As biosimilar competition from companies outside the United States continues, innovator companies are increasingly likely to turn to the International Trade Commission as a first line of defense for protecting critical IP.
Competition for innovator biologics companies has traditionally been relatively low, but since the FDA’s first biosimilar approval in 2015, the U.S. marketplace is seeing a surge of new biosimilar offerings from foreign competitors and a recent surge of biosimilar patent litigation in the U.S. District Courts. Tony Pezzano and Michael Dougherty, partners in Hogan Lovells’ Intellectual Property Group, say that when it comes to competing against these new products, innovator companies should know they have an important line of defense in initiating a Section 337 investigation within the International Trade Commission (ITC).
“For the first time, companies are allowed to make (what are) essentially copies of biologic drugs that are already on the market,” says Dougherty. “That’s never been the case before. Many of these (biosimilars) are made outside of the United States, and any product that is imported into the United States is potentially subject to ITC jurisdiction. That is why we are predicting an uptick in these types of cases arriving at the ITC.”
Unlike pursuing a case in U.S. District Court, where companies may have a higher burden in obtaining injunctive relief under the eBay factors (a four-factor test to obtain injunctive relief which has become commonplace as a result of The Supreme Court’s 2006 eBay v. MercExchange decision), Section 337 investigations in the ITC give innovator companies injunctive relief which can block potential competition from ever reaching the US. “[ITC] cases proceed very rapidly. Hearings occur within eight or nine months and the ITC strives to meet target dates of about 16 months,” says Pezzano. “One thing that makes cases [in the ITC] so attractive is that there are no issues of obtaining personal jurisdiction over the defendant. The jurisdiction is only over the alleged infringing goods, so those will be blocked at the border from entering into the United States.”
Challenging a competitor through the ITC does come with its own unique set of challenges. Unlike litigation in U.S. District Court, the ITC requires complainants to have objective evidence that U.S. industry is negatively impacted. “To obtain relief in the ITC, the party has to show not only that there's infringement of its patent, but that (the U.S.) domestic industry is being harmed,” says Dougherty. “The patentee has to show that it has made significant investment in manufacturing and distributing its product in the U.S.”
Innovator companies must also consider potential public interest backlash if enjoining alternative treatments is perceived as preventing access to important life-saving medicines. “Blocking biosimilar products from coming into the United States has the potential for major public health implications,” says Pezzano. “Most of these products are for patients with very serious illnesses, (and as) part of every investigation there is a component devoted to what's called the ‘Public Interest Factors’. (It looks at) how exclusion of a product from entry will affect public health and welfare. Before a complainant even brings a case before the ITC, it should seriously evaluate those public interest concerns.”
Pezzano and Dougherty agree that a widespread “U.S.-first” perspective bodes well for domestic innovators, but encourage companies to constantly evaluate the competitive landscape in order to understand where potential threats to IP might arise. “Innovator companies should be looking at the strength of their patents and the manufacturing processes that competitors are using. Keeping a close eye on competitors is the only way to determine if there is infringement related to the products themselves or their use by physicians treating patients,” says Dougherty. “The cost of bringing a new biologic product to market is enormous. Companies that invent new biologics and have patents protecting them should be increasingly zealous about enforcing their patent rights. And for that reason, the ITC should be front of mind.”
For additional insights from Pezzano and Dougherty about biosimilars and the ITC, watch the video here.