On February 6, 2019, the US Patent Trial and Appeal Board (PTAB) announced that it has instituted Mylan Pharmaceuticals, Inc.’s inter partes review (IPR) proceeding against Biogen MA Inc’s multiple sclerosis drug, Tecfidera® (IPR2018-01403). Tecfidera® sales exceed $4 billion a year and account for nearly 48% of Biogen’s sales, but there are now questions about its long-term value since it may face generic competition sooner than expected.

The focus of the IPR is on U.S. Patent No. 8,399,514 (the ‘514 patent) which is directed to a method of treating multiple sclerosis in a subject by administering a specific daily dosage, namely 480 mg, of fumarates, specifically dimethyl fumarate (DMF) and/or monomethyl fumarate (MMF). Claim 1 below is reproduced below:

1. A method of treating a subject in need of treatment for multiple sclerosis comprising orally administering to the subject in need thereof a pharmaceutical composition consisting essentially of
(a) a therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof, and
(b) one or more pharmaceutically acceptable excipients, wherein the therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof is about 480 mg per day.

The IPR will focus specifically on the 480 mg per day dosage amount. To win, Mylan will have to prove that it would have been obvious to one skilled in the art to administer a dosage of 480 mg per day. Biogen has already shown that a 720 mg dose was efficacious but a 320 mg dose was not statistically significant. Biogen has previously argued that the magnitude of the clinical efficacy of the 480 mg dose was unexpected and therefore, not obvious. Therefore, a key issue is whether it would have been obvious to a person of ordinary skill in the art to optimize the effective dose and arrive at a dosage of 480 mg per day.

The ‘514 patent is at the heart of the Tecfidera® patent portfolio because it has an expiration date of 2028. Other patents protecting Tecfidera® have expiration dates in April 2019, October 2019, and June 2020, according to the Orange Book. The ‘514 patent is, therefore, critical to protecting Tecfidera’s long-term value beyond 2020.

The new IPR, however, threatens that long-term value. A final decision in an IPR is typically announced 12 months after the IPR has been instituted. In this case, it means that we will probably have a final decision around February of 2020, not accounting for any appeals. If Mylan wins the IPR, it would have to wait until at least the June 2020 patent expires before launching a generic competitor drug. Again, this does not account for any appeals in the IPR. Nevertheless, the earliest possible launch for Mylan could occur in June 2020 which significantly cuts into Tecfidera’s market exclusivity.

The important question now is whether the ‘514 patent can withstand an IPR challenge by Mylan Pharmaceuticals, Inc. While Biogen’s stock dropped more than 7% when it was announced that the IPR was instituted, just because an IPR is instituted by the PTAB does not necessarily mean that a patent will be revoked. Around 60% of petitions are instituted in the pharma space. Once instituted, the likelihood that a patent claim will be cancelled is around 46%, which is a lower percentage compared with other technological areas.

Moreover, the ‘514 patent has already faced an IPR and won. In 2017 it successfully overcame a challenge from Kyle Bass and the Coalition for Affordable Drugs (IPR2015-01993). That IPR was also based on a Section 103 obviousness argument. In that IPR, the PTAB held that the petitioner failed to present any evidence that refuted Biogen’s claims that the magnitude of the clinical efficacy of the 480 mg dose was unexpected and thus, not obvious.

While the new Mylan IPR will also rely on prior art to prove whether the 480 mg dose was obvious or not, Mylan relies on at least one new prior art reference, Schimrigk 2004. The new reference, according to Mylan, shows that “doses of 720 mg/day, 360 mg/day, and those in between, such as 480 mg/day, were likely to be efficacious to treat MS.” In instituting the IPR, the PTAB acknowledged that there was a factual dispute regarding whether Schimrigk 2004 does in fact establish efficacy at 360 mg/day but decided to leave that question for trial. Also to be determined in the IPR will be the question of whether knowledge of efficacy of dimethyl fumerate (DMF) for the treatment of MS at the 720 mg/day dose and/or 360 mg/day dose would have provided sufficient motivation to a person of ordinary skill in the art to optimize the dose of DMF in the treatment of MS and arrive at a 480 mg dose.

Whether Mylan can succeed where the Coalition of Affordable Drugs has failed remains to be seen. We will keep you informed of any new developments in this case.

On Monday, October 22, 208, the US Court of Appeals for the Federal Circuit issued another blow to Allergan’s deal with the Saint Regis Mohawk Tribe (“Tribe”) by refusing to reconsider an earlier decision that rejected use of tribal sovereign immunity in inter partes reviews (IPRs). This is the latest setback for Allergan and the Tribe in their efforts to avoid IPRs before the Patent Trial and Appeals Board (“PTAB”).
 
As a general background, in September 2017, Allergan announced that they entered into an agreement with the Saint Regis Mohawk Tribe (the Tribe) in which Allergan transferred ownership of all Orange Book-listed patents for RESTASIS® (Cyclosporine Ophthalmic Emulsion) 0.05% to the Tribe, while being granted exclusive licenses in the patents related to the product. The patents transferred to the Tribe included U.S. Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191. RESTASIS® is an important product for Allergan since it generated around $1.5 billion in 2017. By transferring ownership of the RESTASIS® patent portfolio to the Tribe, Allergan and the Tribe hoped to dismiss the ongoing IPRs of the RESTASIS® patents based on the Tribe’s status of being a recognized sovereign tribal government to which sovereign immunity applies.
 
Thus far, however, Allergan’s strategy to avoid IPR challenges has faced significant hurdles. In February 2018, the PTAB rejected the attempt to dismiss based on tribal sovereign immunity, finding that Allergan retained ownership in the patents and the Tribe retained nothing more an “illusory or superficial right” to sue for infringement of the challenged patents. According to the PTAB, “[i]n view of the recognised differences between the state sovereign immunity and tribal immunity doctrines, and the lack of statutory authority or controlling precedent for the specific issue before us, we decline the tribe’s invitation to hold for the first time that the doctrine of tribal immunity should be applied in IPR proceedings.”
 
