Biosimilar Patent Litigation: the “Finish What You Started” Rule

As earlier posts on this blog have noted (here and here), the Supreme Court’s 2017 ruling in Sandoz v. Amgen effectively put an end to arguments that biosimilar applicants can be forced to participate in the “patent dance” with biologics innovators.  Even still, there are lots of interesting issues relating to the patent litigation provisions of the 2010 biosimilars law.  Here’s one percolating in the courts right now:  can a biosimilar company start to dance and then change its mind?  Or does it have to finish what it started?

This arises in a dispute between Genentech and Celltrion over a biosimilar copy of Rituxan (rituximab).  There’s a second issue in this dispute, which I will describe in another blog post.  First some background, and then I’ll unpack the litigation.

The Patent Dance

I’ve explained the patent provisions before.  They boil down to a private process in which the two companies identify the relevant patents, followed by immediate litigation on a subset of those patents, and separately an opportunity for litigation on the rest of the patents in the final 180 days before the biosimilar company launches its product.  The mechanism is described in nine paragraphs of section 351(l) of the PHSA.  Here are the key provisions for purposes of this post:

  • Paragraph (2) says that a biosimilar company must provide its application and manufacturing information to the innovator.
  • Paragraph (3) prescribes a process through which the two companies generate a master list of relevant patents.
  • Paragraphs (4) and (5) prescribe a process through which the companies identify a subset of patents for immediate litigation. First they try to negotiate under paragraph (4), and if that doesn’t work, then under paragraph (5) the biosimilar company tells the innovator the number of patents that it plans to identify.  Then the two swap lists, with the innovator basically limited to the same number or fewer.
  • Paragraph (6) gives the innovator 30 days to bring suit on this subset of patents.
  • Paragraph (8) requires the biosimilar company to provide notice to the innovator at least 180 days before launch.  At this point, the innovator can sue on the balance of the patents in the master list.

Once again, it’s paragraph (9) at issue.

  • Under (9)(A), if the biosimilar company provides its application and information required under paragraph (2), neither party can bring a declaratory judgment action before the notice of commercial marketing.
  • Under (9)(B), if the biosimilar company fails to complete a subsequent action in the dance, the innovator can bring a declaratory judgment action, but the biosimilar company cannot.
  • And under (9)(C), if the biosimilar company fails to provide its application and manufacturing information under paragraph (2), the innovator can bring a declaratory judgment action immediately, and the biosimilar company cannot.

Celltrion Dances, Sort of, for a Little While

If you like to dance, and you’ve been stuck on the floor with someone who really doesn’t like dancing and doesn’t do it very well, and basically keeps looking for an excuse to bail and wander off to the punch bowl, this will sound familiar.

Genentech holds the license to market Rituxan (rituximab), a monoclonal antibody approved for treatment of Non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, and rheumatoid arthritis, among other conditions.

In April 2017, Celltrion submitted a biosimilar application for its biosimilar version of Rituxan.  And Celltrion at least initially seemed to be invoking the patent dance provisions.  In July, it provided Genentech with its marketing application and some manufacturing information.  Genentech alleges in its complaint that Celltrion did not fully comply with the obligation to provide manufacturing information, however — that in fact Celltrion withheld key information for months (until well past the statutory deadline).

From September through early January, though, the companies went through the process in paragraph (3).  Throughout this time, according to the complaint, Genentech maintained its position that Celltrion had not complied with paragraph (2).  Nevertheless, Genentech identified patents, Celltrion responded with arguments that it did not infringe those patents, and Genentech responded that some of the patents would be infringed.

In early January, Celltrion finally walked away from the dance floor.  Paragraph (4) says that “after receipt” of the innovator’s final statement under paragraph (3), the biosimilar company and innovator “shall engage in good faith negotiations” to identify patents for immediate litigation.  Celltrion instead suddenly provided its notice of commercial marketing, and on January 11 it brought a declaratory judgment action in California.

Genentech reasons that paragraph (9) applies, though, giving it clearance to sue.  So it brought a patent infringement suit in New Jersey on January 12 (Genentech, Inc. et al. v. Celltrion, Inc., et al., Docket No. 1:18-cv-00574).  This case has been plugging along, with counterclaims filed by the defendants (June), a motion to dismiss the counterclaims (July), and a motion for preliminary injunction (August).

But this is when it gets interesting.

In For a Penny, In For a Pound!

In February 2018, Genentech moved to dismiss Celltrion’s case in California.  Genentech argued that:

  • Celltrion’s declaratory judgment action was barred under (9)(C) because Celltrion did not comply with (2)(A) in a timely manner, and
  • Celltrion’s refusal to complete the patent dance also separately triggered the bar to declaratory judgment action, under (9)(B).

In May 2018, the district court granted Genentech’s motion to dismiss, citing (9)(B).  Celltrion’s allegations indicate that it began the (4)(A) good faith negotiation process by indicating that it wanted to litigate all of the patents.  The company then failed to wait for Genentech to respond.  Further, Celltrion didn’t allege that it had sent the (5)(A) number to Genentech or that the parties had exchanged (5)(B) lists.  Thus its own papers indicated that it had started to dance and then stopped dancing.  The statute is “clear,” he wrote; if a biosimilar company fails to complete an action required under (5), then the innovator — not the biosimilar applicant — can bring a declaratory judgment action.

Under this interpretation, once you agree to dance with someone, you have to stay until the song ends.

The judge dismissed Celltrion’s case.  Final judgment was entered on June 11, and Celltrion filed a notice of appeal to the Federal Circuit on July 12.

And What of the Biosimilar?

It’s still not approved.  Celltrion announced in April 2018 that FDA had issued a “complete response letter” rejecting the application, after discovering problems at the manufacturing facility.  It resubmitted the application in May, though.


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