Amgen Manufacturing Limited v. Apotex Inc.
827 F.3d 1052 (Fed. Cir. 2016)
Authored by Wesley Stafford
Statement of Facts: In 2002, Amgen Manufacturing Limited (“Amgen”) marketed an FDA-approved and licensed product (Neulasta®) whose active ingredient (pegfilgrastim) stimulates the production of white blood cells in patients undergoing chemotherapy. In obtaining its license for Neulasta®, Amgen had to show that its biological product was “safe, pure, and potent.” 42 U.S.C. § 262(a)(2)(C)(i)(I) (2012). In 2014, Apotex Inc. (“Apotex”), sought to market a biologically similar, or ‘biosimilar,’ product and submitted a licensing application with the FDA. In 2009, Congress passed the Biologics Price Competition and Innovation Act (“BPCIA”), which created a shortcut for those seeking to market products biologically similar to products previously licensed by the FDA. 42 U.S.C. § 262, 35 U.S.C. § 27(e), 28 U.S.C. § 2201(b), 21 U.S.C. § 355. The shortcut allows manufacturers of “biosimilar” products, in this case Apotex, to use public information about the previously licensed product, streamlining their licensing application with FDA. For the purposes of the BPCIA, the entity manufacturing the biosimilar product seeking FDA approval (in this case Apotex) is called the applicant, and the entity the received the original FDA license (in this case Amgen) is called the sponsor.
The BPCIA also sets out a specific pathway to pursue streamlined preliminary litigation which tends to arise out of alleged patent infringement of the similar products; however, the company producing the biosimilar has the power to vastly curtail the subject of litigation by deciding which patents will be the subject of an infringement suit. See 42 U.S.C. § 262(l). (For brevity sake, the following statutory discussion references the subsections under “§ 262(l).”) Section (2)(A) dictates that when an applicant submits its application for FDA approval, it has twenty days to notify the product sponsor (in this case Amgen). Under (3)(A), the sponsor then has sixty days to notify the applicant of patents that may be infringed upon and the possibility of licensing those patent. Under (3)(B) the applicant then has sixty days to respond by either contesting that a certain patent is being infringed upon, or replying to the licensure offer. Under (3)(C) the sponsor must then respond within sixty days, accepting licensure agreements , and continuing to assert its patents. Although the sponsor must supplement the (3)(A) list, the original list defines the scope of the immediate litigation under paragraph (6). Following a good faith effort to negotiate over which patents should be the subject of the immediate litigation and assuming the parties arrive at a consensus, the sponsor has thirty days to file for infringement. If a consensus is not reached, paragraph (5) commands the applicant to inform the sponsor of how many patents it believes are being infringed upon. The two entities then create lists of the patents they believe are being infringed upon, naming no more patents than the number the applicant enumerated, and then exchange lists. Within thirty days the sponsor may sue on precisely the number of patents that appear on the combined list. (In the case that the applicant lists no patents the sponsor may list one and bring suit on just one patent). It is in this way that the applicant can curtail the scope of the patent infringement suit, pre-FDA approval. This bars the original license holder, in this case Amgen, from litigating certain claims of infringement until a later date. Of particular relevance here is 42 U.S.C. § 262(l)(8)(A) (“8A notice”) which states that the company manufacturing the biosimilar “shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed. . .” through the streamlined pathway. This serves as notice to the sponsor that it has 180 days to file a suit not statutorily curtailed in scope by the applicant.
Procedural History: In October of 2015, Amgen sued Apotex for a preliminary injunction in the United States District Court, Southern District of Florida (the “District Court”) to enforce the 8A notice provision. It asked the court to order a proper (8)(A) notice and order the delay of commercial marketing of the biosimilar for 180 days after the 8A notice was properly given (i.e. after approval of the FDA’s granting of a license). The District Court agreed with Amgen and issued the preliminary injunction, only ruling on the likelihood of success on the merits as the parties stipulated that the potential for irreparable harm, the balance of hardships and the public interest factors favor Amgen. See eBay v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006). Apotex appealed to the Federal Circuit, which claimed jurisdiction under 28 U.S.C. § 1292(a)(1) and (c)(1).