In July 2018, the Federal Circuit upheld the PTAB’s decision, concluding that tribal sovereign immunity cannot be asserted in IPRs, and therefore cannot be used to dismiss the IPRs filed against Allergan.
 
A month later, in August 2018, Allergan and the Tribe requested a panel rehearing and an en banc rehearing. This request was denied on Monday.
 
Despite the recent denial, Allergan and the Tribe can still appeal to the U.S. Supreme Court.
 
Allergan’s controversial move to circumvent IPRs in an effort to stave off generic drug entry adds fuel to the ongoing debate over IPR proceedings. We will keep you informed of developments related to IPRs as they occur.

Two weeks ago, the Supreme Court issued two important decisions involving Inter Partes Reviews (IPRs). On April 24, 2018, the Supreme Court first issued a seven to two decision in Oil State Energy Services, LLC v. Greene’s Energy Group, LLC (Oil States), where it upheld the constitutionality of the IPR practice. That same day, the Supreme Court issued a five to four decision in SAS Institute Inc. v. Iancu (SAS), holding that when the Patent Trial and Appeal Board (PTAB) institutes an IPR, it must decide the patentability of all challenged claims, not just some of them. Here we discuss some of the implications that the Supreme Court rulings may have on biosimilar manufacturers.

The Supreme Court decision in Oil States was a welcome decision for biosimilar manufacturers. At a minimum, the decision affirmed the constitutionality of IPRs and held that, for the time being, IPRs are here to stay. That is not to say that IPR procedures will not change in the future or that there will not be further constitutional challenges to them. In fact, this decision opens the door for Congress to revisit the America Invents Act and address the many unresolved issues relating to IPR proceedings. However, IPRs and the general concept of challenging patents at the U.S. Patent and Trademark Office (USPTO), will continue to be an effective means by which biosimilar manufacturers can challenge issued patents outside of the traditional district court litigation route.

In contrast to the Oil States decision, the Supreme Court’s decision in SAS may have increased some of the hurdles faced by petitioners in challenging patents at the U.S. Patent Trial and Appeal Board (PTAB). According to the Court, the PTAB was improperly issuing “partial-institution” decisions and holding trials on only a subset of challenged claims. Thus, from now on when the PTAB decides to institute an IPR, the PTAB must decide the patentability of all challenged claims as opposed to only granting institution on and/or fully considering only some of the challenged claims.

This all-or-nothing approach to the new IPR treatment by the PTAB will require petitioners to be more careful and strategic in selecting the claims to be challenged due to estoppel considerations. Previously, if the PTAB decided not to institute an IPR on an invalidity argument, the petitioner could raise those arguments again in district court because IPR estoppel did not attach to grounds that were denied at institution. However, estoppel does attach to final decision. Therefore, if the PTAB now has to fully grant a petition in an “all-or-nothing” fashion, challenges that previously would have been denied at institution will be part of the final decision and petitioners will be estopped from raising those issues again in future district court challenges. To prevent being estopped from raising arguments in future litigations, biosimilar manufactures will, as a result, have to be more strategic in deciding which arguments to raise in an IPR proceeding.

Biosimilar manufactures, and petitioners in general, will likewise need to be more selective in the claims they decide to challenge. The dissent, written by Justice Breyer, notes that the PTAB has discretion not to institute review. Previously, if the petitioner challenged 16 claims, and the PTAB decided that the challenges to 15 of those claims were frivolous, the PTAB could institute review on only one claim. Now the PTAB could chose to simply deny the petitioner entirely if it feels the overall case is not strong. To prevent a denial of all of its challenges, biosimilar manufactures will need to put forth their best arguments against a carefully selected set of claims and not just throw everything at the wall and hope something sticks.

The SAS decision may also impact whether or not patent owners submit a preliminary response, which occurs before an institution decision is made by the PTAB. As of May 2016, preliminary responses have also been permitted to include expert testimony. Historically, patent owners could submit a preliminary response to avoid institution on certain claims. Now, if the patent owner feels that institution is likely, there is little incentive to submit a preliminary response since it may be strategically advantageous to withhold the best arguments and evidence until the proceeding is further advanced. Moreover, patent owners may wish to fight the claims before the PTAB and chose to forgo submitting a preliminary response thereby increasing the chance that the PTAB institutes review of all of the challenged claims. This will create estoppel with respect to the challenged claims and preclude future district court challenges on those claims. On the other hand, with the number of preliminary responses expected to decline, biosimilar manufactures will not have the benefit of knowing which arguments and evidence they may be up against in an IPR proceeding.

While the Supreme Court decisions in Oil States and SAS will have immediate implications on biosimilar manufacturers, there remain many unanswered questions especially with regard to how institution decisions at the PTAB will play out. If the PTAB considers only 2 of 10 claims to be worth review, will the PTAB simply deny the overall petition? Will the PTAB require that all claims be ripe for review before instituting an IPR proceeding? Will the petitioner even be told how the PTAB made its decision, or based on which evidence the decision was made, if the petition is denied? Bioimilar manufacturers should continue to stay tuned to how the PTAB behaves in the coming year as more developments concerning IPR processes are expected to follow.

Last week was a busy week in American intellectual property with the Supreme Court issuing two decisions involving Inter Partes Reviews (IPRs). On April 24, 2018, the Supreme Court first issued a much-anticipated decision in Oil State Energy Services, LLC v. Greene’s Energy Group, LLC (Oil States), where it upheld the constitutionality of the IPR practice. That same day, the Supreme Court issued a five to four decision in SAS Institute Inc. v. Iancu (SAS), holding that when the Patent Trial and Appeal Board (PTAB) institutes an IPR, it must decide the patentability of all challenged claims, not just some of them.  The first opinion concerning Oil State is addressed in a separate blog post. In this post, some interesting, and perhaps unaddressed, issues are discussed concerning the SAS decision.

In the SAS decision, Justice Gorsuch, writing for the Court, held that the U.S. Patent and Trademark Office (USPTO) has been improperly issuing “partial-institution” decisions and holding trials on only a subset of challenged claims. According to the Court, the plain text of 35 U.S.C. §318(a) requires that the PTAB address all challenged claims in a final written decision.  As a result, when the PTAB institutes an IPR, it must decide the patentability of all challenged claims as opposed to only granting institution on and/or fully considering only some of the challenged claims. 

