parties yet.”

The district court (N.D. Cal.) granted the motion to dismiss, agreeing with Amgen and also interpreting the BPCIA as prohibiting Sandoz’s suit. In particular, “[t]he court reasoned that, because Sandoz planned to enter the market by the biosimilarity route, it had to follow the BPCIA’s patent-related procedures… which it had not done.”

The Federal Circuit focused on the “immediacy” aspect of the “case or controversy” requirement for declaratory judgment jurisdiction under 28 USC § 2201, citing the Supreme Court’s 2007 decision in MedImmune, Inc. v. Genentech, Inc.: An event that is several years in the future may be an appropriate subject for a declaratory judgment. The immediacy requirement is concerned with whether there is an immediate impact on the plaintiff and whether the lapse of time creates uncertainty.

The Federal Circuit found no case or controversy, stating: Although not adopting “a categorical rule,” the court noted that “[i]n the pre-application context presented here, we conclude that the events exposing Sandoz to infringement liability ‘may not occur as anticipated, or indeed may not occur at all,’” such that there was no declaratory judgment jurisdiction.

The Federal Circuit made clear that it was not deciding whether Sandoz was obligated to avail itself of the patent dispute provisions of the BPCIA: We also do not decide whether, once an application is filed under the BPCIA, that statute forecloses a declaratory judgment action concerning whether the ultimate marketing of the application-defined product would infringe under 35 USC § 271(a).

Several companies are interested in obtaining approval of the first biosimilar product, and it appears that no company wants to be involved in the first biosimilars litigation. Earlier this year, Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”) filed a complaint for declaratory judgment against Kennedy Trust for Rheumatology Research (“Kennedy Trust”) in the U.S. District Court for the Southern District of New York seeking to invalidate three of Kennedy Trust’s patents covering Remicade® (infliximab), a biologic approved to treat Crohn’s disease, ulcerative colitis, rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis and plaque psoriasis. Celltrion filed its action prior to filing its application for Remsima®, a biosimilar of Remicade®, under the BPCIA, and, therefore, also prior to engaging in the “patent dance” under the BPCIA. The “patent dance” is a procedure set forth in section 351(l) of the BPCIA that requires the holder of a branded biologic and the biosimilar applicant to engage in a series of timed exchanges of information to determine which, if any, of the brand holder’s patents will be litigated by the parties. The impact of BPCIA has yet to be determined and only time will tell on whether the courts will hear a § 262(l) complaint.