On December 5, 2017, the Federal Circuit held oral argument in Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Company, 17-1694. The case comes on appeal from an IPR decision where the Board declined to find U.S. Patent No. 8,476,239 (“the ʼ239 patent”) unpatentable as obvious. The ʼ239 patent covers Bristol-Myers Squibb’s (“BMS”) Orencia® product, a CTLA4Ig protein formulation, also known as abatacept, that is used in treating autoimmune diseases such as rheumatoid arthritis. Judge Newman, Judge Dyk, and Judge Chen made up the panel.

Two issues were raised on appeal: (1) whether Momenta has standing under Article III of the Constitution to pursue its appeal; and (2) whether the Board correctly held that there was no reasonable expectation of success in formulating the liquid protein formulations in the ʼ239 patent claims.

The only issue raised during the oral argument was with respect to Momenta’s standing and right to appeal the Board’s decision. The judges’ questions and comments specifically addressed where the line should be drawn for standing and what the current remedy should be.

What Constitutes a Concrete Injury-in-Fact

Momenta argued that if the Federal Circuit were to affirm the Board’s decision, it would cause concrete immediate harm. Momenta argued that it is at a “fork in the road” in the development process and if it cannot appeal the Board’s decision, it would be forced to change the direction of its research efforts and spend millions of dollars. Momenta also emphasized that the Board’s decision is blocking its freedom to operate. Judge Chen expressed concern over the extent to which Momenta’s alleged injury is speculative, noting that Momenta is not yet a competitor in the market so speculation remains as to whether the product will make it all the way to market and as such, whether the expenditure of money is enough to create concrete harm. Judge Chen further questioned whether the actual reason for Momenta not being able to move forward is not the Board’s decision but rather the failure of Momenta’s Phase 1 trial.

BMS asserted that Momenta lacks standing to assert an appeal, arguing that Momenta has not suffered a concrete injury because Momenta is years away from being able to file an FDA application for its product and the product is not yet marketed. BMS argued the “artificial act of infringement” by filing an FDA application would be the concrete injury-in-fact and that Momenta “jumped in early” so currently it only has a future injury, which is the speculation that it may be sued for infringement. Judge Dyk raised concerns of this argument being inconsistent with years of Supreme Court precedent about what concrete injury is sufficient to have standing. He further noted that there are legal restrictions placed on Momenta by the USPTO upholding the validity of the patent because it could be sued for infringement.

Judge Dyk characterized BMS’ position as being only advantageous for them because it suggests patent owners could own invalid patents that would have no chance of being challenged until a competitor files an FDA application, which would require them to spend millions of dollars at risk before getting a determination of whether the patent bars their product. He voiced concerns about how a company cannot, before spending millions of dollars, secure a determination as to whether it is all for nothing if its product is covered by the patent.

Judge Chen stated that the BPCIA provides that the filing of an FDA application is an act of infringement, and he questioned whether before that a party can have the right to appeal an adverse agency decision. BMS argued that the “artificial” act of infringement is what creates the risk of harm.

If Momenta Lacks Standing, Whether Vacatur is Appropriate

BMS argued that should the Federal Circuit find that Momenta lacks standing to appeal, the only appropriate remedy is dismissal. It also argued that vacatur is an extraordinary remedy that is only appropriate where events render the controversy moot or where the prevailing party deprives the party of its right to appeal. Rather, here, the case is moot due to Momenta’s voluntary act to file an IPR too early.

Momenta argued that the Federal Circuit should vacate the decision to take away any estoppel that would occur through the Board’s decision.

Judge Dyk appeared unpersuaded by the argument that the Federal Circuit should dismiss rather than vacate the Board’s decision. He noted that Momenta did not take some voluntary act to deprive them of the right to appeal or to moot the case, but instead he questioned whether Momenta had standing in the first place.

Conclusions

It is difficult to predict exactly how the Federal Circuit will rule based on oral argument. However, the concerns voiced by Judge Chen and Judge Dyk suggest that they may be leaning towards finding that Momenta satisfied the requirements for standing. Both expressed concerns about a party having the ability to challenge an agency action before spending millions of dollars on filing an application with the FDA. Judge Newman’s minor comments do not appear to suggest where she may be leaning on these issues.

While the requirements for standing are more relaxed when a party is challenging an agency action, the question still remains as to where to draw the line with respect to a concrete injury-in-fact. The issue here is whether the mere investment of millions of dollars, coupled with the impending consequence of being sued for infringement, is enough to constitute an immediate injury-in-fact. The Federal Circuit’s decision here could have a major impact on the biosimilar industry.