Following the SAS decision, on Thursday, April 26, 2018, the USPTO issued a one-page guidance memorandum for moving forward after SAS. According to the guidance memo:

1. The PTAB will institute IPRs as to all claims or none. Going forward, “if the PTAB institutes a trial, the PTAB will institute on all challenges raised in the petition.”
2. For pending trials in which a panel has instituted trial on all of the challenges raised in the petition, the panel will continue with the proceeding in the normal course.
3. For pending trials associated with a partial-institution decision, “the panel may issue an order supplementing the institution decision to institute on all challenges raised in the petition.” In addition, “the panel may take further action to manage the trial proceeding, including, for example, permitting additional time, briefing, discovery, and/or oral argument, depending on various circumstances and the stage of the proceeding” to take into account the shift. “For example, if the panel has instituted a trial and the case is near the end of the time allotted for filing the Patent Owner Response, the panel may extend the due date for the Patent Owner Response to enable the Patent Owner to address any additional challenges added to the proceeding.”
4. The Petitioner and Patent Owner are expected to meet and confer to discuss the need for additional briefing and/or any other adjustments to the schedule. “It is expected that the parties will work cooperatively amongst themselves to resolve disputes and propose reasonable modifications to the schedule.”
5. The PTAB hosted a “Chat with the Chief” webinar on Monday, April 30, 2018, from noon to 1 pm ET (US) to discuss the SAS decision.

While the guidance appears to address some immediate concerns about how IPRs before the PTAB will proceed in light of the Supreme Court’s SAS decision, there are still some unanswered questions. Most notably, the USPTO guidance document fails to address how “partially-instituted” cases currently pending before the PTAB will continue, only saying that the “panel may issue an order” and “may take further action.” It appears, at least from the wording of the guidance, that perhaps only cases that have not yet received a decision on whether they will be instituted will be subject to the new guidance. This raises the question of how currently pending cases, such as those for which an IPR trial has been instituted, but appeals are not yet finalized, will be handled.

It is important to further note that the guidance does not appear to address what effect, if any, the SAS decision will have on previously decided cases that were the result of “partial-institution” decisions. More particularly, patent owners and patent practitioners will need to know whether the previously decided IPR decisions are subject to the new decision, or if will there be opportunities for either party to reopen to the proceeding.

While last week was definitely interesting in terms of IPR decisions, it seems to further compound uncertainties in the US patent system by raising many additional questions that the USPTO, PTAB, and the US courts will have to sort out in the near future. Stakeholders should stay tuned because more developments concerning IPR processes are sure to follow, perhaps raising even more questions and even more uncertainty. It will be interesting to see what effect, if any, these cases will have on how the USPTO and/or Congress revisit the America Invents Act and address the many issues relating to IPR proceedings.
 

On April 24, 2018, the U.S. Supreme Court issued a much-anticipated decision in Oil State Energy Services, LLC v. Greene’s Energy Group, LLC (Oil States), where it upheld the constitutionality of the post-grant Inter Partes Review (IPR) process. The Court held, in a 7-2 decision, that IPR proceedings do not violate Article III or the Seventh Amendment of the United States Constitution.  Justice Thomas wrote for the majority while Justice Gorsuch dissented, and was joined by Chief Justice Roberts.

In reviewing the Supreme Court’s decision, below are five key take-ways from the decision:

1. Patents are public rights – As previously discussed, the main focus in this case is how the Court views the nature of the rights granted by a patent. Are the rights conferred by granting of a patent purely private property rights, in which case their taking must be adjudicated by a jury, or are they public rights that may be altered or extinguished by an administrative agency such as the U.S. Patent Trial and Appeal Board (PTAB)? According to the Court, the rights granted by a patent fall within the public-rights doctrine, and since IPRs involve the same interests, they also fall within the public-rights doctrine. In supporting its decision, the Court goes as far as to equate patents with “public franchises” such as when Congress grants a franchise that permits a company to erect a toll bridge but qualifies that grant of rights by reserving its authority to revoke or amend the franchise. 

2. Previous cases are bound to the patent laws in place during that time – One of the more interesting aspects of the case was to see how the Court reconciliated its decision with previous opinions that explicitly held that patents are private rights. In particular, in its 1898 decision in McCormick Harvesting Mach. Co. v. Aultman & Co., 169 U.S. 606 (1898), the Supreme Court held that once a patent is granted it “is not subject to be revoked or canceled by the president, or any other officer of the Government” because “[i]t has become the property of the patentee, and as such is entitled to the same legal protection as other property.” To differentiate itself from the prior decisions, the Court in Oil States held that those cases, including McCormick, are not in conflict with its current holding because those cases were decided under the Patent Act of 1870 that did not include any provision for post-issuance administrative review. Specifically, under the Patent Act of 1890, the Patent Office Commissioner “had no power to revoke, cancel, or annul” the patent at issue. In contrast, the current patent laws allow for the U.S. Patent and Trademark Office (USPTO) to review and revoke issued patents under certain circumstances. 

3. Historical use of courts does not preclude today’s use of the PTAB to adjudicate patents – The Court further dismissed the relevance of traditionally using American Article III courts to adjudicate patent validity, saying that even though these American courts were historically used to do so, this past use of such courts did not preclude use of other forums today. In particular, the Court held that since patents are governed by the public-rights doctrine (see 1 above), their oversight can be assigned to the Legislature, the Executive, or the Judiciary branch for adjudication. While Congress chose the courts to adjudicate patent matters in the past, it is free to choose the USPTO to do so now. The Court further went on to support this practice by analyzing the treatment of patents in England in the 18th century, noting that patents could be vacated on a petition to the Privy Council, which was composed of the Crown’s advisors, a Council that closely resembled IPR procedures handled by the PTAB today.  For similar reasons, the Court further held that even though the IPR procedure may look like a trial in that it has “motion practice before the PTAB; discovery, depositions, and cross-examination of witnesses; introduction of evidence and objections based on the Federal Rules of Evidence; and an adversarial hearing before the [PTAB],” this does not mean that the PTAB is improperly exercising its power. In other words, even though there are similarities between IPRs and district court proceedings, it does not necessarily lead to the conclusions that IPRs adjudicated by an administrative governing body (i.e., the PTAB) violate Article III of the US Constitution. 

