In Amgen v. Apotex, the Federal Circuit affirmed the district court’s ruling that Notice of Commercial Marketing under the BPCIA is only effective after FDA approval of a biosimilar, even when the parties engage in the so-called “patent dance.”

This case resolves an outstanding question regarding the breadth of the Federal Circuit’s decision in Amgen v. Sandoz, in which a petition for certiorari is pending before the Supreme Court.  In Amgen v. Sandoz, the Federal Circuit held that Notice of Commercial Marketing, which must occur 180 days before commercialization, is ineffective prior to FDA approval.  In that case, Amgen and Sandoz had not engaged in the BPCIA “patent dance;”  thus, it was unclear whether a biologic license applicant (BLA) who ”dances” must also wait at least 180 days after FDA approval to launch a biosimilar product.  Amgen v. Apotex could address this issue since it was the first case involving parties who had fully complied with all “patent dance” sections (42 U.S.C. §§ 262(l)(2)-(l)(4)) of the BPCIA.

The Federal Circuit rejected Apotex’s “asserted distinction” between parties that ”dance” and those that do not.  The Court held that there was no “legally material distinction” because “[t]he (8)(A) requirement of 180 days’ post-licensure notice before commercial marketing … is a mandatory one enforceable by injunction whether or not a [42 U.S.C. § 262(l)] (2)(A) notice was given.” The Court stated such a result is necessary “to ensure that, starting from when the applicant’s product, uses, and processes are fixed by the license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy.” This is true whether or not the parties engage in the information-exchange “patent dance;” in both situations, the final FDA-approved product is not set until licensure.  Requiring 180 days’ notice after licensure in both situations avoids the “uncertainties and deficiencies” associated with temporary restraining orders and preliminary injunctions dealt with on short notice.

In reaching its decision, the Court also highlighted how § 271 was modified to incentivize the reference product sponsor to follow the BPCIA patent process where the applicant has commenced the BPCIA procedures.  In particular, the Court stated that a sponsor’s failure to timely include a patent on its paragraph (3)(A) list or its paragraph (7) supplement would mean that “the owner of that patent may not sue for infringement under 35 U.S.C. § 271 with respect to the biological product at issue” (citing 35 U.S.C. § 271(e)(6)(C)).  It is unclear whether the Federal Circuit only intended to note that the sponsor would be barred from bringing an infringement action under § 271(e), or whether the Federal Circuit indeed read the statute to bar any infringement action at all.

With respect to the notice provision, the Court affirmed that the word “shall” in (8)(A) is “mandatory” regardless of whether the other information-exchange provisions are followed.  In so doing, the Court finely parsed the language of the BPCIA, explaining how the mandatory meaning of the word “shall” in paragraph (8)(A) differs from theoptional meaning of the same word in paragraph (2)(A).  The Court highlighted the fact that no other statutory language effectively compelled treatment of (8)(A)’s notice provision as optional. In contrast, for section (2)(A), the interplay with other statutory provisions (35 U.S.C. § 271(e)(2) & (4)) forces (2)(A)’s “shall” to be permissive, not a term of compulsion.

The Federal Circuit also rejected Apotex’s argument, which was raised in Sandoz, that requiring notice after licensure would impermissibly extend by an additional six months the 12-year exclusivity period for reference product sponsors. Section 262(k)(7) of the BPCIA states that a biosimilar license can only take effect 12 years after the reference product is licensed, giving the reference product sponsor 12 years of exclusivity.  The Federal Circuit interpreted the statute as only setting forth an “earliest date, not a latest date, on which a biosimilar license can take effect.” The Court also predicted that delay beyond 12 years “should occur less and less as time goes by” because the BPCIA allows biosimilar applicants to file applications 4 years after licensure of the reference product, and there is “no reason” that the FDA cannot license biosimilars for new biologics “before the 11.5-year mark and deem the license to take effect on the 12-year date.” According to the Court, if the FDA follows this approach, the 180 days of notice will be subsumed within the original 12 years.

The Federal Circuit also rejected Apotex’s argument that a declaratory judgment action pursuant to § 262(l)(9) is the exclusive remedy for violations of the section (8)(A) notice provision.  Although paragraph (9) permits a declaratory judgment action if the application “fails to complete” any one of several steps, including the giving of (8)(A) notice, the Federal Circuit refused to infer that a declaratory judgment action is the exclusive remedy.  According to the Court, requiring reference product sponsors to rush into declaratory judgment actions would recreate the “hurried motion practice” and “rushed litigation” that (8)(A) was designed to prevent.