Question Presented: Must a manufacturer of a biosimilar product refrain from giving 8A notice until the FDA has licensed their product and refrain from marketing their product for 180 days subsequent to that notice?
Holding: In upholding the District Court’s preliminary injunction, the Federal Circuit stated that when a manufacturer attempts to market a biosimilar product, it must give 8A notice post-FDA-licensure of the biosimilar product (and wait 180 days before engaging in commercial marketing), regardless of whether that company has engaged in the streamlined litigation set out under the BPCIA.
Reasoning: The Federal Circuit espoused three reasons why the likelihood of success on the merits favored Amgen: (1) the plain language of 42 U.S.C. § 262(l)(8)(A) suggests that choosing to engage in the streamlined litigation process under 42 U.S.C. § 262(l) has no effect on whether a manufacturer must provide (8)(A) notice; (2) under Amgen v. Sandoz, 794 F.3d 1347, 1357-58 (Fed. Cir. 2015) (hereinafter Sandoz), a vastly similar case, the six month waiting period does not impermissibly extend the life of a patent; and (3) that § 262(l)(9) does not make a declaratory judgment action the exclusive remedy for an 8A violation.
The court first touched on whether the plain language of the statute, 42 U.S.C. § 262(l)(8)(A), effected when 8A notice must be given. The court emphasized the word “shall” in stating that giving notice was mandatory. It also stated that there was no other language in the plain text that could be construed to constrict the applicability of the notice requirement. It continued on to state that the 8A notice was required regardless of whether the streamlined litigation process described in subsection l of 42 U.S.C. § 262 was used. Additionally, it dispenses with an attempt by Apotex to liken 8A’s use of “shall” to 2A’s use of the same term, holding that the statutory provisions relating to 2A restrict a mandatory construction in certain situations. See Sandoz, 794 F.3d at 1357-58. The Federal Circuit held here that 8A has no such intertwining statutory constraints and should be construed as a mandatory, stand-alone requirement.
The Federal Circuit then discusses its previous holding in Sandoz when disposing of Apotex’s argument that forcing the 180 day waiting period after FDA licensure impermissibly extends the period of time Congress reserved to original licensees to exercise their exclusive right to profit from licensing their products. The court rejected this argument by explaining that the expedited litigation curtailed the original licensee from potentially bringing meritorious claims against the biosimilar manufacturer for infringement. Bringing the suit before the FDA approved the license would lead to litigation over non-finalized, changing, and potentially rejected licenses. Such claims are not ripe as the potential for infringement does not concretely exist yet. Additionally, once the license is granted, the original manufacturer needs notice of said license and time to develop a case. In this situation, Congress deemed 180 days a sufficient amount of time for an original manufacturer to decide if bringing suit was advisable, regardless of whether the patent said to be infringed upon was near the end of its life and essentially extending the patent by 180 days. The Court interpreted and gave life to Congress’ intent here as to help sponsors avoid hasty litigation over injunctions which threaten imminent harm to both the applicant and the sponsor.
Finally, the court touched on Apotex’s argument that paragraph 9 of 42 U.S.C. § 262(l) makes a declaratory-judgment action the only remedy for an 8A notice violation. The Supreme Court has ruled that absent a direct and explicit restriction on the courts’ equitable powers, there must be some “necessary and inescapable inference” that restricting remedies was the legislative intent. Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946). The court stated that because paragraph 9 does not explicitly restrict the remedies a court may grant a manufacturer in this situation, there must be a strong inference for exactly such a restriction. Paragraph (9)(C) says that declaratory-judgment actions may be brought under 28 U.S.C. § 2201 if a biosimilar manufacturer does not give the (2)(A) notice that it will be pursuing the streamlined litigation. It makes no further statements about the exclusivity of such a remedy with regard to 8A. The provision simply lays out when a declaratory-judgment action can be brought but goes no further in restricting courts, either explicitly or implicitly, in exercising their equitable powers.