4. Congress can change it – One of the most important holdings, I believe, from the Oil States decision is that Congress can control which branch of government adjudicates patents. In its decision, the Court held while “Congress chose the courts in the past does not foreclose its choice of the PTO today.” According to the Court, matters governed by the public-rights doctrine (i.e., patents) can be resolved in three ways: first, Congress can “reserve to itself the power to decide,” second, Congress can “delegate that power to executive officers,” and third, Congress can “commit it to judicial tribunals.” Thus, the power rests within Congress to determine the manner in which government adjudicates patents. If Congress wants patents to only be decided by the courts, then Congress can change the patent laws to achieve that rule. For those unhappy with the Supreme Court’s decision in Oil States, this gives a glimmer of hope that IPR proceedings may yet change in the future. 

5. Very limited holding – Finally, the Court cautioned that its decision is a narrow holding that was limited to the precise issues before it and should not be construed to suggest that patents are not property under either the Due Process Clause or the Takings Clause of the U.S. Constitution.  Thus, the Court’s holding in Oil States did not foreclose the possibility of future Constitutional challenges to the IPR process.

​While the Oil States decision suggests that IPRs are here to stay, it also raises additional questions that will have to be resolved in the near future, particularly with regards to further constitutional challenges to IPR proceedings. It will also be interesting to see whether this decision sparks an interest in Congress revisiting the America Invents Act and addressing the many issues related to IPR proceedings.
 

Last week it was announced that Abbvie entered into a settlement agreement with Samsung Bioepis that would delay the U.S. launch of Samsung Bioepis’ biosimilar version of Humira® (adalimumab) until June 30, 2023. This is the second such settlement agreement that Abbvie has entered into related to the its blockbuster rheumatoid arthritis drug. In September 2017, Abbvie also entered into an agreement with Amgen that would delay the U.S. launch of Amgen’s biosimilar product until January 31, 2023, several months earlier than the Samsung Bioepis’ biosimilar.

While a 2023 biosimilar launch perhaps cuts Humira’s patent market exclusivity by more than a decade -- some of Humira’s patents have a patent term extending to 2034 – both settlement agreements provide for undisclosed royalties on Amgen’s and Samsung Bioepis’ biosimilar once those biosimilars launch. Even more impressively, both settlements allow Abbvie to continue marketing Humira without competition more than four years beyond the expiration of a key patent protecting Humira in 2018 (U.S. Patent No. 8,889,135 (‘135 patent)), and more than five years beyond the invalidation of that same patent by the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR) proceeding in the Summer 2017.

As I previously wrote about, the ‘135 patent is important because it covers the dosing and treatment regimen of the drug, which is necessary for any biosimilar drug looking for gain FDA approval. Specifically, claim 1 is directed to “A method for treating rheumatoid arthritis in a human subject, comprising administering subcutaneously to a human subject having rheumatoid arthritis a total body dose of 40 mg of a human anti-TNFα antibody once every 13-15 days for a time period sufficient to treat the rheumatoid arthritis….”

This begs the question, how has Abbvie managed to extend Humira’s monopoly even when one of its key patents has been invalidated? The simple answer is found in Abbvie’s aggressive patent strategy. While it is unreasonable to believe that all companies will follow the patent strategy that Abbvie took with Humira, there are some lessons to learn from Humira’s IP portfolio that could be beneficial to others seeking to protect their IP assets, especially in today’s anti-patent climate.

Our marketplace understands the importance of patents; their value to business in the US cannot be overstated. Patents provide several offensive and defensive marketplace benefits to their owners or licensees. They can do everything from preventing competitors from making, using, selling, and importing the owner’s claimed product, protecting and expanding one’s presence in the marketplace, to attracting investment from venture capitalists, potential partners, and other investors.

Despite their importance, it should be no surprise to patent owners and licensees that the U.S. is currently operating in an anti-patent climate. Patents are being challenged through various strengthened post-grant procedures enacted by the America Invents Act of 2011 (AIA) or through a more traditional litigation pathway provided by the Biologics Price Competition and Innovation Act of 2009 (BPCIA), and patent holders are finding more and more that their patents are becoming susceptible to attack from competitors prior to the expiration of the patents.

The IPR process, for instance, allows a third party to challenge the patentability of an issued patent based on prior art under 35 U.S.C. §§ 102 and 103. The IPR process differs from a traditional district court litigation because it is heard in front of the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB), a final decision can be typically expected within 12-18 months, and the costs are a fraction of a traditional patent infringement litigation. As I’ve written previously, when a company challenges a patent by requesting an IPR, their odds of invalidating the challenged claim(s) are high.

No company is completely immune from an IPR challenge, although these proceedings are more popular in certain fields like electronics and computers. While IPRs are less popular in the biopharma space, they are still used consistently and with tremendous impact. Humira, for instance, has been a favorite target of IPRs from different challenges. In the summer of 2017, the PTAB struck down the ‘135 patent two times in two months finding it obvious over prior art.  Other patents covering Humira were also subject to IPR challenges, including U.S. Patent Numbers 9,017,680; 9,073,987; 9,085,619; 8,802,100; and 9,512,216. Abbvie is certainly not the only company facing IPR challenges. Other biologics that are currently facing or have faced IPR challenges include Avastin®, Enbrel®, Lantus®, Neulasta®, Rituxan®, and Herceptin®.

To mitigate the threat from an IPR, companies need to develop a patent portfolio that is robust enough to withstand not only IPR challenges and traditional litigations, but also possible invalidations. Abbvie’s Humira patent portfolio is a perfect example of this strategy, often termed the “patent thicket” strategy. Despite the challenges and invalidations of Humira’s ‘135 patent over the summer of 2017, no competitor can yet market a biosimilar of Humira in the U.S. without fear of triggering a patent infringement lawsuit. Amgen and Samsung Bioepis are the first in line after signing their settlement agreements, but they will not even be able to enter the market until 2023.

