In 2014, the Southern District of New York dismissed two biosimilar patent litigation actions on ripeness grounds. Holding that no justiciable case or controversy existed, the courts in Celltrion Healthcare Co. v. Kennedy Trust for Rheumatology Research and Hospira, Inc. v. Janssen Biotech, Inc. determined that a declaratory plaintiff cannot sue to invalidate a competitor’s patents where (1) the parties’ adverse interests have not yet solidified; or, (2) where the declaratory plaintiff has not complied with the patent dispute mechanisms—referred to as the “patent dance”—established by the Biologics Price Competition and Innovation Act (“BPCIA”).
Kennedy Trust for Rheumatology Research (“Kennedy”) owned patents covering methods for treating rheumatoid arthritis through a combination of an anti-TNFα antibody and methotrexate. Janssen Biotech, Inc. (“Janssen”) licensed these patents from Kennedy and developed its pioneer drug Remicade®. Celltrion and Hospira, Inc. (“Hospira”) planned to offer biosimilar versions of Remicade® for sale, agreeing to co-exclusively market their biosimilars.
The Celltrion and Hospira courts held that the biosimilar manufacturers failed to establish a justiciable case or controversy for several reasons. First, the Celltrion court noted that Celltrion had not done enough to engage in meaningful preparation to conduct potentially infringing activity. Though Celltrion had invested significant time and money ($112 million) attempting to achieve FDA approval, its biosimilar product was many steps removed from actually being approved. Supporting this point, the court listed FDA approval milestones that Celltrion had not achieved: (1) Celltrion’s application would have to be accepted for review; (2) Celltrion’s biosimilar would have to become the first biosimilar ever approved by the FDA; (3) Celltrion’s biosimilar would have to be approved for the same use as Remicade®; and, (4) all of these events would have to happen before the expiration of the patents-in-suit.
Second, the Celltrion court noted that even if Celltrion’s biosimilar was approved, the suit was not ripe because Kennedy had not expressed a “clear intent” to sue Celltrion for infringement in the U.S. Although Kennedy had previously sued Celltrion over its biosimilar in foreign jurisdictions, the parties disagreed over Kennedy’s willingness to license its patents to Celltrion in the U.S. Thus, the “parties . . . [had] not yet taken adverse positions” sufficient enough to demonstrate a live case or controversy.
The Hospira court echoed these rationales, noting that the motion to dismiss was “granted for many of the same reasons as those discussed” in Celltrion. Both courts, however, explicitly agreed on an alternative point of dismissal: that Celltrion and Hospira should not be permitted to circumvent the BPCIA’s patent dispute mechanisms through declaratory relief. Both courts indicated that even if the biosimilar manufacturers “engaged in sufficient meaningful preparation . . . and that the threat of injury was [sufficient], the court[s] would still exercise [their] discretion to decline to hear” the case in light of the BPCIA’s patent dispute resolution framework. If a biosimilar manufacturer is going to avail itself of the BPCIA’s accelerated FDA approval mechanisms, it must engage in the patent dance.
To date, few biosimilar patent litigations have worked their way through the courts. But Celltrion and Hospira give interested parties useful reference points going forward. First, parties should be mindful that ripeness issues might be raised sua sponte by courts. Both the Declaratory Judgment Act and the U.S. Constitution require a live case or controversy for Article III jurisdiction. And, as Celltrion and Hospira show, a declaratory plaintiff must adequately demonstrate “injury or threat of injury” to establish the requisite case or controversy. Further, these cases show that a court need not find a ripe dispute merely because the declaratory defendant has acted litigiously toward the declaratory plaintiff in the past. Rather, declaratory judgment jurisdiction requires a more solidified adverse relationship between the parties. Consequently, biosimilar manufacturers should note that engaging in meaningful preparation to seek FDA approval and market a biosimilar or interchangeable is necessary to create jurisdiction for declaratory relief. On the flip side, pioneer drug manufacturers should consider the repercussions of threatening litigation as it may solidify an adverse interest between the parties and confer declaratory judgment jurisdiction.
Second, these cases evince a trend that courts, at least those in the Southern District of New York, are uncomfortable allowing parties to circumvent the BPCIA’s patent dispute resolution mechanisms. But the law governing compulsory compliance with the BPCIA’s patent dance is not settled. Judge Seeborg of the Northern District of California issued a contrary ruling in Amgen v. Sandoz (See Amgen v. Sandoz: To Dance or Not?) holding that the BPCIA’s patent dispute resolution mechanisms were optional. The matter is pending before the Federal Circuit. For a summary of the arguments presented, click here, and for a prediction on the outcome of the Federal CircuitAmgen litigation, click here.
The parties in Celltrion and Hospira continue to litigate their dispute in the District of Massachusetts (Case No. 1-15-cv-10698). In March of 2015, Janssen sued Celltrion and Hospira for patent infringement and enforcement of the Act’s patent dance. Janssen alleged that the defendants all but insisted that Janssen bring the suit or risk foregoing certain intellectual property rights. Though Janssen conceded that an action for patent infringement was premature under the BPCIA, it countered that Celltrion and Hospira’s refusal to participate in the BPCIA’s dispute resolution framework made its infringement action necessary. The parties’ motions for partial summary judgment are still pending.