On March 31, Sandoz filed its consolidated response and reply brief in Sandoz v. Amgen. We have previously covered Amgen’s consolidated opening and responsive brief and Sandoz’s opening brief. Amgen’s final reply brief was filed today, and argument is scheduled for April 26, 2017.
Sandoz’s brief replied to Amgen’s counterarguments regarding whether an effective notice of commercial marketing can be given before FDA licensure of a biosimilar, and whether courts can order applicants to provide post-licensure notices of commercial marketing. The brief also responded to Amgen’s cross-petition arguments over whether an applicant is required to provide the sponsor with a copy of its biologics license application and related manufacturing information, and whether a court may issue an order enforcing that duty.
Reply on Notice of Commercial Marketing
I. Notice Before FDA Approval
A. Statutory Text and Context
Sandoz began by restating its textual arguments, comparing notice timing of (l)(8)(A) “before the date of first commercial marketing” to (l)(8)(B) allowing a sponsor to seek a preliminary injunction “after receiving notice.” According to Sandoz, Congress knew how to draft the kind of timing trigger that Amgen argued for, but it did not do so.
Sandoz then argued that Congress did not intend “‘subsection (k) applicant’ to refer only to entities holding granted applications” as that “would have been a bizarre choice.” Br. at 6. Sandoz also noted that understanding the purpose of notice as informing the sponsor “at least 180 days” before marketing flows directly from the text providing for notice “not later than 180 days” before marketing, (l)(8)A). Br. at 6.
Sandoz was critical of Amgen and the Federal Circuit for basing their textual position on the word “licensed.” According to Sandoz, “licensed” merely reflects that those provisions apply pre- and post-approval. Br. at 7. For example, Sandoz pointed to the “product licensed under” phrase in the risk mitigation provision (k)(5)(C), which should apply before and after approval, and not because of distinct provisions under 21 U.S.C. § 355-1 that existed before the BPCIA. Id. Also, Sandoz said, “product licensed under subsection (k)” could serve to distinguish licensing regimes just as Amgen argued that (l)(8)(A) refers to “subsection (k) applicant” to distinguish from the reference product sponsor. Br. at 8.
II. Amgen’s Structural Arguments
Sandoz addressed Amgen’s structural arguments regarding provisions on venue, preliminary injunction, process patents, new patents, and interchangeability. On venue, Sandoz stated that the reference product sponsor, not the applicant, controls the timing of suit through provision of the (l)(3) lists, which is necessary for the artificial act of infringement, and whether either party can file suit in a proper venue is irrelevant when construing the rest of the statute. Br. at 9. Preliminary injunctions, Sandoz said, are not guaranteed and declaratory judgment is also available, so the fact that a preliminary injunction is possible given the right circumstances should not mandate that notice be limited only to situations where a preliminary injunction would be needed, i.e., when commercial marketing is imminent. Br. at 9. For process patents, Sandoz argued that Congress could have thought pre-launch adjudication was not needed or as important as litigation over product or use patents, and that determination does not support a 180-day delay in biosimilar marketing to allow for litigation of those patents. Br. at 10. That the reference product sponsor may receive new patents would not disorder litigation, Sandoz said, because standard procedures, including amending complaints and consolidating cases, would accommodate additional patent claims. Br. at 11. Interchangeability provisions should not impact notice, Sandoz stated, because the distinct timing provisions do not match and interchangeability will typically come after first marketing. Br. at 12.
Sandoz responded to Amgen’s arguments about the two phases of patent litigation on four grounds: First, overlap between the phases is possible even under Amgen’s interpretation. Br. at 13. Second, the statute allows for only one phase of litigation when the sponsor does not obtain new patents after information exchange. Id. Third, patents litigated after notice can simply be added to ongoing litigation or a new suit can be coordinated with an existing one. Br. at 14. Fourth, early notice before the regulatory exclusivity period expires is not a real threat to the reference product sponsor’s ability to seek a preliminary injunction because the information exchange incentivizes the biosimilar applicant to hold notice until near approval to avoid suit on all available patents. Br. at 15.
According to Sandoz, its reading promotes patent certainty and minimizes rushed litigation: Sandoz’s construction allows for resolution of patent disputes during the exclusivity period, whereas Amgen’s interpretation would compress litigation into 180 days after approval. Br. at 15-16. Also, discovery and reporting requirements, Sandoz said, undermine Amgen’s argument about the reference product sponsor’s uncertainty over when to seek preliminary injunction or concerns over amendments to biosimilar applications. Br. at 16-18.
IV. The Federal Circuit Erred By Providing a Right of Action and Injunction to Enforce Notice
The Federal Circuit issued its injunction under federal law, so, argued Sandoz, Amgen’s state-law claims are moot. Br. at 19. And Sandoz said the question of the propriety of the injunction is properly before the Supreme Court. Id. Moreover, Sandoz asserted other potential problems with Amgen’s state-law position based on the scope of the injunction, Amgen’s cross-petition, and preemption issues. Br. at 19-20.