Humira’s dominance in light of the unfavorable environment is in part due to its robust patent portfolio. Humira is protected by about 110 patents, some of which extend the life of the patent portfolio all the way into 2034. We can learn a few things from Humira’s patent portfolio.

First, the Humira patent portfolio is big. As I mentioned previously, there are more than 100 patents protecting various aspects of the drug. Such a large portfolio is designed to contain so many different types of claims, sets of claims, and different claim scopes that at least one of the patents will continue standing even if a few patents are invalidated. Moreover, if a company wanted to challenge all of Humira’s patent, they would find themselves in a very lengthy and costly process. In contrast, many products are not protected by such large patent portfolios. More often than not, companies only pursue a handful of patents for their products, making the portfolio, and thus the product, less valuable and more susceptible to attack.

Second, the Humira patent portfolio is very diverse. In a presentation in October 2015 entitled “Broad U.S. Humira Patent Estate”, Abbvie outlined its strategy: to cover every aspect of the drug. Abbvie listed 22 patents directed to various diseases or methods of treatment, 14 patents directed to the drug’s formulation, 24 patents encompassing the manufacturing practices surrounding production of the drug, and 15 “other” patents. Often companies focus narrowly on specific formulations, indications, or manufacturing processes instead of incorporating modifications, alternatives, or improvements, sometimes not developed until after the initial patent filing, that would expand their scope.

Third, the Humira patent portfolio is temporally staggered. By not filing all the patent applications at one time and including additional inventive elements in later follow-on patent application filings, Abbvie was able to extend Humira’s patent protection to 2034, 16 years past the initial expiration of the primary patents in 2018. Within the U.S. first-to-file system, companies are sometimes too eager to file their patent applications and too focused on making their limited number of patent filings as broad as possible, thereby risking condensing their potential patent term by cutting off the ability to file future follow-on patent applications.

Of course, it should be mentioned that a portfolio like Humira’s comes at a price. Filing, prosecuting, and later maintaining a global portfolio is not cheap. As a $16 billion per year drug, Abbvie’s investment in the Humira patent portfolio most certainly pays for itself. For other products, however, companies should weigh the overall cost of prosecuting and maintaining patent applications in the US and abroad against a realistic projected value of their product in various jurisdictions of the global marketplace. That being said, patent portfolio building decisions can be made strategically to tailor the size and shape of the portfolio to fit the business strategy of the company. Competent patent counsel should guide companies through decision-making gates to determine how best to strategically design and implement the best protection strategy.

In today’s AIA and BPCIA era, companies with robust patent portfolios are better positioned to weather this attack. It is therefore important to cultivate a patent portfolio that includes claims that are not only broad enough to provide ample protection in the marketplace, but also one that is deep enough to withstand possible invalidation. Such patent portfolios should include sufficient “back-up” claims in case the first claim set falls prey to post-grant attack and should further include sturdy, well-written, and strategically planned specifications to prop up those claims and support further revisions if needed.

Two weeks ago, I was a featured speaker during the one-hour webinar, “The BPCIA Patent Dance: Recent Trends, Developments and Court Decisions,” hosted by the Knowledge Group. During the webinar, I discussed some of the ways that Inter Partes Reviews (IPRs) may be used by biosimilar manufactures as part of their strategy of navigating the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) and the Patent Dance following the Supreme Court’s June 12, 2017 decision in Sandoz Inc. v. Amgen Inc.

As a quick reminder, the US Supreme Court reversed the Federal Circuit in Sandoz Inc. v. Amgen Inc., interpreting two key provisions of the BPCIA, and held that: (i) biosimilar manufacturers can begin marketing their biosimilar product prior to U.S. Food and Drug Administration (“FDA”) approval, and (ii) reference product sponsors cannot compel a biosimilar applicant to disclose its application and manufacturing information. On the second holding, the Court found that the only federal remedy for failing to provide a copy of the biosimilar application and manufacturing information is to bring a declaratory judgment action for patent infringement and proceed outside of the BPCIA. One way of challenging a patent outside the BPCIA is through the use of inter partes review.

We have already seen biologic products being invalidated through the use of IPRs. A few weeks ago, for instance, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) struck down U.S. Patent No. 8,889,135 (“the ‘135 patent”) covering Abbvie’s blockbuster rheumatoid arthritis drug, Humira® (adalimumab) two times in two months finding it obvious over prior art.  Other patents covering Humira are also subject to inter partes review challenges, including U.S. Patent Numbers 9,017,680; 9,073,987; 9,085,619; 8,802,100; and 9,512, 216.

Abbvie is certainly not the only company facing IPR challenges. Other biologics facing IPR challenges include Avastin®, Enbrel®, Lantus®, Neulasta®, Rituxan®, and Herceptin®.

Whether or not to challenge patents through an IPR or through a more traditional means such as district court litigation comes down to several key considerations. While not an exhaustive list, the factors below highlight some of the important considerations that biosimilar manufacturers should consider when constructing their strategy.

1.    Timing. The first cases involving the BPCIA, e.g., Sandoz v. Amgen, Janssen v. Celltrion, involve drug products whose patent term is either expired or close to being expired. In these cases, the biosimilar can enter the market as soon as it receives FDA approval and satisfies the requirements of the BPCIA, i.e., provides a 180 notice of commercial marketing. But what about the situations where the reference product still has ten or more years of patent term left? In those situations, the biosimilar applicant may choose to invalidate some patents through the use of IPRs earlier on in the process rather than waiting to litigate the patents as part of the BPCIA.
 
2.    Certainty. By choosing to challenge patents through the use of IPRs earlier on, the biosimilar applicant may benefit from the certainty provided by an IPR decision. An IPR proceeding is generally faster and more cost effective than litigation. Therefore, an IPR allows the petitioner to have a final decision, whether positive or negative, much sooner.
 
