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.
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