As for the federal injunction, Sandoz stated that “there is a single cause of action under which Biosimilars Act-related litigation may be maintained: 35 U.S.C. § 281,” which provides a remedy for infringement, and each of “the Act’s litigation-related provisions controls access to the Section 281 cause of action.” Br. at 20-21. Neither the statute nor case law allows a court to enjoin other violations, Sandoz said. Br. 21-23. And, rehashing its opening arguments, Sandoz stated there is no implied right to an injunction because (1) the statute lays out express remedies regarding notice, Br. at 24-27, and (2) Congress expressly provided for injunctive relief for violation of confidentiality provisions, Br. at 27-28.
Finally, Sandoz argued that Amgen’s reading upsets the balance Congress struck on exclusivity by creating a de facto 180-day extension. Br. at 28. Sandoz contends that “it would have been bizarre for Congress to use the word ‘effective’ to describe a license that would always be ineffective for 180 days.” Br. at 29. Had Congress intended an automatic stay akin to the Hatch-Waxman Amendments, Sandoz argued, “it would have provided one expressly.” Id. Sandoz contended that Amgen’s purported legislative history on delayed marketing is both unreliable and irrelevant, as it addressed a wholly distinct proposal to avoid pre-approval resolution of patent disputes altogether. Br. at 29-30. Sandoz pointed to other statements during the legislative process supportive of its position. Br. at 30.
Response on Information Exchange Requirements
I. The BPCIA Does Not Mandate Information Exchange in All Circumstances
In light of the entire structure of the BPCIA, Sandoz argued that the Federal Circuit was correct in holding that failure to disclose its biosimilar application was not a violation of the law and that Amgen’s state-law claims were correctly dismissed for lack of an unlawful act. Br. at 33.
II. Statutory Text and Structure Shows That “Shall Provide” in Section 262(l)(2)(A) Is a Mandatory Condition Precedent
The information exchange, Sandoz began, is only one aspect of the larger patent dispute resolution scheme. Id. And, according to Sandoz, all roads lead to patent litigation, but information exchange is one optional path, as nonprovision of the application is itself an artificial act of infringement and the sponsor may sue immediately. Br. at 34.
Amgen errs, Sandoz said, by relying on the notion that “shall” is always “language of command.” Br. at 34. For Section 262(l)(2)(A), Sandoz argued that shall denotes a mandatory condition for proceeding with the information exchange, but that the availability of a declaratory judgment action under (l)(9)(C) “[i]f a subsection (k) applicant fails to provide [its] application” shows that providing the application cannot be strictly mandatory. Br. at 35. Moreover, Sandoz noted, Subsection (l)(6) provides that the “reference product sponsor shall bring an action for patent infringement” after the information exchange. Br. at 35. Clearly, Sandoz argued, Congress would not have made it unlawful not to file a lawsuit; rather, different remedies are available to the sponsor depending on compliance. Br. at 35-36.
Sandoz also addressed other terms in the statute relied on by Amgen. According to Sandoz, “may” indicates that providing certain information is purely optional and does not impact the course of procedures. Br. at 36. “Fails” cannot imply a strict duty because other provisions using the term “when there plainly is no duty to perform.” Br. at 36-37. “Must” in discovery rules, Sandoz stated, is irrelevant to the interpretation of the BPCIA. Br. at 37.
III. Interpreting Section 262(l)(2)(A) as a Mandatory Condition Precedent Advances the BPCIA’s Purposes
The purpose of the BPCIA, according to Sandoz, is pre-approval litigation over patent rights, as demonstrated by Congress’s creation of artificial acts of infringement. Br. at 38. Sandoz highlighted a few tradeoffs inherent to the structure of the BPCIA. Br. at 38-39. For example, the “sponsor gains more control over the scope and timing of any infringement suit” when the applicant does not participate in the information exchange. Br. at 38. The applicant can benefit by participating in the information exchange and gaining “control over the timing and scope of patent litigation.” Br. at 39 (citing BIO Amicus Br. at 23).
Sandoz then addressed Amgen’s policy arguments. Concerns that the sponsor may not know what patents the biosimilar would infringe absent information exchange are unfounded according to Sandoz, because normal litigation and discovery processes would still be available and Congress created the artificial infringement for this scenario. Br. at 40. Also, Sandoz said, forcing information exchange would not necessarily streamline litigation, nor would the applicant necessarily value that over other considerations like expedience. Br. at 41-42. Further, Sandoz argued, sponsors do not truly lose remedies without the information exchange because an injunction is still available for patent infringement rather than under Section 271(e)(4)(D). Br. at 42-43. Lastly, whatever permissive scheme Congress considered but did not enact is of no moment, Sandoz argued, because “unenacted bills ‘lack persuasive significance in most circumstances.’” Br. at 43 (quoting Star Athletica L.L.C. v. Varsity Brands, Inc., No. 15-866, slip op. at 6 (U.S. Mar. 22, 2017)).
IV. No Extra-Statutory Right of Action to Compel Provision of the BPCIA Exists
Sandoz concluded by reiterating arguments from Section II of its reply and arguing that Amgen waived its position that a state law injunction is available by failing to challenge the Federal Circuit’s contrary holding. Br. at 43-45.
Big Molecule Watch will continue to monitor this and other cases involving the BPCIA, so check back for the latest updates.