3.    High probability of success. An IPR challenge further offers petitioners a high probability of success in overturning patents. When a petitioner challenges a patent, their odds of invalidating the challenged claim(s) are high. A look at recent IPR data shows that, when a case reaches a final written decision, the odds of invalidating all challenged patent claims are around 67%. For patent holders, the numbers are less optimistic, with patent claims being upheld less than 20% of the time. A recent article published even more remarkable numbers. A look at the Final Written Decisions issued by the PTAB in June found that the Board cancelled 555 (80.32%) of the instituted claims while declining to cancel 114 (16.50%) of the instituted claims.
 
The biosimilar applicant also could benefit from the lower burden of proof standard that applies to IPRs but not to litigations. IPR proceedings are subject to the “preponderance of the evidence” standard whereas litigation is subject to “clear and convincing evidence”, a much higher hurdle to overcome. Challenging patents through an IPR, therefore, often favors the petitioner.
 
4.    Number of patents. Certainly, another important factor to consider in the biologic market is the number of patents that protect each product. Unlike with small molecule drugs that may have a handful of patents protecting their compositions, a biologic product may have dozens and potentially hundreds of patents protecting its composition, including but not limited to, method of manufacture, method of treatment, formulation, etc. With so many patents out there, a biosimilar applicant may choose to challenge some patents through an IPR and leave others to litigation. By challenging some patents, and presumably being successful, the biosimilar applicant may not only obtain some certainly but can also improve its own leverage when negotiating a license with the reference product sponsor. On the other hand, with so many patents blocking its path to market, the biosimilar applicant may struggle to identify the most critical patents that would render an IPR less effective. Moreover, depending on how some of the other factors listed here turn out, a petitioner may choose to forgo IPRs and instead challenge the patents during litigation.
 
5.    Limited discovery and estoppel. One reason that a biosimilar applicant may choose to forgo challenging a patent using the IPR process is the limited discovery and estoppel that IPRs offer. While an IPR allows the petitioner to challenge a patent multiple times, the petitioner nevertheless needs to be thoughtful when citing prior art to challenge patents. Since discovery is limited, if a petitioner cannot put together an effective argument that the petitioner otherwise would be able to if a more in-depth discovery was permitted, then the petitioner should consider pursuing those arguments in a litigation. If the petitioner proceeds with less than optimal arguments and fails, estoppel will prevent the petitioner from raising those arguments in a later district court litigation. Thus, before proceeding with an IPR, the petitioner should make sure that his arguments are sufficient.

Companies developing biosimilar products should consider these factors when preparing to launch their product. As more biosimilars are developed, we will likely see the different ways that IPRs are used in paving the road to market.  

I’ve previously written about how U.S. Patent No. 8,889,135 (the ‘135 patent) covering Abbvie’s blockbuster rheumatoid arthritis drug, Humira® (adalimumab), was invalidated by the U.S. Patent Trial and Appeal Board’s (the “PTAB”) in three separate Inter Partes Review (“IPR”) proceedings, two of which were filed by Boehringer Ingelheim (IPR2016-00408 and IPR2016-00409). While Boehringer Ingelheim filed two challenges to the same ‘135 patent, Coherus filed six challenges to a different Humira patent, U.S. Patent 9,085,619 (“the ‘619 patent”). Such aggressive use of PTAB proceedings is not uncommon, and today I want to look at the strategy behind filing multiple PTAB challenges to the same patent and the reasoning behind such sequential or parallel challenges. 
 
The ‘619 Humira patent at issue in this case is directed to the drug’s formulation. Only claims 16–19 and 24–30 are challenged, with independent claim 16 reciting:

16. An aqueous pharmaceutical formulation comprising:

(a) an anti-tumor necrosis factor alpha antibody comprising a light chain variable region (LCVR) having a CDR3 domain comprising the amino acid sequence of SEQ ID NO:3, a CDR2 domain comprising the amino acid sequence of SEQ ID NO:5, and a CDR1 domain comprising the amino acid sequence of SEQ ID NO: 7, and a heavy chain variable region (HCVR) having a CDR3 domain comprising the amino acid sequence of SEQ ID NO:4, a CDR2 domain comprising the amino acid sequence of SEQ ID NO: 6, and a CDR1 domain comprising the amino acid sequence of SEQ ID NO:8, wherein the concentration of the antibody is 50 to 200 mg/ml; and (b) water;
wherein the formulation does not comprise a buffering system.
 
Formulation patents are important for any company seeking to manufacture a biosimilar of Humira.

Four of the Coherus IPR petitions were filed on January 31, 2017, as follows:

1. IPR2017-00822 asserted anticipation by WO 2006/138181 (“Gokarn PCT”) (published December 28, 2006) and obviousness over the Gokarn PCT and the 2003 Humira® Label.
2. IPR2017-00823 asserted anticipation by US 2016/0319011 (“Gokarn ‘011”), which claims priority to U.S. Provisional Patent Application Ser. No. 60/690,582, filed June 14, 2005.
3. IPR2017-00826 asserted obviousness in view of the 2003 Humira® Label, Fransson & Espander-Jansson, J. Pharm. Pharmacol., 48:1012-1015 (1996) (“Fransson”), and the 2005 Gamimune ® Label.
4. IPR2017-00827 asserted obviousness in view of the 2003 Humira® Label, Fransson, and Gorkan ‘011, and obviousness over Gorkarn ‘011 in view of the 2003 Humira® Label.

​Several weeks later, on March 2, 2017, Coherus filed two additional IPR petitions:

    5. IPR2017-01008 asserted obviousness in view of the 2003 Humira® Label,   Fransson, and Gorkan ‘011, and obviousness over Gorkarn ‘011 in view of the 2003 Humira® Label.
   6. IPR2017-01009 asserted obviousness in view of the 2003 Humira® Label, Fransson, and the 2005 Gamimune ® Label.

