The US Court of Appeals for the Federal Circuit affirmed that the majority of the batches of an accused biosimilar manufactured by Hospira were not protected by the Safe Harbor exemption of § 271(e)(1), and that patent infringement damages were not unreasonable, notwithstanding that none of the accused product had been sold. Amgen Inc. v. Hospira, Inc., Case Nos. 19-1067; -1102 (Fed. Cir., Dec. 16, 2019)(Moore, J.).

EPO is a glycoprotein that regulates red blood cell development. Recombinant versions of EPO are used to treat anemia. One example is Amgen’s product Epogen. In 2014, Hospira submitted a Biologics License Application (BLA) to the Food and Drug Administration (FDA) requesting approval for its EPO biosimilar. Amgen then sued Hospira for infringement of its patent directed to methods of producing EPO isoforms and its patent directed to recombinant cells producing EPO at certain rates. Specifically, Amgen asserted that 21 pre-approval batches of EPO manufactured by Hospira infringed various claims of these patents.

Hospira appealed.

Method of Producing EPO Isoforms Patent

The Federal Circuit affirmed the district court’s claim construction and finding of validity with regard to the Amgen method patent. It also affirmed that the asserted claims of the patent were infringed where Hospira’s processes and BLA clearly indicated that the claimed limitations, including activity limitations, were met.

Safe Harbor

The Federal Circuit affirmed the district court’s decision that seven of the 21 pre-approval EPO batches manufactured by Hospira were protected by the Safe Harbor exemption of 35 USC § 271(e)(1), but 14 were not. The Safe Harbor protects acts from infringement that are performed in order to submit information required by federal law to obtain drug approval. Hospira argued that all 21 batches should be exempted, and it is improper to find some pre-approval batches protected, but others not. While the jury decided that seven batches used to qualify the manufacturing process and equipment were protected, it decided that 14 batches were not, since they were used for testing that was not required prior to FDA approval. This included stability testing and other Continued Process Verification that was ongoing post-approval.

Documentary evidence demonstrated that Hospira planned for remaining EPO from the 14 batches to be used for commercial purposes, rather than FDA-required testing. These batches were initially designated “commercial inventory,” but were re-designated after Amgen filed the lawsuit. In view of that evidence, the Federal Circuit decided there was substantial evidence to support the finding that 14 batches were not protected by the Safe Harbor. This confirmed earlier Federal Circuit decisions that infringing conduct is not necessarily exempt by the Safe Harbor simply by being conducted in the pre-approval context.

Damages

The Federal Circuit also affirmed the jury’s $70 million damages award, despite the fact that Hospira had not yet obtained FDA approval, and, therefore, had not sold product. Most convincing was Amgen’s argument that lump sum damages, rather than a royalty on sales, was proper because the infringing act of manufacturing the product was not tied to the actual sale of the product. The Court explained that Hospira would have incentive to obtain a license in a hypothetical negotiation since early production would allow it to produce sufficient EPO to meet its expected 2015 launch date (regardless of whether the launch occurred).

Recombinant Cell Producing EPO Patent

The Federal Circuit also affirmed the finding of no infringement of the recombinant cells producing EPO at certain rates patent, which claimed cells that produce EPO in certain threshold amounts as determined by radioimmunoassay. The decision was based on the fact that Hospira’s BLA described its EPO production in terms of “dot-blot immunoassay,” rather than radioimmunoassay. The jury was convinced by Hospira’s argument that the two tests were not comparable, as they involved different standards and antibodies. The Federal Circuit found that substantial evidence supported the jury’s finding and affirmed.