On April 11, 2017, the PTAB granted Coherus’s unopposed motions to dismiss IPR2017-00826 and IPR2017-00827 (IPRs 3 and 4, above) without prejudice. Coherus essentially replaced IPR2017-00826 and IPR2017-00827 with IPR2017-01008 and IPR2017-01009 (IPRs 5 and 6, above). Thus, Coherus has four IPR petitions pending and is awaiting institution decisions against the ‘619 patent.

There are several reasons for companies to file sequential IPR proceedings such as Coherus did against the ‘619 patent.

First, there are technical advantages to be gained by filing multiple IPRs against a single patent. Each IPR petition is limited to a specific word count. In the case of filing any petition before the PTAB, the limit is 14,000 words. If the petitioner is looking to challenge multiple claims and using multiple prior art references, or if the patent contains numerous claims, then this word limit could be problematic. To avoid exceeding the word limit, the petitioner could separate out his arguments over more than one IPR.

Second, and more importantly, filing more than one IPRs against a single patent gives the petitioner multiple “bites at the apple.” Each IPR is a pretty good lottery ticket in the post-grant patent invalidation game in the US. A look at recent IPR data shows that, when a case reaches a final written decision, the odds of invalidating all challenged patent claims is around 67%. In fact, the patent holder is only successful less than 20% of the time. https://www.wsgr.com/publications/PDFSearch/PTAB-Year-in-Review-2016.pdf) Thus, while filing one IPR is favorable, filing more than one can increase the odds of success. Big companies launching critical product lines find these odds appealing and often “double down” on the IPR process in an attempt to reduce the risk of failure.

Third, filing multiple IPRs allows you to challenge a patent using different prior art or different combinations of prior art. This, of course, requires the petitioner to carefully evaluate the arrows in their quiver and to strategically decide which prior art arrows to launch in an IPR attack and which, if any, to reserve for potential future battles, such as another IPR proceeding or even in a litigation. Such decisions are important in light of a company’s overall IP strategy.  If a company challenges a patent in an IPR proceeding using prior art reference X, and the IPR is unsuccessful, then the company can try to challenge the patent in a subsequent IPR proceeding using reference Y. If the company is successful with only reference X, then there is no need to disclose reference Y and the company can hold on to reference Y until a litigation, if any, is initiated. If the company, however, tries to challenge a patent using all of its references immediately, and is unsuccessful, then the company may not have any further means of challenging the patent. The failure of the IPR in this scenario leaves the patent in an extremely strong and enforceable position, and the challenger with no defenses. In this case, the company may not be able to enter the market until the patent expires or unless the patent holder is amenable to granting a license.

Fourth, timing must also be strategically considered since challenging a patent multiple times can help a challenger learn from their mistakes in earlier proceedings. This is what happened when Kyle Bass and the Coalition for Affordable Drugs filed two separate petitions against the Ampyra® patents, namely U.S. Patent Nos. 8,663,685, 8,007,826, 8,440,703, and 8,354,437, which constitute four of the five Ampyra® Orange-book listed patents. Kyle Bass’s first IPR petition against the Ampyra® patents was denied because he did not establish that the cited posters displayed at conferences qualified as prior art “printed publications” as required by 35 U.S.C. § 311(b). In the second challenge, however, there was a question regarding the “printed publication” status of Acorda’s S-1 Statement, but the PTAB found a “sufficient showing that the S-1 was publicly accessible to the public interested in the art.”

Fifth, filing multiple IPRs could be used as a means of intimidation. Faced with multiple instituted IPR challenges, a patent holder may simply fold and give up if the patents are not critical to their business. Alternatively, multiple IPR challenges can motivate a patent holder to license the technology if previously they were unwilling to license. In this way, filing multiple IPR challenges creates a bargaining chip that is sort-of a “win-win” for the challenger if they are successful. However, it should be noted that settlements between the parties do not necessarily mean the IPR will be terminated (though in practice they usually are terminated) as it is ultimately up to the PTAB to decide whether termination is merited.

Finally, a biosimilar company such as Coherus may take an aggressive approach to PTAB proceedings to challenge patents as a way to eliminate at least some patent disputes without participating in the patent dance, which is part of the Biologics Price Competition and Innovation Act (BPCIA). By eliminating patents in front of the PTAB, a biosimilar applicant can avoid the cost and uncertainty of litigating patents in court.
 
Multiple IPR filings against a single patent offer several benefits to the challenges and show that even patent owners who successfully avoid one IPR challenge may still face a subsequent IPR challenges by the same party.

Last week I wrote about the Patent Trial and Appeal Board’s (the “PTAB”) invalidation of U.S. Patent No. 8,889,135 (“the ‘135 patent) covering Abbvie’s blockbuster rheumatoid arthritis drug, Humira® (adalimumab), for the second time in two months finding it obvious over the prior art.  The ‘135 patent is a key patent in the Humira® patent portfolio because it covers the dosing and treatment regimen of the drug, features that any biosimilar drug will need to gain FDA approval. The Final Written Decisions by the PTAB were issued in IPR2016-00408 and IPR2016-00409, both IPRs filed by Boehringer Ingelheim. In this post I delve into a little more detail behind the specific reasoning supporting the PTAB’s invalidation of claim 1 of the ‘135 patent as being obvious in IPR2016-00408 because it reveals potential critical flaws lurking in many method of treatment claims.

The ‘135 patent is directed to methods of treating rheumatoid arthritis with a human anti-tumor necrosis factor α (TNF) antibody known as Humira® (adalimumab).  Specifically, Claim 1 is directed to “A method for treating rheumatoid arthritis in a human subject, comprising administering subcutaneously to a human subject having rheumatoid arthritis a total body dose of 40 mg of a human anti-TNFα antibody once every 13-15 days for a time period sufficient to treat the rheumatoid arthritis….” (emphasis added)

The PTAB’s decision not only has significant implications for Abbvie, which now faces several post-grant challenges of its Humira® patent portfolio, but also for other biotech and pharma companies that often obtain and rely on method of treatment claims for protecting their products. In particular, this decision highlights the vulnerability that method of treatment claims not requiring a specific level of efficacy face in light of prior art describing results of clinical trials.

The human anti-TNFα antibody used in the claimed dosing regimen is D2E7, the active agent in Humira®. The PTAB found that the challenged claims of the ‘135 patent were obvious in light of two prior art references, van de Putte 2000 and Rau 2000, both of which described results of clinical trials using the same antibody. In finding the challenged claims of the ‘135 patent obvious, the PTAB construed the phrase “for a time period sufficient to treat rheumatoid arthritis” under the broadest reasonable interpretation standard, when read in light of the specification, as meaning “for a time period sufficient to reduce the signs, symptoms, and/or progression of RA.” The PTAB emphasized that such a construction did not require any particular level of efficacy. In other words, under the PTAB’s interpretation, efficacy could not be used to distinguish the claims from the prior art.

In supporting its construction of the claim language as not requiring efficacy, the PTAB turned to the specification of the ‘135 patent. The PTAB rejected Abbvie’s position that the phrase should mean “for a time period sufficient to reduce significantly the signs and symptoms of rheumatoid arthritis” because the specification only described “administering the antibody for therapeutic purposes to alleviate the symptoms and/or progression of RA” but did not provide a discussion about efficacy levels. Abbvie argued that a person of ordinary skill in the art “would have been motivated to pursue an effective treatment regimen, not one that merely provided baseline functionality”.  The PTAB, however, remained unconvinced by Abbvie’s arguments, reiterating the lack of any new intrinsic evidence supporting Abbvie’s proposed construction.

The PTAB’s interpretation as not requiring efficacy is important because it prevented Abbvie from distinguishing the ‘135 claims from the two prior art references based on efficacy. While Abbvie did not challenge the PTAB’s decision that all the claim elements were present in the combination of van de Putte and Rau, Abbvie instead tried to argue that one of skill in the art would not have been motivated to combine the references, in part, because the combination would have resulted in reduced efficacy. According to Abbvie, the prior art actually taught away from combining the two references because Rau’s biweekly dosing regimen using 0.5 mg/kg (equivalent to a fixed dose of 40 mg in the average patient of 80 kg) was ineffective across the entire population. In rejecting Abbvie’s arguments, the PTAB found that Rau did not specifically indicate that the 0.5 mg/kg does was “ineffective” at treating RA. Moreover, the PTAB relied on its construction of the phrase “for a period of time sufficient to treat rheumatoid arthritis” as not requiring any particular level of efficacy. To this end, the PTAB dismissed Abbvie’s arguments about efficacy.

The PTAB’s decision in rendering the method of treatment claims of the ‘135 patent obvious over the prior art because they failed to recite a specific level of efficacy has broad implications for biotech and pharma companies. Companies developing biopharmaceutical products often rely on method of treatment claims as a means of protecting their products. In doing so, claims are often broadly drafted to include terms like “to treat”, “to prevent”, “to reduce”, “to mitigate”, but without reciting specific efficacy levels. To protect such patent claims from IPR challenge, it is now important to include additional language concerning efficacy levels in the claims, or at least, to provide a clear definition of “to treat” in the specification. 

On July 6, 2017, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) struck down a key patent on Abbvie’s blockbuster rheumatoid arthritis drug, Humira® (adalimumab). This was the second time in as many months that the PTAB struck down U.S. Patent No. 8,889,135 (“the ‘135 patent) finding it obvious over the prior art.  The Final Written Decisions by the PTAB were issued in IPR2016-00408 and IPR2016-00409, both IPRs filed by Boehringer Ingelheim.  The ‘135 patent was previously struck down on May 16, 2017 as obvious in IPR2016-00172, an IPR filed by Coherus.  

The ‘135 patent is directed to methods of treating rheumatoid arthritis with a human anti-tumor necrosis factor α (TNF) antibody known as Humira®.  Specifically, Claim 1 is directed to “A method for treating rheumatoid arthritis in a human subject, comprising administering subcutaneously to a human subject having rheumatoid arthritis a total body dose of 40 mg of a human anti-TNFα antibody once every 13-15 days for a time period sufficient to treat the rheumatoid arthritis….”

The ‘135 patent is important because it covers the dosing and treatment regimen of the drug, which is necessary for any biosimilar drug looking for gain FDA approval.

In each of its Final Written Decisions, the PTAB relied on different combinations of prior art as the basis for finding obviousness. In particular, the PTAB rejected Abbvie’s argument that the commercial success of Humira® supported the nonobviousness of the claimed invention, stating, in part, that Abbvie failed to establish a nexus between the commercial success and the claimed dosing regimen.

On a positive note, Abbvie successfully petitioned the USPTO to extend the term of the ‘135 patent by about 300 days, which means that Humira® could gain nearly one additional year of market exclusivity. To gain this additional time, however, AbbVie would need to successfully appeal the IPR decisions against it.

Other patents covering Humira® have also been under attack. On June 9, 2017, the PTAB has issued Final Written Decisions in IPRs filed by Coherus against two other Humira® patents, U.S. Patent No. 9,017,680 (the ‘680 patent) and U.S. Patent No. 9.073,987 (the ‘987 patent), finding the patent claims obvious over the prior art in IPR2016-00188 and IPR2016-00189, respectfully. The ’680 patent, like the ’135 patent, is directed to methods of treating rheumatoid arthritis with human anti-TNFα antibody, while the ’987 patent is directed to methods of treating rheumatoid arthritis by subcutaneously administering a 40 mg dose of human anti-TNFα antibody once every 13–15 days.

One other Humira® patent, U.S. Patent No. 9,085,619 (the ‘619 patent), which covers the formulation of Abbvie’s antibody, is also under challenge at the PTAB.  
​
The PTAB’s decisions here show the vulnerability that biotech and pharma patents face from IPR challenges. Humira® has been the leading drug on the market since about 2011. It costs approximately $3,100USD a month and generates Abbvie billions of dollars a year in revenue, $16 billion in global sales in 2016 alone. If patents protecting blockbuster drugs like Humira® are susceptible to IPR attack, companies that invest millions into developing these biopharmaceutical products should conduct regular reviews of their high value patent properties and develop strategies for better protecting such properties a post grant challenge.